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Value Proposition: NFL’s Jaguars increase revenue with customer-centric marketing

February 12th, 2015 No comments

The Jacksonville Jaguars, located in the home city of MECLABS Institute, have not had a winning season in nearly a decade. By some measures, the team has actually gotten worse in recent years.

Yet, despite a miserable 1-7 home record for the 2013 NFL season, the Jaguars actually enjoyed a significant lift in local revenue in 2014 and increased average game day attendance by over 3,000 fans.

How did they accomplish this feat?

By viewing their product from the perspective of their prospects and answering one simple question: “If I am the ideal customer, why should I purchase from you rather than your competitor?”

 

Background

Jacksonville is the NFL’s smallest true market, and by most metrics, it’s a borderline miracle that a metropolitan statistical area of only 1.35 million people has been able to sustain a franchise in the country’s most expensive sports league for 20 years and counting.

The per-capita ticket buying pressure on the city is astronomical — approximately one in 20 citizens must purchase a ticket to each game to keep the stadium full on Sundays — as is the sponsorship demands on local corporations.

For this reason, the Jaguars do not enjoy the same leverage to arbitrarily raise ticket prices as do teams in much larger cities where season-ticket waiting lists are the norm and NFL tickets are truly a scarce commodity, cities where demand will likely always outstrip supply.

We live in an age when professional sports (particularly in mid-sized markets) have never faced tougher competition for discretionary income and mindshare. Whereas once there was only a handful of entertainment and recreation options available to consumers, major sports now must compete with the likes of Netflix, Hulu, Spotify, YouTube and a rapidly expanding universe of low-cost entertainment options hyper-specific to each customer’s personal tastes.

At the same time, live professional sports also have to compete with the home theater experience.

In the last 10 years years, economies of scale have made it possible for the average family to afford a high-fidelity home theater setup that provides a perfectly suitable alternative to being at the game in person, at a fraction of the cost. No parking hassles. No overpriced concessions. No traffic bottlenecks. And no $85 tickets, on average.

Without the leverage or on-field product to justify a price increase, the Jaguars made a multi-million dollar bet that they could positively impact local revenue at existing prices simply by putting customer-experience first and enhancing the value proposition of their existing game day experience.

Perhaps the best way to visualize this customer-centric approach is via the exchange fulcrum.

 

The exchange fulcrum:

 

Every purchasing decision that a prospect makes is driven by a competing set of forces — value and cost.

“What value am I receiving, and at what expense?” Every time a customer is confronted by a call-to-action, these two elements will wage war in his or her mind until the scale is ultimately tipped in favor of either conversion or rejection.

The exchange fulcrum — with value force and cost force on opposing sides — brings life to this analogy. Taken one step further, the fulcrum can be given predictive powers via the exchange heuristic:

VfAC – CfAC = Nf

Where Vf = Value Force

AC = Acceptance

Cf = Cost Force

Nf = Net Force

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4 Essential Marketing Insights from Freakonomics Author Stephen J. Dubner

February 9th, 2015 No comments

As all marketing professionals and watchers of “Mad Men” know, marketing is a tricky field. It’s one of the few industries that rely equally on creative ideas that have never been seen before and cold, analytical testing.

But what do you do when you feel stuck in a marketing rut?

Luckily, Steven J. Dubner was there to the rescue. Co-author of the popular Freakonomics book series, which have sold more than 7 million copies worldwide, Dubner is a seasoned pro at looking at seemingly obviously problems from a new angle.

As a self-identified “freak,” I jumped at the opportunity to interview Stephen J. Dubner about what his advice is when it comes to breathing some new life into your marketing strategy. The following interview offers a glimpse into the Freakonomics way of thinking, while giving a taste of what Dubner will be covering during his session at Email Summit 2015. So without further ado, enjoy.

 

First things first, what does it mean to Think Like a Freak?

Whereas Dubner and Levitt’s first two books, Freakonomics and SuperFreakonomics, melded pop culture and economics to explore topics and arguments that “traditional” economists would typically never touch, their latest book explains the thought process behind Freakonomics.

Think Like a Freak explains how to apply this questioning mentality that Dubner and Levitt have employed so successfully in both of their books to answer questions in everyday life. But I’m making this all sound more complicated than I need to.

Essentially, thinking like a freak involves looking at common, everyday problems from a new lens. It encourages the “freak” to be unafraid to question every step of the processes and conclusions that surround them.

The practical idea behind this mentality is simple — how can we be absolutely sure that we are performing at our best if we never try anything new? Thinking like a freak really boils down to one idea: testing.

Here is just a taste of what this freakish mentality is:

So what was Dubner’s advice on revitalizing your marketing?

 

Lesson #1: Get creative

First start with a white sheet of paper. Don’t hold back. What types of things might your customers relate to?

One of the biggest challenges that can come from running campaign after campaign is finding new and exciting ways to look at problems. After all, constantly being on your creativity A-game is draining. Luckily, this is a feeling that Dubner knows all too well:

MarketingExperiments: What are your top strategies to avoid falling into a creative rut?

Stephen J. Dubner: Surround yourself with people who don’t think like you (or come from different age or income or ethnic or political or vocational brackets, etc.). When you’re traveling, always pick out one site to see that you think sounds ridiculous, and see if you can learn something with it. And here’s my favorite: when you meet someone new, no matter what they do, just say this: “Tell me something I don’t know about [whatever you do].” It’s the best ice-breaker in the world, and you’ll learn a lot.

I feel more creative already.

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Marketing Classics: Four principles from the book that changed David Ogilvy’s life

January 26th, 2015 2 comments

Have you ever read an advertising or marketing book more than once? How about more than twice?

David Ogilvy once insisted about a book,

“Nobody should be allowed to have anything to do with advertising until he has read this book seven times. It changed the course of my life.”

What book was he referring to?

Marketer, meet Claude Hopkins, one of the original 1920s ad men who could masterfully blend both art and the rigor of science to marketing campaigns. He is known for many iconic ads of the past, including Pepsodent Toothpaste, which some credit with getting Americans in the habit of brushing their teeth.

Hopkins was studied and admired by both David Ogilvy (who most of us know) and Rosser Reeves (who many of us know as Don Draper).

Hopkins summarized his theory of advertising in a short, easy-to-digest, book called Scientific Advertising. This was Ogilvy’s go-to book. I remember the first time I read through it. What really struck me about it was its relevance to what we were discovering (or I guess is should say rediscovering) almost a century later here at MarketingExperiments.com.

Now, I confess, I am only on my third round through this book, so I know I am not quite yet fit to work for Ogilvy, but I thought it would be fitting to share with you a few of Hopkins principles that seem relevant for us to remember nearly 100 years later.

 

PRINCIPLE #1: People are selfish

First, Hopkins warns the reader, “The people you address are selfish, as we all are They care nothing about you interests or profit. They seek service for themselves. Ignoring this fact is a common mistake and a costly mistake in advertising.”

Much of the advertising in Hopkins day had turned inward and focused primarily on what the business wanted the customer to do — mainly buy a product or service. They had forgotten that before you can move someone to action, you have to help them understand what is in it for them.

It’s humorous sometimes how we can fall into the same trap today as advertisers. You can see it in something as simple as our call-to-action copy. We use phrases like, “Buy now,” “Add to Cart,” “Register” or, even worse, “Submit.”

All these display the symptom that Hopkins was getting at — we are too focused on what we want from the customer, rather than what the customer wants from us.

We run simple A/B experiments (like this series) all the time in which changing emphasis from something like “Buy Product X” to “Get Product X” has a significant impact on customer response.

And it does not simply come down to using a word like “get.” It’s about the mindset behind the word “get.” As Hopkins pointed out, people are interested in what they “get,” not what the business “gets.”

This is as true today as it was then, and the most effective marketers today know how to empathize with the customer.

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Conversion Factors That Impact Your Online Marketing

January 12th, 2015 2 comments

Why do people say “yes” to your offer?  Any time there is an ask for something, whether you are asking people to purchase something, give you something or to do something, the person can either say “yes” or “no.”

In this short article, I will explain the conversion heuristic and how it can help you optimize your online marketing efforts and get to more yes(s.)

 

What is a conversion?

Definition — Conversion:  noun. The act or process of changing from one form, state, etc., to another[1]. If you are a marketer, it is your primary responsibility to help convert a prospect’s interest into an action.

There are many different actions a marketer may wish the prospect take, such as entering their information into a contact form, subscribing to an email newsletter or making a purchase.

When your prospect is presented with your request to do something, they can say “yes” or “no.”  If the prospect says “yes” to your request and they take action, a conversion has occurred.

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2014 Year Review: Most shared posts in Web opt, button copy and email marketing

December 29th, 2014 No comments

What is on the mind of marketers today?

This year, we shared a multitude of discoveries achieved in the MarketingExperiments research lab. We learned about hot topics in marketing today including responsive design, the effectiveness of green marketing and how to improve a Web form without significantly reducing the number of fields.

In the MarketingExperiments Blog, we covered a wide range of topics on website optimization, testing strategies and real-world tests straight from the lab.

To help aid your efforts going into 2015, read on for the most shared posts this year, indicated through retweets and shares by you, the reader.

 

Top Post of 2014 — Less is More: Maximize conversion by removing website distractions

Early in 2014, we heard from a MECLABS Senior Research Manager for his take on a simple and powerful strategy for Web optimization: Less is more.

In a test within the checkout pages for an online retailer, the MECLABS research team identified a number of elements causing friction and distracting customers from completing their purchase.

In the control of the checkout, the page included both side and top navigation, unnecessary text as well as exit points, which all served as distractions from the key goal of the page: conversion.

In the treatment, the team removed the navigation and other exit points from the page as well as the distracting and unneeded text. The result? A 10% increase in checkout completion, equaling to a 20% increase in revenue per visit to the checkout process.

 

According to Jesse Kraker, Senior Research Manager, MECLABS, “When optimizing your website, you should evaluate each page element and consider whether it is helping the goal of your site or distracting visitors. Any potentially distracting element is an opportunity to test how your pages perform with those elements removed.”

 

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Co-creation: The next realization of value-based marketing

November 17th, 2014 No comments

“If I am your ideal customer, why should I purchase your product rather than any other product?” – Flint McGlaughlin, Managing Director, MECLABS (parent company of MarketingExperiments)

At MarketingExperiments, researchers have used this question to develop value propositions over the past 20 years.

Many things have changed over the past couple decades, which has now, more than ever, left room for the customer to answer the value prop question.

Recently, Professor Wouter Van Rossum, a leading expert on value proposition and product development, held an Academic Lecture Series at MECLABS headquarters in Jacksonville, Fla., where he discussed the evolution of a value proposition in a post-Twitter world.

“Companies don’t want to hear [feedback],” Van Rossum explained, “They don’t like to hear it.”

But, in an era where customers can ask questions and interact with not only the company, but fellow dissatisfied customers online and demand a more and more personalized experience, it “more or less forces companies into co-creation.”

 

Defining co-creation

Co-creation implies a situation where both parties profit in terms of exchange value.

threadless-shirt-contest

 

A “perfect example of co-creation,” according to Van Rossum is Threadless, a company that allows designers to submit art for T-shirts, among other commodities. Customers then vote on designs they want to purchase.

If the design is picked up by Threadless, the designers earn a portion of the profits from T-shirts sold and this creates an exchange of value.

Co-creation of exchange value, according to Van Rossum, implies that the company should determine a value proposition that will account for the customer’s contribution and result in a win-win situation for both the customer and the business.

In the case of Threadless: The company queues up designs that they know will be popular and purchased. The designer earns not only monetary rewards but also has work to add to their portfolio. Both parties benefit from the relationship and business model.

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