What My Daughter Taught Me About Marketing
My daughter loves to play with our plastic-ware. It’s in the only cabinet in the kitchen that isn’t baby-proofed and she takes full advantage. Lids, bowls, tubs, big, or small she doesn’t discriminate. It was during a recent cabinet raid, that I noticed our collection of plastic-ware expanded considerably. In fact, we have quite a few tubs of a particular size from buying a particular brand of luncheon meat. Here’s the rub: What I originally perceived as a value-add of buying this product is now actually going to stop me from buying it in the future. Short of adding another cabinet in the kitchen I just simply can’t store any more of this stuff. Throwing it away or even just recycling it seems wasteful.
Perhaps my household isn’t the ideal target for processed-meat-packaged-in-plastic-ware. Maybe their targets are folks who make a lot of lunches and give away tubs full of homemade soups and cookies with their excess containers. But I doubt it. Instead, I just think the company may have forgotten that it’s possible to give your customers too much “value”.
Shared Experiences Build Stronger Brands
Viral Email Campaign
Shared experiences fundamentally connect us. Although we often seek to express ourselves as individuals, we also still long to be a part of a community. Whether it be a hundred thousand fans attending a fierce rivalry between college football teams, or a few thru hikers on the Appalachian trail around a campfire–sharing an experience can create deep emotional connections. N.I.F.T.Y. marketers can create opportunities to build stronger brands using shared experiences as the impetus. A great example is the Nike+Human Race Event, held tonight all around the world. Billed as the “world’s largest one-day running event.” There are 24 official cities participating in the event. Additionally, anyone can turn their local route into a 10k simply by registering on the site and using the Nike + gear.
Target Dorm Parties Pretty N.I.F.T.Y.
It’s every marketer’s dream–a clearly identifiable and accessible target with a demonstrated history of spending 
money–taking over their store to hang out and maybe pick up a few items while they’re there.
Target Corp. created just such an opportunity in recent years by targeting college freshman headed away from home for their first time. The Minneapolis based retailer recently launched a series of very clever, very focused private store parties for freshmen. Here’s why I believe it’s N.I.F.T.Y. marketing idea.
Novel: Target invited freshmen just arriving on campus to an in-store after hours ”dorm party”. It coordinated with approximately 35 colleges and universities nationwide according to an article in The Daily Iowan (though it appears that at least some of these parties were not
Students arrive at a Target Store in Iowa/The Daily Iowan
limited to just freshman). DJ’s helped create a unique atmosphere and students had a chance to win prizes that ranged from an X-Box to goldfish(ones with gills–not the ones in the packaged foods section). To be entered to win some of the prizes, students had to text their entries to the store. Because some universities do not allow freshmen to have cars on campus, Target arranged for round-trip bus transportation.
Inteligent & Flexible: Strategically for Target, the back-to-school/college programs are extremely important sources of revenue for the third quarter. However, Target’s approach with college freshman wasn’t just N.I.F.T.Y. because it helped reach a short term goal. It’s savvy because it establishes a relationship with young adults just at the infancy of their consumer potential. According to Leah Guimond, spokeswoman for Target (as quoted on Marketplace) the initiative is expected to have an ROI that pays dividends into the future. From Target’s point of view: ”It’s way for us to build relationships with these students over the years as they evolve into different life stages of getting married and having babies and growing with us over the years”. Brand loyalty aside, there’s also a more immediate pay-off to the tactic as well. Boston College business professor, also quoted on Marketplace said that the parties help students find the closest campus Target so that when parents are in for a weekend and need to pick up a few items for their kids before heading back out-of-town, the students know just where to take them–extending the revenue stream for the retailer into Q4 and beyond.
Targeted: According to information for the National Retail Federation, college freshmen spend more money than upper classmen on dorm furnishings, electronics and school supplies–all things that Target provides at price points can afford. See the chart to the below.
While the information provided from NRF certainly justifies why retailers should target college freshmen, it doesn’t
College Student spending by Class Rank/National Retail Federation 2009
necessarily tell retailers when they should engage them. Obviously, the back-to-school season makes the most sense and that’s when most retailers typically make their move. Certainly, Target is no exception. However, Target is also reaching out to freshmen during the few days they’re on campus ahead of upper classmen. Traditionally freshmen arrive on campus 3-5 days ahead of the rest of the student body giving them a little extra time to get settled in and take care of some of the university’s pre-class requirements (remember convocation: “look to your left and then to your right–one of you will not be here in 4 years??”). Additionally, when the upper classmen arrive on campus, freshman are more easily distracted by trying to fit in–finding the right bars, the right fraternity houses etc. SoTarget’s smart to hit campuses early when freshmen are likely to be a little more attentive.
Yes!: One Target store, located near the University of Iowa campus indicated that the sales from the Dorm Party represented 14% of the receipts for the day. According to an August 19th conference call with analysts, Target’s August sales were trending slightly higher over recent months, though it was still early in the season. The company expects same store sales in Q3 to improve over last quarter partially as a result of driving traffic from aggressive back-to-school and college programs.
Updates on N.I.F.T.Y. Marketing Posts
Time for an update on some of the previous N.I.F.T.Y. marketing posts:
Responsibility Project
Liberty Mutual scored a big name production house to produce its most recent Web shorts. George Clooney’s Smoke House released the 15 minute film, “Tony”, about a father trying to find his son’s lost teddy bear, in time for Father’s Day. View the film here: http://www.responsibilityproject.com/films/landing/tony/.
Harrah’s Total Rewards
Accolades for Harrah’s ability to mine data for meaningful customer insights continue. Here’s a recent article from Computer Week: http://www.lasvegassun.com/news/2009/jun/22/harrahs-thinks-it-can-gain-online-gambling/
Harrah’s also recently jumped into the online gambling industry, creating a subsidiary in Montreal to circumvent US online gambling laws. With its deep database of Total Rewards members across the globe, look for the company to make significant inroads quickly in this space. Read more here: http://www.lasvegassun.com/news/2009/jun/22/harrahs-thinks-it-can-gain-online-gambling/
Marketing Responsibility: Liberty Mutual’s Responsibility Project
In June 2006, Liberty Mutual began a new campaign with the theme/slogan Responsibility. What’s your policy? You may recall some of the television spots depicting everyday Americans confronted with a decision to do the “right” thing or “look the other way.” According to press releases at the time, the campaign consisted of a 60-second branding spot with 4 additional 30-second television spots and 4 print ads focusing on specific insurance lines. The $38 million campaign developed by Hill Holiday was accompanied with an interactive component, namely banner ads that allowed users to interact with an ethical/moral dilemma and respond to a poll. The banners drove to a micro site–whatsyourpolicy.com, where visitors could take a poll, see how their response
WhatsYourPolicy.com Poll Content
netted out against other visitors and submit poll questions for potential inclusion on the site. The campaign was extremely well received by consumers–especially parents, teachers and religious leaders and quickly gave consumers something they could easily associate with the nation’s 6th largest insurer.
The success of the initial campaign, including whatsyourpolicy.com evolved to the insurer launching the ResponsibilityProject.com in 2008, a web initiative dedicated to, according to the “About “section of the site, exploring “what it means to do the right thing.” The site features responsibility web films and a professionally written blog on responsibility. To keep the site fresh, the goal is to launch a new web film every few weeks. As Liberty Mutual prepared the launch the site it also began negotiating with NBC to modify a future script of the TV drama Kingsto create additional relevance to the responsibility campaign. The entire plot of the episode was about personal responsibility and meant to loosely tie back to Liberty Mutual’s sponsorship. However, according to a March 30, 2009 article in The New York Times, the episode aired in February and Liberty Mutual did not end up committing to being the sole sponsor and did not have a modified script. Though Liberty Mutual seemed to baulk at solo sponsorship, its sponsorship did coincided with the insurance company’s launch of an advertising campaign around the Responsibility Project. The campaign follows a fictional family as they deal with a variety of very real, very common conundrums that many Americans are also dealing with in real life. The unbranded spots, drive viewers to ResponsibilityProject.com where visitors are invited to comment and leave their opinions.
Is it N.I.F.T.Y?
Novel: I can’t think of too many companies that have attempted to “own” a marketing dialogue on responsibility like Liberty Mutual. Sure, many companies incorporate it into their business processes, but very few claim out right claim that responsibility is their way of doing business. For example, one could argue that Ben & Jerry’s has a marketing dialogue on responsibility and certainly the company has demonstrated its commitment to the environmental and social issues. But that’s more or less traditional corporate social responsibility. And there’s nothing wrong with that. But that type of responsibility is practically expected in this day and age. In fact, according to a March 2002 article in the Journal of Financial Services Marketing, entitled “The Effect of Corporate Social Responsibility on the Branding of Financial Services,” 42% of North American consumers surveyed said they “punished companies for being socially irresponsible” (Michel Ogrizek Journal of Financial Services Marketing; Mar 2002; 6, 3). Traditional corporate responsibility makes good business sense. But, let’s contrast traditional corporate social responsibility with Liberty Mutual’s approach. Liberty Mutual has associated its brand with a public dialogue on the general subject of personal responsibility. This approach has essentially given Liberty Mutual an “advance” on the brand’s “responsibility equity”. In other words, because building brand equity around responsibility takes years–even decades–Liberty Mutual couldn’t come out beating its chest on how responsible it is. It would be too much of a stretch for consumers. But Liberty Mutual is able lead the discussion on personal responsibility. In so doing, it creates positive associations between the brand and the need for greater responsibility in day-to-day living. The tagline: Responsibility. What’s your policy? implies the company’s cut and dry approach to responsibility to its customers and begs the question: what else would you expect from your insurer?
Intelligence: Does the responsibility project relate to Liberty Mutual’s overall corporate or marketing strategy? This is difficult for me to prove. As an observer I can only speculate on the company’s branding strategy by reading what’s publicly available. I think it’s fair to say however, that the responsibility project dovetails well with the overall corporate re-branding begun in 2006 with the theme responsibility.
Multi-Faceted: Liberty Mutual has done a tremendous job of ensuring that the equity its building is accessible to its targets from a variety of angles. First there are the TV spots for the Responsibility Project itself and the ResponsibilityProject.com. Although well executed, they are essentially marketing turbines for generating greater salience with the Liberty Mutual’s core brand message of responsibility. This core brand message continues (as it should) to payoff the theme of responsibility in TV spots and interactive media. Additionally, the company’s willingness to explore alternatives to traditional media placements, specifically the Kings episode was particularly intriguing and hints at Liberty Mutual’s desire to explore all channels and approaches in order to make aggressive strides in its targets’ awareness of its corporate identity.
Targeted: I’m just going to have to take a leap of faith in Hill Holiday and Liberty Mutual’s understanding of their
Responsibilityproject.com Demographics
target audience. In everything I’ve read to prepare for this blog entry, nothing spoke to targeting—other than it resonated well with teachers, parents and religious. But I assume they have a more specific target audience (psychographic and demographic) in mind as they rolled this campaign out. Even so, it is interesting to look at the discrepancies between the demographics of visitors to libertymutual.com and the responsibility project site (as provided through Quantcast.com). Visitors to the responsibility project site tend to be older, female, mid to low income and less than 2 children in the household. Visitors to libertymutual.com tend to be more affluent, a higher level of education, middle age and middle income. While I can’t say that this is good or bad, assuming that the Liberty Mutual site is indicative of the core target for its insurance products—then the responsibility project is not doing much to attract a similar audience to its site. Again, this doesn’t necessarily mean the strategy is faulty since Liberty Mutual could be targeting an entirely new segment, not familiar with the brand. If this is the case, the strategy is working. If not, it appears that the responsibility project site isn’t attracting the same demographic that frequents the corporate site which could indicate a potential challenge to the approach.
Yes! Is responsibility enough to make someone want to work with Liberty Mutual? The verdict is still
LibertyMutual.com Demographics
out, and the public may never know how successful this campaign actually is. Traffic to the site according to Quantcast is 136K per month. It appears that a slight upward trend began about the time the new TV spots broke. However, if Quantcast statistics are even modestly reliable, the site doesn’t appear to be able to draw repeat traffic—perhaps a sign that this strategy isn’t working. (To be sure there are a number of short falls with the stats I provided—but it’s the site I am most familiar with so I’ve defaulted to those numbers.) On the plus side, I do feel Liberty Mutual now has something consumers can associate with the brand and connect with. Despite the less than stellar repeat traffic, Liberty Mutual did experience a 4.0% lift in auto premiums in the first quarter compared to Q1 2008, and an 8.0% increase in home owner policies over the same period—indicating that, Responsibility Project or not, they’ve done something right.
Harrah’s N.I.F.T.Y Mobile CRM Initiative
Harrah’s Entertainment, Inc. is one of the largest casino operators in the world, running about 50 casinos in 5 countries-including casinos or resorts in 12 states in the US.
Harrah's has casinos in 12 states
I didn’t really know much about Harrah’s until a retail consulting company I was working for about 10 years ago, was scheduled to do a project for Harrah’s and I needed to learn more. Harrah’s again came to my attention when I was taking an information systems course in grad school at Xavier. One of our cases was on Harrah’s CRM program called Total Rewards. This program is a great example of customer relationship management and put into action what many are currently working toward–closed loop marketing–knowing your customer so well you can anticipate their needs, at any time, at every point of contact. Harrah’s closed-loop CRM is at the core of its business strategy. Case in point see the slide from a February 3, 2009 corporate presentation.
Recently, Harrah’s launched a mobile arm to its Total Rewards strategy. While Harrah’s CRM effort makes a great case study in N.I.F.T. Y marketing with or without the integration of the mobile component, the program is even stronger by incorporating it. Additionally, it demonstrates what an agile marketer Harrah’s truly is.
Capturing the right data
When most marketers think of CLM, their minds immediately gravitate toward data capture. While it is true that data capture is a big component of CLM, I think what most marketers tend to underestimate is making sure that you’re the right data. In other words, we try and capture everything under the sun about the customer in our haste to implement a program. We rush past the need to identify how we’ll use the data, in so doing fail to identify the key data points that are required to deliver on the program’s objectives. Ideally, we should be efficient in our data capture obtaining enough information to be able to meet the goal, but not so much that we can’t do it efficiently.
Harrah’s CLM program is a great example of company doing it right. This program has evolved beyond just the recording of information and now capable of predicting which games a guest is most likely to play, the types of rooms they stay in, and which promotional offers will be the most motivating to the specific target. As a result, Harrah’s Entertainment, Inc. became so efficient and deliberate in its data capture, organization, analysis and execution that it grew its share of Total Rewards customers’ discretionary gaming entertainment grow by 20% (Stanley, T., High Stakes Analytics, Optimize, February 2006).
Their new mobile initiative is fairly straightforward. Total Rewards guests staying at a Harrah’s property are invited to opt-in through on site promotional collateral. Once opted into the program, Harrah’s can begin texting offers to the customer. The offers come via SMS bypassing all the hassles associated with handset compatibility. The offers vary, but according to an article by Mobile Marketer Daily include free parking offers to entertainment tickets. Once the user receives an offer he can redeem the offer via an on-site self service SMS scanner from bCode–that authenticates the text message and provides the reward.
bCode Plane Scanner
You can learn more about the specifics of the marketing program from Harrah’s at mediamarketerdaily.com and about the bCode redemption kiosks at bCode.com.
Here’s why I think it’s N.I.F.T.Y.
Novel: Harrah’s mobile approach is novel in that it isn’t using the channel to push a marketing message or special at a target but simply rewarding its most loyal members. One of the examples used to describe the program, was an initiative to get rid of unsold seats for a show. When excess seats are available, a text message is sent to Total Rewards customers. The offers are based on location (meaning the customer is currently staying in the vicinity of the resort and time, therefore the customer is reached when and where it is relevant-when the member is at a casino property. The participant is already fully engaged in the brand experience (visiting a Harrah’s property) so, by adding a mobile Harrah’s is able to add a “real-time” reward dimension to their existing rewards platform.
Intelligent: What makes the mobile CRM program novel is also what makes it intelligent–not forcing the customer to open themselves up to a barrage of marketing messages, but instead preventing unused inventory from going to waste by giving something of value to its most important customers. Second, because the effort is happening in a sort of controlled environment, there’s immediate gratification–signing up, receiving the offer and redemption all happen within the same environment–the casino property. Most marketers utilizing mobile are at a significant disadvantage not knowing when the customer is in the right place and time to push an offer. Harrah’s structured its effort to utilize mobile while the member is at (or within a short distance) to the property, which also plays into the Targeted aspects of N.I.F.T.Y.
Multi-Faceted: Because the mobile campaign is an extension of the Total Rewards program, there are myriad of ways a customer can interact with the program and track their point balance, see and book offers. Because the program is so well positioned and clearly occupies a distinct purpose to the overall CRM initiative and because the program is so easy to participate in and redeem, I anticipate solid participation levels (Yes).
Are PhotoStamps an example of N.I.F.T.Y product marketing?
My wife and I discovered PhotoStamps for the first time this past Christmas season. PhotoStamps was launched in 2005 in 3 test markets and slowly added additional test markets. Despite that the product has been out on the market a few years, we were oblivious to it. I suppose we weren’t a prime target for the product until becoming proud parents this past summer. It’s amazing how quickly you decide things are just a touch better with a picture of your little bambino on them.
And while babies do not come with instruction manuals, they do seem to come with a membership to some type of warehouse club. It was while we were dashing through CostCo this past December, trying to navigate an endless maze of products packaged as if on steroids, that we happened across PhotoStamps. Instead of using the typical assortment of stamps available through the US Postal service, PhotoStamps, a product offered through Stamps.com, allows customers to personalize their own postage with original photos or graphics they create. We were immediately sold on the concept.
The product packaging clearing communicated the value to us. For less than $30 we received a kit that contained 3 CDs. The customer puts the CD into their home computer and is taken to the PhotoStamps Website.
Photostamps offers customers a chance to personalize their postage
Once on the site, the customer enters the voucher code that is printed on the sleeve of the CD. From there it’s a matter of uploading your favorite photo, filling out the shipping form and allowing about 7 days for delivery. The user interface design makes uploading, editing and optimizing your photo for postage pretty straightforward. The hardest part of the whole ordering process was picking a photo that would work well as a stamp.
So, are PhotoStamps N.I.F.T.Y. marketing?
Novel: Stamps.com, Inc. was the first to market with a product that offered customers the chance to customize their postage with individual photos. The initial launch of the product occurred in May of that year in 3 test markets. In less than a year it sold approximately 138,000 sheets or about $2.8 million in stamps and was recognized by Business Week as one of the best new products of 2005 (Stamps.com 2005 10K). The following year brought the roll out in 3 additional pilot markets. Slowly additional markets were added and now they are available across the US. Over time, competitors offered an identical service, however, PhotoStamps is the market leader commanding nearly 80% market share.
Intelligent: At first blush it’s hard to deny the intelligence in offering customers the opportunity to create personalized postage. Mass customization over the past 15-20 years has given customers new opportunities to put a personal touch on otherwise mass produced products. With the advent of SnapFish.com, Google’s Picasa and ShutterFly.com I believe Stamps.com did a decent job capitalizing on the concept of the “long tail”–using the power of the Web to create economies of scale while still allowing for extremely high levels of variety and or customization. Allowing a customer to add their personal photos to postage-a place once reserved for Presidents, activists and social causes seemed like it couldn’t miss.
But the more I looked into PhotoStamps.com and their relationship with USPS, the more I began to question the product’s intelligence from a marketing perspective (Product, Promotion, Place and Price). Sure, the product aspect of the marketing mix exploits mass customization via the Web quite well, but in my book the order fulfillment (the “place” of the marketing 4 P’s) is where the value proposition falls apart for me. See the diagram to see exactly what I’m talking about.
We went from compelled to buy, to actively engaged with the product site (which theoretically can happen in an afternoon), to waiting for days for the product to be processed not to mention finallydelivered to us. In other words, what has has enabled PhotoStamps to work from a product marketing standpoint, is its Achilles heal when it comes to the logistics side of marketing. While technology has enabled the product to exist in the first place, the company reverts to pre-internet methods of delivery to fulfill the order. Wouldn’t it be ideal to print these stamps off at home? Or at least have that option?
From a product, promotional and pricing perspective PhotoStamps works– its NIFTY. But from a logistics (place, i.e. delivery) point of view it falls very short of meeting N.I.F.T.Y.
Food Perks plus Fuel Perks makes Advantage Card N.I.F.T.Y
Illustration created from Bureau of Labor Statistics pricing data
The addition of Food Perks by Giant Eagle to its well adopted Fuel Perks program (a program that offers its Advantage Card member customers cents off per gallon of gas based on grocery purchases), strikes me as an example of N.I.F.T.Y. marketing. The Pittsburg based grocery retailer rolled out Food Perks in 24 central Ohio Giant Eagle Stores to test the program. Food perks is essentially Fuel Perks in reverse. Buy your gas at Get Go, use your advantage card and receive up to 20% off your grocery bill. If successful the program will be picked up by its other stores.
In November 2008, gas prices were off $2 from where they were just 1 year earlier but food prices remained relatively unchanged–and high (see chart). Giant Eagle seemed to recognize that the value its Fuel Perks program offered to its Advantage card holders would therefore diminish and not remain the motivating factor it once had been in driving customers through the door.
Consider the following: By November 2008, prices at the pump were near what Giant Eagle customers were once getting with their Advantage card points. In other words they had been reduced so low, that Americans began thinking about other expenses that commanded large portions of their monthly budgets. It appears the marketing brass at Giant Eagle grew concerned that customers may now start thinking about how to shrink their grocery bill-something that the Giant Eagle brand hasn’t positioned itself well on in the past. Now that Advantage customers could get their gas at a BP for $1.67-would saving another $.60-.80 off per gallon at GE’s Get-Go gas stations be sufficient to maintain loyalty and drive shoppers to the stores? Or would these once loyal customers take a hiatus and begin exploring alternatives such as Meijer, Wal-mart, Costco and Sam’s-which have positioned themselves on price?
So, is the addition of Food Perks to its existing Fuel Perks program N.I.F.T.Y Marketing? I think so. Here’s why. While points programs have been around for some time and are nothing novel from that perspective, no grocer was offering points for actually purchasing gasoline-the proverbial carrot. Giant Eagle was the first to market with the Food Perks promotion (at least in Central Ohio) in late fall 2008.
Competing grocers throughout central Ohio also offer gas discounts; none has announced a food discount similar to the Giant Eagle program. The Columbus Dispatch, November 6, 2008
The Columbus Dispatch reported that Kroger had not launched a similar program, though a spokesperson for Kroger said essentially new programs were being launched all the time. So, it seems to meet the novelty requirement (at least in this market).
But it’s not just the novelty of the program that caught my attention but Giant Eagle’s intelligence in being prepared to capitalize on the pricing trend. Executives at Giant Eagle recognized that there could potentially be a shift in what motivated their customers in their purchasing decisions. I speculate that marketers within the company realized price was likely becoming less influential in gasoline purchases and had this that this promotion already scripted in the playbook, just waiting for the tipping point.
Adding food to the Fuel perks program truly makes the program multi-faceted-integrating it across all retail opportunities (Get Go Gas stations and Giant Eagle stores). Now it gives the participating customer something at every retail touch point.
The targeted nature of the promotion is also intriguing-focusing on its existing customers-those already familiar helps offset customer acquisition costs. But it’s also targeted from a timing perspective–November-a time gas prices may have bottomed out and the start of the holiday travel season (not to mention the sitting in traffic trying on trips to the mall).
Altogether I think it may be enough to maintain relevance with its core customer base and keep them motivated to say Yes!
