July 02, 2008
Watermelon Aren't Always Round... 5 Lessons for Direct Response Advertisers
Dave Knox shares this story about what we can all learn from watermelons in Japan.
These are universal truths that apply to many business challenges. Identifying and questioning assumptions, awarness of habits, seeing our limiting beliefs, and the power of taking the perspective that "it's possible".
Enjoy Dave's post here.
July 01, 2008
Smart Business is Simple
It's easy to forget that often the simple, common-sense approach can be the best business strategy. You don't need over the top ad claims, a fancy MBA or a McKinsey consultant.
Seths' experience with customink is a great example of this. Here's what Seth writes, reprinted in its entirety (because there's no fluff to cut out of the story):
I sent in a t-shirt order to customink a few weeks ago. Three days later, I got a note from someone named Lori that said,
"Hi Seth, I noticed that you have designed shirts that appear to be for a charity event. If that's the case, CustomInk would love to make a small donation to your team or to the charity itself on your behalf. Please let me know if your order is for one of these events. If you would like us to pitch in and support your cause, please include information about your charity event, a link if you have one or the organization's name if there is no link to a team web page."
That's it. No policy, no standard operating procedure, no promise in advance. Just plain generosity. It turns out that customink does this as a matter of course, regardless of whether the customer has a blog or not. They don't do it as an inducement, they just do it.
Formula: The value of a perk is inversely related to the expectation of that perk.
What does this have to do with direct response radio advertisng campaigns? Everyone is trying to find the right message, the right offer - to acquire the customer at the lowest possible number. That's important - you can't have a successful business without a strong customer acquisition campaign.
But many people stop there when in fact retaining those customers is also vital. How vital? Well first there's the obvious: retaining the customer means a higher lifetime value. But there's a deeper benefit: a higher lifetime value allows the business to be more aggressive with customer acquisition - to ward off competition and grow faster and more profitably. So this one move has reverberations across the entire business.
Thanks why simple and straightforward is smart business strategy.
June 05, 2008
When Does Authenticity in Advertising Backfire?
We may soon have a case study.
David Wolfe points out that according to a recent article in The New Yorker, "the real beauties in Dove's Real Beauty campaign are not real." His reaction to this? "I am stunned. I feel cheated. I am mad. Damn mad! For several years I have been touting Dove's Real Beauty campaign as a high-minded example of authenticity in consumer marketing."
But here's the question: does authenticity really "pay off"? Is that really true or do we just hope it is?
I, for one, have a belief that in the hyperbole-ridden world of me-too advertising one way to differentiate a product or service offering is through authenticity. Authentic words and authentic delivery of those words.
But let's be honest - in some cases this really amounts to nothing more than skillful lying. This is where marketing and advertising get the bad rap - marketing as "manipulation".
There is supposed to be a check to the system to ensure customers aren't ripped off. No, I'm not talking about the FTC. The check I'm talking about is what happens after the call, the web visit, or the store visit - or even after the purchase. Does the company deliver on what is said the supposedly authentic ad?
It used to be that if the product was good, that's all that matters because customers will be happy and they'll both buy more and tell others. However, as we are seeing with the Dove case study, if you duped me into buying your product via a misrepresentation, having a good product won't save you. Not only will you lose my busines, you'll also feel my wrath.
Does it seem that as a culture we've become more sensitive to lies and manipulation?
Just in time for election season.
May 27, 2008
Direct Response Radio as a Core Growth Strategy
What's the strategy behind the growth of your business?
Does this describe you?
"Some marketers are still relying on the idea that they can drill a catch phrase or benefit or USP or differentiation into our heads through ceaseless ads. It sure worked on me."
If so, we, like Seth, doubt it's going to be a viable strategy. Why? Maybe because it's been done that way for so long and it's worn out. This is why, but not for the obvious reason. Because the "drill 'em" approach did work, more of it was done - and the result has been more and more media messages bombarding each person each hour of each day. Which renders the strategy ... ineffective.
In direct response radio we get near immediate feedback about what is and is not working. We know when we need to inject a new perspective into the core of the campaign.
May 22, 2008
The "Most Innovative Small Business"... Doesn't Advertise
Name that company. (Hint, 30% margins):
Year Sales
2002 $100,000
2006 $18,000,000
2007 $30,000,000+
Think they're on to something? Clearly.
They must be selling some high tech product using some high velocity advertising method (like direct response radio), right?
Wrong.
In fact, they don't advertise.
And they don't sell a high tech product.
The company is Threadless, and they sell t-shirts. Yeah, $30 million worth of t-shirts.
Threadless is profiled in the recent Inc Magazine. Get this:
"Revenue was growing 500 percent a year, despite the fact that the company had never advertised, employed no professional designers, used no modeling agency or fashion photographers, had no sales force, and enjoyed no retail distribution. As result, costs were low, margins were above 30 percent, and -- because community members told them precisely which shirts to make -- every product eventually sold out."
Sure, these are great numbers, but how are they doing it?
"...a new innovation model that is quietly reshaping a host of industries. Whether it's called user innovation, crowdsourcing, or open source, it ... completely blurs that line of who is a producer and who is a consumer," says Karim Lakhani, a professor at the Harvard Business School. "The customers end up playing a critical role across all its operations: idea generation, marketing, sales forecasting." This idea goes against a basic principle that has been taught in business schools since the invention of mass production: Employees make stuff, and customers buy it."
That's a lot to digest. But it's worth it.
And once you've digested that, just think about what would happen if the core user base Threadless depends on could be expanded leveraging a flexible, measurable, scalable and highly targetable medium like direct response radio. Why think about that? Because a) someday growth will slow and the VC's won't like that, and b) a competitor, eyeing your 30+% margins, might just think about it, too.
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