When does a sponsorship make sense?
Watching an NBA game last night, an ad for Kia motors came on. It claimed that the Kia Sorrento was the official vehicle of the NBA. The commercial itself was visually appealing with compelling music, but at the end I scratched my head thinking, what does an entry-level SUV have to do with the most competitive basketball league in the world. As hard as I tried I could find no connection between Kia and/or the Sorrento with the NBA, other than the NBA needs sponsors and Kia has money to be a sponsor.
So the next time you’re contemplating sponsorship opportunities for your brand, consider the following…
1) What does your product have to do with the event or entity in question? The classic example is beer (or chips or other snack items) and football. That makes sense to me – friends gathered around the tube, putting back a few cold ones and routing for their team. But again, to reiterate, what does an entry-level SUV have to do with the game of basketball. Players don’t drive them; it’s not a highly tuned performance (read athletic) vehicle, its not going to make me a better baller. Where’s the connection?
2) Would your brand benefit from exposure to the target audience? Here’s where Kia may pick up some points. NBA basketball is a mass market, largely watched sporting event… but then, why not just advertise? Why pay the additional funds to be a “sponsor”? So I would caveat this by also adding that there should be added value by associating your brand to the product in question.
3) Is there a clear consumer insight to you being a sponsor? I’ve watched this ad multiple times and I’m not sure how Kia has made my enjoyment of the NBA better. This partly goes back to point #1 but the other half is simply that I was not compelled to action nor did it push me to view Kia in a different light. The one glimmer of insight I could see was that Kia was trying to position the Sorrento as a hip urban vehicle (which might have some ties to NBA culture)…but that message did not resonate with me, and I doubt it dd with other viewers.
So can sponsorship dollars be wisely spent? Of course, beer and football, auto parts/accessories and NASCAR, brands in related trade shows…I just think that in today’s world where the mediums with which to touch your customers are ever growing – sponsorships become increasingly more costly on a relative scale. So lets make sure we assess the true value of a sponsorship and more importantly the opportunity cost of that investment when compared with other opportunities that more closely align with our customers’ preferences.
Digital is Not a Strategy
First of all, a Happy Thanksgiving to you all. I apologize that it has been two months since my last blog. It has been a busy couple months working up marketing strategy for 2010. Lots of discussion about all the things that could be. I’m especially looking forward to 2010 as a marketer in light of all that has changed in the world. The words “digital”, “social media”, “SEO” and the like have become so ubiquitous that I think many marketers have lost sight of what exactly those things are – they are tools. That’s all. They do not define marketing in its entirety. For tools without a strategy, without a coordinated multi-faceted customer approach are just noise. And quite frankly I believe that most of what is out their in the digital landscape is just that – noise.
Take twitter for example…I’d venture to guess 90% of tweets come from 10% of the Twitter universe. That’s a lot of people who like to hear the click-clack of their keyboards. I’m not here to undermine the value of Twitter or other social media. There’s no denying its significance in the way people obtain information. This is more of a alternative response to a blog post from @hubspot, whom by the way, I’m a huge huge fan of.
The blog above is an insightful look at one CEO’s view of outbound marketing. S/he does not dismiss it, but she certainly does not endorse it. Basically the person is not a fan of outbound marketing. But at the end of the day who is? Yet, outbound marketing remains a viable COMPONENT to a marketing strategy. In my view it comes down to relevant touch points. A marketing strategy must be built on a purposeful multi-touch agenda that includes both digital connections, traditional media and outbound tactics. Especially if the following apply…
1) Your target is not digital media savvy. The referenced CEO may consider herself digitally in-the-know, and some CEOs are…but my observations are that the vast majority of executive decision makers aren’t. Lets face it, if you market to C-level executives, you’d know this is a group that has been somewhat slow to adopt the web as a source of information beyond the occasional Google search.
2) Your target may not know what they’re looking for. The web is an abyss of data. Customers may not even know they have a problem, much less that there’s a solution to solve that unknown problem. So how are they to know what to look for?
3) Your industry, product or service is very specific in the needs it serves, making it very difficult to get noticed through the clutter of all the other information that’s out there. And again, it’s not like executive decision makers are getting RSS blog feeds to their desktop for their most important key words.
So are digital connections important? Yes. Should they be the lone weapon in your marketing arsenal? Definitely not. It should be part of a coordinated effort to touch your customer multiple times in an effort to build awareness and acceptance, which will hopefully drive lead generation. Complimentary outbound tactics like email, direct mail and telemarketing will continue to be used because they serve as measurable returns on marketing investment that enable targeted 1 to 1 touch points.
CEOs and Brand Identity
Ford, Chrysler, GM… besides all being in sweltering financial distress, all three at some point in the last several years have put their CEO’s on a TV ad campaign. Most recently GM has put their newest CEO, Whitacre, behind the camera .
Let’s just say it didn’t work out for Dr. Z or Bill Ford, both of whom handed over the reigns shortly there after. I’m not suggesting this is a curse in the magnitude of the EA sports cover spot, but potentially a trend.
These companies struggled to identify a message and voice to the consumer so they put their CEOs behind the camera…but what has that really done? I dont know the answer to that question and I don’t know the analytics behind these campaigns, but I do know this:
A CEO has NOTHING to do with a consumer’s experience and relationship with her car.
OK…obviously, the CEO should play a role in setting the tone and strategic direction of the organization but to your average consumer, the CEO is likely of little significance. Take a look at the video spots below from each of the big 3 and tell me if the CEO contributed to the compellingness of the brand and/or value proposition?
Starting with the last one, I don’t think that Ed Whitacre was believable or genuine in the slightest. He’s not an actor or an icon. He’s a guy in a suit and he acted like on. There was not an ounce of me that believed he cared about my driving experience. Not an ounce of me believed he knew what American’s value when it comes to an automobile. And that’s in part because I don’t know what GM stands for, a midst all their brands, whats the value proposition of the GM umbrella? And where does Mr. Whitacre communication fit into that?
Bill Ford at least carries the name, so on some level I believe he’s passionate about cars, particularly the mustang featured in the spot. Still, it didn’t do a whole lot to secure his job. Worse still, his replacement lasted only 4 months. And we all know what happened to Chysler. I will say from an entertainment standpoint, I liked the dr. Z spots…but I think again Chrysler struggled with an identity problem…no one really bought the whole German inspired nonsense. I mean, has anyone SEEN the PT cruiser? I think its safe to say that nothing about that car says “German engineering”.
So at the end of the day, I don’t think making your CEO the public face to the consumer is ever a wise move unless they are truly iconic. And even then, I don’t see the value add. Afterall, we don’t see Jobs pitching for Apple, Gates for Microsoft or Laffley for P&G. The CEO should be behind the seens, developing their organizations…not pitching me their products over mass media.*
*Note the exception in the B2B space, where the CEO can be iconic by virtue of her position, where she is respected by other key business decision makers/influencers.
The focus on customer retention
So I realize I’ve been harping on this for a while, but I just got this update from e-marketer that got me fired up. As reported by e-marketer, a study by Unisfair reports that 6/10 marketers say customer acquisition is a critical priority. No surprise. What is surprise however, is that less than HALF of those surveyed said customer retention was important. I know I’ve been on my soapbox lately on the customer experience, but EVERY marketer should consider retention a priority…because once a customer leaves you, consider the cost of replacing that customer via acquisition which is 10x the cost of simply retaining that original customer.
Customers generally leave due to negative experiences (poor price, service, compatibility, etc.). What the survey tells me is that 50% of marketers are basically ok not placing the customer relationship as a priority.
Am I the only one out there who finds this problematic? It just takes one angry customer to tell 10 more, or even 100 more people about their experience. In the case of Dave Carroll and United Airlines, 5 million folks have seen “United Breaks Guitars“. So why wouldn’t customer retention be a priority?
Customer Service Rant Revisited
This is a follow up to my last post: Customer Service Rant
DEFINE IRONY: When after completely botching the customer experience, Time Warner Cable sends you a mailer asking you to come back at a 30% reduction in price. This is a perfect example of how not to treat customers. Why is it that companies come to their senses only after you’ve ceased to do business with them?
What is it that makes it ok to not value a customer relationship until its lost?
Acquiring a customer is 10 times more costly than simply retaining a customer. And as proof, it will take more than one lousy mailer to make me come back, even at the huge discount they are offering me (which by the way they should have offered in the first place – as you can read in the previous blog, I left in large part because of the gradual but significant creep in my monthly subscription fee).
Rather than make this a total rant…some advice for marketers and service providers the world over:
1) Keeping customers happy is ALWAYS easier than trying to win them back after decidedly not making them happy.
See “United Breaks Guitars” as a GREAT example. After decidely failing to reimburse a customer for damage to a beautiful Taylor guitar, country artist composes and posts song to Youtube. With over 5 million views it has cost United Airlines an estimated $180 million in market value.
2) Asking a customer to return just a month after you’ve explicitly devalued that customer relationship is insulting. I don’t think I really need to further explain this point. We all know the feeling.
3) If you’re going to woo a customer back, don’t do it with a mailer that cost you $1.
The most valuable customer relationship managnent lesson I’ve ever learned… The best way to overcome disappointing a customer, is to go back and ask for more. Face to face, one on one, whatever it is that makes the most economic sense. In this case, a phone call thus making it a TWO-WAY conversation would have been better. I probably would have told TWC to you-know-what, but that would have been the first (of many) steps to rebuild a broken relationship.
I’m not going to put out a youtube video about TWC, but the very fact that I’m writing this blog is proof that in today’s digital age, a singular customer experience has the ability to dramatically impact (Positively or Negatively) an image beyond just that one touch point.
Customer Service Rant
Several weeks ago My wife and I were at a movie theater around town (for my local friends, the Marcus Majestic). And we were sitting in their new dinner style theater, complete with individual captains chairs, tables going across each row and an attentive wait staff which could be summoned with a dimly lit light at your table. The experience is truly one of a kind and was completely worth the added premium in ticket price (about $1 more, though I’m sure the food was also more expensive).
As we sat waiting for the previews to begin, chowing on popcorn, I noticed each seat had a pamphlet on ATTs new Uverse offering. I considered at the moment what a great idea that was. You have a captive audience that clearly values the multi-media experience, and since this is a full service dining experience, chances are folks were coming in before showtime and would have time to kill (as we did). During this time I had also become increasingly annoyed with time warner cable who over the past six months had raised our prices on three separate occasions, all due to promotions expiring. I’m ok with this when its within reason…but our cable/internet charges spiked 50%. Talk about a bait and switch. So already inclined to say good bye to TWC, we switched to uverse that week. I’m not quite a Uverse evangelist but so far, I’ll say it as been great, especially since its completely integrated with a multitude of online accessible features (the video quality is also perceptibly better).
OK…let me now get to the purpose of this rant…Why Time Warner Cable sucks.
1) When I called into to disconnect our service, TWC informed me that they could not cancel until they physically had the cable box in their posession. OK…I can understand that to a degree. So my wife accomodatingly drives there that day, at which point we expect a refund for any unused service, right? Wrong. 4-6 weeks.
2) 4 weeks go by…Instead of a check, we get another bill. It would seem “Mr. Kaneta, that when you returned your equipment, the store failed to issue a disconnect.” So not only did I not get a credit, I got another bill and had another month’s worth of fees charged to my credit card.
3) I call up TWC (the rep was actually very polite and helpful)…we work it out such that an agent will arrive at our house to do the disconnect in a week but I won’t be charged for anything beyond the day I returned equipment. Great…except they can’t send me my money until 4-6 weeks after disconnect. So all told I’m out 2 months of service fees that will take 10 weeks from the day I cancelled to show up in my mail box (if I’m lucky)
4) Sadly this is not the first time this has happened to me with TWC. How often does TWC fail to disconnect and charge their customers?!?!? Truly an unbelievably poor service experience… With as much as they spend on customer acquisition, you would think retention and user experience would rank among one of their priorities.
So with that being said, Time Warner now ranks among my five worst service providers on the planet. In no particular order because they all suck… 1) Time Warner Cable. 2) Sprint. 3) Stonegate Properties (my first apartment after college). 4) CARTUS Relocation Consultants. 5) The money-eating vending machine in my office.
Congrats Time Warner Cable… you’ve officially moved from mediocre to suckville.
Your Biggest Competitor: Being Good Enough
Imagine your product or service is the market leader. For years you have sustained a significant competitive advantage, whether that be inimitable technologies, processes, or scale, etc. Now imagine new competitors begin nipping at your heels. You still have a superior product but your price is 20% higher. You believe you command a higher premium and leadership demands higher margins. Now imagine we’re not talking about basic packaged goods where that equates to an extra buck. Imagine that instead we’re talking price tags with one or two commas in them. So the price difference is now hundreds or even thousands of dollars different.
At what point does your customer say you’re not worth the premium? At what point does a customer walk or cease to entertain you as a viable option? The answer is when the cheaper product or service becomes “Good Enough”.
Ever heard of a company call Vizio? Probably not until a few years ago. But today they are the #2 player in Televisions. Why? Because the technology curve and product lifecycle of flat screen TVs has plateaued such that, while Vizio may not be perceived as “good” as competitors Sony or Pioneer, Vizio’s product is viewed as “good enough” when priced significantly lower.
EDIT: I discovered that Vizio is actually now #1 in the US for flat-panel TV marketshare. The top five market leaders, according to iSuppli, are Vizio, with a 21.6% share; Samsung, 19.9%; Sony, 16.6%; LG Electronics, 10.7%; and Sharp, 9.4%.
Now ask yourselves how many of your competitors have assumed a lower cost position with a value proposition of “Good Enough”. Surprisingly there are probably more out there than you think (you may even work for one of them). The reality is that Good Enough players will continue to thrive until we innovate and change the game, and refresh the product lifecycle curve. That will not happen by simply bolting on added features (see PC industry). Each little feature, unless truly a delighter, simply promotes the notion that your space has become commoditized.
I’m not going to tell you how to move that curve, because frankly if I had the answers, I wouldn’t be writing this on a public access blog. I will say that the first step must be recognition that your market is being encroached upon by good enough competitors. Next, determine what your customers want and translate that to a need(s). Finally, make a candid assessment of your value proposition. Does it still hold true or are you delivering (relatively) less customer value than you delivered years ago. Like I said, easier said than done…but if it were easy, none of us would ever have to be just “Good Enough”.
B2B data capture, tool or customer repellent?
Stumbled upon a very interesting blog that really resonated with me. Having many moons ago come from credit card marketing, I believe customer intelligence is king. The more we know, the more we can deliver the right product and message…but of course, in financial services, customer information is a given. Quality and risk inherently justify the collection of personal information.
So what about in B2B marketing? Do the same rules apply…if not, when is it acceptable to gather data? B2B marketers talk about things like “Thought Leadership”, we push whitepapers and case studies, and ultimately hope people read them. But if we want people to read, share, evangelize, then why do we create obstacles like data capture?
Short answer, in my opinion, is that its what we’ve always done. The problem is that the rules have changed. There is so much content out there. Google is a one-way ticket to information overload. If you don’t get me what I want, I’ll go somewhere else. End of story. So if you need to collect information (or at least*think* you do), here’s some tips…
1) Is it information that I would be comfortable giving – Once you ask for my address, that’s just broadcasting your intent to send me junk mail. Unless you are uniquely positioned to provide crucial, relevant information, I will probably close the window. And as a colleague of mine pointed out yesterday, how many of us have NEVER given fake email or mailing address?
2) Is the information quick to provide, or am I going to have to think about it? Example – I HATE long drop-downs… I never know which of the bajillion options to choose, so I usually just randomly select one or skip the capture all together. Which again, goes back to the actual integrity of the data capture. The more complicated, the more useless the information will ultimately be.
3) Have you given me a preview of the content first? Do I know what I’m getting myself into or am I going to give you a ton of information only to find that you’ve handed me over a brochure promoting your company and product? Talk about ruining the customer experience. This among all things is a big peeve of mine. Data capture is a trade, a business transaction, and my information is worth more than a lousy, self-promoting, brochure.
Wrapping up, I will admit that I am guilty of data capture, but only as a means of timely, relevant follow up. Always take a customer-back approach and consider how your customer will feel. This is not rocket science, but judging from all the registration screens I see everyday, its something that B2B marketers sorely neglect.
