Why Social + Mobile = Shopping

July 27, 2010

What happens when you take two hot growth areas—Social Networks and Mobile–and combine them with good old fashioned shopping? You get a phenomenon people are just now beginning to understand: the convergence of Social, Mobile & Shopping—let’s call it SMS for short. 

SMS - Social, Mobile & Shopping

 

What’s the SMS convergence? It’s the increasing ability of shoppers to use social networks to inform their shopping experience, access information about products, and broadcast their product experiences – all in real time via their mobile phone. 

Let’s look at the trends in Social Media and Mobile that are powering this convergence. 

Social Media Trends

  • Social networking penetration is increasing.  Facebook now has over 500 million users, growing its user base by +69% from 2009 to 2010.
  • Consumers are spending more time with social networking.  In the past 3 years, the average time spent has risen from 2 to 6 hours per week.
  • Social networks are mass.  There are now more people aged 50+ using social networks than people <50. They’re not just for students anymore—anyone can be reached thru social networks.

Facebook: Social Networking Growth

 

Mobile Trends

  • Penetration is growing. Within 10 years, there will be as many mobile phones in use as there are people on the planet.
  • Smartphones are taking over.  Smartphones are growing disproportionately fast. It’s projected that by the end of 2011, more people in the U.S. will use Smartphones than standard cell phones.
  • Usage is becoming more sophisticated.  With more Smartphones, come more apps. The average Smartphone user has 22 apps versus only 10 for regular cell phones.

Smartphone Penetration (image from Nielsen Wire)

 

How Social Networks & Mobile Intersect

The stats above probably confirmed what you already knew: Social Networking and Mobile are high growth areas. What you may not have realized is this: Social networking and Mobile are increasingly intertwined. Specifically, social networking apps are: 

  • #1 on the iPhone
  • #1 on the Blackberry
  • #2 on Android phones

It’s easy to see where this is all going. Social networking on Mobile is going to get bigger, more sophisticated and more enabled over the next few years. And this has some interesting implications for shopping. 

Social Networks & Mobile

 

Enter Shopping – A Social and Information Driven Activity

Social networks and Mobile are ideally suited for shopping. Why? 

First, shopping is a social experience.  People love to shop, but they really love to shop with other people. Unfortunately, this isn’t always possible. Enter Social Networking on Mobile. 

Second, shopping is about finding the right product at the right price.  This requires information. Consumers can access the opinions of their friends and acquaintances as they shop. And they can get real time access to valuable information—pricing, quality, etc.– about products and services. 

Third, people love to share their experiences with products and services.  Going forward, consumers will be able to broadcast their own shopping experiences via mobile, to both friends and others, and in close to real time. Had a bad experience with the service desk? Consumers will tell everyone they know—before they leave the store. 

Social Media & Shopping: Users Share Experiences

 

5 Actions for Marketers

The SMS convergence has numerous implications for Marketing organizations. Here are 5 to think about: 

  1. Brands must be open and transparent to win in this environment.  As I wrote in a previous post,  consumers are becoming more knowledgeable about your product and your company. The merging of Social and Mobile only accelerates this trend. Brands cannot afford to hide.
  2. Brands have an opportunity to improve their consumers shopping experience. Brands can now create apps and content that make their target consumers’ shopping experience better. Better could mean simpler, easier, more social, or any other improvement that’s relevant to their shopper.
  3. Brands must invest in creating Social CRM capabilities. Jeremiah Owyang has written extensively about the need for Marketing organizations to create social CRM capabilities. That is, to create a function to listen and engage with consumers in authentic dialogue about your brand.
  4. Brands can drive Social Shopping.  Making the buying process part of a social event is increasingly feasible. Disney recently created a Facebook app which enabled friends to buy movie tickets for the same movie. This is a great example of social shopping.
  5. Brands should experiment with shopping based App advertising.  The advent of Apple’s iAd system opens up a whole new advertising platform. This will create all kinds of new opportunities to advertise to consumers in context relevant ways. Imagine your target consumer walking into a store, snapping a photo of the UPC of your competitors’ product via a shopping app to learn more. Is this a place you might want to advertise?

SMS – Now or Later ?

SMS, like most changes, isn’t happening overnight. So, there’s always a tendency to say “it’s not big, let’s wait to see where it goes…” But the trends are clear and CMO’s need to pay special attention. 

It would be wrong to suddenly shift huge amounts of your Marketing budget into a largely unproven set of opportunities. Yet, the most prudent CMO’s will invest in a measured approach to learning what works and what doesn’t, and ultimately learn how to win in this nascent but increasingly important space. 

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Why “Easier” is Better for Your Brand

April 19, 2010

Is “easier” better for your brand? Consider this excerpt from the article “Easy = True” by Drake Bennett

Imagine that your stockbroker…who’s always giving you stock tips–called and told you that he had come up with a new investment strategy. Price-to earnings ratios, debt levels, management, competition, what the company makes, and how well it makes it, all those considerations go out the window. 

The new strategy is this: Invest in companies with names that are very easy to pronounce. This would probably not strike you as a great idea. But, if recent research is to be believed, it might just be brilliant.”

If making it easier to pronounce the name of a company can influence stock market performance for the better, can making your marketing “easier” for consumers build your brand and Marketing ROI? 

Cognitive Fluency

A relatively new topic of research in the world of psychology these days is “cognitive fluency.” It’s the study of how the ease or difficulty in thinking about and understanding a topic influences our attitudes and preferences toward it. As a research topic, psychologists are learning that cognitive fluency affects our thinking in subtle, yet important ways. Many of which are very relevant for communicating with consumers. 

Apple Advertising — “Easier” in Action

Let’s take a real world example: the Apple iPhone. With the iPhone, Apple had a tough task: communicate the incredible multiplicity of apps so that consumers would immediately understand the ease and simplicity of accessing them to solve basic everyday problems.

iPhone TV Advertising - Simple & Effective

Now think of the Apple iPhone TV advertising. What I think of is simple, easy and wow. Showing the ease of using the iPhone, tapping cool new apps, and solving practical problems brings their value to life in a way that makes complicated and complex-well, easy. 

The Broader Advertising Landscape

In my experience, simple and easy to understand ads tend to be more effective. The impact of making something easy to understand has been show in research to influence consumer preference and choice. For example, Novemsky et al. demonstrated that even something as simple as fonts can make a difference; fonts which were easier to read doubled purchase intent versus more difficult to read fonts. 

Cognitive fluency suggests that making your Marketing easier to understand results in making it easier for consumers to do what you want them to do — consider and buy your brand. There are multiple angles you can take for making your brand easier. Or, just by making it your Marketing centerpiece as Staples has with their “Easy Button.” 

Staples Easy Button - Marketing & Cognitive Fluency

5 Areas to Make Your Marketing “Easy”

1.  Brand Equities – Every brand should have both strategic and executional equities.  Strategic equities include brand benefits and reasons to believe, while executional equities are the distinctive executional assets the brand wants to own (e.g. McDonald’s and the yellow arches; Bounty and the Quicker Picker Upper, etc). 

Once defined, brands should work to build strategic and executional equities into distinctive assets that distinguish the brand from competition through repetition and variation.  Repetition is important because it makes your brand more familiar and, as cognitive fluency learning shows, more familiar equals easier. 

McDonald's Yellow Arches: A Distinctive Brand Equity

2. Visual and Auditory Cues — Another smart way to build brand familiarity and make it easier for consumers to identify your brand is through visual and auditory cues. A great example of a visual cue is the Pantene “hair flip” that communicates “shiny hair,” which has been part of virtually every Pantene ad for the past decade. 

Auditory cues are also important, as I wrote in a previous blog post “Why Your Brand Needs an Acoustic Identity.” Can you imagine the Olympics without the Olympic theme music, or a United Airlines ad without “Rhapsody in Blue?” Of course, when done well, visual and auditory cues can also become executional equities. 

3.  Congruent Context – Ease of understanding is also related to context. The more congruent a brand’s ad with the program content it sits within, the easier it is to relate to the ad. A Slim-Fast ad in the The Biggest Loser is easier to understand and remember than a Slim-Fast ad in another TV program about a different topic, even when the demographic make-up of the audience is the same. Why? The Biggest Loser viewers are thinking about weight loss, and so, it’s easier for them to digest the Slim-Fast ad message. 

4.  Packaging – Even packaging can make consumers’ lives easier. Ease of finding a package in store is a key metric many CPG companies use to evaluate packaging impact. The easier it is for consumers to find your package, the more likely it is that they’ll actually consider and buy it. 

Packaging - Critical to the In-Store Experience

5.  Pricing – Many companies have moved to “value pricing” with low everyday prices and modest merchandising discounts. Making it easy for consumers to understand your true value includes pricing strategies that don’t distort the real value. 

Easier is Better

Of course, the list above is only a starting point–almost any part of your Marketing Mix and customer experience can be made easier. Most CMO’s and Marketers would agree that easier is better. Yet there’s an awful lot of Marketing that isn’t simple, transparent, or easy. 

Why? My guess is that Marketers, like anyone else, need to think that what they’re doing is challenging and difficult. And the truth of the matter is that it is–great Marketing is hard. And one of the reasons it’s hard is that so few Marketers focus on making it “easy.” 

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Guest Post: What the Best Financial Advisors Can Teach Marketers

January 11, 2010

This is the 4th in a series of periodic guest posts. Libby J. Dubick is President of financial services consulting firm Dubick & Associates. Ms. Dubick has extensive experience in investment product strategy, marketing, and distribution at Goldman Sachs & Co. and Citibank.

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Let’s be honest:  there are probably few Marketers out there who believe financial services has anything positive to teach them these days. There’s no question that financial services marketing has received a good deal of negative press recently. But whether it’s during economic upswings or recessionary times, there’s one aspect of marketing where financial services marketers may be ahead of the curve:  the importance of trust in the selling process.

What Can the Best Financial Advisors Teach Marketers ?

Different Types of Trust

A University of Virginia Darden School of Business study identified two types of consumer trust:

  1. “Competence-based” Trust is the confidence that a company has the knowledge, skills and experience required to provide a service. This is foundational–without it, there’s no chance that a customer will choose a firm. It’s necessary, but not sufficient.
  2. “Benevolence-based” Trust is the belief that a firm will put the client’s interest first. While this might seem self-evident, the recent actions and  behaviors of individuals and firms–e.g. Madoff and pyramid schemes, out-sized bonuses for bankers taking TARP funding, etc.–certainly suggests that this can’t be taken for granted.

Both kinds of trust are required as consumers expect expertise and available knowledge before purchasing a product or service (for more on brand transparency, see  “Why Your Brand Needs to be “Open & Transparent”).

After the market collapse of 2008 and the Madoff scandal, many financial firms and advisors have dedicated the last year to winning back consumer confidence, respect, and trust. And many of these financial advisers did just that–they retained clients and maintained their referral flow, keeping their business healthy and vibrant, despite the most toxic economic environment since the great depression.

What Can All Marketers Learn From The Best Client Advisors ?

  • Listen to Clients  — Smart advisors don’t assume what their clients want or need – they ask them. While this interaction should occur all of the time, it’s particularly important when markets decline. This is basic Marketing 101–staying close to your customer in good times and bad–but always bears reinforcing.
  • Be Responsive — Many advisors made a point of returning all client calls on the same day, and not when it was convenient for them. Research conducted by the Spectrem Group, which surveys high net worth investors, found that responsiveness is the most important service attribute (even more than advisor knowledge or overall client satisfaction). Do your clients find themselves contentedly speaking with a helpful and empathetic employee, or trapped in telephone tree? Reaching out to your customer when times are tough is exactly the time they need it most — and builds trust and confidence.
  • Establishing trust: essential for financial advisors, and marketers.

  • Demonstrate Expertise — When economic times became rocky, financial advisors that sent weekly updates to their clients became their primary source of financial news. Through newsletters, email blasts, and website updates, these advisors were able to shape and color their clients’ knowledge base and perception. As an expert, news about your company or industry should come from you – or you risk allowing others to shape your customers views.
  • Be Transparent — Financial advisors have added pricing and process to their annual reviews to ensure clients understand fees and value added. Too many consumers have experienced a sales promotion that offers very little merchandise, or purchased an item online only to find “handling” charges that inflate the price. Marketers who want their products and firms to be viewed as trustworthy are open and transparent and don’t play those kinds of pricing games.

Financial services firms have a lot of work to do to regain the public’s confidence and trust. Buried within every major financial services firm, however, are financial advisors who have demonstrated to their clients that they can be trusted.

They do this by listening, being responsive, demonstrating expertise, being open and transparent, and asking thoughtful questions. In today’s digitally connected, always on world, where consumers are more empowered than ever, these are actions that all Marketers can benefit from–whether in financial services or any other industry.

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Zapped by Zappos – Learnings from CEO as CMO Tony Hsieh

November 9, 2009

The best CMO is a CEO who believes in Marketing. By this definition, Tony Hsieh, CEO of Zappos.com, must be one of the best CMO’s around. Hsieh, known for his firm’s digital and social networking prowess, had over 870k Twitter followers the last time I checked. I recently talked with Tony after he participated in a “What’s Your Digital?” panel discussion. And what he had to say might surprise you.

TonyHsieh

Tony Hsieh -- The Zappos CEO as CMO

Zapped by Zappos

Before that, however, let me tell you about my own Zappos experience—which is instructive. Seeking a pair of dress shoes for my new job, I went on-line to Zappos, and saw a great pair of shoes on the Mezlan Zappos homepage. I searched for the shoes all over the site — to no avail. Exasperated, I sent Zappos an e-mail, asking: “where are those great looking shoes?” No response. I sent another e-mail, and waited…and waited.

Finally, I received a short e-mail:  “Yes, you’re correct; we don’t carry that particular pair of shoes and will remove the photo from our site.” And they did. In fact, here’s the new picture sans shoes:

Mezlan_Shoes

Mezlan on Zappos - Without the Shoes

This is great customer service? So, I related my story to Tony. He seemed mortified, especially after talking about how much Zappos cares about customer experience. He then followed up to have someone reach out to understand what happened so they could fix it, followed by an offer to send me a free pair of any shoes I wanted. Now, not everyone gets to talk to the CEO about their poor customer experience, but Zappos clearly IS different.

What Makes Zappos Different?

Simply stated, Zappos believes that customer service = marketing. Instead of spending loads of money on traditional (and non-traditional) marketing, they focus intensely on delivering a great customer experience—and recovering from mistakes with grace and humility. Tony believes that “the Zappos brand manifests itself through every employee/customer interaction,” and that brand is a lagging indicator of customer experience. His key points:

  • “The phone is a great marketing tool” – I’m not taking about mobile marketing here. Tony made the point that 5 minutes with a customer on the phone is far better Marketing than any web experience can ever deliver. He loves the phone and bricks and mortar touch points and thinks they are often undervalued by companies.
  • “Culture is our number 1 priority” – Many companies talk a good game about culture, but Zappos actually lives it and uses it as a core part of their business model. Zappos has 10 cultural norms that they instill in employees. They interview for these 10 norms, evaluate employees on them in their annual performance reviews, and let people go who don’t follow them.
  • “Authenticity and transparency are really important” – Tony sees authenticity and transparency (to read more on this topic, see my blog post) as a core part of the Zappos brand. When reporters show up at Zappos, they’re shown the bathroom and lunch-room and then told to roam around and talk to whomever they like. Tony’s daily Tweeting is less about Marketing than it is about him trying to make Zappos more authentic and transparent for followers.
  • “Zappos wants totally engaged employees” – Tony only wants people working at Zappos who are really passionate about the company and delivering great customer service. How much does he believe in this? So much that the company offers every new employee $2k to quit after two weeks on the job – they only want the truly committed.

What About Digital and Social Media?

But isn’t Zappos a social media icon? What about Tony’s almost 1MM Twitter followers? Well, get this: Tony hates the “social media” tag. He says they don’t even bother to measure the ROI of their digital and Twitter efforts.

Further, he’s not a believer in creating marketing “buzz.” Instead, he believes the primary role of every employee is to create “positive customer stories” about their Zappos experience. If they do this–everything else, including buzz, will take care of itself.

Oh, and one more thing. Tony does believe in the importance of “influencers,” but not necessarily the digital kind you might be thinking of. He noted that to this day, when his mom calls, he really listens.

Key Learning’s for Marketers

First, having a CEO who really believes in the brand and customer experience sets the tone for the whole organization. This job shouldn’t and can’t be left to the CMO; it’s the CEO’s job too. The CEO and CMO need to be partners in driving a truly customer-centric, marketing focused organization and business model.

Second, actually delivering a great customer experience, particularly in a service oriented business, comes down to employees delivering each and every time they interact with a customer. Building a culture that attracts the right kind of employee and fosters this kind of performance is just as important as any Marketing program.

Zappos Secret Weapons

These are Zappo’s true secret weapons—their CEO as CMO and their unique culture. So what about my Zappos experience? I like Tony’s description of what employees are supposed to do: “Create positive customer/employee stories.” But what I love most of all is that Tony, as the CEO, does what he says. After all, you just read a story about how Zappos recovered brilliantly from a terrible customer experience. Clearly, Tony knows how to create a good story, too.

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What CMO’s Can Learn From the Obama Campaign — Part 2

June 9, 2009

In an earlier Blog post, I asked the question “Can politics teach Marketers anything?” and answered with some learnings from David Plouffe, the chief architect of President Obama’s election campaign. Plouffe recently spoke at the M50 CMO Summit I attended.  To summarize that post, I said Marketers could learn two important lessons from the Obama campaign:

  1. The importance of staking out a brand position and sticking with it. Consistency counts.
  2. The ability to leverage the brand’s strategic message across all relevent marketing touchpoints in a coordinated and integrated manner.

These are Marketing truths often forgotten in even the best Marketing organizations. But what else can we learn from the Obama campaign?

Brand Obama: A Consistent Message Across Media Channels

Brand Obama: An Authentic and Transparent Brand

Plouffe outlined how transparency and authenticity, both of which are discussed in depth in the excellent book “Radically Transparent: Monitoring and Managing Reputations Online,” were the twin character traits to the Obama campaign. In Marketing terms, these would be Obama’s “Brand Character,” or personality. The two are related and both speak to what is required for a brand — Obama or otherwise — to inspire trust and confidence.

Authenticity

Obama, according to Plouffe, wanted the campaign to be “authentic.” Over time, they learned — sometimes painfully — about authenticity and what it really meant to voters. When Will I Am came forward with the idea for his “We Are The Ones” song, the original idea was for the Obama campaign to produce and promote it. While control can be a good thing, Obama rejected the offer because he felt it wouldn’t be authentic. So Will I Am produced the song and it was a huge YouTube sensation with 3.5 million views–an authentic tribute to Obama.

In another example, Plouffe developed short video clips explaining to supporters various campaign topics–e.g. the Obama strategy in Florida; how they would use the web; etc. After several low production hand-held videos, someone in the campaign naturally decided the videos there was a need for more professional video. This led to new slicker, high production value video–which immediately prompted a barrage of complaints from supporters. Low tech was good–and authentic.

Transparency

Plouffe held a contrarian view when it came to campaign strategy and tactics–to be completely open and transparent with supporters.  He did so with the full knowledge that the McCain campaign would ultimately see the communications and understand the Obama strategy. He felt the benefits outweighed the risks. 

Example:  the Florida strategy. Plouffe developed a video which outlined exactly how they intended to win supporters, how much money they would need, and how it would be spent. Of course, the Republicans learned what the Democrats would do in Florida. But transparency was part of brand Obama and the video helped energize and ultimately win the Florida campaign.

Interestingly, the Obama administration is now extending transparency beyond the campaign with the launch of Data.gov, a website designed to disseminate government data to voters

What Marketers Can Learn

First, understand your consumer.  The Obama campaign understood that American voters were looking for authenticity and transparency in their president. Like good Marketers, they understood their consumer–and had a clearly defined brand character to address their needs.

Second, communicate in an authentic manner.  Authentic means honest, real and not manufactured–adhering to facts and supported by experience. The Obama campaign had a clear message, but beyond this, they communicated in a tone and style that increased the believability of their message.

Third, communicate with transparency.  Transparency means telling people exactly what’s happening and what they would like to know–even when there is some risk in doing so. Obama’s strategy for Florida was very clear to Democratic supporters–and Republicans as well.

So what did Obama gain with authenticity and transparency ? Trust and confidence. When people believe they are being told the full story, they’re treated as adults, and being told the truth, they’re more likely to trust and have confidence–something in very short supply for many brands these days.