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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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Customer Anxiety: One element of the MECLABS Conversion Heuristic explained

November 13th, 2014 No comments

If you have participated in a MECLABS, MarketingExperiments or MarketingSherpa event or education program, you may have been exposed to the patented Conversion Heuristic.

It looks like this:

C = 4m + 3v + 2(i – f) – 2a

If you haven’t seen this before, it can be explained in minutes. However, it can take decades to master.

My hope is this MarketingExperiments Blog post will help you gain a basic understanding of the Conversion Heuristic, and specifically, understand the anxiety element in the heuristic.

Each letter in the Conversion Heuristic represents a psychological, emotional or physical element affecting a prospect’s choice to say “yes” or “no” to your offer.

Each number represents the weight or importance each element carries in guiding the prospect to your offer, or away from your offer.

The element “C” represents the probability of conversion. A conversion in this instance describes the event when a prospect becomes a customer.

This event is the foundation of business; without conversion, a business ceases to exist. To increase the probability of conversion, it is important to understand the elements within the Conversion Heuristic. In this post, I will highlight the “anxiety” element present in every conversion process.

Here is the Conversion Heuristic again: C = 4m + 3v + 2(i – f) – 2a

C = Probability of conversion

m = Motivation of the customer

v = Force of your value proposition

i = Incentive

f = Friction

a = Anxiety

 

Customer anxiety

It is very important to remember that your prospects are people. They have thoughts, feelings, needs and desires. When there is product or service being offered to a prospect, that prospect may have questions or concerns.

This psychological concern occurs within the prospect’s mind.

Anxiety is a real concern that the prospect may have regarding your offer. The prospect may not even be aware that it is happening, but when corrected or addressed, there can be some significant lifts in your conversion rate.

Here are some examples of anxieties that people may have when making purchases online.

 

Is my credit card information safe?

billing-information

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How to Improve Conversion of Your Online Ads

November 10th, 2014 1 comment

From pay-per-click advertising to display ads, all online advertising is a micro-yes, a step in the process to the ultimate conversion.

To help you improve conversion of this micro-yes, Flint McGlaughlin, Managing Director, MECLABS, created the MECLABS Online Ad Sequence based on online advertising experimentation for both B2B and consumer marketers.

How can you improve conversion of your online ads? Focus on the three factors identified in the sequence:

 online-ads-conversion

 

Let me explain the elements in the sequence in a little further detail.

 

Effectiveness of the ad

This isn’t an equation to be solved. This is a heuristic, or thought tool (kind of like checklist) to guide your thinking as you look to optimize your online advertising.

The more you improve the elements to the right of the equation side, the more you will be able to increase the effectiveness of your ad.

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Value Proposition: Between perception and reality

November 3rd, 2014 No comments

I recently posted this observation on FlintsNotes, Flint McGlaughlin’s blog designed to showcase his day-to-day work, and I felt that this idea could be elaborated on more:

The challenge for many companies is misunderstood. It is not finding prospects that need what it has to offer, but rather finding prospects who know that they need what it has to offer.

Managers flounder in the gap between perception and reality. They are trained to think about data, facts and rules. This strength obscures a corresponding weakness: They fail to account for the difference between ‘what is’ and ‘what the prospect believes is.’ The latter initiates the experience of the former and thus takes initial precedence.

-Flint McGlaughlin, Managing Director, MECLABS

 

The difference between reality and perception

Fint talks about how managers (marketers) tend to get lost in the blurred line of perception and reality, failing to recognize the difference between “what is” (reality) and “what the prospect believes is” (perception).

He points out that the latter (perception) initiates the experience of the former (reality), thus taking initial precedence.

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Value Proposition: 4 key questions to help you slice through hype

July 21st, 2014 2 comments

I was originally going to write this blog post to help marketers spot hype in their green marketing claims.

But then, I had an epiphany.

Why focus exclusively on green marketing that may have gone awry at the fringes?

Hype in marketing is far from exclusive to the green crowd and honesty is needed in every claim your marketing makes.

I decided to think a little bigger – much bigger – by sharing four key questions you should ask about any marketing claim to help you slice through hype and deliver true value to customers.

 

Question #1. Is our claim tangible? 

value-tangible

 

Our senses love being rewarded, so if your claim offers tangible value, the nature of it should connect directly to the customer experience.

For example, let’s look at the copy above from a recent experiment on green marketing.

The “green value” is in the nature of the manufacturing process and is directly connected to the quality of the product.

This leaves one more thing to consider when crafting tangible claims: Does the nature of the claim actually make the end product more appealing?

 

Question #2. Is our claim relevant to customers’ needs?

relevant-claim

 

I like these examples because all of them, while noble in cause, do not directly connect to a relevant problem a customer is having.

For example, I live in Florida and my desire to avoid sunburns gives the SPF of a sunscreen a greater relevance to my needs than just about any other claim.

Consequently, this is where focusing on claims that are relevant can mitigate the risk of associating products with ideas or causes that are abstract.

A biodegradable pen is nice to have. A biodegradable pen with 12% more ink than the next guy is even better.

The power of relevance rests in crafting copy that deals directly with any key concerns already present in the mind of a customer.

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Hidden Value: What buried treasure are you ignoring in your marketing?

April 24th, 2014 1 comment

Earth Day was Tuesday, which is a great time to remind you that it isn’t eco-friendly to use disposable plastic water bottles. What if you carried a reusable bottle with you everywhere instead?

This type of bland pitch to take care of the Earth’s resources doesn’t tend to be very effective. Sure, you may get the true believers to take action. But the vast middle segment of the population who somewhat care about the environment, but are lazy, likely won’t do anything different. Or, they might try it once or twice and then give up.

 

Shining a light on the hidden value of reusable water bottles

When I spoke recently at the University of North Florida, I noticed a marketing tactic so simple, yet so brilliant, that I wanted to share it with you today as the perfect example of revealing hidden value. Here’s a water fountain I saw at UNF.

water-bottle-refill

 

Now, I admit, I haven’t really kept up on water fountain technology. But you’ll notice how this water fountain is different from when you and I went to college: It has a feature that allows students to refill water bottles with filtered water. But here’s the really brilliant part …

bottle-waste-counter

 

I learned that this model of water fountain is the Elkay EZH2O Bottle Filling Station. There is a counter on each water fountain (which the company calls the Green Ticker) that says, “Helped eliminate waste from 35,403 disposable plastic bottles.”

 

What is hidden value?

This is the perfect example of revealing hidden value. Hidden value is value that your product or service offers a customer, but they don’t know about it because you either:

  • Don’t communicate it
  • Communicate it through your marketing, but it is buried and de-emphasized
  • Don’t track or compile the data at all

I believe that revealing this hidden value, which would have literally just flowed down the drain if the company didn’t track and message it, helped Elkay with two audiences:

  • Water fountain users – By quantifying and showing the amount of trash that was saved, users clearly see how the effort they are making as a community (in this case, university) is actually making a difference. It also adds some social proof, showing that others are taking this action. For example, Elkay has a case study about how a campaign built around this water fountain reduced plastic water bottle consumption by 92% and 350,000 fewer plastic bottles were sent to landfills.
  • Water fountain buyers – A water fountain is a B2B sale. Someone at UNF (and every other institution) had to decide to buy and install these water fountains. By quantifying a number that would have been lost, the purchaser is likely to be able to make an easier case to purchase more of these fountains, essentially showing the ROI to sustainability committees.

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