Monday, November 16

Projecting Sales: Retailers Look To Black Friday

If consumer confidence is any indication of what retailers might anticipate this year, beginning with Black Friday, then the best they can hope for is: the fear of a worsening economy may have had a greater impact last year than living in one will have this year.

Most forecasts suggest a small gain in retail sales over last year. And most consider the smallest gain good news, despite consumer confidence indicators there is some validity to the concept that they will be more cautious.

Consumer Confidence Highlights From comScore

• About 75 percent of consumers across all income levels are more afraid of the economic future than ever before.
• 46 percent of over $100k households/65 percent of under $50k households are spending less on non-essentials.
• 42 percent of all consumers across all income levels are overwhelmingly concerned about unemployment/job security.
• Fear of unemployment/job security increased in October all among 100k households and under 450k households.
• 56 percent of all consumers think that unemployment will not begin to improve in 2010.
• 32 percent of all consumers across all income levels are concerned about rising prices, with 100k households also concerned about the devaluation of real estate and financial assets.

Five Tips For Retailers Attempting To Leverage Online Shopping

• Retailers hoping to drive incremental sales in physical retail locations need to develop reasons for consumers to add their store to their shopping route. Sales are not enough; consumers are shopping for an experience as much as they are bargains. For example, a book store that already has an online component can win with physical events like key book signings.

• Retailers that are already advertising across multiple channels this holiday season (digital and traditional) need to align their advertising messages so that one tactic naturally leads into the next. For example, digital advertising might include in-store discounts or promotions and in-store sales might drive return visits online, with a clear indication of why it adds value.

• Retailers mostly know which digital marketing tactics (search, display, email, etc.) are driving traffic to their sites, but most are struggling to convert visitation into sales. There tends to be an over-reliance on general conversation with little call to specific action. Unlike physical stores where customer service agents can answer questions and direct sales, online stores rely almost exclusively on a browse-and-buy shopper. Retailers with a mechanism to engage customers online tend to have more success with demand fulfillment.

• Retailers seem to think they are able to find their demographic online and distinguish which will visit a site, but they are struggling to determine where category buyers are online within that demographic. While it would be challenging to initiate consumer engagement online one week out from the start of holiday shopping, social media programs that engage consumers could readily provide retail outlets with a better understanding of browsers vs. advocates vs. buyers.

• Search spend investments during the holidays is difficult to validate because the reality is that search spend investments are almost a defensive marketing tactic. During non-holiday seasons, it is easier to validate. During a holiday season, it succeeds mostly at protecting against competitors in the pursuit of diverting would-be customers.

Overall, all of the most common questions being posed by retailers pinpoint the real challenge this season. In general, they are all succeeding in increasing site visitation, but most are not converting those visits into sales. Simply put, there are more people buying online but those people are spending less and making fewer transactions and fewer dollars per transaction.

It is not a surprise, as the majority of online marketers seem better quipped to entertain consumers online than selling products or driving physical traffic. So how do you change behavior when the U.S. jobless rate has climbed to 10.2 percent (and the boarder measure has risen to 17.2 percent)?

With 55 percent of consumers saying that they have less money this year than previous years, it is critical for retailers to provide engaging incentives to buyers. According to the comScore report, the most common ideas are to offer free shipping, provide layaway options, and increasing their use of social media. However, where retailers may falter is in how they employ social media — blasting holiday discounts across Facebook and Twitter are unlikely to differentiate their stores.

Any successful social media model will likely be those that engage consumers much like in-store personnel might, directing consumers to their self-defined interests. Isn't that what we always knew about advertising? It works to get people in the door, but someone or something else has to close a sale that delivers value to the lives of the consumer.

Friday, November 13

Changing Behavior: Consumer Confidence

In coming out of what it defines as the Great Recession of 2008/2009, The Futures Company is setting its sights on a dramatic shift in consumer conscience and confidence beginning to take hold in 2010.

Specifically, The Futures Company sees consumers moving beyond the heightened sense of anxiety and economizing frugality that convinced them (and their employers) to operate from a sense of self-preservation and scarcity. However, in the new post-recession world, The Futures Company does not see consumers returning to an era of accumulation and indulgence. Instead, they make the case for an evolutionary step forward in thinking.

A Darwinian Gale Has Reshaped Consumer Thinking

In its recently published white paper, The Futures Company articulates attempts to identify the crucial characteristics of the marketplace to come, one that will be shaped by a new consumer confidence that would have a direct impact on how marketers, advertisers, public relations practitioners, and social media professionals might proceed. These characteristics include...

• Responsibility. Consumers will be much more responsible when making purchasing decisions, giving more consideration for what they purchase before they purchase it.

• Vigilance. Consumers will be much more watchful about their exposure and position, with every aspect of their spending being questioned and placing increased pressure on communicators to ally with their concerns.

• Resourceful. Consumers will be more resourceful, with an emphasis on the management and conservation of resources that they consider most important to them.

• Prioritization. Consumers will be much more likely to prioritize their purchasing decisions in the marketplace. While this won't change their aspirations, they will think of purchasing decisions as trade offs.

• Network Oriented. With increasing regularity, consumers will forge personal networks of support that they consider essential in a world of uncertainty. The net result will shift the pre-gale presumption of global convergence toward a post-gale world of local "exceptionalism."

Preliminary Conclusions About A Darwinian Gale

There is certainly some basis for the conclusions drawn by The Futures Company. In particular, they are right that marketers have grown too comfortable in an era of indulgence, where they knew what consumers wanted and delivered it to them with an excitement and intensity that compelled people to buy, even if it meant overextending their credit to do so.

They are right that the marketplace is in transition, but some of their glimpses into the future might be slightly offset by other trends that seemed to be dismissed. While there is no doubt consumers will invest considerably more time in defining value, there is an equally likely chance that this definition of value will be based on perception as opposed to reality.

While the current trend certainly suggests a shift toward populist behavior, due largely to an increased reliance on the Internet, we anticipate a pendulum swing back toward the center in regard to popularity defining value over objective thinkers defining value. It almost has to occur as communication continues to increase exponentially and public relations sets its sights on social media, leading to an increased infusion of biased communication in an effort to gain a perception of being valuable.

Much like yellow journalism ushered in objective journalism before many media outlets gave up on the concept in order to cater to stories that affirmed the beliefs of their readers and viewers, someone — either media or other parties — will have to become trusted advisers without individual or organizational agendas.

The other weakness in the white paper is the concept of moving away from globalization without considering the new geography of the Web. While local markets are an increasingly important part of the marketing equation, the white paper seems to de-emphasize the importance of the Internet's ability to create entirely new environments. People aren't only from their geographical locations but also from new destinations like online communities and certain social networks that do not recognize geography as a defining trait among members.

We also found a significant challenge in this world view. Given that consumers have learned that the work is riskier than they once believed, the construct still shows consumer thinking to be based largely on a fear mindset, which in itself has negative consequences, especially as the blame for an air of indulgence is being placed on the mantle of a free market system.

If you can get past some of these challenges, there are glimmers of realities to be optimistic about. The best of which stems from the concept that there is indeed an increased opportunity for companies, and communicators, to turn resourcefulness and innovation into tangible benefits that add real value to the world, which enhances optimism and consumer confidence (much like Steve Jobs did despite the 2001 recession). It is the most accurate assessment in the entire paper.

And from that perspective alone, A Darwin Gale might be worth checking out. Just keep in mind, as the authors freely admit, the future is not fixed.

Thursday, November 12

Rushing The Net: Public Relations

According to a new study by Vocus, an overwhelming 80 percent of public relations professionals see social media as a key focus in 2010. And as these professionals move toward social media in 2010, public relations may never be the same.

Why? Because when most public relations professionals think about supplanting public relations with social media relations, all they are really supplanting is media relations. And, as a result, the profession is setting its sights in a more competitive space that takes them further and further away from work that adds value to a comprehensive communication plan.

While there is significant overlap between public relations and social media, the perspective is not the same. In fact, many modern public relations professionals — especially those who tout relationships — tend to confine their relationships to people they perceive as having influence over the public they intend to reach.

Right. This was the same perspective that moved so many of them to overemphasize media relations because the tactic was simple: develop relationships with members of the media who had already captured the interest of a specific public and then add the total number of impressions to excite the client.

That model doesn't work as well anymore, because mainstream media seems to be hemorrhaging. So suddenly, those oh-so-important relationships with influential media as defined by 80 percent of the industry just doesn't seem to matter that much anymore.

Neither will most of those relationships in social media, as popularity tends to wax and wane. It's one of several flaws in the influence construct, made popular in part by Edleman. The irony is that it is also contrary to an effective social media program, which tends to allow people with seemingly no influence to become influential overnight (or vice versa) within specific publics.

You see, effective social media relies on the ability to see the world from varied degrees (e.g., one-to-one, one-to-many, and one-to-all) at the same time. And that often requires different skill sets that are not scalable for public relations firms alone (unless we are destined to see increased automated push communication, which is the worst possible practice being put into play today).

Most public relations professionals misdefine social media as a communication tool.

Social media is not a tool as much as it is a tactic, but there are tools within the space in which it occurs. More than anything, social media (people and technology) is what happens on the Internet, which is an environment in and of itself.

Until communication professionals understand this, their social media programs will be no more than either an extension of everything they did wrong with media relations or, worse, everything marketers do wrong with automated spam messages.

Quick Example: Yesterday, I wrote "Donations made at Who Will Stand screenings today benefit Help USA Las Vegas, which finds housing for homeless vets" on Twitter, to which Uloop replied "here's lots of available housing near CSN on Uloop." Um, right.

Not surprisingly to me, Jennifer Lawson, a non-communication professional, demonstrated to me over dinner that she has a better understanding of how things work more than most of the top communicators currently engaged in social media. Specifically, she understands that she writes for different destinations on the Internet and each content destination attracts a different group of people.

"Very, very few of the people who read what I write read everything I write," she said. "Some of them even have a hard time believing that I'm the same person writing about being a mom and then writing about sex. Whatever. I'm just me. Multidimensional."

When I teach social media, I try to impart a spatial concept to students. I suggest they think of the Internet as an environment. Within that environment, there are destinations much like we see in the physical world (e.g., we wake up at home, go into our car, drive to work, go to lunch, go back to work, head to the gym, attend an event, and go back home).

Online, it's the same. We wake up, check Twitter, connect to Facebook, check our reader, bookmark some pages on Delicious, share our findings on Twitter or Digg, leave comments on a few blogs, spend time on our own blog, etc., etc.

All the while, public relations professionals are now scrambling to drop us messages along the way, even when we are not traveling in the same destination loop or orbit. They don't often pay attention to what we are doing either. Ultimately, they simply deliver the same message over and over.

The message is to add their client's destination to our orbit OR convince someone else (presumably someone with influence) to do so. While they deliver their message, they ignore the obvious. The average blogger already participates in 10 social networks beyond their blog and those networks have multiple destinations too.

Bad news for them. People have a finite amount of destinations they can visit in one day. And, as Lawson seems to know, people don't want to visit them all, especially if you deliver diverse content. (There are a few who will, and those people are your true evangelists or, in some cases, fanatics.)

So how does an organization develop successful relationships on the Web?

I have a great deal of respect for many social media professionals. Please keep that in mind while I point this out: Most social media professionals are attempting to overlay individual communication models on organizational communication. And, frankly, that just doesn't work. They are not the same. Authors, entertainers, speakers, etc. are different.

If you don't believe me, ask Chip Conley who is discovering that his customers might not want to see his pics from Burning Man (not that there is anything wrong with Burning Man.) Go figure. And, as Bill Sledzik called it right: just because they buy your product, it doesn't mean they want to be your buddy.

While every social media model is different because all communication in an expansive environment (just like the physical world) is situational, online organizational communication also needs to be delivered differently depending on the destination in which it occurs. (e.g., you wouldn't put a television spot on highway signage, would you?)

So some social media programs might need banner ads in one destination, conversation in another, and community activities in another. If this is true, then it is also true that different deliverables in different destinations might require different communication professionals or different skill sets. And those skill sets range from direct marketing and advertising to public relations and customer service. Probably more.

As a result, if someone is hoping to develop a relationship via communication in these varied destinations, then focusing on those with perceived influence doesn't hold up. It's just more of the same. It's an attempt to rely on someone else's brand to peddle your stuff.

In reality, genuine relationships occur when you have an opportunity to touch people in various destinations that may or may not be your own destination. You know, just like real life.

If I see someone at work, at lunch, at the gym, and at some event later that night, I'm much more likely to develop a relationship with them (unless I'm constantly pressuring them to go somewhere else). Unfortunately, too many public relations professionals don't understand this (or at least not those who assume every relationship is just another opportunity to add one more body to an event). So before these public relations professionals rush the net, I suggest they change their thinking.

You see, the real challenges in social media is not attracting more followers, friends, fans, or whatever. The real challenge is having the ability to remove degrees of separation between the people you want to reach and the message you are trying to share. But to explain that, I'd need a new post. This one is too long as it is.

Suffice to say for this one, it seems to me that of the overwhelming 80 percent of public relations professionals who are planning to set their sights on social media, a mere 5 percent or less will survive such a transition. And, if they are not careful, they will damage their entire industry.

In some ways, they may have taken the wrong path already. Based on the rest of the survey, the writing is already on the wall.

Wednesday, November 11

Making Promises: Veterans Day

I met a boy on the ship coming over to Vietnam. He was a good guy from the state of Missouri. He was my friend. We lived in the same tent together, went into the An-Khe together, and spent most of our free time together. I got to know this boy well and he was my best friend. His name was Dan Davis.

On Monday morning, the 15th of November, he died in my arms of two bullet wounds in the chest. He said, "Ken, I can't breathe." There was nothing I could do." — excerpt from a letter from Kenneth Bagby, 1st Battalion, 7th Calvary, 1965

Forty-seven years prior, on the "eleventh hour of the eleventh day of the eleventh month" in 1918, armistice was signed between the Allies of World War I and Germany at Rethondes, France. The promise of armistice was peace, after a different generation of veterans prayed that their sons and daughters would never have to see the horrors of war.

In Belgium it is known as a Day of Peace. In France, Jour de l'Armistice. In the United Kingdom, it remains a day of remembrance. In Australia and Canada, people still wear red poppies and pause for a moment of silence at the eleventh hour. In Germany, Volkstrauertag remains a national day of mourning. And in the United States it was renamed Veterans Day to recognize and honor all veterans who served.

And yet, despite such promises made every year on this day, armistice continues to be a promise the world cannot keep. And children become solders. And soldiers are sent away. And when they return, sometimes only their mothers, families, filmakers, and bloggers remember them.

This Veterans Day is different for me. It is different because I recently had the opportunity to meet Phil Valentine, director/producer, and Michael Bedik, director of photography, who created Who Will Stand, a documentary that examines the experience of a dozen physically and/or psychologically wounded American soldiers who have returned from war. After watching this film, it reminds us that not only was the promise of armistice broken, but so too is the promise of doing everything possible for the men and women who have served.

This promise is broken to such a degree that some people even suggested that the documentary not be seen because it was too political, uncomfortable, and reveals some shortfalls in the system meant to care for veterans. I disagree. While it might be easier for the current administration to not hear the needs of veterans, we can be thankful people like Valentine and Bedik have given them a forum to be heard. They need to be heard.

“The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership.” — Colin Powell

Are you listening? We're listening. Not only to filmmakers like Valentine, but people like Toby Nunn, Ron Portillo, and Dana F. Harbaugh, author of Pearls of Honor: Their Duty to Remember, who served two overseas deployments aboard the aircraft carrier USS Ranger (CV-61) and participated in Operations Earnest Will, Desert Shield, Desert Storm, and the Defense of the Kurdish Peoples. People who have a great respect for servicemen and women.

• The Soldierʼs Project helps provide free counseling and support to military service members who have served or who expect to serve in the Iraq and/or Afghanistan conflicts and to veterans of those conflicts.
Defending Freedom raises awareness and support for servicemen and women with its Defending Freedom wristbands.
Blue Star Mothers provides support for active duty service personnel, assists veterans organizations, and is available to assist in homeland volunteer efforts.
The Wounded Warrior Project raises awareness and enlists the aid of the public in meeting the needs of severely injured servicemen and women by providing direct services that honor and empower wounded warriors.
U.S. Vets provides housing, counseling, job assistance, and hope to thousands of homeless veterans each year.
Soldiers' Angels is an international, volunteer-led organization supporting America's men and women in uniform that supports more than 30 projects.

To that end, Veterans Day doesn't need to be confined to a single day of recognition or remembrance. Rather, it can be the day that you ask yourself if you are doing something, anything, for the men and women who have already done something for you, regardless of the country where you live. Good night and good luck.

Tuesday, November 10

Advertising Sales: Razorfish Jumps A Conclusion

"What we're finding is that with Facebook and Twitter, marketers are assuming some deeper dialogue, but what's really going on is -- people want deals." — Garrick Schmitt, group vice president of experience planning for Razorfish

Really? We don't think so. Not exactly.

Schmitt is basing his conclusion on a study he edited, where 44 percent of consumers surveyed said that they follow brands online for deals as the main reason. This, of course, is partly true.

But where Schmitt might be making a mistake is in not understanding that there is a significant difference between the immediacy of a discount campaign and the sustainability of an engagement campaign. More likely, the relationship between the two is symbiotic. They work together.

Real World Experience Shows Engagement And Sales Are Symbiotic

• Case Study Snippet: Car Dealerships. In working with two car dealerships offering vehicle maintenance, one with a frequent direct sales approach and another with limited discounts but high engagement, we found that former dealership diminished returns on sales over the course of six months. Why? Consumers learned to wait for discount offers before making purchases, and demanded deeper discounts over the long term when the original discounts didn't seem so special anymore. The latter dealership increased sales over time as consumers identified them with quality first.

• Case Study Snippet: Resort Openings. In working with two casino resorts, one with frequent cash rewards and another with a bundled opening package, we found the former delivered a high return on the front end (first 30 days of opening) but then the campaign eroded as consumers demanded higher and higher cash incentives. The latter resort never offered a direct sale or cash incentive, but relied on heavy branding and anticipation that led to a 100 percent occupancy rate for the first 18months of operation.

• Case Study Snippet: Educational Value. In working to open a private elementary school in Las Vegas, the initial reaction was that the school would not do well because its tuition structure was three times higher than the next leading competitor. Not only did the campaign meet enrollment projections, but it also exceeded them by 21 percent. While we're certain every parent would have appreciated a discount on the $14,000 annual tuition rate, they didn't need one knowing that price point provided their child the best education in the area.

• Advertising Rule 6: People Lie. The real rub with looking at a study like the one presented by Razorfish is that people lie. In virtually every study we've seen, people indicate discounts, coupons, and cash back offers will entice them to buy a product or service. However, the reason people choose this answer is because everyone wants a discount from something they might buy. Yet, this is the very reason that Apple doesn't have to enter a price point war to drive sales.

The better conclusion from the Razorfish study would have been that engagement and discounts are often symbiotic.

In other words, once consumers are engaged and trust is established, they tend to respond favorably to purposeful discounts, assuming sales are not the only message used to produce an outcome or keep them engaged. So while Schmitt is right in that outcomes — not impressions — are the real goal of companies engaged in social media, he is wrong to think that discounts or sales are a primary communication solution.

The balance of the Razorfish study is useful intelligence. But again, we would caution anyone against applying the interpretation of that data, especially if it leads to the overindulgence of discounts and sales. After all, the other word for such marketing tactics tends to be familiar. It's called SPAM. Please don't do that.

Monday, November 9

Reaching Mainstream: Social Media And Social Networking

Palo Alto Networks released a new study that pinpoints just how much social media, social networking, and collaborative Internet applications for business has increased in the last six months. What makes the study unique is that it considers organizational usage as a significant measure in determining adoption.

Highlights From The Palo Alto Networks Study

• Twitter session usage grew more than 250 percent since April 2009.
• Facebook usage increased by 192 percent, surpassing Yahoo! IM and AIM.
• SharePoint collaboration increased bandwidth usage 17-fold since April.
• Blogs and wiki posting increased by a factor of 39, with bandwidth increasing by 48.

The study also shows that there is an substantial increase in adoption all applications that are collaborative in nature (social media and social networks) for personal and business use. While employees are likely to use these tools for personal reasons, they also use them to increase business productively. The continued crossover suggests companies increase employee eduction on the subject of balancing authenticity and transparency.

Key Applications To Watch In 2010

• SharePoint grew by 48 percent in usage, compared to Oracle Collaboration Suite and IBM Lotus Notes, which only increased 11 and 12 percent respectively.
• Twitter, despite being limited to 140 characters, experienced a 775 percent increase in bandwidth usage, accounting for more than 184 MB of information per organization.
• LinkedIn was adopted by 89 percent of the organizations surveyed, but bandwidth and usage per organization has declined 42 percent and 22 percent, respectively.
• Facebook Chat, while released in April 2008, has become more widely used than Yahoo! IM and AIM (within the survey sample).
• Blogging by organizations has increased in usage from 22 percent to 51 percent in since April 2009.

The study cites The McKinsey Report on Web 2.0, which reveals that 69 percent of companies have gained measurable benefits in innovation, effective marketing, and better access to information. All of these benefits have lead to lower costs and higher revenues.

It also cites a report from AIIM, which also concluded that the top three business benefits cited by organizations include: knowledge sharing, information gathering, and the increased speed of communication delivery.

You can find the full report, which also addresses security issues, here. Palo Alto Networks specializes in next-generation firewalls.

Based on the Revised Technology Adoption Life Cycle, social media and social networking seems to be well over the mainstream curve with the late majority struggling to catch up. Anymore, organizations without any online presence will likely be left behind.

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