Monday, December 30, 2002

Feets Don't Fail Me Now

A sport shoe company few people have ever heard of, K-Swiss, is actually a marketing machine that does it right...all without celebrity endorsements and through some good marketing "foot work", to exploit the pun. It's in this morning's Los Angeles Times, the only newspaper on the Left Coast. Because they don't have the budget for the big name athletes, K-Swiss has resorted to actually reaching out to the customer (mainly teens) by dispatching their marketing team across 12 American cities to see what people think. I know, it's another Duh! but keep in mind that many businesses fail because they don't do that. What is significant about this is that the teams are coming back with valuable data on expectations, impressions, trends, message strategies, etc.

Apparently, these representative markets are reporting the same information, regardless of whether the research was done in Atlanta, Seattle or wherever. As the president of K-Swiss, Steven Nichols, remarks, "Somehow, a kid in Miami, either through osmosis or mental the same answer as a kid from Seattle...This is what almost always blows us away." And that's why you need to do market research to understand your customers and your's about the kernels of information that will challenge your complacent world view about your market and product that are the most valuable. How valuable has this been for K-Swiss? The company shipped out 160% more shoes during the last quarter than last year's; it posted $236 million in revenue in the first nine months of 2002---the same as all of last year---and the stock is up 34.5%. A great success story that proves that marketing is many things and can be most effective when the people who run companies get close to the customer and keep an open mind without letting their brains fall out.

Starbucks Nation

Nothing new about a Starbucks on every street corner anymore or the co-marketing and products developed by said company that reach out to every element of our lives. United Airlines serves Starbuck. Uhm, wonder if there's a correlation between their demise and the coffee? Nah! Just returned from a welcome respite trip with Mrs. to San Francisco and we started by counting all the Starbucks in hotel area we were in and they were everywhere. What was so significant to us as coffee drinkers is that the coffee we had been served at the hotel and elsewhere just didn't match up to our expectations....that's when Starbucks became a lifesaver. Just think, how does a company take a cup of something that costs pennies and turns it into the wealth machine it has become? By creating an experience that is already a cult, along with many wannabees. It's that the product we enjoyed so thoroughly during our rainy sojourn in the Republic of San Francisco, is the same as on my street corner in my blissful part of Southern California. That's how come we are a Starbucks Nation, soon to be a Starbucks Globe. Is that a semi-wet latte with soy milk and a hint of cinnamon emanating from my local coffee shop? And I'm off!

Wednesday, December 18, 2002

Free At Last!

Well, maybe not yet, but at least the Feds are doing something worthwhile about the telemarketers with the don't call legislation they are recommending...all to the dismay of the Direct Marketing Association, which will probably fight it in court. Most marketers I know have mixed emotions about these intrusive phone calls, and even faxes---I don't know if that's included---because being able to pitch something is a major part of what we do. That goes back to sales process. Seth Godin of Permission Marketing fame, calls this interruption marketing because it interrupts whatever you're doing to talk with these bozos. Personally and professionally, I don't have any qualms with this do not call proposal, although I hate the thought of government regulating anything more in my life. As one who works from a home office, I can tell you that in the course of the day I get several phone calls per week that interrupt my day, all trying to pitch everything from giving to the Police Benevolent Society to being picked by a Member of Congress to be part of a "very important citizens committee" that will give him input on "issues of concern" and would I also please contribute to his coffers. No, no, and hell no!

I just paid my taxes and I can honestly say that if the Feds are able to pull this off, that check will have been worth it. You go, guys!

Tuesday, December 17, 2002

It's All About Words

I teach my students that marketing is about developing a communicative relationship with the customers. It's a give and take game, really, one predicated on language. And the telling of stories. People love drama, they love to hear the words as they fall about them, letting their imagination wander the many dimensions and possibilities. As a child in France, we didn't have television so we listened to the radio serials, waiting each week for the continuing saga, using our minds to imagine the scenes and settings. And in my grandmother's cafe, I used to listen to the stories people told as they played cards and drank and smoked into the late evening. That was how history and myth was passed on to the younger generation. People still sat around and had real live conversations.

I find that successful marketing is usually based on a story. Do you remember the Tasters Choice commercials where in 30 seconds mini-plots evolved and teased you to watch for the next commercial so you could find out what happened---although it wasn't hard to guess what. This series a few years ago had great appeal due to the telling of stories. While the instant coffee may leave much to be desired, especially in The Age of Starbucks, the desire of the actors for each other was cannily crafted around their choice of coffee. Tasters Choice, of course.

One of the first things I want to do whenever I am working on project is to talk with the principals---and generally as many people as I can talk to in the organization at all levels---to understand their expectations and goals, as well as to listen to their words, to ferret what they are intending, carefully trying to figure out what their words are revealing about their true meanings and desires. I also find that in my interviews, I find an eloquence usually lurking inside that gives me clear insights into how to proceed. While marketing is also about process, it is most certainly about the words we use to define our world.

Monday, December 16, 2002

How About That!

An article in the only newspaper worth reading in the West, the Los Angeles Times on December 14th reported that the new CEO of the Gap "wants to understand customers better." What's up with that? You mean he finally got it? Gap just hired the advertising agency Leo Burnett USA to evaluate the "emotional attributes" of Gap's brands. More advertising gobblygook, which I am sure will be followed up by focus groups, etc. If the Gap had just listened to its customers in the first place and understood retail trends better---although I'll admit these change like the weather---they wouldn't be in this fix.

Another amazing quote in this story comes from analyst Jennifer Black, with Wells Fargo Securities, who states, "In an increasingly dynamic marketplace, Mr. Pressler acknowledges the need to monitor and carefully listen to its customers." Duh! I should hope so. That's the distinction between the selling concept and the marketing concept. The selling concept focuses on the seller's needs---gotta move that inventory so sell, sell, sell---and the marketing concept, which focuses on the customer's satisfaction and thinks more long term for future and ongoing business.

How About That, Part Deux. Speaking of "emotional attributes" Infiniti had an insert in the newspaper that worked on that level. It's a glossy poster that takes you from being a 6 year old with a push pedal car to toy race cars on tracks to a teenager with his first car to the young man at the races. "You've spent a long time dreaming" the ad lures you on and when you finally open up the poster it's a dramatic picture of the Infiniti G35 Coupe...with the final verdict of "So Have We." Very effective and must admit it did get the new car fever going around manor, quickly doused when the CFO heard about it. While I am not in the demographic profile this was aimed at, it's still an impressive piece of work.

Wednesday, December 11, 2002

Personal Marketing

AT&T:In this Christmas season we get lots of cards, some from people we feel guilty about because the only time we ever connect is during this time. I'm sure we've all gotten cards from people we can't remember or recall meeting, knowing that we've somehow stumbled onto someone's list by accident. Such happened to Mrs. this past week when she received a very nice card from a Mr. Ray Drake, Manager, AT&T Long Distance Services. He just wanted to wish her the best of the season, along with a letter about our close friends and family who live far away and would like to hear from us. And, by the way, we want you back with AT&T so here's a little Christmas bonus check of $75 to switch. Another marketing effort that cut through the clutter and took opportunity when it could. My point is that a tasteful approach is not offensive and marketers will now do most anything to get someone to look at their product. We are all on marketing overload, fending off an average of 3,000 marketing messages per day, so Mr. Drake was successful in reaching us. His thoughtful gift at a time when money is flying out the door instead of coming in is gratefully acknowledged and will be put to good use in the coffers. By the way, we switch back and forth all the time and reap in the vicinity of $300 per year by doing so. Thanks, AT&T. And Merry Christmas to you, Mr. Drake, P.O. Box 537, Roseland, NJ 07068-0537, our card with the family tale from 2002 is in the mail!

United Airlines:

I seem to have a new email pen pal in the likes of Mr. Glenn F. Tilton, Chairman, President and CEO (How many titles can a guy have anyway and still be effective?). Since I am a frequent flyer and member of United's Mileage Plus program, Mr. Tilton has been sending me very personal emails regarding the trials and tribulations at his shop. Well written and addressing my angst about all those miles I've banked for that trip to New Zealand that I will take some day, Mr. Tilton wants to make sure that he has my interest at heart and that United is not in Chapter 11, but in Chapter 1---new beginnings theme---as the ads and his missives are telling us. I appreciate his concern for my needs and commend United for using the best of database marketing by sending out those personal letters. It's effective and an integrated approach....although it doesn't really lessen my anxiety about flying the friendly skies, at least I know what's up in their hangars and that good marketing.

Wednesday, December 04, 2002

Budget Throes & Woes

Since marketing is always about money---spending it in order to make it---marketing budgets are painful episodes since too often the issues surrounding budgets have to do with the perception of value. This is where value is truly in the eye of the beholder or he who holds the checkbook. As a marketer I try to use the dollars judiciously, knowing that even that approach leads to near apoplexy for some of my clients when they see how much it's going to cost to do that campaign they hold so dear to their hearts. I'm told, "We've got to do ads because X down the street is doing them." Wrong. Letting your competition drive your marketing is lunacy, and usually ineffective and expensive. And advertising is only a tool and not necessarily a strategy.

Still, if I can't dissuade them with reason what I then bring to bear is a reality check, especially when I show the cost of media, which often takes up over two thirds of the dollars required. When I explain that a one time shot for that 4 X 10 ad that tweaks the competition in the L.A. Times will cost over $4,000 and may only assuage their egos and not reach the audience we really need, the tune usually changes. I am relating this because I am in the buget throes and woes right now with a client. While the principals---and I---agree that there is a need for a significant marketing campaign as well as customer service improvements, the message I get from the CFO after the principals have left the room is that there is no money.

The dilemma for me is that while I am not an advocate for spending unnecessary dollars, you still have to spend some money for marketing, smart marketing that is. Walking a tight rope is really what a marketer must do and I cannot alienate the CFO so I have to create a value package that satisfies both him and the principals. And that comes from a well reasoned, well researched, well integrated and measurable plan that shows the marketing budget as an investment in the company's welfare. Sometimes, there is simply little money for much and that's when the marketer earns his spurs with creative solutions that are as innovative as they are effective. Finally, there are also some clients that have so damn little money that you wonder if you're even going to get paid your fee. If a marketer finds himself in that position, he should just run for the exit because some clients take up 80% of your time for 20% of your income.

Monday, December 02, 2002

The Best Buy Shuffle & Other Thoughts

Okay, so the Christmas season is upon us and we're all scrambling to the delight of the retailers who count on us to make their year end stock rise. As an avowed marketer, I succumbed to the sales and ended up on Friday morning at Best Buy to get a flat screen monitor at a $150 savings. The place was packed and I was lucky enough to get the last monitor. And that's when the Best Buy Shuffle began with several hundred other kindred spirits carrying, pushing or simply levitating their purchases towards the cash registers by snaking through all the aisles in the store, where even more specials awaited our buying impulses. Cleverly handled by our Best Buy keepers who kept the mob into decent order, my compatriots and I picked up many CDs, gizmos and whiz bangs that were too good to pass up even if they weren't on the list. A bargain is a bargain and being a captive audience gave us time to think through the savings. The crowd I was with for that hour and a half shared stories, talked about their children, held each other's place in line when nature called or other bargains on the other side of the store beckoned. It was a congenial, all American shopping spree, a true marketer's delight.

On the healthcare front, I was struck by an ad in The Wall Street Journal on November 25 by Blue Cross Blue Shield Association...a truly image ad with an appropriate call to action regarding a study report on the drivers of healthcare inflation. Not surprisingly, the ad touted that increased hospital spending is the leading culprit in our surging healthcare inflation. As a long time healthcare marketer, I must agree that duplication of services and hospital consolidations are partially to blame, but it also stands to reason that insurers such as this association are equally as culpable. I've been in the health plan wars where one plan undercuts the other to gain market share only to raise premiums once that game has played out, while starving out the hospitals and doctors on reimbursement. There's enough blame to go around in this national debacle and ads such as these do nothing to endear anyone about the state of our health system. If you want to see the fallout of this, just check out the state of Los Angeles' health system on the verge of closing down for lack of funds while many of those who fall through the cracks in the system have nowhere else to go. That care usually falls on the backs of the hospitals.