Fruitful

Experience Sells

From yesterday's Reveries, a great article on how interaction and experience via gaming sells products:

The game, called "Jeep 4x4: Trail of Life," was free, and it was designed to give users a sense of the difference between a Rubicon Jeep and a regular Jeep by replicating "the vehicle's axle ratios and horsepower torque."

...All told, some "250,000 consumers ... downloaded it and handed over their names and e-mail addresses." The carmaker estimates "that about 500 of the first 1,500 people who purchased the Jeep Rubicon had piloted a virtual Jeep prior to walking into the dealership." Now, they don't know for sure that the games directly triggered the sales, but it sure looked that way. "It takes about 40 hours of playing to complete some popular adventure games," and since "ads are built into the games, consumers can't dodge them." The games also have the ability to demonstrate the product.

A game involving Sony Ericsson, for example, not only requires players to use a one of its cellphones, but also to capture an image using its T637 camera phone. The Army, meanwhile is using a virtual boot camp to attract new recruits.

Some "42 million U.S. households own a videogame console, according to DFC Intelligence. And, in perhaps the surest sign of advergaming's looming legitimacy, videogame publisher Activision, www.activision.com, is collaborating with Nielsen Entertainment "to build a system that will provide information about videogames akin to TV ratings."

All things to a few people

Thanks to Seth Godin for the link to this great story: "Media attention brings a bevy of baldies to Lodi restaurant." It's a great example of how tight focus on a small audience can lead to big success (as I previously discussed here.)

Dozens of bald men and one bald woman came to Gary's Uptown Restaurant and Bar on Wednesday evening on the strength of worldwide media attention that has put Lodi on every bald person's radar... Most people came in because they heard on TV, radio and in newspapers about the food discount offered to balding and bald men on Wednesdays.

"We were totally, totally blown away and absolutely shocked that it went international," said Gary Arnold, the restaurant owner who started the deal to boost sluggish sales on Wednesday nights.

Baldies from Sacramento, Tracy and Modesto have made the pilgrimage to Gary's, and Arnold expects Bay Area folk to show up soon, since he just did an interview broadcast there.

Arnold said a razor company has called him a couple times to talk about sponsoring a new head-shaving razor.

He recently did a call-in show for a radio station in Australia, when it was 3:40 p.m. here and the next day there. "People were calling in and asking, 'What if I have a comb-over?' They had fun, cute questions, and talking to people on the other side of the world was great," he said. A Google search for Gary's Uptown Restaurant and Bar turned up close to 300 results from the Web, ranging from TV news stations to blogs and promotions and marketing sites.

Stuff worth talking about

Check out the interview with Seth Godin at Global PR Week 1.0 where he comments on the integration of blogging, branding and PR. Here's a snip that resonated with me:

PR MACHINE: McDonald’s vp of marketing, Larry Light, introduced a new marketing strategy which entails using many stories rather than employing one message to reach everyone. He called this new strategy “Brand Journalism.” How do you think this will affect McDonald’s public relations outreach and media management...will the company tell different stories to different media outlets if it wants?

SETH GODIN: I think the vision is just fine, IF McDonald's also changes the product. Spin isn't going to be enough. The challenge is going to be to make stuff worth talking about, and then giving the PR people the freedom to follow through.

PR MACHINE: ...If you say that the brand journalism conversation is going to happen with or "without you” don’t you think PR folks should attempt to manage it [the conversation] by continually staying involved with it (by interacting with it and perhaps attempting to proactively direct it)?

SETH GODIN: I think (but what do I know) that PR pros can add a huge amount of value by focusing on P, not R. By working with the company as the voice of the public, helping them understand how to make stuff worth talking about. Moving upstream ever closer to the core of the factory.

The last statement referred to PR pros, but it's applicable to marketers, sales, brand strategists, agencies... anyone working to promote a brand. Too often, companies without a remarkable core turn to PR, marketing and sales to drive the brand; but this is a band-aid approach that enables the execs to avoid the real issues. It's like the fad diets that promise weight loss without exercising. Sure, you might lose weight initially, but it's neither healthy nor sustainable. There are no quick fixes in life... not in health, and not in business.

There's often a hestitation on the part of sales and marketing to push back and say, "Sorry, but you guys need to create something remarkable before we can promote it." And for good reason. Because according to the standards of the day, this kind of push-back implies a lack of ability. Executives have been trained to think, "If you were really good, you could sell anything to anyone." Good promoters can sell ice to an eskimo... Right? So out of pride and ego, sales and marketing and PR take up the challenge... resulting in spin jobs and overpromises.

I admire the professional marketer, salesperson or account supervisor who is willing to stand up and say, "Sorry, but I can't promote this right now... but let's learn from customers how we can best improve this product and make it worth talking about."

Middle of the Peloton

Continuing the analogies between the Tour de France and business, here's a snip from an article on Motley Fool from 7/9:

The Tour de France is the most grueling cycling race. One feature of the race is the peloton, the group of competitors that rides together in a huge pack. During the race, smaller groups try to break away from the pack in order to gain an advantage. Sometimes the peloton can track the attackers down, sometimes it can't.

In cycling, just as in business, you do not want to be stuck in the middle of the peloton. You can't try different tactics to attack because you're surrounded. If you sit in the pack the whole time, you will stagnate and never have a chance to win. However, if you try to break out from the middle, you risk causing a huge accident that can knock you and possibly others out of the race.

In my opinion, the problem with Big Lots and Retail Ventures is they are poorly positioned competitively (i.e., in the middle of the peloton). They don't have a niche and can't make up for it by being stronger -- in retailing terms, by turning their inventory...

Compare them to Wal-Mart (NYSE: WMT), who conjures up images of cyclists Jan Ullrich or Miguel Indurain. All three are big, strong, and fast. Between Jan and Miguel, they have won six Tour titles and five second-place finishes. Wal-Mart turned $28.3 billion of inventory in 51 days last quarter! Both feats are very impressive.

On the other hand, I would compare riders like Tyler Hamilton and Iban Mayo (who lost his chance to win the race after getting caught up in a crash in the peleton) to companies like Tuesday Morning (Nasdaq: TUES), recently written up by James Early, and Overstock.com (Nasdaq: OSTK). They are trying to break away from the pack by exploiting a niche (furniture for Tuesday Morning) and building a stronger business model (last quarter, Overstock.com took 40 days to sell its inventory).

I can't go without mentioning Lance Armstrong. Like eBay (Nasdaq: EBAY), which can compete business to business, business to consumer, and consumer to consumer, Lance can compete anywhere. He's not known as a climber, but he rules the mountain stages. He's not known as a sprinter, yet few can beat him in a time trial. Both eBay, which may have the best business model ever, and Lance, the best all-around cyclist ever, are champions that are tough to beat.

BJ interviews Laura Ries

BJ Olin interviews Laura Ries, co-author of The Origin of Brands. Check it out! Here's a great snip:

BJ: In Origin of Brands, you discuss the differences between convergence (where industries merge) and divergence (industries branch off to create new categories and becoming the first in the new category). If a company already exists and then learns about the theory of divergence, what should they then do now, since they do not have the luxury of becoming the first in a new category?

Laura Ries: Aim at becoming a strong #2. Many companies have done this with some great success. Pepsi vs. Coke, Target vs. Walmart, Lowes vs. Home Depot.

However, you can’t be a carbon copy of the industry leader. You have to be opposite of the leader and attack the difference (Pepsi aimed at being the choice of a new generation, suggesting that Coke is for old people; Target aimed at becoming cheap chic, etc.).

Or you can simply tweak the category. The point of divergence doesn’t have to be a revolutionary difference. It could be something like locations or operations based.

Good advice, as long as the difference is easily articulated and meaningful to customers. I haven't yet read the Origin of Brands, but it's in my pile. In the meantime, I'm starting to follow Laura Reis' new blog.

Skydiving

I finally got my film developed from my virgin skydive jump a couple weeks ago, so I thought I'd share... I'm looking remarkably calm and happy for jumping out of a perfectly good airplane!

And here's a pic of a few guys who jumped out of the plane right before me:

Teamwork

This is the first year that I've followed the Tour de France; I'm not a cyclist (yet) so I've been quite intrigued by the level of teamwork and strategy that is required to win. Thanks to a few informative web sites and a cyclist friend of mine who's patiently answered my questions, I'm developing a huge appreciation for the sport. And of course, I can't help but draw parallels to business.

I'd always thought that cycling was a very individual sport; every man for himself. Yet there's a remarkable amount of teamwork going on... not only within each cycling team, but also among competing cyclists. Turns out that a cyclist conserves 40% of his (or her) energy by riding in another rider’s slipstream (the still air behind a rider.) So a lone cyclist that breaks away from the main pack must expend an enormous amount of energy to stay ahead; conversely, a pack of breakaway cyclists (whether on the same team or competing teams) can more easily maintain an advantage if they work together, each taking turns at the front.

Let's look at 4 cycling scenarios and their equivalents in the business world (and all you cyclists out there, feel free to correct me or add your own thoughts!):
1. The lone rider who can maintain a winning advantage in front of the pack may be the strongest all-around rider or a specialist (like a climber or sprinter) who's gunning for a stage win. So if you’re not the Lance Armstrong in your industry, specialization could be the only way to differentiate yourself and capture a win within a section of the market. This relates to a previous post about being all things to all people: companies that specialize on serving the needs of a specific subgroup have an opportunity to capture a dominant percentage of that audience in both initial purchase and brand loyalty. Case in point: Nextel (from today's NY Times:)

The walkie-talkie service, which is embedded in all of the company's 13.4 million phones, is probably the main reason corporate and government workers make up two-thirds of Nextel's subscribers. Such users account for about a third of other cellular providers' customers, according to analysts.

The walkie-talkie function, it turns out, is well suited to hospital employees, factory floor managers and other workers who need to have short, frequent conversations. So unlike rival companies, Nextel has focused on signing up blue-collar workers by, for example, designing phones sturdy enough to withstand heavy use. The advantages have made the company's customer turnover - the percentage of subscribers who switch to other services - the second lowest in the industry, after Verizon Wireless.

2. Within a given team, you'll find specialists and key lieutenants whose jobs are help the team leader win the overall race… and they all benefit from high visibility and $ winnings if they succeed. In the business world, a ‘team leader’ brand can leverage the strengths of smaller specialty brands to win market share to the benefit of all. Case in point: Target has recruited top designer brands like Todd Oldham and Isaac Mizrahi to differentiate itself from other retailers and escape commoditization (from DSN Retailing Today, 4/04):

When it comes to maintaining Target's reputation for cheap chic, keeping up appearances in apparel is paramount. And the way that this retailer has managed to stay at the top of its game can be summed up in two words: Isaac Mizrahi. With the success of the most extensive designer apparel launch in its history, Target has successfully raised the bar in terms of its assortment's fashion credibility.

Not only has it set itself apart from Wal-Mart and Kmart with this exclusive designer label, it has also differentiated its merchandising offering from mid-tier competitors, including Kohl's and Sears.

3. A world-class rider can’t win unless his equipment is also world-class. If you’ve watched the Lance Chronicles on OLN, you’ve seen how Nike, Trek, Shimano, etc. have all worked together to help Lance win the Tour by making his equipment lighter and faster… and they’ve boosted their own brands' strength in turn. In the business world, best-of-breed strategic partners can apply their strengths behind the scenes to help the ‘team leader’ gain competitive advantage. Case in point: Starbuck's turned to Pepsi for its bottling expertise to roll out its Frappuccino drink, spreading Starbuck's visibility and market penetration beyond its retail stores. For more ideas on this topic, check out The Support Economy by Zuboff & Maxmin.

4. By working together, a handful of competing cyclists can more efficiently maintain distance from the rest of the pack, or to catch up quickly to a group of breakaway riders. Case in point: longtime rivals Microsoft and Sun Microsystems versus the pack of Linux advocates (from USA Today).

Combined, Microsoft and Sun stand a better chance of catching up to the Linux movement and its biggest backer, IBM. Linux, the open-source-code operating system created and improved by volunteers, has become the fastest-growing server software, eating into Sun's core business. It has begun to spread into Microsoft's jealously guarded turf of desktop PCs.

So what teamwork opportunities exist for your company?

Customer Experience Award

If you've had a great (or awful) customer experience with any of the finalists for the Fast Company Customer Experience Award, make your voice heard!

Fast Company magazine is calling all consumers and business leaders to play a part in choosing the winners of its inaugural "Customer Experience Awards." By participating in a brief online survey, people can help select the winners in five distinct customer service categories, which will be featured in the October issue of Fast Company.

To select a list of best-in-class companies, Fast Company convened a panel of experts in the fields of customer service and customer experience. From an initial set of over 100 nominations, Fast Company chose fifteen companies as "Customer Experience Award" finalists, listed below:

* Chick-fil-A
* Commerce Bank
* Costco
* Enterprise Rent-A-Car
* Fairmont Hotels & Resorts
* Harrah's Entertainment
* Mini USA (BMW)
* Petsmart
* Progressive Insurance
* Sharp Electronics
* Trader Joe's
* Vail Resorts
* Wachovia
* Walgreens
* Wegmans Food Markets

Input from online survey participants and the expert panel will be weighed to help determine the "Customer Experience Award" winners in the following
categories:

* High-Tech Achiever: The finalists in this category have put technology to work for customer service -- and succeeded in areas that others have failed.

* Employee Innovator: These companies are known for innovative employee hiring, training, empowering, or rewarding that creates a customer-focused work environment.

* Leading Listener: The finalists in this category are committed to truly listening to customers and consistently responding to feedback in an effective, appropriate manner.

* Profitable Player: Great customer service can be outrageously expensive, but these companies have managed to implement successful customer service initiatives that make a contribution to the companies' bottom line.

* Customer-Centered Leader: The finalists in this category are led by executives with an intense focus on putting customers first and a commitment to setting a customer-centered tone for their organization.

Ikea, Part 2: Course Correction

A few days ago I commented on a Guardian article about Ikea in which I focused on the strength of their vision. Today I wanted to revisit that article because it brings up an interesting issue: what is the right balance between following your vision and getting feedback from customers?

The Mållen clip doesn't look like much, and yet it represents, in microcosm, a vital Ikea strategy: the way the company decides what you need before you've even realised you might need it. The clip, Vinka explains, is for hanging up magazines in your bathroom: you attach a magazine to the metal clip, then hang the rubber ring over a towel hook. It had never occurred to you, presumably, that you might want to hang up magazines in your bathroom. But Ikea had already decided that you would. And the brilliant but scary part is this: once you've seen a row of magazines hanging up in one of Ikea's showroom bathrooms, each neatly suspended at 45 degrees from a Mållen clip, it takes a will of steel not to find the magazines in your own bathroom, now you come to think of it, almost offensively disorganised. And so you think about purchasing the Mållen clip. At which point another Ikea sales tactic kicks in: the clips only cost 90p for three - so cheap that it's hardly worth not buying them, just in case, especially if you've travelled a long way to get to the store.

You did not, in other words, come into the store with a need that you wanted to satisfy: you came in, and then you got both your need and the means of satisfying it handed to you simultaneously. You came looking for a sofa, say, but you came out with a sofa and a trolleyfull of impulse buys. Theodor Adorno, the eminent German social theorist, called this "retroactive need" - and it was, he argued, a key means by which capitalism perpetuated itself, while shoring up the illusion that what was being offered was individualised choice. Because it so often decides what you're going to need in advance, Ikea does much less market research than many companies, and some strange things have happened as a result. Shortly after the company opened its first north American outlet, in Vancouver in 1976, employees noticed that an inexplicably large number of vases were being sold - so many that they could barely keep up the supply. Eventually they deigned to ask their customers why; it turned out that they found Ikea's European-style glasses too small to drink from.

This brings up the concept of co-creating value with customers. There's a wonderful balance that can happen when a company has a brilliant vision, yet is no so arrogant to believe that they have nothing to learn from their customers. When companies take the time to understand their customers and get feedback, they have an opportunity to make course corrections... much like a rocketship headed to the moon must make minute course corrections to ensure that it reaches its target.

Evangelism 101

Jackie Huba and Ben McConnell at Church of the Customer have created a great little e-book called Testify! How Remarkable Organizations are Creating Customer Evangelists. It's a compilation of 18 case studies from organizations that have mastered the art of word-of-mouth marketing. Check it out!