The Quisenblog

Too many communications strategies are developed by first asking, “What do we want people to think we are.”

That idea, first formally put forward by Al Ries and Jack Trout in their landmark book from 1981, Positioning, is built around the paradigm that there are consumer needs that aren’t being met (either functionally or emotionally) in any category, and if you can identify one that resonates with people, and “sell yourself” as the solution, then your brand will take off like a rocket. “Positioning” was primarily about communication. The idea was “control the communication, and you can control the customer.” And since what the customer “knew” about your product or brand is what you told them, way more thought went into advertising, PR, etc. than went into the actual experience with the brand.

The fundamentals of “Positioning” worked to perfection if the “unaddressed need” identified by the brand was what that brand truly delivered; in many cases, however, the “brand’s solution” didn’t live up to the promise. Either it was mere “window dressing” and wasn’t what the brand was really all about, or it was something the brand didn’t do noticably better than most other performers in the category.

Here, 30 years later, we’re working with a totally different marketing paradigm. The advance of the Internet, social networks and 24/7 peer-to-peer connectivity has made transparency a must. You can no longer be what you say you are; you are now what your customers say you are.

When a brand spots an opportunity in the marketplace, it’s important to not just say you’re the solution (either because it sounds good or it’s who you’d like to be), but to prove that you are the solution, in every action, every customer touch point and every communication–operationally as well as in marketing and communications.

A better question to ask when developing a brand strategy is “Who are we, in the eyes of our most loyal customers? Why do they keep coming back?”

Then ask, ‘How can we demonstrate this so that all customers and prospects experience this?” Not just through communications, but by “living it” top-to-bottom in the organization.

While it’s important for a marketing strategy to be “aspirational,” it’s even more important that it be true. At its best, a marketing strategy is not just a blueprint for selling stuff. It is a blueprint for how you will create a relationship with your customer.

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Raising prices is never something a business looks forward to. Even the smallest, most easily-justified increases will receive some customer backlash, especially in economically challenging times. Yet, from time to time, organizations find themselves with no other choices other than to raise prices. So is there a “less painful” way to raise prices and communicate it to customers and prospects?

As with just about any marketing-related decision, the decision to announce a price increase deserves to be focused around a plan to help minimize customer pushback, cut customer churn, and mitigate bad stories circulating about the way your price increase was handled. So how’s the best way to go about it?

Following are a few considerations that might help customers better swallow an impending rate increase.

1. Be transparent. If there are legitimate reasons why you must increase prices (and most times there are), be clear about them. Cost of materials going through the roof? Transportation costs eating you alive? Let customers know. Make that information readily available on your web site. Arm sales people with information they can share with their clients. Script Customer Service Reps so they’re able to share this with customers. Give customers plenty of notice. And be as empathetic and specific as possible. Don’t fall back on corporate-speak or lawyer-approved boilerplate pap to justify an increase. Instead of saying “Due to the fact that our costs have gone up, we’re forced to raise prices,” try being just a little more human: “Over the past few years, our cost of materials have gone up 64%. While we’ve found ways to increase efficiency and have held the line on prices as long as we could, we’re now in a position where we need to raise prices. Through efficiencies we’ve enacted, we’re fortunate enough to only have to pass a percentage of those costs on to you, our valuable customers. While we understand our 20% price increase may not be easy for some of you to absorb, please understand we are doing all we can as an organization to optimize efficiencies and control costs.” There. Customers might not be happy about a price increase. But at least they understand why.

2. Point out the value that your customers are getting from you, or better yet, use the event of the price increase as an opportunity to help them get more value from your services and products. It’s human nature to feel somewhat dissed when you get charged more but are not getting more. A key role for every marketer should be to help customers get the most value out of your products and services as they possibly can. Ideally, this is an on-going process that allows for plenty of user feedback and contribution. An example of one company that used this as an opportunity is Comcast. While research shows cable subscribers generally limit their viewing to ten or fewer networks, Comcast delivers in excess of 200 different networks. Therefore, it’s safe to say there’s a lot of content Comcast delivers that you’d like, but you haven’t discovered yet. So to help customers get more “value” from their service, Comcast can curate that content, and recommend viewing options based on your personal preferences. Delivering communications such as “If you like ‘Sex And The City’ on HBO, you owe it to yourself to check out ‘Mistresses’ on BBC America” elevates Comcast from strictly being the “pipe” that delivers media to being a partner that is helping me get discover new favorites.

3. Be clear about the business reasons—and the consequences—involved in a rate increase. This past week, Netflix announced a whopping 60% price increase to their core DVD-by-mail + video-streaming service (from $9.99 a month to $15.98 per month). Apparently, Netflix executives didn’t anticipate how much flak from customers a 60% rate increase would generate. Reportedly only 30% of callers who tried to reach the company by phone were able to speak with a Customer Service Rep. And the Netflix blog post announcing the new pricing structure has already reached its 5,000-comment limit. This from a company that up to now was seen as being a very customer-centric organization. A 60% price increase, no matter what your category, is a game-changer, and there’s no excuse for the company not anticipate that. The “value quotient” has changed so radically, there is no accurate way to predict the net results of that move. While the justification for the increase has been muddy at best, one could speculate that the company is finding the DVD-by-mail part of their business more expensive to operate than the video streaming portion. If this is the case, Netflix could have used the specter of an impending price increase to actually add new users. Once the decision was made to raise rates, they could have made the new rate applicable to all NEW accounts, effective 90 days in the future. They then could have promoted the fact that for a limited time (90 days), new subscribers can get the “grandfathered” rate (winning over the “fence-sitters”), and remind existing customers they get to keep the grandfathered rate, while utilizing tactics to move more of them to online streaming.

By employing a little creativity to the process, Netflix execs could have achieved their goal of creating more revenue while stemming churn and reinforcing its position as a category leader, instead of sitting back and hoping 1/3 of their customers don’t decide to take a powder.

Bottom line, if a rate increase process is planned for like any other marketing initiative, an organization will likely suffer fewer lost customers, less bad press and fewer bad stories that make their way across the Internet.

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Harry Anderson is a not your typical magician. Instead of performing outrageous tricks, then leaving the audience guessing how each trick was performed, Harry performs his tricks, then shows the audience exactly how he pulled off the illusion.

David Blaine, he’s not.  Harry does not create a distance between himself and his audience as most performers do. Instead he wows you with the results of his creativity and endless hours of dedication. And then he lets you in on the gag. At that moment, he becomes an ‘everyman.’ Members of his audience connect with him by thinking, “Hey, with enough practice, maybe even I could pull this off.”

Does this transparency diminish Harry’s act? Does it make his illusions any less “magical?” No. In fact, quite the opposite. Once you have an opportunity to “look behind the curtain,” you can more fully appreciate Harry’s act. By “giving away his secrets,” Harry his making magic more human and approachable. It’s one thing to make a 40-story skyscraper disappear. It’s another to have the magician show you how he did it. It gives you a more complete story. It gives you “expert knowledge” that you can try out on your own or share.  It gives you a deeper connection to the craft.

So how can you apply this to your marketing? Instead of attempting to be secretive about everything that goes into the creation of your products, consider what would happen if you were more transparent. Sure, there is a fine line here: there are always patents, trade secrets and competitive intelligence that need to be protected. But most of what we do on a day-to-day basis doesn’t exactly fall under the auspices of “classified information.” Yet we’re reluctant to share much about our processes.

One thing you’ll find out is that the customers who are truly passionate about your products want to know as much as they can about the organization. Just as Harry’s act creates a more complete story for his followers, inviting followers to learn more about your products, people and processes builds a more complete story for them to share.

Here’s Harry perfoming one of his most famous tricks: the old “needle-though-the-arm”:

And here’s the follow-up revealing how it’s done:

Now that you know how the trick works, aren’t you more likely to talk about it later? A more complete story provides a more complete experience.

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It’s been nearly 80 days since the beginning of the BP spill in the Gulf. Volumes have already been written about how BP’s spinning of the facts and less than transparent communications have blown back on the company big time.

That’s not what this post is about.

Instead, I thought I’d take a look at some of the unfortunate collateral victims of the biggest environmental disaster in our nation’s history, and ask, Is there anything marketing can do to help?

I read this week where Florida beach communities are poised to run a multi-million dollar campaign aimed at vacationers telling them their beaches are okay.

The problem, of course, is that their beaches are not okay. Photos like this one, taken on a Pensacola beach, are making the rounds in news reports and via Social Media.

Running a campaign that says, in essence, “Tarballs, schmarballs, our beaches are just peachy” might make residents and businesses of beach communities feel good, but such a campaign would, unfortunately, be no more transparent than what we’ve seen from BP.

Okay, so throwing millions at an ad campaign showing pristine white beaches while folks in hazmat suits are shoveling stinking tarballs from the sands isn’t such a great idea. Still, is there any role for marketing?

Perhaps. I would advise these communities to relax, take a deep breath, and remember a few key facts. Number one, people are still going to take holidays. The folks who normally flock to your beaches in the summer will be going somewhere. You can count on this.

A second fact worth considering is that their entire communities have been set up to accommodate tourists. The beaches may be the top-of-mind draw, but most of these beach communities have a lot going for them, from Pensacola’s National Naval Aviation Museum to Biloxi’s riverboat casinos and famous antique row.

As a model for success, I would point them to what has happened over the last few years in Las Vegas. That community saw its tourism revenues drop mightily, as the economy convinced folks to stay home. Vegas’s major players responded by collectively cutting prices and adding value in order to keep occupancy at acceptable levels. That strategy appears to have worked. While venues have yet to see their margins return to the days of old, occupancy is holding at around 80%. And the stories being told back home about Las Vegas are good ones, which will serve the community well, both in the immediate future and as things recover.

Gulf communities could borrow much the of same tactics. Cut prices. Offer packages. Tie in with other communities to create vacation experiences. Above all, appeal to the folks who’ve established some sort of connection with these communities that they could really use their business. In the wake of 9/11 when no one was flying, Southwest Airlines received hundreds of letters from customers saying they were committed to flying on Southwest because they were concerned for the company.

Let’s not be sanguine about the prospects of these communities. They’ll be hurting, possibly for years to come. But hopefully, these communities will learn from BP’s missteps and understand a transparent approach will deliver better long-term results than trying to ignore the 800-lbs gorilla in the room.

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A lot is being said and written about Toyota’s recall of thousands of its units due to faulty accelerator pedals. The media is talking. Customers are talking. Late-night talk show hosts are talking. But Toyota itself? It’s not talking.

To be fair, Toyota spokespeople are talking. It’s just that they’re not saying anything. Peruse this ad that ran in this Sunday’s paper, and you’ll see what I mean.

While I have no doubt that Toyota’s intentions are good and that the company’s priority is the safety and satisfaction of its customers, one would never know that from the way the company is behaving. Its take-it-slow, let’s-get-to-the-bottom-of-this-and-have-all-the-pieces-in-place-before-we-go-public approach isn’t doing much in the way of maintaining trust. Customers have urgent questions now. Is my car affected? Is it safe to drive? When will it be fixed? What assurances can the automaker give me it is safe?

With all the questions that abound, not just from Toyota owners but from dealers, the media and the general public, this close-lipped approach is proving to be a violation of the trust Toyota has spent decades earning among the car-buying public.

The reality is this: if you’re not out there telling your story, somebody else will be. And you never know who that’s going to be. In these days of Social Media, where anyone with an Internet connection has a microphone, there’s going to be no shortage of commentary. But without a corporate voice, there’s no filter for this information, and the public is left with the uncomfortable feeling that, “There’s something Toyota’s not saying.”

Why is it when there is some major auto recall that the manufacturer gets sweaty palms about the whole notion of transparency? It is the ONLY thing that will contribute to maintaining/rebuilding the trust that is necessary to regain its former position. One need only go back to the Tylenol tampering episode of 1982 to see how it can be successful.

Adopting a “you-know-what-we-know” stance, if taken with the interests of the customer in mind, would go a long way to soothing buyer/owner/dealer anxieties and also nip a lot of the media finger-pointing and speculation in the bud. Accept the fact that you’re going to be fodder for late-night comedians for a while. Don’t stress the fact that some of the answers you’re giving are uncomfortable or uncertain. Trying to do business behind a curtain during a time of crisis management is opening the door to long-term erosion of loyalty.

Toyota’s #1 asset during this time is its base of loyal customers. But how can your most passionate owners stand up for you if they don’t know what’s going on?

From a practical standpoint, there’s a lot Toyota could commit to in order to minimize the damage to its reputation. Offering a 10% discount on new models when owners trade up from a recalled model. Offering an industry-best 10-year warranty, retroactive to 2009 models. Offering free upgraded loaners immediately to those affected.

But above all, be transparent. Take the attitude of, “If I were a customer, how would I expect the company to take care of me?”

It’s the feeling that “there’s something they’re not telling me” from all stakeholders here that is sewing the seeds for discontent.

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If you are a loyal reader of The Quisenblog, you’ll recognize two of the subjects we harp on over and over: 1) the importance of being transparent, and 2) the importance of identifying opportunities to repurpose content.

In the spirit of each of these, we humbly present you with the following links (the “re-purpose”) to our favorite Quisenblog posts of 2009 (which, in the spirit of transparency, frees us up from having to come up with a new post during this short holiday week).

If you have a particular favorite that we missed, please let us know. Happy Holidays, everyone!

• On Creativity
• Mistakes of Action
• He Just Wanted Toast.
• What’s Your Story?
• Finding Your One Thing.
• A Penny For Your Thoughts.
• United’s Sour Note.
• The Social Media Manifesto
• Social Media turns the Media Funnel upside down.
• Action steps for getting your business started in Social Media.

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This week’s social media blog posts:
Monday: Seven ways to doom a Social Media program.
Tuesday: Co-Creating with Social Media.
Wednesday: Building Brand Evangelism through Social Media.
Thursday: Social Media and Reputation Management.
Friday: Now that you’ve engaged, it’s time to re-engage.

(This is the eighteenth in our series of Social Media posts for the month of October. We look forward to your feedback on this series.)

For marketers, these are exciting times. Never before in our lifetime has their been a sea change quite like we are seeing today with the rise and influence of Social Media.

As when other major changes in marketing came about (the advent of TV, the commercialization of the Internet), there is a steep learning curve for those on the forefront. In an attempt to help you flatten this curve somewhat, we present a handy list of things that could conspire to doom your nascent Social Media efforts:

1. Starting too big. You don’t have to eat the apple in one bite. Start out with the platforms you are most comfortable with. Don’t think that because Ashton Kutcher has a million Twitter followers that you need to be on Twitter. While you want to stay in your comfort zone, examine how others you know or follow use various social media outlets. Start a personal Facebook page and Twitter account and play around with them to see how they work. As you become more familiar with them, you may feel more comfortable sticking your big toe into them.
2. Focusing on platforms, not content. We’re on Facebook. We have six microsites. We have an email list of 100,000. So? The real question is, what are you using these platforms for? How are you using each to get fresh, relevant content to your followers? Each platform has its relative strength. Random, unfocused usage of tactics more often than not will deliver poor performance. There’s a lot of crap out there, and being on Twitter for the sake of being on Twitter isn’t going to build a following for you.
3. Viewing the online space as “another medium” for off-line tactics and content. Off-line media at its core is about intrusion: we will sneak this TV spot by you while you’re busy watching “Desperate Housewives.” That type of intrusion doesn’t work in the opt-in world of Social Media. Banner ads that lead to a corporate web site that provides no real value to the user is a case-in-point of a wasted engagement opportunity.
4. Not being transparent. Some organizations just don’t have it in them to cede the control of the communication to the user. Yet to be successful, you have to. Acknowledging only positive posts, or heavily moderating user created content is the fast track to digital irrelevance.
5. Not being available. Remember Motrin Moms? Sharing information via social media without someone there to interact is a giant NO NO! A “must have” when branding on social media is being available to your public.
6. Running out of steam. The landscape of Social Media is littered with abandoned blogs, inactive Twitter accounts, fanless Facebook pages and RSS feeds that go months without fresh content. Don’t just stake a flag across various platforms and move on. It says you’re not serious. Take an honest objective look at where your brand can make the biggest impact from a Social Media standpoint, while providing value to your target audience (remember, value is in the eye of the beholder). Even the best of intentions won’t create a blog post everyday, or a meaningful newsletter exchange every two weeks. Not every follower you have will find every posting or every new piece of content useful. The goal is to keep your platform presence relevant over time. Consider broadening your definition of “relevant content.” Redirect content created by others you have commented on. Invite others from your organization to contribute. Link to articles or content you think your audience may find interesting. Put together questionnaires or surveys for your followers to participate in, then report your findings back to them. Consider anything that will help you provide a solution for your followers.
7. Not being committed. For some, Social Media will represent a giant leap forward in connecting with customers, building loyalty and developing new avenues for brands to grow. For others, Social Media will represent an ill-timed dalliance into platforms they never quite understood. Their initial excitement will ebb as they come to see that building and maintaining a meaningful presence in Social Media requires real effort and commitment. They won’t give their Social Media profile enough resources. They won’t give it enough time. They won’t give it enough attention.

This is sort of the “bookend” post to the one earlier this month on the Social Media Manifesto. Keeping these two on hand and referring to them during the design and implementation of your Social Media program should give you confidence as you move forward.

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