Sunday, June 29, 2008

Mental Floss - Maintaining Marketing Mental Hygiene

Old Thinking Is the "Plaque" That Causes Business Decay

By David Miranda

In today's highly competitive marketplace, old thinking can build-up and cause decay in revenue and market share. For this reason, it is vitally important that marketers practice "good mental hygiene" in order to keep their brain cells open to new ideas and methods of doing business.

This requires that marketers "mental floss" on a regular basis to remove that accumulation of dated thinking assuring fresh perspectives and open minds.

Signs that you need to "mentally floss"?

  • "I'm the boss and I know better."

  • "We're doing just fine, thank you very much."

  • "We have no room for that in our budget this year."

  • "We'll form a committee to investigate and get back to us."

  • "I don't know anyone who [texts, blogs, podcasts, etc.], so why are we discussing this?"

  • "Not now, but keep me posted."

  • "It's not us. It's our agency."

  • "It's not us. It's our client."

  • "It's not us. It's the market."
This type of thinking needs to be "mentally flossed" before the decay sets in. When it does, the only cure is "personnel extraction" and new "fillings" in the corporate org chart.

This is painful for the ones extracted and the organization.

Get out the "mental floss".

Tuesday, June 10, 2008

Recognition Marketing - The 4 "R's" Of Marketing Success

Tips For Marketing Yourself, Your Firm, Or Your Brand

By David Miranda

The basic principles of marketing, 4 P's (product, price, place, promotion) have been taught to aspiring marketers for almost 50 years with gratitude to academics Professors Neil Borden and James McCarthy. The world, however, has changed dramatically in those five decades in ways that would mandate that Professors Borden and McCarthy revise their college textbooks.

There are a confluence of powerful forces that make marketing more challenging that ever before. These include:

  • the perishability of preference
  • time poverty

  • uber-choice

  • societal A.D.D.

  • a wired (and wireless) world
The four P's are less relevant today in the big scheme of things. Product, price, place (channels of distribution), and promotion (advertising, promotion, etc.) are all under siege in ways and means never imagined. Who could have foreseen the impact of email, Amazon, Google, YouTube, iTunes, blogs, social networking, PDAs, cell phones, Tivo, spam filters, Do-Not-Call List, satellite broadcasting, podcasts and so on and so on?

Bottom line? Despite the proliferation of communication channels and choices, people are harder to reach than ever, hence, new thinking is warranted.

The new thinking? The 4 "R's of Marketing.

First, Recognition. "Recognize me as an individual not a statistic."

Second, Relevance. "Don't bother me with things that aren't relevant."

Third, Reward. "I know what's in it for you, but what's in it for me?"

Lastly, Relationship. " Treat me like I'm important and I'll reciprocate".

Note no mention of price, product, place, or promotion.

Why? Do the 4P's well and you have done things right. Do the 4R's well, however, and you have done the right things - those things that matter to the people who matter most - your customers.

Update those marketing text books.

Sunday, June 8, 2008

Pavlovian Marketing - Good Business Or Creating Bad Behavior

The Dark Side Of Relentless Sales, Discounts, Rebates, Coupons, And Incentives

By David Miranda

In his 1992 comedy, Mr. Saturday Night, Billy Crystal's character, Buddy Young Jr., was humorously comparing his family to a Jewish version of the 1990 Academy Award winning Dances With Wolves that had Native American roles like "Stands With A Fist", "Wind In His Hair", and "Kicking Bird" to name a few. His character, Buddy, referred to one of his relatives as "Never Buys Retail".

It is an appropriate term that can be used for all consumers today.

With few exceptions, the retail price of anything today has little meaning with few consumers paying the full price for products and services. Marketers have taught consumers that the retail price is merely the starting point to discount from. Consumers are trained to wait for the inevitable sale, discount, coupon, rebate, or incentive before they purchase and marketers continually reinforce this behavior - the incentive "du jour".

Ask yourself (and your friends and family), when was the last time you paid retail for anything? The automotive industry has institutionalized rebates and discounts. The travel industry has long employed yield management techniques, that creates tiers of discounts for airline seats, hotel rooms, car rentals, cruises, and travel packages. Retailers and brands conduct relentless sales, distribute millions of coupons and promote countless mail-in rebate programs. The examples are endless.

These techniques were intended to create business during periods of soft demand. They are now utilized year round. The brutal truth is that when these incentives stop, so does the business they generated.

It is the dark side of this Pavlovian marketing - it's called "rented demand". This is high cost/low margin business.

It is important for marketers to conduct a comprehensive cost/benefit analysis of these techniques. How much of a company's revenue is rented demand? What are the true costs of this business coming from consumers who have loyalty only to the incentive du jour? And what are you doing for your loyal customers - the ones that support your business regardless of the incentives?

Pavlovian marketing can be good business if used wisely. An old dog can learn new tricks.