- Posted by: Paul Christ
One of the great temptations for marketers is getting caught up in what attracts the attention of the news media. For the news media, when it comes to marketing, a good story is likely one dealing with advertising and product design, and not one dealing with other important marketing decisions such as shipping, warehousing and even product labeling. Yet, these less "glamorous" areas of marketing are still extremely important in building a successful marketing business.
Another area that can be added to this list of less-than-glamorous marketing functions is customer service. Many marketers despise getting involved in customer service as they view this as less of a service and more of dealing with whining customers. Of course, companies do face whining and, in some cases, arrogant customers, though to dismiss or give short shrift to a function that offers direct contact with those who support the business can be a big mistake.
However, recognizing the need for good customer service also means that companies must spend on technology. In today's instant-contact-is-expected age, marketers cannot afford to let customers be limited to obtaining help from a few phone lines or through email. Companies must expand to offering near instant communication with its customer service department. This means providing such options as online chat and, as described in this story from CRM Magazine, the use of text messaging.
Adding a text messaging option would seem to be easy. Just have a few smartphones manned by customer service folks, and you are good to go. However, as discussed in the story, that is not the way this works, as more technology is needed for text messaging to be a useful customer service option.
Yet, offering a customer service texting option creates a dilemma. While responding to customer issues by text may offer convenience for the customer, on the company end they may be losing out on opportunities to develop stronger relationships with their customers due to the impersonal nature of texting. Unlike a person-to-person phone call, it is much more difficult to engage the customer in communication that could possibly lead them to purchase other products. On the other hand, companies not offering this option could be perceived as not being very advanced or not caring about their customers.
The story offers a good background for why texting is quickly becoming many customers' preferred channel for reaching a company's customer service department and also suggests how companies can turn this customer service channel into a sales channel.
- Posted by: Paul Christ
There are thousands of retailers born every year. Many, of course, are single outlet operations, such as a small coffee house or a new website selling a specialty product. Each new entry is looking to mold together the right combination of business decisions (e.g., marketing, finance, human resources, etc.) that will lead to a successful operation.
When it comes to the right marketing decisions, retailers can find success for several different reasons. Some are successful because they sell great products that others do not sell (e.g. Apple Stores). Other retailers find success because of personalized care they extend to their customers (e.g., Nordstrom). While for other retailers it is all about using low price to attract customers (e.g., Walmart). And then there are those who are successful because of ordering and delivery convenience (e.g., Amazon).
Yet, while these examples of retail success may suggest it is about being great at one marketing mix variable (i.e., product, price, promotion or distribution), what all successful retailers have in common is making sure they invest heavily in fully understanding their customers. For instance, the companies mentioned expend great efforts in researching customer needs and in capturing customer data, such as purchase history and website traffic patterns. They then take this information and provide a retail experience that they believe is addressing what customers are really seeking.
A case in point of a company that knows what its customers want can be found in this story from Bloomberg about the Sports Bar chain, Buffalo Wild Wings. The story provides a fairly in-depth explanation of how this company has grown to be a powerhouse eatery with over 1,000 U.S. locations with more on the way (including international locations). What is particularly important from a marketing perspective is how this company has taken what some would consider a niche food product, chicken wings, and turned it into a business that is thriving with over $1.5 billion in sales. What is even more impressive, they are accomplishing at a time when many other major restaurant chains are struggling.
The issues found in this story cover all key marketing decisions. And even for organizations not in the restaurant business, this story will serve as a good case study in how to do marketing right.
- Posted by: Paul Christ
When developing a promotional campaign or deciding what to place on a product package, marketers will often search for comments by a neutral third party hoping these will impress potential customers. The idea is that customers may consider what is said by those who are not directly paid be a marketer to be unbiased and, consequently, highly credible. Examples are easy to find, such as a car company promoting their automobile's top rating in crash tests performed by a government agency or a university touting their ranking by a major news magazine.
The influence that third party evaluators can have is potentially so meaningful that organizations often bend over backwards to support and cater to them. For instance, a marketer may provide evaluators with direct access to top executives and even offer financial support, especially to important non-profits. Of course, there are many that will look at monetary support as an attempt to buy influence but that is far from being the case. There are many reputable third party evaluators whose evaluations and opinions cannot be bought, even if they receive money from organizations they evaluate.
In the same vein there are non-profit trade groups that are funded by and work for their members. While these groups do not specifically evaluate and rate products, they do make decisions that marketers may be eager to promote. An excellent example can be found in this Fortune story that reports on changes in the craft beer industry. According to the story, the Brewers Association, a trade group representing U.S. craft brewers, has changed how they define craft beer. The new definition expands what is classified as a craft beer leading to a change in the listing of top craft brewers.
The alteration has raised Pennsylvania brewer, Yuengling, to the top of the U.S. craft beer list ahead of previous leader Samuel Adams. While there is no evidence in the story that Yuengling plans to take promotional advantage of their new status, do not be surprised to see this coming soon to their packaging, in-store displays and advertisements.
- Posted by: Paul Christ
In February, we wrote how the promotional impact of a sales force may not always be viewed as strongly as what can be done with advertising. We suggested that, in part, this may be because people just do not understand what salespeople do. When it comes to field salespeople (i.e., travel to customers' locations), we can extend this by suggesting that some in an organization may not fully appreciate what they do because, to some inside an organization, field salespeople are more like independent contractors, who are paid for work done outside the office. They only occasionally make a physical appearance within an organization's building and, consequently, rarely interact with office employees.
Because many salespeople perform their work without having other members of their organization around, those who manage the sales function must trust that a salesperson is performing the tasks needed to build strong customer relationships, which will ultimately result in sales. For management, there are certainly methods that can be utilized to monitor what salespeople are doing, such as requiring daily reports. While such tracking is useful, getting a person, who you see infrequently, to go out and give it their strongest effort requires other methods for motivating them to work hard. One way in which management can motivate their sales force is through something that motivates most people – money. For many salespeople, they are particularly motivated when the compensation they receive is tied to sales results, especially when generating greater sales results in more money.
As discussed in this in-depth Harvard Business Review story, traditional methods for determining sales force compensation actually may be decreasing overall sales. Evidence for this comes from research undertaken by story's author. For instance, research results suggest placing a cap on commissions or raising a sales quota based on a previous year's results can negatively impact a salesperson's motivation and, thus, their effort.
This story covers a lot of ground including reviewing previous research on how to motivate salespeople and also offers steps for designing an effective sales force compensation plan.
- Posted by: Paul Christ
I have been a Windows user since Windows 3.1 was first commercially released in the early 1990s having faithful upgraded to almost all Microsoft operating systems including Windows 95, Window XP and Windows 7 (though not Vista!). With each upgrade, I was a willing spender for not only the operating system, but also the purchase of upgraded software that supposedly worked better with a new Windows version.
Unfortunately, my Windows personal computer is now using Windows 8.1. Very likely many people reading this post are now saying "Why!!"
As has been well documented around the Internet since Windows 8 (and then 8.1) was released, the latest version of Windows has been less than well received. While many users have complained about the removal of the much-ingrained Start button, there are certainly other issues. One of the biggest problems rests with Microsoft's decision to develop Windows 8 with the primary intention of targeting users of mobile devices (e.g., tablets). Unfortunately, it now appears this decision was at the expense of existing personal computer users.
My experience with Windows 8 has been like many others – frustrating. My biggest complaint is that my computer constantly freezes or just shuts down for no obvious reason. This has resulted in lots of time spent restarting the computer and, worst of all, having to reenter information that was not automatically saved. The problems have been going on for a long time and software updates have done little to solve the problems.
So finally, after yelling at my Windows computer for the 1000th time I decided a change had to be made. So I switched to an Apple Mac. Now, bear in mind, making a change like this is not easy. Obviously there is a big expense in buying a new computer, but money also needs to be spent acquiring new software when one switches from Windows to Apple. And, of course, there is now the expense of my time in learning how to get around the Apple environment, such as learning new keyboard shortcuts and learning new software, as well as time spent converting files to being Mac acceptable.
So where did Microsoft fail me (and many others)? While I was willing to put up with some of the annoyances, eventually the supposed upgrades that came over the last six months or so never addressed the big problems. What is even worse, the online resources that discuss the problems were just too time-consuming to access, understand and implement. It made me wonder why a car company can often just plug a sensor into an automobile engine and figure out what the problem may be but a company selling the leading computer operating system cannot offer something similar.
So what does all this have to do with marketing? The lesson here is that brand loyal customers must not be overlooked. In fact, almost any customer classified as brand loyal should almost always be considered the most important customer for an organization. Now "almost any customer" does not mean every. Certainly for products that are clearly in the Product Life Cycle Decline stage and primarily being purchased by Laggards, treating these customers as your best customer does not make sense. But in most other situations, customers who are highly loyal should be at the top of the customer relationship list. Why? Because as we note in our Product Decision tutorial, one of the major benefits of brand loyal customers is their reluctance to try other products. Because of this, they tend to be a marketer's most profitable customer because these buyers know what they are getting for their money and have little incentive to consider competitor's products.
However, for a marketer who is losing their brand loyal customers, getting them to return may prove to be very difficult as these customers almost always are motivated to leave because they did not like the way they were being treated and not because they were attracted by another company's product. For many brand loyal customers, switching is not so much about how it affects their wallet as it is about how it affects their mind (i.e., switching to a company that cares). By not addressing the needs of brand loyal customers, marketers allow the door to open to other options. And if that opening continues to get larger and larger, customers will eventually have no choice but to try other products.