Marketing
10 tips for building a digital strategy
May 4, 2011 | 
Author EDITOR’S NOTE: The following is an excerpt of a recent blog written by Paul Barron, the founder of Fastcasual.com and DigitalCoCo, a branding and social analytic firm. For the full blog, visit his website http://www.socialcoco.com.
The decade of the door hanger is gone. The yellow pages are extinct and the printing process for promotion is dropping so fast the rain forest may yet get a reprieve after all. How the connected consumer spreads the word through mobile and social media is the real answer for our future. An all-new consumer science is emerging in the restaurant industry and that science will help our businesses grow.
Recently we tracked the most influential restaurants in America and broke it down by segment: Casual, Fast Casual and QSR. The results were somewhat expected at the top where millions are being spent to drive the digital brand. The next layer was a whole new set of players that do get it and understand the power of the new medium to educate, inform and influence millions of consumers every day. Players that get it are making the most of the newfound way to reach out to consumers and make them raving fans.
We found Starbucks as the most influential brand in Fast Casual as we studied a variety of layers of the social web:
1. How the brand engages (tone, message, interaction, focus on topics or promotions)
2. How their consumers engage with them (frequency, trends and topics, response vs. action)
3. How influential their consumers are in their social circles (not just a Klout Score)
It’s how the ripple effect works when you strategically engage in the right place. The impact can be amazing. Jimmy John’s is the No. 2 most influential with Genghis Grill and Coffee Bean trailing very tightly at Nos. 3 and 4. What is startling is that a small chain the size of Naked Pizza took the No. 5 spot in our Fast Casual segment most influential list.
Google has been about search for the past decade, Social is about influence and trust.
This is our future and the best part is that we know it’s coming this time. The recent NRA 2011 Forecast suggests that social media and digital brand development will play a major role in our business growth over the next several years. So the big question is, what can we do to get there?
Here are just a few steps to take if you are not already doing them:
1. Get a real digital strategy in place with real talent that can help make a difference. This is not an intern handling your Twitter account. It requires the combination of a full understanding of the technology being used and the business impact it can have as well.
2. Get positioned in mobile quickly. This is the reality of how consumers will engage with you for location, referral, menu, ordering, loyalty and best of all repeat business. Embracing mobile should be your No. 1 consumer engagement plan right now.
3. Social CRM (customer relationship management) is the next phase. Work fast on targeted audience acquisition. Don’t leave out integrating your e-mail as a crucial priority in an overall social CRM strategy as well.
4. Start year-round engagement campaigns. Start with digital strategies that can be integrated into all of your marketing on a year-round basis and not just here and there. Digital should be the first plan in every marketing and consumer engagement calendar.
5. Bring in your franchise and management teams. Educate them so they understand the overall digital impact on the business. Best of all, this can help with idea generation. Remember, this is not the era of “Spray and Pray” marketing anymore. That is the first thing you will have to teach your team. The game has truly changed.
6. Get digital quick. Every major platform should have your brand represented. Twitter, Facebook, YouTube, Quora, FourSquare and the emerging ones as well. Test often and deploy in the ones that rise to the top.
7. Build your digital content plan. You have to become a publisher now instead of a marketer. In the past you published marketing material like mad, right? Now you will need to shift to content that makes sense to your customers. The competition noise is really loud and customers won’t listen to old standard marketing messages, they are looking for a new voice. It might as well be yours.
8. Analyze your digital competition. Now with open access, you can see the plans of your competition being executed right in front of you. The successes and failures are also transparent, but with the right strategy and tools, you can start to evaluate trends. This evaluation can teach you a ton in how your business needs to compete. Trends and tactics are the key to directing where your business goes.
9. Work on many fronts at once. This will require some heavy lifting and shifting of marketing, operations and even HR budgets, but you must shift your plan into all aspects of your business. Get your suppliers involved. If those suppliers don’t have a digital and social strategy, it’s time to change suppliers.
10. Listen. Yes, I know that is a simple tip but in reality it’s the hardest thing to do. We know our own businesses better than anyone but we must listen to our guests and our staff to really understand the opportunities that lie before us. Social media and digital branding is not just an outward persona. It is a revitalization of your entire organization. Analyze your customer’s tweets, posts, and videos. Empower your employees because today there are hundreds or even thousands of brand ambassadors, and though it’s hard to hear and especially listen to them all, you will find the ones who rise to the top are worthy of your attention.
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Marketing to Kids While Partnering with Parents
By Ted Mininni
Marketers all know about “pester power” and the increasing influence kids have over family purchase decisions in almost every category. To the tune of $500 billion dollars, according to statistics. So what else is new? Plenty.
Children now account for a whopping $21.4 billion worth of their own purchasing power. As kids get into their tweens, ages 8-12, they have their own discretionary dollars, and they’re likely to purchase what they want with some degree of guidance from their parents.
Trends point to the need for more engagement between kids’ brands and their target demographic groups. And parents are an important part of this equation. Failure to connect with each is a mistake. Recent push back against children’s marketing shed light on an important issue: parents are increasingly concerned about hard-sell efforts aimed at their kids. So brand interaction to gain parental trust is paramount if brands are to succeed.
In spite of their reservations, parents are spending on their children. Packaged Facts projects families spent $143 billion on children’s products in 2010. Since the recent recession, adults have cut back on spending for themselves, but they’re still spending on their children. What are parents looking for now? A reason to believe. A brand must demonstrate its value, showing parents it nurtures, educates, elicits their kids’ creativity, feeds their imaginations, reinforces positives or helps them to grow. Parents will gladly say “yes” to such a brand. That points to the marketer’s need to engage parents, not only their children.
Kids themselves are more sophisticated now than even a couple of years ago. They still watch plenty of television, and TV advertising is extremely influential on young kids and tweens. These groups make instantaneous decisions when exposed to advertising: they either want it or they don’t. And if the response is a positive one, kids “want it now” and they let their parents know it. As a result, marketers spend a whopping $15 billion on advertising aimed directly at children.
Besides TV, more kids are coming online and at an increasingly younger age. eMarketer projects that in 2011 20.2 million kids under the age of eleven will be online at least once per month. That’s just shy of 40% of this demographic. By 2014, an estimated 24.9 million, almost 48% of kids, eleven and under will be online. Since kids are tech savvy, they’re perfectly comfortable researching products and brands that interest them. They’re also susceptible to online advertising. Since these kids communicate heavily with their friends online, they then become heavy influencers.
Besides this, access to the Internet with mobile devices continues to rise. While marketing to children under the age of thirteen is not allowed, kids are being handed parents’ cell phones to play games and listen to music. As they get older and parents give them their first cell phones, these kids, having grown up on the Internet, will use these mobile devices for more than communications. They’ll be online themselves and the target of marketing.
Tweens and teens are increasingly creating their own content online, influencing a wider circle of their peers as they do. Engaging tweens and teens on all communication platforms, especially social media, is a “must”. Marketers that make the effort to connect with these groups in new, inventive ways will reap significant rewards. These demographics and their friends can become true brand devotees.
In all of these communication platforms, the marketer needs to message to engage parents, not only children.
Here are the Dos and Don’ts on how to accomplish this:
Do engage them by playing to their sense of adventure and their imaginations.
Do get the point across simply and succinctly.
Do engage them with activities that teach, educate or encourage creativity.
Do make certain your messages are truthful and authentic. Kids can spot a phony from a mile away; that will turn them off to the brand for good. Hint: they’ll take their friends with them away from the brand, also.
Do emphasize safety and wholesomeness if these are central to the brand. Always accent the positive and highlight value.
Do take responsibility. Be up front if there’s a problem and show a willingness to make things right.
Do partner with parents. They need and want reassurances. An interactive flow of communication is vital to the success of brands now.
Do set up a strategy that employs traditional and social media platforms since kids multi-task and need to be messaged with more than one medium.
Don’t talk down to the kid’s demographic you want to appeal to. Speak in their language. Better yet: show them in inventive ways. Remember: kids see themselves as more mature than they actually are.
Don’t only engage kids; engage their parents. Especially if the brand offers an opportunity to bring the entire family together. Hint: family game nights and activities have reappeared since the economic downturn. How can marketers capitalize on that?
Research shows parents are being far more selective now in their purchases for their kids. Even though cost-cutting measures are evident in households across the country brands that are perceived to have value; brands that inspire trust and loyalty; will continue to be purchased by parents when their children ask for them. Tweens will also receive their parents’ approval for these kinds of brands as they make their own purchases.
There has been a decided shift in families and a reorientation of values. More meaning is placed on the family as a unit, and to be successful, marketers will have to get connected and stay connected, engaging the modern family on its own terms.
Ted Mininni is president of Design Force Inc., a brand design consultancy to consumer product companies with Enjoyment Brands.
Know Your Competition
Feb 7, 2011 Carlos Flores
Who is Your Competition?
A competitor is any company or individual that can provide products and services similar to the products and services you provide and offers or can deliver those products or services to your target market. While this definition may seem broad, it is quite precise. If, for example, you sell shoes, your competition includes local shoe stores within driving distance of your immediate area. It also includes shoe departments in the local department and clothing stores. It includes mail order and Internet stores. If you specialize in ladies’ shoes, your competition will include men’s shoe stores that could potentially sell ladies’ shoes.
If, on the other hand, you run a neighborhood restaurant, your competition might not include a similar restaurant in a nearby town or across town even if they offer the exact same menu you offer. This is because consumers do not typically go to other towns or across town to eat at a neighborhood restaurant. This statement causes a little bit of a back track. To properly identify your competition, you must first understand the buying habits of your customers and potential customers.
Let me go back to the restaurant example. If you run an expensive, romantic restaurant specializing in a particular cuisine, your competition will probably include similar restaurants within driving distance that target your potential customers, even if they specialize in a different cuisine. After all, we have all asked the question, “Spanish food or French?”
Your competition may change depending on the time of day. For example, a neighborhood restaurant may compete for business with a fast food restaurant during lunch hours but not during dinner hours. At lunch time, people are in a hurry and may decide where to eat based on how fast they can get in and out. To compete, the neighborhood restaurant needs to offer a quick lunch menu that is price competitive with the fast-food establishments while providing better quality and sit-down service. People who use a fast-food establishment as a dinner alternative typically either do so because they are in a hurry or want to take the children out for inexpensive food and entertainment. There is little the neighborhood restaurant can do to compete for that type of business. On the other hand, the neighborhood restaurant can focus on offering a dinner experience that is quiet and unhurried. The fast food restaurant may be your competition at lunch time but not at dinner time.
Continuing with the restaurant example, some of the competition, such as the other neighborhood restaurant across the street, is direct. Some competition, such as deli department at the local supermarket, is indirect. Don’t limit your concept of competition only to other businesses. A neighborhood restaurant also has indirect competition from the home kitchen. Why? A person cooking at home is not going to the restaurant to eat. That is lost business. The neighborhood restaurant has to figure out how to entice the consumer to leave the comfort of their home to eat at the restaurant. Therefore, you must identify who is your competition, what kind of competition they are, and under what circumstances.
How Do You Compare to Your Competition?
Once your have identified your competition, you need to know how they compare to you. There are a few basic reasons why. For example, in order to make sure that you are providing the best possible product, with the best possible service, at the best possible price, you need a basis for comparison. Your competition provides that basis. Evaluate several of your competitors and rate them in critical areas. Do the same for your business. Now compare. Identify the areas in which your competition has you beat and come up with a plan to improve in those areas. Identify areas in which your competition is right behind you and find ways to widen the gap or, at least, keep your edge. Look for innovations that they have introduced and see whether you can apply them to your business.
Your industry may provide statistics and standards against which you can compare your business. Although you should use these when available, their basis is often the entire industry or large demographic areas. Comparing your business against those that you have identified as your direct competitors is much more meaningful than comparing it against industry standards.
Look at what your competition is marketing heavily. This will give you an idea of what they think is important. Understand the marketing techniques that they are using. It will help you understand how they reach their customers. How do their sales compare to your sales? If they have strong sales, then they are doing something right. Can you implement some of their techniques? If they are floundering, can you identify what they are doing wrong? Can you avoid the same mistakes? Finally, put yourself in your competitor’s shoes. Try to see things from their point of view.
Business Competition is Like a Battlefield
Any good military commander knows that the best way to beat an enemy is to learn to think how they think. How does the competition view your business? How do they think you are doing? What do they think you are up to?
Knowing your competition is important regardless of how well you are doing. It is important regardless of whether you are in a shrinking market, a stable market, or an expanding market. Many companies think that because there is enough business to go around, they don’t have to worry about the competitors. That may be true in some cases. However, it is only temporary. The customers you get are the overflow that your competitors cannot handle. Those are not good quality customers. They will split and run the moment another company can service them.
In today’s environment, markets change overnight. You must always be prepared to make changes to your strategies and approaches in order to remain competitive. They best way to remain competitive is to understand with whom you are competing.
5 Trends to Watch in 2011
Patricia Odell for PROMO Xtra
If 2010 led marketers farther into the digital world to wring what they could from Facebook, Twitter, wireless devices and other non-traditional promotional medias, 2011 will also deliver its own curve balls. Todd Engels, the general manager at Marketing Drive in Norwalk, CT, offers five trends to key an eye on in the coming year.
1) Leveraging the power of social media to drive commerce Groupon is setting the bar and we’re watching for how its success may fundamentally change distribution, effectiveness, and efficiency of promotional value offers to consumers. For example, Groupon recently launched “Grouponicus,” a holiday dedicated to “filling your loved ones’ gift buckets with experiences, not gift cards.” The daily deal shopping Web site also recently entered into a partnership with eBay to offer incentives to eBay loyalty members who participate in Groupon deals.
2) Integration of mobile (handheld) into shopper marketing programming As marketers and retailers look for new touch-points along the path-to-purchase we’re seeing the use of more digital applications such as QR codes. Interestingly, marketers are trying to get on the leading edge of the trend and capture the early influencers while driving greater awareness and usage for the majority vs. waiting for overall adoption rates to hit critical mass. Canon was one such brand, testing QR codes in September on its printers in a number of retail stores, including Best Buy.
3) Marginalization of “brand.com” promotional websites Virtually all clients are looking to platform their promotions on social networking sites (Facebook), sharing sites (You Tube) or partner with existing content/audience relevant sites (e.g. WebMD) vs. building their own stand alone sites.
4) Localization of promotion We’re having a lot more discussions about driving promotion down to the local grass roots level. The Web is certainly enabling this but also indicative of a trend toward greater personalization/customization and a backlash against big high-profile events as the economy continues to teeter. We’re seeing this realized often in cause marketing and at retail.
5) Continued blurring of the line between content and promotion We’re looking at, and our clients are asking for, more content integration opportunities across all platforms (TV, print, digital, social, gaming). Marketers want the promotional message to be almost indistinguishable from the content because of the ability to deliver promotional messages in high-value brand environments. We’re working on a host of videogame integration opportunities right now and traditional CPG marketers are seeing that as a new frontier to reach their audience.
Keep Them Guessing: Loyalty Programs Need Randomness
By Barry Kirk
Predictability is reassuring. It’s also boring. Think about it—when did you last you call IHOP to see if they still served pancakes? Or had any doubts whether the fall TV lineup would include a reality show where a houseful of beautiful people compete for televised validation? Some things are just a sure bet. The upside of the predictable things in life is that we don’t waste any brainpower worrying about them. The down side is … we don’t waste any brainpower paying attention to them.
Game designers intuitively know this. Randomness, or “chance,” is woven into most great game experiences, whether drawing cards or rolling dice. Randomness is novel, and novelty keeps us interested. The trick, of course, is balancing the predictable and the random to create a compelling experience that’s not frustrating. Try these seven game mechanics in your next loyalty program.
Game designers aren’t unique in understanding how humans think. Thanks to the growing fields of neuroscience and behavioral economics, marketers have a larger window into how human beings connect with what’s important to them. We can see how the brain responds to different stimulations and gain a biological understanding of how branding, rewards and messages resonate with consumers.
Typical loyalty programs are stale. Marketers focus too much on structuring programs for a mythical consumer who only thinks rationally about the program’s value proposition. Marketers need to ask themselves this one essential question. Design teams also pride themselves on creating fair rules, in part, because they’re highly predictable—members know exactly how the program works, how to earn points, and when they can redeem for a reward. Unfortunately, this focus on the rational and predictable means missing major opportunities for engagement, because you’re asking members to go on auto-pilot.
Neuroscience studies help us understand all humans are rational and emotional. Consumers engage more meaningfully when there’s opportunity for an emotional connection with the brand or program. This emotional connection may trigger the release of dopamine—which translates into a feeling of pleasure. This same “pleasure chemical” is released when we receive rewards. People experience that feeling with other program attributes that are often underdeveloped, such as status, social interaction and randomness.
The impact of randomness in this chemical interaction is that unpredictable wins produce the greatest pleasure response. Neuroscience shows unexpected rewards have a heightened emotional effect, compared to the rewards participants know are coming. The effect applies even when the value of the reward is less than the expected reward. This means “surprise and delight” isn’t just a good idea; it’s a smart financial choice. Unpredictability also equals attention, as the brain is programmed to focus on the novel and seek patterns even in those experiences that are truly random.
A random element can be applied to any part of your program. Charter Communication’s “Live it With Charter” program includes random redemption periods. Members only receive 24-hours notice for one of these periods. Starbuck’s loyalty program sends unexpected direct mail coupons for new products and discounts. Upstart location-based service, Whrrl, recently launched its Society Rewards loyalty program; the rewards are structured as “prizes of chance” that members might win by participating in checking-in and other engagement behaviors.
Once you choose to introduce a random element, the best approach is to adopt test-and-learn methodology. Keep in mind the need to occasionally switch things up—ironically, even randomness becomes boring if it starts to feel too predictable.
Each brain is unique in how it responds to stimulation, but there are clear advantages in looking to neuroscience to help improve loyalty marketing initiatives. When you shift your focus from only providing “stuff,” you may be amazed by the world of options for creating a more intriguing program experience. The mixing of intrinsic wins—such as the “pleasure chemical” experienced from a surprise—with more traditional rewards will strengthen brand marketers’ ability to build both lasting and meaningful consumer connections.
Barry Kirk is solution vice president, consumer loyalty, Maritz Loyalty & Motivation. He can be reached at Barry.kirk@maritz.com.
Tips for the 2011 Promotion Marketing Tool Box
By Patricia Odell for PROMO Xtra
Expect the unexpected: That’s the number-one tip for promotion marketers as 2011 gets under way. And if that’s not specific enough for you, we asked several industry pros at Aspen Marketing Services for advice on what to keep in mind in the year ahead.
Grab rich data from social media sites to predict behavior. Focus on places, such as Facebook pages, where you can watch how consumers interact with the content and what information prompts them to post. Then use the data to determine relevant topics and promotions going forward.
“We have to wedge our way in to grab that data and find out who those customers are,” said Cathy Lang, COO of Aspen Marketing Services, which ranked No. 4 on the 2010 Promo 100, with 2009 U.S. net revenue of $274 million.
Get beyond traditional marketing metrics of contacts, clicks, conversions, and sales to get at sentiment. Look at favorable and unfavorable comments, and respond to them to show consumers that you are listening to them.
Engage in customer retention warfare. The sluggish economy of the past few years has forced marketers to rethink how they interact with existing customers. This in turn has prompted the implementation or upgrading of customer retention programs.
“Existing customers have become that much more important, and to understand and cultivate that relationship so that they buy more is really a trend,” said Steven Howard, president of the advanced analytics, Aspen Marketing Services. “There needs to be a relevant communication stream through whatever means the customer prefers. Don’t talk to them the way you the marketer want to because it’s convenient; talk to the consumer the way they want to be spoken to.”
Find new audiences to target and the best ways to reach them. To understand which potential market sectors act similarly to your existing customers, you’ll want to consider database modeling. “Modeling analytics is where rubber meets the road,” Howard said.
Test multiple options, using standard direct marketing practices: Establish a control, then test new creative, timing, and messaging to gain a better response than that of the control. Conduct this sort of testing in terms of contact management strategies, prospect modeling, and predictive analytics. Then focus all the models on maintaining lifetime relationships and increasing revenue. You can also apply these learnings to social media.
Create a unified customer database. Integrate online and offline data in one central database to provide the foundation for one view of the customer, then use that view to determine your messaging and marketing.
“You have to find a way to have one universe for your customer database and to be able to capture all the interactions with that client brand,” Lang said. “You then have a universal view of the customer to be able to talk to them in a unified manner. The biggest challenge for marketers once they have that rich information set is to discuss across the organization what it means and how to best leverage the data for competitive differentiation and to drive profitable revenue.”
Remember that ROI is king and drives everything marketers do. Deadlines and expected turnaround times are getting shorter and shorter, with clients requesting immediate returns.
“More than ever before, there is a focus on ROI,” Lang said. “No longer is the payback 12 or 15 months; it’s hitting the bottom line in a shorter timespan. Every thing comes down to ‘Prove to me that there is a return on investment, and give it to me now.’”
Marketers should be asking: What are the key metrics we can measure? How do we analyze and then translate that into a financial metric for the company? What are the keys to success? How do we define success? Answering these questions entails, among other things, establishing key benchmarks such as response rates and closed sales.