Archive for the ‘Integrated Marketing’ Category

It’s easy to imagine how a company moves to variable pricing. They follow the money. They test into it. They realize that the buying behavior of shoppers varies from day to day and hour to hour. Their analytics tells them that someone using Safari has higher average purchases than someone using Firefox. They know that visitors that come to their website after visiting certain websites are more or less price sensitive than if they come from other referring sites. And sometimes, they’ve even learned that it pays to increase prices based on repeat visits. In other words, on some sites, the best price you’ll ever get is the first one they show you. Shop around, come back, and you’ll pay more. (Sort of like a car salesman, who knows that if you come back, he’s got you, and he doesn’t have to lower his price to make the sale.)

Then a marketing manager or someone in the sales department makes the case that they can improve profits by harnessing all of this data into a variable pricing strategy. It’s hard to argue with the data.

So the company invests in a pricing engine or builds its own pricing algorithms and institutes variable pricing. And guess what? Profits go up. Sales go up because shoppers are getting deals created with their buying habits in mind. After all, it is an accepted rule of Internet marketing (and direct marketing before it) that the more relevant and personalized the offer, the better the response. And milking every extra dollar out of a sale (or, in some cases, many extra dollars) increases profits.

A slam dunk, right?

Anybody who remembers the relevance of that phrase knows where I’m going with this.

Pricing may seem like a commodity, but in fact, it is part of brand identity. As is the relationship a buyer has with a brand. And just to be clear, a retailer is a brand, too. Sure, Target sells brands, but it is also a brand. People shop at Target as opposed to Wal-Mart for many of the same reasons that they choose Land’s End over Old Navy.

If you found out that the person next to you in line paid less for the same sweater at Land’s End than you did, how satisfied with Land’s End would you be?

Some shoppers will be so upset they’ll never come back. And others will find out how to get the lower price, and then make sure they do that from now on.

Let’s call the first shopper a Brand Shopper. And the second a Price Shopper.

Price Shoppers are smart. They find coupon sites. They find discount codes. They follow blogs and Twitter feeds that promise to find and deliver the best prices. Some of them use bots or apps to notify them of the best prices on specific retailers and shopping aggregators.

And in many cases, price shoppers know that brand distinction isn’t as important as it used to be. As Seth Godin famously said, most products these days are “good enough.” In other words, the upcharge for a top brand isn’t always worth it, and price shoppers often know that.

If you are courting price shoppers, then you’re always in a pricing war where the shoppers are as well-armed as you are… sometimes better. And the competition can almost always undercut you… unless you’re the rock bottom price, in which case, you’re not varying your prices anyway. You’re Wal-Mart.

With variable pricing, price shoppers learn when to buy, and when not to buy. The profits you initially expected from this major segment wither away.

Now let’s look at Brand Shoppers, the core of your business. Your house list, so to speak. They love you. They swear by you. They only wear/drive/eat you. But it turns out, brand is about more than just quality, or value. Brand is emotional. Brand lets people willingly buy inferior products out of love, or a sense of belonging, or even habit. In other words, brand is like a relationship, the human kind.

And nobody likes to feel cheated on, or duped, or lied to, or made a fool of. When they do, they dump you like a bag of bread that’s gone moldy.

So what happens to your brand loyalists when they find out that you’re playing fast and loose with pricing and they get no benefit for being a loyal customer? Even worse, what happens when they find out that you’ll give a better discount to someone who’s never bought from you before, rather than they, who sing your praises, evangelize your brand to all who will listen, and buy whatever new product you throw at them?

So yeah, variable pricing looks great from inside the bubble. But can someone please explain to me the value of a brand in a world where we’re made to feel like chumps if we don’t outsource our shopping decisions to mindless shopping bots that always find us the best prices, regardless of source, regardless of emotion, regardless of loyalty?

Like I said. Slam dunk.

I just saw “The Social Network” and I loved it. Aaron Sorkin proved once again that he is the best dialogue writer in Hollywood (followed closely by Quentin Tarantino and Diablo Cody, IMHO). His words, and director David Fincher’s skill, kept the movie flowing and riveting, never once sounding anything but utterly real and believable.

And Jesse Eisenberg made Mark Zuckerberg into an everyman for our generation.

In the first scene, Zuckerberg tells his girlfriend that there are more geniuses in China than there are people in the US. We begin to see Zuckerberg as an everyman: even though he’s a genius, and knows it, that doesn’t guarantee entry into the members-only clubs where the cool people hang out.

“The Social Network” is about us, all of us, trying to fit in, looking for a place to belong, and finding our voice: collectively and individually. It’s a messy process, and there will be sins of commission and omission along the way.

I heard a reviewer on whatever cable channel was on at the time saying that this movie isn’t just the movie of a decade, it’s the movie of the generation, and that got me thinking.

We live in a time that future generations will look back on as revolutionary. And it’s not revolutionary because men like Bill Gates and Mark Zuckerberg built products and companies that changed everything: it’s revolutionary because society was ready to embrace the new world their creations helped birth.

That new world is the world of virtually simultaneous, planet-wide shared awareness, perception and discussion.

Think about it. How do you get your information now? How do you experience the world? And most importantly, how do you share it, and what’s the lag time between discovery and dissemination?

I used to be a newspaper junkie. Then a Google News Junkie. Now, I have a News list on Twitter that gets the latest updates from the WSJ, The NY Times, Huffington Post, CNN, Mashable, Techcrunch and more. (The WSJ alone has dozens of Twitter feeds.) Now I can finally scan the news quickly and easily and know what’s going on everywhere instantly.

A few days ago, the shooting at the University of Texas was first reported on Twitter by students on campus. And as the situation developed, the local police were sending out their “official updates” to the news networks via Twitter.

The implications for Marketing and Advertising are sweeping. Because in the new era, ideas don’t spread because you throw money into spreading them. An idea spreads now because the wired-together world likes it and tells itself about it. The internet is littered with the corpses of bad ideas drenched in the blood of wasted marketing dollars.

Yes, getting heard among the rising background noise is hard. And at its most basic level, if you don’t know how to use the tools of social media, or don’t have the time, then marketers and advertisers can help.

But make no mistake: the ultimate success or failure of an idea, a product or a service is now dependent upon the quality of the idea, the product or the service. If people like it, they tell others. If they don’t, they don’t. And the way people find out about things these days is through a connected, always-on social network that exists online and off, via text and email and word of mouth across mobile phones and smart phones and laptops and computers, via Facebook and Twitter and Google.

It didn’t used to be that way, and that is sad for the good ideas that died stillborn and unheard, for lack of money or wherewithal. But I say, good riddance to the old world, and welcome to the new.

And yet, there are still those who resist the tide and cling to the ways they’ve always known, who look at multiple channels and only see fragmentation, who look at millions of people talking about what’s important to them and only perceive self-indulgent and distracting noise.

Can someone please explain to me how anyone can look at this time as anything less than a revolution, as the dawn of an era where a world of billions of individuals finally came together to know itself as a whole community greater than the sum of its parts?

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I can’t remember the last time I got a personal letter. Even my birthday and anniversary cards are likely to come via email these days. But my daughter got a postcard yesterday from her soon-to-be First Grade teacher telling her how excited she was to meet her when school starts in a few days. Not only was it totally unexpected, but the look on my daughter’s face has already sent the teacher’s Brand Perception through the roof in our family.

My daughter is not alone in responding favorably to Direct Mail. According to the August, 2010 Consumer Channel Preference Study by Epsilon Targeting, 18-34 year-olds overwhelmingly prefer to receive information via postal mail compared to any other medium across a wide variety of categories, with one exception (Travel). (You can download the full study here. And thanks to the TM Tipline newsletter for tipping me off to the new study.)

As you can see from the following sample of products and services, the preference for direct mail over email is staggering. In no case is it less than 2 to 1, and in one case, direct mail beats email by nearly 6 to 1.

Product/Service Mail Email
Sensitive Health 43% 9%
Prescription 41% 11%
General Health 37% 11%
Personal Care 37% 10%
Food Product 36% 11%
Cleaning Product 34% 9%
Financial Services 40% 7%
Insurance 38% 8%
Travel 28% 13%

There’s more in the survey. For instance, when it comes to household products, Newspaper Inserts are in second place, preferred 2 to 3 times more than email. For health related products, information from friends, family and doctors is more desirable than email, although still not as desirable as direct mail. (Maybe that’s because direct mail can be more private and less confrontational than asking your best friend, lover or doctor about a medical need?)

The survey also assessed trust, and found, as expected, that for health care, medical professionals are most trusted. For everything else, friends and family are at the top. The next most trusted source is newspapers, followed by company websites. Social Media like Facebook, YouTube, and Twitter are in the basement at 7-8%.

Source Trust
Doctor/Nurse 80%
Friends or Family 57%
Newspaper 26%
Company Websites 22%
Television 20%
Direct Mail Brochures or Flyers 18%
Radio 16%
Email 12%
Other Online Sites 11%
Cell Phone 9%
Blogs 8%
Facebook 8%
Online Forums 8%
YouTube 7%
Twitter 7%
Other Social Media 7%

So what are we to derive from this survey? Well, aside from the premise that more people prefer and trust dead tree communications (direct mail, newspapers) over electronic ones, I think the big lesson here is that you can’t put all of your communications in one basket. At its best, direct mail only reached a 43% preference. That means that 57% of potential customers want to be communicated with through a different medium.

As the Director of Integrated Marketing at Tanen Directed Advertising, a channel-neutral direct marketing agency, this is good news to me. It supports what I’ve always believed: combined arms tactics beat single tactic strategies every time.

It also means you can never stop testing. What works today may not work tomorrow. Just a few years ago, email was outperforming direct mail. Adults 18-34 may prefer direct mail now, but what will that cohort prefer when it’s made up of today’s tweens and teens? Will people who’ve never even read a newspaper trust one?

Media channels may rise and fall in popularity and effectiveness, but I think it’s safe to say that in the rapidly changing world of advertising, there are no silver bullets, no perfect answers. A multi-channel strategy gives you the best chance of success. More importantly, communications across each channel often reinforce each other, creating synergies you can’t get with a single communication.

Even some of the most successful “social media” campaigns in recent memory have been multi-channel. As Scott Monty, Ford’s head of social media has said,  “If your customers are there, you need to be there too… You need to listen… see how they behave and act similarly.” He was talking about social media, but I say his insight applies to all forms of marketing and advertising.

People live multi-channel lives. They want some information one way, and other information a different way, sometimes at the same time. So can someone please explain to me why there are still some advertisers who operate with a one-channel-fits-all mindset?

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“Just the facts, M’am.”

Pepsi, who has advertised in every Super Bowl for 23 years, is shifting its entire Super Bowl budget into social media via its charitable crowdsourcing community called The Pepsi Refresh Project.

According to a UMass Dartmouth Study released this month, 80% of the Inc 500 use social networking as a marketing tool. And 89% of them say it was successful, “using hits, comments, leads or sales as primary indicators of success.”

The Mobile Internet Report by Morgan Stanley, released in December, says,

“Regarding the pace of change, we believe more users will likely connect to the Internet via mobile devices than desktop PCs within five years.”

Okay, that wasn’t a fact. That was a prediction. But it’s a conviction backed up by a 424 page research report.

But this is: as of today, the Red Cross had raised $22 million for Haiti relief thru text donations alone. And I don’t know about you, but I first found out about the effort on Twitter.

I could keep listing facts that prove the value of social media, but I’m lazy. Instead, I’m going to post this great video, Socialnomics, by Erik Qualman, that I found on Josef Katz’s Marketing Maestro blog that addresses the ROI of social media.

Pepsi. Ford. Gary Vinochuk. Zappos. Lenovo. Burger King. Blend Tec. Dell. Intuit. Volkswagen. Barak Obama. The Red Cross.

They all get it.

Can someone please explain to me why there are still people who don’t?

Lands’ End’s Big Warm Up: The best viral video I’ve ever missed

I saw a video the other day that was so good it brought tears to my eyes, which was, after all, its intention. It was so good that it powered Lands’ End customers to bring 33,267 “gently used coats” to Lands’ End shops at Sears to donate to the homeless. (If you haven’t seen it, you can see it here.)

It’s a good video. It’s powerful. It makes you feel all warm and fuzzy and makes you want to do something good for someone.

All of which is going to make me look even more curmudgeonly than normal, because I am not here to praise Lands’ End.

I think they screwed up.

I didn’t see the video until  Dec. 1, which was one day too late to actually join the Big Warm Up and donate a coat.

And that really bothered me. Because I have a gently used coat I would have gladly donated. And because I was actually in a mall with a Sears the last weekend of the promotion. And because I love good cause related marketing. I love it so much I actually co-wrote a book about it.

I wondered, how could I have missed out on this? I’m a good Lands’ End customer. I have 3-4 pairs of their pants and half a dozen of their shirts. More than that, I’m a fan. I blogged about them back in July and how they helped build direct response retail with their “Guaranteed. Period.” (R) guaranty.

So I went to my inbox (luckily, I try and keep my inbox at a lean, mean 300-400 emails) and sure enough, there it was. And it had company. Lots of company. The Lands’ End email barrage had started on Nov. 9th, and by the time it let up on November 20th I’d gotten 16 emails in 12 days.

But only 3 of those 16 emails were about the Big Warm Up. The rest were about clothes… and canvas.

The first email in the campaign, on Nov. 11, was actually the second Lands’ End email I received that day. It had the subject line, “Save 25% on a new coat & warm a heart!” Being that I’m not currently in the market for a coat, I didn’t notice that this was actually the announcement of a cause related marketing campaign at www.BigWarmUp.com.

In fact, that grand announcement was considerably quieter than the “Introducing Land’s End Canvas” email I’d gotten earlier the same day with a link to a video titled “What Will You Make of It” about the exciting, Ken Burns-ish history of Lands’ End Canvas.

The Lands’ End email tsunami continued. 4 days (and 5 emails) later I got an email with the subject line “What will you make of it?”

This was intriguing, so I opened it. It lead to an interactive site where I could “explore a unique interactive experience — then make and share my own canvas.” Wow. Canvas again.

So when I got the 15th email in 12 days, this one with the subject line, “Join us in making a difference,” I just assumed it was another email about the glories of canvas and ignored it. After all, it had the word “make” in subject line. What else could it have been?

This is a classic case that highlights the dangers of mailing too frequently. Your customers get so overwhelmed they tune out.

30,000 coats donated to the needy is a good thing by any standard, right? So do you think Lands’ End was happy with the results?

I’m not sure I would have been. Here’s why:

Way back in 2002 when Sears bought them, the NY Times reported that Lands’ End had a customer file of 30 million households. Now, not all of those households has email, and that number could be considerably smaller — or larger — by now.

30,000 coats is certainly a lot of warmth, but in terms of results, 30,000 is only 1/10th of a percent of 30 million.

On a more granular level, the email campaign was ignored by at least one ideal target: me,  a repeat customer, who makes buying decisions based on cause-related marketing and corporate philanthropy, who had a coat to donate, and who is clearly on their email list. And if they missed an easy target like me, how many others did they miss, too?

Maybe if the subject line of the first email in the campaign had led with the cause rather than a discount, I might have noticed it.

Maybe if they’d used some of their fancy personalization in the subject line instead of just in their video I might have noticed.

Maybe if they hadn’t bored me to death with their celebration of canvas and trained me to ignore their messages, I might have noticed their worthy campaign to spread the warmth.

But one thing is definite: if they hadn’t sent me 16 emails in 12 days I would have actually read the really important one.  (I’ve asked around, and I’m not the only one who missed this needle in the haystack of Lands’ End emails… or who regretted missing the opportunity to join the Big Warm Up.)

Good cause related marketing is a win-win for everyone. In this case, more coats donated to help the homeless would most likely equate to more coats sold.

This was an important campaign. So can someone please explain to me why Lands’ End quietly buried it under a pile of canvas instead of shouting it from the highest mountaintops?

And while you’re at it, can you direct me to the nearest Goodwill Donation Center? I have a coat I want to donate.

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?

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?

On a recent post I commented about CNN’s updated news crawl being a shill for their Twitter and other online efforts. Turns out, I was more right than I knew. Not only were they in the midst of a heated competition with their worthy opponent Ashton Kutcher to see who could reach a million followers first, but they were simultaneously reeling from the news that they were now, for the first time in their existence, ranked THIRD in viewership behind Fox and MSNBC!

Ashton beat them to the mil, but as Rick Sanchez so magnanimously said, “If you counted everything we do on Twitter we really beat him, but it’s all good.” or something empowering like that.

Normally I’d ignore his good sportsmanship except that I also read an article in Variety that said nearly the same thing. CNN spun their 3rd place finish in prime time into an ad for their multi-channel capability:

“Primetime is most meaningful to entertainment networks,” says CNN U.S. prexy Jonathan Klein, noting that his channel sells its commercial time in a more bundled, multiplatform way that differs from most cable networks, which deal more in the typical currency of primetime ratings points.

And that’s why, no doubt, during the middle of the day the other Friday, they actually showed Ed Henry interviewing somebody on CNN-Radio on CNN cable TV. There he was, boom mike dangling in front of his face, CNN Radio sign strategically positioned, except he was on the TV.

Multi-Channel is as multi-channel does. So CNN aims for the Twitter stratosphere,  creates partnerships with Facebook, takes on Talk Radio (“We’ll fight them on the fields, we’ll fight them on the shores, we’ll fight them in the air!”).

Or, to quote a more controversial character than old Mr. Churchill, “Get ther the fustest with the mustest.” (Be the first to guess who said that one and I’ll send you a Claxton Fruit Cake!)

We are watching CNN, the people who transformed television news by replacing the tyrannical scheduled reporting cycle (anybody remember the 6:00 News?) with getting their cameras wherever news was happening as it was happening (and using local network reporters when they didn’t have one of their own in place) transform news again. This time, they’re replacing the tyranny of platform exclusivity with the freedom of device. Klein continues:

“We sell against all of our platforms — TV, online, international — and it’s hard to say there’s one particular daypart or hour of the day that matters more,” says Klein… Our competition doesn’t have the resources to cover the news the way we do. They’ve actually ceded news coverage to us.”

Convergence doesn’t just happen. CNN is using their core platforms to advertise and drive their customers to their other platforms including Time Magazine. It’s a massive multi-channel marketing effort, it’s intrusive, and apparently, it’s working:  Follow us on Twitter — over a million Twitterers can’t be wrong!.

Recognizing, as CNN’s John King said, that they are “in the word business”, CNN is stuffing those words wherever they can … and monetizing their words along the way. Newspapers should take note:  you’re all in the “word biz” — not the dead tree biz or the radio wave business or the cathode ray business or the pixel business.

Of the last twenty or so articles I read from the NY Times, none of them were on newspaper, and I found them via Digg, Google News, and in emails from friends. The last radio program I listened to was on my computer. The last time I got a story from CNN I read it on my phone.

CNN won the first digital news revolution. They overthrew the powers that be and changed everything. Now that they’re the underdogs again, it looks like they’re sticking it to the man one more time — only this time, the man is Rupert Murdoch.

So, with CNN working hard to become the multi-channel newsroom of the next great era in journalism, with all their vaunted commitment to new media and the instant-dissemniation nature of Twitter, can someone please explain to me why in the last 24 hours, CNNBRK, their twitter account with 1,339,599 followers, had only two breaking news stories?

The other morning on my way to work I was listening to CBS-AM, and Joe Connolly of the Wall Street Journal told the story of someone who had gotten a collections letter from their bank that sounded more like it had come from a repo man. (Or maybe it was the Sopranos… sorry if I’m misquoting, Joe.)

I’ve been seeing a lot of collections letters recently, and not because I’m up to my eyeballs in debt.

It turns out my agency, Tanen Directed Advertising, is pretty good at writing collections letters. And not the kind Joe was talking about.

For the most part, collections letters tend to fit into a few basic molds.

There’s the impersonal, computer-generated type that remove all humanity from the equation… and from the recipient. (You’d be surprised how many of them aren’t written by computers.)

There’s the escalating, threatening letter that’s meant to scare the recipient into compliance but frequently just pummels them into paralyzed inaction.

And there’s the sickeningly sweet, fake “we know what it’s like and we want to help” letters that allow the sender to hide behind feigned consideration without presenting any real options and just serve to drive the recipient further away.

We don’t write those kind of letters. You see, we look at collections letters as CRM (Customer Relationship Management) tools.

After all, the recipients are your customers. They bought a car from you. They took out a mortgage with you — or with a bank thrice removed, but they’re your customers now. They get their electricity from your utility. They’re your patients and you’re their doctor.

Every time you communicate with your customer, you have the chance to deepen or damage your relationship with them. Which outcome would you prefer?

Sure, you can beat them into the ground to get your money, and you’ll get it. Maybe all of it, maybe just some of it. Maybe you’ll be the last straw that breaks them, but you’ll get your money.  And unless you’re a monopoly, it’s probably the last money you’ll ever get from them.

What if it turned out that by simply communicating with your customers, by treating them like valuable human beings who have feelings and brains and are integral components of your company, and by going the extra mile to give them some options, you can actually get more of the money they owe you?

We’ve written collections letters that have gotten 400% more of our client’s customers to call in to discuss repayments than did their previous best performing letters (known as controls in direct marketing). We’ve increased the amounts collected by our clients time and time again.

If you know anything about collections, you know that you usually have to hunt down your customers to talk to them. Our letters get your customers to pick up the phone and call you. Willingly. Because we explain their options to them, we empower them to take control of what felt like an out of control situation.

If you keep a customer, their lifetime value to you continues to increase, rather than bottoming out. If you show faith in your customer, and work with them to come up with a solution, they tend to respond with something every business desires:  loyalty.

Last night our President reminded us that we’re not a nation of quitters. That given a chance, Americans will do what it takes to rise from the depths of despair and work their way back to the top.

I’ve heard our current economic situation described in part as a crisis of faith, and that not until we all have faith in the future and start spending and lending again will we come out of it.

I’d like to add that as businesses, if we have faith in our customers and help them through these tough times, the rewards can be far greater than can be gotten through threats and intimidation.

I’m not arguing for charity — I’m making a case for a more successful business strategy. I’ve seen it work for our clients.

So can someone please explain to me why there are so many short-sighted businesses out there who would rather turn their customers into quitters today than do what it takes to earn their loyalty for years to come?

The other day, we got an interesting pre-recorded message on our phone. It was from Clif Bar, notifying us of their voluntary recall of certain Luna Bars that potentially have peanut butter in them that came from the same processor responsible for the current salmonella outbreak.

The message said they called us because we were Costco members, and that we’d bought the affected products. A friend of ours got a similar call, also because his family are Costco members, too.

Here’s what I find most interesting. Just the week before, I’d bought a case of Clif Bars that fell into the recalled batch… from BJ’s.

Did I get a call from BJ’s? No.

Did I get a call from any other manufacturer about their possibly contaminated products? No.

Recalls are touchy things. They can make or break a company. Marketing professors use the 1982 Tylenol recall as a case study of how to manage a crisis and turn a potential customer service nightmare into a brand building triumph. It cost them over $100 million dollars to recall 31 million bottles of Tylenol, but in the long run it saved the brand, and possibly the company, Johnson & Johnson, for whom it represented 17% of net income.  The International Herald Tribune has a good article about it here.

I’ve had other things recalled — most recently, my daughter’s toys being recalled for lead contamination comes to mind. But I never received a call from the company — I had to find out about it myself online after hearing the news stories.

What Costco did is good customer service. And Costco and Clif Bar have raised the bar (no pun intended.)

In the rivalry between Costco and BJ’s to win my business, who do you think just gained the lead? Given similarities in pricing and selection, what else is there to help set these two big box wholesalers apart except service?

I can’t imagine there’s much of a difference in the way they track customer data. They both swipe my membership card before they ring up my orders. BJ’s must have known that I bought the contaminated bars.

So can someone please explain to me, not why Costco called, but why BJ’s didn’t?

PS. Shameless promotion follows…

I just finished another dark and twisted collaboration with my friend, the extremely talented illustrator, Viktor Koen. As some of you may know, we worked together on Lexicon: Words and Images of Strange (AtticChild Press, 1996).

Our new collaboration is Toyphabet. You can read more about it here. But for those of you going to New York Comicon next week, I wanted to let you know that TOYPHABET is a limited edition book made specially for the 2OO9 New York Comic Con and is carried exclusively by Baby Tattoo Books at booth#1622.