Tag Archives: Customer Experience

Early Adopters and the Mass Market

A well-established principle of marketing says that a small group of early adopters can spur mass-market acceptance of a new product. But how do early adopters react when its brand is accepted by the mass market? And do mass markets react the same way that early adopters do to the same brand? Marketers assume that dominating the first market (early adopters) will also help them dominate the second market (mass market).

Wharton marketing professors David Reibstein and John Zhang have explored the topic and say that a company could experience a backlash as early adopters move on to other new products. An example is Porsche, a successful brand for sports car enthusiasts. The brand saw a decline in sports car sales after it entered the SUV mass market. The backlash was significant.

In fact, as The New York Times points out, teenagers would rather text their friends a message rather than post it on Twitter. Instead, Twitter has been embraced by an older demographic. Twitter’s success has shattered a widely held belief that young people lead the way to popularizing innovations. The brand has proved that an offering can take off in a different demographic than you expect and become very popular. Twitter is defying the traditional model.

So why do marketers assume that success with early adopters will lead to quick adoption by the mass market? The “early adopter” concept is flawed because they aren’t always a good indicator of the growth potential of a brand nor do they have an extended Customer Lifetime Value. Most early adopters move on to the next big thing and may not be loyal to brands.

What is more important is to identify your most profitable potential customers. These profitable customers will eventually be the core of your growth strategy and profitability. The important indicator is the rate of adoption – the relative speed with which the most profitable consumers adopt an innovation. Success depends on an organization’s ability to build and maintain loyal and valued customer relationships. Therefore, it is essential to build refined strategies for customers based on their value to the organization. The best marketing strategies pursue long-term relationships with profitable customers.

Two questions for you: (1) Who is your most profitable customer? (2) What is their lifetime value to your organization?

Please email me for our “View from the Top” series on best practices in customer satisfaction strategies.

Who Won the Superbowl?

Okay, I admit it. While you’re reading this during the week at some point after the SuperBowl aired and know who won, I’m sitting here writing this blog entry on SuperBowl Sunday instead of watching the big game. And while I’ll be interested to hear who won (Go Saints?), I, like you, will go online tomorrow to find out who advertised and which spot was the funniest or most outlandish. And then I’ll go on with my day and probably never think about those spots ever again.

However, the Superbowl is the most watched televised event of the year with some 100 Million people expected to watch. According to a recently televised report, a 30 second spot on American TV during the Superbowl will go for between $2.5 and $2.8 Million. That’s about $80,000 a second!

But the larger question being asked these days, especially by a lot of young people I know, is whether that money could be better spent. Especially with everything that’s going on in the world right now.

Now after years of producing some of the most memorable Superbowl ads in history, PEPSI is asking the same question and has decided not to run an ad. Instead, they’re going online with “The Pepsi Refresh Project”. http://www.refresheverything.com/

According to their “refresh everything” site, they’re looking for people, businesses, and non-profits with ideas that will have a positive impact. “Look around your community and think about how you want to change it.” Submit your ideas and vote on your favourites. Those chosen will be awarded up to $250,000 in grants in categories ranging from Health, Arts & Culture, and Food & Shelter to the Planet, Neighbourhoods and Education.

And the so-called Pepsi Generation is eating it up. This is just one example of what’s going on right now. We saw the impact the internet and social media had and is having post-Haiti. This is more of the same great trend. The NetGeneration is getting involved and looking for something more fulfilling than a gratuitous 30-second spot where the money spent to buy the media could eradicate so many issues affecting Haiti, Cambodia and the Congo to name a few — and those affecting us right here at home. Pepsi is on to something and other brands ignore the trend at their peril.

The iPad has arrived. Now what?!

Today, as I was riding in on the subway, reading the New York Times on my new iTouch, I stumbled upon an article about Apple’s launch today (Wednesday Jan. 27) of its tablet product, or iPad.

http://www.youtube.com/watch?v=4_zI21XEo0Q

Being an Apple fan from way back I couldn’t help but feel a sense of real excitement. It got me reflecting on how much the Apple brand has meant to me over the years. And I’m not alone. The excitement that’s building up in the media and among the Apple Faithful is almost palpable and very real.

I bought my first Mac (Mac Classic II) back in 1993ish. I was working at an agency and wanted a way to be able to work on those weekends when I was going back home to Kingston to visit the folks. The idea of a portable computer was exciting. Imagine, being free to take your computer anywhere. It was only 14 or 15 lbs. Oh, you PC people chained to your desks. How quaint.

Then when the first Apple notebooks came out, I was fortunate to be working on the Apple account and helped develop a launch campaign for them. (Best. Account. Ever.) The objective, as outlined in the brief, was to get the public over the mental hump of being able to work anywhere. Imagine sitting in a park or in a coffee shop clicking away on your laptop computer. Why, you could even work from home!

Then of course, the iPod changed everything. The recording industry, advertising, interaction (or lack thereof) between people in public places…everything. The iPhone then revolutionized how we think of what a phone is and what it can do. People could earn money and express their creative by developing Apps. We were now all working for Apple.

Walk into any mall where an Apple store exists and you’d think they were giving stuff away for free in there.

And now the anticipation for the iPad is reaching a fever pitch. People can taste it. The article in the NYT suggests that it’s going to do for newspaper publishing what the iPod did for music. They’re counting on it because we all know where the newspaper industry is headed. But will our collective love for all things Apple mean that we’ll be willing to pay for things like the Star or the NYTs online through the Slate, when so much of the same information can be found on free sites elsewhere.

That’s just one fascinating question we as marketers should be watching and reading about — probably on our iPads.

Bryan Tenenhouse

Time to Talk Community

Communities can take on many shapes and can be formed for numerous different reasons. Some may share a common interest in bird watching while others may congregate to discuss computer programming techniques or even dating tips. Although, when discussing communities in the context of brands, trying to understand the motivations that drive consumer involvement becomes slightly more complicated.

What do you mean by “Community”?

What’s the difference? We should begin by defining both an online community and a brand community as follows:

online community: is a group of people that primarily interact via communication media such as email, internet social network service or instant messages rather than face to face, for social, professional, educational or other purposes. (Wikipedia: online community )

brand community: A brand community is a community formed on the basis of attachment to a product or marque. Recent developments in marketing and in research in consumer behavior result in stressing the connection between brand, individual identity and culture. (Wikipedia: brand community)

According to the definitions above, an online community is focused on how people form and nurture relationships online while a brand community is all about why people/consumers choose to affiliate themselves with a particular brand. This distinction is very commonly overlooked and may be a key reason why many brands who attempt to build a strong following are unsuccessful in doing so.

Consumers are not inherently associated to any one brand. They build an affinity to them when they feel a connection; a certain passion for something that the brand values embody or represent. To simply build the infrastructure to allow consumers the ability to congregate and communicate with each other without understanding what they may be passionate about would result in an environment that lacks cohesion.

The 50th Anniversary Party

Use the example of a 50th anniversary party. John and Sally have been married for 50 years and have a large network of friends of family. They’ve decided to have a large catered event with live entertainment and are thinking about who to invite. Since it is such an exceptional milestone, they thought it would be nice to have an open event where anyone could attend.

In theory it sounded like the event would be a gallant affair yet how would they spread the message to let people know about the occasion? The message would be sent to family and friends as well as to strangers looking for an enjoyable night out. To some the concept of free food sounded appealing while others were looking forward to a night of dancing or even the prospect of meeting an eligible bachelor that they could click with.

Now the question is would people attend because of the couple who were celebrating their milestone or for the freebies that had nothing to do with them at all? If the couple were to host subsequent parties in the future, would people continue to attend and possibly bring their friends along with them? They might, although what would be the common thread that would connect everyone together? What similar interests would people share who were attending these events?

The same could be said for the creation of online communities. To create a series of tools (“freebies”) enabling consumers to congregate online without providing the common thread upon which they may have a unique experience would be similar to inviting people to the party as mentioned above. When developing communities online it’s important for brands to identify the theme or values that will not only connect those who participate but to also bring them closer to the brand.

CCM Takes a Shot at Online Communities

Take CCM Hockey for example. In speaking with Ross McCracken, Senior Brand Manager he mentioned that hockey fans are a very passionate group and that they have a natural tendency to organize themselves and form groups online. CCM recognized this and has been leveraging the web to form meaningful relationships with their consumers since the late nineties when they would respond directly to consumer enquiries via e-mail. Their level of responsiveness and shared passion for the sport allowed them the ability to establish the foundation of an online brand community which has continued to grow and evolve ever since.

Although ROI is not currently being tied back to their online community initiatives, the organization recognizes the power that the social web brings not only to their marketing communications but also in their focused product development efforts. “Key influencers are a big part of our success,” says McCracken, “we look to them to provide valuable input into our new product innovations while helping to create excitement for them when they become market ready. Our communities have enabled us to build a stronger relationship with our consumers while simultaneously positioning our brand as a category leader”.

CCM has done a great job of listening, communicating and connecting passionate hockey fans with the brand, although Ross states, “we still need to do a better job at linking all of our approaches together. The web is constantly changing and we’re continuously looking for ways to keep up with the times so that we can remain relevant to our consumers and be perceived as a trusted partner who understands their needs.”

The organization has embraced the medium and has developed a corporate culture where virtually everyone in the office is involved in social media at some level, not necessarily all working on the brand, albeit, the first step truly is about understanding the channel before being able to realize its full potential.

Is Your Company Ready?

Organizational cultural readiness is a critical success factor for any company seeking to leverage the power of the social web and this is where I will begin my next topic…

By Jeff Pontes, Director – Digital Strategy, FUSE Marketing Group

Pay Attention to Different Shades of Grey

I was interviewed by the Montreal Gazette last month which reported on the many shades of grey in Canada. As I said in the interview, any retailer hoping to tap into the wallets of aging baby boomers must realize that there is no one size that fits all. We are probably entering an age of the custom fit. There are boomers shopping in plus-size stores. But there are also lots to be found in Lululemon shopping for yoga pants.

As we enter the new year, retailers should consider catering to boomers who are going to want more service and more advice. But they don’t want to be singled out as a group and they don’t want to be described as old.

Older women do not want to dress like an older woman. So they do not really want to shop at separate stores. Everyone thinks they are younger than they are, and to be seen shopping at a store for ‘older’ women is not good for their self-esteem. But, at the same time, they don’t want to walk out the door looking like mutton dressed as a lamb.

Retailers will have to understand the mindset of aging boomers and have floor staff trained to be helpful, to offer advice, and to make sure the customer does look good when he or she walks out of the store. The use of personal shoppers will not only be reserved for luxury shopping. Any retailer who offers personal shoppers to boomer customers will more likely succeed than others in winning a share of boomers’ wallets.

So far, everybody says yes, yes, we must do something about it. But very few retailers have addressed boomers’ needs in a comprehensive, thoughtful kind of way. Let’s hope the new year will bring a new approach to the retail world.