The Most Hated Companies in America and Customer Satisfaction Research

  

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Ok – maybe that’s a little too harsh.  Let’s call this the ‘The Companies Who Should Have Conducted Better Customer Satisfaction Research in 2011’.

This list is more about my observations of brands than the results of an elaborate model that takes into account public perception of the brand, total return to shareholders, negative press and other factors that left a blemish on the brand.  Admittedly, there are some companies that should be on the list, such as the United States Postal Service, Fannie Mae and Freddie Mac, but these are not ‘companies’ and rely more on legislation than customer feedback.

But here are some companies that left me scratching my head in 2011:

Facebook

Since Facebook has more than 800 million users, one would expect customer satisfaction to be at the top of their ‘must do’ list.  But the site has repeatedly angered their users by neglecting personal privacy, deploying ‘features’ no one asked for (such as the new Timeline) and forcing new settings on customers that changes how information is shared with others.  They’ve turned what was once a pleasure into a chore.  Is it a wonder that Google+ seemed so attractive to disgruntled Facebook users?

Goldman Sachs

GS’s poor image was ‘set’ when the government sued it for fraud in 2010 for $550 million, since it was viewed by most as a mere slap on the wrist.  Since then, the fraud accusations have not stopped, but actually accelerated!  This was mostly based on GS misrepresenting the quality of $11.1 billion in mortgage-backed securities.  Anyone with a home mortgage whose company borrowed from Goldman Sachs probably knows what it feels like to be underwater.

Best Buy

Best Buy managed to break the first rule of customer relations – keep your promises!  Best Buy pushed the online aspect of their business prior to Christmas guaranteeing delivery prior to the Holiday, but instead, they didn’t tell customers that they had run out of certain items until two days before Christmas!  In a typical corporate move, Best Buy passed-on the blame to their suppliers.  Is it any mystery why Amazon.com was at the top of the customer satisfaction list?  Or any mystery why the value of Best Buy’s shares dropped 30% in the past year?

Johnson & Johnson

The company that was once a model for customer satisfaction has fallen dramatically, primarily due to the number of product recalls.  Since 2009, J&J has issued recalls for more than two dozen J&J products – ranging from Tylenol and Motrin, to prescription drugs for HIV, defective hip implants that caused severe pain and contact lens solution that irritated the eyes. The situation was so serious that the FDA took over three Tylenol plants to ensure the drugs and products were being manufactured correctly.  Not reacting to the recalls fast enough – in light of numerous cases preceding the recalls – did not win them back any lost customers.

Netflix

I saved the best until last.  Only a couple of years ago, Netflix had the highest customer satisfaction ratings of any large consumer-facing company.  One of their biggest stumbles in 2011 was raising the customers’ rates by 60% last August.  The move resulted in the loss of 810,000 subscribers and set off a maelstrom of customer complaints.  Although CEO Reed Hastings stated at the time that the cancellations would continue until consumers “…got used to the price increase”, Netflix shares were among the greatest losers on NASDAQ last year with virtually all its losses occurring in the final four months of 2011.  And this isn’t even mentioning the ill-fated Qwikster venture that lost them both customers and goodwill.

I could lump Bank of America and Wells Fargo together since both floated out the idea that they were going to start charging for ATM usage, but due to public outcry, they withdrew these plans.  I’d like to give them a ‘pass’ since it shows that someone there was concerned with how satisfied their customers are; however, they’d have scored bigger if only they had thought to gage their customers’ reactions before the announcement.

What do all of these companies have in common?  It’s my guess that they did not have, or did not monitor closely enough, their customer satisfaction research findings.  Just stepping-up and telling their customers that there was something wrong and they were going to fix it immediately would have been better than the ‘burying your head in the sand’ strategy some chose to follow.  It appears that this pattern will plague us in 2012 as well, starting with the Carnival Cruise Lines PR debacle over the recent sinking of one of their ships and the lack of corporate communications to their potential customers.

I’ve said it before and I’ll say it again – how can you expect to react to a disaster or misstep when you don’t know how your customers currently feel about you?  A regular tracking of customer perception towards a brand will help if a disaster occurs, but it will also serve the company well even in non-disastrous situations.  You’ve heard the expression, “Look before you leap”? I would alter that for corporate America to “Research before you act”.  It’s a lot easier to act, or react, to a situation if you know how people feel about you through a regular tracking of their satisfaction with your product versus just guessing – and guessing wrong.

Based on your experiences, have I left any big offenders out? 

2012 Cause Marketing Trends, Summaries, Predictions

  

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This week's The Marketing Dialog was written by: Trisha Stezzi, Creative & Digital Director / Account Services/ For Momentum

With over 15 years of cause marketing experience, Trisha is adept at coming-up with fresh ideas, innovative solutions, and intuitive flashes of insight to create dynamic solutions. With her experience in cause marketing, event marketing & strategic partnerships, she has seen the dividends true collaboration and teamwork produce. Trisha leads, organizes, manages and plans from strategy through execution.  Her analytical and creative skills lead to successful revenue and awareness–generating efforts — for names such as Holiday Inn, Pfizer, Rebuilding Together and more.

In the spirit of For Momentum’s twINFO feature – here’s a handy list/breakdown of cause marketing/social good summaries, trends and predictions (in no particular order).  I’m sure AT LEAST 58 more of these have been posted within 30 seconds of this going live.  So, if you have any additional ‘finds’, please add them to our ‘Comment’ section.

OK, here goes…

Mashable:

Charitable Giving Set to Plateau in 2012 [STUDY]
Excerpt: Nonprofits that want more donations in 2012 had better up their game. A new study from Fenton and GlobeScan suggests that donations to nonprofits next year will remain at 2011 levels.

Two from Triple Pundit:

Cone Inc.’s Top 10 Cause Marketing and Corporate Responsibility Trends of 2011
Get Green (not what you think), No Bully, Limited Edition, Every Penny Counts, Zero Down, CR Kumbaya, Get Real, Retail Therapy, Good.0, Next Gen

Top 12 Predictions for Corporate Responsibility in 2012
Excerpts:
#2: There will be a continued growth in employee-engagement programs.  If the economy continues to falter, we will see corporations supporting NGOs and nonprofits via employee volunteer programs rather than writing checks.  Organizations such as VolunteerMatch and Executives Without Borders will benefit.

#4: Increase in the number of cause marketing programs.  These continue to appeal to corporations as they are a way to add legitimacy to a program that can also drive revenues while helping the world (in some capacity). If done authentically, such programs can enhance a firm’s reputation in the eyes of consumers.

#5: The continued demise of checkbook philanthropy. This will happen in parallel with the the increases in cause marketing programs.

Two from Katya’s Non-Profit Marketing Blog:

3 Trends in Digital Marketing for 2012
Katya’s take on three of the key trends that nonprofit marketing folks should watch relating to: Silverpop white paper on where digital marketing is headed in 2012. 

5 Scary Strategy Mistakes to Avoid in 2012
Excerpt: The Harvard Business Review has an excellent piece by Joan Magretta, who recently finished a two-year project looking at Michael Porter’s most important insights for managers.  She has identified 5 really dangerous strategy mistakes that are absolutely worth sharing.

2-Part Post from Cone, Inc.:

A Year in Cause & CR (Part 1)
A Year in Cause & CR (Part 2)
10 trends Cone, Inc. noticed in 2011: Get Green (not what you think), No Bully, Limited Edition, Every Penny Counts, Zero Down, CR Kumbaya, Get Real, Retail Therapy, Good.0, Next Gen

Kivi’s Nonprofit Communications Blog:

Where Marketing is Headed in 2012
Includes a brief slideshow of 3 Nonprofit Communications Trends from the aptly named 2012 Nonprofit Communications Trends Report to be launched in late December 2011

Network For Good Blog:

2012 Cause Outlook: Corporate Generosity Here to Stay
Includes interesting links; discusses ‘One for One’ Model, Charity Starts at Home and Meeting Basic Needs

JWT Intelligence:

10 Trends for 2012: 2-minute video “teaser” (FREE!)
Here are a few teasers for the teaser:  “We vs. Me” generation ---synergistic not mutually exclusive; Green Movement to focus on impact of food choices.  Buy the report for $250

TechJournal:

Top 2012 marketing trends: guruism, collective curation, seamless tech
Excerpt: “Cause with Effect:” With the lingering threat of a “cause bubble,” cause marketing must increasingly focus on making relevant, visible, and inspiring impacts.”

Forbes:

The Brand Keys 12 for 12: Brand and Marketing Trends for 2012: Part 1
#3 Inward Bound
Excerpt: Differentiation will increasingly come from a brand’s emotional offerings and finding what will best resonate with consumers. Doing what others do signals commodity, not brand. This is one suit that needs to be custom made. Personal connection and engagement will be more and more critical especially in today’s weakened economy.

Abnormal Marketing (Australia):

Top Marketing Trends for 2012

Good compilation of “prediction lists” here.

AllBusiness:

Wendy’s Takes Prize for Most Popular Tweet of 2011
Excerpt: Proving that social media is perhaps not a complete waste of time for brands, hamburger chain Wendy’s was recently awarded the Golden Tweet Award by Twitter. This honor goes to the Twitter user with the most popular tweet of the year, as measured by the number of times it gets retweeted.

CommPR:

Let’s Get Real: Six Social Media Trends to Watch for in 2012
These are straight-up social media trend predictions---but, if you are smart, you will consider how these might be applied to your cause strategies.

MarketingProfs:

12 Marketing Predictions for 2012
Another social-media focused list, including it here for good measure (pun intended as ROI should be top of mind). 

A Look Back at Marketing ‘Fails’ in 2011

  

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2011 saw a lot of marketing campaigns spectacularly ‘fail’ for what seem now, obvious reasons, but as the man said, if we don’t learn from the past, we are apt to repeat it in the future.

Sure, there were brand ‘suicides’ committed by Charlie Sheen, Herman Cain and Anthony Weiner, but what about the just dumb marketing mistakes that were committed? 

Here are some of my favorites, in no particular order:

• Mothers Against Drunk Driving (MADD). Last year, a New Jersey chapter of MADD held a benefit to raise money by conducting a beer pong tournament.  Although their heart may have been in the right place, think of the public perception of such an event – it seems to go directly against MADD’s objectives.  It would ‘fit’ as well as awarding winners with cigarettes at a Cancer Society event or awarding a fur coat at a PETA meeting.
•  Qwikster.  One of the best fails of the year!  In essence, on September 18^th of last year, Qwikster divided Netflix so that if you wanted streaming DVDs, as well as DVD rentals, you had to maintain two accounts - something that subscribers found confusing and upsetting.  Netflix expected some of its 23 million subscribers to cancel the service due to the price increase, but the cancellation rate greatly exceeded their customer loss projections.  Then, on October 10^th, Netflix subscribers got an email telling them that Netflix had come to the conclusion that Qwikster was a mistake and would be immediately withdrawn.
•  Verizon Wireless.  The communications company found itself in a similar situation to Qwikster in that in one week, the company announced that it would add a $2 fee for one-time phone and online payments. People raised an immediate ruckus and Verizon rescinded the decision the next day.  A similar ‘fail’ happened when the Bank of America and Wells Fargo announced that they would begin to charge fees to use their debit cards, then rescinded that decision due to their customers’ very vocal objections 
• Delta Airlines.  Although not a ‘fail’, we still wonder if they conducted any research on a new slogan they unveiled last year - "Delta.  Keep Climbing."  For an airline, that would seem to be a ‘given’, considering the alternative. 
• Groupon.  Groupon started the year off with a monumental gaffe during last year’s Super Bowl.  They aired a couple of commercials which initially seemed to be cause marketing to help some of the world’s trouble spots.  The most memorable one appeared to be a heartfelt plea highlighting the upheaval and exile the Tibetan people have been enduring for decades – then suddenly veered into a commercial extolling the joys of getting 50 percent off fish curry using Groupon.  Insensitive or just plain stupid?  Ask the geniuses at Crispin, Porter that came up with the idea.  Fortunately, it was a short-lived campaign.     
• Abercrombie & Fitch.  What were they thinking?  A press release announced that A&F was offering the cast of JERSEY SHORE money not to wear their clothing since it projected the ‘wrong image’.  Immediately, the cast fired back that they had not been made that offer by A&F.  Quite the opposite – A&F had already produced shirts that bore the words of some of the cast’s catch phrases.  One of the cast members – Mike ‘The Situation’ Sorrentino – filed a $4 million lawsuit against A&F alleging that the clothing company had made false promises to pay Sorrentino not to wear their clothes after the company profited from tee shirts they produced, including one that was emblazoned, ‘The Fitchuation’.

And companies weren’t the only ones that left us scratching our heads.

Penn State, on the heels of the firing of Joe Paterno, saw its students rise en masse to protest the firing before knowing the sexual abuse that had happened during his years there. 

Celebrities weren’t immune either since Ashton Kushner’s ill-timed, and ill-informed, vehement Twitter response immediately after Paterno’s firing caused him to close his account and then turn his Twitter account over to an editor.  Similarly, Gilbert Gottfried lost his job as the ‘spokesduck’ for AFLAC when he twitted an insensitive joke on the heels of the Japanese tsunami. 

All we can hope is that in the coming year, companies will take the time to research some of their ‘brilliant’ marketing ideas before letting them loose on the public.  Once silent, ‘the general public’, with its ability to immediately respond positively or negatively to such actions via social media, can become very vocal, very fast.

Need I add that a lot of these ‘fails’ could have been avoided if the right type of brand research had been conducted?  I would hope that at least the worst offenders now conduct at least practical, if not regular, brand research so that they know how customers and the general public will react before the launch a campaign guaranteed to ‘fail’.

10 Marketing Research Trends for 2012

  

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With 2012 just around the corner, it's time to look forward rather than back. Today's article comes to us from Mike Carroll, Director of Sales & Marketing at MarketResearchCareers.com. 

Based upon their experience in the industry, we thought it might be helpful to share their  perspectives regarding emerging trends in Marketing Research -- helping you to prepare for the coming year.

Trend #1: Data Streams Will Shift Researcher Focus

With the growing availability of data streams that reflect consumer behavior, it is essential that these sources be understood, harnessed, and mined in 2012. Technologies such as in-store location monitoring, eye tracking, and others generate data that reveal true consumer activity. Mining these streams will lead to superior marketing results with a lessened reliance upon survey-based data -- and DIY survey tools in particular. However, researchers will be required to review, interpret, and limit activities based upon privacy policies to prevent alienating their audience and exposing themselves to significant business and legal risk.

Trend #2: Mobile Devices Will Shape New Methodologies

With the exploding use of smartphones and tablets, researchers need to become intimately familiar with how consumers actually use these devices. This knowledge must then be translated into methodologies that minimize inconvenience levels and maximize data quality. Simplified apps producing actionable data, single question surveys, and other approaches that reflect how these devices are used will be essential to developing and defending reliable research methods for this "new world."

Trend #3: Insights From Unstructured Text Will Become More Precise

More than any previous year, new technology will be developed in 2012 to accurately interpret blogs, online comments, and Facebook postings. Such tools will provide marketers and brand stewards with real-time insights that reduce the reliance upon traditional data capture methods.

Trend #4: Completion Rates for Online Surveys Will Continue to Plummet

By no means is this a new trend, but the erosion of cooperation and completion rates will continue. Surveys requiring more than 5 minutes will falter and data quality will further suffer from random input. Regrettably, there will be no ability to correct datasets as traditional approaches such as weighting and data bridging will be unsuccessful. And we anticipate a larger presence of "survey bots" that will further reduce the accuracy of and confidence in survey data.

Trend #5: Brands Will Accelerate Direct Access to Their Customers

Again, this is not a new trend -- but one that will continue to grow in importance and pervasiveness. Large brands will invest heavily in dis-intermediating methods such as Facebook, smartphone/tablet apps, and couponing to better understand their audiences and drive sales. These coveted relationships will become the cornerstone for product feedback and drive product innovation.

Trend #6: Research Patents Will Be Actively Enforced

With growing competition chasing stagnant research budgets, organizations with patents will flex their muscle in 2012. This action is long overdue within the market research industry. The coming patent wars will redefine the offerings of many research firms and spark industry consolidation.

Trend #7: Overall Research Budgets Will Experience Limited Growth

Despite decades of growth, we expect the overall spending for market research will grow at rates no greater than the CPI for the foreseeable future. Buyers of market research will pass along cost containment pressures to their suppliers. The ability to leverage technology and automate tasks will be essential for research organizations to maintain margins.

Trend #8: Prices for Syndicated Research will Remain Stable; Custom Research and Sample Access Will Decrease

As custom research and access to sample continue their drive toward commoditized services, research buyers will be willing (and expect) to pay less. Regrettably, the use of offshoring that once enhanced supplier margins will serve to limit pricing power given perceptions of limited data quality. However, the unique insights provided by well recognized analysts will enable syndicated research firms to maintain -- and perhaps even increase -- prices.

Trend #9: New Skill Sets Will Be Required -- Paying Substantially More

Research professionals will need to develop the ability to manage large, disaggregated datasets. In particular, researchers will need to master SQL and SAS/SPSS at a minimum. Furthermore, researchers will be required to have a fundamental understanding of the Internet and how it works -- technically. And those who possess these skills will be in great demand -- easily commanding salaries between $100,000 to $200,000 per year.

Trend #10: Job Hopping Becomes Popular Among the Most Skilled MR Professionals

Researchers with the skills will job-hop seeking new challenges and greater compensation. In an attempt to keep their best, retention measures (bonus, options, etc.) will quietly become commonplace. For perhaps the first time in the MR industry, compensation will be based upon what a researcher can do rather than what they have done.

We hope these trends help you to prepare for 2012 and beyond.  We'd welcome any comments regarding these projected trends.

MarketResearchCareers is the career website with a comprehensive database of resumes and jobs focusing exclusively on the Market Research industry. You can reach them at: http://www.marketresearchcareers.com/

The 7 BS Stories of the Market Research Business

  

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As our regular readers know, occasionally we like to repost outstanding articles in The Marketing Dialog and this is a 'must read' to get the client's perspective of marketing research.  Client-side researcher Jason Anderson continues his quest to create a “No BS Zone” within the research blogosphere by speaking out on the reality of some of the biggest issues impacting the business of market research. Although his context is within the gaming industry, I suspect his experience translates across most categories. As a supplier-side researcher, it’s both refreshing and a bit intimidating to have our dirty laundry aired this way, but it is my belief that you can’t fix a problem unless you understand the cause and in this post Jason gets to some of the root business model issues impacting MR. You can follow Jason's blog at http://gamehex.com/. This one is sure to spur some debate and I’m looking forward to hearing what you think!

By Jason Anderson, Director of Global Consumer Insights, Blizzard Entertainment . 

Last month, I saw a presentation from VGMarket (a boutique research shop in the video games space). If you hit up their website, you’re going to see something rarely revealed by a supplier: their prices. Yes, for a firm quote that includes all of the idiosyncrasies of your particular study you’ll need to talk with someone, but if you’re just trying to size up a hypothetical project you can avoid salespersons entirely.

You’re also going to notice that their prices are…well, they’re cheap, by industry standards. I rarely get quotes for gamer-targeted focus groups for $3k/piece. But this isn’t an article about a specific vendor per se — it’s about the seven “truths” they expressed about games research practices.

I agree with all of them. They’ve given me permission to post and comment upon their presentation, so here are 7 distortions that too many companies accept at face value.

BS Story #1: Focus group pricing is fair.

Actually, most of the time it’s not. If a standard focus group or playtesting group is 6 to 8 respondents for 2 1/2 hours, a typical invoice for a US-based group adds up to $6k to $10k per group. In reality, the recruiting is typically outsourced to another firm for $80 to $120 per respondent. Add on some fixed costs for facility, and that’s lots of healthy profit margin.

If you are conducting at least 4 or 5 standard groups, there is no financial justification for a vendor to charge more than $3k to $5k per group, including expenses. I recently hired a quality firm to conduct 8 groups and 20 individual interviews for under $30k. And I got great quality output. Quotes for the same service from other vendors were as much as twice as much.

Lesson: when is the last time you looked underneath the hood of your vendors’ financial model? Are you paying an appropriate margin for the value added? If you’re paying $60k when you could be paying $30k, what is the extra value delivered for that extra $30k?

BS Story #2: You can always trust that your focus group respondents meet the criteria

While I didn’t need a vendor to tell me this for me to know it to be true, it’s refreshing to hear. Most of the time you’ll work with your vendor to develop a screening survey, and you probably rely on that vendor to manage the integrity of the recruiting process.

Most vendors don’t manage the recruit directly, however. They outsource to another firm and use the screening survey as the delivery contract. Those recruiters (now two steps removed from the project) won’t have industry-specific experience; they will have survey script-reading experience.

This is particularly challenging in the games business. Not surprisingly, gamers are  great at “gaming” the system and figuring out the right answers to qualify (and earn their money). Weeding out the liars requires in-depth knowledge of games and game genres, and the ability to challenge respondents to prove their claims. For example, if your recruiter isn’t a gamer, and their target is people who have “played required game X for at least 5 hours,” how can you validate their gaming experience?

You can’t. And if your vendor isn’t paying attention to these details (either by doing their own recruiting or micromanaging their subcontractors), you get participants with the wrong background. Which leads me again to wonder why I’m paying twice as much for half the value.

Lesson: Contract management 101. Make sure ownership of recruiting process and quality control is clearly defined and there is explicit accountability.

BS Story #3: You can always trust your online survey sample and its pricing.

VGMarket’s presentation captures the problem succinctly: “Because the end customer has zero visibility into online recruiting practices, the online sample business has devolved into a cesspool of incestuous outsourcing, excessive mark-ups, and rampant fraud.” Those aren’t client-side words, they’re supplier-side.

Why are things this way?

Lesson: You need to know exactly where your sample comes from. And your vendor needs to be transparent about the sourcing.

BS Story #4: Market research requires a lot of time

While some types of research require more time for analysis and processing, focus groups and crosstabbed surveys do not. For me, project turn-around time is a primary factor in whether or not to “do it myself.” If I have good internal attendance at a playtesting or focus group session, I have 48 hours (best case) before the other observers in the room begin distributing their own notes and findings, and I lose control of the message.

In these situations, I need topline reports in 24 hours. I need final reports in 4 days. My business moves fast, and I presume this is true in many other industries.

Lesson: Vendors supporting fast-moving industries need to be able to keep up with the pace of their clients’ businesses.

BS Story #5: “Business Hours”

Game development is notorious for “crunch time” — that point in the project where deadlines and the 40-hour workweek fall painfully out of sync with each other. In these situations, 8-hour days become 14-hour marathons and weekends happen once or twice per month. If I’m working that hard, so should my vendor. Just in the past month, I’ve had to:

• Repair an 18-country email campaign from a hotel room the morning of my brother’s wedding;
• Manage two surveys from a Blackberry at 5am the morning of my TMRE presentation;
• Edit 200MB of focus group videos from a Dropbox while en route to the airport;
• Fix audio wiring problems in my playtesting lab 30 minutes before start time;
• Go from “we need to do Project X” to “Project X is finished and decisions made” in 5 days;

This isn’t about “oh, woe is me” — this is just the way things are in games. I’m 24×7 on call. I need to be able to contact my vendors at 1am on a Saturday and get the same level of service that I would during “working hours.”

Lesson: Your vendor’s working hours should match your own. If you’re in a 24×7 role, you need 24×7 support.

BS Story #6: Research for games is the same as research for other products.

I’m not disparaging research in other categories. All industries have their own vocabulary and norms. Games are extremely sensitive to the lexicon that has evolved over several decades, however, which makes it difficult (if not impossible) to moderate a discussion with only a superficial understanding of the category.

Gamers have invented hundreds of words and acronyms: LFG, GG, LB, RT, UDUDLRLRBAStart, pwn, 1337, raid, crit, epic, headshot, metacritic, FPS, RTS, MMO, RP, frag, ping, PK, mule, 4X, easter eggs, boss kill. It’s endless. So when your participant says “I don’t like playing RP because it takes too long to find a PUG on the LFG channel,” can you translate?

Lesson: You need to work with people that understand your product category. This is easier for some categories than others. In the case of games research, it’s not good enough to have one analyst or moderator that happens to be “a gamer” — they need solid experience in your particular genre.

BS Story #7: It’s OK to make big decisions based on small sample sizes.

Because game development can be so fast-paced, product teams are easily tempted to use the results of a few focus groups or playtesting sessions to make large decisions. The reason: they assume it will take too long to achieve a larger sample, or it will be too expensive, and so it’s better to act with some feedback than none at all.

I suspect this issue may be more common in the entertainment industry than in packaged goods or other products and services with longer shelf life. But it’s still possible to recruit 80 or 100 respondents at a reasonable cost and deliver both quantitative and qualitative feedback. Yes, your confidence level will be lower, but I believe it would be better to do a smaller number of somewhat significant studies than a larger number of purely directional interviews.

Lesson: Make sure your internal client knows how a study’s results can and cannot be applied.

We welcome any comments you may have regarding this article!

Happy Holidays from Polaris Marketing Research

  

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Thank you to all our readers for your support. We wish you an abundance of friends, happiness, and fun this holiday season. TMD will be back blogging in the New Year!

Sincerely,

Polaris Marketing Research Bloggers

The Holiday Marketing Challenge

  

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Eggnog. Fruitcake. Candy canes.  Stockings hung by the fire with care.

The holiday season is certainly rife with opportunities for marketers, but the challenge for holiday promotions is to (1) make it memorable and (2) make it brand-enhancing.  While on the surface, Coca Cola's polar bear campaign seemed perfectly attuned to the brand, customers thought otherwise, forcing the white cans to be pulled by the global softdrink maker.  But I recently became aware of two holiday promotions that have become long-awaited traditions by these brands' customers.

PNC Bank Christmas Price Index® shows the current cost for one set of each of the gifts given in the song "The Twelve Days of Christmas."  It began 28 years ago when the chief economist at PNC Bank decided to figure out how much it would cost to buy each of the gifts. Little did he know, he was starting an economic tradition that continues to this day.

In Marketing, Timing is Everything

  

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 The competition to define the ultimate in-flight experience in a tweet for the "Qantas Luxury" competition was supposed to build good will and customer engagement.

It was also not supposed to launch a day after Qantas and its union broke off contract negotiations and the airline grounded its fleet in a drastic move that stranded thousands of angry customers.

So instead of goodwill, Qantas got backlash.

Qantas took the drastic step to ground all flights on Saturday (OCtober 30, 2011), disrupting 70,000 passengers and spurring the government and its labor-market regulator to seek a quick end to hostilities between the airline and unions. At the government's instigation, Australia's labor tribunal ordered Qantas to resume flights and banned trade unions, which have waged a damaging campaign of industrial action, from staging more strikes while negotiations continued.

Amid a background of unions considering more flight disruptions, this is the tweet that started it all and the tweet that Qantas sent after realizing that it was facing a massive response.  (To its credit, Qantas later tweeted "at this rate our #QuantasLuxury competition is going to take years to judge.") 

PR experts quoted by Reuters called the campaign "the Hindenburg of social media strategies" and an "excellent case study in cultural tone deafness."  Needless to say, angry customers tweeted extensively and creatively.  My favorite defined "Quantas Luxury" as "flyinh Singapore Airlines."

You really have to wonder how this competition was launched amid one of the bitterest labor disputes in the airline's history!  Was the marketing department completely out to lunch?  Or, if this was a contest managed by another company, how did that company miss this important event?  Qantas is not in any way unusual in making PR miss-steps: it happens all the time to all kinds of companies!  The key question is: Why?

What do you think?  How could this contest have been launched the day after the airline stranded 70,000 customers?

Measurement: Brand Value vs. Brand Equity

  

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Today's blog comes from brand expert Ron Strauss. Many businesses have a difficult time knowing their brand, but also measuring their brand value. In this blog Ron explains value and how a brand is measured by their brand value and brand equity.

There’s lots of confusion between what measuring brand value is versus what measuring brand equity is. The purpose of this article is to clearly define each, and establish why they are quite different, even though most marketing professionals use them interchangeably.

First, let’s establish some basic definitions.

Value = benefits – costs.

Attributes are things or values associated with a brand.

Values are ideals, beliefs, principles and standards which are subjective and, therefore, somewhat unique to each individual. Values are the stars that shape our choices and guide our way.

Brand: An intangible asset (or liability) that creates (and/or destroys) future cash flows. To understand the liability part, ask yourself ‘What would I pay to own and use the Enron brand?’

Equity: In a financial sense it’s defined as ‘an ownership interest.’ What’s left over after all claims against a property/interest have been satisfied. We use a different yet similar definition which we’ll explain.

Since value is benefits less costs, then it follows that brand value is benefits associated with the brand less the costs of acquiring and owning the brand.  Expressed as Brand Value (BV) = Benefits – Costs.

Brands are special since they consist of many attributes, both tangible, performance based and intangible emotionally based. These two bundles of attributes are available at a price, which represents the cost of obtaining and using those benefits. That’s expressed as BV = Tangible brand attributes (TA) + Intangible brand attributes (IA) – Price. This is expressed as BV = TA + IA – P.

Our other name for the bundle of emotional, emotive attributes described as IA is brand equity, or BE. Why is that? Well, most tangible performance attributes (TA) are easily copied and replicated by competitors. In most industries and product/service categories, they offer little to no competitive advantage or differentiation. Therefore, the bulk of the value is created by the intangible, emotional, emotive attributes, or BE. Yes, you always need the tangible performance attributes, and they are necessary but not sufficient for value creation. Therefore, BE plays a critical role in value creation. So, our final expression is BV = TA + BE – P.

So, how does this all work? Most purchasers/users/consumers buy based on knowing the product/service category for which they have a need. Sometimes they know all the available choices in the category, but in most cases they are aware of only a few. From those they create a choice hierarchy based on which brand gives them the greatest perception of value.

So, brand value is the overall value equation that consumers assign to each brand in their consideration set on their brand ladder or hierarchy, with those with the highest value being highest on the hierarchy. Brand equity is the pivotal factor in creating perceptions of value. Brand equity is a subset of brand value, however it plays a critical role in creating perceptions of brand value.

So, if you want to know what’s creating or driving brand value, for the greatest insight look to brand equity.

Note: This article is based on ideas contained in the book ‘Value Creation: The Power of Brand Equity,’ by Neal and Strauss, SouthWestern Learning div. of Cengage and available online at http://www.amazon.com/Value-Creation-Ron-Strauss/dp/1587992043/ref=sr_1_1?s=books&ie=UTF8&qid=1321404275&sr=1-1

Ron Strauss is founder and Senior Executive Officer of Brandzone, LLC, the Atlanta-based brand-guidance firm.  Strauss is co-author of “Value Creation: The Power of Brand Equity.”  Strauss works with CEO’s and their staffs in deploying the unique power of brands to motivate employees, suppliers, customers and other network partners to create meaning and purpose for all, sustainable competitive advantage, and economic value-added outcomes. 

The Future of Marketing

  

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Occasionally we will repost blogs that we feel are outstanding.  The following is one of those, written by Dana VanDen Heuvel, founder of The Marketing Savant.   An award-winning marketing blogger, Dana is also the author of the American Marketing Association’s “Marketech Guide to Marketing Technology” and their “Guide to Social Network Marketing” and the creator of the AMA’s TechnoMarketing training series, Advanced Social Media training series and B2B Social Media training series.

The Future of Marketing is going to rely more heavily on online research and social media than has been done traditionally.  "Time" is becoming a precious commodity and marketing that is fast and hard-hitting is the type of marketing efforts we can expect to see in the future.  We hope you enjoy this article.

We’re All Marketers Now!

We’ve entered an era where customers no longer separate marketing from the online, in-store or face-to-face sales experience – it is the experience. In this era of engagement, marketing is the company and it’s far too important to be left to the marketing department. You’ve likely heard this before, but it’s never been so true, real, and in your face as it is today.

The Evolution of Engagement

Engagement has forever changed the buying experience to one where the marketer can ‘push’ their messaging to the marketplace to where the customer simply ‘pulls’ at will and engages in a collaborative (you’ve seen the commercials that tell you to “ask you friends on Facebook, right?) marketplace conversation before they show up at your door.

The problem with this is that customers can pull from anywhere and every touch point in the organization is vulnerable. Centralized marketing works great for push, in the old world where messaging was well controlled, but not so much now when every single touch point must scream “ideal brand experience!”

Marketing Pervades Everything

The pervasiveness of marketing is also reflected in the lack of linearity in the buying process. Customers can bounce from touch point to touch point and no longer can one function control just their own slice of the organization, rather, the entire company needs to pull together to build a compelling customer engagement model that’s consistent with the overall vision for the organization. In academic terms, it’s no longer corporate strategy, then marketing strategy but rather a blending of the two, to the point that the corporate strategy is inextricably linked to the marketing experience.

The Four Pillars of New Marketing

As pervasive as marketing as, as much as design matters and in spite of all the content that an organization can develop, there are still some structural fundamentals that need to change within the organization to capitalize on the future of marketing. The environment within the organization needs to match the mantra of “everyone as marketers.” These four pillars strike at the heart of effecting a positive environment for pervasive marketing.

Distribute Your Activities:Marketing should have dotted-line responsibilities within and across the organization. Embedded marketers in functions like sales, operations and customer service can adapt the corporate-level marketing programs to departmental or local situations.

Marketing Centers of Excellence and Partnerships:Smart marketers view partnering with customers in the form of customer advisory boards and bringing in vendors to share best practices both within the category and across the organization as essential their success. Leading companies also build marketing councils or centers of excellence with representation from across the enterprise.

Listening and Customer Insight as Strategic Functions:Listening to the market (social media, mass media, the press, customers…) used to be relegated to customer service and the PR function. In the future of marketing, listening is a 24/7 strategic activity powered by sophisticated tools and analysis allowing organizations to respond more quickly than ever before to the most minute change in the market.

Competing on Data and Insights:One of the fundamentals of integrated marketing communications is having a robust and accurate customer database. The next generation goes well beyond the database and into the era of ‘big data’ where we have customer insights that shape strategy at the highest levels, across the entire organization.

I’ll admit, these changes will not hit everyone like a wave, but rather, they will creep up on you gradually over time. But make no mistake, the structural change is forthcoming – organizations need to embrace the marketing revolution, take steps to connect the dots across the enterprise and embrace the coming changes that the new age customer demands.

We would welcome any comments you may have and we'll make sure that Dana receives them.