Category Archives: Brand Integrity

Why the Role of Trusted Advisor Has Become So Important

Role of Trusted Advisor in Business Communications is CriticalI am a firm believer that deep down inside, people want to do the right thing. Perhaps it is my Economics training – a key foundation for this field of study is that consumers will typically make a decision that improves their well-being. Of course, if that decision is good for you, but not good for society, then the theories of Economics don’t always explain how decisions are made, or necessarily lead to decisions being made for the greatest common good. In these cases we need a trusted advisor.

Quite often it can be difficult to say the “right” thing with family or friends. Most of us want to see our family and friends achieve success, meet their goals, and feel good about what they are contributing to society. The reality, however, doesn’t always work out as smoothly. The truth can be hurtful or damaging, or at least appear to be at the time.

Adding further complexity to our decision-making capacity, everyone is more busy today than ever before. More activities must be tended to, more distractions exist, and every day we are being bombarded with thousands of product suggestions, outfit options or other shopping needs we are told we simply must have from the advertising and social community.

Given the world of accelerated confusion and complexity, it is no wonder that people are struggling with how to make good decisions, and do so quickly. No longer is it possible to do the level of research and investigation – including personal contact and discussion – before making every decision. We are all looking for shortcuts to get the task at hand done, so we can get on to the next one.

The Need for a Trusted Advisor in Marketing Communications

The aforementioned environment has created an enormous service economy to help us make better decisions, and to do so with greater speed, less effort and with accountability. If you shop at Nordstrom, you  have access to a personal shopper who can accompany you throughout the store, suggesting what clothes look good on you, and would fit well with your style or other purchases.

The same process exists online. I won’t consider an online purchase now unless I can read reviews, such as those on Yelp or other sites. The same can be said for our personal brands. We all track how many followers or friends we have in our social circles, as well as how many mentions we get on our anniversaries or birthdays. The higher the count, the more we feel validated and take more seriously what is said. We want to be validated, we want to know we are doing the right thing, and we want help in making all the decisions now part of our everyday lives.

As a marketer, are you taking advantage of this social, cultural transformation? Have you adapted your marketing campaigns, messaging and public relations strategies to play the role of trusted advisor, or subject matter expert? Are you helping to ease the decision process being made by your customers? Are you helping to overcome the complexity or lack of time / resources / effort your customers might have for your product? If not, what can be done to address this challenge?

The Role of Awareness in Marketing Strategy

The organizations that understand this social transformation have invested considerable time and effort to position themselves as the thought leader that understands their customer’s challenges – and the company that has the best solutions to address it.

This strategy can be easier said than done. The world is not black and white. Considerable areas of ambiguity exist where decisions must be made. Here is where hiring the right team to execute upon your vision is critical. One bad decision can explode into a real Public Relations nightmare. Just look at what happened with United Airlines, and the decision that was made to limit the amount of vouchers offered on overbooked flights. We all know of Dr. David Dao’s situation, and his recent retirement based on receiving a nice big check from United, after he was forcibly removed from his flight. Now we know that the price of being bumped off your flight just went up – it could now be as high as $10,000 on a future United flight.

One area that can be particularly challenging is when a friend asks you for a recommendation or to help with making a decision. You may not be in agreement with their choice. They might have already made up their mind, and are just looking for you to support their decision. This may be the right move with a friend or spouse. But, in the world of business, this type of situation becomes potentially quite risky. Those who have worked at a startup know that it is better to raise an issue early and be upfront with a customer or prospect if what they are asking for doesn’t yet exist. The risk of staying quiet today could come back tomorrow and cost much more, potentially killing the company (in some scenarios). The upside of being honest: earned trust as an advisor.

Properly executed, a marketing awareness strategy that conveys how a company understands its market, can make problems go away and can help customers to simplify their lives goes a long way. This type of strategy can gain a life of its own, becoming an integral part of brand equity – a very valuable asset that can have a lot of staying power, through good times and bad.

 

Gordon Benzie is a marketing and sales communications professional that specializes in creating and executing marketing communications strategies. Gordon can be found on Google+

Leave a Comment

Filed under Brand Integrity, Marketing Communications, Public Relations

Does Brand Value Live Beyond the Grave?

enduring-value-brands-Lehman-BrothersI was most amused when reading about a new Scotch whisky that now carries the Lehman Brothers name. The product is called “Ashes of Disaster,” so is clearly meant to evoke memories of the failed financial services company. As a reminder, some consider the failing of Lehman Brothers the catalyst that triggered the 2008 global financial meltdown.

According James Green, a 34-year-old London entrepreneur that is launching the whisky, “It has a contrite, bereft peatiness,” as quoted from the Wall Street Journal article. Mr. Green plans to offer his spirits online and has gotten orders from bars in London and New York.

Who Owns a Brand Name Once a Company is Gone?

My curiosity was focused on a few aspects of this story. To start, there is the legal ownership question of the name. Barclays PLC bought parts of the firm in bankruptcy – and as you might have guessed, in 2014 tried to block Mr. Green’s using the name. According to the article, Barclays PLC said in the U.S. trademark filings that it “has a bona fide intention to use” the name for financial services. But, that wasn’t enough to stop Mr. Green’s endeavor.

I have a very basic understanding of trademarks. From what I know, even if Barclays PLC did open a new investment bank called “Lehman Brothers,” it still would not necessary preclude other businesses from using the name if the likelihood of confusion was minimal. In other words, if you ask for a Lehman Brothers whisky, most would not be confused to think you wanted to open up an IRA account at an investment bank instead.

Mr. Green has elected to use a name that invokes the reminder and feelings that we all felt (and experienced) at the time this financial firm failed. This is an important part of his awareness and branding strategy. In fact, unintentionally, I too am helping with his plight by writing this blog post (as are other journalists writing about this story).

I am not a lawyer, nor have I read the trademark filings, nor do I have visibility into exactly what Barclays PLC purchased. It could be the case that the assets they purchased did NOT include the brand’s name. If this were the case, then hats off to Mr. Green for having the insights and “chutzpa” to proceed forward.

Not the First Time

In credit to Barclays PLC, this is not the first time a company purchase has failed to include the appropriate trademarked or product names. Back in 1998, Volkswagen acquired Bentley Motors Limited, which at the time included both the Bentley and Rolls Royce motor car divisions (source).

What wasn’t recognized at the time, however, was that the name “Rolls Royce” was owned by the aircraft division, something that was not part of the deal. As you can imagine, this created an enormous problem, headache and embarrassment for VW. Fortunately, significant supply chain partners and future business opportunities were presented to help smooth the way. Their problem was ultimately resolved at a significant cost and with great complexity. Here is a detailed article for those who would like to read the whole story.

The Enormous Value of a Brand Name

What I find most interesting about the Lehman Brothers whiskey story is the fact that the two businesses are completely different – yet Mr. Green considers this name to be an important part of his go-to-market strategy. If this indeed the case (time will tell if he has success), then I would propose we need to completely re-think trademark law on company brand names. The value clearly extends for a wider scope of influence and, in this case, beyond the grave of when a high profile company went bankrupt.

In a similar note, the old adage of “any publicity is good publicity” might need to be updated or expanded upon. Perhaps any brand recognition is good too? Despite the fact that many, many people lost their jobs, their life savings and more when the original Lehman Brothers was dissolved, an entrepreneur looks to start a new business with the exact same name. If such a name tied to a terrible event can somehow be deemed worthy of launching a new product line, then I have a hard time figuring out if there can be any bad impact from a brand name, once it has become recognized on a global scale.

Leave a Comment

Filed under Brand Integrity, Branding, Marketing Strategy

Social Media’s Influential Role

role_of_influencer_todayI have already written about the important role “influencers” play in the purchase process – from the choice of what ice cream flavor to eat, to the complex purchase cycle of an enterprise software solution (link to prior post). This article will take a closer look at how social media has taken on an important role in helping influencers connect with buyers along their purchase journey.

It wasn’t long ago when Facebook was an application just used by college students looking to make plans for the weekend, or to catch up with others on recent news or activities. The amazing growth of members quickly validated how popular and how much value its members place with this social community.

Then, something interesting happened. Companies began creating pages, and the race to add “Friends” began.

I remember considerable apprehension and discussions that occurred in marketing departments about how much time, effort and resources should be applied to this social network, among others. Soon, success stories began to emerge from those businesses selling to consumers (B2C). Then it became clear that these online communities were actually impacting sales and the brand’s perception in the marketplace. Prospective customers were going to social media sites to share product stories, endorse or share an exceptional experience or rant about poor customer service.

Recommendations and referrals became important and seen as endorsements or validations to try new products or see a new movie, as just two examples. The role of influencer has gone digital.

Early adopters began to see patterns. Offer a venue for your customers to speak about their experiences with your product, and other future customers would take note. Add advance notification of a future sale to your followers, and response rates improved. Of course, this connection is most compelling if your own friends are the ones doing the recommendation … but this level of familiarity with referrals is not necessary.

Influencer Segmentation in the Digital World

Today, with the passing of time and the knowledge that has been gained, it is apparent that not all social media sites are the same. For example, Facebook might be a great venue for consumer goods products, those that are not too expensive, and could easily be substituted based on incremental differences or brand perceptions. Yelp, on the other hand, seems to have found a niche in the sharing of service stories, such as eating out at a restaurant or using a hair salon. Travel Advisor, on the other hand, has now become the place to research vacation stays, tourist attractions or other such activities you might do when travelling out of town.

Other social media communities, such as LinkedIn, have proven to be quite effective for presenting thought leadership discussions. This type of discussion indirectly helps shape the perception of your brand. Influencers will take note, and either help or hurt your ability to promote future business opportunities.

Each of these venues has now taken on a critical role – letting influencers expand their reach to be virtually global. This is an enormous responsibility, and one that must not be taken lightly. I now feel almost an obligation now when I take a trip, to be sure to provide my feedback on what worked well, and perhaps what I would suggest to improve, so others can gain from my experience. If we all took this approach, I suspect global service levels would all go up.

Nowhere to Hide in the Digital World

vw_diesel_scandalOf course, we don’t live in such a perfect world. Anytime there is an opportunity for companies to take a shortcut to save time or a few dollars, some will take this less than ethical path. This was recently the case with the VW Diesel Scandal, where a faction within VW thought they could cheat their way to passing U.S. emissions tests with engine-management software that altered emissions during the test cycle.

The proverbial “ball” is now in the court of the digital (and other) influencers. How will this end? How much brand erosion will occur? How much will people forget over time?

As a point of reference, it was just a couple of decades ago when the Audi 5000 had sudden acceleration problems – at least that is what the story was on CBS’s 60 Minutes back in 1986. Interestingly, three years later, the National Highway Traffic Safety Administration (NHTSA) issued their report on Audi’s sudden unintended acceleration problem. NHTA’s findings fully exonerated Audi. Regardless, Audi sales collapsed from 74k units in 1984 to 12k by 1991. Anyone who experienced this crisis first hand knows that their car became virtually worthless over night – no one wanted to buy a car that could allegedly accelerate suddenly, and potentially run over someone! It took nearly 10 years before Audi was able to make significant inroads back in the US market. The company has always claimed their innocence.

That incident occurred in the 1990s, when digital influencers didn’t really exist, with a company that claimed innocence. Today’s VW incident is totally different, in a very different time. Will VWs fate be more severe? Can they recover? Or, have we all become almost “numb” the fact that some companies will take advantage of its customers if given the chance?

One thing is for certain. If we as digital influencers decide “enough is enough,” we can certainly get our message out there and heard by all – and cause havoc to the brand that cheats or deceives us. And that is a force to be reckoned with. Markets and senior management teams take note – we are all brand stewards and need to take very seriously the role digital influencers play, as part of the obligation in taking ownership in the brands we work for.

 

Gordon Benzie is a marketing communications professional and business plan adviser that specializes in creating and executing marketing communications strategies. Gordon can be found on Google+

Leave a Comment

Filed under Brand Integrity, Marketing Communications, Social Media

Marketing is More than Advertising

I find it interesting when I speak with new acquaintances and they ask me what I do. I’ll typically respond with “I’m a marketer” or “I’m part of a marketing team.” Nine times out of ten, the response I’ll get back is “Oh, you do advertising.” I used to be surprised with this response, given that advertising is really just a small part of the marketing discipline. Now, I have come to expect it.

Of course, advertising is a part of the marketing mix. It comes in many forms, as shown in this recent media share chart.

advertising_spend_by_catetory_2013

Average allocation of advertising budget for marketers in 2013. Source: BIA Kelsey.

Each of these categories represent are part of the advertising spend, with each component offering unique advantages and opportunities, depending upon what you are selling and where your audience resides.

But, the role of a marketer is far more than planning a media spend and allocating budget to various communications channels. Marketing is really about understanding customers. Who are they? Where to they shop? What leads to a purchase decision? And, with this knowledge, what can be done to influence and accelerate the process? These are the questions a marketer must understand. With this knowledge, advertising spends can then be established and executed, with hopefully an understanding of what results will emerge.

Working in high tech for the past couple of decades, my advertising spend is highly focused trying to reach a specific audience. I have never worked in a role of advertising to the masses. I do marketing campaigns tied to some sort of “asset” that yields inquires for helping prospects to solve business problems. As you likely can tell by now, I work in what marketers call a “b2b” or business-to-business environment. Traditional advertising spent for this type of marketing is typically more brand or image based, so done only by the largest companies interested in building awareness of their name or presence within a particular market.

The Age of Experience

Today, marketing might be better described as “managing to create and sustain the best customer experience,” which is rewarded by new and existing customers purchasing your goods or services. There are many ways the purchase experience is impacted – from what other customers are saying, to what is published on news sites, to what is involved in the purchase process. (See “Is Customer Satisfaction” article link)

The role of a marketer is to ensure that each of these “parts” of the experience lifecycle all come together to tell a consistent story with a logical conclusion: purchase this product or service, and you will be better off, will solve your problem, or will feel good about yourself for doing so. If any part of the prospective customer experience lifecycle fails to consistently deliver this story, you have a problem. And, this problem isn’t something that just the marketing department needs to worry about … it impacts your entire business.

Let me give you an example. I recently had an experience where I was undergoing a purchase of a product that required some level of knowledge of what options to consider as well as what choices would be appropriate. The owner of this business didn’t think it necessary to train their new sales staff. As a result, I was stuck with someone who had no business being in a sales role – he didn’t know anything about the products, the competition, or how to even proceed forward with the purchase process. This lack of training led to a terrible customer experience, one that scarred the entire process (and one that will lead me to never do business with this company every again.)

Marketing Plan as part of a Business Plan

When preparing a business plan or speaking with a business plan writer, it is important to understand what role marketing will play as part of your plan. Marketing professionals are tasked with a critical role – helping the sales process be effective. This is way more than just running ads in a local newspaper, magazine or a billboard.

Today’s marketers have much more responsibility to look at the entire purchase process – from how a product or service is introduced to a prospective user, to what the purchase process is like. Without a clear focus on the entire process, a company’s financial future is limited, to say the least.

Those companies that are too small to justify hiring a marketing person or staff must rely upon themselves to review their own customer purchase experience, and to then address any shortcomings that might be identified. Unfortunately, this can often be a difficult exercise when there are likely other pressing needs involved with running the business. Ironically, it is in these situations where the greatest price is paid and the greatest opportunity for improvement is available.

Perhaps the first step to raising awareness of this opportunity is to get the stereotype of “Marketing is advertising” out of our heads.

 

Gordon Benzie is a marketing communications professional and business plan adviser that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Leave a Comment

Filed under Brand Integrity, Business Plan, Customer Satisfaction, Marketing Strategy

Is there a Link between Customer Satisfaction and Loyalty?

customer_loyaltyFew would argue the importance of customer satisfaction. Every business owner strives for happy customers. In practice, however, what does it mean to achieve customer satisfaction? What makes a happy customer? Are they more profitable? More loyal?

Fortunately, considerable research has been performed on this subject, which will be quite helpful to address these questions. The first challenge is to understand what is actually going on versus what business owners think is going on. According to Lee Resources, 80% of companies say they deliver “superior” customer service, but only 8% of people think these same companies actually deliver this type of service. That is quite a perception gap. A big part of the reason why such a gap exists is that most unhappy customers don’t tell you – only about 4% – according to “Understanding Customers” by Ruby Newell-Legner.

Conclusion: for every customer complaint you receive, realize there might be another 25 you’ll never hear.

Why Care About Happy Customers?

Beyond the ethical and philosophical perspectives on why it is important to spread good will to others – happy customers are simply more valuable, so can add more profit to your business. Selling to an existing, happy customer is far easier than selling to a brand new one. The probability of a successful sale to a new prospect ranges from 5-20% … that success rate nearly quadruples to 60-70% if a relationship already exists (source: Marketing Metrics). Not only does the probability of closing a sale increase dramatically with existing customers, but the cost to sell to new customers is significantly higher – about 6-7 times greater. Lastly, about 91% of unhappy customers will not willingly do business with you again, which ultimately will shrink the pool of prospects you can sell to (source: Lee Resources).

From a public relations or brand awareness perspective, happy customers tell better stories to their friends, co-workers, and others. Anyone who has tried to get an unhappy customer approve a case study knows what I am talking about here … it just doesn’t happen.

Author Pete Blackshaw suggests that happy customers tell their stories to three friends and that angry customers tell 3,000 – at least in today’s world of social media connectivity. As it takes 12 positive experiences to make up for one unresolved negative experience (source: “Understanding Customers” by Ruby Newell-Legner), one negative experience can ruin a good relationship. The only one who will be happy when you deliver poor customer satisfaction is your competition. About 3 in 5 Americans (59%) would try a new brand or company for a better service experience (source: American Express Survey, 2011).

So What Makes a Happy Customer?

It turns out, a lot of happiness can be gained (or lost) each time an interaction occurs between your company and its customers. According to Matthew Dixon and Brent Adamson in their book “The Challenger Sale” (see page 47), they explain that customer satisfaction (i.e. happiness) is not the primary driver of customer loyalty:

  • 53% of customer loyalty is related to the purchase experience
  • 19% of customer loyalty is attributed to brand and impact
  • 19% of customer loyalty is based on product and service delivery

In other words, customer loyalty comprises many factors, some of which is tied to satisfaction with your product or service, some is tied to your brand – but most is tied to the purchase experience. Based on these figures, it appears that a loyal customer may or may not be happy; they may simply be content enough to remain a customer, but not necessarily “happy” enough to purchase additional products or services. Alternatively, a happy customer is likely a loyal one, so will be more likely to purchase future items, and, will stick with you during the process. The key is the experience they feel each time an interaction occurs – be it good or bad. It is all about how you conduct yourself during each communication.

Based on these findings, the surprise might be the importance of the purchase experience. How easy do you make it to do business with? What is the initial experience for new prospects when they either come into your store, visit your website, or come in contact with one of your partners? The answer to these questions will be an important factor on what customer loyalty you will experience in the future – and that experience will have significant impact on your bottom line.

 

Gordon Benzie is a marketing communications professional and business plan adviser that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Leave a Comment

Filed under Brand Integrity, Customer Satisfaction, Public Relations

Public Relations on a Shoestring Budget

public_relations_on_shoe_string_budgetBy Gordon Benzie

 

Having just discussed the importance of measuring the incremental marginal value and marginal cost of public relations as a way to determine an optimal level of investment, sometimes that option simply doesn’t exist. If you only have a limited budget, then you must simply learn to make do with what you’ve got.

For the purpose of this post, let’s assume you have at least some funds that can be allocated to PR. For your initial public relations campaign, you need to start small. Regardless of your budget, spending a high proportion of available cash flow on an untested, unknown marketing activity is needlessly risky, so don’t do it! Instead, set a few targeted objectives and allocate a modest budget to accomplish.

Most importantly, you must be able to measure these actions with metrics that matter. Then give yourself a minimum of 3-4 months to lay the foundation for your Public Relations campaign to allow for a bit of a “runway” to experiment with a couple of activities. Often a campaign will “grow legs” and set in motion other, related actions that bring rewards and opportunities you never even considered.

First Steps

Once you have mentally committed to this “experiment,” the first step is to identify an objective or goal that can be measured and is a reasonable expectation. You don’t need to talk to a marketing consultant to know that if you are currently ranked #50 amongst your competitors, issuing a press release won’t get you to #1 over night!

To help illustrate, let’s say you own a shoe store, located in a mall. Your customers primarily consist of those who are either already at the mall and see something interesting in your window display, or are repeat buyers. Given your knowledge of the business, you know what a “normal” traffic baseline is, so for this example, our goal is to increase foot traffic by 20 percent. Note I am not directly targeting an increase of revenue, but instead that increased traffic will lead to more sales. My hypothesis is simply that a rising tide will raise all boats, leading to more sales. If increased traffic does not improve sales, then a different problem might exist.

The Campaign

Now we have a goal, the next step is to think about is what event or activity can be established and communicated to achieve more traffic at the store. Perhaps you are friends with a local celebrity in the area, in which case you could advertise they will be in your store next Saturday to sign autographs. With this “call to action,” you can now invest the time (and resources) to draft a press release announcing this activity, which then would need to be published in time for your prospects to read about it and make time in their schedule to visit. You could then reach out to your local paper to make a short announcement, even inviting someone from the paper to attend (if they are available). A few phone calls and some time spent writing the announcement sums up your investment for this trial activity.

Another example might be to sponsor a local school event by providing running shoes for some (or all) participants. This could be a way to raise awareness to the other athletes in the area your commitment to being part of the local activities, helping to make your store be known as one that is investing in the community. In “marketing speak” this is referred to as brand awareness. With this scenario, the investment cost all depends on what you want to give away.

In the end, the activity or campaign will then need to be measured against your objective to see how it fared. Missing your objective can teach you just as much as over-attaining it. Dissecting this activity can reveal enormous intelligence on how your customers perceive you, as well as insights into their buying behavior. From this knowledge, you can then adjust your approach, message or outreach to hopefully continuously improve your results and return on investment.

And that, after all, is the key to unlocking the future upside in any business.

 

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

1 Comment

Filed under Brand Integrity, Marketing Communications, Public Relations

What is the Right Amount to Spend on Public Relations?

public_relations_return_on_investmentBy Gordon Benzie

 

Once you have made the investment to do public relations, the next step is to determine the right level of investment. While some consider a bus the best way to commute, others might be completely justified to insist on a Lamborghini. Your level of spending must match your business profile, budget and message objective. If you are publicizing a high end brand, a corresponding higher level of PR investment might be warranted. For all other campaigns, return on investment should be carefully evaluated to determine what is right for you.

One approach is to apply the concept of “zero-based” budgeting. Start with nothing, and then only justify incremental programs, starting from a zero baseline. If your ROI is positive, then spend more. As long as your returns continue to be positive, a reasonable case can be made to continue to expand. Note that some returns may be “soft” and yet completely justified. Borrowing from my economics background, at some point, your marginal returns will turn negative. At that point, stop spending more dollars and shift focus to continuous improvement at that spending level.

It is easy to quantify what you are spending on Public Relations. It is the benefits that are more intangible. As a way to help with this process, below is an example of a return on investment of public relations campaigns can be reasonably measured.

Measuring Better Public Awareness

Increased awareness is a benefit that makes sense on paper, but can be difficult to measure. To start, try doing a Google search on your company product name, company name or whatever term you are seeking to measure increased awareness on. In your search query, make it specific to your company market, target audience, geographical location (if applicable), etc. How often were you mentioned? How high up on Internet searches did your terms rank? This is a quick way to gauge a baseline exposure level.

Of course, search engine optimization impacts ranking levels. More news will too. More public relations activity generates additional listings to drive improved web traffic. If your listings doubled, web traffic will likely increase, resulting in greater value with increased levels of prospect engagement.

Another way to measure is with your sales team. As they go out on customer prospect meetings or calls, how often must they explain who you are? This measure will be rough at best, but, you might get answers such as “all the time” or “about half of the time,” which can then give you a baseline to measure against. Less time spent introducing the company means more time for sales people to sell.

In the end, the best measurement strategy depends on what type of business you are in, the competition and what level of existing awareness already exists. Investing in public relations can yield many benefits. Pick your target, implement a campaign and then measure it. Repeat. Over time, your understanding of the market will increase, which can then be used to justify expanding or contracting your existing spend rate.

 

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Leave a Comment

Filed under Brand Integrity, Public Relations

Why do Public Relations?

Why do public relations?By Gordon Benzie

 

For this post, I thought I would challenge what the role of public relations is, with the objective to provide a thoughtful perspective on what value PR plays within an organization.

To start, the objective of public relations or PR is to raise awareness of a company, non-profit group or any other organization. Why does this matter? Well, to start, it is a lot easier to sell products or services if your audience has heard of you. Simply stated, no one wants to buy from a stranger. Public relations overcomes this sales hurdle by creating stories about the organization that will be viewed as interesting, or at least interesting enough to be read about by your target audience.

Note that this methodology must be applied with the sole objective to engage your audience. If other people find out, that is fine. But, you must be careful to not waste limited resources reaching individuals that will never be part of your buyer’s purchase lifecycle. This philosophy must be applied religiously to every opportunity for contributed articles, guest blog posts, speaking engagements and award opportunities.

My Audience Already Knows Me

I have spoken to some business owners who state that their target audience already knows who they are, and they know all about their company’s product or service. If this is the case, why spend the investment to reach out to them again? The reason why this investment makes sense is that it is going to help you to continue to best serving your market segment. Just because a customer has heard of you doesn’t mean they will continue to purchase or renew their existing services with you on a consistent, never-ending basis.

The Risk of Complacency

Imagine this scenario as a theoretical a case study. A new competitor enters your market. What do you think will be the first thing they do to introduce themselves to your customers? Odds are some sort of PR campaign, including announcements, special offers, grand opening day parties, etc. They must make this investment as they are coming into your market as a “disruptor,” which must be announced in order to be effective.

Now let’s say that you haven’t been investing your own PR campaign. Maybe funds have been tight as you have neglected this activity for the past year or so. Maybe your website and social media channels are a bit out of date too, falling into the category of something that could be deferred for a year or two.

Unfortunately, you are now a sitting duck for this new competitor to come in and eat your lunch. Once they begin making noise, you will be caught off guard. Assuming you move quickly and start to invest in getting your PR program back on track, it will still take time. Days, weeks or even months will pass before you are able to first get your routine changed to re-focus on this topic. You will be in “catchup” mode for some time. Every month you are behind is a month where you are at risk of losing customers. Think about it … what is the opportunity cost that someone might come into your market and try to steal market share?

At minimum, it might make sense to at least keep a few programs running, even if funds are tight. This way you still have a “toe” in the water, as a steady “beating of the drum,” to remind the market and your audience of current customers and prospects. This activity states that you are still there, and are actively reaching out to them to continue to help better address their needs with your product or services. Seems like a good investment and an even better business strategy decision that can be easily incorporated into your marketing communications strategy.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Leave a Comment

Filed under Brand Integrity, Business Plan, Marketing Communications, Online Marketing

Did Labor Unions Really Kill the Twinkie?

The nostalgia world may never be the same after the events from earlier this month. After 88 years, Hostess, the makers of Twinkies, Ding Dongs and Wonder Bread, is going out of business. According to the story that ran on NBC.com, the CEO blames the unions, which made the decision to go on strike as part of the latest round of labor negotiations. The company has been in Chapter 11 bankruptcy proceedings for the past 10 months or so. Last week it was announced that all assets will be liquidated, resulting in about 18,000 employees losing their jobs – certainly an unfortunate turn of events.

When I first read this news story, it struck me as interesting how strong the focus was about the role that the Labor unions played in “bringing down” the company. Since the labor unions would not accept new lower salaries, the only choice CEO Gregory Rayburn had was to shut down the company.

That is one way to tell the story.

Another angle is that the company failed to adjust to the times. Over the past decade or so, eating habits changed – the focus today is on eating healthier foods. Given this trend, it is not surprising that a company such as Hostess began having problems, given its product line. I don’t think anyone will argue that the nutritional value of a Twinkie is not too high … according to info published on Livestrong.com. At 150 calories per Twinkie, it has 4.5 g of fat, 20 mg of calcium, 20 mg of cholesterol and 19 g of sugar, equivalent to almost 5 tsp. Double each of these figures for the typical way this product is sold, as a two pack. Other Hostess products don’t fare much better.

This brings me to my point. When you are crafting a story for the press to cover as a business communications or news announcement, there are many options on how to pitch it. Seldom is there just one story. In this case, perhaps the Hostess CEO and management team sought to blame the unions for the downfall of their iconic institution in order to deflect a different line of questioning – such as what were you doing about new product introductions a decade ago when this trend first became obvious? A few days later, more details began to emerge indicating that maybe there were other issues impacting sales. Clearly their cost structure was not well aligned to revenue. It might be that there is no business model that could work for these products today; however, a story focused on that theme wouldn’t do well to help the company find a new suitor. When faced with these alternative stories, portraying the problem on the unions was probably the best way for them to deflect blame while keeping the door open to a new buyer that believes they can address the labor issue.

When you have a business communication to address, sometimes you get to choose what the lead in story and news will be – more often if you proactively make an announcement or hold a press conference. If this is the case, best to take advantage of this opportunity. Other crisis communications, such as an oil drilling platform explosion and fire, can’t really be modified to give it a good “spin.” Over time, if your story has more to it, then it is most likely that the rest of the story will follow. But, it will be secondary to the original announcement, which might just buy you some time to get through your crisis, should you have to experience this type of announcement.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

Leave a Comment

Filed under Brand Integrity, Business Communications

Communicating Pricing in a Multi-tiered Distribution Model

It is no secret that companies regularly charge different prices for the same product. Just look at the airline industry as one example. Nearly every seat has a different price, which can vary depending upon the day of the week, your status as a frequent flyer and how close the flight is to departure. The strategy behind this pricing decision is valid – lost seat revenue from departed flights can never be recouped. Airlines must try to fill every seat for the highest possible rate to maximize revenue. This pricing dichotomy can create a potential communications challenge, but only if the rationale behind this difference isn’t reasonable.

I would propose that the car rental industry’s pricing strategy doesn’t make sense, and as a result, that industry is communicating poor messaging resulting in a loss of consumer loyalty and repeat purchases. Speaking from my own experience, I see the purchase of a rental car as a commodity item, one that is identical regardless of what provider I choose to patronize, with one exception – Enterprise. They will bring the car to you. This is great service, and truly a competitive differentiator.

Here is my source of confusion – if you take the time to create an online profile with your preferences, including personal identifying information about what you like to rent and where you like to rent, this privilege you are bequeathing to the car rental company comes at a price – you are charged a higher rental fee! One might think that a “preferred” member should at least be given a coupon or some sort of advantage for going through the hassle of creating the online profile..

Let’s assume there is some sort of loyalty program that gives repeat buyers a discount. If that were the case, then the choice to purchase through a third party might be worth less to a car rental company – a commission must be paid to these purchases, reducing the economic value of such a purchase. The reality is just the opposite, and the price difference is unbelievable. At Hotwire.com, I can rent an economy car for $15 per day, provided I can create an alert and check back periodically to when that rate comes available. Alternatively, if I go directly a car rental company and try to book the same car, the price is about $80-$90 per day, for the same period, same location and same type of car, a rate increase of 400-500% higher. The only difference is that the $15 rate is non-refundable, so clearly there is some value in being able to cancel without penalty.

Perhaps, this is a reasonable pricing decision and worthy from an economics perspective to continue this practice. I don’t know, as I am not privy to this information. My point is that from a consumer messaging and business communications perspective, this discrepancy simply doesn’t make sense. For example, the car rental companies could offer a “refundable” and “non-refundable” rate, if that is indeed the source of the extreme pricing difference. Then, it starts to make sense.

In the same way that an empty “seat” on a flight represents revenue that will never be recaptured, rental cars sitting on a lot overnight represent the same opportunity cost. Clearly, a multi-tiered pricing strategy is logical. The challenge how do you execute a sensible pricing and communications messaging strategy that can be a win-win for both the company and its customers?

Does your business or industry have its own pricing “nuances” that only you, as an insider, understand? If so, maybe it is time to fix them.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

Leave a Comment

Filed under Brand Integrity, Marketing Communications, Pricing