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design & marketing blog

Straightforward design, marketing, and technical advice for making your marketing communications more effective.

The Mac is Back: Apple’s customers make it a major player again

June 4th, 2007

Mac ads


Apple’s current ad campaign

For those of you who know me best, you’re already familiar with my incessant evangelism regarding Apple’s Macintosh. For those of you who don’t know me that well, just keep reading this blog. But for all my biased chest-beating, even the most anti-Apple critic has to acknowledge the recent strides the Mac has made in the marketplace. First off, Apple increased its earnings 88% last quarter, the company’s stock/equity portfolio is higher than it’s ever been, and well known icons within the PC industry are in the process of making “the switch.”

So how does Apple leverage their success? Simply buy understanding the consumer and building stylistic products suited to their needs. Steve Jobs and his engineers and marketers strive toward building and communicating value to those who believe there has to be more to computing than blue screens, random shut-downs, and indistinguishable error messages. Not to mention, Apple has developed a reputation for taking care of its customers, providing the industry’s highest standard in design, all the while building quality products that put the competition to shame.

The point I’m trying to make here is that Apple is successfully de-commoditizing itself within the computing market by establishing itself as a leader in consumer satisfaction. It’s one thing for a company to claim it’s good at pleasing customers, it’s another thing when the customers are saying it themselves. While Dell is struggling to right itself by opening low-price channels through Wal-Mart, Apple is creating the undercurrent for a consumer revolution that will only help to break the Microsoft hegemony within the market.

In conclusion, Apple has proven that organizations are able to operate with substantial margins within a commoditized industry. If your business is struggling to find it self within a competitive, dog-eat-dog market, remember to follow Apple’s example in focusing on your customer’s needs. After all, customers are the most selfish people on the planet; they only care about what your product, service, or brand means to them. Apple understands this principal, as do most profitable businesses.

Customer Level Marketing – Investing in the Bottom Up

April 27th, 2007

Earlier this week, I was engaged in a discussion with a colleague on the way corporations tend to invest their capital. The amount of wasted dollars thrown toward executive pet projects, productivity initiatives, cubical redeployments, senseless non-strategic advertising, and other non-sales generating expenditures is simply mind-boggling. It truly makes me wonder how many companies have ever taken the time to consider what the results would be if they were to redirect a portion of their SG&A expenditure to improving customer relations.

Okay, you’re probably asking “what the heck does Erik mean by customer relations?” To be honest, I’ve never worked with or for a company that has ever concentrated their resources at the customer-level of the organization; every company I know concentrates most of their salaries, bonuses, amenities, perks, and other resources at the corporate executive level. Think about it, how many large organizations pay their frontline employees, namely those who interact and serve the customer, more than keyboard jockey managers back at the office?

I remember the first time I was introduced to this concept during my undergraduate studies over in Finland. My marketing professor asked us to read a phenomenal book by Jan Carlzon titled Moments of Truth. Through the book, Carlzon focuses on his stint as CEO of Scandinavian Airlines (SAS), where he is widely renowned for resurrecting what should have been a dead dog company. The SAS Carlzon took over was destined for insolvency, yet his progressive approach to turning the organization upside down literally saved the company and made it a world force in airline transportation. His strategy was simple: slash resources and expenses at the top and invest heavily in the bottom. Within a matter of months, SAS drastically reduced corporate headcount, frivolous spending (such as corporate-level perks), and useless overhead all the while investing in customer service training, customer-focused sales strategies (in regards to ticketing, seating arrangements, and travel packages), employee bonuses based on customer satisfaction, and salary increases for frontline personnel.

Along with the reallocation of resources, SAS initiated a policy wherein all corporate-level employees were required to work at the frontline level for a designated period of time so as to gain an intimate appreciation for the ticket counter representatives and stewards/stewardesses and the customers they served. Furthermore, SAS adapted a progressive policy of promoting high-performing frontline personnel to strategic positions within the organization so as to help consult other service-oriented personnel with customer-relations. Despite the temporary moral downswing at the corporate level, the frontline employee moral shot through the roof as opportunities opened up for incentive pay and promotions. Guess who reaped the benefits of motivated frontline personnel … yep, the customer.

So as to not give too much away, I do encourage you to read Carlzon’s book and contemplate his advice on marketing to your customers through your frontline employees. In addition to the frontline, bottom-up approach, Carlzon provides great strategic insight to managing a successful firm. Here’s a link to purchase Moments of Truth through Amazon:
Moments of Truth

To conclude, it would be well worth your time to consider how your organization could reallocate its resources to building a stronger relationship with your customers. It might be time to consider how to incentivize those who deal with your customers the most.

Market Need Versus Market Want

April 1st, 2007

A major error many sales and marketing professionals make involves confusing a market need with a market want. In fact, marketers that have been around for a while understand all products and services eventually evolve into non-discriminate commodities over time. Make no mistake; understanding the difference between a market need and a want will decide the long-term success of a firm.

So, what is the difference? Namely, a market want is an immediate response by consumers to a service or product without knowledge of a better solution. In other words, a market want is derived through a quick fix, convenient and affordable means to solving a problem or desire. Market wants exist simply because they temporarily answer consumer’s expectations. An example of a market want would be a pre-industrial revolution candle that was used to light a room … luminescence. There was no knowledge of or accessibility to a better solution, therefore the market want settled on candles for light.

Conversely, a market need addresses a higher ideal wherein innovation and customer-directed service push market wants in perpetual progression. In theory, market needs can never be fulfilled since the market is in a constant state of evolution. Additionally, Market wants are actually a very important element of addressing a market need. In other words, we should view market wants (i.e. products) as incremental steps toward satisfying the demands of the consumer. Referring back to the candle example, gas lamps and eventually the electric light bulb replaced the candle as the primary device for luminescence, therefore eliminating the primary use of a candle as a device for light. Today, the candle is used primarily for ambiance rather than luminescence.

For a more practical application of this theory, let’s say your company is in the business of producing cellular telephones. Four years ago, the market want was to develop the smallest practical handheld device that was affordable and would pick up great reception. Today, with the introduction of GPS technology and devices like the Apple iPhone, the market want has evolved to include worldwide accessibility along with features such as SMS texting, GPS mapping, and Internet browsing. In fact, it could be argued that the market need is affordable instantaneous global communication through telepathic transmission … okay, that’s getting a little Star-Trekish, I know. However, the point being that consumers may not be able to express what their true need is, therefore they settle with wants. To my point; this is where the opportunity exists for your hypothetical cellular phone company; you can assume the role of an innovative customer-oriented firm by pushing your product and service offering toward a new ideal of market satisfaction. For example, what if your company could develop a true vid-phone so you could actually view the party on the other line? It’s only a matter of time and money before this technology becomes commonplace, and the first cellular phone manufacturer to do it will in effect push the market want closer to achieving the market need. Perhaps the market need is not a vid-phone, but the point is the iPhone in all its greatness will eventually be obsolete.

In conclusion, companies that focus on solving market wants will always be in a reactionary state, competing primarily on price. However, companies that focus on solving a market need however will be shaping their products and services toward answering the desires of their customers, helping to differentiate themselves from the competition while justifying a higher price per unit. In the real world, Apple is doing this with the iPhone, Target is doing it with virtually the same products as Wal-Mart, and FedEx is doing it with the same overnight delivery services as UPS and the United States Postal Service. Who’s to say your company can’t be the next Apple, Target, or FedEx?

Real Word of Mouth Marketing

December 14th, 2006

The Washington Post reported Tuesday about the FTC’s ruling to “Unmask Word-of-Mouth Marketing.” The FTC is on target in my opinion. But the implication that the scams mentioned in the article are somehow representative of word-of-mouth marketing (WOMM) is misleading. The very premise and power behind WOMM is that it’s unbiased and credible. We all know that the traditional advertising spin is often quite the opposite.

As the FTC’s ruling highlights, we’re still going to deal with a segment of society that tries to beat the system. Old marketing habits may die hard, but they won’t last long in this new era of open consumer communication that’s been
enabled largely from technology like blogs. Sony Ericsson, for example, may fool a few people with their shills but they will never build a significant customer-led marketing campaign with such gimmicks. The average consumer can communicate too well now.

Idaho businesses should by no means shy away from WOMM because of this misconstrued portrayal. Like the other WOMM advocates in the Treasure Valley, RisingLine promotes marketing strategies for organizations that have proven
themselves by already developing a contingency of legitimate client advocates. We prefer to use the term customer evangelist to describe WOMM because it emphasizes the element of unsolicited motivation to share a good experience with a friend or acquaintance. A completely different concept than the shenanigans the FTC has associated with WOMM.

The important thing to understand is that true WOMM is simply encouraging honest referrals from friend to friend and it remains the most credible and cost effective means of promotion for any business or product.

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