http://www.lubicom.com/ en 1@lubicom.com Copyright 2008 2008-09-12T15:48:00-05:00 http://www.lubicom.com/ootb/soft_opening_is_an_opening_nonetheless/ http://www.lubicom.com/ootb/soft_opening_is_an_opening_nonetheless/#When:15:48:00Z Soft Opening is an Opening Nonetheless By Menachem Lubinsky In the past few weeks, a number of new retail establishments opened in Brooklyn, but at least two opened without any publicity or fanfare in what has become known in the industry as a “soft opening.” I know that many banks also prefer a soft opening to a real opening, which would include a full court press announcing the launch of a new bank or branch of a bank. The reason for a “soft opening,” you will no doubt hear, is to essentially do a dry run or as some people put it more starkly “to get the kinks out.” I remember a bank opening in Brooklyn many years ago that followed that model for so long that the actual opening became irrelevant. The branch president had decided not to set a timetable for the soft opening and whenever you would ask him when the branch would formally open, he would tell you that it wasn’t ready yet. Indeed, that was the case, as there were numerous problems with the ATM’s and with some of the new tellers that were hired. The branch had become a fixture on the block and the grand opening 3 months later was greeted with a yawn and very little excitement. The concept of a soft opening in itself is not a bad idea if it is a prelude to a real opening shortly thereafter. In due time, a new retail establishment will be noticed by some and be a very well kept secret by others. Marketers will tell you that a soft opening has to be treated like a real opening or else it may leave a lasting bad taste in the customer’s mind. A good example of how a soft opening (and oft times even a real opening) can backfire is a restaurant that opened several years ago in Brooklyn. One day the restaurant simply opened its doors without any previous announcements, ads or publicity. The owner wanted to be super-cautious. He had hired a new chef and rounded up a wait staff and did not want to go public before he was sure that he had the right team in place. On the first night, a few stragglers came in to see what the new restaurant was all about, especially since it really looked good from the outside. Everything that could go wrong went wrong. Almost half the items on the menu were still not available, the waiters seemed to have to go back to the kitchen to get answers to every question, and the food was ultimately below par. Things were a little better the second night as more people came in, but many of the problems still persisted. The buzz that was generated the first week was far from positive. The word on the street was that the restaurant had poor service and so-so food and that meant many empty tables night after night. After about two weeks, the owner believed that he had in fact dealt with all the problems and felt it was time to launch a full blast marketing campaign. More people did ultimately visit the restaurant, especially with the special promotions that he advertised, but in the end it never quite took off. Although the quality of his food and the service were much improved, the initial group of diners had managed to give the restaurant a failing grade and even with all the marketing, the restaurant was never able to recover, closing its doors nine months after the soft opening. What this seems to indicate is that even a soft opening should not be treated in a casual or cavalier way. If there is a decision to delay the formal opening, the informal or soft opening must be treated as if it was the only opening. The restaurateur should have made sure that everything was perfect prior to opening. He should have made sure that the staff was trained and ready, that every item on his published menu was available, and that he was satisfied with the quality of the food. He should have brought in consultants and made sure that the quality of his food was impeccable. In the case of the bank, the preparations should have been completed well before the opening. Most banks nowadays begin promoting a new branch weeks before it opens. Once the doors open, there is no longer any room for error, which is why I am quite apprehensive about putting too much weight on soft openings. It probably makes sense to perfect the model before opening the doors which could be informal for a few days or so but under no circumstances should a soft opening take longer than a week or two. Most franchise manuals counsel to conduct “dry runs” without opening the doors. In other words, they suggest role playing and getting the staff fully familiar with inventory and customer relations issues. A large drug chain, which has been opening stores at the rate of 10 a month, mandates that new workers spend at least 3 days at a fully functioning store before moving on to the new store. On the last day, the group is joined by the store manager as they discuss the similarities with the new store. On the next day, the group and the manager spend a day at the new store going over everything they saw at an existing store with the formal opening taking place a day later. They believe that an opening is an opening. Period!  2008-09-12T15:48:00-05:00 http://www.lubicom.com/ootb/can_a_good_message_go_stale/ http://www.lubicom.com/ootb/can_a_good_message_go_stale/#When:19:28:00Z Senator Barack Obama’s message of change catapulted him to the top of the Democratic ticket. With a failing economy, the ongoing war in Iraq, and terrorism still on the minds of Americans, “Change” seemed like a viable slogan to many Americans, at least Democrats. On the flip side was Senator John McCain’s straight talk about issues, without resorting to any central message. If there was a message, it was that experience is what the nation needs now, particularly in facing up to the international scourge of terrorism and in bringing home the troops from Iraq with honor. While Obama was said to have a near double-digit lead nearly a month ago, most polls now say that the race is a dead heat with expected bounces coming out of each party’s upcoming convention. In trying to explain why Obama’s numbers declined, pollsters and political pundits gave a marketing answer: his message of change was running stale. Worse, they said, is if he keeps using the slogan all the way to the November election. Not everyone shared that opinion as several marketing publications counseled that he should stick to the message that got him here in the first place. There is also considerable debate whether a candidate absolutely needs a memorable slogan to succeed. Perhaps the non-slogan has been working better for McCain since he can project himself as being the candidate of substance vs. the slogan of Obama. Others are not so sure, arguing that even a slogan that included the word experience would be better than no slogan. Marketers have long suggested that messages can become stale and even boring to consumers, which is why even some of America’s corporate icons have been coming up with new slogans on a fairly regular basis. Every company wants to appear as dynamic and fresh and thus goes to great lengths not to appear to be stale and outdated. If you are a businessman, this all might sound very confusing. On the one hand you have always been taught that a good slogan or theme can be an important asset to a company. On the other hand, you hear all this talk about slogans growing stale and perhaps not very productive in terms of sales and profits. Many older readers will surely remember the slogan of General Electric: “We Bring Good Things to Light.” It seems so perfectly suited for the company that you’d never believe that the company would ever change the slogan, and certainly not to the current slogan of “Imagination at Work.” But it seems that the GE marketers were concerned about getting painted as an older company with a tired slogan, which is why they opted for the change. Corporate America invests a great deal into slogans. Yet, a 2004 survey by Emergency, a marketing consulting firm, showed that only 1% of 500 people surveyed were able to match familiar brands with their slogans. But there were some slogans that did better than others, such as “You’re in Good Hands with All-State” that 87% of those surveyed were able to match. If you are an All-State marketer you just don’t tamper with that kind of success. It may appear that the success of the slogan should dictate its longevity. But as we well know by now, some of the most successful slogans were retired long before they became obsolete. The reason: the company did not want to wait till it became a tired slogan. There is a school of thought that urges periodic change to slogans. The reasoning is that the change of slogans is like an event that can help generate excitement. Frequently, companies roll out a new slogan with the same fanfare as they might a new line of products. It gives the company the opportunity to deliver its message in a controlled but upbeat manner. Its shelf life can be long, giving a company a good run before moving on to the next round of slogan change. So if you are Obama, how do you handle the slogan of change which he used so cleverly to raise money? Obama raised $51 million in the month of July alone, a large part of it attributed to his message of change. Yet, you receive the analysis of professionals that people may be tiring of your message while your opponent does not even have to worry about a slogan altogether. The bet is that Obama will refine his message somewhat, at least through his acceptance speech at the Democratic National Convention in Denver. Slogans are a good vehicle for delivering a message about the culture of a company and often its mission. They can be an enormous boost to branding, but may not be for everyone. If the message can not be succinct and convey an immediate impression, it may have the effect of confusing the customer, which is the last thing that marketers would suggest. In evaluating a slogan, it may be wise to take the Obama test. Is the slogan propelling the company to the next level or is it tired and boring? Does the slogan send the right message about the philosophy of the company or does it mean absolutely nothing? In the next few weeks, we will learn more about Senator Obama but we may also learn a lot more about slogans and messages. 2008-08-19T19:28:00-05:00 http://www.lubicom.com/ootb/promotions_sponsorships_in_an_era_of_decline/ http://www.lubicom.com/ootb/promotions_sponsorships_in_an_era_of_decline/#When:16:21:00Z Travelling through Europe recently I couldn’t help but notice how commercial Europe had become in the sense that you are totally inundated by advertising and sponsorship messages. With its strong Euro and economic prosperity, the Europeans are in many respects ahead of us in many areas of marketing. I saw many more electronic advertising messages than I see in this country. From the moment you step off the plane, there are ads all along the hallway. The luggage carts (which are free) have ads on them. Huge banners hang in many of the terminals, again promoting a brand. In some supermarkets, the shopping carts have rotating ads. In this country, stadiums are being named after airlines and banks. Companies sponsor sporting events, culinary competitions, and almost anything else that will give them the exposure that will help in their branding. So what has changed? There was a time when corporate sponsorship was reserved for not-for-profit causes. A charity looking for funding for a project would offer a sponsorship to a company in what appeared to be a win-win situation for all. The not-for-profit organization received the money to fund projects that they might otherwise have trouble funding. The company received exposure to large numbers of people in a targeted marketing effort to increase visibility. Today, in an age of soaring fueling costs and a declining dollar many businesses behave like not-for-profits. One international airline that is still offering pillows and blankets to its passengers features the logo of a major communications company. We are after all living in an era when airlines charge for snacks, baggage, headsets and in one case even for pillows. A European airline provides its Business Class passengers with a bag of amenities that features the logo of a newspaper. Daniel, a marketing director for a large travel related business, still has some marketing dollars to dispense despite the down economy. Prior to 2008, Daniel’s advertising budget was well over $1 million for print media and some electronic media. With a slowdown in business, Daniel still has a budget of $400,000 but now he spends the money on sponsorships, ranging from a community concert in Connecticut to a bike race on Long Island. He is convinced that despite the retrenchment in advertising, he is still getting bang for the buck through his sponsorship programs. Marketing professionals might not disagree with Daniel, but are likely to counsel using some dollars for advertising as well. The marketers say that targeted sponsorships often restrict the number of people that will be exposed to the brand, necessitating somewhat of an effort to go beyond the sponsorship. Daniel is not alone. Many marketers are looking to team up with other companies that are also hard pressed for the extra marketing dollars. On the West Coast, a minor league sports franchise was building a new stadium but fell short on funds to construct a state-of-the-art electronic scoreboard. They were about to give up on the scoreboard in favor of a much cheaper conventional scoreboard when they learned that a local utility company was looking for a sponsorship opportunity. The utility company, it turned out, had made a strategic decision to cut back on its conventional advertising. When they learned about the scoreboard opportunity, they immediately seized on the chance. They estimated that some 75,000 people from the County would see the scoreboard during a season. These were not just 75,000 people at random but 75,000 people who live in the County and use the service. They were given the opportunity to advertise various products and after a year were convinced that their investment had paid off. The trend is to increase these sponsorship opportunities in what marketers say will continue to cut into conventional advertising. The simple formula of past years no longer works for anyone. You cannot simply pass on increased costs and hope that it will cover the budget. There is a fear that at some point you will price yourself out of the market. Sure, airlines can pass on the higher fuel costs, but what is the limit. The answer is that while some increases will still keep the consumer’s interest, declining budgets will have to be made up elsewhere. For marketers evaluating sponsorship and promotion opportunities the key question is the bang for the buck. One marketer told me that in making a decision for sponsorship he was considering bus shelters, the marquis on yellow cabs, public school athletic fields and even sanitation trucks. The Bloomberg administration was said at some point to be considering selling individual trains stations for sponsorship opportunities. The 34th Street stop, for example, might be changed to “Macy’s 34th Street” station. What some of these government opportunities offer is volume. Their services are simply used by large numbers of people. For example, you can buy a sponsorship at the Cleveland Metropark Zoo or a children’s wing at a major Metropolitan area hospital. The extent of the exposure is what gives the sponsorship its ultimate value. There is no question that marketers will increasingly look to sponsorship to disseminate their message to large numbers of people. The media itself is expected to jump on the bandwagon, offering the corporate world many sponsorship opportunities of special sections or special events. Sponsorships have always been a basic tool of the marketing mix but in today’s tough economic times, they will become even more important. 2008-07-30T16:21:00-05:00 http://www.lubicom.com/ootb/selling_by_phone/ http://www.lubicom.com/ootb/selling_by_phone/#When:13:42:00Z The Acme (not its real name) company cleans commercial carpets. Many of its clients (about 50%) are on a semi-annual schedule as part of a contract. The rest are on an as needed basis or once-a-year, perhaps as part of Pesach or Spring cleaning. Ronnie, the company’s marketing manager, put an aggressive marketing program in place to attract new customers that he and the CEO figured should represent 25% of the company’s sales. Ronnie’s marketing program included sending out regular “cute” reminders about service. One even said: “Hi, I’m your carpet. I don’t mind being stepped on but I could use a shower once in awhile.” Another had a before and after picture with the heading. “I promise I will change...if you take care of me!” It then went on to remind the customer about the need for cleaning the carpet. Despite all these efforts Acme’s leadership felt that the company was really not growing. While Ronnie’s program was working, many customers were dropping out, either because they were trying to save money by cutting out one cleaning a year or because they found a young start-up company that offered the service for less money. Ronnie decided to hire Rona, an experienced saleslady with an impressive track record of selling by phone for a communications company. Her job would be to contact existing once-a-year clients and offer them a contract, past clients who have dropped out and potential new clients. Rona turned out to be the perfect person for the job. For the customers who were the once a year or infrequent customers, she would explain that the infrequency of the cleaning shortens the life of the carpet. She followed up the conversation with articles from several well known magazines that she sent along by e-mail. For the drop-outs, she had a whole array of tools, ranging from a Welcome Back special to a free mat designed by a well-known artist. She was particularly effective in making cold calls, usually adding: “So who’s taking care of your carpets?” Rona says that the question always evokes a response and ultimately leads to business. Finding people like Rona is not an easy task. It is difficult to find good salespeople in general, but particularly someone who is good over the phone. Recognizing that they may not always be successful in finding experienced people, many companies are prepared to train, provided that the person has some experience in a business environment, is intelligent, well spoken (particularly over the phone), and not afraid of rejection. Selling by phone is not for everyone. Ronnie made sure that he gave Rona enough of a client mix that assured her of some success even if the potential new clients were hanging up on her. Rona herself wasn’t sure if she could handle a day that was exclusively reserved for cold calling, although in some businesses that is the case. Many businesses overlook the potential of generating more business from their existing client base and certainly from drop-outs. Rona’s pitch to the drop-outs begins with the soft-sell of chatting about both Acme and the company she’s pitching. She treats it like calling a relative you haven’t been in touch with for a while. Her next step is to make the person on the other side of the phone feel that they were missed and then comes the embrace with the promotion. Rona and others that try to revive old clients say that the communications itself can be a positive step. She found that many of the companies were simply “tickled pink” that Acme had not forgotten about them, which resulted in a positive outcome. Many companies, through newsletters and other communications, never quite allow the communications to stop altogether, which makes it much easier for people like Rona to solicit a positive response. Sometimes Rona would suggest that a more senior person, and perhaps someone who handled the account previously, follow-up with a call to restart the relationship. A case in point was when a major customer for a home decorating manufacturer had taken his business elsewhere. The reason given at the time was the obvious: someone had offered the items for cheaper. For 3 years, the manufacturer simply accepted the fate and did nothing to stay in touch with this major client. They thought that there was nothing that could be done to bring the client back into the old. When a consultant had challenged the CEO to “call anyway,” the former client was upset. “We did business for 5 years. You stopped sending me holiday cards and you never called after Jackie’s operation.” Jackie’s operation? How was he to know if he never kept the contact. The two ultimately got together and restarted the relationship, leading to a significant jump in the company’s sales. Sales by phone can be a very important part of a company’s marketing program. It is imperative that salespeople sound like they are part of the company and not just a hired gun. The more knowledgeable a sales person is about the company, the more likely they are to generate a positive response. The more passionate a salesperson sounds about the product or institution they are selling, the greater the chance of success. In only a year’s time, Ronnie’s strategy paid off with a remarkable 20% increase in sales, much of it due to his aggressive marketing program, but also a good deal of the credit has to go to Rona, who could be successfully used by any business. 2008-07-18T13:42:00-05:00 http://www.lubicom.com/ootb/wal_marts_image_change/ http://www.lubicom.com/ootb/wal_marts_image_change/#When:13:48:00Z Believe it or not, Wal-Mart is about to undergo an image change. One marketer referred to their current image as being “dowdy"while another called it “stuffy.” Customers have repeatedly labeled their store signs as “boring.” Even the hyphen in the name will disappear. In recent years, Wal-Mart replaced the hyphen with a star and now it will be referred to as Walmart. The new logo was due to be released by mid-July. The news of the logo change came at a time when the discount giant was looking to preserve its substantial lead over discount competitors. It was also attempting to project a new user-friendly image. There is also the notion that with a down economy, Wal-Mart hopes to lure more non-traditional buyers to its stores. They are hoping that some customers who frequent department stores might look to Wal-Mart to realize deeper savings. The idea of a logo change for an icon retailer like Wal-Mart might appear to be out of character. After all, aren’t companies like Wal-Mart supposed to bank on their familiarity and comfort level with consumers? But as much as familiarity is important, marketers say, an occasional fresh look can do wonders for a company. Even Coca Cola and Pepsi Cola occasionally tinker with their well-known branded logos just to make it more contemporary and thus more appealing. They may also develop a new slogan, add colors to their basic label and so forth. They certainly rely on promotions that make them appear to be relevant and interested in the community. Almost from the moment that a new logo goes into the marketplace for a large company like Wal-Mart, you can be sure that someone at the company is already thinking about the next generation, although companies like Wal-Mart do not change their logos that often. The cost alone of changing a logo can be staggering even for a Wal-Mart. When they do take the plunge, they will factor in the expected benefits, or in the very least calculate how they can stave off losses to their competition as a result of a stale and outdate image. The truth is that Wal-Mart is probably amongst the most conservative of companies when it comes to changing their image. The current logo has been around for about 30 years, albeit they did tinker with the star and made other adjustments over the years. Wal-Mart’s new starburst logo mimics the cleaner, brighter sign of competitor Target with its iconic red-and-white bull’s-eye. A client recently asked me if there was any specific time-frame in changing or updating logos. I have read the opinions of many professional marketers and I would have to say that the average appears to be 10 years, although it also seems that updates are performed every 5 years. An update can be a color change or introducing a new slogan. The issue that has always plagued marketers is whether a drastic change in an image can mean the loss of familiarity and a resulting loss of business. I have seen many companies lose market share because the customer simply did not relate to the new branding. I am sure you have seen how hard companies have to work to keep the consumer in the loop when they undergo a name change, mostly because of a merger or acquisition. It has cost Capital One millions to educate the consumers that its acquisition of North Fork Bank meant that customers of the bank were now part of a bigger bank. In Wal-Mart’s case, nothing has changed. Its 3600 stores are still where they are. The company will probably not make a drastic change in that it will most likely change signage and other images that are associated with the store. For example, the company might take months before it changes the uniforms of its large employment force. It is extremely important for businesses to constantly refresh their image, including a facelift that involves the logo, a key element of brand recognition. Marketers say that customers respond well to a fresh image and tend to shy away from brands that appear to be dull and stale. Yet, many successful well-known products and institutions have kept their logos for decades without any change. They might argue that the fact they have always looked the same is an important ingredient in their success. Consumer behavior experts say that customers are not very expressive when it comes to their views of a brand. Said one: “It is one of those subconscious feelings that consumers have. They won’t openly complain if an image is stale but they will compliment a fresh look.” They make the case that this subconscious attitude is directly responsible for an upward or downward curve in sales. Another said that a new logo is like a fresh coat of paint, “You can smell it and see that it’s fresh.” Every company should periodically evaluate its image. It should look at the image of competitors, because after all every business operates in a competitive environment. They should consult with marketing experts to assure that the image is still relevant. A logo with outdated images can have negative repercussions with consumers. Finally, they should assess their company’s message with some hard questions: “We are selling an A product today whereas 10 years ago we mostly sold B products. Is our image from then suitable for today’s reality of both what we sell and whom we sell to?” If you have doubts about this exercise, rest assured that Wal-Mart already did the research for you. 2008-07-11T13:48:00-05:00 http://www.lubicom.com/ootb/learning_the_business/ http://www.lubicom.com/ootb/learning_the_business/#When:16:52:00Z One of the major food magazines carried the story of a relatively new business that was producing corporate cakes. What is a corporate cake? It is a cake that is designed with the company’s logo, slogan or other visual on top of the cake. The two women who founded the company were truly passionate about pastries and decided to turn their hobby into a business. To market the cakes, the woman baked mini-versions and delivered the pastries to executive secretaries in their hometown. They soon found the task of baking, managing the business, and marketing daunting. A marketing consultant suggested that they hire a special person to concentrate on marketing their cakes. The new hire took her time in learning the industry, understanding the whole area of corporate gifts, branding, and how the pastries were used. After several months, the women grew impatient, wondering when the orders would start coming in. How much of a learning curve should there be for the new marketing person? Some experts attach numbers like 3 months, but others are not so sure. One marketing magazine several years ago suggested that new employees use more of their own time than company time to learn the business. In fact, said one marketer, much of the learning should be done even before they spend a day at the desk. It is important for people involved in marketing to understand every aspect of the business. I have found that the more the marketer knows, the better job they are likely to do in promoting the products and services they are hired to market. It is equally important that the marketer believe in the product. I recall one marketer who told me bluntly: “Our product is not as good as our competitor’s but it is in the ballpark.” Assuming that what the marketer said was absolutely true, it might have been better if he said:"Our products compare favorably with our competitors.” This slight bit of vagueness is the difference between a credible presentation and actually knowing the product. In most cases, the marketer needs to understand some nuance that makes the product worthy of being marketed. If the product is not as good as its brand name competitor, how does it compare in price? Perhaps there is a service angle that can help the product stand out. In my book, learning the business, means just that: Understanding the intricacies of the business, the quality of the product and service, and very importantly, having a firm grasp of the sales environment. For our pastry marketer, the environmental question is how likely are corporations to buy a pastry as either a gift or showpiece in a conference room? Are the cakes priced competitively with other gift ideas? Although the cakes may look great in a conference room, will they be affected by the spots that light up the room or do they need constant refrigeration? Learning the business also means having a good grasp of historical concepts and I don’t just mean the history of the company. Who were the early customers of the clients? Why did they buy the product? If they are no longer customers, why not? Who else is in the category of the buyers that can be marketed to? I have no idea whether the two women devoted the time to properly train the employee. I have seen too many cases where proper training is never offered, not out of a malicious intent, but because the higher ups were so busy. I even chided a “boss” who told a new hire to “just watch me.” That approach doesn’t work since the employee may be watching, but not understanding. Let’s assume that our bakers took the new hire along on sales calls. Let us also assume that they met with the marketing person frequently. Is that enough? No, not at all. The employee has to assimilate that information and perhaps even carve out creative approaches to market the product. This particular hire went on to focus on large trade shows, with fairly good results. It is also important for a company to establish realistic goals for their new hires. If the company was had $100,000 in sales, it is unrealistic to ask the new hire to bring in $500,000 in the first six months. If others in the industry are growing at a rate of 10%, the new hire will not have an easy time even taking sales to 20%. The most successful approaches build incremental increases, allowing the new hire to achieve modest successes before moving on to the next level. Learning the business, as the common saying is, means learning all that is necessary to know to be a successful marketer. The marketer does not need to know the internal politics. That they can pick up just by observing and hopefully putting it into perspective with their responsibility of marketing the company’s products or services intact. It is the business that relates to the product or service that a new marketing person must learn. 2008-07-03T16:52:00-05:00 http://www.lubicom.com/ootb/hiring_and_firing/ http://www.lubicom.com/ootb/hiring_and_firing/#When:19:49:00Z It is hard to think of the hiring and firing of employees as a marketing issue. Yet, it has increasingly become just that. Businesses routinely use the occasion of a new hire to stress change or progress. On the flip side is the potential for negative publicity over the laying off of an employee, particularly if it is from the ranks of upper management. I recall consulting for a business that was in the process of a significant expansion of their business. In just one year, the business had taken on a new partner with a concomitant capital investment, moved into a new suite of offices and was in the process of hiring several new key management people. The CEO was anxious to tell the story of the company’s development, including the hire of a new CFO, but he was concerned that an announcement would backfire. He wasn’t sure whether the CFO would ultimately work out, whether his competitors would not go after him and “offer him more,” and whether some of his clients would worry that he, the CEO, was surrounding himself with subordinates and would no longer be accessible. All of the CEO’s concerns were legitimate, but the key question that must be answered is what the motives for the announcement of a new hire are. If it is designed to add manpower to potentially win over new clients, then it might well be worth the risk. If on the other hand, the new hire is used as the showcase for a business that is growing, it might be best to profile another aspect of the business that might be better grounded. Big business routinely publicizes a new hire, but may let a period of perhaps 3 months pass before going public with the announcement. They simply want to make sure that the new hire is working out. They want to avoid a PR fiasco that has happened to several companies who have had to retract an announcement because the hire either left or was fired after a very short period of time. When it comes to firing, the risks that a business might find itself on the defensive are considerable. The recent firing of a manager of a New York sports team that was underachieving turned out to be a huge PR fiasco for the team. The general manager had flown 3,000 miles where the team was playing to fire the manager. The fans were incensed and the media was relentless in its attacks over the way that his firing was handled. The firing of a manager of a sports team is markedly different from a food supplier that fired its sales director who the company determined was responsible for the loss of a significant amount of business. The sales director was said to be arrogant and not “a people’s person,” which caused many clients to leave. Once the president realized that his sales were down because of one person, he immediately fired him. But even before he had any idea of who would replace him, he sent out a letter to his entire customer list that the sales manager had indeed been fired. His letter also included details about who would be handling the account on an interim basis and invited customers that had left in a separate letter to deal directly with him. The response to the president’s letter was swift. He received letters of encouragement and at least 10 customers took him up on his offer and called to do business with him. His sudden return to day-to-day sales only encouraged him to expedite the search for a replacement. Within 2 months, he had hired a new sales director who had worked for a competitor and came highly recommended. This development gave the president yet another opportunity to hype his business and hopefully encourage more of the drop-outs to return. The company’s director of marketing saw the occasion of the new hire as a great opportunity. In addition to having the president send out another letter praising the new sales director, a reception was planned and a press release to the business press dispatched. The new sales director ultimately made personal visits to the customers that left and successfully managed to bring back many of them. In covering this topic, I realized that there are always those that are reluctant to make a move at all because they fear for possible consequences. They are worried whether an employee that is under performing will bad mouth them. Some are concerned that any type of layoff may be perceived as a sign of weakness and so forth. While it is important to think of the potential down sides, a business should not keep an underachieving employee out of fear. A business is in business to make money and if an employee does not contribute to the bottom line, or even hurts it, the appropriate action should be taken, taking all of the human elements into consideration. 2008-06-27T19:49:00-05:00 http://www.lubicom.com/ootb/a_loyalty_card_for_a_small_company/ http://www.lubicom.com/ootb/a_loyalty_card_for_a_small_company/#When:19:34:00Z Starbucks recently introduced a new card that offers customers many freebies, including syrup and soy milk additions to its drinks, refills of drip coffee and a tall beverage of any sort for people who buy a pound of whole bean coffee. As the New York Times put it “on a pure dollar basis, all of this doesn’t add up to much.” The Starbucks Reward card is much like those used by other major companies in what is known in the industry as a loyalty program. There are many good marketing reasons for having a loyalty program, but fundamentally it is designed to create brand or institutional loyalty that is so important to the bottom line. By offering perks, discounts and even rewards, the marketer hopes that the customer will spend more money on the brand or with the sponsoring institution. Loyalty cards have also become an important source of information for marketers, allowing them to better target their customers, plan their products and services and even in launching new products. With today’s technology, marketers can accumulate detailed information on their customers, including demographics, buying habits and even history, all helpful in marketing to customers. Securing all of this information is well worth whatever freebies are being offered. Of late, many companies with sluggish sales have turned to loyalty programs to help them recover. The evidence is that it works. Loyalty programs like all business promotions and programs require management but with today’s technology and firms that specialize in the management of loyalty programs the information can be easily managed. On the surface, it certainly sounds as if loyalty programs are for the large companies that have huge marketing budgets. But of late, say marketers, many mid-sized and even smaller companies are turning to loyalty programs to help sales. Club cards are common with many supermarkets. Drugstores have their own discount cards and many well-known retailers have jumped in as well. A relatively small book store in a major city faced enormous competition from the national chain bookstores in his area. It seemed as if he almost always had to undercut the price of books just to compete, but the discounts for him spelled small margins and small profits. He couldn’t compete with the volume of books purchased by the chains, which is why they can offer the books for less, and thus he found it increasingly more difficult to stay in business. A marketing consultant advised the storeowner to launch a loyalty card that would offer customers an array of special services. The card offered free coffee, the right to exchange books with other used books, notification of new books by authors that the customer bought before, invitation to book signings and readings by authors, and more. The store did extensive mailings and advertising, including posting a huge sign in the window, with an offer a free book just for signing up that generated more than 1500 applicants in less than 6 weeks. The agency that gathered the information provided the bookstore with valuable information on the customer base. It even was able to pinpoint how many books were sold on what days and what hours. This information enabled the store to be more efficient in staffing, inventory and general services. It is important for every business to know its customer base well. The more information that is gathered, the better the company is able to target the customer. If at the end of the day, the loyalty card accomplished its goal of generating more loyalty, which will result in a greater share of the customer’s spending dollars. Loyalty cards also offer a great deal of flexibility. Each sponsor can design their own program, depending on what the impact would be on their financial situation. Benefits can be increased or withdrawn, with proper notification, of course. Special promotions can be targeted to loyalty card carriers. Finally, it can even be offered as part of a joint program with another business, potentially increasing the clout mani-fold. I noticed that some marketers are advocating card-less loyalty programs. They argue that the data is already available and can be accessed at any point, including the check-out counter. But others see a great deal of value of the consumer actually having the card in their wallets. They say that it is an important branding function and has proven to generate significantly higher sales. The bookstore encouraged signing up for multiple cards so that families would be included in the loyalty effort. They also kept information on the demographics of family members and even touched base with their customers on their birthdays. There are many retailers throughout the country that offer discounts to customers on or around their birthday date but with the loyalty program it is that much easier. Should you consider a loyalty program? If you can manage the information to your advantage, it is crucial that you do. But if the information becomes part of the paperwork on a crowded desk, probably not. 2008-06-20T19:34:00-05:00 http://www.lubicom.com/ootb/can_marketing_be_self_taught/ http://www.lubicom.com/ootb/can_marketing_be_self_taught/#When:19:29:01Z The other day a 20-ish young man named Sol asked me if he could possibly acquire marketing skills without going through formal training. He very much enjoyed observing the dynamics of marketing and was seriously considering making marketing his career. “Marketing?” I asked. “What part of marketing are you interested in?” The question surprised him. Marketing, I explained, was the umbrella term for a process that begins with the raw materials and ends up as a finished product in the consumer’s hands. I used my desk as an example. The wood company that manufactures the oak begins by marketing its wood to the manufacturer, who in turn produces the desk with all of the other materials that are needed. The company will then market to distributors or brokers that that sell to furniture stores or perhaps sell directly to the stores. They will use sales catalogs, salesmen, advertising, and public relations to pique the interest of their perspective buyer. This process may very well repeat itself as the store tries to sell the desk to the end user. They too will use many of the marketing vehicles that were used to sell them for the purpose of selling the desk to the ultimate consumer. The marketing example that I shared with Sol also included a list of all of the people that may have been involved in the process: researchers, salesmen, writers, graphic artists, strategic marketers (that plan the marketing road map), printers etc. So when I persisted in determining what part of marketing he could possibly be interested in, he chose the strategic marketer, which is really a combination of being very knowledgeable about markets, consumer behavior, research data, the marketing vehicles and using logic and reasoning well. I have met some people that seem to have an inherent marketing sense, sometimes as a result of working alongside a person who is well grounded in marketing. But even they lack all of the ingredients that are necessary to make smart marketing decisions. They are, however, smart enough to seek outside help to augment whatever expertise they do not have. If they are good marketers but lack marketing skills, the obvious solution would be to hire a good writer. And yes, there are some people that just have the smarts for marketing and do well in some marketing capacity. Sol was determined to at least give it a try. At the urging of several marketing people, he began to read marketing articles in the daily papers. He read several basic texts on marketing and did some role playing on his own in handling various scenarios of companies that were in the news. Sol imagined being the marketing director of a well known high end woman’s clothing company that suddenly found that market conditions were no longer rife for the luxury goods. Sales had declined by nearly 25% in just six months, according to the business daily that reported on the company’s troubles. He was curious whether the company had developed new markets in the past year or so or just watched the dip in sales. He wondered why the company had not simultaneously produced a less expensive line of clothing that might be more in sync with market conditions. Finally, he thought about some ideas to target consumers that would be ideal loyal customers. The questions that Sol raised were impressive since in all likelihood the company’s marketing director had also considered them. We speculated together as to what the answers might be. Develop new markets? The company most likely had a sales staff that added stores, but in all likelihood they served the same type of customers who were in the same bind. Did they create a program to reach out to private shoppers, for example? Probably not. A less expensive brand of clothing? While it sounds like a good contingency plan now, the company had spent a lifetime branding its label as an exclusive designer brand. Like many other companies in their position, they did not want to confuse the marketplace with a cheaper brand. It’s probably like Samsonite’s desire to be perceived as the leading brand of luggage and they would never consider a B brand that might possibly confuse the market. What they and others occasionally do is to create a different line with a different brand that is totally separate from the higher end label. Sol’s creative plans to generate new business included opening their own retail outlets, creating a private shopper’s club, expanding into accessories, and co-branding in foreign markets. While these were good and innovative ideas, the company was like many conservative companies that pretty much stick to their boilerplate model. Sol had certainly passed my initial test. His questions showed that he did have a marketing mind and that he perhaps can be self-taught to eventually embark on a marketing career. With all the reading and role playing, the real test would only come when he faced real everyday challenges that often separate the men from the boys, even the best trained ones. Obviously, not everyone that is interested in marketing has the capacity to think like Sol. They can do some research, see whether they really like the field, and consult with an expert. Can marketing be self-taught? It depends. 2008-06-06T19:29:01-05:00 http://www.lubicom.com/ootb/the_youth_vote_in_marketing/ http://www.lubicom.com/ootb/the_youth_vote_in_marketing/#When:20:28:00Z Political pundits seem to have concluded that Senator Barack Obama was a huge success with the youth vote, a major factor in his success. Mr. Obama used modern technology to communicate with the young. He resorted to short and dramatic phrases like Change, which seemed to capture the imagination of a significant segment of America’s youth. Even if the word was loosely defined, it went over well in the imaginations of America’s young. He added these features to his charismatic personality and considerable oratory skills. In short, the youth vote felt very connected with him. The pundits say that while Senator Hillary Clinton ran a more classical campaign, Obama clearly energized the young who somehow felt engaged in his campaign to the point where large numbers volunteered for him and others even raised money. Whatever changed meant to them, it was better than the current set-up in Washington. Mrs. Clinton, on the other hand, say the pundits, tried to control the message and failed to communicate Obama’s message that if elected they will be alongside the driver. This analysis of the campaign for the presidency is also consistent with marketing principles that I have heard over and over again. Marketers that tend to take their market for granted and “control the message” do not fare as well as those that involve their target audience. In recent years, many companies have taken to survey their customers with increased frequency and in many different ways. It even translates to an ordinary service call, which I am sure that you might recognize. “Have I provided you with the answers that you needed?” is what you might hear from the person on the other end of the phone. Even the clerk at the bank is asking such questions nowadays in an effort to engage the customer. It’s not a survey, but an attempt to convince you that the clerk really cares. This engaging strategy that seems to have worked so well for Mr. Obama is even extending to fundraising. Many fundraising professionals recognize that spoon feeding emotion and need may be similar to controlling the message of corporations. Instead of selling how great the cause is, they now tend to solicit advice and comment on how to do things better. They create activities where the donor can be involved. An anti-poverty organization that has its donors distribute food packages before Yom Tov is engaging its donors. Fundraisers are finding that when they do involve their donors more, the payoff is greater. In the general election, Senator John McCain will face the challenge of not seeming too aloof and not relying on spin. He will have to come across as someone who cares about young people and somehow relate to their quest for change, whatever that change may be. This challenge will be even more daunting as I have no doubt that his opponent and the media will play the age card to further distance him from the youth audience. He in turn will have to show that age is not an impediment to experience, particularly his formidable military record, in which he is portrayed as a hero and a man who is far from his own selfish interests. Marketers of products frequently face that same challenge. Even the most tried and tested products need to reinvent themselves and become relevant to a new generation of users. Using global messages that gloss over the large and influential youth market are destined to fail. That is why popular brands always seem to be addressing youth in their advertising. It is more important to capture the dynamic youth market and to plan for a strong future than to gloss over that market and find out later that the youth do not relate to the product. There are exceptions, as there always seem to be in marketing. As an example, the investment and banking community tends to go where the money is and target older consumers. They may even segment their messages, depending on the product they sell. A good example is targeting the young with their loan and mortgage business and relating their investment and retirement account business to older customers. Fundraisers also successfully use market segmentation in planning special events that cater to specific audiences and even highlighting different activities that appeal to different audiences. The presidential candidates will also have to tailor-make separate messages to a diverse electorate and perhaps avoid what is now considered the Clinton mistake in not engaging the youth audience. Ads for a well-known supermarket chain used to address experienced shoppers with messages that seemed to feature experience, knowledge of food, and a more mature lifestyle, until a survey showed that they were shunned by younger customers. The younger shopper preferred a competitor because it was friendlier to children with a designated play area, highlighted new products, offered demonstrations on how to use new products and in general had a friendlier staff. With such results, the chain that appeared to not to be in step with younger shoppers moved aggressively to win over the younger customers. They adopted some of the programs of the competitor but proceeded to go well beyond that program. They produced their own coloring book and crayons, introduced a cookie jar with many cartoon characters on the outside, and even distributed children’s bracelets with their logo on it. Most importantly, they constantly “engaged” their younger shoppers, in a marketing approach that may be dubbed in the future, the “Obama” approach. 2008-05-23T20:28:00-05:00