Beyond brand loyalty: Where “daily relevance” now matters.

In recent times, the Harvard Business Review has reported on a so-called “new era” that is emerging in marketing.  In an HBR article co-authored by Joshua Bellin, Robert Wollan and John Zealley, three marketing science specialists at Accenture, the notion of marketing as a set of sequential trends that overtake and supersede one another is covered.

What are those sequential trends? The HBR article outlines five of them and dubs them “eras,” each of them evolving with increasing rapidity:

  • Mass marketing (up through the 1970s) – The era of mass production, scale and distribution.
  • Marketing segmentation (1980s) – More sophisticated research enabling marketers to target customers in niche segments.
  • Customer-level marketing (1990s and 2000s) – Advances in enterprise IT make it possible to target individuals and aim to maximize customer lifetime value.
  • Loyalty marketing (2010s) – The era of CRM, tailored incentives and advanced customer retention.
  • Relevance marketing (emerging) – Mass communication to the previously unattainable “Segment of One.”

Clearly, it’s technology that has been the catalyst for change as we migrate from one era to the next. Mass marketing was a staple for the better part of 40 years, what with radio/TV and newspaper advertising being paramount.  But subsequent eras have come along much more quickly as we’ve moved from market segmentation to customer-level marketing and loyalty marketing.

As for the emerging era of “relevance marketing,” new techniques are enabling marketers to exploit explicit data by name (such as previous purchase history and other known information) along with implicit data (additional information that can be inferred by behavior).

The question is whether this kind of “relevance” will engender long-term wins with today’s customers. The same technology that enables advertisers to target “Segments of One” is what enables those very targets to weigh the worth of those messages, discounts and offers so that they can find the best “deal” for themselves in their exact moment of need.

As far as the customer is concerned, wholesale digitization means that last week’s “preferred vendor” could be next week’s “reject” — with “loyalty” standing at the wayside holding the bag.

The danger is that for the seller, it can rapidly become a “race to the bottom” as buyers’ spontaneity erodes profit margins while the brand goodwill dissipates as quickly as it was created.

Marketing thought leaders Jim Lecinski, Gord Hotchkiss and several others have referred to this as the “zero moment of truth” – and in this case the “zero” may also be referring to the seller’s profit margin after we’ve progressed through the five eras of marketing that bring us to the “Segment of One.”

What are your thoughts about where marketing is ending up now that technology has given companies the power to micro-target — particularly if it means profit margins declining to their own “micro” levels? Please share your thoughts with other readers.

Cookie-blocking is having a big impact on ad revenues … now what?

When Google feels the need to go public about the state of the current ad revenue ecosystem, you know something’s up.

And “what’s up” is actually “what’s down.” According to a new study by Google, digital publishers are losing more than half of their potential ad revenue, on average, when readers set their web browser preferences to block cookies – those data files used to track the online activity of Internet users.

The impact of cookie-blocking is even bigger on news publishers, which are foregoing ad revenues of around 62%, according to the Google study.

The way Google conducted its investigation was to run a 4-month test among ~500 global publishers (May to August 2019). Google disabled cookies on a randomly selected part of each publisher’s traffic, which enabled it to compare results with and without the cookie-blocking functionality employed.

It’s only natural that Google would be keen to understand the revenue impact of cookie-blocking. Despite its best efforts to diversify its business, Alphabet, Google’s parent company, continues to rely heavily on ad revenues – to the tune of more than 85% of its entire business volume.

While that percent is down a little from the 90%+ figures of 5 or 10 years ago, in spite of diversifying into cloud computing and hardware such as mobile phones, the dizzyingly high percentage of Google revenues coming from ad sales hasn’t budged at all in more recent times.

And yet … even with all the cookie-blocking activity that’s now going on, it’s likely that this isn’t the biggest threat to Google’s business model. That distinction would go to governmental regulatory agencies and lawmakers – the people who are cracking down on the sharing of consumer data that underpins the rationale of media sales.

The regulatory pressures are biggest in Europe, but consumer privacy concerns are driving similar efforts in North America as well.

Figuring that a multipronged effort makes sense in order to counteract these trends, this week Google aired a proposal to give online users more control over how their data is being used in digital advertising, and seeking comments and feedback from interest parties.

On a parallel track, it has also initiated a project dubbed “Privacy Sandbox” to give publishers, advertisers, technology firms and web developers a vehicle to share proposals that will, in the words of Google, “protect consumer privacy while supporting the digital ad marketplace.”

Well, readers – what do you think? Do these initiatives have the potential to change the ecosystem to something more positive and actually achieve their objectives?  Or is this just another “fool’s errand” where attractive-sounding platitudes sufficiently (or insufficiently) mask a dimmer reality?

Company e-newsletters: Much ado about … what? (Part 2)

This post is a continuation of a topic I wrote about several days ago. That column focused on the (lack of) reader engagement with customer e-newsletters and what may be the root causes of it.

This follow-up post focuses on what marketers can do to improve their newsletters’ worth to readers. It boils down to addressing four main issues:

Too much e-newsletter content is “full of it” – People don’t want to read about how great the company is or other navel gazing-type content that’s completely company-focused.  Instead, offer soft-sell (or no-sell) content that’s truly of value.  Simply ask yourself, “If I weren’t an employee of this company, would I care at all about this topic?”  This exercise applies equally to B2B and B2C newsletters.

Tired writing – There’s nothing more tiresome than a newsletter article that’s filled with corporate-speak or comes across as a patchwork of language from multiple sources.  But this happens all too often.  Sometimes it’s because the writer is overworked and hasn’t had sufficient time to source the article and create a compelling narrative.  Perhaps the author is a non-writer.  Often, it’s simply that the people inside the company love how the copy reads – tin ear or not.  Regardless of the topic of your story, newsletter copy should have personality, and it needs to move.  Otherwise, it’s your reader who’s going to move on.

Gaining an audience – Too many newsletters are playing to an empty house, whether it’s because of an opt-in audience that doesn’t care about you anymore, or from a total lack of visibility in search results or on social media.  Build circulation through in-house databases, optimizing copy to draw in new readers via SEO, and promoting article content through social posts.  Again, these prescriptions work for both consumer and business marketing, although the individual tactics may differ somewhat.

Neglect – It happens way too often:  An e-newsletter initiative begins with great fanfare, but it doesn’t take long for the novelty to wear off.  What starts out as a bi-weekly turns into a monthly or a quarterly, with gaps in between.  Eventually the only thing “regular” about it is its irregularity.  It’s surprising how many corporate websites show links to archived newsletters all the way up to 2016 or 2017 — but then nothing more recent than that.  And we all know what that means …

Wrapping it all up, it’s worth asking this basic question every once in a while: “Is our newsletter any good?” The answer should be unmistakable — if you read your content with a completely open mind.

If you’re involved in your company’s e-newsletter initiatives, do you have any additional insights about what makes for a successful program? Please share them with other readers here.

 

Company e-newsletters: Much ado about … what?

One of my clients is a multinational manufacturing firm that has published its own “glossy” company magazine for years now. The multi-page periodical is published several times a year, in several regional editions including one for the North American market.

It’s a magazine that’s full of interesting customer “case histories” accompanied by large, eye-catching photos. The stories are well-written and sufficiently “breezy” in character to read quickly and without strenuous effort.  The North American edition is direct-mailed to a sizable target audience of mid-five figures.

And I wonder how many people actually read it.

The reason for my suspicion stems from the time we were asked to produce a survey asking about readers’ topic preferences for the magazine. The questionnaire was bound into one of the North American issues, including a postage-paid return envelope.  The survey was simple and brief (tick-boxes with no open-ended questions).  And there was an incentive offered to participate.

In short, it was the kind of survey that anyone who engaged with the publication even marginally would find worthwhile and easy to complete.

… Except that (practically) no one did so.

The unavoidable conclusion: people were so unengaged with the publication that they weren’t even opening the magazine to discover that there was a survey to fill out.

In the world of company e-mail newsletters, is the same dynamic is at work? One might think not.  After all, readers must opt-in to receive them – suggesting that their engagement level would tend to be higher.

Well … no.

A just-published study titled How Audiences View Content Marketing, finds that company e-newsletters are just as “disengaging” as the printed pieces of yesteryear.

The study’s results are based on a survey conducted by digital web design firm Blue Fountain Media. Among the findings outlined in the report are these interesting nuggets:

  • One in five respondents completely ignore the e-newsletters they receive, while more than half scan headlines before deciding to read anything.
  • Two-thirds of respondents admitted that the main reason for opting in to receive e-newsletters is to take advantage of special offers or discounts, while only around 20% expressed any interest at all in receiving information about the company.
  • More than half of respondents (~52%) feel that newsletter content is too “commercial” (as in “too sales-y”). Other complaints are that the e-newsletters are “too long” (~21%) or “boring” (~19%).

Even more alarming is this finding: Approximately one-third of the respondents felt that e-newsletter content is so lame, it actually leads them to question using the product or service.

That seems like marketing going in reverse!

What Blue Fountain has uncovered may be indicative of another challenge as well:  the diminishing allure of content marketing. Over time, readers have become cautious about accepting online content as the gospel truth; this research pegs it at two-thirds of respondents feeling this way.

At the same time, only about one-third of the respondents think that they can distinguish well between fact-based content versus content with an “agenda” behind it. And therein lies the basis for suspicion or distrust.

On the plus side, the research found that readers are more apt to engage with video content, so that may be a way for e-newsletters to fight back in the battle for relevance.  But it still seems a pretty tall order.

I address the topic of company e-newsletters in a second blog post to follow.  Stay tuned …

Are 5-star online reviews really the best ones?

It would seem that the more top ratings a company or product can receive in online reviews, the better it would be for their business.

As it turns out, this isn’t exactly the case. A recent national study has concluded that businesses earning star-ratings averaging between 3.5 and 4.5 on a five-point scale earn more revenues annually than those with other ratings – higher or lower.

And even more surprising, top-rated businesses with five stars actually earn less in revenues than those whose customer ratings are two stars or lower.

What’s going on here?

It would seem that five-star ratings are considered “too good to be true.”  Seeing them, people tend to think something’s fishy about how the ratings can be so high. And if there’s something worse than getting low ratings, it’s the feeling that the ratings a company has earned aren’t “genuine.”

The analysis, conducted recently by small business SaaS supplier Womply, sought to study the correlation between online customer reviews and company revenues, and in doing so it looked at data from a large number of U.S. small businesses.

The more than 200,000 businesses studied had an average annual revenues of around $300,000. The Womply research spanned diverse industries and markets including restaurants, auto shops, retailers, medical and dental offices, hair and nail salons, etc.

While the ratings dynamics may be surprising, another Womply finding reinforces the intuitive view that attracting more reviews online is better than attracting fewer ones.

The businesses studied by Womply averaged ~82 total reviews across multiple online review sites. But for those businesses attracting more than the average number of reviews, they earned ~54% more in annual revenues than the average.  And for those with 200 reviews or more, the average annual revenues were nearly double the average revenue figure.

The propensity for companies to respond to reviews appears to boost revenue performance as well. The Womply study found that businesses that fail to interact with their customers’ reviews earn lower revenue on balance – as much as 10% less than their counterparts.

The key takeaway points from the Womply research appear to be:

  • Too many top-rating reviews risk making a company’s reputation appear less genuine, actually repelling business rather than attracting it.
  • To improve revenues, businesses should encourage their customers to post reviews online.
  • To improve revenues, businesses should engage with reviewers by responding to their comments, addressing concerns, and expressing gratitude for praise.
  • People feel more affinity with companies that acknowledge their customers and treat them like they care. It’s basically the Golden Rule in practice.

What are your thoughts? Do the findings surprise you?  Please share your perspectives with other readers.

Short attention spans invade the B-to-B space.

For years, we’ve been hearing about the “great disappearing attention span” of the broader population when it comes to how people consume information.

Business-to-business practitioners were supposedly different – particularly the ones who are decision-makers or influencers concerning their companies’ consequential purchases.

The assumption has been that people are more careful or deliberative when they’re buying high-ticket items on behalf of their employer — if only for the “CYA factor.”

But new information is casting some doubt on this time-honored assumption.

According to a communique published this past month by the Software & Information Industry Association (SIIA), the average length of B-to-B videos has shrunk by approximately one-third in just the past few years.

Whereas the typical B-to-B video used to be around six minutes long, it’s now fallen to just over four minutes in duration.

On the plus side, due to those shorter times a larger percentage of viewers are watching all the way to the end of B-to-B videos. Even so, the proportion doing so is only around half (52%, up from approximately 46%).

And if a B-to-B video is shorter than 60 seconds in duration, an even larger proportion of viewers watches the entire video — typically nearly 70%.

It would appear that short attention span characteristics have leeched into the business realm as well:  To have the greater impact in B-to-B video communications these days, “less is more.”

What’s the “long-game” in the U.S.-China trade conflict?

The efforts to craft a new trade agreement with the People’s Republic of China have run into some pretty major roadblocks in recent weeks and months.

Things came to another inflection point this week when President Trump announced that new tariffs would be imposed on more Chinese goods imported into the United States. As of September 1, pretty much all categories of Chinese imports will now be subject to tariffs.

If we look at the impact the protracted impasse has had on markets, the repercussions are plain to see. One result we’ve seen is that China has dipped from making up the largest portion of trade with the United States to being in third place now, behind Mexico and Canada:

But what’s the long-term prognosis for a trade deal with China? Recent world (and USA) statistics point to softening of the economy, which could have negative consequences across the board.

When it comes to perspectives on economic and business matters involving China and the Pacific Rim, I like to check in with my brother, Nelson Nones, who has lived and worked in the Far East for more than 20 years.  He has first-hand experience working in the Chinese market and is keenly aware of the issues of intellectual property protection, which is a major bone of contention between the United States and China and is one of the factors in the trade negotiations.  (Nelson runs a software company which has chosen to forego the Chinese market because of regulations requiring software firms that set up a joint ventures with Chinese companies to disclose their source code — something his firm will never do.)

I asked Nelson to share his thoughts about what he sees happening in the coming months.  Here are his observations:

Chinese President Xi has a lot on his plate right now. It isn’t just the U.S. trade war but also the Hong Kong disturbances, U.S. arms sales to Taiwan, the U.S. sending warships through the Taiwan Strait and the South China Sea, and China’s domestic banking sector weakness, to name just some. Trump has also put President Xi in a tight spot by demanding (or getting) Xi’s assurances that China will buy more U.S. agricultural products and will enact legislation protecting foreign intellectual property.  

In spite of his very substantial power, I predict that Xi will have a very tough time ramming Trump’s conditions down the throats of his countrymen. 

I should mention that the biggest issue here is intellectual property protection. The draft agreement that China “almost” signed had assurances that IP protection laws will be enacted, but Xi apparently nixed that draft whereupon the Chinese government stated that no government can promise, when negotiating a treaty with a foreign country, to change its domestic laws.

Technically, they’re right. For example, President Trump can’t commit to changing U.S. laws because only the Congress can do that under the constitutional separation of powers. Similarly, on paper, only China’s National People’s Congress (the national legislature) can change Chinese laws, and President Xi is not a member of the National People’s Congress. (Of course, this explanation conveniently overlooks the fact that both the Presidency and the National People’s Congress are subservient to the Communist Party of China, and that Xi is the General Secretary of the Communist Party, but still it’s technically correct.)

In view of all this, the natural Chinese instinct is to wait … and in this case, wait until the 2020 U.S. election and see what happens. If Trump is defeated for re-election, then perhaps many of Xi’s problems will disappear magically. On the other hand, if Trump stays in office maybe the pain that Trump’s China trade policy is inflicting on U.S. businesses and consumers will force Trump to lighten up a bit.  

In other words, President Xi has much to gain and relatively little to lose by playing the waiting game for a while. 

As for U.S. tariffs, those are causing Chinese businesses to adapt their supply chains by routing them through other East and Southeast Asian countries which are not subject to the tariffs. For instance, instead of sending products straight to the U.S., Chinese manufacturers are sending products to Vietnam or Thailand where a tiny bit of additional work is done – just enough to qualify for a “Made in Vietnam” or “Made in Thailand” label. (This adaptation partially explains Thailand’s large trade surplus which has made the Thai Baht one of the world’s best-performing currencies this year.)  

These maneuvers actually provide a safety valve for both Xi and Trump. For Xi, it cushions the reduction in demand for Chinese exports. At the same time it puts some additional pressure on Trump because this type of safety valve does not really exist for U.S. exporters trying to evade reciprocal Chinese tariffs.  But on the plus side for Trump, it tends to dampen the impact of higher tariffs pushing up U.S. producer and consumer prices.

If you ask me to bottom-line this, the trade problems look more like a protracted siege than an episode of brinksmanship.

How the siege is resolved depends on how strong Trump’s position will be after the 2020 election. If the Democrats continue with their leftward lurch, then Xi will eventually have to cave because Trump’s position will be strong (I’d say a 65% probability of re-election). But if the Democrats come to their senses and Trump continues shooting himself in the foot, then he’s in real danger of losing the election and Xi will come up the big winner (I’d give this a 35% probability as of today). 

So there you have it: the prognosis from someone who is “on the ground” in East Asia.  What are your thoughts?  Are you in broad agreement or do you see things differently?  Please share your observations with other readers here.