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Part I

“Customer Value = Perceived Benefits – Perceived Costs”

It’s a simple equation learned by marketers early in business school. But which side of the equation can best be influenced to motivate a sale? Which has more enduring effect on the customer experience?

12082-10_blog-graphic_equation8Adding benefits over discounting is the better play. Here’s why:

1. Earns Stronger Goodwill

A customer feels better receiving more of something than feeling like they got something for less. While everyone likes a deal and money saved, adding things like a free attachment with a sweeper purchase is a “purchase trophy” of tangible value

2. Lengthens the Value Tail

Not only do we put a higher value on products or services that we pay for, but that value endures. Having a tangible reminder of that transaction lengthens the “value tail” and leaves a more enduring impression of the brand.

3. Protects Brand Integrity

The Chevy Cavalier suffered a death-by-discount demise. The intention was to make it easy for the entry level, first-time buyer to be introduced to the Chevy family – an annuity account of sorts – but heavy and consistent discounting on an entry price devalued the product so much, it had to be re-designed and renamed as the Cobalt.

A durable goods manufacturer I’ve worked with has performed research on attributes most important when buying a new product. Quality, durability and reliability are consistently above price in the hierarchy. Increasing the perceived value of the product’s performance is a much better bet than making the price more attractive.

Part 2

6 Ways to Add Value

Earlier we discussed the reasons why creating the strongest customer value results from adding benefits versus reducing price (see blog entry…). Here are 6 ideas:

12082-10_value-graphic

1. Package Price the Offering

Create the offer through a packaged price offering which provides an overall value than if the same products within the package are sold separately. For example, offer a lawn tractor and an attachment for a price less than each item ordered separately.

2. Include an Element of Surprise

Everyone loves a positive surprise. I remember once buying an SUV and 6 weeks later receiving a wonderful, high-quality emergency kit as a thank you. I kept that kit in my car long after I traded that vehicle in for another. You can also create surprise at the time of purchase with on-the-spot add-on incentives or gifts.

3. Offer Something Different

Think of an incentive that clearly adds value, but is also unique. Leverage relationships with sports sponsorships to provide official merchandise or offer emerging technology products – like a phone app – as an added-value incentive with purchase.

4. Place the Value on the Back End

In lieu of a price discount, offering a free extended warranty or a “1st time free maintenance” offering not only adds value to the purchase, but offers assurance that the customer is making a safe choice – well after the purchase date. Research on the automotive industry suggests that customers who purchase and then make their first oil change appointment with that dealer are 95% more likely to return for a second service visit. So giving a free 1st oil change can have a far greater lifetime value than the cost of that initial incentive.

5. Choose an Offer with a Long Value Tail

Add value with a tangible incentive that endures well beyond the purchase, thus reminding the customer of the value they received. For example, I recently bought a wireless printer and received a large pack of photo paper as part of the purchase. I’m continually reminded of the value every time I print a new picture.

6. Clearly Communicate the Value

You don’t necessarily have to add anything to the equation so long as you have something to communicate which is already meaningfully different and valued by the intended buyer. It could be a customer rating, award, product feature or a better, proven record of performance.

Google Express, the same-day shopping service, just rolled out in my area (Washington, D.C.), so I decided to give it a trial run.

The user experience is simple and clean. You’ll need a Google Wallet account which requires a quick registration. Delivery is free on orders over fifteen bucks if you commit to a $10 monthly or $95 yearly subscription fee.

I placed an order for toothpaste and mouthwash at 11am and WHAMMY: it arrived on my doorstep by 4:15, via Google Express-branded delivery car and pleasant delivery dude.

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Retailers vary by region, and inventory can be limited for speciality items, but they’ve got most of the bases covered in DC:  grocery, drug, babies, books, sports, office supplies, and one oddball: guitars.

The takeaway for CPG brands? Services like Google Express, Amazon Prime, Peapod and others are changing the way people shop in a significant way. And they’re making it easier to justify your investment in eCommerce (since Google Express is sourcing from the same retailers you already partner with).

Same-day service also challenges the conventional shopper marketer’s wisdom that eCommerce is irrelevant for so-called “mission trips” (for products that are needed right away). And once these services start to layer on alerts for profile-based offers and one-click ordering, the barriers will really start to fall away for the average consumer.

In the past, I was always reluctant to buy low-interest  household items like toothpaste online. With same-day service, it’s one less stop to make on my way home from work, and probably saves me 15 minutes. Which at the end of a workday is all that matters.

Innovation Lab

Brunner’s innovation lab, BHiveLab is recognized as one of the first true agency innovation labs.  At our 2013 industry creative technology conference sponsored by the 4A’s, we were asked to chair the innovation lab session which took a look at various successful innovation lab models.  During the 1 hour session there was one question that was asked repeatedly of the panel – How do I get started?

This Slideshare deck contains my personal top 10 steps to starting a successful agency innovation lab.

Smarter, faster brands today are looking at the mix through a new lens:  the customer (or user) experience. Because the ability to continuously engage consumers to build brands, drive sales and increase customer loyalty requires a new mindset. And better content to satisfy that experience.

The velocity at which consumers move through the purchase path is faster today than it used to be.  That’s why mapping the customer’s journey—across all media touch points (paid, owned and earned)—is so critical. Defining a clear role for each communication at each stage of the journey will help guide companies (and their agencies) on tactics and connections that move consumers closer to desired outcomes.

Brands today are increasingly content driven. The brand itself is content. Big brand ideas still connect with consumers at an emotional level, but at the heart of brand activation today is content. Content that meets their emotional and rational needs. Content that creates utility and meaning. It may be created, curated or sponsored by the brand, or perhaps generated by consumer.

Hello, brand marketing? Meet brand publishing.

Great content marketing requires the proper attitude, vision and strategy. Your compass is still your customer but their attention is the new currency. There is no completion date for content, especially in the age of the connected consumer. Above is a tool to help you get organized.

fox-in-hen-house1I recently read an article in Ad Age* about the need for agencies to defend their turf against ad-tech companies who are moving in on clients. As programmatic buying and the real-time bidding space have grown during the past several years, agencies have been adding this capability to their services in different ways – by either building their own solutions, acquiring technologies to enable execution, or creating licensing agreements with third-party suppliers.

The new trend is toward ad-tech companies going directly to clients with a sales pitch that offers them cheaper alternatives so they can cut out the so-called “middle man.” The result is a sense of heightened competition. But, I have to question the practicality of it all.

This might be fine for companies, such as P&G or Kellogg’s, which can fund the in-house resources necessary to work directly with ad-tech companies. But, most companies don’t have the kind of marketing resources needed to set up such a specialized in-house operation. And, should mid-sized to small companies really put their trust in the ad-tech companies themselves to monitor, optimize, and price inventory? Isn’t that kind of like having the fox guard the henhouse? (more…)

With fragmentation comes complexity. And with complexity comes an appreciable amount of misguided perspective, including sweeping statements about tactics and technologies that derail smart approaches in digital marketing.

The decision to use or not use responsive design is one of the more recent debates where the facts are getting swept under the rug. So we wanted to bring some clarity to how brands should approach this important choice.

responsive_web_design

Quick refresh:

Responsive Web Design (RWD) is a web design approach aimed at crafting sites to provide an optimal viewing experience across a wide range of devices (from smartphones to tablets to desktops). A site with RWD adapts the layout to the viewing environment by using fluid, proportion-based grids, flexible images, and CSS3.

Thanks Wikipedia! In short, your site’s design—and it’s content—responds to the user’s device.

SEO & Responsive Design: Perception

Here’s a sampling of what we’ve heard in clients’ hallways and some industry conferences:

  • “Google prioritizes sites that have responsive design.”
  • “Your site will not be found in Google unless it’s responsive.”

SEO & Responsive Design:  Reality

This is not true. (more…)

129252537 Media planning and buying professionals have been talking about Addressable TV for decades. Yes, decades. The first mention of it was back in 1980, when the dream of delivering a specific TV spot to a specific TV set based on the profile data contained in that set’s cable box started to look like it could become a reality.

Addressable TV is, indeed, here. It delivers efficiency, performance tracking and actionable insights. And it provides for greater accountability overall for a medium that historically has been a one-way communication vehicle.  But I have to ask the question: “What happened to television’s main role in the media mix?” With all of this applied data targeting, what Addressable TV may not deliver is the thing we always looked to television to deliver: mass. Take away “mass,” and I have to wonder what television offers that other digital media options don’t.

With about 66 million households, it is true that Addressable TV has come a long way from its earlier days of 8,000 Households in Huntsville, Alabama.  So now the technology is here, and we have some scale. But the fact remains, Addressable TV is a “precision-play” in a world with a lot of other precision-play options. In the new digital and mobile media landscape, what platform doesn’t enable data-driven hyper-targeting and the ability to track and measure results?

What’s all the fuss is about? (more…)

167172306When it comes to marketing in today’s digital and social world, I believe coming up with ideas is the easy part. There, I said it, and I have no doubt I’ll get pummeled by many of my colleagues for making that statement.

I doubt anyone would disagree that in the advertising industry, we love to celebrate creative thinking. But we must remember that creative thinking goes nowhere without people who can bring ideas to life. And that’s getting harder every day as technology gets a stronger foothold in the marketing world.

A 2013 Harvard Business Review article titled “Closing the Chasm between Strategy and Execution” got me thinking about how the “chasm” applies to advertising. And while I don’t say this lightly, the truth is, with the digital ecosystem being so complex and continuously evolving, finding talent with the skills to deliver flawless execution is much harder to come by these days than a creative mind to dream up the idea.

Mapping out the customer journey is a painstaking and methodical process, and I’m not talking about the old “Attract-Engage-Convert” model. I’m talking about the complex and convoluted path the consumer takes today, and the detailed planning we have to do for every step of it. For which device should we optimize? Where does the data live? How do we analyze the data? Are we following the rules of every social platform and exploring how to use each to our advantage? What technology do we use and why? What are the potential effects of those decisions? The list goes on and continues to grow every day, and people who can not only navigate these waters, but can also lead within them are invaluable.

But I have to say, they are hard to find these days.

So what is a marketing executive to do? Here is what I think: (more…)

I have a confession to make. I don’t usually watch the Super Bowl. I don’t even care about football. (This is about the time I usually get weird looks from people.) But this year, the powers-that-be at Brunner requested that my colleague, Maria Bowers, and I watch the “big game.” As you can imagine (considering we work for an ad agency), they didn’t want us to watch for the hard-hitting, yard-measuring, rules-lawyering action, but rather for the advertisements. And, with Maria sitting in the creative department and me being on the technology team, they specifically picked the two of us knowing that we would have very different perspectives on what we saw. So, while the rest of you were busy getting beer and competing over who could eat the spiciest chicken wing, we were hard at work watching television and searching for stuff on the Internet. (Did I mention that I love my job?) Here are our observations about a few of the many advertisers who laid down $4 million in a bid to win over consumers.

Heinz

show-us-your-heinzKyle: For their first Super Bowl (I mean “Big Game” – wouldn’t want any legal reprisals for a simple blog post) ad in 16 years, Heinz tries their hand at successfully executing the buzz-word that I like the least: “viral marketing.” They opened up showusyourheinz.com, which encourages fans of the ketchup masters to take photos of themselves with the product and submit them for the opportunity to win a prize. This is pretty standard fare for an online contest, but I found the connection to the television commercial to be tenuous. (more…)

Twitter-end-of-world

What do Chicken Little and Twitter have in common? They both have a knack for prematurely stating apocalyptic doom.

I say this with much love for Twitter, as I’m an avid user who devours the 140-character nuggets on my feed. And I’m still awed by the role Twitter played in the Egyptian revolution of 2011.

So I guess what I’m irked with is not Twitter the medium; but rather, the over-reaction to how much negative impact will befall someone whose misstep lights up Twitter. Ugh, hearing “the Twitterverse is gonna explode” is nails on a chalkboard to me.

I was reminded of this by Bob Costas’ comments this week, calling Olympic snowboarding events “jackass stuff.” Well, that didn’t sit well with the rad, winter-sports crowd. Naturally, within an hour of his declaration, Bob Costas was trending on Twitter. And not in a good way. Irate fans of snowboarding pelted him with icy disses. (more…)