Archive for the ‘Retail Marketing’ Category
The on-demand web video site Hulu announced a new subscription service Tuesday called Hulu Plus, which will allow users to unlock full seasons of premium shows on ABC, NBC and FOX across a variety of new platforms for a flat monthly fee of $9.99. This includes a growing library of 120 seasons of TV and 2,000 episodes, according to Hulu.
While the business world debates Hulu’s business model, we marketers are looking at it as one more significant move that will put television as we know it in the grave. Especially because Hulu is offering its new service in mobile formats on the iPhone, iPad and iPod Touch, as well as select Samsung internet-enabled TVs and Blu-Ray players. It will also soon offer Hulu Plus service on PlayStation 3 and X-Box 360, as well as devices from Sony and Vuzio.
Advertising space will continue to be sold, which means Hulu is adopting Cable TV’s strategy of collecting fees from both advertisers and subscribers. But advertisers will soon be able to geo-target specific messages to specific audiences in specific areas making their ad dollars much more cost-effective. And millions of people have already said they’re willing to pay $9.99 a month in order to watch almost any show they want anywhere, anytime, on any media player.
But don’t throw your TV set away. After all, antique shops are always looking for classic oldies. Your 72″ screen may someday become a valuable relic.
I found this fascinating blog quote regarding agency compensation:
Media costs are market determined, so they’re easy to value. An hour of time is easily measured by a clock. But, how is the brightness of an idea measured, or the effectiveness of communication? These are really fuzzy, non-touchable things to measure. In the land of lawyers they’re called “intellectual property,” and payments for them are generally determined through royalties and licenses.kilgannonsays.wordpress.com, Kilgannon Says, Mar 2010
Just yesterday I was with a great client of ours debating how our agency fees should be valued. He noted that when we first started working with him two years ago our compensation was based on a much heavier level of traditional media use. He very politely argued that now, since we have moved away from so much traditional media, the fee doesn’t make sense. I responded saying how ironic it was that, since we moved away from the traditional media, we were actually investing more time and effort into his account. Neither of our thoughts were valid points. His tied our value to traditional media commissions. Mine tied our value to the clock. As an ancient wise man once said, what does that have to do with the price of tea in China?
I love the story about the plumber who shows up at a home for an emergency repair. He spends five minutes fixing a very large pipe leak in the kitchen. After his five minutes of work he hands the homeowner a bill for $150. The homeowner is exasperated and accuses the plumber of highway robbery, stating that the repair only took him five minutes and how dare he charge that much for such a quick repair. The plumber calmly replies, “I just saved your kitchen flooring, which appears to be worth thousands, not to mention your water bill, which would have been very high had I not known what to do quickly. Are you paying me for the five minutes, or for my ability to solve your problem?”
As agencies we spend most of our working hours helping clients solve their problems. This usually means helping them generate more customers, more leads, and more sales. But even with today’s amazing online technology and the ability to measure consumer movement and actions, there is still a lot of intangible effectiveness that can result from an agency’s problem-solving efforts. Like the ability to pick the right musical background for a radio spot that increases it’s stickiness. Or being able to negotiate lower printing costs for a mailer that, in turn, increases the project’s ROI. Or how about not only coming up with the big idea, but then making sure it’s delivered through every brand touch point from website to floor graphics, to business cards, to POP to traditional media?
An agency’s value should be based on their ability to quickly and accurately determine the problem, develop a strategic solution, and deliver appropriate results. That’s what the plumber had. That’s what the customer was paying for. And that makes sense. So, maybe we should change our name to Brandtailers Plumbing?
Catchy headline, eh? And what does it have to do with the gift card photo? Everything.
Here’s a quick example. I just had a small family owned air conditioning and heating company, Fisher Air, come out to my house to service our heater (yes, we still use them sometimes in Southern California). They showed up on time, did a nice job, and charged about $75.
Three days later we get a thank you card in the mail with a really nice, credit card quality, $50.00 gift card for their services. But it wasn’t for us. It was to give to a friend or neighbor. And, they noted in the thank you card, when our friend or neighbor uses it, Fisher will send us another one for $100.
Since I already had a feeling of TRUST with the company, I didn’t see this as a scam. I saw it as a genuine effort for a small business to build quality relationships with their customers. So maybe they’ll give up $150 in labor to retain our business and earn another household’s. But how much word-of-mouth (and mouse) might they get in return? A lot more than $150. And a lot more than a $150 ad in some local circular. But remember, they had to have a QUALITY PRODUCT for me to earn their TRUST. And their product was integrity, honesty, kindness, knowledge, efficiency and, oh yes, a reasonable price.
So, you want to save money advertising? Give your customers a gift they didn’t expect. Don’t be cheap. Make it count.
Although it’s hard to say Southern California has a rainy season, what little rain we did have earlier this year included a couple of pretty good downpours. In the midst of one of them, I stopped by Kragen Auto Parts store to buy new windshield wiper inserts for my car. What I saw was an amazing example of customer service. As I pulled into their parking lot, I saw a half dozen or so Kragen employees helping customers replace their wiper blade inserts. Now, a set of wiper blade inserts usually costs under $10.00. It’s not a huge profit center for a store like Kragen. But the good will that was being made in that parking lot was priceless.
Good Will vs. Media Dollars. Hmmmm…. So, I thought to myself, how can a business like Kragen take this concept and make it a home run online brand marketing success?
What if they had some local customers following them on Twitter and, when it started raining, they sent out a message offering FREE wiper blade inserts to the first 100 visitors. Do you think they’d have a huge line at the door? Marketing history says they would.
But wait, how can a store give out 100 sets of wiper blade inserts and justify the expense? At $10 a set that could add up to $1,000 in product! Yup. It sure could. But how much did it cost in media expenditures to get 100 people in the door? How much would it cost if they tried doing this on TV, or some other form of traditional media? And how could the message be distributed in such a timely manner, and thanks to Twitter, shared so quickly with friends, coworkers, family and other miscellaneous Twitter followers who get the offer re-tweeted to them? How much good will could be created by helping customers out, free of charge, at a time when they needed something pertinent to their immediate safety?
What’s the biggest challenge with this type of new marketing concept? Changing marketers ways of thinking. Getting out of the old mindset that you spend money on the media, and the creative, not on good will. That’s old thinking. And it’s really, really expensive thinking. Why not take just a tiny piece of all that money to be saved from expensive traditional media buys and instead use it to be helpful. Yes, even use it to give something away. With today’s consumer, being helpful can pay off ten-fold. Seeing those Kragen guys standing out in the pouring rain smiling and helping customers was enough to earn my loyalty.
By the way, did I happen to mention that almost every customer in the parking lot that day was holding a Kragen bag with other things they had purchased?
There’s a relatively new retail automotive TV campaign making it’s viral way around the country. It’s a puppet badger acting as a sleezy car salesman. Granted, most of the spots are very funny. But why? Watch the clip below and then ask yourself why it makes you chuckle. Possibly because you’ve experienced it? Is that smart marketing?
I’ve never understood this strategy. According to sales reports, neither have most consumers. I think this is just one great example of incomplete thinking in the marketing process. Could a funny industry-degrading ad get attention? You bet. Could it win creative awards? Of course (that’s just a question of money). But does it really change the opinion of the consumer when the “alternative” solution is presented? RARELY.
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I don’t think our clients are all that unusual. First of all, they’re really good at what they do. And they also understand the need to involve their business in this relatively new thing called Social Media. But, they ask, we’re going to have time to learn this and do it WHEN?
They’re right. For the techies and online gurus that helped invent, develop, and grow this powerful new communication, it might all seem simple. But for the other 95% of America, it is overwhelming.
So, if you’re in the 95% what do you do?
Here’s our opinion – Find someone you trust, and outsource it to them. Oh, I know. How do you outsource something that is supposed to be so personal, so transparent, so pure? Leave that to the people you decide to trust, and let them be your online “concierge”. They’ll cover for you when it’s simple, alert you to things you should be involved with when necessary, and help you respond to things that really do need to come directly from someone inside your business.
The alternative is to spend about 200 hours getting your arms around this new world, then another 20 or so a week managing it. Right, like you’ve got time.
But do your homework. Make sure your concierge knows their stuff, mostly about you, so they can accurately represent you. And be sure to give them regular feedback. Make yourself available to them at least once a week for an hour of debriefing. That one hour will pay off in multitudes, and allow you keep doing what you do best.
