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Archive for the ‘Marketing Insights’ Category

Service Recovery: Three ways that Audible uses its cancellation path to encourage retention

August 13th, 2015 No comments

As marketers, we often hear the old adage that it is five times more expensive to gain a new customer than it is to retain an existing one.

This stat has been circulating since the 1980s, but didn’t take hold in the industry until July 1990, when the Harvard Business Review cited the five times figure in an article. Though the accuracy of the stat is often called into question, the underlying principal — it’s cheaper to keep your existing customers happy than to continuously pump marketing dollars into chasing their replacements — is fundamentally sound.

This is the same core tenet that has driven much of our work at MarketingExperiments over the years. We believe in the transformational power of customer-first thinking, and hold that companies should shift their focus from the cost of pleasing customers to the value of doing so.

In the same Harvard Business Review article — ”The Profitable Art of Service Recovery” by Christopher Hart, James Heskett and W. Earl Sasser, Jr. — formally introduced the concept of “service recovery.” Service recovery refers to the retention strategies that we implement when customers’ perceptions of or experiences with our particular services do not match their expectations.

“Service companies must become gymnasts, able to regain their balance instantly after a slipup and continue their routines,” the article  argued. “Such grace is earned by focusing on the goal of customer satisfaction, adopting a customer-focused attitude, and cultivating the special skills necessary to recovery.”

While the traditional business model primarily emphasizes monetary benchmarks — revenue, profit margins, return on investment — the recovery model holds customer satisfaction as the most fundamentally important KPI of all. A study conducted for the U.S. Office of Consumer Affairs once found that 70% of U.S. households would maintain brand loyalty if their problems were resolved satisfactorily at the time they arose, adding credibility to the importance of this KPI.

In short, putting the customer first and quickly and honestly addressing their concerns fosters loyalty, even when errors are inevitably made.

For an example of service recovery in action, let’s take a look at Audible.

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Creating Product Names to Maximize Digital Exposure

August 3rd, 2015 No comments

While generating the maximum exposure isn’t always the first thing your product development team thinks about when developing a product, it falls to marketers to inform our company’s prospective customers about this new and exciting product.

Unfortunately, rarely is the marketing team able to lead the product naming conversation; thus, by the time the product is ready to go to market, we are often handicapped in our options.  Below you will find three guiding principles for product naming that enable maximum exposure once your product hits the market.

After all the hard work of developing a product, why name it in a way that reduces your ability to market?

Following the guidelines below when choosing a product name gives you the best chance to achieve the maximum amount of exposure while expending the least amount of resources.

Each rule below can be broken or ignored if necessary, but doing so will mean increased marketing costs over the life of the product.

 

Principle #1: Don’t allow search engines to guess

While massive strides have recently been made by modern search engine algorithms in their ability to determine the user intent behind a given search query, they are not perfect. In order for your product to achieve the maximum level of exposure, your greatest weapon is to remove as much guesswork from the equation as possible.


Principle #2: Don’t create product names that resemble a mistake

Avoid misspellings

Search engines automatically make adjustments for queries they deem to contain spelling errors.

Google has even gone so far as to automatically show users the results for what the algorithm assumed they were intending to spell. This greatly reduces exposure of your product until your misspelling is adjusted for in the algorithm.

Examples:  Sinc, Sync, Reli, Mi, EZ, Lazer, Xport

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Email Marketing: Tips for tech support selection and contract negotiation

July 30th, 2015 No comments

In the world of marketing, there’s always a push to stay ahead of the curve and, more importantly, ahead of competitors.

However, it’s hard to dedicate the time, money, manpower and technical know-how to launching truly eye-catching (and revenue-generating) campaigns. This is especially true for smaller companies with marketing teams consisting of only one or two employees.

Enter the potential best friend to most campaigns: the vendor.

At the MarketingSherpa Email Summit 2015 Media Center, Erin Hogg, Reporter, MarketingSherpa, sat down with John A. Caldwell, President and Founder, Red Pill Email, to discuss the finer points of vendor negotiation. Specifically, John explained what to look out for when considering tech support vendors and what you should — and shouldn’t — negotiate when it comes time to draw up a contract.

Watch the below interview to learn tips on how to handle vendor negotiation:

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Process-Level Value Proposition: How marketing can leverage the value it creates

May 18th, 2015 No comments

If I am your ideal prospect, why should I buy from you rather than your competitors?

This is the essential value proposition question, and many major business decisions must be made to truly discover and deliver on your company’s value proposition — from the CEO down to the intern.

But today, let’s focus on the small stuff to raise this question for you …

 

What minor changes can you make right now to deliver a better value for your customers?

Once you have the big stuff taken care of, once marketing has communicated (and sometimes even created) value, sometimes the little touches make all the difference. They are the tipping point to help your ideal customer decide to choose your product or service instead of your competitors’.

Let me give you an example.

 

Really, they’re more than just stickers

My wife and I needed to buy some Mother’s Day cards, so we stopped by Deerwood Village, a shopping center near our house. As soon as we swung into the parking lot, we were confronted with three choices right next to each other that all likely offer Mother’s Day cards:

  • Publix (a grocery store)
  • CVS (a drug store)
  • Hallmark Gold Crown store (a gift shop)

We decided to buy the cards at the Hallmark store, and a simple but profound thing happened at the checkout. The cashier handed us stickers.

But, they weren’t just stickers. They were a signifier.

When she was done ringing us up at the cash register, she said, “Wait. Let me give you some of these to put on the back of the envelopes.”

With that, she reached down and counted out four gold crown stickers.

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How to Avoid Losing the Value of Your Value Proposition

When a customer comes to a page or an ad, one of the primary questions asked in their subconscious is, “If I am your ideal customer, why should I buy from you, rather than your competitor?

The answer to this question is, essentially, your value proposition.

However, what happens when you’ve formed a perfect value proposition, but it’s not giving you the results you wanted? You’ve filled out the worksheets, read all the articles on value proposition and followed all the rules you know. So, how is it that you’ve done everything, seemingly right, but it’s still not working?

For a quick example, let’s imagine for a moment that you’re reading through an online article. As you’re reading, you see the following advertisement on the side of the page with the caption, “Let’s look at the world a little differently.”


When we look at this ad, the first thing we see is the text in all caps; “Retired old man intercepted on his way out of the bank.” Below that is a confusing image of what looks like a diagram, followed by, at the very bottom of the page, what appears to be the value proposition: “Open happiness.”

The customer is left with the question: What can I do here?

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Direct vs. Indirect Creative: Which ad is better?

April 20th, 2015 No comments

Most people spend their lives trying to avoid ads. Not me. This may make me a complete marketing nerd, but I actually enjoy reading ads. I have for some time now. I love studying the different approaches of persuasive communication. I love attempting to uncover the underlying value propositions under each ad. I love just seeing how other marketers are attempting to communicate value to their potential customers.

Recently, I was on a Delta flight to San Diego, and I began to sift through the different ads in the Delta Sky Magazine. The first ad that caught my attention was an ad from Little Caesars. Now, I am no Little Caesars expert by any means, but its brand real estate in my brain up to that point was simply this: We do cheap pizza.

This ad was trying to combat that perception in a decently creative way.

 

Ad #1: The creative (indirect) type

The ad was mostly made up of white space (or perhaps orange space). The first positive thing about this ad was that it stood out from the other pages. It also had one bold image in the middle — an industrial mixer. A single line of ALL CAPS text centered beneath the mixer simply stated, “Saving the commercial mixer from becoming extinct.”

 

Now, there are very few elements to this ad. Its creative is simple and elegant. Its creative also takes an indirect communication approach. David Ogilvy (widely hailed as “The Father of Advertising”) would be proud.

What are they trying to say by putting a big picture of a commercial mixer? What do you think the implied value proposition is? What is the message underneath the creative approach?

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