ACHRNEWS

Getting Your Arms Around Marketing

October 29, 2007

Marketers have long believed that they could influence the buying habits of consumers. In fact, as the definers of both desire and taste, they took pride in creating demand. As Ford has discovered, however, is that even what would normally be known as effective marketing cannot persuade consumers to buy a product such as the Ford Five Hundred sedan. Ford is far from alone.

TECHNOLOGY CHANGES THINGS

There’s no turning back; marketing will never be the same. Even the staunchest Luddites must find it difficult to deny the extent to which technology has changed everything. The Internet has turned consumers into lowest-price shoppers, and many are addicted to surfing the Web to save money.

Both Kodak and Fuji, two of the largest manufacturers of camera film, have been caught off guard by the lack of consumer interest in having prints made from digital cameras. Prints are yesterday. Cell phones, e-mail, and computers have changed the industry.

Then there’s music. CDs are out. When consumers can choose and pay for the exact songs they desire from iTunes, why would they buy an entire CD if they were only interested in one or two songs?

The bottom line is that there’s no way today to hold the customer captive. If you try, you’re done.

DO-IT-YOURSELF MARKETING

Residential real estate is a good example of an industry that is attempting to do everything possible to maintain the mystique of the realtor. For several generations of homebuyers and sellers, real estate brokers played a key role. They were the access point. If you wanted to see listed homes, it was literally necessary to go through the agent to get into the house. Control of the product and the process was key to maintaining their hold on the 5 percent commission.

The Internet has changed that too. The iron grip is going away. Most every home is now available on the World Wide Web. Homes are being sold to buyers who have never seen them except on a Website. The number of homes “for sale by owner” is another clue to what’s happening.

In effect, the Internet is quickly empowering buyers and sellers. Having had plenty of practice on eBay®, they now feel competent and self-assured to take on the task of selling a home.

Google™, as much as any technology, has also emboldened consumers. They can find the information they need almost instantly. Far less dependent on others, they venture out on their own. Home Depot’s marketing slogan, “You can do it. We can help,” is just another example of consumer empowerment.

Customers will not and cannot be held captive. The real estate industry is fighting a losing battle to control the buying and selling of residential real estate, as is anyone who tries to thwart the “taking charge of my life” movement.

Facing such circumstances, what do marketers do to meet these challenges? Here are five principles to follow:

1. Make everything transparent. Over a three-month period, the copy equipment dealer offered a series of lease arrangements, each lower than the one before. Rather than generating increased customer interest, the process produced distrust. The company chose another vendor that provided a clear, simple, upfront proposal detailing all the costs.

Even when notified to pick up the old machine, the original dealer came back with yet another proposal that had a lower price. A lack of transparency kills confidence and trust.

2. Coach, don’t sell. The headline in the ad caught my attention, not because it was compelling, but because it presumed to tell me what I was thinking. The ad was for a specialty hospital and the headline read, “The people you trust at the place you know.” This is an example of the old marketing of telling customers how and what to think.

How different are the TV ads for CDW, the online electronic warehouse? A slightly nerdy IT guy, faced with seemingly insurmountable issues, comes through every time thanks to his empowering partnership with CDW. The difference is significant: Coach, don’t sell.

3. Create a brand promise. If there is no promise, there is no brand. While it seems simple, it’s difficult to put into practice. With every cell phone provider making endless claims, how does one stand out from another in a way that resonates with the customer?

Cingular is particularly adept at using a brand promise strategy to connect with customers. It identified dropped calls as high on cell users’ irritation lists. Seeing this as an opportunity, Cingular married its tagline, “Raising the bar,” to the brand promise, “fewest dropped calls.”

Since dropped calls do occur, even with Cingular, the branding reminds the customer that there are fewer with Cingular than with other providers.

4. Personalize pertinently. If anything is clear today, customers want to be recognized and appreciated. To some extent, companies have taken advantage of personalization when it comes to communications. Personalized letters have long been a marketing staple and a giant leap beyond “Dear Valued Customer,” even though such nonsense persists.

However, the new personalization goes well beyond the basic use of the customer’s name. In fact, if only the name is used, many customers can be turned off. It’s the content that must be personalized today. Amazon.com is rather effective at data mining to deliver products that match customer interest. Those frequenting that Website often note, “It’s as if they know me.” They do.

5. Practice the power of persistence. The 2006 holiday season was a challenging one for the Macy’s brand. After acquiring Filene’s, The May Co., and Marshall Fields department stores, there was one major question: Could Macy’s hold the customers? Throughout the fall of 2006, Macy’s discount coupons filled mailboxes and were featured in full-page print ads across the nation. When Thanksgiving arrived, they stepped up the pace.

The owner, Federated Department Stores, reported an 8.5 percent November sales increase, higher than just about all rivals. It also increased its December sales forecast from 5 percent to 8 percent.

It was a strategy of staying in front of the consumer with a continuous stream of compelling offers designed to take them straight to Macy’s. Persistence goes a long way to keeping customers focused and buying. The only way to get our arms around marketing is to get them around the customer.

Publication date: 10/29/2007