The Heinrich Report Blog

Strategies, insights and tactics for today's marketer

Archive for June, 2011

Online Daily Deals: Don’t Lose Your Shirt – Do Your Homework First!

June 28th, 2011 by

Some of our consumer clients ask whether they should make daily coupon deals, through companies such as Groupon, Google Offers and LivingSocial, as part of their marketing mix.

In these deals, your business offers a discount on food, services or products. If you’re a spa, for example, you can offer an all-day beauty package at a reduced price. A restaurant can offer dinner for two at a special rate and a bagel place can offer a free bagel with the purchase of a cup of coffee. A karate club can offer “trial” lessons.

You then contract your special offer with one of the daily deal companies. The company promotes your offer to their subscriber base. (Groupon, for example, has over 35 million registered users.) These deals also get passed around on social networks, such as Facebook.

Consumers can then purchase your deal. You get new customers in the door and everyone is happy. Right?

Not exactly.

Many businesses learn the hard way that daily coupon deals are expensive, both in terms of upfront and long-term costs. Smaller businesses can get slammed with the sheer number of people who come through the door. And, there’s no guarantee that these new customers will become repeat customers.

If you’re considering a daily deal for your business, it pays to do your homework first. With that in mind, we’ve compiled a list of best practices to help you get the most from daily deals and maximize repeat business – without losing your shirt.

1. Do the math first.

Let’s say you offer a spa package normally priced at $150 for $75 (50% off). Groupon and other daily deal companies generally require 50% of the revenue generated, so for every $75 spa package, you have to pay the brokering company $35. This means that for every daily deal spa package you sell, you gross $35.

In addition, you have to consider your “hidden” costs. Whether you charge $35 or $150, you still have to pay employees, taxes, utilities, supply costs, etc. If you sell more daily deal packages than you anticipated, you may have to pay employees overtime, order more stock, and incur other costs.

The bottom line? A daily deal may cost you much more money than you anticipate, so run your numbers first to ensure you can handle and afford the onslaught of new business.

2. Read the fine print – twice!

You can find many articles online that discuss how daily deals benefit the brokering company more than the merchant. One issue is the revenue model – you don’t receive your revenue right away. Another issue, as cited above, is that you pay a huge percentage to the deal company. As a result, you’re effectively offering your product or service as a loss leader.

If you decide to do a daily deal, read the contract carefully and ask questions, such as:

  • Will you get the names and email addresses of the people who purchased your package? How will this information be delivered to you?
  • When do you receive revenue payouts?
  • How long do you have to honor a daily deal?
  • Can you limit the number of daily deals sold?

3. Determine how you’ll manage the influx of new business.

We all love getting new business. However, too much new business too quickly can leave you scrambling. Before you sign up for a daily deal, work out how you’ll manage the new business, including extra hours for employees or more inventory.

Don’t forget “extras”: Will your spa need more towels, candles and laundry detergent (to wash all those extra towels!)? Will your karate club need extra uniforms for trial lessons?

4. Limit the number of deals honored and the redemption period.

Some businesses fail to ask if they can cap the number of deals sold. You can state in your contract if you want your offer stopped once you’ve sold a specific number of packages. Your contract and the deal copy should state how long you’ll honor redemptions – e.g., “This offer valid until [date].”

5. Determine how you’ll track daily deal buyers and their repeat business.

As stated in Tip #1 above, ask the daily deal company if you get customers’ names, email addresses and phone numbers. If you don’t (and you may not), you’ll need to devise a plan for collecting this information when daily deal customers walk in the door.

After all, what’s the point of going to all this effort if you can’t turn new business into repeat business? Some things to consider include:

  • Contact information – How will you collect contact information and where will you store it?
  • Coupon redemption – Which methods will you need to ensure people redeem coupons only once?
  • Ongoing communication – Do you have an e-newsletter or Facebook page where people can receive ongoing messages from you?
  • Repeat business – How will you track new business to see if it becomes long-term repeat business?

Daily deal sites can be a boon to consumer-based businesses. However, to make them work for you – and to turn new business into repeat business – it pays to do some homework and planning up front.

 

Category:  Customer Acquisition / Retention, Digital Marketing, Marketing Trends  |  Tags: ,   |  No Comments

Trends We’re Watching: Social Game Marketing

June 14th, 2011 by

I’m not a gamer, but I can’t help noticing that games have become a big part of how marketers are engaging consumers with their brands; Foursquare, for example, is a game that rewards people for “checking in.” In fact, there’s an official name for games used in marketing: social game marketing.

Mashable ran an excellent post showcasing five brands that have incorporated social gaming into their marketing (Why 5 Big Brand Marketing Campaigns are Betting Big on Social Gaming, May 3, 2011).

According to stats cited by author Brian Anthony Hernandez, the social gaming population is expected to reach 68.7 million players by the end of 2012. Big brands haven’t ignored this fact, with many offering “branded virtual goods, integrated ads and offers as well as games that combine digital and real-world incentives.”

MasterCard is one company that’s using a social game to engage customers and prospects. In the You Play, We Give campaign, players shoot at colored balls on the brand’s Facebook page. For every minute someone plays, MasterCard donates 10 cents to Junior Achievement Hudson Valley. As of this writing, 36,000 people have “liked” the page and MasterCard has donated over $100,000 to the charity!

Pop star Lady Gaga last month partnered with FarmVille (another huge game played on Facebook) and began offering tracks from her “Born This Way” album on a new partner site — GagaVille. According to Entertainment Weekly, players can “undertake lightweight tasks to unlock tracks.”

Why games matter: they’re part of the human condition

In her 2010 TED talk, Gaming Can Make a Better World, Jane McGonigal gives an impassioned talk about how games can help us improve our society and our lives. Games, she says, offer the following benefits:

  • Clear and compelling goals
  • Challenges suited to our capabilities/skill level
  • A chance to work hard to improve our skills
  • Non-financial rewards and recognition
  • The chance to become a hero by saving the world

We all like games, says McGonigal, because they make us feel good. Even more important, research has shown that we like people better after we play a game together, which is why brands like MasterCard and Lady Gaga are using games to connect with their audiences.

According to Aaron Dignan, author of Game Frame: Using Games As a Strategy for Success, people have turned to games because they’re bored — bored at school, at work in their lives — and games offer an escape. In fact, McGonigal cited a statistic that gamers spend 3 billion hours a week playing online games!

I find social game marketing fascinating, especially since many of the ideas being put forth by people like McGonigal and Dignan resonate with what I see in my own life.

Games, says Dignan, give gamers the motivation and internal drive to do something (e.g., get to the next level, meet a challenge, solve a problem, etc.), and they give players the necessary skills and tools to handle the challenges presented — something that’s often missing in real life. They also allow you to score an “epic win” — a positive outcome so extraordinary you can’t even imagine it, according to McGonigal.

While developing a game may not be something your company can implement right now, I highly recommend that you read Game Frame and watch McGonigal’s TED talk if only to gain insight into consumer behavior and how games affect us. Both Dignan and McGonigal are brilliant.

You can also follow how marketers are using games by subscribing to the Inside Social Games blog (scroll down and click the “Marketing” link under “Topics”).

Do you have examples of social game marketing that you like? Let me know in the comments section!

 

 

Category:  Book Reviews, Marketing Insights, Marketing Trends, Social Media Marketing  |  Tags: ,   |  No Comments

What We Learned From Oprah About Marketing to Women

June 7th, 2011 by

As you know, Oprah taped her last TV show on May 25, 2011. Ranked No. 1 for its entire 25-year run, The Oprah Winfrey Show “made it clear that women want to listen to women like themselves,” says Marti Barletta, author of Marketing to Women and PrimeTime Women™.

To celebrate Oprah’s success, I asked a few of my marketing colleagues what they learned from Oprah about marketing to women. Whether or not they were fans of the show, my colleagues’ insights illustrate the huge effect Oprah has had on our culture, our society and how women see themselves.

Marti Barletta: Oprah understands that women are complex.

“When I give presentations, I tell audiences that men are simple and that women are not. When I first used this idea in a presentation, I had to ask my husband if he thought this was male bashing. ‘Of course this isn’t male bashing,’ he replied. ‘We men pride ourselves on being simple. Women complicate things — look how many discussions you have with friends to buy a handbag!’

“I say men are simple because they’re focused — this translates into how they make decisions. Oprah’s genius is that she understands that women are complex and multi-dimensional.

“On the surface, women appear superficial: We like fashion and celebrity gossip. We care about what we look like.

“But women also care about making their lives worthwhile and living their best life, a sentiment embodied in Oprah’s tag line, which is ‘Live Your Best Life.’ Women care very deeply about an aspirational, integrated life that’s also spiritual.

“At the time Oprah went on the air, all talk show hosts were men: Phil Donahue, Jerry Springer, Johnny Carson, and David Letterman. Oprah proved that a huge hunger existed among women to learn from women like themselves. This is because women are far more interested in people than men are.

“This is the message that marketers who market to women need to take from Oprah: that messages need to be based on people benefits, not features. For example, if you’re a car company, tell me a story about why a person (not necessarily a woman) enjoys driving your car versus giving me facts and figures. As Oprah proved, women relate to messages if they come from real people versus idealized celebrities.”

Debranne Santucci, Financial Services Marketer: Oprah aligned herself with experts.

“What can marketers learn from Oprah? They can study how she extended her brand by aligning herself with subject matter experts such as Dr. Phil, Dr. Oz, Nate Berkus, and Rachel Ray.

“What Oprah did is sheer genius. She offered her target audience the information they craved by seeking out experts like Dr. Oz. Her audience learned about losing weight, received medical and relationship advice, acquired designer tricks to make a house a home, and learned how to make quick nutritious meals.

“Marketers need to ask themselves, ‘What am I selling and what other needs does my market have? How can I tap subject matter experts to enhance our brand and fulfill this need?’”

Lori Graham, Home Depot: Women dream big.

“Women are behind many of the purchasing decisions in the home improvement category and are actively involved in do-it-yourself projects. Many women attend our in-store workshops and learn how to do everything from lay tile to build a deck. We help them build the home of their dreams.

“What can marketers who market to women learn from Oprah? Have your brand empower women to dream big, make a difference and achieve a goal.”

Kathie Williams, Heinrich Marketing. Oprah shared her story with the world.

“Oprah made women feel comfortable, safe, and secure about being themselves by showing them a great deal of respect. Most important, Oprah was honest and sincere. She shared her own story with the world. Hence, her audience trusted her.

“Oprah’s mantra in life is summed up in a quote I read from Austrian neurologist and psychiatrist Viktor Frankl: ‘Life expects something of you, and it’s up to every individual to discover what it should be.’ This message has been at the core of everything Oprah has done. It’s a responsible mission — and that’s why she’s so successful.

“What can marketers learn from Oprah? If you’re trying to sell something or market to a particular audience, you’re more likely to get your message across if people see themselves in your brand and if they know you care about them. You want to make them feel warm and fuzzy about themselves.”

Sue Beranek: Oprah created jobs!

“Although I have not been a big fan of The Oprah Winfrey Show, what I find wonderful about Oprah is that she has created so many jobs. In addition to her TV show, she has the magazine, products, movies, a radio show and now her network.

“Her job creation is in line with the fact that data is showing that female-owned companies in the U.S. are growing at twice the rate of all businesses. What marketers need to learn from this is that women continue to make a huge difference in our society and in the workplace and that messages should be aimed at women’s decision making power.”

What I Learned From Oprah

For many years, I didn’t connect much with Oprah’s TV show, mostly because it aired on daytime TV, and I’m almost never home during the weekdays.

However, I did read her magazine (being a magazine junkie!). Although it’s challenging to find the time to read it cover to cover, I admire the publication for its topics, the richness of the stories and the way it speaks to me about meaningful things in my life.

A year or so ago, while driving to a client meeting, I stumbled upon Oprah Radio on XM. Now here was a place I could connect! I spend a lot of time in my car; the radio show filled that time with everything I was interested in: relationships, health and wellness, spirituality, and finance. The final season of the TV show was rebroadcast on the radio — now, I could finally catch it!

The lesson: Make yourself accessible to your audience wherever they are.

Shortly after I started listening to Oprah Radio, it occurred to me what a brilliant marketer Oprah was — and still is. She found a way to provide access to ALL women wherever they are in their lives. Some women watch Oprah sporadically — perhaps they’ll catch a show while home with a sick child. Other women have watched her show day in and day out for a decade.

Oprah’s genius is that she knew how to relate in a meaningful way with women. It didn’t matter if a woman was looking for information relevant to a specific situation (such as breast cancer) and tuned in only when Dr. Oz or another expert talked about the topic, or if she watched the show every day. Oprah filled these needs and more because as Marti Barletta pointed out, she understood that women are complex creatures who want to live integrated, whole lives.

What I admire about Oprah is that she knew when it was time to close a chapter in her life. Although she ended the TV show, she’s still working, but on something more meaningful and relevant. I’m sure that wherever OWN takes her, she’ll find a way to connect with women at even deeper levels. I wish her the best.

What do you think marketers who market to women can learn from Oprah? Leave your comments below.

Category:  Marketing Insights, Marketing to Women  |  Tags: , ,   |  6 Comments

Three Easy Ways to Develop Content That Builds Trust and Sales

June 2nd, 2011 by

Heinrich clients continually ask, “What is content marketing and why do we need it?” Content marketing, according to Joe Pulizzi, co-author of Get Content, Get Customers and publisher of the Junta42 blog, “is a marketing technique of creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience — with the objective of driving profitable customer action.”

To put it more simply, content marketing isn’t about selling. Instead, it’s about offering your prospects and customers information that’s relevant to them — in their jobs, in their personal lives, or both. This is one reason social media has become so huge: It’s the one place where content is all about “me” the individual versus “you” the company.

Does content marketing work? Yes! According to a statistic cited by Pulizzi, Roper Public Affairs posted data that shows:

  • 80% of business decision makers prefer to get company information in a series of articles versus advertisements
  • 70% say content marketing makes them feel closer to the sponsoring company
  • 60% say that company content helps them make better purchasing decisions

Here at Heinrich, we’re dealing with the content marketing revolution too. Many of our clients don’t know that we can develop and implement both their content and social marketing campaigns, so instead of telling you what others are doing, I thought I’d show you how we’ve been incorporating content into our own marketing mix:

1. Turned our e-newsletter into a blog.

Like direct mail, email marketing is the workhorse for many companies. Email is wonderful because you can measure response almost immediately, and because performing A/B split tests on headlines, images, or copy is cost-effective. However, email lacks social’s engagement. And as you know, our inboxes are overflowing, which has lead to reduced open and clickthrough rates.

For all these reasons and more, we turned the Heinrich Report e-newsletter into a blog. (Lucky for us, we implement and manage blogs for our clients, so this process wasn’t difficult.)

A blog offers many advantages over an e-newsletter as it allows:

  • People to subscribe via RSS, which reduces inbox overwhelm.
  • Marketers to produce content very quickly, an important consideration if you’re in an industry where you need to comment on current events or breaking news.
  • Prospects and customers to engage with you through direct feedback.

The third point is the most important because it’s this engagement that builds trust over time. People who read your blog learn how you think, as well as how you handle positive — and not so positive — feedback. As the marketer, you have the opportunity to get to know people and, over time, turn those online relationships into business.

2. Became more engaged on Facebook.

For those of us who didn’t grow up with the Internet, using Facebook for business-to-business purposes has been a challenge because it’s just so . . . different from what we’re used to; however, that doesn’t mean you should ignore it.

Because Facebook is all about conversations (and definitely not about selling), it allows companies to show their personality — much more so than is possible with email or even a blog.

On the Heinrich Facebook page we’ve been experimenting with posting pictures of some of our office events and using questions and polls to conduct research. (Pay us a visit and give us a “like”!)

How does using Facebook help build trust? As with a blog, Facebook is a place where prospects can engage with you one-on-one. You can use the platform to ask questions — the way Netflix does about movies — or you can deliver information related to your products that your audience finds relevant.

Cabot Creamery Cooperative in Vermont, for example, posts recipes that incorporate its famous cheeses. In a recent post, someone asked the company to bring back its sliced cheddar “without animal rennet.” Gail from Cabot responded by saying the company uses a “microbial-based enzyme” in its cheeses. The customer replied, “Good to know!”

Not only is Cabot positioning itself as a company that cares about its customers and building trust, it’s also learning what its audience values, which allows it to develop products that meet people’s needs — and thus increase sales over time.

3. Developed a special report.

When I meet with my banking clients, I hear their pain with regard to content and social media marketing. As Pulizzi says, today’s customer expects a brand to be a resource of relevant information, not just sales messages, which is why Heinrich developed a new special report about content marketing specifically for financial services.

Whether or not you’re in financial services, download the report to see how we used nine real life examples of banks, credit card companies and insurance firms using content and social media marketing to reach out to their audiences. (Another report about how to incorporate social into direct mail is in the making!)

Special reports like this one help you build thought-leadership and trust. If the content is particularly valuable, others will pass it around to their networks (think Twitter and LinkedIn).

Content marketing is important because it allows you to communicate with people who have learned how to tune out overt advertising messages.

If you’re ready to develop or need help managing a content marketing campaign, Heinrich can help you. From blogs and social media to special reports and landing pages, we have the big picture perspective plus the tactical know-how to help you grow your business.

Feel free to give me a call at 303-239-5213.  In addition to replying to blog comments, I also love talking to people on the phone.

Category:  Content Marketing, Customer Acquisition / Retention, Lead Generation, Social Media Marketing, White Paper  |  Tags: , ,   |  No Comments