The 3 legged stool


Wisdom from Seth this week:

Three things you need if you want more customers

If you want to grow, you need new customers. And if you want new customers, you need three things:

1. A group of possible customers you can identify and reach.
2. A group with a problem they want to solve using your solution.
3. A group with the desire and ability to spend money to solve that problem.

You’d be amazed at how often new businesses or new ventures have none of these. The first one is critical, because if you don’t have permission, or knowledge, or word of mouth, you’re invisible.

The Zune didn’t have #2.

A service aimed at creating videos for bestselling authors doesn’t have #1.

And a counseling service helping people cut back on Big Mac consumption doesn’t have #3.

What Cha’ Drivin?


Folks are hanging on to their cars longer, but take a look at this prediction:

Japanese May Top Detroit 3 in February Sales

Sure, the auto industry is navigating new waters these days. But here’s an uncharted inlet we didn’t expect to find ourselves in — at least for a while.

In January, Japan’s automakers came within a smidgen of topping the Detroit 3 in U.S. monthly sales for the first time. And they may get the job done in February.

The Japanese sold 278,366 vehicles in January, just 1,165 fewer than General Motors, Ford and Chrysler.

“It is very likely that the Japanese automakers will outsell domestic automakers in February,” said analyst Jesse Toprak of Edmunds.com. “If the domestic automakers continue with their decision to cut fleet and rental sales into February, that may have the deciding impact.”

Last year the Detroit 3 held 47.5 percent of the U.S. market (sliding under 50 percent of annual sales for the first time), while the Japanese stood at 39.5 percent.

In January, the Detroit 3 advantage was considerably narrower: 42.6 percent to 42.4 percent.

But Toprak figures the Detroit 3 will hang on to their lead for the full year.

“It’s likely that they are not going to have this low of fleet and rental percentages for the rest of the year,” he said. “I think at the end of the year you’re going to see the domestics ahead of the Japanese, but not by very much.”

(Source: Automotive News, 02/16/09)

Grandpa is online….


50 year olds on Facebook?

Are Facebook And MySpace Becoming Uncool?
Advertising Age
Almost two years ago now, Mom and all her friends started signing up for Facebook. From there, colleagues, bosses, neighbors and others started creeping into the social networking site, once the exclusive playground of the Web’s young. For better or for worse, Advertising Age‘s Michael Learmonth says, social networking is no longer a youth phenomenon. In fact, he says, Facebook, with 52 million U.S. users and 170 million worldwide, is starting to look “like America.”

As of January 2009, more than 50% of Facebook’s users and 44% of MySpace’s users in the U.S. were over age 35, according to comScore’s estimates. The researcher also claims that the single biggest age demographic in the U.S. on both MySpace and Facebook is now between 35 and 44. And Facebook’s fastest growing demo is 55-plus.

To a certain extent, that has to be expected, as both Facebook and MySpace don’t have a lot of growing room left among younger demos. According to the Pew Internet and American Life project, 75% of online adults 18-24 already have a profile on a social network. Says Learmonth: “Generally, somewhere between growth and ubiquity is when uncool usually starts to set in.” College kids are usually a great barometer for what’s cool. According to Anderson Analytics, Facebook is still the No. 1 Web site on college campuses. MySpace, however, has fallen from second last year to No. 4 this year. – Read the whole story…

Marketing Wrap-Up


From the Thinking Blog:

Dusty Archives – February 2009 Edition

Posted: 20 Feb 2009 07:04 AM PST

From time to time we sort through the archives of THINKing to resurrect gems that you may have missed. Here are a few that we recommend.

It’s The Relationship, Stupid – I don’t care how you slice it, when it comes down to fundamentals, business is all about relationships. Ignore this truth at your own peril.

What Customers Want – Here’s the truth: Your customers don’t know what they want. And to assume otherwise is folly. When you begin relying totally on customers to be your product development department, you are asking for serious trouble.

Patience? No, Let’s Kill Something – There’s the old joke about the two buzzards sitting in a tree overlooking a highway. One responds to the other, “Be patient? I’m hungry. Let’s kill something.” Just like that buzzard, it is not in the nature of most marketers to be patient for business to grow.

Great Employees = Happy Customers – Companies spend millions of dollars each year identifying their brand, and then communicating their brand promise through various media. Employees are the primary “media” in the majority of brand contacts. Raise your hand if you think a majority of your employees understand your brand promise well enough to live it and articulate it clearly.

Better than Cold Calls


What’s better than making cold calls? Check out this advice from Steve Clark:

Sometimes it’s difficult to ask for referrals, whether as the sales person you don’t feel comfortable, you don’t like putting the pressure on to get referrals, maybe you haven’t worked with the person long enough to establish the relationship of being “referable”, or the customer/client may blow you off telling you “if I know of anyone, I’ll let them know about you”. Either way, you walk out without any names.

One of the best and easiest prospecting ideas is the opposite of the referral or the reverse referral. When you want to solicit similar businesses, for example, hardware stores or computer stores in the same vicinity of the customer you already have, this tip will apply.

Rip out the yellow pages for the type of business that you want to solicit in the same vicinity of your customer. If you are in a hardware store, show the hardware store yellow pages to your customer, which most likely would be the owner if this instance, and ask him which hardware store owners that you shouldn’t call on, either because they’re not as nice as you are. they’re difficult to work with, they have no money, they’re not progressive thinkers enough to expand their business, whatever the reason.

Give him a big black magic marker and ask him to cross off the names of the businesses that you shouldn’t call on. As he’s crossing off names, ask him to mark the names of the people you don’t know. Now there should be only a few unmarked names left. Discuss these remaining names with him and ask questions about the people’s personality, etc. At the end of your fact finding, ask your customer if you could use their name as you call on the remaining list. For the most hesitant referral, this normally works. Especially if you use the magic words, “I’d like to ask you for your help”

Friday Night Marketing News

Clickables from Mediapost:

Restaurants
by Karlene Lukovitz
Brands could benefit from more compelling Facebook pages, perhaps incorporating surveys, polling and a restaurant locator, Vitrue’s Reggie Bradford says. Providing franchisees with the tools to tap their online social circles to market local events is another opportunity, as is capturing event RSVPs to go back to individuals with coupons and other loyalty-building offers, he adds. … Read the whole story > >
Retail
by Karl Greenberg
“We like this program because it immediately spurs consumer spending on efficient appliances, since they get both a rebate and the efficiency savings,” says Jill Notini, VP communications and marketing at the Washington, D.C.-based AHAM, says the Energy Efficient Appliance Rebate Program will jump-start a market frozen by the housing crisis. … Read the whole story > >
Telecom
by Aaron Baar
“Compared with the cost of most of these devices, it’s the first time we’ve seen applications exceed the cost of the phones,” says Jeff Orr, ABI’s senior analyst for mobile content. The level of spending is even more considerable when taking into account that many of the applications come at a low cost–as low as 99 cents apiece in Apple’s iPhone App Store, … Read the whole story > >
Research
by Les Luchter
Companies plan to increase marketing efforts that highlight their social responsibility and what they are doing to minimize environmental impact, the study found. The study’s author also says there has been a significant shift in reasons for such marketing–what once was just good publicity has now become key to earning consumer trust. … Read the whole story > >
Retail
by Sarah Mahoney
Categories tied to housing fared the worst: Home and household goods, appliances, and lawn and garden. Margins declined, as the company cut prices to stay competitive, which were partially offset by lower expenses, including $94 million whacked from its advertising and display expenses in the fiscal year. … Read the whole story > >
Trends
by David Goetzl
A well-known researcher is projecting that the local ad market will continue to experience revenue dropoffs. More startling: the forecast covers the next five years, during which, some experts have predicted, the economy will presumably begin its turnaround. … Read the whole story > >

What’s for Dinner?


Check this out from CNN:

Fast-Food Chains Going After Sit-Down Diner Dollars

Fast-food chains are targeting cash-strapped patrons of casual-dining restaurants with premium products that are blurring the line between the two dining categories.

One chain boosting its high-end offerings is Burger King Holdings Corp. The No. 2 burger chain has installed a new broiler at over 60 percent of its stores in the U.S. and Canada that can cook foods like thicker burgers, ribs, kebabs and a host of other items that could give sit-down chains like DineEquity Inc.’s Applebee’s, Brinker International Inc. Chili’s or Ruby Tuesday Inc. a run for their money.

“The lines between a QSR and a casual diner, from a product standpoint, are starting to blur,” Goldman Sachs restaurant analyst Steven Kron said, referring to quick-service restaurants, jargon for fast-food chains.

In the same vein, Jack in the Box Inc. soon plans to roll out miniature sirloin burgers, which Chief Executive Linda Lang on Wednesday said are intended to rival the mini burgers sold at casual-dining restaurants.

While premium products can give a tasty boost to sales at fast-food restaurants and can help them stand out among their direct competitors, introducing them during an economic downturn may seem counterintuitive.

Consumers, strained with mounting job losses and dwindling wealth, are responding to low prices right now, with chains like Yum Brands Inc.’s KFC and Sonic Corp. trotting out national value menus for the first time. Higher-priced items could change the perception of the chains offering them, and send value-seeking customers elsewhere.

But Burger King is drawing a circle around the subset of the dining public that can no longer afford the casual-dining experience. With its latest product, a “Steakhouse XT” burger set to hit stores equipped with its new broiler next month, Burger King is hoping a thicker burger patty at a lower price could reel in some new customers.

For “someone who was having a premium burger at an Applebee’s or a Chili’s that’s paying $9 to $11 dollars and can come to Burger King for a Steakhouse Extra Thick burger and pay $5 to $6 dollars, that’s value to them,” Burger King Chief Executive John Chidsey said at a recent Deutsche Bank conference.

Premium products are nothing new for Burger King, McDonald’s Corp. and other fast-food chains, who have sold premium products alongside value items in so-called barbell or multi-tiered pricing strategies. While the value-menus get customers in the door, higher-priced items beef up bills.

To hold onto the value image, chains are adding lower-priced products as well as premium meals. Burger King, for instance, has also added a line of mini-burgers as it plans its premium burger.

McDonald’s, meanwhile, is experimenting with its own thicker burger. It has expanded tests of three varieties of an angus burger, a one-third pound burger patty on a higher-end bun, to 1,100 stores, and it’s pleased with results thus far, spokeswoman Danya Proud said.

McDonald’s has not set a time for a systemwide rollout, partly as it finishes installing premium-coffee capabilities at its stores, although some analysts suggested that the company pushed back the launch of the product due to the economy. Proud would not address that contention, although she said that McDonald’s sheer size, with nearly 14,000 U.S. locations, would let the company introduce the sandwich at a good value.

“We have to find a balance because we can’t alienate our core customers but we recognize the opportunity to bring in new customers with these items,” Proud said.

Fast-food chains may only have a temporary window to use premium products to woo diners who are trading down. Tom Forte, restaurant analyst with Telsey Advisory Group, said casual-dining chains got a boost in sales from last year’s stimulus checks. He said there may be some pent-up demand for a meal with waiter service and menus, and that the dining dollars could shift back fast once the economy rebounds..

A meal at a fast-food joint isn’t soon going to replicate the dining experience at a sit-down chain, which is one reason that operators in that sector are holding firm.

Susan Lintonsmith, chief marketing officer at Red Robin Gourmet Burgers Inc., said the company is not looking at fast-food places as a greater competitive threat any more than it did before the downturn. Instead, the company is playing up its own value message, which includes offering unlimited steak fries with each classic burger.

“We’re trying to make sure they know about our value proposition,” Lintonsmith said. “People are still looking for the experience and the quality of the food when they go out.”

For the time being, analysts think that fast-food chains will continue to have the edge.

“Given an increasingly difficult consumer environment, we question whether more consumers may be willing to sometimes sacrifice the full service experience with respect to atmosphere and service, particularly when (fast-food) competitors are responding with appealing and premium offerings to meet their needs,” Wachovia Capital Markets restaurant analyst Jeff Omohundro said in a recent note.

(Source: CNNMoney.com, 02/18/09)