Customer Satisfaction and Customer Loyalty

It is being observed across the world that customer satisfaction has little correlation with customer loyalty. 80% of customers who defect to competitors score themselves as “satisfied” or “very satisfied” on surveys! (“Turning your Consumers into Die-Hard Fans” by John Blasberg, Vijay Vishwanath and James Allen)


Therefore, customer satisfaction does not guarantee customer loyalty. I am using a Loyalty-Satisfaction Matrix to explain the subject in some detail.


‘Proprietors’ are companies that command high loyalties despite poor satisfaction because probably the customer does not have any other choices available. Most companies fall under the ‘Distracted’ class. Though they try to focus on increasing customer loyalty, they end up concentrating on the wrong activities that eventually lead to customer satisfaction only. It is only a few companies like Starwoods Hotels that are true ‘Winners’ and offer highly customer centric loyalty programs to create highly loyal customer advocates.


The kind of loyalty behavior exhibited out of the nine options of the Product Patronage Matrix (http://marketingexplorers.blogspot.com/2007/08/product-patronage-matrix.html) is highly customer specific. This largely depends on the values, beliefs and attitudes of the customer and this in effect necessitates understanding the customer well in order to design loyalty programs successfully.


This is even more important from an Indian perspective where tastes, preferences and even cultures vary widely. Therefore, customization of loyalty programs according to the product category and the customer values, beliefs and attitudes is important.


It is a high level of customization of loyalty programmes shall aid in the movement of customers from other cells to 'Winners' in the Loyalty-Satisfaction Matrix.

Avon Nail Fortifier: Print Creative

Carrying on with the tradition of acquainting you with some of the best print creatives of the world, here is one that was used in Sao Paulo, Brazil to advertise Avon Nail Fortifier. I personally thought it was very creative.

PRIYAGOLD Valuation by Brand Finance... But How is this Valuation Done??

Recently, the valuation of Surya Foods’ flagship brand PRIYAGOLD was done at Rs.1200 crores. This gave the Noida-based food company reason to cheer before the company floats an IPO later this year.

The valuation was done by Brand Finance. Now the important question is, how is this Brand Valuation actually done!! I am trying to explain this in through this post…

It is nearly twenty years since RHM, a UK-based food manufacturing company, placed the value of its brand portfolio on the balance sheet as part of its defense against a hostile takeover bid. While it was not the first instance of brand values being capitalized on the balance sheet, the context and subsequent result caused many accountants to fall off their stools in horror.

Since then, Brand Valuation has gained increasingly more importance over the years.

Brand Finance is an independent consultancy, headquartered in London, which focuses on the management and valuation of brands and branded businesses. Since 1996, Brand Finance has performed hundreds of brand valuations with an aggregate value of over $150 billion.

Brand Finance calculates brand values using the ‘Royalty Relief’ approach. This approach is recognized by technical authorities worldwide. The methodology used to value a brand is briefly explained in the text below.

The future revenues of the brand over a five-year explicit period are estimated taking market growth, competitive forces, historic sales and analysts’ projections, growth assumptions into consideration. A Royalty Rate is applied to the future revenues to determine the Royalties that would be payable for the use of the brand by a third party. The determined royalties are then discounted and the NPV calculated gives the Brand Value.

The Discount Rate is determined using the Brand Beta Analysis (proprietary of Brand Finance) that uses a Brand Rating corresponding to the brand. The Brand rating is similar to a credit rating and delivers insight into the underlying strength of the brand and illustrates how valuations require a robust analysis of a brand’s performance in order to determine its value.

According to Brand Finance, the top ten brands in the world by value are listed below in decreasing order of their brand value:

1. Coca-Cola
2. Microsoft
3. Citi
4. Wal-Mart
5. IBM
6. HSBC
7. GE
8. Bank of America
9. Hewlett-Packard
10. Marlboro

Product Patronage Matrix

Product patronage Matrix is an interesting concept that was introduced by Louis P. Bucklin in his book titled 'Retail Strategy and Classification of Consumer Goods'.

Product Patronage Matrix builds from the foundation of classification of goods and stores the cross-classification of the each product motive with each patronage motive, a three by three matrix is created representing nine different types of customer buying.

The following are the product motives which are derived from customer attitudes towards a product:

Convenience Goods: Those goods, for which the customer before his need arises, possesses a preference map that indicates a willingness to purchase any of a number of known substitutes rather than to make the additional effort required to buy a particular item

Shopping Goods: Those goods for which the customer has not developed a complete preference map before the need arises, requiring him to undertake search to construct such a map before purchase

Specialty Goods: Those goods for which the customer before his need arises, possesses a preference map that indicates a willingness to expend the additional effort required to purchase the most preferred item than the most readily accessible substitutes
Similarly, the following indicate the patronage motives which are derived from consumer attitudes towards a retail establishment.

Convenience Stores: Those stores for which the customer before his need for some product arises, possesses a preference map that indicates a willingness to buy from the most accessible store

Shopping Stores: Those stores for which the customer has not yet developed a preference map, requiring him to undertake a search to construct such a map before purchase

Specialty Store: Those stores for which the customer before his need arises, possesses a preference map that indicates a willingness to buy from a particular establishment even though it may not be the most accessible

Bhopal Medical Appeal Campaign : A Testimony to the Power of Advertising

Here is one of the eight ads from the Bhopal Medical Appeal Campaign that have been doing rounds in the west since 1994.

Many people say that these ads are too long, and that no one has either the time, patience or enthusiasm to read long copies! But this campaign PROVES THEM WRONG. Not only are these ads read, they also generate enough income off the page to pay for themselves and run a clinic in Bhopal employing a staff of 40.

The clinic and its work are testimony to the power of advertising, because this campaign started without a single penny!

The first ad, a double page spread in the UK's Guardian newspaper ran on a personal guarantee to pay if the ad failed. Happily, the public's response was so generous that that first ad enabled the sponsors to buy a building in Bhopal, hire staff and begin training them. Fourteen years later, the sponsors have been able to give medical care to nearly 30,000 people!

This my friends is the power of advertising!!!

For a look at the other copies and details about the ads, refer to the following link which is also the source of this ad.

http://adsoftheworld.com/media/print/bhopal_medical_appeal_may_god_forgive_you

Multilevel Marketing (aaproach companies like Tupperware and Avon follow) is different from Buzz!

Buzz is nothing but all the word-of-mouth that exists about a product. This buzz travels through invisible networks where each node is a person.

(see http://marketingexplorers.blogspot.com/2007/07/identify-network-hubs-for-word-of-mouth.html)

Experts said that if people can create word-of-mouth about a product, why not use them to sell the product itself. This gave rise to Multilevel Marketing (MLM) where companies like Tupperware, Avon, Amway and Oriflame create distribution channels in the invisible networks. But it is important to note that MLM is not buzz. It has very different objectives and ways in which it operates. To give a clear picture on the distinction between the two, I am including an excerpt from the book “The Anatomy of Buzz” by Emanuel Rosen:

“While these programs work for certain companies, it’s important to note that the phenomenon they’re based upon is not exactly buzz. There is a key difference between and a marketing scheme in which friends are supposed to sell something to their friends or recruit them as distributors. While buzz may be stimulated with an occasional incentive, it is usually free from any monetary transaction. A customer recommends a product because she truly believes in this product. Part of her credibility comes from the fact that she has nothing to gain by recommending the product, which is not the case when she is selling it.

Advocates of MLM love to point out the potential for exponential growth that comes with this method. (“If your friend tells two friends, and these two friends tell two friends, you reach a huge audience very fast.”) But in real life this exponential growth is hardly ever reached. Why not? Because many people don’t want to get involved in this type of business and don’t feel comfortable selling to their friends. Most people want to talk with their friends without having to sell them anything. When they meet a relative, they want to hear about the family, without thinking of how they could enroll him as part of their “downline” (the industry term for the chain of distributors one recruits).

MLM is far from gone, however. The very same trends that cause customers to rely on their friends in making purchasing decisions – information overloaded, customer skepticism, and customer connectivity – could help MLM organizations to expand, especially in product categories such as skin care, personal services, and food supplements. There is also evidence that this marketing method is more effective in certain social circles and countries than in others. But as MLM grows, it’s important not to confuse it with buzz. Don’t expect an MLM organization to grow at the rate of an ICQ or Hotmail. It’s a different phenomenon.”

Heat Activated Urinal Billboards

The world of Interactive Advertising is endless. It was innovative to see Urinal Advertising changing the face of interactive advetising. But HAUB (Heat Activated Urinal Billboards) have taken it to a new level!!

HAUB uses heat sensitive ink technology. This innovative medium combines high definition colour graphics, hidden by "disappearing ink" delivering an interactive message to a captive audience... A perfect strategy to get your message across.

Used successfully in a "Drunken Driving Campaign" in New Zealand, it is a perfect Billboard to deliver any message to a male audience. Strategically placed in the corner of a urinal, (yes that's correct... studies show that 8-10 males prefer the corner), it's sure to generate interest when a male enters the bathroom.

The heat in a male's urine starts filling colours in the image and thus delivers the message! The automatic flush from the toilet re-sets it for the next unsuspecting visitor... A perfect repetitive marketing tactic.

Very Strong Tape by Penline, Malaysia

Penline is a Malaysian stationary company. They have been coming up with creative and high-impact outdoor and print advertisements for a considerable amount of time now.

Here are some samples from their basket.

The taped billboard shown below has been talked about in the marketing circles quite a lot already.

Shown below is one of their print advertisements. Neat work!!

Identify Network Hubs for Word-of-Mouth Marketing

The structures through which Word-of-Mouth spreads are similar to networks as shown in the figure below. There are certain hubs that are connected to other nodes and it these hubs that spread word of mouth to these nodes.

It becomes important for marketer to target these hubs to spread word of mouth to as many people as possible. In Word-of-Mouth parlance, these hubs are called Network Hubs or Opinion Leaders. According to Emanuel Posen, an expert on the subject, Network Hubs are individuals who communicate with more people about a certain product than the average person does.

To enable marketers to identify these Network Hubs, some common characteristics that are exhibited by these individuals have been observed and identified. The acronym used for these characteristics is ACTIVE:

1. Ahead in adoption
2. Connected
3. Travellers
4. Information-Hungry
5. Vocal
6. Exposed to media

By “Ahead in adoption” it is meant that Network Hubs are early to adopt or reject an idea or an offering than the others.

They are “Connected” in the sense that they are more cosmopolite i.e. more oriented towards the outside world.

It has been observed that opinion leaders generally travel more than an average individual. They make more out-of-town trips. Today, this behaviour is complemented by virtual travelling i.e. surfing more and more websites on the internet.

Opinion Leaders often serve as ‘local experts’ because they are well-informed since they always want to learn more. Because of this trait of theirs, it is not unusual to see many people approaching opinion leaders for advice on what to purchase and what not.

Network Hubs are “Vocal” not because they are necessarily out-spoken, but because they voice their opinions more often.

And finally, they are more exposed to media. This may be true because they read more magazines and watch more advertisements or because they themselves are part of the media. This is why many marketers approach personalities and experts, who are more exposed to the media, to talk about their products in person or in editorials.

This Ad Touches your Heart and Soul

http://www.youtube.com/watch?v=nhwIFbB5iuo

Ineffable. I shall not give any descriptions here because words cannot match the class of this creation.

I suggest you watch the ad at least twice to appreciate the beauty of the piece. Also visit the websites mentioned at the end of the clip.

Where to have a PoD for your Brand!

Whenever we talk about positioning a brand, the first two concepts that come to our mind are Points-of-Parity (PoPs) and Points-of-Difference (PoDs). In order to have a distinct differentiated offering, having PoDs at the right level in the Brand Hierarchy is important.

A marketer can differentaite his brand vis-à-vis the competitors at three levels:

1. Brand Attributes/Features
2. Brand Benefits
3. Brand Value

It is essential to have the PoDs sustainable. Special attributes or features that a brand claims can be easily copied by the competitors more often than not. It is tougher, but still possible for competitors to match the benefits that a brand offers. But once a brand has created a distinct value in the minds of the consumers, the competitors cannot follow that route.

Colgate Motion is the battery-operated toothbrush that Colgate has launched. If it focuses on its special bristles or the ergonomically designed handle, Oral-B can come out with its toothbrush with the same features anytime. If Colgate Motion tries to differentiate on the benefit of giving “Superior Cleaning”, Oral-B can match that in some time too. But if Colgate Motion differentiates itself on the Brand Value level as a product that is highly-recommended by dentists, no competitor will be able to replace the trust and respect that the brand will enjoy because of the value it will derive from dentist-endorsements. The trust, once developed in the values a brand stands for, is very difficult to break or replace.

Therefore, whenever you want to find PoDs for your brands or products, look for them at the Brand Value level.

What a Successful TVC Needs....

The aim of any TV Commercial (TVC) is to perform well on three accounts:

1. Engagement
2. Communication
3. Persuasion

The first job of a TVC is to Engage the viewers. How good the engagement was can be measured by testing aided and unaided recall.

Then, the Communication has to be clear and relevant. A TVC consists of different elements. What each of these elements conveys to the audience is extremely important.

Let us take the example of the recently released Levi Strauss Signature Jeans TVC featuring Deepika Padukone.

http://youtube.com/watch?v=ig-wYLpr-2A

An example of an element is the part of the TVC where the stool starts following the girl attracted by the fit of the jeans. When the mirror starts walking for the same reason is another element.

Each element in a TVC should communicate something relevant that builds up the impression in the minds of the viewer about the product.

Finally, the TVC must Persuade the viewer to purchase the product. Whether the Signature Jeans TVC and the charm of Deepika Padukone can persuade a college girl viewing the ad will be the final acid test.

It is important to note that the success of Persuasion depends on how well the ad is Communicated which in turn depends on how well could it engage the viewers. Therefore, we can say that these three stages form a continuum and the success of the one that follows depends on the one(s) that precede it.

Billboards by ActionAid India

ActionAid is an international anti-poverty agency working in over 40 countries, taking sides with poor people to end poverty and injustice together.

In India, they are working with more than 300 civil society organizations and over five million poor and excluded people in 24 states and two union territories.

Their focus is on the rights of India’s most marginalized communities: Dalit and indigenous people, rural and urban poor, women, children and minorities. These groups face an acute lack of access to and control over resources, services, and institutions.

The organization pays special attention to those in vulnerable situations such as people living with chronic hunger, HIV/AIDS or disability, migrant and bonded workers, children who are out of school, city-dwellers without a home, and people whose land or livelihood is under threat.

Recently, they installed billboards in Delhi to generate concern for homeless people.

I came across this and thought that I should include it on the blog, not only to display the innovation in communication but also to contribute to the promotion of the cause.

Log onto http://www.delhishomeless.org for more information.

Difference between Word of Mouth, Viral Marketing and Buzz Marketing

Ever tried finding out the difference between the terms “Word of Mouth”, “Viral Marketing” and “Buzz Marketing”? Not many have. And not many know whether there is any difference at all!

In an article titled “The Word on Word of Mouth” by Dave Balter, the writer beautifully delineates the differences between the three terms.

WORD OF MOUTH is the most powerful medium on the planet. It is the actual sharing of an opinion about a product or service between two or more consumers. It is what happens when people become natural brand advocates. It is the holy grail of marketers, CEOs and entrepreneurs, as it can make or break a product. The key to its success: it is honest and natural.

VIRAL MARKETING is an attempt to deliver a marketing message that spreads quickly and exponentially among consumers. Today, this often comes in the form of an email message or video. Contrary to alarmists’ fear, viral isn’t evil. It isn’t dishonest or unnatural. At its best, it is word of mouth enabled, and at its worst, it is just another interruptive marketing message.

BUZZ MARKETING is an event or activity that generates publicity, excitement, and information to the consumer. It is usually something that combines a wacky, jaw-dropping event or experience with pure branding, like tattooing your forehead or your ass, as a NYC health club recently did). If buzz is done right, people will write about it, so it essentially becomes a great PR vehicle.

Let us get this clear by a few examples.

The Subservient Chicken (http://www.subservientchicken.com/) is a website developed by Crispin Porter + Bogusky for their new client, Burger King. The website was comprised of a video with a man in a room dressed in a chicken suit. If you just typed in a word in the bar below the chicken, you could make the chicken do all sorts of things. People visited the site again and again. They talked about it and recommended it to others. The chicken was addictive! This was a great example of Viral Marketing. But what it lacked was WOM. Though everyone talked about the chicken, no one talked about how good the burgers were. The sales did not increase.

When Richard Branson wanted to launch his mobile services in America, he wanted to create a splash, a buzz. It was decided to drop Richard Branson from a skyscraper into Times Square in New York City at rush hour — naked. At the same time, have two hundred people, dressed up in red spandex suits, running around handing out product samples and information leaflets, and otherwise scaring the hell out of the commuters running for the five o’clock train. And you know what? They pulled it off. Okay, so Branson was in a nude suit and he was actually lowered on a crane. But those guys in the red spandex managed to hand out thousands of flyers and many people missed their five o’clock train. Overall, the Buzz Marketing was a raging success.

(http://www.informationweek.com/news/showArticle.jhtml?articleID=6502659)

Google did no marketing, they spent no money. They created scarcity by giving out Gmail accounts to a handful of “power users”. People started talking about the benefits of having Gmail accounts and thus they started lusting for these accounts. This was effective WOM that led to the success of Gmail.

So what is the easiest way to tell these mediums apart? Viral and Buzz marketing are the cause. They are manufactured marketing initiatives that are intended to capture people’s attention and get them talking. They can certainly be effective at cutting through today’s cluttered marketplace, but when they become pervasive, they just become part of the noise. Word of Mouth is the desired effect. It is a natural and honest occurrence, and it is very difficult for a manufactured marketing message to create it.

Even the Church needs to Market itself!

It is a well known fact that the popularity of the church has been on the decline. Probably the biggest challenge facing the Pope is to revive the glory of the church that it has been losing of late.

The church has finally realized that just like any other business entity, even it needs to market itself! The CedarCreek Church has launched an aggressive campaign to promote itself. In order to attract people’s attention, eye-catching billboards showing defamation of the church by Satan have been installed.

A website named SatanHatesCedarCreek.com aims at reinforcing the faith in God and attracting people towards the church.

The website clearly shows an act of repositioning the church’s image to match the interests of the people today. The language used in the texts is very “common-language” so that it can hit a chord with the target group. A more modern and open-minded image is displayed which is evident by the following extract from the website:

“Come casual, as you are. Tattoos, piercings- not a problem. Whether you’re married, single, single again, you are welcome at CedarCreek and we’re here to help you in life’s journey. Oh yeah, if you have kids, they’ll love it too.”

There are also live online-feeds available at http://www.cedarcreek.tv/. One can also find out information about any events that the church is organizing at all of its campuses.

Visit the website at:

http://www.SatanHatesCedarCreek.com

Print Ads for Pedigree Light

Came across a couple of print ads for Pedigree Light. Very creative indeed! Must see...

Great Ad: American Express

http://www.youtube.com/watch?v=7UfGpt-0ncc

Innovative advertising is what you need to make an impact, to break the clutter. American Express did just that to great succes in this advertisement. A highly recommended view on Youtube. Follow the link given above.

From Taditional AIDA to Engagement Marketing

The communication mix and the touch points for the same are identified according to the objectives that marketers aim to achieve at a particular stage in the buyer's purchasing process. Traditionally, the model that has been followed is the AIDA model that stands for four stages in which the consumer might be with respect to the product : Attention, Interest, Desire or Action.

This model suggests that firstly it is important for the marketer to grab the consumer's attention towards the product, secondly generate interst in it, thirdly induce desire in the consumer for the product and finally make him act and purchase the product.

The word that is taking rounds in the marketing world today is that this model has become obsolete. Experts contend that this model treats the consumers or the shoppers as subjects and directs marketers, the subjects, to target the objects through their communication mix and strategies.

The concept that is being endorsed as a replacement to the AIDA model is called Engagement Marketing. The mantra is to engage the consumer or the shopper with the product and the brand rather than directing communication or strategies to him/her. For the increasingly evolved consumers of today, it is essential to make them a part of the product and brand experience, to make them touch and feel the offering at every stage.

Theoretically, there are said to be four types of engagement: Media Engagement, Ad Engagement, Engagement Marketing and Brand Engagement.

Media engagement provides a context that can facilitate this engagement. The relative preference of one media over the other sets a platform, and engages a consumer to a particular set of media. The next step is to connect with the Advertisements, known as Ad Engagement, where the consumer relates to the ad and receives a personalized meaning out of it. Once the connect has been established, a stimulus must be provided to the ad to give it personal relevance. This is done through Engagement Marketing, which reactivates the associations and symbols at a time when the consumer is ready to move from the emotional, subconscious form of engagement to an active form.The last step, Brand Engagement, ensures sustainability and loyalty towards the advertised Brand. This happens when the messages and experiences blend into a combination culminating into a strong association with the brand per se, and not only the communication.

A practical example of Engagement Marketing can be stated as the Shopper Engagement Programmes (SEPs) that many marketing firms organise. A Promoter Girl at a leading hypermarket requests you to spare a few minutes. Then she makes you play a small game about Colgate Maxfresh that involves answering a few multiple-choice questions on whether you like bungy jumping, scooba diving or rafting and the sorts. After the game you are told that you fall in the category of "Lime Fresh" people based on your answers. After this game you are given a free sample of the toothpaste.

In the above example, the shopper is made to engage with the the brand (freshness and adventure) through a game and then made to "Try" the product through a "Trial Sample". This is nothing but an example of Engagement Marketing.

Next time you read Koetler, appreciate the concepts. But at the same time, question them and try to see if there is anything better at hand!

Innovation in Billboards to Attract Attention

kuchh

Billboards have been one of the oldest and the most prevelent tools for outside promotion. But today one sees hundreds of them in a day and it is becoming increasingly tough for marketers to make an impact on the people with their billboards.

To break the clutter, instead of glitzy and colourful billboards, some marketers have started using Transparent or Blurry Billboards.

Transparent Billboards are completely transparent like the one advertising Nike. Blurry Billboards blur the scene behind them as people look at them like the one promoting Mustang. These catch the eye of the people much more than the hackneyed billboards that one finds all all around oneself.