JULY 22, 2009

Last year I saw a cool story on how Nintendo was using a unique approach in marketing their gaming consoles to women. They held “Nintendo parties” where groups of women got to play games, drink some wine, and munch on some hors d’oeuvres. I thought it was a cool idea, targeting groups of women in a low key social setting has been done to sell everything from tupperware, to make-up, to even sex toys.

Recently my friend LiLu over at Live It, Love It got to throw such a party. She got an e-mail from Brand About Town and next thing you know she and 25 of her friends were off to a “Girlfriend’s Guide to Gaming” bash. They got to try out the new Nintendo DSi and ended up receiving one to take home and enjoy.

What makes this such a great move for Brand About Town and Nintendo is natural buzz that followed afterwards. It only took a couple of days before all of our friends were talking about it. My blogger pal Liebchen attended the party and couldn’t put the DSi down all night:

“Before I knew it, it was almost 9pm and I was still bent over the little device, trying to get to the next level of Dr. Mario. God help me when I finally get more games on this thing; someone might have to stage an intervention. For instance, if I were to get Mario Kart…I used to think that video games were something that you grew out of. I’ve never been so happy to be wrong.”

This is the kind of word of mouth you want surrounding your product.

What makes these events so valuable is the chance to connect with the consumer in a casual, low-key setting and allow them to test drive your product. Liebchen didn’t fully realize what the Nintendo DSi was all about until she picked one up, “I still liked playing other people’s games, but didn’t figure I needed one of my own but the DSi…it was just fun the games were fun; the camera; all of the capabilities I didn’t really know how much it could do.”

A great way for Nintendo to reach out to those outside the typical video gamer demographic, in fact I could easily see this model transferring over for different kinds of products. The key is to keep it casual, make it fun, and make it about the consumer.

[Comments(5) »] [TrackBack »]

JULY 13, 2009

Via PC World comes the release of a new study by The Leading Question, a UK media strategy company, showing that illegal file-sharing among British teens has decreased by close to 33%. 26% of teenagers admitted to illegal file-sharing in the last month, down from 42% in December 2007.  Not only that, for the first time in the survey’s history, the data show that purchased music downloads outpacing illegal file-sharing.

The study’s authors suggest that the decrease in illegal activity has come partially due to the increasing popularity of legal, paid options, but also the pervasiveness of music streaming sites like Spotify, Pandora and YouTube.  Streaming sites have seen enormous growth, not only because of the risks of illegal file-sharing, but also because of the increasing ubiquity of wireless data services - with devices like the iPhone, streaming is possible from anywhere, making downloaded, local copies of music more or less obsolete. Throw in the computing industry’s recent trend toward netbook computers, with their tiny hard drives, and you have a whole lot of factors creating a greater market in online streaming, making the greater prominence of these services not too surprising.

I’m encouraged by the study as a music lover. But I’d offer some words of caution to record execs who think people are finally turning away from stealing their intellectual property: the terms you’re offering to sites like Pandora are more or less killing the streaming business model. Pandora’s announcement last week that it will begin to charge heavy users of the service has, anecdotally, driven quite a few people away - even if they can afford the very small surcharge that Pandora will ask of those who listen more than 40 hours a month. I definitely listen more than 40 hours a month and can afford it, but why should I pay, when there are countless alternatives?

Pandora power users have an enormous level of interaction with the service. We generally sit and rate tracks as they play, to improve the content of our personal stations. I even have a keyboard shortcut on my laptop for doing just that,  so I don’t have to switch windows to rate songs. This should give marketers an incredibly rich data environment with which to discern our likes and dislikes. You’d think that, to simplify things a bit, if Pandora’s algorithms notice a huge number of 24 year-old guys giving good ratings to both Weezer and Mariah Carey songs, that that might be an incredibly valuable piece of data for a record executive, who could then find or create an ironic nerd-rock band with a mezzo soprano lead singer - even using the Pandora service to introduce the band directly into our headphones.

If this occurs to me, as someone well outside the music business, it has to have occurred to the pros in New York, LA and Nashville. I wonder what’s keeping it from happening. But one thing’s for sure - the costs imposed on streaming sites by the music industry will ultimately end in those sites becoming less prominent, sending people right back into piracy.

As an aside, I discovered my new favorite song, Metro by the Vincent Black Shadow, on thesixtyone, a new site that makes music streaming into a kind of video game. I don’t know how to explain it better than that, so you should probably just check it out.

(image is of the basement of Plan 9 Records in Richmond, VA - my favorite record store growing up)

[No Comments »] [TrackBack »]

MAY 20, 2009

Call me old-fashioned, but I still prefer to go shopping at an actual store – not online.  I would much rather see/touch/examine what I’m buying before I have it shipped (and I’ve had too many bad experiences with returns).  Yet, I still research products online before heading to the store, to make sure it’s even worth leaving the house for.  Recently, I found window curtains I loved on a store website and was so excited about them until I noticed a bad review (it still amazes me what people actually take the time to review).  And, now, I’m struggling to decide if I should listen to the person I’ve never met or buy the curtains! That got me thinking about how much people allow consumer review sites to influence their decisions.  I read just the other day that Google has now tweaked its searches to pull more from sites like Yelp and LinkedIn.  According to Business Insider, “The idea is to improve people searches and searches for product reviews. Results from reviews sites will now include snippets from actual user-reviews.” 

Consumers have always asked friends and family about products, but, now, frequently rely on perfect strangers, as well.  Yelp, a user review website, boasts that it has over 10.6 million people access its website each month.  In a USA Today article, a chiropractor in LA said he gets 80% of his business from online reviews!  Morning News Beat reported on a shopper survey that stated:“Seven out of ten survey respondents said that they check online product reviews before actually purchasing things, and 62 percent said that they spend at least-a half-hour online each week specifically reading consumer product reviews.” 

Before working at TMG, I used to work for a company similar to Yelp, and working there made it easy to see how important good reviews are to companies.  Customer review sites are forcing businesses to listen to consumers.  Companies that frequent these sites will know what is being said about their products, how to fix any problems, and validate their customer’s concerns.  It’s just another way companies can show that they’re listening. 

Now, would you buy the curtains, or heed the reviewer’s advice?

[Comment(1) »] [TrackBack »]

MAY 19, 2009

So much is changing as a result of this downturn in the economy.  For one, living space seems to be getting smaller.   People are renting out rooms in their homes and grown children are moving back in with their parents to cut costs, the square footage of new houses is being reduced, and more businesses are offering telecommuting to their employees so they can cut back on commercial leases.  Even my office is  consolidating to take advantage of unused space and become more efficient.

In a sense, we are migrating towards each other.  As a recent 5 Forces summary points out, migration is not only about moving away, but can also mean coming together.  Since most of us anticipate that the changes being brought about by the current economic crisis will last a very long time, we could be seeing a permanent transformation in the way we utilize our space and a resulting change in how we interact with each other as well. 

In an era where texting, cell phones, YouTube, blogs, and Facebook have allowed us to communicate more closely, while still keeping our distance, actually shrinking our home and work spaces and forcing greater togetherness could bring back the days when social interaction was defined by water cooler chats and multi-generational dinner table discussions. 

We may come to realize that for all of the advantages of modern communication, nothing compares to a face-to-face conversation.  In fact, it wouldn’t surprise me if we see a build-up of a group mentality, a “we’re all in this together” collective thinking, that displaces the “me” focus of past generations. 

It may be a leap to believe that more crowded spacing will develop into deeper bonds between people, but we all want good things to come from downsizing and sacrificing, and if we are lucky, this may be one of them.

[Comment(1) »] [TrackBack »]

FEBRUARY 17, 2009

Can too much transparency be a bad thing?

Political debate this week here in Washington centered on an unprecedented effort to stimulate the flailing economy by passing approximately $800 billion worth of tax cuts and new government spending. Any government attempt to spend that much money is rightfully - and necessarily - going to be a long, complicated, drawn-out affair, and the stimulus debate proved no exception.

But the availability of new tools to track the provisions of the bill made this time different. Sites like Stimulus Watch allow those interested to investigate exactly how stimulus money will be spent on projects like new police cruisers for Youngstown, OH and downtown quiet zones in San Diego.

I’m usually reflexively in support of anything that remotely resembles a transparent database of government actions, and I was certainly in support not only of sites like Stimulus Watch, but also the White House’s own transparency efforts on the bill. But after watching how the opposition used that transparency to muddy the political waters to its own advantage, I’m a little more indecisive.

Consider GOP Chairman Michael Steele. Steele made a point of ridiculing some of the more esoteric-sounding provisions in the bill, like the one that calls for the removal of “fish passage barriers” from the nation’s streams and rivers. The only problem? Academic studies seem to indicate that the passage barriers are both an environmental problem and an economic problem for fishermen, and that the removal of the barriers would create jobs, the expressed purpose of the stimulus in the first place.

Without the necessary context to understand the provisions of the bill, many Americans likely heard Steele’s objections and agreed with him. After all, what are “fish passage barriers” anyway, and how does their removal help American families?  Not realizing that the provision could indeed be useful, not only intrinsically but also for the purpose of creating jobs, political opponents of the president used his own administration’s transparency efforts against him. Steele proved how easy it is to sort through a database like Stimulus Watch, cherry pick a few projects that sound easy to make fun of, and start stereotyping the largest government undertaking in the past five years as full of nonsensical projects and “pork”.

What’s the lesson for businesses and organizations undertaking their own transparency projects? Transparency alone is not enough to adequately represent your intentions to the public. Instead, it can be just an opening for your critics to take you out of context unless context is provided. Listening to questions and objections and responding to them in the spirit of good faith is a necessary part of any transparency initiative, and without those, transparency might be more of a liability than an asset.

[Comments(2) »] [TrackBack »]

FEBRUARY 12, 2009

Here at TMG we’re always looking for examples of companies that we think are doing a good job of listening to their consumers. These companies anticipate the ever-changing marketplace and, inevitably, set themselves apart as leaders in their industries. Gayle blogged about Zappos a few weeks ago and mentioned reasons that she believed they were a great company. While Zappos has had to lay off employees, it is still profitable and its cash-flow is positive - something that is extremely hard to achieve right now.

Here are a few other companies/industries that I think are standing strong:

• Nike: Its online sales are increasing, and it reported a 9% rise in quarterly net profit last December and going strong. Perhaps consumers are making more purchases online because they don’t want to spend money on gas to drive to stores. Also, consumers trust the Nike brand, are familiar with the products, and appreciate the ease of use online shopping provides.
• Avon: This cosmetic company posted a 4th-quarter profit of over $230 million from about $128 million just a year ago. Because consumers are trying to save money where we can, splurging on smaller items seems reasonable to us right now. It’s the little things.
• McDonald’s: McDonald has announced expansion plans and have recently added blended coffee drinks to its menus in certain markets, which puts it in direct competition with Starbucks, a company that isn’t doing so well as of late. Consumers want luxury, so if a company can give that to them and make it accessible, convenient, and affordable, they’ll do just fine.
• Alcohol Companies: Alcohol purchases have risen about 2% nationwide and, historically, consumption climbs in tough economic times. Some states, like New Hampshire, have seen sales alcohol rise 3.5% overall. Nielsen found that over 80% of consumers polled last spring said they were spending about the same or more than they usually spend. Guess there are just some things that consumers are not willing to give up.
• Twinkies: Yep, Twinkies emerged from bankruptcy last week. It may decide to lower prices as a result of the economy right now, but Interstate Bakery (the company responsible for making delicious Twinkies) CEO Craig Jung says, “at the end of the day, consumers want to indulge.” Twinkies are an inexpensive treat that remind many consumers of their childhood.
• Wal-Mart: Sales have been steady and the retail giant has been ahead of its competition so far. In fact, January 2009 store sales were up more than 2%. While the company is planning on cutting workers to reduce costs, there are also plans to expand in the near-future. Maybe it’s the new commercials that focus on Wal-Mart’s healthy offerings at low prices that has set it apart? Or perhaps it’s simply consumers wanting to stretch their dollars as far as they can.
• Dollar General: Okay, who knew that this company is the largest U.S. discount retailer (by number of stores)?Dollar General is expanding and plans to open approximately 450 new stores in 2009. Again, who can resist buying necessities that only cost a dollar? Because unemployment rates are increasing and people are struggling to pay their bills, it is taking advantage of less expensive purchasing options.
• Lottery Sales: Nationwide, daily and instant lottery revenues have been increasing steadily since 2004. Apparently, hopes of striking it rich instantaneously increase when consumers face economic hardships. This one is obvious– we want an easy fix for our money problems. Who doesn’t want to win a few million right now?

While it’s true that there are many companies suffering right now (and many facing bankruptcy), it’s important to pay attention to the ones that are standing tall so that we can learn from them.

[Comments(4) »] [TrackBack »]

FEBRUARY 11, 2009

After writing a lot about the Inauguration over the past few months I’d be happy to move on, some unhappy ticket holders for this historic event are not quite ready…

While my adventure to the Inauguration  went off without a hitch, the thousands of others with the purple tickets weren’t so lucky. After the delay at a purple section gate led to a mysterious closure, this particular group of people was forced to wait in line in the closed-off, 3rd street tunnel that leads to the U.S. Capitol, and, unfortunately, were not allowed to attend the ceremony. 

In the not so distant past, these thousands of ticketholders would have had nowhere to vent their frustrations apart from friends and families, their congressperson, a letter to the editor in their local paper, or local radio host. However, all that has changed – these victims of the “Purple Tunnel of Doom” took their frustrations to the Internet.

A Facebook group called “Survivors of the Purple Tunnel of Doom“ was created to allow members to share their Inauguration horror stories, organize protests, and demand apologies.  This is yet another clear example of the consumerism movement that we at TMG find so fascinating.  

What’s also striking about this story is the way in which the government chose to handle it. Senator Dianne Feinstein has issued an apology and promises an investigation, while Senate Sergeant-at-Arms Terry Gainer has reached out to the Facebook group by creating his own account for the sole purpose of addressing individual concerns. Gainer has also agreed to meet with Marisa McNee and David Meyer, two of the three creators of the group.

I, for one, am very impressed by Gainer’s initiative to reach out to those victims of the debacle and practice his Deep Listening skills and validate their concerns. Whether Gainer truly cares about the group or is just being a good politician, one thing is for sure: he gets it.  Clearly, he realizes that there has been a tremendous power shift; that consumers are more in control than they have ever been before, and that social media has changed the game and forced leaders to pay more attention. 

We think companies can learn a lesson from Sergeant-at-Arms Gainer: listen to your consumers, validate their suggestions, and communicate with them as often as possible.  If you do, you’ll be well on your way to gaining their loyalty and stepping into the role of leadership.  

[Comments(2) »] [TrackBack »]

FEBRUARY 10, 2009

Amid the tumult around the traditional news industry  - as seen by reports of weeklies going to monthly-only publications and some news organizations simply going bankrupt - it’s refreshing to read about one news publication making a move that we at TMG believe is crucial for any organization: Deep Listening.

Instead of closing up shop and calling it a day, Newsweek is taking a risk and changing its identity to meet the wants and expectations of its consumers.  According to a piece in The New York Times:

The venerable newsweekly’s ingrained role of obligatory coverage of the week’s big events will be abandoned once and for all.  Executives say, ‘If we don’t have something original to say, we won’t.’  Editorially, they’re headed toward not just analysis and commentary, but an opinionated, prescriptive or offbeat take on events.

Not only is Newsweek changing some of its content from objective to biased, it will also be making adjustments to layout and style, including an “emphasis on photography… and a cleaner, less cluttered layout that has more open space and fewer pages that seem an uninterrupted sea of words.”

Hmm…more targeted, personal, and colorful content, with a focus on graphic content and less dense text? Sounds almost like a published paper blog post to me.  An interesting shift indeed, considering the recent creation of The Printed Blog, a paper publication self-described as “an independent media outlet that aggregates user-generated content from the Internet and publishes it twice daily via print. The result is a revolutionary newspaper that reads and functions like a web feed -yet can still be enjoyed on the train or spread across the breakfast table, for an uninterrupted, pleasurably tactile experience.”

Although Newsweek is taking on a challenge during uncertain times, we agree with Roberta Garfinkle, senior vice president and director for print strategy at TargetCast TCM, who said, “I give anybody credit in this difficult environment for saying, ‘What we’re doing doesn’t work anymore and we have to change our model.’”

We applaud Newsweek for truly listening to its consumers, taking a risk, and being willing to change its behavior in order to reach a similarly changing audience. We can only hope more and more organizations will follow suit.

[No Comments »] [TrackBack »]

FEBRUARY 5, 2009

The New York Times recently reported, “[m]ost retailers suffered double-digit declines in January” as it was one of the worst economic months in a decade. This has me wondering: Would transparency regarding credit on the part of the retailers help our economy?

Anyone who is a regular reader of our blog knows that transparency in the way one conducts business is an important value at TMG – one that we believe, combined with deep listening,  can lead to great success.  After reading “Consumer Safety for Consumer Credit,” one of Harvard Business Review’s Breakthrough Ideas for 2009, I tend to agree with the authors on this point:

[t]he notion that the ordinary customer is somehow on equal footing with a $1 trillion megabank is absurd. The terms for credit cards, mortgages, and car loans are bloated, eye-straining treatises that even experienced lawyers have difficulty parsing.

I personally know the above statement to be true because as a former Navy JAG attorney, many of my clients – 18-year old sailors – brought me their car loans.  The authors call for treating financial products like any other consumer product by engaging a regulatory body similar to the Consumer Product Safety Commission for oversight. Doing so would “make financial products more transparent, get rid of tricks and traps, and give consumers the tools to make prudent financial decisions.” If changes aren’t made, these complicated economic products “destabilize families and the economy alike.”

The authors argue that applying safety regulations to financial products would “reduc[e] loan defaults and foreclosure rates” as well as end the “boom-and-bust financial cycle that has proved so devastating.” In some circles, these ideas are starting to gain traction. Sally at NLC’s Savvy Consumer Blog applauds the idea because it jumpstarts an important conversation:

Consumers should feel they can enter credit markets confident that the products they purchase meet minimum safety standards. A financial products safety commission could collect data about which financial products are least understood, what kinds of disclosures are most effective, and which products are most likely to result in consumer default. Consumers deserve far stronger protections from predatory loans and gotcha late fees and finance charges - and this commission, or a bill that addresses these same issues, might just be the answer.

(Also check posts from David Bau and Jakob Rutqvist on their respective blogs.)

I tend to believe that knowledge is power.  Poet Maya Angelou once said, “When you knew better, you did better.”  What do you think: if consumers knew the terms of the deal because businesses were absolutely transparent in their terms, would it change the way business is done?

[Comments(5) »] [TrackBack »]

FEBRUARY 3, 2009

I have written previously that when I am saturated with information and can’t decide what to do,  I turn to others for input.  In fact, I have recently discovered that this is typical psychological behavior.  A recent book titled Yes! 50 Scientifically Proven Ways to Be Persuasive describes how the power of persuasion can impact consumer response in very significant way.

The author of the book, Robert Cialdini, gives two examples of how small changes in a business approach can have a big impact on consumer response:

First, an infomercial writer changed the wording at the end of the program from “Operators are waiting, please call now” to “If operators are busy, please call again”. This caused a huge increase in the number of people who purchased the product, because they thought others were buying it too. It’s amazing how changing just a few words can make such a difference.

Second, Cialdini also did an experiment aimed at encouraging greater participation in a hotel’s towel reuse program. In addition to the usual signage, the hotel informed guests that the majority of people who stay with them actually do recycle during their visit. As a result, guests in those rooms were 26 percent more likely to participate. Ironically, when asked, the majority of people they surveyed were adamant in saying they weren’t influenced by other people’s behavior.

The book’s conclusion: be mindful of the true power of “social proof” and how, when people are undecided about a course of action, they tend to look outside themselves to others to guide their decisions. This concept is reiterated in a recent blog post by Gayle that talked about the online shoe company Zappos. She pointed out that Zappos uses most of the money it would spend on paid advertising instead to enhance the customer experience, like by providing free shipping. Its belief is that word-of-mouth marketing by customers who feel well treated by Zappos has more influence in attracting new buyers than traditional advertising.

Peer-to-peer communication, either directly or subliminally, is the new persuader. This is evident through the technology of the new age - YouTube, texting, blogging, Twitter, and social networking.  It’s surprising to me that some companies are slow to catch on, for clearly, those hesitating to adapt are missing out on a big opportunity to reach out to their customer base in a more effective way.

[Comment(1) »] [TrackBack »]