Redmarketer

May 30, 2008

$2.99 A Gallon (Part 2)

Filed under: Green MKTG, Marketing Tactics — Robert John Ed @ 1:51 pm

Quick follow up on the big auto makers using gas as an incentive to purchase cars: Brandweek is doing a feature article on it this week, here’s the link.

Some interesting takeaways:

– Chrysler’s showroom traffic is up 10-20%, web site activity is up 25%

– In May 2007, gas mileage was stated the number one influence for new car buyers (J.D. Power & Associates)

Suzuki’s free gas program, which I had seen on television and since forgotten, is also doing well. Their selling rate was up 9%, although only 1/4th of the buyers are taking the 0% financing and summer of free gas.

– Other companies like GM aren’t jumping on the bandwagon with similar tactics but are focusing on the idea of miles per gallon.

This isn’t going away. With petrol resources in decline, prices of gas will only go up and up some more from here. Car makers will continue to push fuel incentives and aspects of their products. The real winner is the company that can alter the way we look at transportation; develop products that offer us the same ends with new means. I think I’m overly simplistic in my view points here, but sometimes that’s the best way to look at things.

I’m much more interested in the things Tesla is doing right now. Now if they can only make something affordable that looks like my Saab Nine Three.

May 29, 2008

Threadless

I had been meaning to detail the idea of consumer generated media as a means of making a business with primarily your fans providing the content or product ideas.

Threadless is my only great example of this for physical stuff.  Inc. Magazine details them this month.  Check it out.

One other thing worth noting is that on the web a lot of sites make use of this idea in terms of Wikis, discussion forums, Craigslist, Ebay, etc.  It’s incredibly valuable online and you could argue even Google is using this in terms of advertising.  My question is can we translate that into use in RL?

Gamestop Doesn’t Want My Money

Filed under: Digital Distribution, Marketing Philosophy, Marketing Tactics — Robert John Ed @ 2:43 pm

So I’ve been meaning to purchase Mario Kart Wii for some weeks now. I’ve been lazy about it because I don’t play video games that much; it just seems like I have too much to do most days. But Mario Kart looks like it’s plump full of awesome and despite my lack of discretionary income, I decided it will be mine.

Oh yes. It will be mine.

Off to Gamestop, the cool retailer that lets you trade in your old games for store credit and buy new or used games in return. I’ve been working this system since my first generation Sega Genesis back in the 5th grade (And don’t think I can’t bust you up 3 button style in SFII CE or plunder Streets of Rage deux in like 45 minutes, it’s been done and my skills are 1337.)

I bring in Smash Bros. Brawl and Legend of Zelda Twilight Princess. The former for lack of play and the latter for having already squeezed every last drop of gaming nectar from it’s delicious shell. Combined they are worth $47 of store credit. That means only $6 for some sweet, sweet Kart racing. Completely rock fest on that tip.

But alas, there’s a problem. The store doesn’t have the game in stock. Bummer. So I ask if I can order it. This is where it gets weird. The gal at the counter tells me they don’t take orders. She tells me to keep checking in by phone or coming into the store to see if it’s in stock. At that, I got a little perturbed and pointed out the fact that I’d essentially be playing the lottery to continually try to buy from Gamestop as such. What’s crazy about this is that I was asking to give them money! Nice business model:

“Here take my money, despite the fact that I could go to a big retailer that has this game in stock every day, I’m choosing to give you my money in spite of instant gratification if you’ll simply order it for me and give me a call when it arrives.”

0_o “Get out.”

It took a while of speaking with the assistant manager to understand that they weren’t being lazy, they were just following current corporate policy. Eventually I decided to email corporate. Twas a long winded email explaining the situation, so I won’t subject you to it, but here’s the response:

Dear Valued Customer,

Thank you for contacting GameStop.com. Unfortunately in this case the store was right. The stores can not take orders, for customers. You can however place an order online for whatever item you are looking for.

Best Regards,
Tim
Customer Service Agent

So that’s a dead end. There were actually a few other annoying aspects of this trip to Gamestop, but I’m just focusing on their moronic policy. I’m not going to be a consumer who screams I’ll never go there again. I probably will. But I’m not going to back order a product online (it was out of stock) when I can get the cash at Gamestop (20% less than store credit or $37 for record) walk to the crappy Kmart in Uptown and buy it that day. The real question is how hard is it to place an order for a customer? Although this is corporate policy, I believe the individual store could easily make a system (Google Docs is pretty cheap…$0) where they take orders in store and fulfill them for customers. Honestly, these people aren’t so busy that they couldn’t handle a system like this.

Why would they do this? Well the first reason is that they are throwing away money from consumers like me. How many orders per year are they throwing away? I have no idea, but these are the same marketers that will cry about how big retail is crushing them. Losers. The second reason is CRM. Duh. How many consumers respond well to “Just keep checking in and maybe you’ll get lucky and miraculously we’ll have the game that’s never in stock in stock. Thanks for stopping by.” That’s essentially saying that you aren’t willing to help me. The worst part is that I have to feel like an ass by arguing with the assistant manager for ten minutes trying to figure out why they won’t take my money.

Kmart here I come.

May 28, 2008

$2.99 A Gallon

Filed under: Marketing Tactics — Robert John Ed @ 3:21 am

Guarantees are proven to resonate with consumers. Chrysler/Dodge/Jeep are now heavily pushing their guarantee for $2.99 a gallon for the first 12k miles for three years. That’s a pretty good proposition, considering gas prices are likely going to hit $4 per gallon this summer. Assuming they held value, that’s a potential for quite a bit of savings.

Looking at the models, here’s a break down of the savings assuming that over the next three years the price per gallon would hold at $4 (yes, this is theoretical, but my assumption is that this will probably be a conservative estimate, PS I did this long hand so I’m making no, ahem, guarantees):

Jeep Wrangler: 15/19mpg (avg. 17)
12,000m/17mpg = 705 gallons
705 x $1 savings = $705 per year
$705 per year x 3 years = $2,115 in savings.

Chrysler 300 LX: 18/26mpg (avg. 22)
12,000m/22mpg = 545 gallons
545 x $1 = $545 per year
$545 per year x 3 years = $1,635 in savings.

Dodge Charger SRT8: 13/18mpg (avg. 15.5)
12,000m/15.5mpg = 774 gallons
774 x $1 = $774 per year
$774 per year x 3 years = $2,322 in savings.

The funny thing is that you can probably buy these same vehicles at the year end clearance coming up around October or November. I don’t know how much the savings will be then, but I wouldn’t doubt they’d match or beat those savings. This particular guarantee has a safety bait to it; no matter how much gas goes up, the consumer is guaranteed the same price. Our minds work to ensure security. And that is why this promotion will work.

Car dealers and all other kinds of marketers have certain margins built in to their products. They have a certain amount of leeway in terms of pricing, and can alter it in any number of ways. Cash back, 0% financing, year end closeouts, employee pricing, etc.

But this gas prices are tangible. They are what we speak about every day. They are social objects (BTW Hugh Macleod is a good read; cool illustrator too). What does that mean? Well when you buy one of those cars, every single time someone speaks about how high gas prices are, the buyers will speak about their deal on gas. This can go one of two ways, either they realize it’s a great deal and spread the word or they realize it wasn’t that great of a deal and keep mum to avoid the discerning crowd.

It could go either way, but I have a feeling it will sell a lot of cars in the short term. What the auto industry really needs to do is focus on providing products and services with a more long term solutions to what consumers are looking for.

And lastly, someone has done much better investigative reporting than me and thinks it’s a better idea to just take the consumer allowance they offer concurrently.

PS (I can’t finish this post) Here is Chrysler’s blog…checkout the comments. Seems like people agree with the idea of more long term solutions.

May 27, 2008

New York Times & Boston Globe

Filed under: Blog Explanations, Random — Robert John Ed @ 3:32 pm

From department of unsuspected cool things:

The New York Times quoted me from my post on Zappos…I’m not sure if this is only online but I suspect as much.  Um, wow?

Then the Boston Globe picked up the same article.  Crazy.

The lesson:  it’s better to be lucky than to be good.  There are far better bloggers out there with far more insight and I’m quite honestly astounded and thankful to Dan Mitchell for even reading Redmarketer.

Gravy.

Flow

Filed under: Book Reviews, Random — Robert John Ed @ 2:06 pm

So I’ve gotten 1/3rd through Emotional Intelligence. It’s wonderful. This book is very dense and takes a bit to really derive points of relevance. Just yesterday it got to explaining flow, or the optimal state of neurological stimulation allowing for a person to really maximize their output.

Have you ever experienced that state of intellectual euphoria where ideas seem to cascade from your brain? It’s like a lush Niagara output. Most people experience this kind of thing every now and then and find it hard to replicate (I certainly do). An interesting point of this book (btw there are books dedicated to Flow as well…which I may partake in at some point) is that replicating the scenarios where every individual can find their flow is completely within our means; though it may not be an exact science and developing a point of perfection in heightening our output is unlikely, we can increase the characteristics which improve the state.

The idea is that we learn much more when in a state of flow, but we also must increasingly heighten what we learn to continually achieve that mental ideal. Flow can be described as a state where the mind is challenged the perfect amount. When we are not challenged enough (the subject matter is too easy or already understood) we become bored and uninspired; when the subject matter is overly difficult or beyond our means of comprehension we become overwhelmed and potentially harbor a negative outlook. So as we continually learn and challenge ourselves, the necessary level of challenge rises.

What’s so interesting about this is that we can affect the level at which we work and develop. Understanding the particular circumstances that engage and challenge yourself could be great indicators of your long term success. It also explains well why certain students and professionals thrive and others do not; the most likely scenario being that the environments set forth for the masses stimulate those that excel and likewise aren’t the correct kind of stimulation for those that do not. It could also be argued that those that excel train themselves to be intrigued and engage with the kind of academia presented in traditional education.

I’ll get into a more formal review of this book when I find the time to finish it.

(PS the picture is of Frank Lloyd Wright’s Falling Water…lovely.)

May 25, 2008

Words.

Filed under: Information Supernova, Marketing Philosophy — Robert John Ed @ 5:09 pm

Words mean so much more than their definitions. It’s difficult to define the importance of the words a business uses to describe itself. This is the nature of marketing. This is why most everything the President ever says is preconceived by professional writers.

Public relations or PR is actually the origination of marketing today. A simple way to look at it: some very intelligent people realized that keeping the masses in check was necessary to avoid large problems proliferating. It sounds insidious, but it’s simply a way to control the information in front of people. That kind of power can be used for good or bad, but it’s necessary for government. Some may see this as a bad thing; many may understand the necessity.

Yet, things are changing today.  The funnel has been flipped, a lot more people have the ability to self publish and garner attention.  It’s not longer a broadcasting world.  This is a good thing, but does it effect the importance of the words we use?  Well yes and no.  The truth is that as the medium proliferates our expression and company explanations will be forced to become less contrived.  Meaning that not every time we contact the public will have time to be perfectly formulated.  I think the important thing is that CSR’s and other public relations persons have a clear understanding and mindset regarding their company and the words they use to describe it.  Then let them run free.  The information supernova will overtake everything in terms of media and public relations will have to learn to run much faster as an effect.

Words will always be important.  Ensuring the correct connotations and understanding amongst those in an organization expected to represent corporate ideals is the hard part.  So how do you go about deciding which words?  Personally, I feel that the best thing a company can do is walk the walk and really believe what it says.  And the best way to do that is to do what actually drives you; not merely do what you say drives you.  I’ll touch on this another time.

May 22, 2008

Responsibility

Filed under: Marketing Tactics — Robert John Ed @ 9:39 pm

I understand the reason marketers shoot for certain kinds of people, we need to interact with the people most likely to use products and services. Marketing to hunters is something that a beer seller should do. It makes sense. Typically, outdoors people enjoy having a beer or two.

Marketing products like alcohol and cigarettes and even medication is touchy. The reason is that these products can cause harm to the people who use them. In Brandweek, AB is noted to be using camouflage cans. As a specialty can this is actually a good idea, camouflage is popular with many different groups. There is a problem though. Having a camouflage can technically allows for another utility, specifically, using it while hunting. Even in the issue of Brandweek it states that “The deer won’t see your drink.”

Um…does anyone else remember AB getting in trouble by marketing overly aggressively? Ugh.

The problem, for those of you who missed it, is that operating fire arms while drinking beer probably isn’t a great idea. And although a camouflage can is cool (I actually like the design) the idea that AB is intentionally designing the beer so it’s easier to use while hunting is disastrous for the brand in terms of negative press.

I’m almost absolutely positive that AB isn’t thinking of the design in those terms. But it only takes one incident of someone drinking those cans and making a big mistake before the press starts wondering why anyone would design a can more conducive to use during a hunt.

Some products just need a bit more tip toeing than others.

(PS I’m quite surprised a picture of this man made it onto the blog. Life is full of surprises.)

Trade Show Time!

Filed under: Marketing Tactics — Robert John Ed @ 7:22 pm

It’s really a shame how spectacularly uneventful these events are. I just participated at a show today and it reminds me of how very mediocre us marketers are today.

The funny thing is that it doesn’t seem to matter that we operate at 60% capacity in terms of marketing well at these shows. They still produce. My company happens to do more than the vast majority of competitors and I still believe we are sluggish; the fact is that most companies don’t assertively market to the customers that have paid good money to come see them. Others are so incredibly bland they don’t differentiate themselves from the guy next door, yet expect a different outcome.

The largest problem however, is the failure to make use of the permission they are given. Make a phone call, send a mailer or personal email! Do something. Too many companies (and the percentage is ridiculously high) exhibit the show and assume that their boring display and run of the mill pitch will sweep the buyers off their feet. They sit back and let the leads come to them. This only works for one kind of company, monopolies.

If you are a monopoly, you don’t need to read this. You need to get a lawyer.

May 21, 2008

Zappos and Customer Centricity

Filed under: Digital Distribution, Information Supernova, Marketing Tactics — Robert John Ed @ 3:45 pm

Everyone is talking about Zappos. Honestly, I’m getting to the point of burnout on hearing about Zappos in marketing circles. That’s pretty impressive. When did this happen? Well, I heard about them a few years ago. What I heard about them was how great their customer service was. And still today that is what people are talking about.

Here’s a unique piece that speaks about how they offer workers $1,000 (!) to quit their jobs in order to weed out the people not totally committed to customer satisfaction. That’s cool stuff.

This is the nature of marketing. Zappos hit critical mass a long time ago. And why? They are just a shoe store; an online shoe store with great customer service. Big deal. The secret to Zappos’ success is real commitment that permeates through every customer and every transaction, every time. The point here is that smart people in suits lying through traditional methods won’t sell any more products; especially commodities. And shoes are commodities (maybe not by true definition) but in the fact that any the same shoes you buy at Zappos can be bought at ten other online shoe stores. The reason Zappos succeeds is that they are adding value to otherwise indiscernible products. The service is the product. Marketers today have to embrace their ability to add value through organizational processes.

Our ability to add value is the make or break for many companies.

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