How Customers Shop

There has been a ton of research over the years on how consumers make purchase decisions. On my radio show, I've interviewed many experts who offer up just as many explanations ranging from brand loyalty to price sensitivity, and everything in between. However, I've never found anything that replaces the Howard Model of Consumer Decision Making. In its simplicity, it breaks down consumer purchases into three possible categories -- habitual, limited, and extended decision making.

The easiest purchase are those we make from a habitual basis. A recent study by brand guru Erik Joachimsthaller, author of Hidden in Plain Sight, found that when customers went into a convenience store for a salty snack, they avoided the displays up front and went to the part of the store they knew had their desired snack. It was a routine, not a thoughtful choice. This scenario is played out whenever you buy that thing at the store without really looking at what's available, rather you shop for recognition of the package in the spot on the shelves you've seen it before. Purchases of gasoline, toilet paper, or other low-involvement commodities fit into this category.

The next level up is a limited decision-making purchase. This is when we are looking at options, but don't want to put a lot of energy into the purchase. A common scenario for this type of purchase is when considering what movie to watch or which restaurant to go to dinner at with friends. Typically, the purchase price is a bit higher than a habitual purchase, but not always. Price is not always a factor.

The third and most complex level is the extended decision making scenario. For example, this scenario comes into play when you're buying a car, a house, or getting a pet. This situation is very similar to the limited scenario except for what happens afterwards. Have you ever bought a car and then drove away feeling like you should have done this or that? Or on the way home you see your type of car everywhere? This after-purchase dissonance is common and suggests an opportunity for marketers to reinforce the purchase decision with added value and positive messaging.

When marketing, I've often suggested that marketers consider tailoring their communication programs first on where their product or service fits into the decision-making model, and then on integrating communications into the consumer behavior patterns. This creates an opportunity to not only stay relevant based on consumer activity, but also provides a better ROI by linking the communications program to the product value.

-- David Kinard, PCM

Owning Your SERP

When you search for something on the Net -- regardless of the search engine -- the results page is known as your SERP (search engine results page). On that page are listed both organic results (also known as algorithmic results) and paid results where advertisers have paid to show up in your SERP. Regardless of the type of result, savvy marketers will want to own that first page.

So, as an experiment, I, David Kinard, am going to try and make this blog entry hit the top of the search engine results page when people search for David Kinard. Now, there are a lot of David Kinards out there, some are teachers, some work for the IRS, and there is even a David Kinard who I think is the CEO of InFocus. I am not that David Kinard, I am the other one -- the David Kinard whose LinkedIn profile hits the top of the SERP when people search for David Kinard.

Okay, so having my name listed over and over is only the first step in getting a posting to make it to the top ten links on a SERP. There are other things I should do as well. For instance, I should create a David Kinard YouTube channel (which I've done but haven't posted anything up there as of this writing). Having a link in this post to the David Kinard YouTube channel would be a good idea as well. You can find the link here: http://uk.youtube.com/davidkinard.

I would also want to ensure that I created Facebook and MySpace pages for David Kinard. They are popular sites (like LinkedIn) and have a strong influence in your SERP. I created a David Kinard Facebook page and you can find it here: http://www.facebook.com/people/David-Kinard/508369666.

So, with a long entry like this and the instances of David Kinard pretty high so far, the liklihood of this posting making it in the top ten listings on a SERP for David Kinard are good. As long as I keep my David Kinard Facebook page and my David Kinard YouTube channel updated (Google and the other search engines love fresh content and recently updated pages), then I'll have a good chance at starting to own my SERP.

Lastly, another great way to own the SERP is to have your stuff published by other reputable Web sites. You won't see David Kinard listed on any link-sharing sites or what I like to call Link Farms. Those are not highly favored by Google or other engines. Rather, get out there and comment on other people's blogs, make contributions to discussions on forums, and get articles or other thought pieces published on sites. Of course, like me, you'll want to make sure your name is listed. I try to end everything I post on the Web, whether it's my site or someone elses with a -- David Kinard, PCM. The PCM is a credential I earned from the American Marketing Association many years ago, and it adds credibilty to my posts.

But this is just an experiment. There are no hard and fast rules of what you have to do to own a SERP. There are certianly things I could do to get any posting about David Kinard blacklisted but any reputable person who is legitamately trying to do their best should not have to worry about those things. It is said that Google updates their search algorithms about every six months. That means you need to ensure your pages are constantly being updated with fresh and relevant content.

So, today is November 23 and we'll see how long it takes this David Kinard post to land on my SERP. Typically, it can take a few days to several weeks.

The Right Tool for the Job

Likely the one greatest challenge plaguing many companies today is how do they measure the effectiveness of their marketing efforts. One great tool for evaluation, originally developed by George Black, is the CAST system. This analysis model can be applied to any marketing effort, including ads, newsletters, press releases and more. The benefit of evaluating your marketing communications through this tool is an increased awareness of what works, what doesn’t and if you’re using the right tool for the job.

The CAST system evaluates the following measurements by using a simple three option metric: High, Medium, and Low.
• Impact or Impression
• Size of Audience and Reach
• Cost per Contact
• Sales Lead Development
• Message Control
• Timing Control
• Repetitive Contact
• Reaction Speed
• Credibility
• Closing the Sale

You can use the CAST system to determine which of your efforts are actually providing a maximized return on your investment. Plus, it also helps you to identify areas of your marketing and communications that may need further integration with one another for increased effectiveness.

There is a bottom-line benefit to using this type of analysis tool in evaluating your marketing efforts. All too often, our marketing efforts are out-of-date and we don’t know it, or we spending our limited funds on efforts that are not cost effective. By taking the time to assess your marketing efforts and make any necessary adaptations, you help to ensure success.

-- David Kinard, PCM

The Power of a Plan

We create plans all the time: plans to go to dinner and a movie with friends, plans for an exotic vacation, we plan our household budgets and plan for our retirements. In all, every plan we make is an attempt to help us move from where we are to where we want to be in the most convenient, effective and efficient way possible.

Surprisingly, however, many organizations are operating without one of the most important plans they need—a strategic plan. As a critical business development tool, the strategy plan is a keystone to evaluating future growth and providing a roadmap on how to achieve it. It helps us to see our companies from an objective impartial manner and strategize the direction of our efforts.

Strategic plans articulate the past and present, and provide a sense of direction for companies that enables growth from better use of existing resources, and identification of needed new ones. In its simplest form, a good strategy plan will provide an objective view of the world, allowing a company to make informed decisions.

But perhaps the most important value of the strategy plan is its ability to organize a business around the characteristics of its markets. The plan brings to life the true bottom-line value of keeping customers for life and identifies the areas where customer relationships can be enhanced.

One of my favorite tools for strategy building is the Balanced Scorecard™ created by Robert Kaplan and David Norton out of Harvard. The tool asks you to look at the business in terms of four key categories: financial, customer, innovation/infrastructure, and learning and growth. Basically, working from the bottom up you identify what knowledge and skills your teams must have to generate the innovation and systems needed to serve your customers and manage markets, while providing a financial return that satisfies all stakeholders.

Perhaps the most clear and appropriate explanation of the value of a strategy plan can be found in the story of Alice in Wonderland. Alice, who is lost and doesn’t quite know what to do asks the Cheshire Cat for directions.

“Would you tell me, please, which way I ought to go from here?” said Alice.
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where…,” said Alice.
“Then it doesn’t matter which way you do,” said the Cat.

If it doesn’t matter which way your organization goes, then perhaps creating an adaptive and strategic marketing plan is not a good idea. But, if you want a roadmap for success then there’s no better tool than a well developed strategy plan.

-- David Kinard, PCM

Fight Commoditization with Real Value

I just finished reading an amazing book by Erich Joachimsthaller, Hidden in Plain Sight: How to find and execute your company's next big growth strategy. It's a fabulous book and I'll be interviewing Erich on my radio program on Wednesday, November 19 on wsradio.com.

One line in the book hit me like a ton of bricks this weekend while I was reading it.

"We were a highly specialized product turned into a commodity."

To be clear, the line references a German insurance company who by all accounts was a superior product in the marketplace, but because people where shopping on price, none of their elaborate feature sets meant anything. I see this same situation so often; price-driven markets turning complex and highly differentiated products into commodities. So what is a markter to do?

Well, first you should read this book and it will tell you what the insurance company did. But aside from that, you need to ensure your head is not hidden in the sand, hoping that somehow consumers will suddenly wake up to your messaging and branding and agree with you that your products are truly the unique offerings you believe they are. It's never going to happen.

When a product is willingly or unwillingly turned into a commodity by the market and consumer opinion, the simple fact of the matter is that the product has failed to rise above the fray and create a demand ecosystem. In other words, I would say that most products suffering this fate are developing and pushing feature sets that are not relevant, not important, and don't resonate with consumers. That's why they're comparing only on price, because you're just as good, or good enough, as everyone else.

I think Joachimsthaller brings out many excellent ideas in his fresh book and it shoudl be required reading for MBA students. Oh wait, I teach MBA classes, and I assign the books. Guess what folks -- it's now on the reading list!

-- David Kinard, PCM

Hidden in Plain Sight is also the American Marketing Association Foundation’s Berry Book Award winner for the best new book in marketing.

Rule of 7

One thing you learn from being in marketing for any length of time is that there are lots of formulas and rules for doing most anything. Marketers are great at coming up with six easy steps for this, 10 rules for that, and a dynamic 4-part matrix for thinking about anything else.

One of those rule sets I've always like was the Rule of 7. It basically says that if you want your prospect to take action and buy what you're selling, you need to connect with him or her a minimum of seven times in an 18-month period. Then and only then can you reasonably expect the prospect to fully understand what your product benefits are, and take action.

While I've never been able to find any study or research data to suggest that the Rule of 7 is correct, I do like the spirit behind it. In a world where it is said that the average consumer is bombarded by more than 3,000 marketing messages every day, it's easy to see why we need repeat exposures of our messages to gain memorability and traction with our audiences. It also suggests that there is something to be gained with time. Eighteen months is a long time in a marketers world, but it is short in terms of the quality of relationship between people.

I think there are three key take aways from this rule:

1. Think long term. Building a meaningful relationship with a prospect that fosters awareness, remembrance, and positive action takes time. When you approach your marketing communications with an 18-month timeline, they move from hard sell to intimacy. It causes you to think about quality and depth.

2. Frequency of contact is important. When you think of a family member and staying in touch with them, is seven times over a year and a half enough to keep them top of mind? I might suggest that seven is too little, but it depends on the relationship type. Regardless of the ratio of time and contacts, what is important is that you remain on the radar screen of your prospects. This means frequent and relevant communications.

3. Think dialogue, not monologue. This is an obvious point in a Web-enabled, socially-empowered, and technologically-linked marketplace. If those seven communications are just you talking, then there is no relationship being developed, no intimacy being gained, and no relevancy being learned. Make sure that your communications are both monologue and dialogue -- with emphasis on two-way conversations.

-- David Kinard, PCM

Dim Bulb Illuminates Once-Smart Marketers' Failure

My friend Jonathan Salem Baskin, author of the popular blog The Dim Bulb, wrote yesterday about Sprint losing

another 1.3 million subscribers, and turned in a quarterly loss of $326 million. It promised to boost ad spending. Company CEO Dan Hesse said they'd "make the case for competitive pricing." He's been the spokesperson in some of the ads so far.

Baskin suggested in his blog that Sprint go out and steal some customers from AT&T and T-Mobile.

However, I would venture that just stealing customers won't fix Sprint's problems. People are leaving Sprint for the same reasons they will soon leave At&T or any other carrier -- they get bored with the brand and will flock to the next new shiny thing that comes their way. Any investment spent on stealing a customer has a tenuous long-term ROI attached to it.

Rather, I think the problem is much deeper for Sprint -- they've lost their way. They stand for "simply everything" (Sprint's new catchy slogan -- just Google "sprint simply everything to see how pervasive it is) but mean nothing. When they draw a clear line in the sand, gain the courage to do something remarkable and valuable, then I think they'll begin to solve their customer migration issues.

As usual Baskin highlight's the most absurd in big-dumb-company marketing. It is amazing how quickly once-smart people can lose their wits when they enter the corporate board room.

Tough Market Needs Tougher Marketers

It is a comforting thought that if you do your best, work hard, and can attribute results to your efforts, that you will be rewarded and have a good level of security in today's tumultuous economy. However, that comforting thought may not be reality.

Last week I joined the ranks of many qualified marketers who have recently found themselves laid off. After four years with my last employer (almost to the day) I was told my position was being cut. Though I was disappointed and surprised, I wasn't dismayed. I knew that I've spent my time developing a solid resume and network that will -- hopefully -- see me through this employment gap and on to my next role with another company.

What this situation reminds me of, however, is the need for marketers to be tougher than the times they face. It is very easy for marketing professionals to rest on past accomplishments, go at the pace of their competition, or even lag behind in their own learning and education. Rather, marketers need to lock down those new skills on a regular basis, constantly review their work for better ROI opportunities, and innovate their strategies and tactics so that they lead the competition rather than walk alongside or fall behind.

Tough economic times call for tougher marketers -- professionals who have resumes packed full of quantifiable results. Even in the toughest of times, businesses still need good marketing people. In fact, in those tough times they need marketing professionals who have delivered solid results in the past with a brand promise of repeating those results in the future.

If you've found yourself out of a job in these tough times, what are you doing to ensure your marketability is high, and that you're a preferred candidate for the jobs you're applying for?

-- David Kinard, PCM

Meaning Matters – Adapt or Die

In 2001, the American Society of Association Executives Foundation published a seminal book on Exploring the Future. In it, authors Olson and Dighe reported on fourteen trends facing non profits, especially associations. Those trends represented seven strategic conversations that any enterprise benefits from engaging.

Charles Darwin is often attributed with the phrase, “Adapt or Die.” He was referring to the survival of the species but his comment applies to all organizations that are facing relevancy issues. And with today’s troubling economic times, those who survive will be the ones who are most effective and efficient in creating meaning for their customer communities.

Meaning matters. In the marketing world we know these words as customer value. However, there is a much richer interpretation of the words when looked at from a non-profit’s perspective – and an application of them that could mean increased customer loyalty and competitive positioning.

The competitive company will create more than just the traditional supply of products and services laden with various feature sets that are an attempt to beat out the competition. From a meaning matters perspective, the competitive company will create an opportunity for belonging and identity on behalf of the customer. Social networking sites are attempting to do this, some with more success than others. But when the formula is right, they become the enduring qualities that drive customer loyalty and create brand evangelists.

Meaning matters suggests we stop looking at our customers as transaction channels. It demands from us a perspective that treats customers as members of a community. Their payments to us are an act of investment into the community, and we then serve as stewards of those dollars. We take their investment and strive to make the community, and it’s value, richer and more meaningful to the members.

It’s a different perspective, but one that has been working for non profits and associations for more than a century now. And if you think there’s no money to be made by thinking this way – just consider the tens of billions of dollars raised every year by non profits, and the seven-figure incomes of their senior staff.

Meaning matters.

-- David Kinard, PCM

Two New Ideas -- Review of Wrap Mail and Elevator Pitches

I found two new items on the Web today that really impressed me. The first is simple enough -- go visit it: Elevator Pitches, a service of TechCrunch. This is a site where you can upload your own elevator pitch, have others vote on it/provide feedback, and even review others' pitches. If you're a budding entrepreneur, or a grass-roots marketer needing to generate some buzz, this is an excellent site for you.

While there, I happened up on an idea I think has some solid potential -- Wrap Mail. This is a service that while relatively inexpensive could quickly easily pay for itself. The basic idea is that each email you send out -- or anyone in your company for that matter -- from their client-side machine would be wrapped by clickable and trackable ads about your company. So, while you're emailing out Web site maintenance announcements to your customers, sending customer service emails, or basically any other communication for that matter, the email is wrapped with yoru ads. It's the ultimate in "did you want fries with that?" marketing.

-- David Kinard, PCM