- 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.
- Posted by: Paul Christ
A common theme that runs throughout the material found on KnowThis.com is the need for marketers to engage continually in research. We especially mentioned the importance of research last June when we reported on how marketers are using a special method of research, called A/B testing, to test online marketing efforts, such as advertising, pricing and webpage design. In that post, we noted that A/B testing is a form of experimentation where a marketing decision is studied to see what works best. For instance, a test may involve determining where on a website an advertisement will generate the highest revenue. While technically A/B testing only involves testing two different options to see which is better (e.g., ad located in upper left vs. ad located in top middle), testing involving the manipulation of more options (called multivariate testing) is also widely used.
In fact, A/B-style testing has become one of the most dominant forms of online marketing research. This is because it is relatively inexpensive, can be created very easily, and provides useful information in a short amount of time. A/B-style testing has grown in part because of online research facilitators such as Optimizely, which enables websites to test different layouts to see which one is more effective. Google is also a major provider of A/B-style testing. Advertisers using Google's AdWords service can carry out tests with the Content Experiments feature while websites that generate money by placing Google ads on their site can run experiments to test different ad designs.
However, A/B-style testing is certainly not limited to the online world. It can be used in many other offline situations including testing product layout in stores and testing different types of ads on television. An interesting example of how A/B-style testing is done with television ads can be seen in this CNN Money story. The story discusses how a lingerie retailer, Adore Me, tested television ads to see how model's hair color (blonde vs. brunette) and body dimension (standard-fashion-model vs. plus-size model) affected lingerie sales. The tests revealed that an ad featuring models with blonde hair and standard-fashion-model dimensions was much less effective in generating sales compared to an ad with models with brunette hair and standard fashion-model dimensions. They also found that an ad featuring models with blonde hair and standard fashion-model dimensions was less effective than an ad featuring a model with brunette hair and plus-size dimensions.
Certainly this information will help guide Adore Me's television advertisements. However, it is also important to understand that the information obtained should not suggest that this is the way the market will always view this issue. That is why marketers cannot rest on a single set of research results and, as the founder of Adore Me acknowledges, must continually carry out research because the market is always evolving.
- Posted by: Paul Christ
It has been over 5 years since we last discussed the idea of scent marketing, which can be defined as "the intentional use of olfactory elements, such as an odor or fragrance, for the purpose of enhancing customers' experience with a product." At that time, we suggested, that after a few false steps, maybe the time had finally come when more marketers would begin to deploy olfactory elements in their marketing efforts. Yet, five years later adoption of such methods remains relatively slow.
Obviously, the practice of scent marketing has almost always played a critical role in creating customer interest in industries in which smells represent the essence of the product being sold (e.g., baked goods, perfume). However, the adoption of this method across many other product areas, where the smell of the product may not be critical to the buyer, is still something that is slow to develop.
Yet, once again, there are reports this may be changing. This NPR story discusses new developments in scent marketing and provides several examples of companies selling scent-producing devices for installation in retail stores and other locations. For instance, a company called ScentAir, sells devices that can emit a single scent or be programmed to change the scent throughout the day.
The story also indicates that effective use of scent is not only about choosing the right ones but also the strength by which customers experience it with one industry expert suggesting a subtle aroma is more effective than strong scents. Finally, the story also offers a summary of what academics and other researchers have learned, and why they believe the time is now right for many others to explore scent marketing.