Costco, How I Love Thee

In prepping show notes for this week's episode of The BeanCast, I came across a headline near and dear to this marketing podcaster's heart:

"Bloggers Love Costco, Hate Walmart"

Now my first reaction was the usual, "Woot! You go, Costco!" But as I prepared the notes, an interesting question came to mind? 

Is this a social media win or a customer service win?

What Really Inspires Brand Conversation?

Why do bloggers (and I'll included myself in this category) like to write about Costco in the first place? Is it because of their Web 2.0 initiative? Probably not. Their site's okay, but nothing special. Certainly not better than Amazon. So is it their blogging efforts? I Certainly know of no blog. Maybe they have one. I couldn't say. Maybe it's their Twitter presence? Hmmm. Maybe I should check to see if they are even on Twitter.

So if it's not any of this, then why do bloggers talk positively about Costco so much? I would suppose it comes down to the fact that we like going there.

That's right. We like going to a bricks and mortar operation. We like getting our free food samples. (I'm not the only one who calls it the "Costco Buffet.") We like to fill our carts with bulk amounts of the brands we love, while we get tires rotated for free, grab a prescription and plan our vacation.

We love the user experience.

Brand Conversation Starts Offline

Now contrast this reality with the other brand mentioned, Walmart. I would rather have my fingernails pulled out and walk across broken glass barefoot than darken their doorway. This is just barely hyperbole. I feel like I'm going to get mugged in the parking lots whenever I go there. It's dirty. It's crowded. The only smile I get from an employee is from the greeter. It's an experience I endure because 

I have to go there for some reason.

I could go on, but all this is only to set up my next question: What would you suggest Walmart do get more blogger love?Should they be setting up a robust social media presence? How about Facebook page? Think that might work? Maybe they should be blogging more themselves?

You know the answer as well as I do. They need to fix the problems with their user experience. Before Tweet one, they need to go into every location and clean house.

My blogger love isn't given to Costco because they are engaged with me online. Heck, I don't even read the dang magazine they send me. I love them and give them so much attention because my user experience is always phenomenal. It's a perfect storm of exclusivity, friendliness and value that makes me not just shop there, but rave about shopping there.

Sometimes Social Media Just Happens

My point in all this is simple. Your social media quotient is not always directly correlated to your personal environment there. Apple may have almost zero social media involvement, yet they are constantly talked about in social media circles. Why is that? Because the brand is designed to be talked about. It delivers on a level that inspires conversation. Costco is kind of the discount version of that approach. They get people talking. And really, isn't that what social media's all about anyway.

So before you launch your big social media initiative, maybe you should take a look at the rest of your operation first. Because no matter what online engagement you have with your customers, if your brand doesn't inspire conversation you'll largely be wasting your time. Sometimes the best social media strategy is just to give people something to talk about.

Finding The Big Idea

We talk about the “idea” in advertising. And whether it’s marketing podcast pundits, like those on The BeanCast, or the average creative director toiling away to bring originality to the work, we all agree that big ideas are central to what we do.

But in our striving to position the brand as central to a customer’s life, I’ve been unsettled for years by a tendency to favor the big idea of the creative vision at the expense of the big idea of the brand itself.

Revealing a Core Brand Truth

Let’s use the Super Bowl for starters. The big winner in the ad race this year was Doritos with what I’ve heard both Bill Green and John Wall refer to along the lines of “shot-in-the-crotch” advertising.

Admittedly, the ad with the boss taking it in the groin is funny. It might have even made you favorably disposed to buy the product. Maybe. But does it do anything to enhance the brand that invented the flavored tortilla chip? Does it reveal any core truth of what the brand means or represents? Quite simply, no it doesn’t.

It’s not that this ad or the hundreds of other beer and fast-food and soda ads are bad ads. It’s not that these type of ads are ineffective either. The problem is that if we believe in ‘branding” as the reason behind doing measured media in the first place, it seems to me that everything we communicate should be enhancing that value. And doing that takes more than just running a wacky commercial that gets attention for a brand. A brand ad also needs answer a basic truth about what the brand means.

I’ll agree that maybe each ad doesn’t need to tell the whole story of the brand. Maybe individual ads can also be funny or otherwise entertaining. But if a print ad or a TV spot or online banner is not revealing some core truth about the brand, it isn’t truly branding. It’s essentially nothing more than a direct response ad without a response device. It’s a wing and a prayer that builds nothing except the hope that it will stimulate sales. And that runs counter to why we brand in the first place -- to build something that lasts beyond the campaign and gives us a firmer foundation from which to launch the next campaign.

Real Branding Builds Equity

The way to best understand what I’m talking about is probably to consider ads that actually brand well -- Apple, VW, Burger King, just to name a few.

Every Apple ad, from design to script to casting to font, reveals a basic truth that the brand stands for simplicity. It may be great, it may be cool and it may be less prone to viruses, but it’s essentially still the computer that you can actually use and the phone that makes life easier or the music player that puts it all literally at a fingertip.

VW is clearly trying to be the “people’s car,” with their name literally means in translation. So they show people, warts and all. Even when they get wacky, they do so in terms of personifying a core brand theme that people have a hard time understanding. “German engineering” sounds impressive, but it becomes memorable in the hands of a crazed German engineer.

And Burger King, for all the crap it catches, does a fantastic job of personifying the brand, without losing focus on the food. They stopped trying to “me-to” McDonald’s are carved out a kingly niche where McD’s would never dare to tread.

In all of the above examples, the work is building equity in things that matter to the brand, as much as they are getting attention for the brand. Even if the campaign were to radically change, they have established core truths like designed simplicity or a car built well for me and my life, that can serve as a starting point for future efforts. They have a foundation built on a core truth, not a trendy fad, passing fancy or humorous gimmick. And that is infinitely more valuable to a company over time than any promotional sales spike. Just ask McDonald's, Coke or Disney about that one.

The Company/Product is the Idea That Matters

I’ve gone to great length here to paint a vision. Whether you are a marketer considering your agency’s work or an agency person bringing ideas to bear on your client’s market, always remember that the work itself is not “THE” big idea. It’s “a” big idea. The real Big idea with a capital “B” is what put that brand on the market in the first place. It's the product or service you offer. It's the drive that pushed someone to address an unmet need. It was the imagination that reinvented a market. It was the effort that defined a new space. It was the inspiration that caused your engineers or developers or service personnel to work over-time and forgo weekends to get a new idea out the door.

Don’t let all that passion go to waste! No matter how good a creative advertising idea is, it is meaningless if it doesn’t call upon the things that define the product in the marketplace. It says nothing. It means nothing. It builds nothing.

So as you look at your own work or evaluate the work in front of you, always be asking the question, “Does it speak to a core truth about my brand?” Believe me when I say that this is not a death sentence to creative ideas. Asking this question will simply help us get past the chaff, reach deeper and find those ideas that do it all. And that’s what we all want anyway, right?

Collection Call Or Loyalty Program

The bane of the down economy. The collection call. Businesses hate making them. Customers despise receiving them. And without a doubt a collection calls makes the customer instantly undesirable and your organization a place where that customer will never do business again.

In the old world this may have been an acceptable loss to a business. But in today's environment this delinquent group may also include lots of people who in any other circumstance would be A-list leads. So pursuing business as usual with your collections may be driving away individuals who after the recovery will be highly desirable. And when they are empowered again, they will NEVER come back to your brand. What's more, they will probably trash you at every chance because your didn't work with them in their time of need.

Treating Collections as an Opportunity

I first came across some interesting statistics on this subject back in the late 90's. It wasn't a loyalty number or a liability number. It was a profitability number. And it said that businesses that had a plan for actively marketing solutions to slow-pays and no-pays were showing significant profit increase.

Think about it: The slow-paying customer who isn't threatened by you, provided with a reasonable means of paying and takes advantage of such means, isn't listed as a loss, is providing some repayment on a regular basis and is appreciating you more because you care.

The Numbers Make Sense

Let's look at the risk here and run the numbers. Say the liability of slow-pays is standing at about $1 million. All of that money is at risk and we can probably expect a quarter to half to default completely. So let's for argument say that under normal circumstances we can expect $500,000 of this to be written down as defaults.

Now, consider what would happen if you provided a reasonable solution that helped the customers. Maybe you spend $30,000 to send a self-mailer that explains the program and encourages them to enroll. Maybe then add the cost of follow up with telemarketing, instead of a standard collection call. In such a scenario we can expect a very high response rate. Probably a minimum of 75%. And it's also acceptable to assume that most who respond will actively work to meet the terms of the agreement. So conservatively we can expect a 50% reduction in write-downs, plus interest earned from the the payment plan. So it's not crazy to think that you could reduce your defaults down to $100,000 to $200,000, even after factoring in your additional marketing costs.

Proven Success

I can't share specifics of the data, since it remains proprietary, but in the case studies I saw the companies were actually erasing the debt and coming out ahead. Imagine that! Even the remaining no-pays were erased by the value of the people buying into the new paydown plan. Plus, you can't ignore the increased lifetime value of what we will call "future As." They won't forget your foresight and flexibility and no one will be a bigger advocate for your brand as they get back on their feet.

We always think about the total value of a customer in every marketing endeavor. So it's always seemed strange to me that this thinking goes out the window for many companies when it comes to collections. This is a huge opportunity for many businesses to cast off debt and increase profits, all with minimal cost. And it's the perfect forward-thinking strategy for a down market.

Car Buying Highlights A Dilemma

Bill Green over at Make the Logo Bigger is currently chronicling his car buy experience. And I have to say that these insightful posts are eye-opening about the classic disconnect between sales and marketing.

For those of you who don't know him, Bill is a regular panel member on our marketing podcast, The BeanCast. And his blog is a look not just at advertising and marketing, but the cultural relevance of our industry.

The Great Brand Divide

This particular series of posts starts with impressions of the dealership ad and marketing materials. And in his latest post he tackles the on-site experience. But what's striking to me (beyond the humorous take on the process) is that he is revealing how the dealership/promotional part of the auto-buying equation systematically dismantles the brands.

Think of the effort that goes into the creation of a car brand. You have the design and manufacturing elements, crafted carefully with the marketing potential in mind. You have numerous focus groups to make sure that the identity of the car is clearly communicated in the user experience. You have logos and design guidelines to create, ads to design, photos to shoot, videos to produce -- it's seemingly endless the details that must be addressed.

Then all that hits Big Dave, who won't be undersold...and neither will his dog.

The Universal Marketing vs. Sale Conflict

But isn't this what always seems to happen when marketing objectives are put in the hands of sales realities? I've talked about this before, but this has always been the number one internal dilemma of marketers -- especially B2B marketers. You go into any knew program with the assumption that sales is going to ignore it and do what they want anyway. It's inevitable.

In the case of the car dealerships, I won't even venture to say I have a solution. I think it's clear that it's time for them to be ejected from the model. Or at the very least, take on the retail model of a single dealer selling many brands. Kind of a CarMaxfor new cars, like was discussed on Twitter during a recent #carchat.

But when you don't have a sprawling network of dealers to contend with, I have a suggestion.

Enlist Rather Than Fight

I offer up this simple reminder: 

You can't win against sales.

 They will short-circuit you every time. Sometimes they'll do it just for spite. So always enlist rather than fight.

Dealing with internal sales teams is exactly the same as dealing with external customers in a loyalty scenario. You engage, you enlist, you listen, you respond and you create advocates who do your work for you. Just like any retention effort, you find the key influencers among your sales staff and make them your friend. Give them extra attention. And then rely on them to do you selling of new programs. Pretty soon this person's success will be all the pitch you need.

So good luck to you and your internal efforts. And good luck to our friend, Mr. Green. Personally, I'm rooting for the Fords.

Amazon Fail Or Measured Response

The Twitter world was in an uproar again this weekend. And this time the subject of their ire was Amazon and their supposed segregation of Gay, Lesbian, Bi-Sexual and Transgender content.

We've talked about this type of thing before on The BeanCast. Brand does something perceived as bad. People trend the subject up with their commentary on Twitter. Brand usually over-responds. Everything blows over. And then in hindsight, brand reason just how small the negative response really was.

A Vocal Minority in an Uproar

I don't know what your experience is with negative online posters, but my own is that angry people tend to post a lot. There's a reason we call them the "vocal minority" in marketing. They make enough noise to seem bigger, more threatening and more damaging to market share than they really ever could be. They also attract a lot of tacit support in terms of people who essentially agree enough with their comments (enough to re-tweet at least), but who in the end won't change their purchasing behavior.

Social Media Strategy in Question

However, the Amazon case is especially interesting because it's also attracted a lot of commentary from people claiming that somehow Amazon was caught with their pants down on the whole social media issue. And just today, B.L. Ochman posted this to the DigitalNext blog at Ad Age.

Let me first say that I love B.L.'s work on Ad Age. I've quickly become a huge fan since I started reading her. But here she is dead wrong in her opinion on the subject, as are many in the social media space who were up in arms. And the reason is because of the extenuating facts to this case.

Did Amazon Really "Fail?"

According to the best sources available at the moment, this whole situation was caused by a hacker going by the name "Weev." Amazon is claiming they had nothing to do with the segregation of the content and is correcting the situation. Barb points that out in her post, which makes it even more inconceivable to take the position that Amazon did wrong by not responding to the situation until Monday.

If the facts are true, this is a major security issue, not just a social media problem. And it's unfair to make statements like, "Amazon should have been monitoring its brand in social media 24/7. And clearly it wasn't."

In the comments section of the post I responded like this:

Okay people, let's for the benefit of the doubt say that Amazon was indeed hacked as they claim. While a little suspect, there really is nothing to doubt them on this. So with this assumption, how many companies do you know that immediately tell the world that their website has a vulnerability and that ithas been exploited before you've a) identify that vulnerability and b) plugged that vulnerability[?]

We can get all high and mighty that Amazon said nothing and that somehow this was a social media fail, but that would be forgetting a few important facts. First, they did respond. Second, they are obviously placing security above social memes. And third, they realized that the so-called "huge" uprising was actually quite small considering their total user base.

Abbey Klassen's recent article on this very site highlights this subject beautifully. Using the Motrin "fail," we discovered that in the scheme of things no one really cared. Sure the topic was a top-trending topic on Twitter, but the actual users posting to that topic was a small sub-set of an even smaller sub-set of the Internet community. And most mom's (customers) in post research really couldn't have cared less about the ads.

Over and over again, the subject of Twitter uprisings comes up on my show, (http://beancast.us). And the opinions from those who know social media marketing always run along the lines of, "Don't do anything." Or "Don't over-respond." (And we're talking people like Scott Monty, John Wall, Peter Shankman, Chris Brogan and others.)

We forget that the value of social media marketing is to bring the corporate identity down to the level of the individual. So response should try to remain at the individual level. When brands like Facebook or Motrin respond with sweeping corporate decision-making to their "Million against..." postings, they miss the point of what it means to monitor the social streams and how to react to them.

Just because someone calls you[r] customer service center and says they hate the red on your site, doesn't mean you take red out of your brand. Twitter and social media sites are in many ways just a public analog to the call center. And we shouldn't be too critical of a brand taking time to gather facts and respond carefully and individually in such cases.

A Measured Approach

In the end I think Amazon handled itself quite well in this situation. They took time to consider the extent of the problems they faced, withheld from over-reacting to the situation and then responded in a manner appropriate to the situation. And far from lampooning them for inaction, I would say others companies would do well to follow their example when facing such crises.

(P.S. Make sure you also read Ken Wheaton's comment on the post. He makes some really good points on this issue.)

Reflections From A Year Of The BeanCast

I can hardly believe that the marketing podcast I started as a way to to stay busy and connected as I was getting my marketing consultancy, The Cool Beans Group, is now a year old. The BeanCast has been an awesome experience and I'm so thankful that we're reaching the 50th episode this coming Sunday.

So as I prepare for the show, just thought I'd call out some of the key things I've learned this year.

The Truth Behind Pseudo Fame

I knew that a show coming out of the woodwork would need a certain amount of help. So in the beginning I set out to convince some of the established podcasters and bloggers I respected to be on the show. I figured they had audience and I needed an audience. Made sense, right?

What surprised me, though, was how little convincing I needed to do!

And over the months as I've gotten to know John Wall, Scott Monty, Steve Hall, Peter Shankman, Chris Brogan, the ever-energetic Mr. Bill Green and many others, I've found very good role-models in how to navigate the waters of Internet-fame. The secret? Be helpful and approachable to everyone and don't drink your own bathwater.

These guys helped me out and showed me (sometimes by contrast with those who were reluctant to help me) that anyone can appear famous on the Internet. It takes someone special to get past all that and realize that what we are doing takes a symbiotic relationship with each other.

Never Be the Expert

Over and over again I've heard this said a million different ways on the program. There's a difference between a person with an expertise and an expert. The person who says they are an "expert" has to waste too much time proving that they are the best. Whereas the simply competent person is more able to focus on finding the best solution.

I started the show with the self-description, "Hosted by the man who knows a little, but knows everyone" for exactly this reason. I do this show not because I have a lot of knowledge to share, but rather to keep myself sharp by debating with the smartest people I can find. I find this to be true of my guests as well and I think this is what makes the show so valuable to people. You don't feel stupid listening. You feel like you are just part of an ongoing conversation. I like that.

There's Always Another Good Idea

So many times I've heard prior to a big presentation during my agency days, "We don't want to give them too much or they'll just take this and run without paying us." Here's what I think of that:

Hogwash!

The minute I run out of a good ideas is the minute I should walk away from this business. Good marketing is all about new ideas. Which is why I don't mind giving away the farm in each show and in each blog post.

My content here on this site is proof positive that the more I share, the more it forces me to innovate and reach beyond the expected. And I think there's a lesson in that for all marketers. We are so afraid of the competition getting our strategies and taking away our advantages, that we stay secretive with our thinking. What I'm learning now, though, is that the more open we become the more it forces us to get sharper, brighter and competitive. Assuming what we have is "the best idea" is what kills even better ideas.

The Needs Are the Same, Only the Means Have Changed

Probably my biggest insight from this year is that in spite of all the changing ways in which we communicate with our audience, the basic needs remain the same.

I've had people on the show who bring vast experience in all of the traditional and new media disciplines. We've discussed everything from social media strategy to direct marketing response measurement to media placement for TV. And while I've learned a lot about best-of-breed thinking in all of these areas, I've been shocked at the universal agreement that the basic goals of marketing still need to be addressed:

You need to always be building a brand identity
You need to drive measurable sales
You have to justify every dollar spent
You need to build loyalty with your customers
You need to engage your customers to prevent churn

It's easy to lose sight of the basics in the excitement of changing times. But our discussions on the show have helped me stay rooted in the fact that changing marketing tactics don't negate basic marketing needs.

Thank You

So to end this little reminiscence, I want to say thanks to those of you who listen. I've said since the beginning that I would do this show even if no one listened. It's just too valuable an experience to talk to such smart people each week. But I have to admit that it's a lot more fun doing it when lots of you are listening in. And I hope you find it as enjoyable as I do.

Here's to another 50 episodes!