Technology

“Click to Skip this Blog Post” – why disruptive “in-experience” advertising hurts more than helps

We’ve all been there…

“Nobody counts the number of ads you run; they just remember the impression you make”
– William Bernbach, founder, DDB Advertising Agency (for you Mad Men fans, Sterling Cooper’s main competitor)

If this is true, Mr. Bernbach, then why is it that every 3rd video I click on YouTube forces me to watch an advertisement? Why is it that, as I scroll through my Instagram feed, I see a video for a VISA card I have no intention of acquiring? How about when I click a link on espn.com, instead of the article, I get an autoplay advertisement for the latest iteration of “Paranormal Activity”?

The answer is unfortunate for those of us who appreciate high-impact, creative marketing:
In-experience advertising in it’s current state is broken. In fact, it is counterintuitive. Advertisers have failed us – instead of coming up with creative ways to capture our attention and inspire action, they have chosen to force us to consume their messaging, at the expense of our time and more importantly, our trust.

Ultimately, the goal of any advertiser is to inspire action – their ads should motivate consumers to read about, talk about, and ideally buy, their product or service. Advertisers continue to stretch their imagination when trying to structure the timing and location of their messaging for the highest possible impact. As an example, this is precisely why SuperBowl ads come at a premium. Presumably, consumers are tuning in with the intention of being sold to. It’s why the “ad inserts” in your local paper contain 3x the content during “Black Friday” week. It’s a no brainer – consumers are in their most impressionable state of mind during these times, so naturally, advertisers are there to pounce. Consumers say “sell to me during these times” and advertisers respond in kind.

However, in recent years, we have changed the way we consume information, which has resulted in a very challenging position for advertisers. The pace of this change is accelerating at an amazing rate. Consumers are spending less time in front of their TV’s, and more time on their iPads. Less time reading Home & Garden, and more time reading their customized Home & Garden page on Flipboard. Content is instantly accessible from a variety of sources, and those sources are growing every day, making it increasingly challenging for companies to ensure their advertising dollars are being maximized.

So what’s a Marketing team to do? As with any other form of industry disruption…the answer is to panic. To bombard us in our most “vulnerable” state. The in-experience advertisement is a modern day version of the 7PM “do you want to sign up for the Washington Times?” phone call that comes right as you sit down to dinner with your family.  We’re better than this, folks.

If you wish to increase the effectiveness of your marketing/advertising spend, the first thing you should do is determine how and when you will reach your target audience during a time they are most receptive to your messaging. Take a tip from one of the best “experience” companies in the world – we were brainstorming this week around this very topic, and the theme for our direction centers around one statement:

“Our outreach should be immersive – not intrusive”

The next time you think about disrupting a user or customers’ experience to force them to listen to your pitch, ask yourself one question. “If I was the user, and all I wanted to do was access this content and <company x> was blocking me from doing so instantly…would I be more or less likely to utilize their service or buy their product?”

Consumers trust us to not waste their time or money – who wants to create or enhance their relationship with a brand that devalues either one of those assets regularly? The least lucrative of all demographics – no one.

Categories: Customer Experience, Leadership, Technology | Leave a comment

The iPhone 5 is the latest example of “The Apple Effect” – how do they do it?!?

New product launches are like walking on thin ice. Same goes for service providers and retailers entering new markets. You can never truly predict how the market will react. You can have the best marketing campaign in the world supported by all the statistics money can buy, and still come up short. You could gather a lineup of Obama, Michael Phelps, Justin Bieber, RG3 (!), and Oprah jumping up and down on trampolines with big signs saying “greatest product in the world”, and still people may not be so quick to engage.

Enter the iPhone 5. Apple continues to be a marquee brand that other organizations aspire to be like. Regardless of industry, people look at what Apple has accomplished in terms of Customer Loyalty and constantly ask – how can we generate that same loyalty and enthusiasm within our industry?

Check out this video – can you imagine someone walking into a Volkswagen dealership and having the same reaction to a “new car”…that it turns out they already own?

Jimmy Kimmel: What Happens when we “Introduce” the iPhone 5 to the public – with an iPhone 4s?

While Apple detractors can use this as proof that Apple products aren’t all that great and it’s all about the “mystique” associated with the product, savvy marketers watch a video like this, their jaw sinks, head shaking, asking “wow how do they do it?”

Apple has a different approach than most organizations, one focused on what should be, not what can be. Jobs’ team is famous for running through boundaries when others are frozen by them. Let’s break it down by talking about the Apple experience in the context of Who, How, and Why.

Who?

Let’s focus on their 2 most high impact organizations – Design/Development and Marketing.

Apple does not develop their products based on what people WANT. They develop them based on what people don’t know they want…yet. Here is a great quote from Jobs that summarizes:

“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new”

– Steve Jobs

People are inspired by innovation & change…and ultimately, that’s what any strategic marketer wants to do to grow their customer base and take market share – motivate their promoters to keep buying and promoting while activating the need to change amongst their competitors’ customers.

As great as their design team is, Marketingis where Apple really shines – some may say it’s easy when you’ve got great products, but the main thing Apple does better than everyone else? They believe in the Customer EXPERIENCE, not Customer SERVICE. What makes the people in that video so inclined to trust their emotions over their actual physical senses, when they are holding this iPhone 5 imposter? Apple has set the expectation that their brand is associated with innovation, improvement, and agility…regardless of if it actually is.

How? Apple does a better job of communicating with the consumer than nearly anyone else, in any industry. Whether it’s communicating with you via an interactive digital experience (App Store updates, iOS updates, iTunes, etc), or via an in-person experience (retail stores, call center, etc), they focus on 2 things – adding value, and measuring your experience while doing so. Just like a puppy who jumps when they hear the treat jar lid spring open, consumers jump when they are alerted to a pending Apple Experience…and they want in.

Why? Confidence. Consumers are confident that every Apple experience will meet their expectations, or exceed them. Apple builds confidence amongst consumers by constantly delivering on their promises. When they don’t – they want to hear about it. Heck, when they do, they want to hear about it. I have never seen an organization so dedicated to their engagements with consumers – if Apple could ask you every day “give me one word that describes Apple” (shout-out to BrandTags) and track that sentiment, taking into account all of the external variables (seasons/weather, market share, spend, product releases, etc) to measure the reasoning behind customers’ feedback they would. Apple has a level of respect for consumer sentiment that is unmatched in any industry. This allows them to align their delivery to their customers’ expectations, and ultimately drive consumer confidence and loyalty through the roof.

So to recap – how does Apple create a culture of loyalty so strong that anticipation, emotion, and promotion takes precedence over features and functions? Thank goodness for simplicity and flowcharts.

Disruption–>Innovation–>Commitment–>Engagement–>Experience–>Confidence–>Loyalty–>Revenue–>Profitability–>Shareholder Value–>SUCCESS

Simply put by Jobs himself:

“Our DNA is as a consumer company – for that individual customer who’s voting thumbs up or thumbs down. That’s who we think about. And we think that our job is to take responsibility for the complete user experience. And if it’s not up to par, it’s our fault, plain and simply”

Nice job Apple. Like my man Aziz Ansari said, “that’s how it’s done son!”

Categories: Customer Experience, Leadership, Technology | Tags: , , , , , , | Leave a comment

“Don’t talk back!”

Remember when you used to hear that as a child…all…the…time. Well I did. That and “because I said so, I am the parent, you are the child, you need to do what I say!”

For our entire formally educated lives, we are rewarded for falling in line, following the rules….not being insubordinate. If you couldn’t already tell, I am a BIG fan of insubordination. Not the kind of obstinate, purposeless, stubbornly defiant insubordination that creates conflict. The productive kind. The kind that fires you up and motivates you to change something that is unnecessarily broken. If something can be improved…why shouldn’t it? Because someone says something is just the way it is…well why?

I am reading a terrific book entitled Tribal Leadership, by Dave Logan and pals, which essentially breaks down how tribes, or groups of like minded people, determine the fabric of a company’s culture. Logan goes into great detail on how these tribes are created and how we as members of tribes in various stages, can inspire others to become leaders and help fundamentally improve or progress the culture of an organization.

One of the most interesting paragraphs in the book takes a look at how, throughout our lives, we are taught to stay in a box. School bus is here, get on. Bell rings, class starts. Bell rings, class is out. Your 10page essay on the cultural impact of “the Joy Luck Club” is due Thursday. 1000 words or less. Arial font only, and staple in the upper right hand corner please. WHY? Because I said so.

For many people, this doesn’t change when you enter the workforce. “that’s the way it’s always been done, it’s just the process ” – have you heard that one before?

Well Mr. Lumbergh, frankly, your process sucks as much as your giant honeycomb tie. OK, you’re right, let’s try that with a little less emotion. Yesterday’s interview with Brian Wong, CEO of Kiip, offered a much more accurate and appropriate definition of this apparently destructive “insubordination” we have been taught not only to avoid, but to prevent others from embracing:

“I have very little regard for regulations that make no sense. The fundamental trait of an entrepreneur is questioning the status quo”

(credit Bay Area News Group)

Wong is one of the youngest people to ever win venture backing when he was just 19 years old. Imagine how many times this guy must have been told he was nuts…at 19 he was asking for millions of other peoples’ dollars. This is a guy who graduated college at 18. His whole existence is the epitome of going against the grain.

Much to the chagrin of my own parents, I have often said that if we are blessed enough to have children one day, the best day of my life will be the first day I lay down the boundaries and my child looks up at me and asks me simply “why?”  I know you experienced parents out there are literally choking on your blueberry scones laughing so hard. Is it so crazy?

The chase for improvement is what fuels me. Every day I look around, as a consumer, as a son, as a husband, as a friend….how can we improve?

The answer exists somewhere out there, and if you don’t talk back….well how is the world going to embrace your great idea?

Categories: Leadership, Life, Technology | 1 Comment

Should Olympic athletes have the right to traditional sponsorships?

Ari Jacoby, CEO of Solve Media, recently wrote about a topic that I am surprised, in this day and age of media and sponsorships, hasn’t been reversed yet. Why can’t Olympic athletes benefit from the same sponsorship opportunities as everyone else in the world?

First off, if you don’t know Solve Media, check their site out – they offer an extremely innovative way to improve the accuracy and effectiveness of your advertising dollar, while also simplifying a common web annoyance – the randomly generated “type what you (can’t) see” Captcha”. You gotta LOVE companies built on innovation that provide a service that benefits both businesses and consumers.

So before we talk about the Olympics specifically, let’s take a look at the precedent that has already been set worldwide with regards to sponsoring athletes and teams:

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(NBA to begin allowing jersey advertisements in 2013)

So what do the above pictures have in common?

They are all athletes.

They are all (relatively speaking) highly paid athletes.

They are all highly paid athletes wearing the logo of a corporation.

So we have established that a precedent has been set, worldwide, that pre-game, in-game, and post-game sponsorship is acceptable to viewers. The public is perfectly OK with seeing corporate logos during competition.

Furthermore, the above players are free to promote any sponsor they want, regardless of the teams’ sponsorship decisions. In-game and post-game press-conference action aside, they can promote that sponsor when they want, how they want. Want to tweet “Coke Zero helped me win!” after the NBA finals? Go right ahead.

Now let’s take that concept and compare it to current Olympic policies. According to Olympic rules in London, no athlete is allowed to promote any non-official-sponsor for (roughly) the duration of the Olympics – July 18th through August 15th. Want to upload a picture of you eating a McDonalds’ salad? A-OK, they are an official sponsor. Panera? No way, they may be YOUR sponsor, but they don’t buy into the Olympics.

Sure, not a big deal for some Olympians like Michael Phelps who have a huge bankroll from post-Olympic sponsorship revenue. However the majority of these athletes are just regular people who are immensely talented, devoting a good portion of their lives to a sport they love. After the Olympics, they see a bit of local fame, then it’s back to reality. An Olympian typically makes just shy of nothing. Travel expenses are funded by private donors, and there are bonuses IF you take home a medal.

The Olympics are all about capable people seizing an opportunity, and the committee’s financial interests should not limit the extent of that opportunity. Companies should be able to invest in athletes and athletes should be able to, in turn, promote their chosen sponsor in the same appropriate way every other athlete can.

Admittedly, I have a soft spot for companies like Solve who aim to improve something so simple, yet so broken. Captchas that contain strange words and distorted letters are annoying, period, and their solution eliminates that annoyance for consumers. My admiration for the company aside, Solve Media did a terrific thing by sponsoring two world-class athletes, despite the mandatory limitations that exist in their ability to actually promote the brand. They are no dummies either – this will certainly result in some positive press. For example, Forbes and others have picked up the story. Simply good business all around.

Now let’s hope Rio thinks big in 2016 by letting Olympians’ share in the same sponsorship benefits enjoyed by their peers all over the globe.

Categories: Sports, Technology | Tags: , | Leave a comment

What’s the iPhone worth to you? For mobile carriers…a lot.

If you’re a bit of a tech geek like me, you are probably checking in on the Apple v Samsung drama from time to time. Some interesting accusations and facts have come out, but one in particular caught my eye this morning.

What does Apple really charge carriers for the iPhone?

Thanks to documents released Friday, we have a pretty good idea.

For those of us who grew up during the peak of the Nokia/Sony Ericsson/Motorola days, remember when mobile carriers introduced the “free phone” concept? There was a period where quality service was expected, and carriers differentiated with their devices and associated marketing campaigns. That’s how AT&T scored the iPhone exclusively…at the time, even though Apple was a bit of an anomaly, as a whole the carriers called the shots. It was normal for carriers and device manufacturers to cozy up and work together exclusively.

Wow, how times have changed in just a few short years. Device manufacturers now rule the yard, as it’s their product that interacts directly with the customer…the service is a commodity, it’s the device that creates the relationship and maintains loyalty (quick plug for the power of the consumer!!!) Mobile plan costs have skyrocketed 2x and 3x from past pricing. The carriers claim its the advent of the smartphone and the need to invest in the bleeding edge technology that these devices require, and consumers expect.

Today, you sign up for new service via your preferred carrier, be it VZW, AT&T, Sprint, etc. you typically pay $199 for your shiny new iPhone. If you’re used to FREE, well, $199 can be tough to swallow. After all, those evil carriers are charging us $100-$200 a month, can’t they hook us up with a freebie device? Well, yes, if you’re willing to use the modern day version of the Startac. If you want that iPhone, pony up!

However, while the iPhone has literally changed the face of multiple industries, impacting our lives in many ways…who is footing the bill? Ultimately it’s us, but taking a look at their sales figures, there is more to it than that.

How much do you think VZW, for example pays for that iPhone?

Try $590.

Yes, Mobile carriers take, on average, a nearly $400 hit every single time a customer signs up for their service and chooses Apple’s one button wonder. Furthermore, if you look at costs over time, they are increasing steadily.

2007 (the iPhone is introduced) – $428 average revenue per device
2010 – $563 average revenue per device
2012 – $621 average revenue per device

These numbers raise a few observations and of course many questions. Before we draw conclusions, we need to point out some variables here:
– Firstly, there is no way to distinguish between the people who paid the $200 intro price, versus the $650 non-upgrade price either via Apple directly, or a carrier. So while the price per device numbers are direct from Apple, we can’t tell for sure how many devices were sold directly to consumers without a plan which would impact the overall profit loss carriers have experienced. Go conservative and cut it in half if you want, it’s still startling.
– Second, Apple still sells older iPhones at a discount. So in reality, if we are talking strictly their latest 4S model, the average cost per unit is actually HIGHER than what is above.
– Finally, Apple’s sales claims are quite contradictory. In 2011 Jobs claimed Apple had sold its 100 millionth iPhone. In 2012 analyst estimates were around 250m units sold worldwide. Per recent court filings, that number is approaching 100m iPhones sold…what number is correct? We will use the 100m number to be conservative.

OK, on to the commentary and analysis:

– Kudos to Apple for turning an industry upside down and completely changing the way their
partners think…and doing it by delivering what customers want, before we know we want it. This has ushered in a whole new era of customer focused companies who create the path forward versus simply copying others. Last night a friend of mine mentioned the new Sony Ericsson phone that “looks like a Droid 1.” If you aren’t innovating and driving consumer demand, you are the punchline. Companies have been dong this successfully for years, but Apple deserves their credit for recent contributions.

– Assuming 100m iPhones sold, at an average ~$400 loss…over the last 5 years mobile carriers have experienced nearly $40 BILLION in losses via iPhone pricing. That is one hell of a commitment to this technology and this device.

– For comparison purposes, in 2012 Samsung received $316 per device (Galaxy S2). That results in a much more cost effective proposition for carriers. Another testament to Apple that carriers actively market more profitable devices, yet consumers still choose Apple more than half the time versus dozens of other options.

– I would love to see someone do an analysis/chart of the major carriers’ R&D investment over this same time period. Has it truly risen parallel to the cost of service plans? Furthermore, how has profit risen/fallen over that same time period?

– Clearly the carriers feel this whole situation, at a minimum, is egregiously acceptable, or they wouldn’t be scrambling to get in on the action. However the trend here just isn’t sustainable long term. Something has to give. Plan prices obviously are increasing (and now we see a big reason why), one has to imagine Apple will continue increasing their prices as their own R&D costs increase. They are facing more legitimate competition than ever. I’m no Tim Cook, but I would venture to guess their strategy is to do what they have always done, but do it better, and faster. Well, for you automotive gearheads out there, you know the old adage – “cheap, reliable, fast – pick two”? Yep. There is also that little commitment they have to shareholders to grow profitability quarter over quarter.

My guess? Price hikes are coming…with regards to your plans…and your device. Carriers have to draw the line somewhere. If the iPhone 5 is released and Apple expects carriers to take a $500+ hit again and again…what will they do? My guess is charge the consumer more…maybe a $249 price point for the device, and some iPhone feature-specific pricing, if things get really hairy.

After all, someone has to pay for it 🙂

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The rise and fall of internet browsers – what is the trend consumer-driven organizations should take note of?

The goal of every customer-focused organization should center around not just keeping your customers happy, but effectively developing them into promoters of your brand. It’s great if I enjoy Philz Coffee, but if I don’t speak up when someone says “hey where do you want to go to grab a coffee?” then the company is missing something in their efforts to develop me into a true promoter.

As I was reading an article this morning using Chrome, I started to think about the correlation between the rise and fall of web browsers, and what those companies could do, and are doing, in recognition of the above fact – making customers “happy” doesn’t cut it anymore. Happiness = the meeting of expectations for most. Promotion = exceeding expectations. If your customers are just “happy” that doesn’t mean they are loyal. There is so much technology out there that allows us to capture true customer sentiment, there is no reason an organization should sit back and allow their competitors to drive loyalty, while their internal efforts ultimately drive complacency.

Let’s take a quick walk down Web Browser Way to reflect…

Netscape

Remember this? If you’re a Millennial like me, of course  you do! Netscape was cool because it introduced us to the concept of a “portal” to this “world wide web” – a place where anything goes and information is accessible 24/7. Netscape was embraced as “THE” portal for years…mainly because there weren’t any viable options. Microsoft swooped in and said “we can deliver more” – which at the time meant mega-functionality and complexity. Which is what we wanted, interestingly enough. Our demand at the time was “ok we get step 1, we’re on the internet – now give us more of it!” Netscape couldn’t deliver…enter Microsoft.

MS Internet Explorer

We all know this product well. For years it was the standard, and we endured long load times, crashes, and other technical challenges…all because ultimately IE delivered way more functionality. MS did a terrific job of incorporating plug-ins and embedded video and whatever the latest buzz was….but often at the expense of usability and stability. So while consumers were demanding for functionality just a few years prior, and MS delivered…what was the latest demand? “Just make it work!” So while MS was focusing on building more functionality that no one wanted, Mozilla came along…

Mozilla Firefox

This is where things got really interesting. YES IE is the standard, it’s on 90%+ of all computers, everyone uses it and everyone knows it. The folks over at Mozilla knew there was a better way and decided to go against all odds (and a surging MS at the time), introducing Firefox. This was so very disruptive on so many levels at the time, it’s such a great story. The very nature of Firefox as an open source tool meant that the company could quickly deliver and maintain a product based upon what people wanted. This agility was a stark contrast to IE, and users began defecting in droves. Firefox also opened the door for Opera, Safari, and other browsers to get away from being platform or niche-specific browsers and welcomed them to the mainstream. Firefox (and its peers) offered stability, and started a trend that Google ultimately would pick up and run with….SIMPLICITY!

Google Chrome

Google banked on their corporate message of simplicity to bring out, in their eyes, the ultimate browser…one that is functional, stable, and just works. Your experience may vary, but the point here is to emphasize their intent…which was directly driven by what was going on in the marketplace at the time (think about all the automation we have been introduced to in the last 5 years aimed at simplifying our lives)…what CONSUMERS wanted was something that is simple and just works as advertised. Chrome is not without its flaws, but Google delivered and consumers (like myself) are responding favorably.

So to summarize, the demand went from ACCESS -> FUNCTIONALITY -> STABILITY -> SIMPLICITY.  The common trend here is right before every disruptive technology was introduced…something fundamental to the customer experience was broken and someone knew it. Someone, somewhere realized that IE was unstable and folks simply shouldn’t have to deal with crashes. So they developed a better way. Anyone who has been a part of this process will tell you – what’s the best way to find out what’s working and what’s not? TALK TO YOUR CUSTOMERS! Leverage every tool you have – online reviews, customer feedback/surveys, social media….use it all. Not just to enter data into a spreadsheet and present in your next weekly team meeting (which is a blog topic for another day)…do more with it. Make it actionable by embedding the analysis and response to this data into your organizations’ daily routine.

We as consumers are  very fickle (especially Millennials)…if you are not constantly improving your service (and letting us know about it) we will find another outlet…like we all did with web browsers. Innovation isn’t just about revenue, it’s about inspiring and motivating your customers to believe in your brand…moving them from happy customers to loyal customers to active promoters.

Just ask me – I use Chrome. I literally have 18 windows open right now on a 3yr old Dell Lattitude laptop…and it’s humming right along – you should try it 🙂

Categories: Customer Experience, Technology | 1 Comment

Square Payments coming to Starbucks – EMBRACE DISRUPTION!

Square goes mainstream (updated link)

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We all enjoy disruptive technology as consumers. Developments like Square’s payment system are a perfect example of people realizing “there is a better way to do this” and actually doing something about it. Hey, small business owners, remember the days of those “payment system” companies robbing you right in front of your eyes?

“Yes sir, that will be $2500 for the credit card machine, payable in 100 installments of $25 a month…and we will also be taking 3% of every transaction for VISA/MC and 3.5% for AMEX, thank you”

I was talking to the owner of a local business the other day who told me that he gets a surcharge on every transaction he swipes that is under $10. Wow. It’s (ironically) a small coffee shop – how many transactions do you think are subject to this arbitrary fee?

The “experience” didn’t stop with hefty fees. Good luck getting a live person on the phone to assist with an inoperable machine or a billing issue. Your brand and your revenue stream rests on your ability to take payments via card, and if your machine is down, your world stops….yet you couldn’t hold anyone accountable to meet your expectations as a customer.

Credit cards are such a staple of our everyday purchasing routine, we as consumers expect businesses to accept any and all forms of payment. When they don’t, you kind of look at them funny like “is this a legit operation?” Small businesses need to accept credit cards, so unfortunately, they are taken advantage of in the process. Excuse me for being sentimental, but shouldn’t we be encouraging people to start local businesses, not discouraging them with unreasonable fees on top of unreasonable fees?

Enter Square – eliminate the hidden fees…charge a flat fee for any type of card. Leasing a credit card machine? History. Eliminate the proprietary hardware and associated challenges by making a simple device that works via technology you already own and use every day. Create a vast online knowledgebase where customers can get support immediately. Truly act as a service provider, taking pride in the service you are delivering. As with most technology today, Square is taking the details out of the equation and making it simple – pay us a flat fee, and we will provide the service you require….no fluff.

The deal with Starbucks (SBUX) is a terrific win not just for them and for Square, but for small businesses, consumers, and fans of similar companies who challenge conventional thinking and fix what’s broken. Howard Schultz (Chairman & CEO of SBUX) sitting on Square’s board makes so much sense as it strengthens their credibility in the eyes of other retailers, who certainly are taking notice.

Way to go Square, and way to go SBUX for believing in and embracing disruptive technology.

What’s next? Replacing cash registers with iPads? Equipping everyone at your big box retailer with their own scanner and payment system via iPhone, so you can “check out” anywhere in the store? It’s all coming…and as consumers, our transactions are about to get much easier.

Categories: Customer Experience, Technology | Tags: | 22 Comments

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