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AIDA’s dead. Give it a rest.

19 Jan

AIDAAwareness. Interest, Desire. Action. When I took my first advertising course almost thirty years ago, our professor intoned those words as if they were gospel. “That is how,” he would say, “consumers move along the path to purchasing this item or that one.” And the whole industry was built around that never-proven, not-based-on-any-credible-research theory — all the stuff about reach and frequency and three-exposures-required-to-gain-awareness. It was how plans were developed, how fortunes made (and spent). AIDA.

For over 20 years now, since the advent of integrated marketing communications, the AIDA theory has been on the wane. Customers just aren’t that simple. The most current research by McKinsey about the Consumer Decision Journey should have put it to rest forever. And yet,… and yet students and clients still talk to me about AIDA as if it were the latest thing, as if all we have to do is make enough people aware of a brand to magically induce some portion of them to take interest, a smaller portion to develop desire, and a smaller portion yet to take action and buy: simply pour enough people into the top of the funnel (awareness) to see some flow out the bottom (action). Once upon a time, the P & Gs of the world placed product on every shelf and could buy enough reach and frequency for a product to make it look as if awareness led inexorably to action. Maybe it was even true in some small way. But not anymore. And even if it were, with people’s attention divided between so many media, so many content offerings, who can afford to buy huge awareness anymore?

The newer models, including McKinsey’s and inbound marketing models, take into account — correctly — the fact that interest now often precedes awareness. People start with a set of acceptable brands,  search for information, stumble upon things they weren’t hunting for, develop a modified set of acceptable brands, search some more, succumb to last minute changes of heart — in short, they act like people, not like lab rats. A brand’s mere presence somewhere on the journey, combined with the ability to establish some sort of connection, based on shared goals, values, or interest — as opposed to a simple bludgeoning of customers with a blunt message — can win the day. Let’s call it “affinity,” rather than “awareness,” that drives the brand decision journey.

Oddly enough, traditional media — notably television — can be effective in developing affinity, because of its great story-telling power, even though it lacks interactivity (for the time being), while most Internet advertising fails horribly in this regard. I urge you to check out two great pieces about this: a blog post by David Aaker and a video of a tremendous TED presentation by Chris Anderson. One of the key nuggets of knowledge that drives them both is the fact that the advertising value of an hour of an Internet user’s time is only about a dime. The reason is not only because the Internet’s infinite inventory of advertising makes it very cheap, but because we have not yet cracked the code on how to make it  effective, that is engage people and drive affinity. Most of us are still caught up in the AIDA model — impressions, eyeballs, clicks.

This is partially a measurement problem. Impressions, clicks and the like are very measurable; affinity and connection not so much. But we are also faced with a creativity problem. Knowing what we know about how individual customers make decisions, understanding that they are now in charge of what they see and when they see it, how do we use all the available new platforms to enable them to meet and engage with brands on their own terms? In a world where advertising is more like wildflowers and less like bullets, how do we spread our messages?

Social media has blossomed as a brandland strategy in response to this dilemma. But it’s only one answer. What seems clear while we grope to use digital and traditional media more effectively is that building brand communications around a full understanding of individuals’ complex motivations and habits, rather than forcing messages down any available throats, seems a better prescription for long-term brand health.

Arizona Shooting: Good for the Glock Brand?

12 Jan

Fair warning: this isn’t a post about how the Arizona shooting is the gunmaker’s fault, or the fault of loose gun legislation or enforcement, or over-the-top political rhetoric.

I simply find it interesting in a macabre way that — according to  Michael Riley of Bloomberg — Glock sales are surging in the shooting’s aftermath, particularly sales of the Glock 19, Mr. Loughner’s weapon of choice (as well — it should be said — of many law enforcement organizations). Though Riley reports gun dealers believe the sales surge is due to ” fears among gun buyers that stiffer restrictions may be coming from Congress,” no one can really suppose that Congress (OUR Congress), where there has been no gun legislation since 1994, is likely to rush through a bill banning the Glock. Indeed FBI data show sales were up on January 10 all over the land: 60 % in Arizona; 65 percent in Ohio; 16 percent in California; 38 percent  in Illinois; and 33 percent in New York.

No, this seems to be a simple case of a brand reaping the rewards of its product performing spectacularly in a very public way. As one of Riley’s interviewees said, this helps prove the Glock 19 “is one of the greatest guns made in the history of the world.” It’s as if the McDonalds diet Morgan Spurlock (barely) endured in Supersize Me had actually improved his health and he were REALLY “lovin’ it.” Or as if The BP oil spill IMPROVED the ecological health of the Gulf.

We all know now the Glock is now the baddest handgun in all the land. And that’s very good for the brand. Strange consequence of a bloody tragedy, yes? As a brand strategist and student of consumer behavior, it doesn’t make me feel so good about my profession today. I’m just saying…

A Restaurant’s Guide to Groupon: Do it Right or Not at All.

19 Nov

I usually write about branding in this space. But at one time or another every brand builder has to face the issue of promotion and what to do about it. Having spent a significant portion of my career in retail marketing, I understand well the lure and peril of promotions. When you want to “drive traffic,” nothing’s easier to execute than a big ol’ sale. I’ve advertised a gazillion of ‘em, myself, which has given me ample opportunity to witness their aftereffects: busted margins and often an ensuing drought of customers who — having already gotten what they wanted at a discount — can only seem to be reeled back in by… another sale. And so the merry-go-round begins.

I remember a number of years ago being exposed to supermarket scanner data for Coke and Pepsi sales that illustrated the point perfectly. As if by they were Siamese twins, the two soda behemoths had coordinated their promotional calendars to alternate promotions every few weeks — one week Pepsi, the next Coke, and vice versa. One week Coke would crest, then dip to a trough and plateau; the next week it would be Coke’s turn. Clearly the plateaus represented brand loyal customers and the crests on top of the plateaus represented customers more loyal to the promotion than the brand.

That’s the way the world is in every category: some people buy brands and some people buy price. People who buy brands get happy when their brands are discounted, but people who buy price won’t come back to your brand unless it’s discounted again. So if you think price promotion is your ticket to building a loyal clientele, think again.

It’s not that promotion is a bad thing; simply that it’s strong medicine that needs to be taken in measured doses to treat specific issues.

Which brings us to Groupon and all its socio-promo clones. Like all bright and shiny things, they are difficult for small businesspeople to resist, especially for restaurants suffering in the current economy, who account for over 30% of Groupon promotions. Groupon has been great for Groupon investors and exciting for all us folks who have been getting $40 of sushi for $20. But is it good for restaurants? And if it can be good, how do you make sure your restaurant is one of the winners.

A recent study of Groupon effectiveness by Utpal M. Dholakia of the Jesse H. Jones Graduate School of Management at Rice University reveals a lot that many of us have suspected and some of us have experienced for ourselves. Here are the raw facts:

  • Overall, Groupon promotions were profitable for 66% of the study’s respondents, but for only 58% of the restaurants.
  • Only 44% of the Groupon redeemers came back for a second visit. That number is only 13% at locations that reported an unprofitable outcome, which means about half of all the restaurants.
  • The factors that appear to either drive the numbers of Groupons sold are the duration of the promotion (longer is better); an upper limit on the number of Groupons sold (a limit is good); and whether the Grouponing business is a restaurant (people buy lots of restaurant Groupons). In other words, Grouponers favor restaurants, yet restaurants still struggle to make the promotion popular, and most Grouponers never return.

So should restaurants use Groupon or not? Well, yes, IF:

  • You are a new restaurant, desperate to ramp up your clientele. According to the study, effectiveness in reaching new customers was a primary reason for retailers to want to repeat a Groupon promotion. Even though the promo may not be profitable and most customers won’t be back, it may be one way (but not the only way) for a new restaurant to make customers. 13% is better than nothing.
  • Your employees are prepared to handle the Groupon rush and prepared for the likelihood of low tips. By far the greatest driver for businesses who want to repeat the Groupon promotion was employee satisfaction with it. The study relates lots of anecdotal evidence that restaurant employees resent the deal-prone Groupon customers (“waiters were frustrated by low sales and low tips, since guests didn’t tip the full amount”). So if you’re a full service restaurant, be forewarned; if you are QSR or fast casual, it may be OK.

If you do decide Groupon is worth a try, how can you get the most out of it?

  • Make sure your promotion lasts a month or more. Longer is better, not only because it gives people more opportunity to redeem their Groupon, but because it decreases the potential of a stampede.
  • Set a limit on Groupons sold. This should both drive demand and limit liability. 2000 to 2500 seems to be an effective number.
  • Don’t overdo your price cut. The study shows that Groupon value actually has a negative effect on demand. Rather than cut a full meal 50%, or offer $40 of food for $20, try offering up a single item at a discount, or a free side with another purchase. You ought to still be able to drive demand, but retain enough margin to increase your chances of coming out on the profitable side.
  • Use the opportunity to collect customer data. If your goal is to increase tour customer base (and it should be), you can’t afford to miss the opportunity to onboard your new arrivals onto your email and/or mobile marketing lists and encourage them to “Like” you on Facebook. If you’re not ready to do those things, hold off on your Groupon until you are. It could be the difference between a successful promotion and a money pit.

Oh, and one more thing: avoid the Groupon clones. They’re even less effective than the original.

How People Choose Your Brand

5 Nov
The Consumer Decision Journey

© Copyright 2010 Mckinsey & Company

McKinsey recently published the analysis of a terrific piece of research, in which they detailed the route of what they called the “consumer decision journey.” Those of us who grew up with the AIDA model of consumer behavior (Awareness, Interest, Decision, Action) and all the various funnel models (awareness set> familiarity set >consideration set > purchase) have known for some time how flawed these models were as reflections of real life decision making, especially since the advent of the Internet turned decision making on its head.

The new map McKinsey charts begins with an initial consideration set of brands the consumer is already aware of. But rather than getting winnowed down, the set grows considerably as the consumer actively evaluates not just the initial consideration set, but anything else they find through word-of-mouth, web searching or newfound attention to advertising. In other words, whereas once we thought of consumers as gatherers of information (which we supplied), they are now hunters of information. Eventually they make a decision — very often at the point of sale. But more often than not — up to three times more often — that decision is in favor of a brand within their original consideration set.

So what does that mean for brand marketers?

  1. You shouldn’t ignore “push” advertising. If you can find ways to gain awareness of your brand and make it part of the initial consideration set, you stand a much better chance of being chosen. That means traditional media advertising still has validity. But inasmuch as traditional media advertising is no longer the only way to gain attention, you have other options, too. The idea of inbound marketing — capturing idle interest through dissemination of interesting information can certainly be effective.
  2. You need to make as much information about your brand as available as you possibly can. Many marketers have assumed that if they pushed hard enough to ingrain their brand in the minds of consumers, they didn’t have to work so hard educating them on the back end. Not so. When the gatherer goes out hunting for information, you’d better be there. Moreover, if your brand isn’t already part of the consumer’s initial consideration set, the evaluation process gives you another chance to find your way into her heart. It’s not enough to publish manuals on your web site; you need to be out there with testimonials, customer forums, category information and wisdom,… you name it.
  3. Pay attention to point of sale. All the evaluation consumers do can actually be confusing. Decision making is often left to the point of sale. It’s where the battle is often won.

Oh, and one more thing they found: consumers aren’t blindly loyal to the brand they chose (as if we didn’t know that). Because they tend to have evaluated the brand’s claims more carefully in the decision making process, they can be tougher in their post purchase evaluation. Does your brand live up to its promises?