Category: Business

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Business direct marketing Misleadership

Delivery Confirmation Consternation

The other day my wife and daughter and I went for a walk. It had been raining on and off, and now the sun had broken through the clouds and we needed to get outside.

As we walked past one of the units in our garden apartment building, I noticed a USPS package in front of the door to Unit A.

Since I was expecting a package, I went up to check. We’ve only been living in this apartment for about a month, but in that time the Post Office had delivered Unit A’s mail to us in Unit C more than once, so I figured it was only a matter of time before the reverse happened.

The package was actually in the right place, Unit A, except for two minor details. First, Unit A was empty and had been for over a week since the tenants moved out. But more importantly, the package had a Delivery Confirmation label on it.

Now I don’t expect the U.S. Post Office to be mind readers. If someone moves without filing a Change of Address notification, I don’t expect them to peep into a window to find out that the residence is empty. (Although, in this case, since the blinds were up and the apartment was clearly vacant, it wouldn’t have been that hard to guess.)

But I do expect them to deliver on the specific features of a service someone paid extra money for. Here’s the U.S.P.S’s own definition of Delivery Confirmation, from their website:

Verify delivery with Delivery Confirmation.

Our low cost Delivery Confirmation service gives you the date, ZIP Codeâ„¢ and time your article was delivered. If delivery was attempted you will get the date and time of attempted delivery. You can easily access this information with our Track & Confirm tool.

And from their Delivery Confirmation FAQ:

The customer will be provided the following information about items mailed with Delivery Confirmation:

  • If item was delivered:  the date and time of delivery
  • If delivery was attempted but not successful:  the date and time of the attempt

By what definition is leaving a box in the rain in front of an empty apartment a successful delivery?

I assume it wasn’t an attempted delivery, because that implies that the box wouldn’t have been left there. Although, technically, I guess it was an attempted delivery after all, but probably not in the way the sender was expecting.

As a direct marketer, I’ve had my share of unpleasant surprises from the Post Office. We once did a mailing in the Phoenix, AZ area where the variety of reasons for returned mail was so astounding and inconsistent that our regional rep could only laugh and offer some potential off-the-record explanations that could get them in trouble if I repeated them here. And we all remember the bad old days when Postal Carriers were getting busted for dumping catalogs or storing commercial mail in their lockers and garages.

But for me, this was over the line. I’m not going to get into comparisons with FedEx or UPS, because if you’re like me, you’ve been confounded by their occasional screw ups too. And I’m not going to conflate this into an indictment of  government incompetence and the “public option” like some congressmen or pundits have been doing these days.

But can someone please explain to me what was going through that mail carrier’s head when he or she chose to leave that package in the rain in front of a vacant apartment in spite of the sender having paid extra to know when it was delivered, or if not successful, when delivery was attempted?

Categories
Business Media Misleadership PR and News

How to Make Scrapple Less Appetizing

Have you ever eaten Scrapple? It’s gastronomically ghoulish, made up of pig or hog offal (liver, heart, head, and anything else left over) that’s smashed into a mushy paste, sliced and then fried on a grill slathered in fat.

I know, I know, you’re wondering  what could possibly make something that good tasting that’s also good for you be any less desirable?

The answer is:  Hoovers.

I was doing research the other day on Jones Dairy Farm and banged into the Hoovers profile for the company. You can read the public profile here. In that profile, Hoovers says that

The links on this company’s Web site are of the edible variety. Jones Dairy Farm produces sausage, bacon, ham, and more…In 1981 Jones Dairy Farm acquired Ralph and Paul Adams, Inc., which markets Rape Scrapple.”

Rape Scrapple?

Now some of you may know that I’m a mostly vegetarian, except for one day a year when I gorge on Hot Pastrami at Katz’s Delicatessen in NYC for my birthday, and maybe the occasional classic hot dog from a classic hot dog stand I may come across in my travels. But before I met my wife and became a vegetarian, I’d never met an animal I wouldn’t happily eat. So my vestigial meat-eater’s senses perked up when I read “Rape Scrapple.”

I had to know what tasty extras they put into ordinary Scrapple to make it into Rape Scrapple.

Alas, the truth is that the only way to make  Rape Scrapple is through typographic error.

It turns out that Ralph and Paul Adams, Inc. make Rapa Scrapple, not Rape Scrapple, and have since 1926. In fact, according to their website, they are the largest producer of Scrapple in the world. The name Rapa comes from taking a little bit from Ralph and a little bit from Paul and mixing them together, in not too dissimilar a way from the way they make the Scrapple portion of Rapa Scrapple.

Searching on Google turns up numerous repetitions of the Hoover’s Rape Scrapple error, passed blithely along to unsuspecting searchers by Answers.com, numerous contacts on DemandBase.com, AAAA’s Smartbrief, and of course, the ever popular but highly dangerous varta.rr.nu/germany-dialing/xionghim (NOTE: Don’t check this out: it’s a reported attack site!!!)

I think it’s safe to assume Hoovers made the first typo, and it was simply picked up by other companies that reference or license the Hoover’s information, since the Hoovers free profile says:

“Produced by Hoover’s in-house editorial team, the Company Description tracks ownership transitions, company progress via mergers and acquisitions, major growth milestones, and strategic initiatives, to provide a holistic view of Jones Dairy Farm’s evolution in the marketplace.”

Clearly Rape Scrapple is just a typo. Somebody inadvertently changed an “a” to an “e.”

So what’s the big deal?

The big deal is that Hoovers is a D&B company, and their stock in trade is corporate research. Hoovers made the mistake, and then they failed to catch it, and  it got picked up and repeated across the Internet (where it will most likely stay forever) by people who have reason to trust Hoovers to get it right.

Now I’m not suggesting that some potential investor or business person doing their due diligence will choose not to invest in or do business with Jones Dairy Farm because they make Rape Scrapple.

But can someone please explain to me why, if Hoovers can’t catch a simple error like this, we should trust them to get the financials correct? Or the media spend?  Or the annual sales?

Now if you’ll excuse me, I’m off to microwave a Morningstar Farms Vegetarian Sausage Patty and pretend it’s Scrapple. It’s not the same, but then again, maybe that’s a good thing.

Categories
Business CRM Directed Advertising

Costco Direct Mail Fail

I just received my membership renewal notice from Costco, and I was astounded by their blatant failure to apply one of the most basic rules of direct marketing:  give me a reason to buy!

There were at least 3 offers to upgrade my Gold Star (or Basic) Membership to an Executive Membership for an additional $50. The most prominent of these offers was a Yes! box on the reply “portion” (their lackluster word, not one my agency would ever use) of the renewal notice.

Since Gold Star Membership only costs $50, I was intrigued to know what extras I would get for double the price.

I looked on the front of the notice. Nothing. They spent a whole panel encouraging me to sign up for exclusive online offers and shop online, but not a single word about why I should upgrade my membership — at the exact moment in our relationship when I was about to take action to renew my membership!

I looked on the back of the notice, where they directed me to find instructions for upgrading to an Executive Membership. Sure enough, there were instructions… but no list of features and benefits or any kind of explanation of Executive Membership.

I looked at the inserts. There was one for Ameriprise Auto Insurance. Nothing there about Executive Membership.

There was an insert for the TrueEarnings Card from Costco and American Express Card. And miracle of miracles, it mentioned that with the TrueEarnings Card, you can earn 1% in addition to the 2% rewards “you’re already earning” with your Costco Executive Membership. But nothing else.

Just for fun, I went to the Costco website and looked up Executive Membership. Here’s what I found:

Executive Membership is our highest level of membership. Executive Members enjoy an annual 2% Reward on most Costco purchases, as well as additional values on member services, such as lower prices on check printing, auto loans and identity protection; larger Costco Cash card amounts for mortgage, real estate and home equity transactions; an account bonus for money market and online investing accounts; free roadside assistance for vehicles covered through the auto insurance program; and extra travel benefits.

That’s not a bad offer: Cash rewards, better benefits, extra features. At 2% cash back, I can even figure out my annual purchases and see that if I spend over $2,500 a year, the upgrade more than pays for itself. And that’s not even including the value of extras and account bonuses.

It’s a good story, one that might have convinced me to upgrade my membership, if it were anywhere at all on the Renewal Notice.

Direct mail isn’t rocket science. There’s a set of time-tested basic rules, a wider set of tested-into best practices, and some basic mindsets. A good direct marketing agency (like mine, Tanen Directed Advertising) knows how to apply these time after time to generate predictable, successful results.

But it doesn’t take a direct mail expert to know that if you want to upsell someone to a product or service that costs twice as much, you’ve got to give them a reason why.

Did they just forget? Were they trying to drive me to the website or the phone to get more info because they’ve tested into it and learned that they actually upgrade more memberships that way? Or did their lettershop screw up and fail to insert the buckslip extolling the features and benefits of upgrading to Executive Membership?

Since this blog is based on the premise that if we knew the reasons behind some seemingly incomprehensible choices those choices would make more sense, can someone please explain to me why Costco thought they could get me to fork over an extra $50 without telling me why? (And Costco, if there isn’t a good reason, give me a call. My agency can really improve your membership renewal mailings.)

Categories
Branding Business Marketing Media Misleadership Social Media Value for Value

Are you my baby’s daddy? Oops… just kidding!

Have you heard the one about the beautiful blonde Danish woman named Karen who went on YouTube in search of her baby’s father, a tourist with whom she had a one night stand a year and a half ago? Turns out it was all a hoax, courtesy of the Danish government tourism bureau, VisitDenmark.

I found out about this on Mashable, perhaps the greatest blog covering all things Web 2.0 and Social Media. According to Mashable, the video got over 800,000 views on YouTube before it was taken down. If you hurry, you can still see it here on this Australian 9 News site.

More from Mashable, “…by her own admission, the woman in the video is an actress named Ditte Arnth Jorgensen and the baby is not hers. According to Danish newspaper Ekstra Bladet, it’s a hoax created by the Danish government’s tourism agency… It seems that the Danish government opted for quite a radical approach in luring tourist to the country; as they say, any publicity is good publicity.”

Now, it’s easy to get outraged by the hoax, as comments on the YouTube video proved. There were people who felt sorry for Karen, and then felt abused when they found out it was a hoax.

Setting aside the moral issue, I’d like to look at it from purely a marketing point of view.

I’m not against hoax marketing, if it’s done right and delivers a high degree of value to the people being hoaxed. Sega’s Beta-7 is a classic of the genre. FastCompany did a great post-mortem article about the campaign and Campfire, the viral agency that created Beta-7, and before that, the Blair Witch Project, reporting that:

“Beta-7” ultimately clocked some 2.2 million followers and, for $300,000 (excluding TV spots), helped Sega top sales projections by 25% in a category overwhelmingly dominated by Madden. Along the way, however, Campfire had done something else: It proved that a young, cynical, media-saturated audience just might be willing to listen to marketers as long as they showed some respect. “The virtue of their work,” says ESPN’s Daly, “is that if you’re on the side of the equation that believes [the hoax], then it’s fascinating, and if you’re on the side that gets that it’s not real, then it’s just great entertainment.”

I think the key to successful hoax marketing is best summed up by Harry Anderson, the actor/magician who played lovable con artist Harry the Hat on Cheers and Judge Harry T. Stone on Night Court. Back in the 80’s I saw his live act at Caroline’s, basically a celebration of misdirection and the con. In bit after bit, as he tricked us while blatantly telling us he was tricking us and still got away with it, he made the point that you can take a victim’s money as long as you entertain him for it.

The Danish video certainly delivered entertainment value. It was compelling and engaging. It might deliver a great ROI and boost Danish tourism. (It even had a bit of mischief of which Harry the Hat might have approved: the word “Ad” is in the background as part of an innocuous piece of art.)

But the message it delivered was that the Danish Board of Tourism is willing to dupe you into visiting their country. If they’re willing to do that, what other practices may they condone? Bait and switch hotel packages? Cab drivers who overcharge tourists for trips to the airport? “Official” currency exchanges with rip-off rates?

And how’s this for a mixed message? In the video, Karen says that it was a discussion of “hygge” — the Danish word for a warm, fuzzy, cozy, comfortable feeling of well being (according to Wikipedia) — that led to the one night stand. (Don’t you feel warm and fuzzy knowing that the Danish government is willing to lie to you to get you into bed with them?)

What kind of tourist do you think an advertising message like this will attract to Denmark? If I were a Danish woman (or the father of one) I’d be appalled at my government right about now.

In the end, just because you can use an advertising tactic doesn’t mean you should.

So can someone please explain to me why VisitDenmark chose to advertise the warm and fuzzy nature of their culture with a hoax that is exactly the opposite of the brand character they were hoping to portray?

Categories
Business Marketing Misleadership Relationship Marketing Social Media

Consumer Reports vs. consumers reporting

We had to buy a microwave oven the other day, so I did what I always do before making a purchase: I went online to Consumer Reports.org to do some research. I’m not alone: according to the Pew Internet and American Life Project, of the 79% of adult Americans who use the Internet, 81% “look for information online about a service or product (they) are thinking of buying.”

Not all of those pre-purchase researchers go to Consumer Reports, but my wife and I do, just like my parents have always done. This time, though, I was shocked by the results. (I apologize that I can’t link to the results, or that I won’t be mentioning them in this article, but CR is a subscription service, and I don’t wish to violate the terms of use.)

In their Microwave section, Consumer Reports rated various countertop microwaves from multiple manufacturers as Best Buys, and I read the rankings on all of them. Then I noticed Customer Reviews for each model — and that the Average Ratings for the top models were glaringly bad. In fact, the average reviews for all the models rated were bad. As I read the reviews, one common thread emerged:  the customers, all of whom are Consumer Reports subscribers, not only disagreed with the CR ratings and reported reliability, but were genuinely upset that CR had given them information that led to an unsatisfying, and in many cases disastrous or even explosive results. I lost track of the number of “Shame on you, Consumer Reports” type comments I read.

I read all of the reviews, desperately searching for a Microwave that had a positive result. One review mentioned that they eventually found a good microwave by reading the customer reviews on Best Buy, even though the units rated well on BestBuy were not rated well on CR.

So I went to BestBuy.com, read the reviews and found three microwaves that didn’t sound like they’d blow up or die inexplicably whether within or outside of the warranty period. Then I did what Pew says most Americans who research products online do: I went to an actual brick and mortar store to make my purchase. (One side note: while in the store, I heard a Best Buy employee interacting with a shopper. When asked about the GE models, he said something like, “I’d recommend anything we sell except for the GE’s. They’ve been having quality problems for the past few years.” Now I’m not saying that CR rated GE products highly, or even at all, or that there were customer reviews on the CR website that singled out GE for quality problems; I’m simply saying what I heard in Best Buy.)

I left the store, happy and secure in the knowledge that my choice was backed up by the real experiences of real people — a feeling that I used to get from basing my choices on reviews in Consumer Reports.

Before you dismiss online customer reviews as the exclusive domain of malcontents, consider this survey by Bazaarvoice and Keller Fay, user review and WOM experts, reported here on Search Engine Watch:  “…79 percent of reviewers write reviews to reward a company for the quality of the product or service they bought, with 87 percent of the reviews being positive in tone… 97 percent of review readers find the reviews they read to be accurate.”

Customer Reviews are one of the most utilized forms of consumer generated content. When it comes to buying cars, JD Power’s 2008 New Autoshopper.com Study reports that 70% of autmotive Internet users utilize consumer generated content when shopping for a car, with 63% using customer ratings and reviews. (You can download the study here.) Search Engine Watch blogs here that customer reviews are one of the most important sources of product information, second only to word of mouth from a friend.

And before you dismiss the value of Consumer Reports, please consider that they were honest enough to print customer reviews that not only disagreed with them, but openly questioned the validity of their ratings. Those reviews sent me in a direction that led to my satisfied product purchase.

Will I ever use Consumer Reports to research a product before purchase again? You betcha! CR is still a great resource for product and category information, and their testing facilities still provide data that can’t be gotten anywhere else.

Will I ever skip the customer reviews and just read the ratings? What do you think?

But this whole experience leaves me with one unanswered question: Can someone please explain to me why there is such a consistent, category-wide disagreement between the ratings of the professional researchers at Consumer Reports and of the consumers reporting their own experiences with the same products?

Categories
Branding Business Directed Advertising Marketing Misleadership

What color is Havana? Or Gypsy?

Good catalog copy needs to immerse its reader in an experience of a product they can’t touch. It’s a lonely voice in the wilderness, tasked with selling a product in a few words, at a distance, sometimes with the help of a picture.

Sure, if you’re selling copier paper or a toner cartridge in an office supplies catalog, you can get by with just the basics. But if you’re selling hand-stitched honeymoon hammocks made by entrepreneurial Maragucho mothers in steamy Venezuelan villages around Lake Maracaibo, or a $239.95 wooden ship model of The U.S.S. Constitution, “Old Ironsides,” or the softest pillow you’ve ever laid your weary head upon, non-descriptive copy just won’t do.

Your catalog doesn’t need to show your products in photographs, or even in color. Years before Banana Republic had brick and mortar stores, the Zeiglers’ hand-drawn, monotone illustrations on rough-hewn, un-coated digest-size stock built a direct response kingdom based on romance, adventure, intrigue and promise.

So did J. Peterman. Long before Seinfeld satirized him, his first ad was a 1/6 page black and white with a line drawing that appeared in the New Yorker back in the mid 80’s for the Cowboy Duster.

I still remember the last lines of that ad: “Although I live in horse country, I wear this coat for other reasons. Because they don’t make Duesenbergs anymore.” (See this People Magazine article from 2000 for the full story, including the name of the copywriter, Don Staley.)

The instant I read that ad I picked up the phone and ordered two coats, one for myself and one for my friend, noted funny car designer and railroad artist par excellence Tom Daniel.

I was a catalog copywriter at the time, selling wooden ship models and car collectibles at Model Expo, and I learned how to romance and sell just about anything by reading catalogs like Banana Republic and J. Peterman. (My copy for the Navy Issue Coffee Mug in the Lion’s Share catalog — “0:300 hours… the windswept, raindrenched bridge of a ship on patrol in the Pacific…” —  broke all sales expectations for what was supposed to be an impulse item throwaway on an order form.)

I get offended by bad  catalog copy. And there’s nothing worse than catalog copy that doesn’t deliver.

Why am I telling you this? Because I was just reading the black and white, line illustrated  Campmor catalog, my favorite outdoor adventure catalog, and came across the following available colors for hiking boots:  Havana, Jupiter, Gypsy and Brindle.

Now, to be sure, some color names are getting more intriguing, playful and engaging. I can figure out what color Butter is, especially when paired with Cordovan. Mint Green is easy, as is Dark Chocolate. Mud is a bit less clear – after all, wet dirt can come in a variety of hues. I’m pretty sure Limonata will look something like the liquid in those tiny Italian bottles of soda that cost way too much and never taste that good anyway.

But what about Beluga? Is it describing the whale, which is white, or the caviar, which is smoky black? Then there’s Moonstruck, Picante, London Fog, Andorra, Fossil, and Elephant (They don’t say whether they mean African, Indian or Pink. Hey, it matters!). Then there are the blues:  Pearl Blue, Turkish Blue, Brushed Metal Blue, and Goblin Blue. (I’ve played D&D for decades and never once heard of Goblin Blue.)

It’s not just one company. These colors describe boots by Columbia, Merrell, Vasque and North Face. I breathed a sigh of relief when I got to New Balance’s color palate:  Blue, Red, Brown, Black and Grey.

But my absolute favorite obfuscated colors are Havana, Jupiter, Gypsy and Brindle.

I looked at a Google Earth and for the life of me couldn’t figure out what color Havana is. (Unless they were making a sideways reference to skin color, but even then, Cuban skin color varies in the extreme from light to dark.)

I looked at a picture of Jupiter on Google. Do they mean the spot or the bands? And are they looking at the red-tinged color enhanced photos, the washed out grey ones, or what?

Gypsy — I don’t even know where to start, given that traditional Gypsy garb is very colorful and almost never monotone.

The best of all is Brindle. According to Webster’s Ninth New Collegiate Dictionary, Brindle is defined as “Having obscure dark streaks or flecks on a gray or tawny background.” Mmm, I want a pair of those to go with my Roan pants and Harlequin shirt. (What, no dog lovers out there?)

Look, I love when copywriters romance their descriptions. And I get the problem of making your product stand out from the next when they’re all colored Brown. But what’s wrong with using words that simultaneously describe and romance? Nobody was ever left wondering what color Mocha is, or whether Apricot would look better on your feet than Desert Sand.

I guess I could just go to the Campmor website and look at the pictures to find out what color these colors really are. But doesn’t that defeat the purpose of a printed mail order catalog in the first place?

So, since I’m clearly too stubborn to find out on my own, can someone please explain to me what color Havana is?

Categories
Branding Business Marketing Value for Value

Dr. Bronner’s and Thorlo: A tale of two brands

Try this experiment. Go hiking on some back country trail one day and ask every backpacker you meet what soap they have in their backpack and what socks they have on their feet. You might be surprised how many of them say Dr. Bronner’s Magic Soap and Thorlo socks.

It wouldn’t surprise me, though. That’s because I’m a big fan of both brands. But these days, only one of them makes me happy, and the other has begun to break my heart.

If you don’t know Dr. Bronner’s, here’s a great article that will do a better job than I can of telling you about one of the quirkiest brands on the planet with one of the most loyal customer bases of any product I know. Made from natural ingredients and organic oils, Dr. Bronner’s is sold in nearly every health food store in America. It’s inexpensive, it’s made by hand, and millions of bottles are sold every year with a minimal marketing budget. The company splits much of its profits with its small staff of employees, and gives away much of the rest to good causes ranging from Boys and Girls clubs here in the US to orphanages in China, schools in Mexico, and impoverished villages in Ghana.

The 61-year old company is still being run by the Bronner family, 5th generation, and still being bottled in the same anti-commercial packaging, a bottle completely covered in a cacophony of tiny words, a weird mix of philosophy and quotes from the Bible to Confucius, Chaucer to Paine, creatively adapted by the original Dr. Bronner himself.

Most importantly, the soap delivers the same customer experience it always has. It is an honest product that lives up to its brand promise.

Then there are THOR-LO socks. If you’ve never put on a pair of Thorlos then your feet don’t know what it feels like to walk on clouds. Thorlo socks feel so good and cushion your feet so well that you don’t mind paying up to $18 a pair for them. They’re made in the USA, they’ve never given me a blister, they wick away perspiration and they’ve got task specific models for virtually every type of activity you can do with your feet except swimming.

According to the company website, Thorlos are backed by 25 years of scientific research. The company has spent many millions on R&D alone. They’ve got 59 patents. They trace their roots back to 1953, when they made their first socks in 1953 for the military. The company even supports our troops by letting you buy discounted anti-microbial military versions and send them to the troops with no shipping or handling charges.

I have a couple of pairs of Thorlo socks that are at least 20 years old. I’ve worn them hiking at the top of the Swiss Alps and the bottom of the Grand Canyon.

Unfortunately, those 20-year old Thorlos are in better condition than the wimpy 2-year old pairs that are wearing out from just being worn to work.

If you are a long-time Thorlo fan like me, then you know that the quality of Thorlo socks has plummeted faster than the waters of Yosemite Creek plunging over the edge of Yosemite falls. They wear out in the heel and the toe so quickly that if you just stare at them long enough, you may actually see the fibers fall out. Okay, that’s clearly an exaggeration, but it’ s no exaggeration to say that the newer the pair, the shorter the life expectancy.

Both Dr. Bronner’s and THOR-LO have loyal fan bases, from celebrities and athletes (Martha Stewart uses Dr. Bronner’s and Martina Navritalova wears Thorlos) to regular folks like me. You won’t find either brand in Wal-Mart or Target, but you will find them in places like Whole Foods and Campmor, where shoppers demand value and store employees use and swear by the products they sell.

But while one brand has continued to deliver on its powerful, if quirky, brand promise, the other seems to be committed to destroying its reputation for longevity and durability, two of the brand attributes it’s most valued for?

So can somebody please explain to me why nobody at Thorlo seems to have noticed, or if they have, why they don’t seem to care?

UPDATE: 9/8/09

Somebody at Thorlo has noticed, thanks to a nudge from reader Oftenatangent, which got a response from Jim Throneburg Owner/Inventor/COB/CEO, and they do seem to care. See the comments below from Oftenatangent, Jim Throneburg’s response, and one by David Varsik, Director of R&D at Thorlo. Not only did David address my concerns, and admit that the current source for Fibers may not be everything desired in terms of longevity, but he directed me to Susan Graham in Customer Service to get more detailed feedback. I have done so, and after a frustrating experience sending them a comment, Susan got back to me. We had a pleasant, in-depth conversation, and I am sending them some socks for further investigation. I’ll keep you posted.

Categories
Branding Business CRM Integrated Marketing Marketing Marketing Partnerships Media PR and News Relationship Marketing Value for Value

How to save the NY Times?

News outlets make news. But to make money, they wrap that news in advertising.

Anybody else see a disconnect?

As we all know, advertising revenues are down as advertisers shift their dollars to more attractive media channels. And not every newspaper, least of all the NY Times, will be saved by the influx in erotic advertising that is resulting from Craig’s List’s ban described in this article on Adotas.

So I have a suggestion. Newspapers should climb out onto the leading edge of the micro-payments industry in this country and charge us for the news we so desperately need the same way they used to pay their reporters:  by the word.

I wonder what would happen if the NY Times wrote an open letter to all its readers in all formats (print, online, Facebook, Twitter, etc.) explaining that the old advertising model no longer supports the costs of news gathering, and asking us to opt-in to a micro-payments structure that has users pay for content by the word or article.

After all, we pay for our music by the song or album at iTunes and Amazon. Users pay for their apps, too, at the iPhone store.

Maybe our news will cost us 100th of a penny per word — I don’t pretend to know — but there’s a number that would be worth paying to get accurate, valuable journalism, fed into our brains by whatever method we choose.

Faced with the alternative — disappearing like The Rocky Mountain News, turning into an online blog like The Tucson Citizen, or going Chapter 11 like the Chicago Tribune — would the stakeholders of the Times keep the “Old Gray Lady” afloat?

Advertisers could play along too. They could buy prepaid content credits that they would give to their target consumers  — as premiums, promotions, free-downloads, usage credits, rewards points, membership discounts or rewards. When a reader used credits, if they were sponsored, they would see their sponsor’s message.

From a reader’s perspective, it would look like this: Whenever I logged onto the Times website (or followed a Twitter link (A Twink?) etc.) I’d get a screen with that day’s advertisers’ offers. I’d pick a sponsor, they’d pay, I’d get my news, and they’d get my eyeballs. Maybe by the article, maybe by the day, maybe by bandwidth, whatever. (Hey, if Bank of America brought me my NY Times content for free, I’d gladly sit through their pre-rolls.)

These prepaid blocks would represent reliable chunks of income that could be sold through a digital auction model or on an upfront basis, or a combination of both (digital auction for the any inventory left over after the up front sales). A major advertiser could work out a promotion with Amazon that every large format Kindle would come with a sponsored year-long subscription to the Times.

Forwards to a friend could represent extra eyeballs for the advertiser, or extra charges, depending on the media buy.

It is frequently said that people don’t value what they get for free. While that may not always be true, it is true that the Internet has changed people’s cost/value perceptions as it pertains to news.

I am a news junkie. I stopped reading printed newspapers long ago, mostly because they’re outdated the minute they’re printed. And I’m ingesting more of my news online or on my phone rather than be continuously disappointed by cable and network news (which I am watching less frequently). Online, I can get better news faster. And much of that news comes from the NY Times. But I usually only notice the publisher after I’ve read the article, if at all. I frequently don’t even notice whose article it is I’m reading on Google News. Or Digg. Or a tweet.

So, in my desperate search for news, would I be willing to pay for that NY Times article? I would if, like E-ZPass, it was effortless to do. Would I sometimes choose an article from the competition if it were cheaper? Depends on the organization. (After all, I have always had the option to buy a Post or Daily News rather than a Times, and yet rarely did so.) More importantly, would I sit through ads for the sponsored version if it were free? I would.

Format-wise, news gathering and dissemination is wonderfully adaptable to large-format Kindles, Twitter, Facebook, SMS, and more.

But what will happen to the dead trees, and all the personnel associated with their destruction, rebirth, and delivery as newsprint?

Since we’re attempting to reinsert value into the equation, let’s look at it in those terms. Would people find enough value in the printed version to pay more for it? Might the printed version of the Times became such a status symbol that some people would happily pay more to make a conspicuously consumptive statement?

Where is the tipping point? Could the Times sustain a print edition at $10 per copy? Remember, under this model they’re already paying for news-gathering and editing with micro-payments. The printed version just needs to carry its own weight. And if it can’t, then I’m sorry for all those workers along the non-value chain, but it’s time for retraining.

So what do you think? Am I crazy, or could this work? And if so, can someone please explain to me why the NY Times isn’t already doing it?

Categories
Branding Business CRM Marketing Value for Value

What can iPhone apps teach us about price, perceived value and customer satisfaction?

Hi there, everybody. My name is Jeffrey Lee Simons, and I don’t have an iPhone. You see, my fingers are the wrong temperature or something and touch screens only work for me about 20% of the time. You’ve probably seen me at an ATM, stabbing my useless digits at the screen and cursing a blue streak until I remember to use the keypads.

(What uber-phone do I use? LG Voyager… it’s got a touch screen, but flip it open and you’ve got a full keypad.)

So I’ve missed out on the whole iPhone App feeding frenzy. Although I’m not sure exactly what I’ve been missing. After all, the average iPhone app only gets used about 19.9 times in its lifetime according to this article on marketingcharts.com.  “The study also found that 46% of users play their games/apps five times or more, while 10.2% play 25 times or more.”

I just read a detailed discussion about the economics of iPhone game apps in Gamasutra, the gaming business enewsletter, written by iPhone-appmaker Ian Bogost.  Game apps are among the most popular of all iPhone apps. (12 of the top 25 apps in Feb 2009 were games according to a recent Comscore report.)

Bogost tells a woeful tale of plunging sales (down 8% in April alone) and a race to the bottom for both pricing ($0.99 seems to be the target)and quality. The average net profit on an iPhone app is $1771, and for a game app that figure is closer to $900. That’s average. The difference between the hits and the not-hits is so wide that the median may be much lower, though Bogost admits this is hard to determine.

$900 or less. (Apple doesn’t even distribute royalties until you hit $250 in each region, so for many game developers, there’s no profit at all.)

Now while I haven’t ever produced an Apple iPhone Game App, I have produced a variety of games in my life, from advergames that took a minimum amount of time to historical simulations that took a tremendous amount of time. But at no time would I have looked at $900 or less profit as a sustainable business model.

Hoping and praying to be the breakout game among the multitudes is fun, to be sure, but makes for a harsh, ridiculously competitive and ultimately indefensible business strategy. (Although it sounds a bit like blogging. Or publishing. Or the music industry. Or…)

But the most insightful aspect of Bogost’s article concerned perceived value and customer satisfaction. People who are willing to shrug off a bad cup of $0.99 coffee hold a $0.99 game app to much higher standards. One is clearly disposable, and for $0.99 who really cares enough to complain. The other is not, and is far more likely to garner complaints (especially now that Apple lets people “comment after deleting” an app).

All this really comes down to value.

How much value can an app developer deliver for $999 or less? How much value does a customer deserve for $0.99 these days? Does using a product 19 times make it disposable or not? After all, you probably use a razor blade that many times before throwing it away.

And the answers, it seems, comes from where they always do. The customer. If a customer feels a product isn’t worth the money, they buy the lower priced versions. More people buy Toyotas than Rolls Royces, although to be sure, there is a market for both.

It looks like, in Apple-land, $0.99 is the acceptable price for everything from games to songs. Regardless of their cost to produce, you’re expected to make it up in volume.

But can someone please explain to me how consumers can ever expect to get value out of a system that refuses to return value to the producers?

Categories
Business Directed Advertising Marketing Media Misleadership PR and News

What does global warming have in common with junk mail?

To a direct marketer, testing is vital. But it’s important to know exactly what you’re testing. If you’re not careful, what you think your test is telling you may not be what it’s saying at all.

It’s not just in direct marketing and business that testing matters, as you’ll see in a minute.

Evan Jones, my good friend and ex-Partner-in-Crime at our old game company, QED Games, Inc., is beginning to make a name for himself in an entirely new field, Climate Change. He’s about to be the “et al” in two scientific papers and was a key researcher in a current report to Congress.

Evan is part of a group led by meteorologist Anthony Watts (who writes a very popular blog, Watts Up With That, aTechnorati Top 5K blog with a ranking of 2083!) that is focused on a major aspect of Global Warming:  not whether it’s happening, but whether we know whether it is or not.

Evan and his colleagues have been examining the over 1200 U.S Historical Climate Network (USHCN) surface stations in the US that measure temperature. And what they’ve found is surprising. Nearly 89% of these stations are located in situations that render their data suspect or flawed according to the government’s own standards. Most of these stations were once fine, but encroaching urbanization has frequently turned an isolated station into one surrounded by heat sources. Add to this the fact that temperatures are recorded by citizen volunteers and are roughly 30% incomplete.

There’s more, of course. You can read about it here in this article from WBZ TV in Boston.  Better yet, WBZ did an interview with Evan while he was up in Boston assessing some of the surface stations there. You can watch the report here. And be sure to check out Anthony’s blog for even more examples of questionable data.

In the end it all adds up to one thing: the data doesn’t add up. It is, for the most part, not telling us what we think it’s telling us. For instance, when a station formerly situated in the middle of a field registers a temperature increase over the last decade but that station is now situated in a blacktop parking lot with an air conditioning exhaust unit nearby, is the planet getting warmer, or just the station’s readings?

Whether you’re building an online research survey, setting up a 16-cell direct mail testing matrix, optimizing a paid search campaign or collecting temperature data to prove or disprove global warming, you need to check your inputs, check your confidence in the amount and clarity of the data, and structure the test to actually answer the questions you’re asking.

It’s critical that your testing framework not be flawed or all of your results could be useless. It’s equally important that you analyze the testing results accurately. And if you go ahead and act on bad information, whether it’s a new product launch or an attempt to save the planet, you could be doomed to failure before you start.

And speaking of global warming and saving the planet, can someone please explain to me how anyone can be so certain of the truth when the tests themselves are flawed?