Category Archives: 4. General Marketing

Customer Experience, or, Travelocity Sucks

I’ve wondered for some time how much difference there is between online travel brokers ever since it’s become a commodity business. Now I know. I’ve had accounts at both Expedia and Travelocity since way back when the Nasdaq was at, what was it, 5000? I’ve also used Orbitz and some other latecomers, like FlyBankruptCarriersForReallyReallyCheap.com. But somehow I just got into the groove at Expedia and stopped shopping around.

For some stupid reason, I decided to retry Travelocity when scheduling a Christmas vacation with my family. Maybe it was that gay lawn gnome thing they’ve got going on. I don’t know. So I reactivated my dead account, browsed around and booked my tickets, confirming that indeed, there is no Difference. What an idiot.

A few weeks later, I get a friendly email from the folks at Travelocity. Sorry, the totally reasonable flight you fell for on our site has now been switched with an insane flight. Instead of leaving at the leisurely hour of 11am the day after Christmas, I would now be dragging my wife and 4-year-old son to the airport for a midnight flight, arriving in Dallas at 5am for a 4-hour layover. Maybe it’s just coincidence, but in 6 years at Expedia, I had never had one of many dozens of flights switched. But that’s really just the setup.

When I called Travelocity, I got one of those friendly new HAL9000 customer service reps–you know, the ones that make you drone your reference number into the phone just so they can serve you generic information, and then say about 6000 times in a syruppy voice: "I’m sorry, I didn’t catch that. You said you’d like to pull out your eyeballs?" After I screamed "operator" a dozen times, the system finally put me in the long queue for an open phone line to India. Amazingly, they can transfer my call 12,000 miles away to another continent where an operator can tap directly into my account, but they just couldn’t manage to send along the 87-digit alphanumeric reference number I’ve already recited into their system.

The operator–Mike, from Bangalore–is neither helpful nor friendly. Did I get an email about the switch? Yes. Did I wish to cancel the flight? No, I’d like to explore some other options. Like what? Oh, I don’t know, like maybe a longer layover so I can really appreciate those abbreviated airport museum displays of cattle farming history and modern macrame. Geez. What other flights are available that day? I don’t know, I’ll have to call the airline. You mean, you can’t look it up on the computer? No, I have to call, please hold.

I then got 8 minutes and 37 seconds of Adagio for Idiots on Hold, punctuated every so often with an ominous click and a long silence that had me convinced they were doing an experiment to see when I would finally hang up. Mike eventually came back and delivered the crushing blow. Yes, there is a flight that leaves just an hour after your arrival in Dallas, but it’s oversold…would you like to stew over that on your terminal layover in the departure ward, or would you like me to just cancel your whole vacation?

Travelocity sucks.

And I can say that with some authority, because only 3 weeks ago, I had to call Expedia customer service. I had purchased pre-paid parking for a recent business trip, and couldn’t find the parking lot–they had, whoops, neglected to put the address and phone number on the handy dandy printout map. When I called the parking garage to get a rain check for a future trip, they refused. So I called Expedia to complain, and without a moment’s hesitation, they did one better than a rain check, they refunded my card. That is customer experience. The flight scheduling may be a commodity, but the service is different. Expedia has it, Travelocity doesn’t.

So, one more time for the benefit of Search Engine Optimization:

Travelocity Sucks. Yes. They really really do. Travelocity Sucks. Sing it with me now. Travelocity Sucks.

I feel better now.

Alan Scott Interview

In my first foray into podcasting, I’ve interviewed Alan Scott, CMO of Factiva. Alan is one of the most candid–and often provocative–marketers around, so it was the perfect opportunity to step into audio and capture some of his thoughts on tape. I interviewed Alan over the phone, and we talked about everything from why marketers are losing control of "the message" to why salespeople make better marketers.

The podcast is about 22 minutes long, and the file is 8MB–and you’ll have to endure my first attempts at "slick" audio production. Click here to listen. (right click to download).

Googlemyopia

I had a funny conversation with a sales rep from Google who called to sell me on reselling AdWords and AdSense. She was smart, well informed on Google’s offering, and pretty well briefed on the company I work for. But when I told her Paid Search and SEO weren’t on the roster of services I would be offering in 2006, she went, like, totally blonde on me. "You’re a PR and Marketing firm, right?" Yes, I confirmed, and we don’t do search marketing. She barely concealed her incredulity, circling back to the beginner’s pitch to introduce me to AdWords. Yes, yes, I know. Great stuff, really. No, not interested, thanks. But if you want to send me some material I’ll keep it on file. She couldn’t resist confirming one final time, "You are a PR firm…right?"

Yes. I know Google is a really big phenomenon, and I know AdWords is critical for generating topline revenue at many companies–especially if they happen to be selling something like refrigerator magnets or life insurance. I’ve advised businesses spending 10s of thousands of dollars a month on paid search, and others spending over $100k on SEO. When something like 80% of all Internet traffic begins at a search engine, it’s a good idea to understand how the game works. But–gasp–I don’t think it’s the end-all, be-all marketing strategy for most businesses. This seemed to come as a genuine shock to the Google Ad Rep. As if, what else is there?

Well, I think the biggest What Else is what seems to be a rapidly resurging relevance for Social Marketing–a marketing approach that focuses on meticulously cultivating relationships with a selected audience rather than trying to push a critical mass of anonymous and abstract targets through a response filter. As effective as AdWords is today, it still represents a paint-by-numbers approach to mass marketing that won’t stand on its own in a world where users have on-demand access–through Google, no less–to hundreds of data points on your product from media sources, expert reviews and countless peers. Businesses are rapidly losing control of their own message, and channel efficiency isn’t going to solve the problem.

I’ll post more on this after the CMO Summit in Monterey this week. For now, I’m not sure whether I’m captivated more by the Google Ad Rep’s inability to conceive of any marketing tactic beyond Search–are they really that self-inflated?–or by the thought that she was so incredulous because she doesn’t come across any other companies that question Search’s omnipotence. That can’t be true. Can it?

What’s Happening to PR?

Here’s a challenge to the traditional Public Relations process at most companies. Despite all of the fragmentation and multplication of information resources, most businesses are still pursuing the age-old PR methodology of spitting out press releases as the primary method of media relations. Well, we’ve jut completed an interesting audit of one of our clients. In 2004, this company put out nearly 400 press releases–more than one a day. After analyzing media coverage, we discovered that although they distributed more press releases than any of their top competitors that year, they actually had a lower share of coverage than any of their top competitors.

It’s going to be hard to change the attitude of CEOs who only judge the effectiveness of their PR by whether or not they find the latest release on Yahoo!, but clearly more strategic media relations methodologies are mission critical. That’s always been true, but now we have the metrics to prove it.

99-Cent Salvation

Is it just me, or is this not one of the most nauseating examples of street-pimp marketing ever vomited up by a barrel-scraping network? NBC is launching dear God no not another Reality-TV-Show-But-With-A-Twist this fall, and they’re trawling for media coverage and viewers by dragging dollar bills through America’s trailer parks as a moving testament to Christian faith.

Here’s the story: Lagging behind the other networks in the popularity of its Slit Your Wrists programming, NBC has concocted a reality show designed to appeal to God-fearing WalMart shoppers from America’s heartland. In NBC’s Three Wishes, an "unscripted show" premiering this fall "singer Amy Grant travels to a different town each week in an effort
to fulfill the heart’s desire of needy families and community groups." It sounds sweet. Really.

So NBC, looking to stir up some coverage for this faith-based initiative hires a publicity firm to cook up some media impressions. The big idea? Stalk "needy shoppers" in the checkout lines of discount retail chains and trot in on a big white horse to pick up the tab with a conspicuous stack of 1-dollar bills. Why waste time and money on creative marketing when you can just buy viewers, and through the magic of stunt media, multiply your audience?

Now I know the professional marketing purists will protest that Hey, they did their job and got national coverage, who cares if it’s singularly unimaginative? My response is that the skirmish won for publicity is a battle lost for NBC’s soul–ahem, I mean brand. The entire stunt paints NBC as a cynical manipulator of America’s poor and needy, eschewing substantive acts of service in favor of Good Samaritan skits prepackaged for the camera. The fact they’ve enlisted Amy Grant, the spokesmodel of shrinkwrapped Christian consumerism, only amplifies the effect.

Don’t get me wrong. I’m no voice crying out in the wilderness here. But this is a gravely disheartening view of America to me. The greasy aftertaste of this campaign is that faith and compassion in
America can only be signified by randomly showering money and
brand name appliances on unsuspecting poor people who look good on
screen being effusively grateful. Perhaps it’s a testament to the marketing company’s professionalism that they so effectively segmented their subject and target audience. Notice they’re distributing fistfuls of cash to people not so needy that they don’t have a credit card and an eye for brands.

I guess good faith comes with a minimum requirement of purchasing power. 

CMO Views

I’m back in the office today after a week in New York to attend our Marketing Performance Measurement forum. We had a great turnout, about 75 marketing executives who joined us at the Thomson Financial headquarters a few blocks from Wall Street to talk about trends in marketing metrics. Jim Lenskold, author of Marketing ROI, keynoted, along with Geoff Ramsey, CEO of eMarketer.  We ran three panels featuring top marketing execs from companies like IBM, Avaya, Kodak, SAS and Factiva, covering different stages of program evolution, ending with a panel of CEOs who gave their perspective on current marketing trends.

A few quotables:

"You’ve got to be able to communicate [to the board] that Marketing is in the game, helping to move the ball. The vehicle for that communication is numbers. If you don’t have the numbers, you have no platform for communicating your value to the company."

–Bill Brewster, VP of Marketing, Konica-Minolta

"Sales is coin-operated–motivated by numbers and sales. Marketing needs to be coin-op."

–Deborah Rosen, Executive VP, Marketing – webMethods

"Don’t worry about doing it right. Instead, do it wrong fast. You’re going to do it wrong anyway,
so do it and learn, and don’t waste time worrying about trying to do it right."

–Mike Moran, Distinquished Engineer, IBM

"If you can’t track lead gen measurements through to closed sales, you just may be doing some great marketing which has no value to the company."

–James Lenskold, President, Lenskold Group

We followed up the event with a VIP dinner, and gathered 15 marketing executives around a table with a lot of wine and food to talk about marketing trends and challenges. Not too many places where you’ll see Google sitting across the table with Yahoo!, or hear the top brand executive from AT&T talk about what the brand means in a world of cable and VOIP. Lest this start to sound like the society pages, I’ll stop there.

Suffice to say the topics that have been rolling around on the street for the past three years, challenging marketers to get in the game, have engaged some of the smartest marketers around, and the dialog is getting interesting. I’ve started to schedule interviews with some of the voices that are emerging from the CMO Council membership, and I’m planning to bring those to Marketonomy in the next few weeks as podcasts.

Marketing Mindshare

I’m at an event in Boston this week for senior marketers–a week long summit of targeted sessions on everything from Competitive Intelligence to CRM optimization. It’s an interesting crowd–maybe 200 or so marketing executives and 30 vendors. The event is hosted by Frost & Sullivan, and I’m actually here to support the marketing and sales team of one of my clients, Leverage Software.

The event is pretty well produced as far as conferences go–the venue is right on the harbor, the networking is well facillitated, the crowd is highly qualified and strategic–nicely done. My only complaint is at a much higher level. When you get a few hundred marketers in the room together and start threading the crowd to network, you get a really good sense of the current position of marketing evolution. There’s certainly a lot of activity out there–busyness–but the signal-to-noise ratio isn’t what I would have hoped by this point.

Here’s the problem: While the activity of marketing is changing, the mentality is too much the same. The activity of marketing today is focused on accountability, metrics, ROI. It’s all about efficiency. If marketing can line 100 ducks up on the fence, sales can shoot 1.5 of them. And the big objective of today’s marketer is to improve that ratio to 1.7.

What few marketers seem to appreciate is that you can be remarkably efficient at serving your market poorly. The mentality needs to change from shooting a fraction of your ducks and calling that success, to gathering those 100 ducks off the fence and cultivating them into a channel that can consistently offer up 1.5 new customers, without making the other 98.5 gun shy. You do that by engaging with your market, cultivating peer connections, collaboration and dialog–not by spouting positioning messages and applying your cookie cutter qualifiers. That, by the way, is why we’re here with Leverage, because they provide software that enables such an approach.

As a blog entry this is oversimplified to the point of being parody. But I just want you to know that I’m milling around this show with a highly concentrated crowd of high-level marketers–and as events go, it’s a decent one–but it feels like there’s not enough octance in the fuel.

Apple’s Core Positioning

I went to a business rountable last week in San Francisco, and found myself sitting around a table with a group of senior marketing executives talking about various issues in pop marketing. The topic of Apple’s incredibly successful run over the past few years came up, and the popularity of the iPod. One anecdote in particular made me start thinking more critically about Apple’s current position, and how that might change as they take on more visibility and more market share.

One of the guys at the table was shopping for an MP3 player for his teenage daughter. When he mentioned the iPod, she screwed up her face just as you would imagine a girl would if her father offered advice on fashion accessories. "I don’t want an iPod. Everybody has those." Apparently, the cool brand among her friends was anything but an iPod. She ended up falling in love with a Zen from Creative Labs.

A little red light started glowing in the back of my head when I heard this story. There have been a number of interesting PR threads over the past few months involving various growing pains for Apple: their shift to Intel chips; an increasing virus threat as their OS gains market share; their lawsuit against three journalists for uncovering future product plans; closer scrutiny into Apple’s environmental record, and some complaints among music fans about iTunes’ business structure. None of this is too surprising: Apple is a large company on a tear–their stock has doubled in the course of a single year. Along with all the glowing coverage about how Apple is shaping popular culture, you expect a fair amount of critical coverage as well.

What interests me about this anecdote, though, is that it cuts to the heart of what has always been Apple’s brand–the cool factor. Apple has always put a lot of resources into design aesthetics, and with good results. They’ve been the creative light in the middle of a technology industry dominated by Bland. But the more technology becomes mainstream, and the more marketshare Apple gains of that mainstream, the more ordinary Apple’s image becomes.

I’m sure no one at Apple is losing any sleep over their image–they have a strong sense of identity, and good retail brands like Apple are very adept at reinventing themselves to stay fresh. But Apple’s rapid growth is going to change the dynamics of brand marketing significantly. I’m sure Design will remain at the core of Apple’s brand image, but it will be interesting to watch their positioning moves over the next year to see how they adjust to a growing presence in the mainstream. What does it mean to Think Different when every third person in your Subway car is wearing a set of white ear buds?

Thought: A propos of "Think Different", does anyone know if the genesis of that tagline was a response to IBM’s longtime motto "Think"? Apple was often going after IBM aggressively in their ads (remember the toasted bunnies?), and it’s typical of their strategy, but I’ve never seen anyone parse it specifically.

The “Run Screaming” Imperative

A good friend of mine runs IT for one of Berkshire Hathaway’s portfolio companies. He fits the IT profile pretty well: he grew up around computers (his dad was a 30+ year veteran of Big Blue), goofed around with programming and hacking (I remember spending 5th-grade sleepovers typing in lines of code to program "Battleship", not to mention hours of "Zork"), he’s into gadgets and motorcycles and servers. Now he is the primary gatekeeper for the technology infrastructure for his company.

If you’re not heavily into direct marketing, you might be surprised to know that this demographic is one of the most expensive to reach effectively. IT decision-makers are one of the most highly prized market segments because they command an enormous percentage of the aggregate business capital budget. Not only are they difficult to reach because the demand is so high and the channels saturated, but they’re typically distrustful of marketers and prickly about having their privacy breached in any way. It’s one of those cosmic allignments that make you wonder about the order of things: a group that hates more than anything to be bothered, smack in the bullseye for people that will stop at nothing to bother them.

So I called my friend yesterday to ask him for some insight about the IT purchasing process. IT purchasing is highly studied by marketers and analysts, and I’m working on a study for one of my company’s clients to look at one particular facet of the process. The study is being designed to better understand the role the Internet plays in actually influencing corporate IT purchases. Much of the structure of industry vertical sites on the Web is tailor-made to influence corporate buying–research, opinions, competitive comparisons, pricing and ROI data–and we want to understand more about the effectiveness of different Internet channels at different points in the buying process.

What’s interesting about the discussion we had is not the insight that will help shape the study–everything pretty much begins with a Google search to start exploring product options, usenet groups to hear war stories about particular products, calls to peers to compare notes, etc. etc. What was interesting was my friend’s characterization of marketing. For him, it’s basically been reduced to a big game: marketers come after him all day long, and he does absolutely everything he can to avoid them. If you call to sell him something, you’ll never reach him. The receptionist will put you into a mailbox that he monitors without ever revealing his name or title. If you send him email, it will be scanned and ignored. That’s par for the course, and typical for IT.

What’s interesting to me is his characterization of those stalwart IT influencing tools: the whitepapers, demos, benchmarking guides and analyst reports. These are touchpoints IT marketers rely on to get their message out, and if my friend is any kind of a canary-in-the-coal-mine, the outlook isn’t good. His characterization of "the game" is that he now assiduously avoids any content in which he can’t clearly discern the motivations of the messenger. Benchmarking study by a leading analyst: who’s funding them? Buyer’s guide in a magazine: who’s advertising? Discussion guides on a popular forum: who’s seeding the boards?

My take on these issues has always been: read them, and think critically about the source. My friend’s take: avoid them and look for more reliable information from peers. He summed up his attitude when he told me he treats it as a game: "any time I think anything has been influenced by marketing, I run screaming."

Instinct or environment?

Killing Customers Softly

Everyone’s talking breathlessly about the apparently sudden realization that Amazon and other retailers may be "secretly" shifting prices around to give different deals to different buyers. The buzz is being driven by an article from AP reporter Ted Bridis spotlighting a new study by The Annenberg Public Policy Center titled Open To Exploitation, which highlights the ignorance of American shoppers.>

Sixty-four
percent of American adults do not know that it is legal for online
stores to charge different people different prices at the same time of
day for the same product. This Groundbreaking new study explores this
and many other shopping facts that all Americans need to know in order
to protect themselves from online and offline exploitation.

It’s interesting that many people passing the story around are focusing on Amazon–probably because it’s the most recognizable brand in online shopping. The story originated from an incident in 2000, which you can read about here at The Register. In that instance, Amazon was giving a better promotional price to first time shoppers than it was to loyal shoppers. Apparantly, the practice has evolved as companies find ways to deal with "bottom feeders" who scour the Web for the cheapest prices. According to the Bridis article, one photography Web site is searching your cache to see if you visited a number of other sites to check prices, and then offering a higher price to bargain hunters to discourage price shopping, while offering better discounts to loyal customers to try to retain them.

Companies have long offered acquisition discounts to attract new customers, which existing customers don’t get. You see this most gallingly in cell phone ads which offer fantastic premiums and benefits to new customers, but existing customers need not apply. The question was always how to do this in such a way that you don’t anger loyal customers enough that they switch to a competitor. Cell companies have relied on long contract terms that lock you in tight, while Amazon has depended on building a customer experience that can’t be replicated elsewhere, and which will hopefully overcome any annoyance over some missed deals.

What’s intersting now is that the practice seems to be evolving as companies gain the ability to track more behavioral data, and target those kinds of customers that are most profitable for them. It’s price strategy beyond the price war. What intrigues me most about this whole story is the realization that Amazon probably has the most powerful price modelling system on the planet. A number of years ago I worked on the repositioning and rebranding of Talus Solutions in preparation for their acquistion by Manugistics. Talus provided a system of profoundly robust price modeling applications–the kind used by automobile companies and airlines to figure out the revenue impact of myriad pricing programs, including discounts, promotions, and all the competitive strategies that go along with pricing. We’re talking about the kind of programs PhD economists sit in front of all day to fine tune programs that can swing revenue millions of dollars in either direction.

When you consider the volume and variety of what Amazon is selling, and the data they have to populate their models, you know they have some pretty heavy iron on hand to calculate how they can squeeze an extra dollar or two out of every sale they can. Some people feel that’s exploitation, but is it? No. It’s good business in an age where competition is driving profits down to a razor’s edge, and it’s what allows Amazon to keep giving customers the convenience and variety they want.