Simple and thoughtful design makes business sense

The 21st century marketplace

Apocalypse, soon!

Is the sky falling for marketers?

Women aren’t buying it

Ad effectiveness is going to continue to decline’, says US trend Meister Sam Hill in his latest book 60 Trends in 60 Minutes.Yes, agrees Australia’s own Kim Boehm, managing director of Clemenger Harvie Edge. ‘In the US and Canada, there’s a lot of talk about whether advertising has reached the point of saturation…today we are facing the almost impossible task of penetrating what the Americans are calling ‘the concrete consumer’…If this is anywhere near the truth, the implications are challenging for agencies and consumers.’

Today’s customer, dubbed the ‘concrete consumer’ by some advertising industry heavy hitters, is becoming increasingly resistant to mass marketing messages. Indeed says Mary Lou Quinlan who runs a strategic consultancy in New York specialising in women, ‘Before my very eyes, women have morphed from interested consumers into vigilante shoppers...’ Sam Hill concurs. ‘Concrete is great stuff. It’s too heavy to move. It’s so hard a sledgehammer just bounces off…Concrete can’t be moved or dented and messages don’t stick. Hmmm. In other words, concrete is just like the modern consumer.’

So does Sam, or any of the other marketing futurists, have a definitive answer to this increasing perplexing situation? They certainly all agree that the concrete consumer is often resistant to mass advertising messages, appears to exhibit irrational decision-making behaviour, is elusive and unpredictable, doesn’t get off on overt brand image or prestige any more and is hard-core marketing-savvy. But do they tell us what’s causing this concrete consumer and give us an idea of what can we do about it? Not so far.

Why is this happening in consumer land?

First, some history. Our modern economic system developed during the Enlightenment period around four hundred years ago with the introduction of capitalism and the invention of the printing machine. Around two hundred and fifty years ago another huge leap in human progress brought us the Industrial Revolution where machines and factories revolutionised the way we lived and traded.

Indeed mass production, mass distribution and mass communication became an overnight sensation. Form was favoured over function and consumers increasingly clamored for the goods they saw on TV, heard about on the radio or saw in newspapers and magazines. Shopping became entertainment and consumers wanted to be amused. Provided we could delight them as a whole with the right product at the right price in the right channel using the right promotional message, they were ours. Until now.

Digital technology and globalisation have changed all that. A new revolution has emerged over recent times, a revolution where the passive consumer has morphed into an active, demanding individual. We call this process The Individual Revolution and it has profound implications for the future of not just marketing communications, but the way companies do business.

Is it all doom and gloom? Absolutely not!

The good news is that the active customer is in the driver’s seat of The Individual Revolution and in order to appeal to them marketers simply need to re-orient their primary focus from their own brand experience to the customer experience. Individuals notice everything but actively pursue very little. It’s only when they come up to buyer level that they get interested in what you have to say. And then they don’t distinguish between a direct marketing campaign, a sales promotion, e-marketing, mainstream advertising, hot packaging, sampling and demonstration, customer relationship software or even an ‘integrated’ campaign from an ‘integrated advertising agency.’ They just want to own something that suits them.

The trick is to find who might be interested in buying our products and to nurture that relationship until that magical moment of purchase arrives. And the paradox is that where digital technology has significantly de-stabilised the consumer-marketer relationship it has also provided us with cost-effective ways of satisfying this increasingly demanding individual. Things like excellent service, reliable communication, genuine one-to-one relationships, a message centred on performance, style and value and, importantly, respect for the identity of your customer are critical to breaking through to the concrete consumer.

International case studies

The Wall Street Journal recently emailed a variety of companies to test their customer responsiveness. They contacted General Electric about a broken cordless phone, they sought Palm’s advice on software for tracking expenses and asked Oral-B for help with an electric toothbrush that was on the blink. Their goal was quick and accurate answers but more often than not they got the runaround. Here’s a quick overview of their results:

The good

Company/problem: Palm re advice on buying Palm software to track expenses.

Response time: To their only email was 7.5 hours.

Answer quality: Supplied web address where consumers could buy the software.

Snafu: Sent them to Windows version though they had asked for Mac. (Mac software was one click away).

Comment: Accurate response that beat the promised turnaround time of 12 hours.

The bad

Company/problem: Oral-B USA regarding two-year old electric toothbrush that wasn’t working.

Response time: To their first email: 20 hours. To their follow-up: 1 day, 8 hours.

Answer quality: advice was tailored for a new toothbrush (theirs was two years old)

Snafu: They entered their ZIP code and got to a page showing…their ZIP code.

Comment: Service rep finally delivered the correct answer on the third try.

The good and the bad

Company/problem: Dell and NEC wanting advice on how to connect NEC flat-screen to a Dell laptop.

Response time: Dell: about one minute. NEC: To their first email, 22 hours. To their follow-up, 19 hours.

Answer quality: Dell’s answer was perfect whereas NEC was vague, eventually giving accurate, if unhelpful, advice about display settings.

Snafu: Dell: Made them reduce their browser’s privacy protection. NEC: Told them to use ‘recommended settings’ without explaining what that meant.

Comment: A victory for artificial intelligence. Dell used an ‘experiential system’ – no humans involved – to answer questions!

The Key to Incentives

The Incentive Federation in its 2003 industry study found that in most incentive programs, gift certificates were one of the most popular types of merchandise.

"When you want to recognize someone for a job well done, you need to give them something they really appreciate. If you give something that isn't quite right, you risk ruining the whole intent of the gift," says Cindy Mielke, Vice President of Education.

According to a recent readers survey conducted by Incentive magazine, most incentive buyers go directly through retailers to purchase gift cards and certificates for their incentive programs.

Since 1997 sales of gift cards in the US have grown from 15% to 35% annually, with 2003 sales estimated at $42 billion to $45 billion, according to a Bain & Co. study.

Source: Elizabeth A West Potentials.Minneapolis:Nov2003.Vol.36,Iss.11;pg.26
How Businesses Communicate

A survey has found that email has become the business world's preferred means of communication (see below). Auckland e-marketing development company Calcium Software worked with the Direct Marketing Association and MessageMedia to poll 3,000 business people.

64% of respondents said they used email to develop business or generate sales on an individual-to-individual basis:

* Email 42%
* Face-to-face 25%
* Phone 18%
* Fax 2%
* Other/not stated 13%

Individual emails sent per day:

* 10 to 30 - 62%
* 31 to 50 - 23%
* 51 to 100 - 8%

Source: Businesses saying it by email The New Zealand Herald,, 12/2/04
What’s Your Individual Index Rating?

Tick Yes has created a new rating for organisations of all sizes. The Individual Index measures how well you actively engage with and earn the loyalty of your key stakeholders.

Give your organisation a realistic mark out of 10 as to how well you perform in theseareas (click here to read the article ‘How Do You Rate on the Individual Index?’)

1/ We have each individual stakeholder’s personal information as it relates to my product/service

2/ We have permission to use that information

3/ We are using that information

SMS Your Way 2 Success

Short messaging service (SMS) can be very effective as a marketing tool. According to the Australian Communications Authority, the mobile telecommunications market has expanded by 44 per cent in the use of SMS messages between 2002 and 2003.

In 2003, 40 per cent of businesses reported using SMS, which is a ten per cent increase from the previous year.

Jupiter predicts that nine billion SMS messages will be sent in Australia in 2008, compared with four billion in 2003.

With nearly 15 million mobile phones in Australia, and almost every one of them able to send and receive messages, SMS is becoming the new email for business communications.

Source: Andrew Grill. My Business Pg. 42-44, 1 June 2004

Businesses getting the message on mobile data

A new report by research company IDC shows the importance of mobile data to Australian businesses. Mobile data includes wireless Internet access, email, short message service (SMS) and multimedia message service (MMS).

The report suggests that the business uptake of these services will surge by 2007.

The popularity of SMS has continued to rise, with the report finding that 75 per cent of Australian companies use the service, compared with 60 per cent last year.

‘Australian businesses have yet to take full advantage of wireless technology,’ the report says.

Source: Australian Financial Review, Pg 16, 7 June 2004

Mobile’s the new tickets

Sydney’s Metro Theatre is the first venue to use the SMS bar-coding ticking system. The system sends a bar code to mobile phones to be read by a standard scanner.

It offers the facility to charge tickets to the customer’s phone bill or credit card.

More than 30 per cent of attendees chose to receive tickets via their mobile phones, which shows the rapid public acceptance of such technologies.

Other applications include cinema tickets, proof of purchase for mobile commerce, and coupons for retail promotions.

Source: SMH-Next, Pg 1, 11 May 2004

From Mass to One-to-one Marketing

One-to-one marketing can improve customer loyalty and retention by directing messages to the most likely buyers. Some basic features include:

• Permission-based. Prospects will more likely respond positively if they are offered the choice to subscribe to your information.
• Personalised content. Capture customer preferences from web site visits, surveys and other interactions.
• Proactive. Provide personalised information or promotional giveaways through email or your website.
• Medium of choice. Allow your customers to choose their preferred communication method – be it phone, fax, email or postal mail.

Use surveys and questionnaires. Collect detailed information and provide feedback opportunities for your customers.

Source: Adams Business Media, 2003

Who do you think you’re talking to?

The only messages with a chance of sticking in consumer’s minds are personally relevant.

A recent Harris poll shows that 74 per cent of U.S adults wish more products were customised to their personal needs and tastes, while 70 per cent say they’d be willing to pay a premium for that attention.

Customising communications will help increase response rates and maximise customer relationships.

For Example – A hospitality message tailored to affluent empty-nesters:

‘Dear Alex & Judith,

Imagine watching the sunset from the tranquil luxury of your private balcony.

We would love to lavish you with: golf courses, day spas and evenings at the theatre all a courtesy shuttle bus away. We’ll pick you up at the airport too.

You can book online at http://www.xyzhotelandresort.com/ or toll free 800-555-1234. That sunset is calling……’

Such relevant promotions offer high click-through rates of up to 62 per cent.

Source: Lodging Hospitality. Cleveland Jul 2004 Vol.60 pg. 30

Rise of DM bears witness to value of segmentation

DM is more effective in building an individual customer relationship.

There is more value in retaining existing customers and persuading occasional customers to purchase more often than in gaining new ones.

Even traditionally mass-marketed retailers and newspapers are investing more in building relationships with existing customers. Witness the retail sector’s drop in TV spend of 23 per cent year on year.

Technology, data and new segmentation techniques have enabled marketers to understand consumers at an individual level. Advertisers are aware that unless their messages are relevant to the people they reach, they could damage the brand.

Source: Marketing, London, Nov 27, 2003 pg.2

The Internal Innovation Powerhouse

The old-fashioned 'Suggestion Box' is making a timely revival.

Ideas that come from this well of knowledge are more likely to work. Invariably they're also easier to implement in the shortest possbile time.

For every idea that is received, it must, unconditionally be assessed and replied to. Those ideas that have merit need to be implemented with the involvement of the originator of the idea. And finally, if the idea is for a new product or service, a full business case must be prepared and the concept originator recognised.

Your business might be sitting on 'the next great thing' that will change your future and you might not know it. If time is short or your business structure does not have the capacity to establish the criteria to stimulate your Team's thinking and evaluate the potential, Tick Yes can help.

Home Entertainment Innovation

Red Room DVD did not want to be yet another video store. They looked into the customer's needs and developed a list of things theywanted.

Then they looked at technologies employed in other industries that might deliver the same service. What did they come up with? ATMs.

Yes, 24/7 movie hire from a machine that is simple to use and very price competitive. And, if you want to browse and learn more during conventional hours, their space age retail environment allows the customer to access all manner of information before hiring their chosen DVD.

So what can we learn from this?

• Marketing initiatives fall into two categories - Leaders or Followers
• Leaders achieve more for less and Followers achieve less for more
• Marketing is all about cut through and understanding the customer
• Good marketing takes courage and sometimes a little risk
• Rule-bending wins the game, not rule-breaking
• Learn lessons from other industries

 Have a look at http://www.redroomdvd.com.au/

Australian Internet Usage: 13,991,612 users as of Sep 2005 (Neilsen/Net Ratings)

Internet Growth vs. Population:

Online Advertising Spend:

$620,000,000 in 2005; 64% increase vs. 2004 (Audit Bureau of Verification Services)

60% growth predicted in 2006; will dwarf growth of other media.
Consumers spend 15% of their time online; only 6% of media spend is online (Roy Morgan)

Online advertising spend is now greater than Outdoor &
Cinema combined. Predicted to be greater than Radio by 2007.

Viral Marketing:

89% of US internet users send viral emails (Sharpe
Partners, Jan 2006)

Viral content sent:

• Humorous/jokes/cartoons - 88%
• News item/article – 56%
• Health care/medical – 32%
• Religious/spiritual – 30%
• Games – 25%
• Sports/hobbies – 24%
• Business/personal finance – 24%
• Sexually provocative content – 12%

Blogs:

• 25% of internet users say they read blogs
• 750,000 blogs in Australia; 21,000,000 worldwide
• 9% of internet users now say they have created blogs (technorati)

Nestle has many marketing options due to its size, budgets and number of brands. The fact that 1-to-1 marketing still figures prominentlyfor Nestle speaks volumes for organisations that don’t have the same budgets.

Click here to read how Nestle is doing it and to get some ideas of how you can do it too. Of course, Tick Yes can help you make it happen!

Source: BRW, August 31, 2006

Corporate Blogging: Why & How to Do it

General Motors has one (http://fastlane.gmblogs.com/). So does Kodak (http://ofoto.typepad.com/), Maytag and a range of other smaller businesses*.

Blogs are the relatively new way to involve and engage your customers. With more than 14,000,000 Australians online, Blogs can give you a much greater share of voice than a range of other marketing options.

Here are the ‘10 To Do’s’ for Corporate Blogging:

1. Beauthentic

2. Be an unmatched resource

3. Once you start, don't stop

4. Keep it relevant

5. Measure your effectiveness

6. Monitor other Blogs

7. Trust your employees

8. Use Blogs for knowledge management

9. Use wikis for employee and customer collaboration

10. Develop a content strategy

Source: 10 Rules for Corporate Blogs & wikis, Nick Wreden,

http://www.marketingprofs.com/4/wreden5.asp

* We're about to launch one too! Keep a look out for the Tick Yes Blog when our new site launches in the next month.

Online Advertising Spend Continues to Grow

Major advertisers report that they will invest over 21% of their advertising dollars online in 2006-2007 according to the latest emitch/Roy Morgan Internet Advertising Intentions and Attitudes survey.

A majority of advertisers have now embraced the Internet with 71% of advertisers having invested in online advertising in the past 12 months, up 12 percentage points from the 59% reported in January 2006.

Click here to view the emitch/Roy Morgan distribution chart of Online Advertising Dollars across Internet Advertising Categories.