Monday, January 30, 2012

Unforced Errors

“To play it safe is not to play.” – Robert Altman (Film Director)

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I am still recovering from Sunday’s epic (five hours and fifty-three minutes) men’s Grand Slam final at the Australian Open. No I did not experience cramps like the two players Novak Djokovic (winner) and Rafael Nadal. I made sure I had plenty of bananas and Evian by my TV set while I watched. What I am trying to come to terms with is how much the men’s game has changed since both players entered the scene. Power tennis – players now position themselves way behind the baseline, go toe to toe, play relentless defense to break down their opponent. Either they construct their shots to deliver a winner or they wait for their opponent to make an unforced error. Consequently, in the new era of power tennis, I am now witnessing statistics where winning players have a negative ratio, more unforced errors to winners. In Sunday’s match Djokovic (#1 in the world) had two less unforced errors than Nadal (#2 in the world), but overall a negative ratio of minus 12 to Nadal’s ratio of minus 27.

I hope I have not lost you sports fans. What I am advocating is playing defense might work for men’s tennis, but not in business. In business you need to play for winners versus waiting for your competition to make mistakes. I mean competitive mistakes are great, but why play it safe? A good example is Coca Cola (#1 and #2 if you factor in Diet Coke) versus Pepsi? Did Coca Cola play it safe or did they dive into the new digital world, make some mistakes, but are now hitting more winners. Did IBM’s former CEO Samuel Palmisano play it safe or he came up with some innovative winners by shifting from the low margin personal computing business to the higher margin services and software businesses.

I hope you are prepared to make more winners vs. unforced errors in 2012!

Thursday, January 26, 2012

MOT (the Moment of Truth)

I am a student of consumerism, especially as it relates to impulse purchasing. I will have the opportunity to share my ideas on this subject at numerous conferences throughout the year. Consequently I have been doing my homework. Today I would like to post about MOT (the Moment of Truth).

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America’s purchasing decision process is morphing. The traditional model first surfaced back in 2005 when Proctor & Gamble identified three steps:

1.) Stimulus – First consumers are exposed to some form of advertising about a product via TV, print, direct mail, etc. During this first step, occasionally coupons came into play. In addition, smart shoppers also relied on printed reviews (e.g., Consumer Reports).

2.) FMOT – The First Moment of Truth is when the consumer is actually in-store ready to purchase a product. They are influenced by numerous factors – packaging, pricing, shelf marketing (e.g., product positioning at eye level vs. top or bottom, instant promotions, pushy sales associates, etc.).

3.) SMOT – The Second Moment of Truth occurs when the consumer actually uses the product and either has a positive or negative experience.

Great brands according to the marketing gurus at Proctor & Gamble consistently win the first two moments of truth.

Flash forward to 2012. Thanks to the collaborative tools of Web 2.0, consumers now have an influential voice, they are actively engaging online. A fourth step has now been added to the model. Google has titled this fourth step as ZMOT, the Zero Moment of Truth. People are sharing their experiences online and influencing consumer purchasing decisions. So now we are stimulated, then we conduct our fair share of online research (ZMOT) before we buy. Sounds confusing? Not so! Google conducted a study back in April, 2011. They revealed that 70% of Americans look at product reviews before they buy; 79% of consumers indicated they use their smartphones to assist with shopping. When I put the two findings together, my take is our mobile devices will become MOT (the Moment of Truth) accelerators. This will open a huge window of opportunity for savvy marketers to capitalize on intercept marketing strategies, a topic for a future post.

What is your MOT when you shop?

Wednesday, January 18, 2012

Santa Continues to Go Mobile

The NRF reported that 2011 holiday sales were $471.5 billion, an unadjusted increase of 4.1 percent year-over-year. Lean inventories, strong promotions were contributing factors. Based on the level of discounting I witnessed, I question the margins retailers actually achieved. Regardless, this much I do know – Santa continues to go mobile.

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There are numerous studies published about the number of smartphone users in the U.S. The resource I usually quote during my mobile presentations is comScore. Recently comSource indicated there are 91.4 million smartphone users (38 percent of all mobile users). Nielsen just released a higher figure and now project 44 percent of all mobile users own smartphones. One fact that is consistent, mobile was a bright spot for retailers this past holiday season. Let me share some facts:

· Google conducted research and revealed that 79 percent of consumers use their smartphones to assist smart shoppers to find product information, locate retailers and perform price comparisons; 70 percent use their smartphones when they are actually in a store.

· Mobile browsing on Black Friday for in-store and online bargains increased from 5.6 percent in 2010 to 14.3 percent in 2011.

· PayPal reported a 397 percent increase in the number of consumers shopping via PayPal Mobile on Cyber Monday 2011 compared to 2010.

· IBM Coremetrics released a study that tracked mobile usage December 25th and 26th; online sales via mobile increased year-over-year 172.9 and 117.8 percent respectively. Note: Traffic from mobile devices accounted for 18.3 percent of overall web traffic during those two days.

Good news for those monitoring the adaption of QR codes (yours truly) during the past holiday season. A new survey indicated that half of smartphone owners scanned the 2-D codes during their purchasing process; 18 percent ended up making a purchase while 21 percent shared the information with someone.

Another one of my reliable sources, eMarketer estimates that when the final data is tabulated, 2011 mobile advertising spending will be $1.23 billion. No surprise, based on the mobile revolution we are experiencing. These expenditures which include display, search, text ads and video, will reach $4.4 billion by 2015.

Santa continues to be bullish about going mobile. Are you?

Friday, January 13, 2012

Resolution Shopping Season

I am looking forward to next week when the final 2011 holiday season sales numbers are released to corroborate an old post, The Cheesecake Barometer. I predicted consumers would start spending money again. Nevertheless, we are in the midst of new holiday season created by retailers labeled the Resolution Shopping Season.

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According to the market research firm NPD, the average consumer visits a big-box retailer once every two to three weeks. In contrast, shoppers go to the grocery store every seven to ten days. Consequently big-box retailers are adding grocery items to increase visitation, but they also know that getting people to buy impulsively is key. NPD reported that impulse purchases have dropped from 29% in 2008. down to 15% in 2010. Accordingly, retailers are creating additional seasons beyond Christmas to enhance their merchandising/impulse sales.

The first holiday season officially has kicked in. In recognition that a majority of shoppers made New Year’s resolutions (e.g., health & wellness, personal organization, etc.), retailers are promoting items geared towards these resolutions. No surprise the number one resolution is weight loss. January has always been a good month to get bargains on exercising equipment or health club memberships. A quick check of GNC’s website revealed that they have an abundant number of promotions across their entire product line. Electronic activity monitors which measure calories burned, critical to successful weight loss management, are this year’s rage. Their prices range from $100 (Fitbit Ultra Wireless Activity tracker) to $300 (Motorola’s new Motoactv). Target is heavily promoting their “Storage and Organization” product lines (save up to 25%) for consumers looking to organize their homes. IKEA also has special home organization offers, but for those shoppers that do not care about health & wellness and want to remain a couch potato during the football playoffs, they are promoting their BESTÃ… VARA TV/storage combination to help you get organized for game day.

Have you organized your resolutions shopping list yet?

Tuesday, January 10, 2012

“Big Data” Explosion

Listening to a BBC radio program about Green Clouds, I learned ninety percent of the world’s data was created in the last two years. I.B.M.’s Chairman Samuel Palmisano projects we will reach 35 zettabytes of information by 2020; 44 times of what currently exists today. “Big Data” explosion is here!

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Business intelligence is exponentially growing at an inconceivably rapid pace while you are reading this post. Companies are struggling to get their hands around this massive amount of external and internal data. Recently, Connotate, a web data monitoring/collection company, revealed that 45% of the companies surveyed believe their number one challenge with “Big Data” is the time and manpower needed to collect and analyze it; 44% indicated the amount of data was too overwhelming for business to effectively leverage. Nevertheless, as a Business Catalyst, I firmly believe we are entering an exciting phase of business, especially when data is mined correctly. We will evolve into smart business leaders who will develop sound strategic initiatives. We will implement cost effective contextual marketing programs that will result in high levels of customer acquisition and retention.

Below is a quick sneak preview of the future I envision for contextual marketing:

You are driving and you decide to check out football scores on ESPN Mobile – two hands, two hands please! Up pops a banner ad for Wendy’s Hot n’ Juicy Burger. You tap on the mobile ad, up pops a video. The next thing you know you crave a burger and you tap for the nearest location; 1.2 miles away. As you pull into Wendy’s, Modell’s Sporting Goods which is located across the street, thanks to the advancement of Near Field Communications (NFC) sends you via SMS text a mobile coupon – a buy one, get one free offer, on NFL jerseys due to the amount of time you spent online (ESPN) the past month checking out football scores. Thirty minutes, plus 1,760 calories later (who‘s counting?), with two Green Bay Packer jerseys on your front seat, you pull into your local 7-Eleven® store for some gas. At the pump you scan the QR code on the poster and find out that Coca Cola has a great deal on Diet Coke. In the store, while checking out with your 7-Eleven® loyalty app, the POS touch screen communicates to you about the sale on Oreo’s new, Peanut Butter Fudge Cremes based on your past six weeks of in-store Oreo purchases. Etc., etc., etc.

Welcome to “Big Data” explosion. Companies, whether they are B2C of B2B, will be able to send the right message, to the right target audience, at the right time.

So what data did you reveal over the weekend that some marketing geek has already analyzed?

Friday, January 6, 2012

Walt E. Disney’s 5 Secrets

As we close out the first week of the New Year, I trust everyone is sticking with their New Year’s resolutions. More importantly, I hope all of you have established some solid goals for 2012. When it comes to setting goals, I am always inspired by Walt E. Disney’s 5 Secrets.

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1. Think Tomorrow

2. Free Up Your Imagination

3. Strive For Lasting Quality

4. Have “Stick-to-itivity”

5. Have Fun!

What are your secrets for establishing goals?