Posts Tagged ‘Seth Godin’

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.

Seth Godin has a new book called Tribes. Before it was published, back in July, he built a social community around it called Triiibes that I was fortunate enough to be able to join.  (By fortunate, I mean that as a regular reader of his blog I read the single notice he posted about the new book and a limited, exclusive offer he made: buy an advanced copy of the book and you can join this unique community.) After a very limited time, membership to the community closed, and won’t be reopened again until some time this month.

In all honesty, I’m not really a social media guy. I rarely visit my facebook or myspace pages. I under-utilize LinkedIn. But I’ve been a more regular visitor and poster to Triiibes. I’ve gotten great value and given a little back, too. It’s been a great experience for me, because I finally understand the passion and connection that social media members can feel about their community.

The most interesting aspect of Triiibes, for me, was the casebook that we Triiibes members created, a companion e-book to Seth’s own book, Tribes. That casebook is now online. You can get yourself a pdf copy of The Tribes Casebook here.

The case study I wrote was called “The Tribe of Marrus.” It appears on page 79 of the ebook. It’s about my friend, Marrus, an artist, who I also blogged about in a post here called “Portrait of the artist as an integrated marketer.

There are plenty of great case studies about tribes of all kinds. It’s excellent reading, and I highly recommend it.

I’ve been reading Seth Godin for about 8 years now. I’ve seen him speak more than once. I’ve watched with glee each time he rewrites the rules of publishing when he comes up with a new way to market his latest book.

He’s been a leading pioneer of “the new marketing” and an honest, inspirational voice. He’s one of the most published business book writers ever, a voice respected by the people running the most successful companies in the world.

Every once in a while, I see one of his books on the shelf of a client or a prospect, and we instantly get into a vibrant discussion about Seth and new marketing. Invariably, we end up reaching a point in the discussion where one of us or the other says, “How come everybody isn’t getting into this stuff?”

I’ve discussed Seth’s thinking with other marketing professionals I know, usually ones with decades of experience and perspective. They frequently net out at the answer that there’s always new thinking that argues that the old thinking is wrong or outdated, and only time will tell. Until then, they’re not ready to throw out the old ways.  They’re too invested in them, and they’ve worked for all these years, they say.

Not me. As a marketer, my only real rule is do what works best (as long as it’s ethical and honest.) Anything less isn’t worth doing, is it?

Not only am I a member of triiibes, but now that I think about it, it turns out I’m a member of The Tribe of Seth Godin, too.

Can someone please explain to me why everyone who works in advertising and marketing isn’t one too?

Are you the kind of person who enjoys reading product packaging at the table?

I am. I’ll read anything, even if I don’t eat it. The story of how my natural Sea Salt gets from the sun drenched shores of the Mediterranean Sea to my table. The instructions on how to properly fold a US Flag as part of a Leann Rimes/US Flag promotion on the back of a Kelloggs Corn Flakes box. The exotic ingredients below the parrot on the beautiful label of a bottle of tangy Pickapeppa Sauce from Shooters Hill, Jamaica. (Mangoes and raisins? Mmmm.)

Recently I was reading the side of the Silk Soy Milk carton while having breakfast with my family, and found myself first educated, then disappointed and finally, offended.

Now don’t get me wrong. Silk has a great story, which I learned from reading the side of the carton. I quote, “Did you know that every delicious drop of silk is powered by clean, renewable wind energy?” On the carton I also discovered that Silk has 11 essential vitamins and minerals, natural Omega-3s and antioxidants, 20% less fat and calories than 1% milk, 30% of your daily calcium per serving, and 6.25grams of soy protein per serving.

So I’m thinking now I’m an expert on Silk Soy Milk. I could answer any Soy-based question they asked me on Jeopardy, even one in Final Jeopardy for all the marbles. I could be the lifeline a friend calls on “Who Wants To Be a Millionaire” when the question is “How many grams of protein are in an 8 oz. glass of Silk Soy Milk?”

And then I get to the “Test Your Soy-Q” side of the box. Man, am I ready to rock or what?

What follows is the actual copy on the carton (and as such I’m sure is Copyright 2008 by Silk or whoever owns it now):

  1. Silk is full of surprises — including some flavors and varieties you might not expect. Can you spot the imposter in a Silk Soymilk lineup?   A) Silk Light Vanilla   B) Silk Banana   C) Silk Chai   D) Silk Plus Fiber
  2. Silk’s so delicious, it’s easy to get carried away. However, Silk is not intended for use in:  A) Coffee   B) Macaroni & Cheese   C) The Bath   D) Smoothies
  3. Nine out of ten Silk drinkers agree that SIlk tastes best:   A) Nice and cold   B) Among friends   C) On weekends   D) All of the above

Not done learning? Good for you! Visit http://www.silksoymilk.com

Answers:

  1. B — Yes, we have no banana. But we do have Vanilla, Very Vanilla, Chocolate Mocha, Cofee, Plain and unsweetened — Plus a few more that we can’t squeeze on this carton. (Visit us online to learn more!)
  2. C — Although we’ve heard some stories.
  3. D — The tenth guy thinks it tastes best in the bath.

Shockingly, I didn’t get a single answer correct. So, why am I disappointed and offended by this cheesy yet innocuous piece of drivel on the side of a box of liquid squeezed out of a bean masquerading as the fluid produced by the mammary glands of a mammal?

Because as a marketer, I was disappointed that Silk wasted the most interactive, engaging element on their packaging with bad jokes and incompetent cross sell. As a customer, I’m offended because Silk enticed me with the tasty promise of ego gratification based on my ingestion of their product attributes and then made me feel stupid for swallowing it. (Plus, I know if I’d just studied the right material prior to the exam, my Soy-Q would be considerably higher than it is now. Oh, the shame, the shame!)

But really, aren’t I making too much of this? I thought I might be, which was why I held off writing this particular post. Until I read a post by Seth Godin the other day about political spin, media outlets and marketers. Speaking of politicians lying, he says, “The spinners lie constantly. They lie with a straight face. They lie sentence after sentence, relentlessly…we don’t really know what to do in the face of non-stop lying. Is this person an alien? Do they think we’re stupid? How are we supposed to respond to the onslaught of disrespect?”

“Do they think we’re stupid?” And then it hit me. I felt personally disrespected by the Silk Soy Milk box.

Sure, as a marketer I care that Silk missed an opportunity to interactively engage their customers. And that if they’d actually asked some interesting and even challenging questions, customers might actually have been “Not done learning?” and “visited us online to learn more!”, thereby increasing site visits, deepening relationship and creating more and better developed opportunities for cross sell and product trial.

But why I’m really offended, what I really care about, is that they have so little respect for me, as a customer, that they think they can treat me like an idiot, and I’ll lap it up. It’s the same way I feel when Ellen Degeneres, whom I adore, tries to tell me that she doesn’t have any “people” who can get her into a Beyonce concert in that stupid American Express commercial. (Full Disclosure:  I have multiple Amex Cards, I love the company, and I wish Ellen and Portia all the best in their marriage.)

These are not companies who are ignorant of customer relationships. Far from it — both were built because they understood what their customers wanted and gave them something other companies did not. And they usually engage with their customers and prospects in an intelligent way. (After all, it’s not like we’re not talking about Budweiser, here.)

So can someone please explain to me why even good marketers sometimes create advertising that assumes their customers are too stupid to tell when they’re being treated like morons?

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My friend, the artist named Marrus, is the best integrated marketer I know. That’s because she is her brand, she lives her brand, she presents a consistent brand image to everyone she meets, and she has a heck of a story to tell.

When she’s not fighting for the right to show her work on Jackson Square in New Orleans (Click here, then see pages 7 and 9 of the newspaper pdf), Marrus travels from Renaissance Fair to Kink Festival to Science Fiction Convention, selling her art and painting faces.

Her tribe is far flung, she’s always on the road, and yet she’s always connected to her community via the internet. And because of this connection, she actually makes a living as an artist, mostly from sales of her prints online and at these events.

She started LiveJournaling because it was the logical way to stay in touch with her far flung tribe throughout the nomadic lifestyle she’d forged. Her posts during and from post-Katrina New Orleans, where she’s rebuilding a home and studio, and those of her partner Jay, who geared up and went back into the ravaged zone and was soon an integral part of the rebuild in some tiny town in Mississippi, were riveting and real, and public.

Her growing involvement with her community of fans has been hard to keep up with. The more popular she gets, the harder it is to answer every post, meet every fan. Like anyone who dives into the Groundswell, she has joined a conversation that she may have started, but no longer controls.

She’s writing an autobiography-journal sort of thing, and I was privileged to read a manuscript and give my opinions. Marrus is a person who lives in the now, vibrantly, and so the last thing I would have expected is that her book about her life would feel anything at all like hanging out with her in real life did. Except it did. For the three days I read the book, it was like hanging out and having one long extended conversation with her. Like a holograph, any one slice of Jen can deliver a fully integrated experience.

She was even the subject of a question I asked Seth Godin when I attended one of his paradigm shifting book tour appearances for The Dip. The question? It was hard enough for creators to have any distance between themselves and their fans before the internet, and blogging. Now, building a community online, a relationship with your fans, is all about personal relationships, answering posts and emails, opening up. And once you’ve built it, you fail to nurture it at your own risk. So, how do you manage community growth when you are your organization and you have limited time? (His answer, as always, was on point (paraphrased from memory, so be kind, Seth): be honest and renegotiate your relationship with your community in a way they can understand, and then own the consequences.)

Marrus is a microcosm of every brand out there that realizes they don’t own the conversation, even when the conversation is intimately about their brand. She’s got scalability issues, budget issues, resource issues, risk management issues (she’s been burned out, flooded out, and victimized by unfair and uneven government intervention), marketing issues, advertising issues, inventory issues, customer service issues… you get the point.

And yet her brand is fully integrated, 360 degrees, 24/7, always showing a consistent message to everyone she meets from every angle. She doesn’t know whether the kid whose face she’s painting is the child of a potential buyer of her original art. She doesn’t know if the person trying to get her attention at a show is one of her most devoted fans or a blogger or the art critic for the Times or just somebody who wants to know where the bathroom is. And she doesn’t care. Her customer service department is fully integrated with her marketing department, able to make the right choice to deliver customer satisfaction and a good user experience with every interaction. Her advertising department would never say something that Legal wouldn’t approve. And her CEO champions every new venture, no matter how cutting edge or low tech, regardless of ROI, as long as it’s in line with her brand integrity.

So, can someone please explain to me why every company and every brand isn’t striving to be more like Marrus?