The Honey Pot
by Dan Kurani
Copyright © 2009 by Dan Kurani. All rights reserved. Published by Kurani Multimedia, Inc., Red Bank, New Jersey Visit Dan online at http://www.kurani.com No part of this book may be reproduced, transmitted, or disseminated, in whole or in part, in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system now known or hereafter invented, without written permission from the author or publisher. Requests for permission to excerpt or quote this work should be made to the author directly via email (firstname.lastname@example.org). This work is based wholly upon the opinions of its author. Neither the publisher nor the author make any representations or warranties with respect to the accuracy or completeness of this book and specifically disclaim any implied warranties. The viewpoints expressed in this book may not be suitable for your business and no part of this book should be viewed as specific business advice or strategy recommendations. Neither the publisher nor the author shall be liable for any loss of profit or other types of damages. Readers must use their own judgment when evaluating or executing any business or marketing strategy. Although software, technology vendors and websites may occasionally be mentioned, this book offers no explicit or exclusive endorsements. Names and dates have been altered in some of the anecdotal accounts contained within this work to protect the privacy of those involved. ISBN 978-0-9800051-1-0
Acknowledgements ....................................................... 6
Dedication ..................................................................... 8
Introduction .................................................................. 9
Like Bees to Honey.............................................................................9
Building Buzz ....................................................................................11
The Sweet Spot ................................................................................. 12
About This Book............................................................................... 14
Chapter 1 The Honey Pot Strategy ............................... 17
What’s in Your Ecosystem?.............................................................. 18
Chapter 2 The Media Landscape ................................ 20
Ubiquitous Infrastructure................................................................ 21
Connected Fragmentation ...............................................................23
Online Experience for Offline Media ...............................................32
Disintermediation and Democratization.........................................33
Semantic Tools ................................................................................. 35
A Shift Towards Creating Value.......................................................40
Chapter 3 How a Honey Pot Works .............................47
First Things First.............................................................................. 47
Distilling the Value...........................................................................50
Living It ............................................................................................53
The Power of Core Value..................................................................54
Chapter 4 How to Sweeten the Pot ..............................56
Cultivating a Honey Pot ...................................................................58
Brand Promise and User Experience...............................................59
How to Grow an Ecosystem .............................................................64
Ecosystem Tactics and Synapses .....................................................64
Content and Contact Strategies .......................................................92
Conversion Strategies ......................................................................96
Performance Tracking and Metrics ................................................. 97
Balancing the Budget .....................................................................100
Chapter 5 Where This May Lead................................102
Integrated Consumption................................................................ 103
Shifting Logistics............................................................................ 105
Renewed Focus on Intellectual Property....................................... 109
Glossary ...................................................................... 112
Index ........................................................................... 116
Colleagues and confidants: Hillary Bressler of .Com Marketing a great friend and web original, Tom Sullivan of Princeton Partners, Michael Parker of Gravitate Design, Stephanie Agresta, a social guru, Walter “Chip” Craig, Josh Goldman, Sal Magnone, a true futurist, the St. Jacques crew, Dave Einzig of Industry Connect, and Valon Sopi of BoldUnderline. People and firms bringing talent and a solid reputation to the Red Bank, NJ area: Thomas McGee and Gregg O’Keefe strong UX design from MediaHive, Bill Meyers and Alex Shanley of DefinedLogic, an enterprise-level web development shop, and Domenick Cilea of Springboard, a PR agency that gets the web. Help with the book: Jeffrey Ginsberg for editing, Barbara Clement for the Organization, Greg Marta for the sanity check. Team members I’d like to thank: Matt Holloway for always hitting a visual on the head, Joe Falcone for his unrelenting effort, Mike Melli for smart solutions, and Alan Mazzan for his commitment to excellence. Out of a few hundred clients and over a thousand consulting engagements a few standout as particularly influential: Ed Grzeszczak of foryourgarage, David Edell of CCA, Amram Shapiro and Louise Firth Campbell of Book of Odds, Patrick Seehafer of Nike, Karen Verelley of DFA, Mike Boneillo and Scott Rasmussen of 6
Rasmussen Reports , Cathy Peterson and Doug Weeks of Primus, John Caplan of Ford Models, Jules Garner of PointRoll, Michael Jager of JDK design, Brian Ribeiro, of mspire group, and Bob Joudanin at RJ Consulting. Author Influences: Seth Godin, Chris Anderson, Malcom Gladwell, Guy Kawasaki, and Jeff Howe.
To my wife, Danielle, and 3 children, Kai, Max, and Tate – thank you in every way conceivable
The Honey Pot is about a shift in marketing. It’s an approach based on extending brand value to attract and retain customers naturally, by giving them something they want instead of just bombarding them with advertising. This approach is rooted in the interactive, but Honey Pot thinking could very well change the way you approach marketing in general, because this strategy leverages changes that have been taking place all across the media landscape. Your brand lives in that landscape. A world of ubiquitous infrastructure and multi-channel media convergence, where the distinction between online and offline have blurred and the old rules of advertising and marketing have morphed into something new. The Honey Pot is a way to leverage that connected landscape.
Like Bees to Honey
Since 2001, the number of “wired” Americans has risen sharply. Three out of four have easy access to the Internet, two out of three via high-speed connections. As cheaper smartphones and netbooks proliferate, the community enjoying constant access only grows. Last year, a Harris Interactive poll found that 95% of the American public characterized access to the web as “very 9
important” or “important.” A number of those polled even said they’d rather give up sex than lose their Internet access! Whether the Internet is truly an acceptable substitute for sex is questionable. But there’s no question the web’s a sociable place. The number of Americans who maintain a profile on a social networking site more than quadrupled in the past three years according to Internet Retailer. Nielsen Online estimates the amount of time users spend updating their status on social networks nearly doubled in the past year. There’s been even more velocity in the growth of blogs, tumbleblogs and microblogging. Thanks to camera phones and mobile apps allowing bloggers to post from pretty much anywhere, citizen journalists are everywhere. News of a major world event, celebrity misfortune or political scandal may reach you by tweet before it hits the wire services. You may be more likely to see television commercials when they’re shown on sites like Hulu than when they were first broadcast on network television and you Tivo’d past them. The digerati can speculate on the resale value of MySpace and debate whether Twitter has indeed led us to Web 3.0 with semantic predictive filtering, but what’s undeniable is that tools like these have permeated our lives. The fact that Rupert Murdoch’s plans for MySpace or Biz Stone’s pronouncements about Twitter are breathlessly reported, not only in industry blogs, but also in traditional media outlets like The Wall Street Journal and The New York Times tells you something—that social networks, blogging and microblogging are all squarely in the mainstream. Of course, we knew that the first time someone re-tweeted Oprah. But if you need more proof, just look at how many column-inches of print media are now devoted to promoting their own blogs, websites and social media profiles. 10
Traditional media isn’t trying to compete with new media; it’s trying to incorporate it in an attempt to stay relevant. Clearly some major cultural shifts are under way. Businesses that want to stay competitive know they have to dive into this roiling stew of new media, old media, social media and social messaging because their customers are always on and more connected than ever.
Bottom line, marketers now face more challenges than ever. How you advertise your products and services, how you get media coverage, how you create brand awareness – have all changed radically in recent years. Lots of new technologies have come into play, of course, but that’s only half the story. The other half is that a new kind of consumer has evolved – one with high expectations shaped by their “always on” lives, their exposure to new media tactics and their own embrace of social media. One study points out that younger consumers are more heavily influenced by recommendations from friends and trusted sources than brand strength compared to other age groups. They may be influenced by all kinds of digital/print/broadcast media, including your carefully planned media buys, but these are not passive consumers. They’re participants. They’ll give brand loyalty when it’s deserved, but they demand a two-way conversation in order to build a relationship with the brands that are important to them. A new kind of marketer has emerged as well. Ten or fifteen years ago, a marketing officer might have spoken vaguely about wanting to “add” an online component as an “adjunct” channel. A committee would hire a consultant. They’d produce a nice static, text-heavy, “brochureware” website and the web address would 11
get added to everyone’s business cards. End of story. Even worse, the marketing director would take a stack of brochures and hand them to the webmaster and walk out. Now, the internet has become a company’s primary mechanism for two-way communication – a real conversation – with consumers. Now, it’s the first place marketers commit budget because it’s the first place consumers look for information. Even as fewer people read print ads or watch commercials on network television, more people are searching for products and services online. They’re reading crowd-sourced reviews, and they’re paying attention to the recommendations of powerful online influencers. So the average marketing officer today is not only working feverishly to make that old brochureware site more engaging and more interactive, but also trying to juggle a dozen other very different kinds of online channels, all hooked into an increasingly complex online ecosystem where marketing and media overlap and most of the old rules have been thrown out window. The industry has gone through profound changes, and, as the founding partner of an interactive agency, I’ve had a ringside seat for most of the fun. The game really began to change at the turn of the millennium, with the rise of search marketing. Then the pace of change accelerated once again as social media moved into the mainstream. Now we are in the midst of another surge, as semantic technologies spread.
The Sweet Spot
In the past few years we’ve grown used to hearing one respected consumer brand, after another, announce decisions to focus almost exclusively on digital. Advertising spending, or adspend, on print collateral had already been declining. Adspend in both 12
print and broadcast media followed suit, as tightened budgets were reallocated to digital. Why? Search marketing, social media, semantic technology – all of these promise to help a brand achieve greater impact with less investment. Brands making the switch expect to realize significant cost savings and achieve greater reach, too. The big question is, can the social-semantic web deliver on that promise? I believe the answer is yes. There is potential for more brand loyalty and much greater return on investment (ROI) in the long run, but only if the brands making this change also embrace certain core principles that are critical to success in the current media landscape. The Honey Pot is really about embracing those principles – things like alignment, authenticity and value – and using them to build a rich online ecosystem that can attract customers the way a pot of honey attracts bees. If done properly, the honey pot may even start to feed its own growth. The reason why a Honey Pot strategy can work so well right now is that value matters more than ever. We’re in a long-tail world, where niche products and services proliferate, the voices of individual consumers are louder, and the impact of those voices more wide-reaching than you can imagine. But if you can win over your core constituency by providing real value – the sweetest honey – the customers will find their way to you. Take a look around at what’s happening in the advertising and media landscape and you’ll see why it may be time to change the way you think about marketing. It’s no longer about mass marketing, and may not even be about one to one marketing. Today think one to niche marketing as a way to reach your core. I’d be the first to admit that a Honey Pot strategy won’t work for every business. For those companies that have a compelling core, 13
however, this kind of approach can provide better ROI over time. The principles behind the Honey Pot can help you build strong brand identity, attract new prospects and forge lasting relationships with customers.
About This Book
What I hope you find here is encouragement to adopt a more value-driven approach to marketing. In more practical terms, what you’ll discover as you thumb through this book are musings about achieving brand alignment, communicating authenticity, starting a conversation with your customers and offering them real value – all the essentials of a Honey Pot strategy. These musings are organized in five sections:
Chapter 1 explains what a Honey Pot is and why valuebased, “pull” strategies are so attractive. Chapter 2 surveys the media context, highlighting key trends that call for a value-based response. Chapter 3 examines the principles that make a Honey Pot strategy succeed. Chapter 4 describes tactics that can sweeten your Honey Pot and add more brand value. Chapter 5 looks at the big picture and speculates about where Honey Pot thinking may take you.
As you read, you may encounter a few unfamiliar phrases. Online ecosystem and user experience are the most important of these. An online ecosystem is somewhat analogous to a carbon footprint in the sense that it can serve as a measure of accumulated impact. But it’s digital impact we’re talking about. Your own personal online ecosystem, for example, comprises all the evidence of your 14
online life, including your public profiles as well as your connections and activities. The more active and connected you are, the larger your digital footprint. Companies and specific brands have online ecosystems, too. The larger the ecosystem, the higher the visibility and the more likely they are to be found by customers. That’s why so much of the advice in this book is about ways to enrich and expand your online ecosystem. Whatever it is you’re marketing, it’s more important than ever to recognize that an online ecosystem forms naturally around your brand and its audience. That’s true whether you’re paying attention to it or not. Implementing a Honey Pot strategy can help really leverage that online ecosystem. User experience sometimes refers to experiencing a specific digital environment (such as navigating a website or reading an email.) It also refers to the entire brand experience. How your target audience experiences your brand is the end result of all the touch points, both online and offline. One fundamental assumption I make is that user experience must reinforce brand identity. Another is that it’s important to deliver an engaging user experience throughout the different components of your online ecosystem (at least, those that are under your control). You may notice that I use the terms digital, interactive, online, and web almost interchangeably. This is because the original distinctions are no longer meaningful. I also refer to members of the public as “users” – whether they are website visitors, consumers, target audiences, customers or prospects. This is due in part to my having a digital orientation, but it also underscores my belief that you must offer your public something useful and valuable. 15
Other special terminology you may encounter here is explained in the glossary at the end of this book.
What You Won’t Find in This Book
You won’t find any checklists or simple rules here. There is no standard formula for building a Honey Pot of your own because, by definition, it’s something that needs to grow out of an understanding of your brand and the culture it serves.
How to Use This Book
You can use this book however you like, of course. Feel free to read the chapters in sequence, from beginning to end. Or act like a honeybee. Flit around and dip into anything that looks interesting.
Chapter 1 The Honey Pot Strategy
A Honey Pot strategy can pretty much be summed up in two words: create value. Strip away the advertising gimmicks and old-fashioned marketing ploys. Instead of trying to message more, more loudly or more insistently, just focus on creating value. If your product is sound and you communicate honestly, you will naturally develop a deep connection with your audience. Consider this: what if you had something so rich and sweet and irresistible that it would simply pull people in? What if it would not just attract new prospects, but also entice them to come back again and again and tell all their friends? Your online ecosystem can be an irresistible Honey Pot that pulls people in. All you need to do is start building brand value and communicating honestly. First, shift your attention away from advertising. Stop bombarding people indiscriminately with unwanted, disruptive and frequently irrelevant messaging. Instead, invest in building value: create something that is so useful, informative and maybe even entertaining, that your customers and new prospects naturally gravitate toward you. Offer a unique solution to a particularly difficult problem while remaining closely aligned to your brand message. It’s best to stay focused on a very specific need or sensibility your target market has. In other words, offer something your audience will want, 17
need or enjoy. That’s Honey Pot value. It will attract exactly the kind of qualified traffic you want – the kind that comes to you already interested, engaged and ready to act. The real beauty of this is that you can feel good about what it is you’re doing. Every day you’re creating more value for your customers and prospects, not just stealing their time or alienating them with unwanted ads. Instead, you’re always seeking to be more relevant to their specific needs. You’re asking, “What can I do to make your life easier? What can I do to make your life more fun? What can I do to solve the most annoying problem you have?” When marketers shift from thinking about how to steal your time to thinking about how to improve your life – well, that changes everything. And that’s what the Honey Pot strategy is all about. It’s a fundamental shift in the way we approach marketing – through attraction. Many businesses see the value in this new strategy, but don’t fully grasp that they can implement it to make this new form of relationship marketing work for them. They need to define exactly what their Honey Pot can be.
What’s in Your Ecosystem?
You probably already have an online ecosystem of sorts. What does it say about the health of your brand? And what’s there to attract and engage your market? Unless you’ve intentionally tried to remain under the radar – and even startups trying to keep the lid on things have a hard time doing that these days – the fact is you probably already have an online ecosystem. The centerpiece of your ecosystem is likely to be your website. But your digital trail shouldn’t begin and end there. You’ve also got 18
press releases and various newsletters you’ve created. Perhaps you and your colleagues have made the news on occasion. You’re probably in a variety of online directory listings. Your products may appear on review sites. Members of your staff may be active in social and professional networking communities, leaving tracks back to you. They may be blogging or commenting on other people’s blogs. They may be microblogging. Or maybe you’ve got some banner campaigns running somewhere. There are back issues of your trade publications where you’ve been featured. Your suppliers and distributors may have sites that link back to you. Get the picture? There’s a whole network out there that’s formed around you. Whether intentionally or not, you’ve been building a platform for value creation. If you’re like most companies, you haven’t used that platform to build real value in your brand – or even seen it for the resource it could be. Its potential remains untapped. However, if you really invested in building value in selected areas of your ecosystem, it could become your Honey Pot.
Chapter 2 The Media Landscape
The subject of this book is not media or market trends, but rather the idea that the best way to grow your brand’s online ecosystem and enhance your marketing efforts is by creating value. However, it’s helpful to begin by surveying major trends. Advertising, media and consumer markets have gone through profound changes in recent years, and those changes are some of the most compelling reasons to consider a value-based Honey Pot strategy. Marketers need to stay nimble and on top of the trends because the media landscape is always evolving. Some of the trends that have emerged in the past decade are real game-changers. Ubiquitous infrastructure, continuous information flow, the fragmentation of media and markets; the emerging influence of the individual, even in the midst of increasing collaboration and connection; patterns of integrated consumption and media convergence; and a new generation of semantic tools. These are just a few of the trends that are changing the media landscape. The players best positioned for success in this changing media landscape include:
Owners of original ideas and unique intellectual property
Businesses that know their core, listen to their niche, remain agile, and invest in areas that improve value Niche communities with critical mass Neutral parties that facilitate collaboration and interaction Tribal leaders or influencers Individuals with targeted ideas and the discipline to execute
Those who may face challenges in this new environment include marketers of homogenized, one-size-fits-all, mass-market products and middle market players, such as retailers and distributors.
The reality of life today is that we are always on, always connected. The technology infrastructure that unites us allows for a continuous flow of information that we, both, consume and feed. This information flow gets deeper and faster all the time. This is the result of many factors:
The digital medium itself Improved publishing tools Hunger for information Search technology Accurate measurement and anlytics Easy tools to slice and dice information Mobile access Social connections Citizen journalists pushing information in blogs, tumblelogs and microblogs 21
Microapplications, such as iPhone apps Infotainment vehicles like Yahoo Buzz, Daily Motion and others Integrated consumption and media convergence
Interesting stories and news of product launches are all communicated almost instantaneously. This means that if you have something of great value, it can catch on quickly. Conversely, bad products will fail just as quickly. Word gets around faster than ever, and the value you offer matters more than ever. Not just because we’re always on. The jury is still out on how being “always on” will affect humankind in the long run, but the speed of information flow certainly isn’t slowing down. At 6pm, I bought tickets from Fandango on my iPhone immediately upon seeing a billboard ad for a new movie. I was hungry and my phone told me I was within minutes of eight different restaurants, three of them chain eateries I’d liked before. If my iPhone had triangulated my position just an hour earlier, while we were still driving west, it could have offered me a coupon for Jersey Mike’s subs – and then we would have been able to bypass the whole family discussion about where to eat. Within hours of Oprah introducing a new book club selection, it can be number 1 on Amazon and hit 5 million books in print. But before she is even done with the 5-minute segment, I can have already downloaded the audio book on iTunes and be listening to it. I may have even already tweeted it. And during the couple moments I spent waiting for the book to transfer to my iPod, I realized the release date of this book was just two weeks ago. How long would market penetration have taken in the past? Are you keeping up?
The intense connection made possible by the Internet is precisely what has led to such extreme fragmentation of mass markets and mass media. We’re now in the age of the niche. The central paradox of all this connectedness is that it has resulted in a kind of connected fragmentation. While the Internet can bring everybody together, it also allows us to break apart into smaller and smaller tribes. And even fragmentation of individual identity, allowing us to belong to several different tribes at once. Some of the most profound changes impacting media and markets relate to this connected fragmentation. Because of our ability to connect with obscure niche groups, to purchase highly unique product from anyone, anywhere in the world, people are gravitating toward the fringes. Brand dilution combined with access to on-demand manufacturing has sped the process. In the past, there was a discernable cycle: a fringe product, once it proved it wasn’t just a short-lived fad, would gain enough traction to move into the mainstream and become part of the mass market. Now, however, the fringes won’t be the new mass because volume won’t exist to create that mass market; demand will be spread out over a larger and larger number of unique niche products. In theory, the market will continue to divide itself into smaller and smaller slices, in an attempt to increase relevancy, until it becomes unsustainable (i.e., unprofitable). The increased ability of nimble manufacturers to produce on demand may, in fact, be doubleedged. Mass marketed products may only be viable if they have uniquely differentiating customizable options.
Niche Markets, Niche Media, Nimble Manufacturing
Not only does the web allow individuals to connect with other individuals who share similar – even impossibly unusual – 23
interests, but it also allows marketers to identify those individuals as members of a specific niche market and, more importantly, connect with them. This is not just because marketers have more data than ever and thus can find those niche markets, but it’s also that marketers can now offer niche markets a product that suits them thanks to more and more nimble manufacturing practices. We’re not just seeing more fragmented niche markets, but more fragmented SKUs as well. As a result of media fragmentation, it’s taking businesses longer to find places to spend their advertising budget. Despite the continued reduction in share many traditional channels like network television continue to charge more and get away with it. The death of mass advertising might be near, if not for the sheer amount of capital that has no other place to go – yet. Once a clear path to fragmented communities is laid, advertisers will realize the unbelievable conversion rates that can be had by targeting so precisely. (This is not about vertical ad networks, for they are still sliced too thick.) The cost will rise for online advertising based on the volume of viewers in precisely targeted niche communities. This will suck capital out of less effective scattershot mass advertising. That means the most rewarding time to play is now. At least until publishers figure out how to drill down to the levels possible. The moment that happens the upside will vanish. For now, you need to work site by site and section by section on push advertising efforts in the interactive space. But prior to undertaking those types of light seeding efforts, you should first invest in building up your online ecosystem so that you’ll get the most value possible from the capital you deploy. That’s the underlying message of the Honey Pot, really: the best way to deal with the diminishing returns of “push” advertising is to enhance your online ecosystem so that it supports a “pull” strategy. 24
Just think what you can do to actually improve your product with that leftover capital you no longer waste on mass advertising.
Collective Conversation, Individual Voices
The internet has given us new ways to connect with others and to have collective conversations. But here’s another paradox: it’s also truly empowered the individual voices and producers. The individual’s perspective can be delivered quickly, cheaply and effectively thanks to an infrastructure that’s leveled the playing field so much even the smallest players can compete. Even people with limited technical knowledge are able to express themselves and increase their visibility online using tools like:
Blogs Tumble logs Microblogs Personal websites Podcasting/Vodcasting Commenting, rating and ranking Social news sites Social networking sites Social bookmarking Review and opinion sites Wish list and intention sites Collectives Video sites
Every one of us can have a voice online. Individuals can set up a media outlet all by themselves, if they want. And sometimes a 25
lone voice can be louder than the biggest advertising budget. Think about what happens when a top 100 reviewer on Amazon shares a particularly disappointing experience with a product. Individual opinion – whether delivered in comments, ratings, blogposts, or tweets – can have real potency, but there’s also a weight to the aggregate of individual voices. Note the impact of the accumulated opinions voiced on forums like Yelp, Epinions and The Consumerist. This collective voice is different from mass media. Think about the effect of reading a succession of blow-byblow accounts of an event from multiple citizen journalists. Each individual account takes on more importance when it correlates with other accounts. The power is in the hands of the crowd, and every member of the crowd has a digital megaphone. The Internet provides any individual with a worldwide podium or a soapbox for expression and exposure. This makes it a great time for start-ups, creativity and new connections, but a perilous time for the mass media behemoths that can no longer force-feed homogenized products and messages to the masses.
The new demographics are simple: everyone is as unique as a snowflake or a fingerprint. We’re seeing the end of broad-brush demographic profiling. Forget simply advertising cereal to any “female-head-of-household-middle-income-25-to-45”. Most of your adspend will be wasted on people who never eat breakfast or who ignore your billboards entirely. But suppose you are a small specialty foods manufacturer trying to market a new cereal. It may be true there’s not enough value in that untargeted mass advertising. However, it may be worth your while to join the community at the PostPunkKitchen or run a promotion on the MrBreakfast site. And if you’re thoughtful about the information you provide on your site, you can easily connect with the customer or social influencer who’s searching for 26
breakfast cereal ingredient labels online. Offer that searcher your clean-label information, information about children’s nutrition, and maybe some coupons and recipes. Sign her up to be part of your online rewards program. Soon she’ll be happy to tell you what she buys, how often, when, where, and why. Oh yeah, and you’ll also discover she’s a vegetarian with two preteen stepchildren who really want you to use more eco-friendly packaging. Consumers are able to communicate their own individual identities today, while revealing their interests and behaviors making it easier to identify and connect with those whose values align with yours. And markets can actually identify and connect with you when your values align with their interests. So there is an opportunity now to focus on solving problems on almost a unique personal fingerprint level. That’s why the hot new demographic is not an age group, an income level or a zip code. It’s hardly a group at all. Say you live in the Pacific Northwest and you like to run in flipflops when it’s raining and the temperature’s just below 65 degrees, but still above 38 degrees. I have no doubt that with just a little Digging, you could find other people who also like to run in the rain in flip-flops when it’s cool, but not too cold. You can find each other online and create your own little community. Soon, you may create a running sandal company of your own or an existing running sandal company will find you, by matching certain points of your online fingerprints. Marketers can find niche markets for their products and they can make niche products to suit these markets. Even if you aren’t going to sell five million units of running sandals, isn’t there a way to sell a half million or even a quarter million units and have a good, profitable niche? You might even be able to develop a similar product that’s just right for groups of golf sandal lovers and fishing sandal lovers and any number of other niche markets who will be incredibly loyal to your specialized products. More 27
and more companies are going to be asking themselves how they can take advantage of niche markets and incorporate real time feedback into their product lifecycle development So these personal fingerprints have a lot to do with how marketers can connect products directly to smaller and smaller subcultures. There’s also an interesting corollary to the uniquely personal ID: the personal profile.
Centralization of Identity
First, mass markets fragmented into many, smaller niche markets. Then, those niche markets fragmented into individual fingerprints. Now each social influencer has their own identity and their own personal fingerprint online reflecting their personal interests and behaviors. And we have the tracking mechanisms and behavioral analysis techniques to use that unique fingerprint. Another phenomenon that’s closely related to the new demographics of individual identity: the centralization of identity in personal profiles. Although there’s a lot of loud pushback from privacy advocates on this, your personal profile is becoming more and more like an online ID. It’s not quite centralized yet. Your medical profiles are over here and your social profile is over there, while your friend profiles, work status and personal status are somewhere else entirely. But, while this data might exist in separate places for a while, it seems inevitable that your disparate profile information will start to coalesce at some point soon. We’re already seeing some of that with Facebook Connect. Should we be afraid of our online identities destroying our offline privacy? In the short term, we should continue to be vigilant, but be open to selective changes. Whatever happens, fears about privacy issues will eventually be more than outweighed by the benefit because there’s a better understanding of the user. As 28
marketers we don’t really want to reach somebody who’s not going to be interested in our product. Understanding the consumer better means we won’t end up serving them messages they don’t want or need. What an improvement! This could still be many years away, but when it happens it’s going to change the environment. We aren’t going to need to see a lot of messages that we don’t care about because it’s a waste of money for the marketer, the advertiser and the company. Plus, it creates a negative impression for the consumer. On the flipside, when centralized profiles are available, we’ll be able to get things that are much more relevant to us. This can be based not only on interest, but also on timing. Say it’s dinnertime and you’re driving by a Quiznos. An advertiser knows which chain you like and also knows you’re likely to have three kids in the car. Voila! you get an electronic coupon for “buy three subs, get one free” sent to you in real time. Of course there would likely be an incentive for you to forward to your friends or neighbors. Tie together the interest level and the timing, and you actually have a stronger messaging system – because more relevant messaging means fewer irrelevant interruptions. People talk about how invasive that might be. But, at this point, I feel pretty invaded by the billboards that are all along the highway, too. I’d rather see that billboard come down and have a much more relevant message come to me personally via text.
Individual Influencers and Individual Producers
One more interesting development – not only do the phenomena of fragmentation and the trend towards customization together lead to almost individualized markets, but this new reality also invites other kinds of individualization. Namely, the emergence of highly effective social influencers given voice by new media and 29
the resurgence of individual producers making highly unique items in a modern-day twist on artisanship. Individual consumers can sometimes have impact on a brand simply by posting a scathing review in the right place at the right time, but singular reviews or rants tend to be ignored or discounted – unless the writer has established credibility in their online life. Some pundits who noted the increasing importance of individual influencers over the past few years have dubbed it “micropersuasion.” Media consumers adopted a steady diet of blogs, social networks and discussion boards – leaving a lovely digital trail detailing likes/dislikes and interests in their wake. They also came to be influenced by the guides in these new media venues: moderators and administrators who acted as the guardians of groups, forums and message boards; bloggers elevated to demigod status within their own little tribes thanks to highly specialized search engines (think Technorati, for example); and the stars of social networks who garner more friends or followers than the rest of the crowd, who get more feed subscribers, or who exert more authority through more (or more powerful) interactions with the community. In the new/social media world, it’s clear that individuals can become hugely influential, taking center stage either by the sheer volume of their actions or by building trust when they demonstrate their knowledge and expertise. There are even specialized services to help you identify the individual influencers in specific niche communities – so you can start the delicate dance of engaging with them. These individuals have, in effect, created personal brands of such power that marketers feel the need to court them or at least, wish they could. In some tribes, the strongest influencers are notoriously independent. Those with an analytics orientation may even look 30
for key metrics, such as who has the most incoming links or incoming traffic thanks to their feed subscribers. Individual producers exert a special kind of influence. As massmarket goods become less attractive, niche products take on more cachet. The individuals who create those products become stars of a sort. They’re no longer anonymous designers or crafters because online audiences can connect with them directly.
Consumer Vigilantes and Revolt
advertisers to target specific user behavior and market directly to it. With publicly announced calls for patience by the CEO and some adjustments that gave users more control, the backlash relented, but not before some damage was done to the “Facebook is like us” image. And, in the end, even though it did spark some privacy concerns, users eventually found that the connection of activity, likes and wants through a list of behavior actually helped them find the things they needed and make new and deeper connections. Digg got a taste of crowd revolt when word buzzed around that the there was editorial weighting going on in what many perceived to be the world’s most democratic news aggregator. Most of the community associated with Digg, as well as industry media outlets like Wired, voiced their disapproval. Whether there was actual editorial weighting or not, the fact that the founder’s Diggs and a steady group of Diggers always seemed to be associated with the stories bubbling to the top gave the community at large enough ammunition to cry foul. The story eventually faded and most observers later speculated that the algorithm was tweaked to find middle ground for all sides.
Online Experience for Offline Media
One of the most striking characteristics of the media landscape today is its connectedness. Newspapers, magazines, radio, broadcast and cable television – even movie studios and record labels – all use interactive channels to stay connected with their audiences. Every major broadcast player now has an online presence and every one of them tries to drive their offline audiences to it. It’s not just about traffic. Although there’s often a cost per thousand, or CPM, component that still represents a fairly minor return 32
when compared to airtime. It’s really about relationship marketing – continuing the conversation with the audience and strengthening the connection. These media outlets have essentially become brands that use multiple online and offline channels to reach their markets. Effectively, they’ve moved toward a brand model – something that’s based on customer solutions rather than specific types of content platforms. The more that print or broadcast media use both online and offline channels, the more they elevate their brand over their native media platform. Courageous media outlets there are reaching for iPhone apps and mobile video. The best adapters are providing an interactive online user experience that connects with the offline customer experience and enriching the overall experience of the brand. For their sake, we can only hope they haven’t waited too long.
Disintermediation and Democratization
New media encourage direct engagement and provide few barriers to entry. The combination has been somewhat explosive. Because they can make direct contact with the source, users now feel encouraged to so, bypassing middlemen and distributors whenever possible. This disintermediation puts more of the burden on companies in many respects, because consumers not only expect to get valuable information from manufacturer websites, but they also expect to have conversations directly with manufacturers. Honoring expectations and engaging in conversation can strengthen your relationships with customers. Moreover, this connection with users can enhance your product development. When you encourage that kind of interaction, you’re hearing the voice of the customer loud and clear. They’re not just telling you what they want, they’re often telling you exactly what you need to do to improve your product offerings. 33
The fact that ubiquitous infrastructure is equally available to all without major capital investment is also leading to greater democratization. Individual producers running sole proprietorships can compete with large companies to service small, niche markets in search of unique products. Citizen journalists with smartphones or netbooks can scoop professional journalists backed by major publications and service bureaus. In fact, media professionals are increasingly cast as middlemen, and bypassed. There is also something inherently democratic about phenomena like peer production and crowd-sourcing. That leveling effect is particularly evident now that we’ve seen sites replete with usergenerated content usurping the place of traditional media. In this new age of the individual, the playing field is level. Any person or entity can produce an amazing product, service or piece of unique content. If it fills a real need, it can spread like wildfire overnight. In some cases, without spending even a penny of marketing budget. Democracy equals opportunity because everyone has a completely independent vote. Anyone or anything that is viable in the eyes of enough people becomes viable. In a true democracy, no one can cry about foul play or barriers to entry since everyone has a chance. Certainly there are factors that play into the likelihood of success, such as intelligence, talent, skills and relevance. However, this is about as level as the playing field can get. Democratization of content also reflects those independent votes. The content that is the most preferred gets the most exposure. The method of determining what is viewed varies, but it’s usually based on user rankings, number of views and links to the content. What makes this even more interesting is that content has the ability to transcend planes. For example, it’s easy to see that the most viewed videos on YouTube and especially the ones most 34
often identified as favorites (“favorited”), move to the forefront and therefore get more exposure. However, those same videos are likely spreading along through other channels (including email) that aren’t as readily tracked. It’s also important to note that although there is some advantage to being a first mover, reset rankings, fair algorithms and user-controlled timeframes allow for content to enter the marketplace. If users find the content valuable, whether for entertainment, education, or any reason whatsoever, it has the ability to go viral through widespread exposure. Today, anyone can become a hit – an individual, a small company or a large company. For those that provide a compelling core value, the world can open up faster than ever. But for those who have counted on traditional barriers to entry – such as large capital investments – to maintain their monopolistic mojo, a new game is afoot. This new, democratic environment has resulted in two striking developments:
Customers have always had more credibility with their peers than you when talking about your brand, and now their voices are just as loud as yours. Customers expect more from your brand now. Forget your monologue. They want dialog. They have grown to expect it because they get that level of interaction everywhere else. They require a relationship with your brand.
A new ability to reveal intent promises new opportunities. There are many definitions of the semantic web. Fundamentally, it means the ability to take the syntax of conversations and data and the timing of that data, and draw actionable insight from it. This insight into intent and relevance can be used to improve 35
people’s lives by helping them to collaborate, quickly find information they really want and receive marketing information they may actually find interesting. Suppose you’re in the digital photography business and are specifically interested in people who only use Leica cameras. If you drill down further into that demographic, there’s bound to be a certain mindset and personality type that tends to like that camera. Semantic tools could give this particular niche market the ability to make deals in a group fashion. For instance, they might save money by buying equipment at a quantity discount and having it all shipped to a location where they agree to meet up – say, at an upcoming Leica convention. Tapping into intent also allows you to message people more effectively – using GPS data on mobile phones to tie their areas of interest to their geographic area at any given moment. Semantic tools let you deduce interests based on the syntax of their conversations and their online behavior. This all creates a powerful foundation for giving people what they want, when they want it.
The first intent shown by Internet users came in the form of user searches. But search data initially had no time frame, level of desire, or other information associated with it – except for the following activity by the user. For instance, if the user made a purchase after a search, we could deduce their level of desire was high and their place in the sales cycle was deep. We then looked back at the information they’d entered in the search box and cross-referenced it with their subsequent activity. This allowed us to figure out that searching for specific multi-keyword phrases led to faster and higher conversions, and that singular, generic terms led to browsing-based activity, and so on. 36
But logical assumptions about what we would do, given certain search terminology, just weren’t enough to change the market. It had a temporary positive impact on marketing ROI. But, as we’ve grown able to figure out expected conversions to an even more precise degree, the positive spread – or differential – is decreasing, and, it’s pretty likely that as the level of certainty increases with a particular tactic, the cost will go up. So how do we move to more explicit exposure of intention? How do we move to effective collaboration – banding together to achieve a specific goal, for example, whether it’s to save money, create a product, or harness processing power to solve complex computational problems? And how far away are we from this capability? People made a major step toward collaboration with more explicit expression of intention as a natural extension of our activity in online communities. Simply, by telling friends and coworkers in our own circle our intentions – whether it was to buy a home or a car, go on vacation, or whatever – we automatically included qualifiers that aren’t needed in search. Maybe I’ve revealed that I’ll be renting a bungalow in Tahiti in three weeks and I am nervous about sun exposure because I burn really easily. In a normal search scenario I might type in “best sun block”, which would trigger vaguely relevant ads to be sent my way. But by tapping into the semantics of the conversations I’m having with the people in my circle, an advertiser might be able to introduce something totally new – an intelligent suggestion that actually improves my experience. Maybe it’s an offer for a longbrimmed hat or reduced-cost tanning sessions. Maybe it’s tanning sessions at a local establishment two weeks from now since they know I’ll want to be building my base tan right before I go. With the outcry of privacy invasion at Facebook, it was clear that users aren’t yet completely comfortable with the announcement of their previous activity or future intentions unless they’re given the 37
opportunity to confirm them. In the case of Twitter, users detail practically every move they make, but again, it is pushed by them directly – as opposed to their cell phone mapping back GPS coordinates or taking random pictures against their will. However slowly, users are starting to come around to more explicit expressed intention and some non-controlled manipulation of how those intentions are displayed. Even in the Facebook example, users are actually connecting with more friends, new causes and useful applications because of the listing of user actions.
Connection and Collaboration
When we truly become effective at the gathering of intention, natural collaboration will ensue. Unfortunately, we can’t get there until we get past some initial resistance. Once people begin to see the positive effects of their intentions being exposed, I believe we’ll see widespread acceptance. At that point, we can deal with other obstacles and risks, such as people not knowing what they want or changing their minds. Once we can develop a unifying force that either consolidates (simplifies and cross-references) data or creates fixed data points (such as an interest in product X, at cost Y, within Z weeks) to express intention, we can then match effectively and aggregate intention among individuals to do things like group buys or matching people to causes – whether it’s for a charity walk or for building a company. In fact, we are already seeing non-profits benefiting from badges on Facebook and LinkedIn profiles. Given the number of people within my network who match some aspect of my digital fingerprint, it isn’t surprising that quite a few of them have charities that are of interest to me.
I don’t mean to make it sound like we’re on a path to socialism when it comes to collaboration. Have faith that the motivated forces of commerce within our networks and communities will always be looking for ways to profit. Furthermore, increasingly sophisticated algorithms will allow those willing to expend greater effort to take a bigger share of the pie. This could lead to a more pure and efficient form of capitalism, essentially shifting the value of relationships to the value the relationship produces. I do think that collaboration will be the next great frontier on the web. The amount of collective power that can be harnessed by social networks to achieve goals is astonishing. Think about saving money with group buys, cloud computing to solve medical problems, conducting joint product development or even simply finding a way to pass on a lineage of storytelling. Wikis and other tools have given us the ability to crowd-source all types of information as well as new opportunities to work together toward a common good. At first we saw groups of individuals who were already connected in the offline world embracing online tools as a way to collaborate on a business presentation, a school project or community initiative. But soon it was clear that simply having the means to collaborate could itself create connection and community. For years, intent existed in our own minds but generally went unspoken, except perhaps with close friends and spouses. On the web we find that by expressing our intent we are fulfilled. We’re able to connect with products or services or communities that meet our needs. This gratification probably explains why early technology investments focused so heavily on search results. But imagine a world where people express their desires proactively prior to making a decision. Although we’re still in an early stage, it’s exciting.
A Shift Towards Creating Value
Some marketers like to bemoan the decline of brand loyalty. But how can you expect loyalty unless you’re providing real value to your customers? Especially when the value becomes more and more transparent with the proliferation of information and distribution through new communication tools. There’s no logical reason for somebody to be loyal to a brand. The brand is there to provide a product or service and get paid something in exchange. Whether the price is $5, $500 or $5 million, there’s a value exchange involved. If they’re acting logically, customers will be loyal as long as there’s a compelling exchange for the price. The challenge arises when the value is no longer compelling enough or there are equal alternatives. Just because somebody always used Tide detergent in the past does not necessarily mean they always need to use Tide. Consumers know that there are alternatives and there will always be more alternatives. Niche products have less to fear from alternatives, however, and this is important. More niche products and more SKUs mean a longer tail economy – one that serves the customer in a different way. This changes a basic dynamic. It no longer makes sense to spend so much on brand marketing. Just raising the recognition of your brand and reinforcing the perception of your brand won’t increase brand loyalty. The way to increase brand loyalty is to have the best product, solve the problem in the best possible way and provide the best value exchange for that user who fits your core value based on their unique needs. In the most basic terms, the old way of brand marketing was an exposure model that pushed messaging on people. Brand value and trust used to be proxy for real information. But with the 40
Internet, users were suddenly able to pull the world to themselves on their own terms. This means more than empowerment for audiences, although that’s certainly part of it. It also means that a good deal of consumer intent that had been hidden is now exposed. Simply by stating their interests – through the navigation of category selections, through consumption patterns, and via search – consumers revealed a wealth of data to advertisers. Not just what they were looking for, but also how they looked for it. Although search certainly helped accelerate the shift, this change actually began as soon as consumers were able to express choice in a dense enough market to perpetuate that activity – meaning they got what they were looking for, and not just because they had a tool to do it. Then, with search, consumers were not only able to find the things they were looking for, but also the things they didn’t know they wanted. Even mistaken searches opened new horizons. The world hasn’t changed totally; you still must have a compelling product that fills a need in order to thrive. But what is fundamentally different is this: people are now telling you exactly what they want and need. Moreover, in the current landscape consumers draw out pertinent value – whether that’s a product, content or a connection. They choose. Therefore, unique value is paramount. Consumers now create their own vacation experiences rather than relying on vacation packages. They research product intensely and know prices high and low before making an offer. They can connect with people like themselves immediately whenever they want to, even if they’ve never met anyone like themselves before. And they consume niche lifestyle/mindset-related entertainment such as heavy.com, vbs.tv, and surfline.com.
How does a marketer deal with this? By offering something uniquely compelling that builds upon the core value of the goods or services offered. Give consumers a reason to engage with your brand. Of course, while you want your online presence to be attractive and pull people in, you should always make sure that the incentive is related to your company’s core value in some way. You also want to be sure not to get too caught up in technology for technology’s sake. If it doesn’t help a user in the lifestyle where your brand lives, don’t offer it. In today’s market, alienating even one person can throw a monkey wrench into your efforts – because it’s so easy for that one individual voice to make itself heard. And one more thing – you always want to ask yourself whether your product is good enough. Because the best way to achieve marketing success today is not to trump your competitor’s ad strategy – it’s simply to provide a better product. Your customers will spread the word for you.
One of the most significant changes that the spread of “web culture” has imposed on advertising and marketing is greater accountability. The availability of metrics has had a huge impact on business relationships, and it’s also allowed for some direct partnerships to develop that might not have happened in the past. In the same way that the web allows consumers to find manufacturers directly, cutting out the middleman, it also allows would-be advertisers to bypass media buyers and partner with publishers directly. So we now see manufacturers connecting with niche publications that directly cater to the audience that would consume their product. They’re bypassing the standard advertising relationship, which is often CPM-driven.
Online publishers who truly “own” a niche audience, can track visitor behavior precisely, providing an asset that can be leveraged with advertisers. Niche publishers, in fact, have the ability to prove they can help advertisers get into deeper relationships with audiences. So instead of spending time simply trying to sell more advertising on a CPM basis, they can focus instead on creating opportunities to advertise products or services that are directly relevant to their readership – and thus get a much higher effective CPM. Because it’s tracked, the risk is driven down to limited tests. Advertisers can know exactly what worked and even a fair amount about whom it worked on. There’s more direct and more accurate feedback than there was from old advertising models, too. The infamous quote by John Wannamaker, "Half the money I spend on advertising is wasted; the trouble is I don't know which half.", may becoming obsolete. But the accountability inherent in the new, metrics-driven model changes that. It allows advertisers to shift some risk back to the publishers – risk that publishers are willing to take on when the metrics justify it. The new dynamic can actually get better product in front of consumer markets and also level the playing field for companies with better products. They can now reach markets with much lower upfront marketing expenditures. A whole new era of deal-making has begun, primarily because of the accountability that metrics bring and because deeper analytics give the ability to break things down to such a granular level. But publishers and advertisers will need to align more closely while walking the tightrope. Collaborative efforts mean that businesses become more intertwined and depend on each other for success.
Before we get too far ahead of ourselves, however, it might be good to take a quick time-out and go over some of the fundamentals that underlie online advertising deal structures. There is a difference in which party – publisher or advertiser – bears more of the risk when deals are based on CPA (cost per action) versus CPM (cost per thousand). At the end of the day, putting an advertiser with a great product or service together with a publisher who’s got highly targeted and receptive readers is a win-win for both parties. But there are different approaches to financially aligning and balancing publisher risk with advertiser reward and vice versa. With CPM models, cost is typically based on how tight the demographic is, the behavior of that demographic, and the available inventory. Unless we’re talking about a fairly large campaign or a campaign with a particularly motivated publisher, it’s typically the responsibility of the advertiser to provide appropriate creative (direct response, branding, or a blend). In a CPM deal, fees are paid regardless of the performance of the campaign; therefore the risk is primarily on the advertiser. Typically, this results in the lowest long-term effective cost for the advertiser. But that’s something that can only be determined if the advertiser has solid metrics with conversion data. Often, if a publisher isn’t getting the conversions expected at a CPA level, they may fall back on a CPM or a CPC (cost per click) arrangement with the advertiser. They may be doing this for cash flow reasons, due to an unexpectedly long sales cycle with your product or service. But if you’re an advertiser who’s allocated a fairly reasonable budget for threshold marketing cost, be wary of doing a CPM or CPC deal instead of CPA. You may be advertising in the wrong venue or using the wrong medium or the publisher may not be providing proper placement, or maybe your product/service just isn’t critical to the audience at this point. 44
CPC models balance out the risk between publishers and advertisers. Depending on the CPC cost, it may slant in favor of one party or the other, but both are typically vested in making sure that the creative converts. For example, Google Adwords will make sure that the highest conversion/price combination moves up higher in the listings. CPC is a good way to start a balanced relationship while mitigating some risk; however, keep in mind that it is likely you will be limited to text links and traditional display ads (rich media or other). It is possible, with a minimum commitment, that the integration may be greater, but likely still not as far reaching as the CPA. CPA models make the most sense when they’re related to a transaction (such as a sale, form completion, or other action.) The publisher takes on most of the financial risk because they believe they will get a larger upside on the back-end, leading to a higher effective CPM for their inventory. It’s not unusual to see effective $1000 CPM deals on the back of a CPA deal, sometimes unbeknownst to the advertiser. Pure and simple, CPA is a math and risk game. Although it is in the interest of the publisher and the advertiser to build a longterm relationship that is mutually beneficial, it is important to understand how the system works so you know which approach is best for your target audience. You’ll also want to see that the metrics line up so both parties can thrive. CPA deals are often the most creative and effective at reaching your target. Publishers are committed to integrating advertising messages in the most appropriate spots for conversion. They’re also offering more touch points (phone, email, and other types of support) to ensure that a transaction is completed. However, you must still know your metrics and the exact reach of the deal. For example, a publisher may expect a payout if users who register on their site first later convert with you. This can expose you to an unexpected payout in the future, even if the publisher did nothing more than just increase your brand awareness. 45
Further, it’s wise to thoroughly evaluate any agreements that include touch point controls to ensure that delivery is consistent with your intended brand experience. Remember, these customer experience touch points are associated with you. Regardless of the level of risk and time required to set it up, a CPA is a partnership that can yield great results for both parties, especially if you don’t have a strong ecosystem or content strategy of your own (and thus can’t generate the kind of traffic you need organically.) If you have an opportunity to do a CPA deal, don’t just jump at it thinking, “Hey, we are only paying for results.” Even if you have already done your homework and know your threshold cost per acquisition, you could still get stuck with a long term contract that forces you to pay $100 per customer, for example, when you have been getting them for $20 using a CPM approach across all of your networks. Equally costly, CPA does typically carry a higher opportunity cost, so you expend more internal resources, technology costs, and mind space to get a deal implemented. Upfront risk is calculated into a CPA and CPC. It may not be the best option if you have stellar metrics. Once you have a solid set of performance metrics – from multiple publishers, ad types and creative – you should consider whether moving away from CPA or CPC toward a CPM approach that will get you the best ROI simply because when you take on the risk, you get the benefit.
Chapter 3 How a Honey Pot Works
Brand alignment, authenticity and a compelling core value. Those are the requirements for making a Honey Pot work. Without them, your Honey Pot just won’t be sweet enough. Creating value for users is the central goal, but alignment with that core is critical if you want to be sure you reap the rewards of the value you create. And without authenticity, none of this will fly. Any online ecosystem can give you some visibility and generate some traffic. What distinguishes a Honey Pot is that it’s an online ecosystem cultivated specifically to impart value to your users in a way that aligns with your core value. The result is something better than just eyeballs. It means qualified traffic, better conversion and retention, and better ROI.
First Things First
At the heart of a strategy based on authentic brand value there has to be, well, a brand. For a while marketers talked about the death of the brand – or at least the death of brand loyalty. Certainly, it’s true we’ve seen the painful death of some badly managed big brands in recent years. It’s also true that economic downturns can make consumers more price-conscious, putting their brand loyalty to the test. But the
brand dynamic is always there unless your business is completely commoditized. By commoditization, I mean that there’s absolutely no qualitative difference between you and any of your competitors. It’s all about who can offer the lowest price. A higher quality product or a more convenient location or superior customer service – none of those things make a difference because your customers are completely driven by price. If you are purely a commodity player, then you had better be selling something relatively scarce. Otherwise, you’re going to have to find some point of differentiation and fast. That differentiation is what allows you to market your products or services, and what distinguishes you from the competition. It goes right to the core of your value proposition. Cultivating a rich, sweet Honey Pot requires three things: brand alignment, authenticity and a compelling core value. But in order to pursue a strategy that leverages authentic brand value, first you need to build authentic brand value. And that means you have to be able to do three basic things:
identify your core value develop a brand experience that embodies your core foster a culture that aligns with your core
These are the necessary prerequisites. Without them, a Honey Pot – even if it’s well executed – just won’t work for you.
Identifying Your Core Value
Not everyone can easily articulate his or her company’s value proposition. But if you’ve stayed in business for any length of time, it’s a good bet you have one. There’s probably something you’re doing right – whether by accident, by instinct or by plan. 48
The trick is recognizing what your core value is so that you can put together a strategy that really leverages your value. There is simply no way to succeed with a Honey Pot strategy if you truly can’t discern your core value. So what is it that you do particularly well? What is it that you offer that no one else does? What unique problem have you solved that no one else even recognized? What is your story?
Communicating Your Brand Identity
Face it, mood boards are some of the best props to come out of design studios. But your brand is more than a mood board or a list of attributes. It’s more than your logo or tagline, and it is definitely more than all the agency conversations you’ve had about how to communicate your brand. Brand is something intangible, but nonetheless powerful. It is, in a sense, the real essence of your product or service – a set of associations based on the public’s interactions with your product. For years the common wisdom held that brand identity was an image you could carefully craft. It was the impression you wanted customers to have of what your products or services stood for. So brand managers tried to create this idealized identity and then advertising whizzes tried to persuade customers they wanted or needed exactly what was promised by the brand. But it’s increasingly hard to pull that off. The days of simply running a catchy campaign for a completely mediocre “New and Improved” product and then watching its subsequent meteoric rise are long gone. The reality is that you have much less control of your brand identity than you might like to think. Customers now have the ability to talk back – more easily and more publicly than ever. They won’t just talk to you. They’ll also talk to each other. 49
This means the reality behind that carefully crafted brand identity will be readily apparent. So those who fill a real need, make a totally great product or offer a truly unique service, can grow their business – sometimes very quickly – based on word of mouth alone.
Aligning Culture and Core
The notion of seeking “cultural alignment” with your brand is just as important as recognizing your core and building a strong brand identity around it. Aside from being something that can drive innovation, “cultural alignment” is one of the things that will help keep your messaging authentic. As an entity your company needs to live the brand. The members of your organization need to understand your core value and be able to express it. Don’t worry if you think they’re not a particularly expressive bunch. You can always have a third party help smooth the rough edges, but you definitely need to make sure everyone in the organization knows what differentiates you from your competitors. That’s not only your core marketing message; it’s a compass for day-to-day business decisions.
Distilling the Value
If you don’t have a compelling or differentiated core value, nothing much in this book really matters. No matter how smart your tactics are and how well executed they may be, without that core value a Honey Pot strategy just won’t work for you. A Honey Pot strategy can be a wild success when you have a clear and compelling core value, but it’s tough to build an online ecosystem around nothing other than an empty positioning statement. The amazing thing is lots of clients come to us with that compelling core but don’t even know they have it. We love those opportunities when we can help unlock hidden potential.
My agency, like many others, has one hard and fast rule about clients: we won’t work with companies that lack a solid core value because we believe an online ecosystem can thrive only if it is built around that core. It’s important to find your core. If you’re really lucky, it’s the story that’s told in the marketing collateral. When it’s not, the best thing to do is to strip away all the marketing jargon and see what’s left. What was the spark that started the company? What was the founder’s intention? Sometimes when you get back to that, all of the elements you need to communicate the company’s core value readily bubble to the surface. Maybe the company founder was a scientist who needed precision lab equipment to ensure the fewest possible variables in experiments, so he started making his own because he couldn’t find anything on the market that was good enough. There’s the story behind a major equipment supplier. Maybe the founder was a baseball player frustrated that he couldn’t bend his pinky when wearing his mitt. He just wanted a mitt that was a little more supple so he could feel the ball a bit more. There’s the story behind a sporting goods manufacturer. Sometimes the core value is at the heart of what drove everything before there was any profit. It’s okay if the founders were looking for some financial reward, but what was their real motivation? Were they trying to solve a major problem faced by a loved one? Were they fascinated by an idea for an invention? The truer the story, the more it will help you communicate the core. If somebody was just searching for a dollar, they could have gotten that dollar any number of ways. So why did they choose this way? You want to look for the heart so you’ll be able to decide when value’s being added in the right places. Everything you do to build the online ecosystem should be an enhancement of that core value 51
– and not just an effort to get more traffic or higher conversion rates. Those things may result, but they shouldn’t be the primary focus. Agencies typically go through some kind of “discovery” process with new clients. We try to elicit the business goals. We review what the positioning statement is and what the messaging has been to date. We break down the business units into teams, then we interview, research and summarize. The problem is, the usual discovery process doesn’t always yield results that are honest. When an organization has been telling itself a particular story for a long time, staffers may come to believe it – even if it’s not quite true. Often, you can figure out what the core value really is by finding the passion in an organization. That’s why we sometimes pay more attention to the intangibles during discovery sessions. When do the CEO’s eyes light up? When do the chief marketing officer’s hands start moving enthusiastically? Sometimes the best place to look isn’t even within the organization. What do the company’s customers have to say about the core value of the company? Are there feedback mechanisms? Can you intuit anything from metrics that may have been gathered? Can you put some street teams out there? Can you make the call to a friend who happens to be a loyal user of the company’s product? Why does she use it? What problem does the product solve for her? That’s another way to find the heart. But what happens if there really is no hidden heart? If you can’t get down to a core value that you believe in – or one that you at least believe can succeed in the marketplace – then you have some serious work to do. Figure out how to improve or enhance what you’ve got. Work with your R&D folks. Find out who’s most closely aligned from a cultural perspective and work with them to enhance your core 52
value. Take responsibility for making that product better, making that service better and making the real heart come through.
In the best companies, the organizational culture aligns with the core value of the brand. If you’ve got that heart, then let it show. That’s authentic value. Every company has its own back-story and a unique culture. That uniqueness must be embraced to connect with consumers in the new media landscape. It’s an essential part of establishing your credibility. A typical tactic in the past was to go after the mass market with a brand identity calculated to appeal to the broadest group. Although there are still some opportunities to do that, the middle is really shrinking. The plays are on the fringes. And to reach those fringes, you need to speak the right language. If you understand their needs, niche markets will come to you – and can spread like wildfire. When your people are aligned with your core value, you have credibility with your constituency. And, as an organizational culture, you have passion, energy and clarity of purpose. That passion and connection to the community are critical. Say your business is building better bikes. Do you hire biking enthusiasts or just people who are trying to earn a good living? Do you attract outdoor enthusiasts? People who are intensely healthconscious? You really should think about this because the mix will start to affect your product – and your customer base – at some point. If your culture is aligned with your core value then let the individuals in the organization do their thing naturally. The people on your team must not only believe in your vision but live 53
it themselves so they’ll understand how they would want to interact with your brand. Your team will be speaking the same language as your customers and you’ll be able to build a more credible ecosystem. You’ll make a natural connection with your audience. That’s something you just can’t fake.
The Power of Core Value
For a number of years the web was ripe with marketing inefficiencies (read, opportunities.) Some companies were built on arbitrage plays as affiliates or as product companies filling a void in niche markets. These companies relied on pockets of low acquisition costs, maybe a super cheap remnant CPM or uncontested pay-per-click terms. Although some of these opportunities still exist, the best categories are taken, and a shift away from media spend on mass advertising is squeezing out any differential in converting inventory. Recently, I helped a client negotiate what I thought would be a challenging CPA deal because of the price expectation imbalance illustrated in a volley of emails between our client and a publisher, leading up to the talks. I prepared every data point possible based on about a half a dozen scenarios, including various combinations of percentage share of voice, data sharing, ad formats, email frequency, transaction process and touch-point control. I noticed the principal representing the publisher becoming a bit agitated just as my client started talking about how they had cornered the market. This was odd. A bit of frothing (whether real or feigned) might be typical when the deal numbers are being discussed. But we hadn’t discussed any numbers yet, and the principal of the publisher was a seasoned deal-maker. Such visible reactions were out of character. My client finished a clear articulation of his unique service and was about to broach the numbers in an attempt to set a realistic 54
anchor. But the publisher interrupted to say, “Whatever it is, we will find a way to work with you.” Excuse me? Did they really just say that? In a nervously enthusiastic follow-up to the unexpected, they went on to say my client’s product was something they felt the market had needed for a long time and that they had even tried to bring something similar to market at some point in the past. They weren’t reacting to the deal; they were having major “I-missed-the-train” pangs. If you have a compelling and differentiated product that fills a need, don’t underestimate the power of your position.
Chapter 4 How to Sweeten the Pot
How you grow your ecosystem – and turn it into a rich, sweet Honey Pot – depends on what the core value of your brand is. Even though you may engage consultants to actually build elements of your ecosystem for you, remember that you know your business, your customers and your core value. Don’t be pushed to do anything that doesn’t align with your core brand identity. There’s no one-size-fits-all approach to building a Honey Pot. What works for you may not work for another business and vice versa. So embrace the concept without trying to replicate it. First try to understand your user’s motivations, needs, loves, fears. Then do something original with your customer in mind. We’ve seen that the fundamental reason why a Honey Pot works is that it imparts value to its visitors. Whether it’s information, entertainment or utility, there’s some type of value being provided. Of course, the trick is not simply to attract traffic, but to engage then convert and retain that traffic. So you need something sweet enough to attract visitors and sticky enough to keep them coming back. This means you have two challenges: first, what can you do to provide the value that will attract, and second, what kinds of things can you do on a tactical level to ensure you close the loop? Many of the same concepts you’ve always used in relationship 56
marketing will work here, too, but they have to support the value strategy. Just pushing your messaging isn’t supporting value. Remember that the whole point is to nurture an ecosystem that will take hold and flourish – ultimately, delivering better margins for your company. You’re in this for the long haul in order to tap into the system you’ve nurtured and reap the real benefit of your investment. A “pull” strategy like the Honey Pot can definitely yield a better return on investment over time, but you do need to give it that time. While “push” marketing strategies can give instant gratification, whether they achieve anything in the long run or not, there is a certain amount of latency in many “pull” strategies. Unlike spending on advertising, which is akin to putting gas into a car (a never-ending demand, with diminishing returns), cultivating your organic ecosystem and turning it into a Honey Pot is an investment. Think of it as a capital expenditure on an asset that appreciates. I’m not saying there’s no longer a place for straight advertising messages, but just that you can achieve more by finding ways to impart value through the process of a user’s behavior. Then you’re not just advertising to them – you’re doing something more important. You’re providing value. This creates a real relationship with your customers or prospects because you’re giving the user more control over his or her environment. Those with product to market, for example, can tell a story that’s useful and engaging and based on what the user’s actually experiencing at the moment or how they are aspiring to feel. So the presentation of the product is really just an extension of the user’s experience – rather than something that is abrupt or disruptive.
The Honey Pot strategy requires you to make a decision as a marketer: do you continue to be disruptive so you can be in control of the user, or do you look for ways to give value to the user so that they’ll choose to stay in a relationship with you? That’s a big shift in thinking, and a critical one.
Cultivating a Honey Pot
Your ecosystem will be as unique as your company and the culture it serves. So there is no one, perfect formula for turning that ecosystem into your Honey Pot, but there are some best practices, which you may want to follow. The easiest way to understand those is to look at examples of the kinds of things that typically work well. This isn’t, by any means, a how-to guide; it’s just meant to get you thinking. Whenever you’re trying to decide whether a tactic makes sense in your ecosystem, ask yourself two important questions: “Does this align with the core value of my company?” and “Does it add value for my customers? “ It’s easy to over-think what will and won’t work on the web. The reality is simple: even though the web can be a viable revenue channel when used as an extension of an existing business, there are really three primary areas that work well on the web: content, commerce and communication. You may find examples that fit neatly into just one of these categories, and you may find hybrids that have some element of all three.
Content (Information, Education, Entertainment): This was once a simple advertising (placement or sponsorship) or subscriber play. Now many content providers have found that the abundance of free proxy content combined with lower-than-expected volumes (and/or corresponding CPMs) requires a different monetization model. Those different models include everything from intertwined commerce and product placement to incentivizing user-
generated content. There are a number of players that have made it in this area as pure plays, too; however, more prevalent success can be found with the hybrids – those companies that own a lifestyle brand and leverage content to build value for their constituents.
Commerce/Savings: Across the board, commerce online works and alternative commerce (such as auction sites and social shopping) is growing at a faster rate. It isn’t just Amazon. Savings and/or niche products also do quite well. Communication: Even though the field is crowded, the potential for this type of venture isn’t tapped out yet. There’s still room for expansion of online communities and social networks. Collaboration platforms, in particular, offer major opportunities going forward.
Brand Promise and User Experience
Before we get into specific tactics, one of the things we should address is what kind of user experience is required not only to keep the brand promise, but also to achieve the right balance of engagement, utility and conversion. There should be at least an understanding of what it is you’re trying to achieve. Engagement is typically the first conversation that design studios like to get into and it’s often the last. What’s the level of engagement? What’s the brand story? What content could engage the user and pull them into that story? The answers will depend on the brand. In some respects, the nature of the enterprise can determine the overall level of engagement. A major movie studio, for example, might be able to get a level of engagement that’s ten times as strong as what a successful B2B manufacturer might be able achieve with their audience.
Obviously, you want to create a user experience that’s aligned with the brand and suitable for the user (meaning that it works within the culture of its target market.) And you want to consider whether it provides any utility. The utility factor, ultimately, is what imparts value. But that utility can be provided in many ways. It can take the form of information, a feeling of esteem, entertainment or useful tools of some sort. What provides utility to users depends entirely on the community you serve. It could be something that helps your users do their job, something useful to their households or something that helps them enjoy a personal hobby. The kind of utility you provide to a business audience might be something that gives market insight or digs deeper into a service offering your company has that could benefit their operations. An example of a utility app useful to households might be something like an income ratio calculator that allows a consumer to figure out their ability to finance a large purchase. Or you can offer utilities that touch people’s personal passions. Say you manufacture surfboards. What will surfers find useful? Maybe a “wave cam” that lets them see the waves at popular beaches around the world? The goal for any utility you provide must be to enhance the user experience and/or solve a particular problem and/or enhance a feeling or experience The utility is also in the content itself, which can be authoritative, informational or just wildly entertaining. What value can you impart in terms of adding to a user’s knowledge? And can you do it in an entertaining way? Another aspect of this is conversion. Although we usually think of conversions as specific actions like requesting a quote, buying something or signing up for a feed, depending on how long your sales cycle is, your conversion goal might simply be to get users in the loop. This way you can continue to build a relationship and execute a transaction with the user at some point in the future.
Getting the user in the loop can mean an actual e-commerce transaction, but it can also mean getting them interested in signing up for your house list – with a specific value that’s offered – and helping you build segmentation in that list. Or generating a sales lead that can be scored and sent to your CRM.
Experience Isn't Equal in All Forms
User experience isn’t just the interaction design on your website (although that’s especially critical for purely online plays.) It’s the whole customer experience – the smell at the threshold of your location, the inflexion in your customer service rep’s voice, the sincerity of their smile and the texture of the floor. Even the toilet paper in the restroom. We live in a world where product and services are becoming increasingly commoditized. So the ability to provide a unique, relevant, and engaging experience may be the sole surviving differentiating factor for some companies. The ability to transport a customer to another world becomes your responsibility. They aren’t just paying you for your wares – they are paying for love, for excitement, and often for the chance to fulfill a perceived identity. Your ability to provide them with a visceral experience relies not on a wow factor, but on an intuitive understanding of the intangibles that make up your brand and touch your customer’s soul. Don’t underestimate the value of user experience nor assume that user expectations of experience are similar across online and offline media. Further, don’t expect that the merging of two or more media is going to yield an experience similar to either individual medium. Experience in the physical world has higher value because all senses can be engaged. It’s easy (and this is particularly true for those of us in the interactive industry) to focus entirely too much on the digital experience. But even though we are certainly going 61
to see more digital signage tailored to a viewer’s individual identity (yes, think Minority Report), the physical world will still take precedence. Our experience in the physical world engages obvious senses such as smell and touch. Attempts have been made to simulate those aspects online, but they just can’t stimulate the emotions and provide the same degree of engagement. Especially when you add in the impacts of the intangibles – like intuition, pheromones, wind shift, a genuine smile from a customer service rep, and so on. The long and short of it is this: what you do to enhance the online user experience also enhances the brand by leveraging the utility value within the brand itself and sharing it with your users. So even if users can have a physical experience of the brand, you still have an opportunity to improve overall ROI with the online experience – and it’s generally a far more cost-effective proposition.
Surprise! Users are Human
The funny thing about users is that they are human. Agency types (and this is true whether we’re talking advertising, marketing or interactive agencies) can get wrapped up in professional debates and obsessing over client deliverables like complex wireframes, heuristic evaluations and in-depth quantitative analyses. But the reality is that there are so many intangibles and so many different dimensions making up a user experience that you can never completely define it with the deliverables. Even qualitative feedback from user testing may fall short. These artifacts are just studies that help us explore the user experience we want to provide. Frankly, a lot comes down to feel. That’s why you always want to work with an interactive agency that gets engaged and thoroughly enjoys solving problems. They must connect with your product 62
and be able to sense what’s right or wrong with it. Does it have a richness to it or is it minimalist, and does that clean, simple quality adequately reflect the brand? Remember, a blank screen is one thing for Google, but it’s not necessarily going to work for another brand. Not everyone will think about your brand the way you think about it, but that ability to get into the user’s mind has everything to do with your success and the alignment of your brand value with the user experience. Every choice creates an experience that adds or subtracts from your brand’s emotional bank account.
Online Brand Extension
Expect widely varied results when extending your brand online. In fact, if you are the owner of a single mom-and-pop or a small chain, be careful. An online player with a streamlined infrastructure may undercut a well-trafficked regional brick and mortar retailer whose core value proposition revolves around price. Even a seasonal retailer, with great in-store merchandising, may find that providing a unique experience on the web has its limits. On the other hand, professional services can thrive online. A twoman operation that offers network consulting with a differentiated approach, for example, can become a national brand. First, you need to decide if digital is your primary channel or a support channel. Once you’ve decided on the web’s role in your business, you can determine how your brand may fare online by considering your core DNA. Pick one of the three known success zones – content, commerce or communication – and leverage it.
How to Grow an Ecosystem
There are some other things you need to be thinking about beyond the fundamentals of brand value. Is your message clear? Are you offering the real value your customers need? Are you providing increased value in each touch point with them? Are you giving them enough value through your conversation that they perceive this relationship to be a benefit to them? Here’s a concrete example of giving value. When you send out an email blast, are you just hawking your latest offer or are you respecting the customers who opted into your email list by providing real value to them? Respecting your audience means you hold up your end of the relationship. You don’t just target someone. You get to know what their role is and what’s important to them, then you provide them with something that will be of particular interest to them. Talk of the decline of loyalty has a lot to do with annoying or irrelevant push-based marketing tactics. The essence of pullbased marketing is natural attraction – which is exactly what we’re talking about here with the Honey Pot. You create brand value and people seek it out. Ultimately, this approach requires much less of a financial investment than the old tactics and results in better retention. Think about it this way… instead of having an advertising machine that needs to be fed more and fed more often, you’re in a situation where your initial investment is compounded. The value you create actually helps create more value; there’s a snowball effect. In the end, the value you add to your ecosystem adds value to your brand.
Ecosystem Tactics and Synapses
The specific tactics that create the user experience form the framework of the organic ecosystem. Some of these tactics might be used on the main website, while others might be used on other 64
areas of the ecosystem – for example, on an extranet (sometimes a multiple-permission level extranet), on an intranet, on a microsite or a family of microsites around specific events or issues, on landing pages, in applications (both on-site, platformspecific applications and off-site applications that are selfcontained), in search (both paid and natural), in email newsletters sent to your segmented house list or to a partner’s list in a cobranded message) or in some direct email. There’s potentially a viral or social component in many of these tactics. Some, like news releases, also tie into your online PR, influence and outreach efforts. There may be mobile tie-ins as well, and alternate distribution, including affiliate and syndication. Then there are a lot of traditional tie-ins. Depending on your particular audience, guerilla tactics may also be fruitful. Web-based, mobile, print and broadcast advertising can also help by driving traffic and getting users into the loop. A digital approach calls for customer-focused, two-way communication, but there’s still room for traditional print or broadcast media to act as stimulators, even if they’re no longer your main tactics.
Extranets and Intranets
An extranet is a good way to provide things like tiered pricing for your distributors. It also allows you to create secure login areas where your consumers can manage their account or their orders. Really, you can create any type of workflow that’s consistent with what your business offers, and bring it directly to the user – often cutting a tremendous amount of overhead and opening up new opportunities for feedback channels. You can gather tremendous insights from extranet usage patterns. We recently built an extranet site for a client containing compliance material. It allowed them to see what materials their users were requesting and what paths they were taking. We built in some fairly extensive reporting features so they could monitor the flow and see exactly what the interest areas were for 65
compliance. This allowed them to optimize training for their software based on the needs or interests expressed by users. That level of responsiveness kept users engaged through the training material – long enough to show them the benefits of additional functionality they weren’t using yet. What you do with an extranet or intranet component, of course, depends entirely on your brand, but both provide a good, solid communications platform that can have substantial utility value. On the other hand, we’ve often seen far too much invested in company intranets with little return. If your people are very attuned to what’s happening in the digital space, then the intranet might have more value – or a whole lot less, since there are many other online utilities competing for their attention. Say you’re a manufacturing facility, where 85% of the population comes in for a shift, does their job and leaves. They might not hang out on the intranet reading news, but they might take advantage of HR forms libraries and benefit summaries posted there.
Landing pages are a wonderful tool for testing different campaigns, optimizing pages and experimenting with where to put forms. You can even optimize on the fly, tweaking your messaging and getting an instant read on results. Landing pages allow you to do multivariate testing on larger volume campaigns.
Applications and Widgets
Applications and widgets are another type of component that can be important to the organic ecosystem. Savvy marketers are finding that offering things of value not only improves brand exposure and awareness, but also brand interaction. 66
If your company’s product/service lends itself to developing your own media, why would you spend millions on display advertising when you could put a quarter of that budget into content development that supports your niche base? For instance, when I was a kid, I used to go into a nearby surf shop to pick up a small pamphlet that listed the local tide tables. The pamphlet contained the surf shop’s branding and other marketing related content. Yet, those tables were so useful to my friends and me that we never minded having the store’s brand in front of us. In our present-day connected landscape, there are more ways to provide that kind of utility than ever. What if I could order a Domino’s pizza with one click on my refrigerator screen – then see the GPS coordinates of the driver when I want to check on delivery status? Or what if I’m out volunteering at a Life Rolls On event and I’m so overcome with emotion that I want to donate, but I don’t carry checks or cash, and they won’t take credit cards. It would be nice to hit a Charity Navigator app on my phone and tap in the amount I’d like to donate. Neither of these examples is at all far-fetched. The point is that if you truly understand the needs of your market segment, you can give them amazingly useful tools that improve their lives. Just make them effective tools that are a natural extension of your core brand value. As with all ecosystem extensions, the goal is to provide users with functionality they need or want, but in a way that suits your brand. Maybe it’s a calendaring or a time-tracking wizard, some kind of really specialized calculator or another helpful tool. Whatever it is, it should convey your brand value. This is really wide-open territory. You can have large-scale, enterprise-level apps that solve a workflow problem, or quirky little widgets that act as small, highly specialized applications providing a very unique utility value. Applications and widgets come in many forms and can be provided to users in many ways – 67
as downloadable, self-contained components or hosted on your main site, on microsites, or even on partner sites. Platform-specific apps – such as for Facebook, MySpace and other active social sites – are continuously evolving, always staying just ahead of the curve. That makes doing platformspecific applications a little harder, but the trade-off can be many more impressions served. Not only do you get more brand impressions, but you also get them cheaper than you would if you’d had to go out to the market. If an application is strong enough, it’s something that can stick with the user for a long time, too, which is another reason to make sure that the application is a natural extension of your core brand value. An application that gets lots more impressions, but does nothing to tie back into your brand does little good because there’s a total disconnect. It’s a wasted opportunity.
Microsites are another great extension. They are a natural place to feature event-driven material or to provide a very specific functionality or tool set. You can also develop microsites on separate servers, so they function more like unbiased resources that can help drive additional natural search results back to your core site. Creating a strong, unbiased microsite can allow you to build a reputation. When multiple people link to an unbiased resource that, in turn, links back to your core website, it ultimately raises the ranking for your core site as well. Because corporate websites often get bogged down providing information and links to multiple product lines and services, compliance requirements and investor relations pages, microsites can become areas where companies are able to build the most brand engagement. On their microsite, companies are free to 68
think like their audience and give that audience what they want and need.
Email is another tactic you want to coordinate within your overall ecosystem. This includes auto-responders associated with very specific on-site actions taken by the user as well as scheduled follow-up emails based on where the user might be in the sales cycle. Email also includes things like cart reminders, confirmations and receipts, as well as more crafted messaging like e-newsletters. The important thing to remember about developing newsletters is making sure you don’t go outside of a contact strategy that you’re really comfortable delivering. Make sure it’s providing valuable content and not making announcements of little use to the user. Also make sure that the communication is as consistent with the brand as anything else you do. The site, the extranet, intranet, microsites, applications, search and all the components of your ecosystem need to be as consistent with your core brand messaging as possible. You’ll see the best return on investment when you’re coordinating all these elements. There are a number of things you should keep in mind as you develop your email strategy:
Value – This is perhaps the single most important factor. What are you giving the user in exchange for their time? The content of your emails needs to target what’s important to them and demonstrate an understanding of their mindset. The days of an auto-responder or enewsletter with no value-add are past. This means you’re in the value-creation business, but once you are thinking in terms of what emerges naturally from your brand, this isn’t the burden it would seem. However, you want to consider whether your plan is sustainable. Remember that 69
you’re going to need to increase that value over time to keep attrition low while increasing sign-ups.
Frequency – The timing of mailings is important: How long between each mailing has everything to do with what value you are pushing in the email. Are your users willing to consume what you can deliver daily or weekly? If so, they may welcome frequent mailings. Segmentation – If you can provide strong enough incentive (such as a free app, a white paper or a special offer, for example) during the data gathering process (whether it’s a profile, an application, or newsletter signup) you will be able to segment your list further. This is hugely helpful in targeting your communications and making sure you are providing appropriate value based on user interest. Delivery – Use a hosted solution instead of managing the data in-house. The primary reason for doing so is deliverability. Credible hosted solutions have close relationships with Internet service providers (ISPs) and can help ensure that your IP address is white-listed. House List Email –Even if you have permission, I can guarantee most of your readership will not be waiting for your email. If you want to get through, you need to provide a lot more value in exchange for their time. Otherwise, you’re just intruding. Emailing in the individual age requires some finesse. It isn’t the old days when you could rent a legitimate list of 2M names and email en masse. List Rental – Remove “rented list” from your vocabulary. Building a verifiable opt-in email database of users that are explicitly interested in your brand is the best way to go. A tightly woven co-branded email is a respectable runnerup. List rental is a very distant third. If you cannot build a decent house list of your own, it’s a better strategy to do a joint, co-branded mail campaign using a partner’s list
(provided you can find a solid partner that’s a strong fit in terms of lifestyle.) If you still insist on renting a list, here are some things you’ll want to find out up front: How often is the list mailed to? What are the results? What are the deliverability metrics? What have typical open/clickthrough rates been? Who are the other advertisers using the list? Whenever you have an opportunity to partner with a publisher or another house list owner, try it. Mix your house lists together and send out a co-branded mailing that benefits both parties. As long as there’s no direct conflict between your offerings, it only enhances the efforts of both.
Search engine marketing has two aspects: natural search (visibility in search engine query results based on relevance/ranking, also called SEO) and paid search (pay-perclick ads that appear adjacent to natural search results also called SEM.) Putting a good foundation for natural search in place on your main website is an absolute requirement. Paid search is something you might use tactically. One of the great benefits of SEM is not just the traffic it can bring, but also the fact that you can use it as a type of testing mechanism and get results that can then inform natural search and overall messaging. SEM can also be useful to provide coverage for your SEO campaign by filling in gaps where your rankings fall short for important keywords.
SEM (Paid Search)
You can do a lot of keyword research prior to running any actual campaigns but, ultimately, seeing which keywords or buckets of keywords are converting and garnering the greatest interest is more helpful. Paid search can give you that kind of intelligence.
There is one thing to consider if you go the paid search route looking for conversions: long-tail search means someone is that much deeper into the sales cycle (and thus more open to your message.) So it’s great to go a little bit deeper using multiple words in the keyword phrase. The users searching with more detail will generally turn into more qualified traffic. Broad keyword searches will generally indicate people in the early stages of the sales process so you’ll need patience and may need to consider these keywords more of a branding method. Remember to invest in your branded keywords. Even though you should rank high for your branded phrases in the organic results you can block out competitors by buying up branded phrases. Say you’re an auto manufacturer and you’re putting some advertising budget into Google AdWords to create excitement for a new hybrid car. You might not want to pay for search ads associated with the generic keywords “car” or “cars” because people searching on that kind of generic term are most likely not far into the sales cycle at all. But compare that to somebody searching for “crossover hybrid 270Z with a 4.2-liter” and you’re looking at someone much deeper in the cycle – someone who’s likely pretty close to finding a dealer and asking for a quote. Another consideration with search marketing is balancing your efforts with both paid and organic tactics. There is a documented brand lift and increase in conversion rates when you appear both at the top of natural search results and in pay-per-click ads relevant to that search, but achieving that kind of mutual reinforcement depends on staying abreast of how the search engine algorithms evolve. Do your research when you’re selecting niche keywords. Look into whether there’s high or low search volume on them. Also bear in mind that these search ads can act as standard display advertising. So you may decide to provide a message from a branding perspective without expecting conversion. If you can stay competitive and fairly high up in the ranking, you can get 72
some brand exposure without necessarily paying for all the clickthroughs on the page. Paid search campaigns can often get better ROI by targeting many different, low-volume niche terms rather than just a few highvolume generic terms, because the higher volume terms can also be more expensive. This is still a very effective way to market for now, although there may soon be less opportunity as everyone catches on to this. It should be noted that we’re talking mostly about Google here, because it’s got the lion’s share of the traffic right now. Again, that might change, but as of this writing, it’s still one of the main areas that you’ve got to consider, along with Yahoo, bing, Ask, and MSN.
SEO (Natural Search)
If you’re building an effective organic ecosystem, you’ll get the most results in terms of natural search performance just by following the most accepted best practices – designing the core website with a logical structure, logical page structure, searchfriendly content management system, proper keyword weighting within the content itself, and well-formed, descriptive metatags, including page titles, descriptions and keywords. Internal anchor text is also important in helping the search engine spiders understand what your site’s pages are about. Be sure to use keyword-rich phrases when linking internally. Further, by doing things the right way, you’re also giving the user more value. When you find a site that offers precisely what you were looking for, particularly if you’ve been frustrated by visiting other sites that don’t, you feel a positive sense of accomplishment. The whole page-ranking strategy that Google has built is about creating a reputation ranking – that’s typically based on the value to the user, traffic to the site and reputation of inbound links for that particular location. 73
If you want to build a real Honey Pot, you want to deliver exactly the right kind of value to users (both people and bots) based on your brand. That means coming up with unbiased, valuable content that’s able to suit the market. Looking in obvious places may yield surprising results. For instance, you may find a useful manual, an offline database, or stacks of attribute rich spec sheets to build out content and value for the user. If you do that, you’re going to get unbiased, highly reputable inbound links, which are going to help improve your ranking. The best way to succeed in natural search is to offer good value and put a solid technical foundation in place. That’s not to say you won’t need to do some ongoing optimization and monitoring, including a lot of nuances from domain aging on down the list. But, ultimately, following best practices means that a good deal of natural search performance has been baked into your organic ecosystem from the start. It is pretty important that you begin managing search right from the start of the process. Do some keyword clouds upfront as part of brand discovery. Talk to users about your product and understand what’s really being searched for. This kind of research is invaluable. You may find that how users search – and how they think about your product or service – is very different from the way you talk about your product or service. For this reason search can actually help fine tune your messaging overall.
It seems that the love affair with viral is far from over, so if you decide to go this route, make sure that the entertainment you provide is in some way related to your products or services (see the Will It Blend? video from Blendtec: www.willitblend.com.) There are all kinds of formulas out there for viral success, but the reality is that even if you follow them slavishly, the chances of you having a viral breakthrough are still pretty slim. There are a 74
number of intangibles that come into play, among them: timing, execution, the idea itself, the value of the idea, the culture it targets and whether that culture will actually facilitate the speed of the spread. It may not, depending on the market that you’re going after. Though there are a lot of factors to consider, they can be thought through, giving you have a greater chance at success. But keep in mind that it isn’t as simple as creating a video – and boom! – you’re the next viral success on the Internet. There are hundreds of thousands, if not millions, of people attempting to do the same for themselves and their businesses. More often than not, companies actually do more damage to themselves with a poorly executed viral attempt. The fortunate thing is that most of the failures won’t spread very far. Of course, if it is forwarded because it’s such a great failure, you’re still not going to be getting a positive brand impression. So be careful attempting a viral strategy. Know that there are formulas out there for success, and try to play within them. Most importantly, don’t be bland. If your ideas start to play it too safe then viral may not be appropriate for your brand. By the same token make sure that you viral marketing ideas don’t hurt your brand. This is an opportunity to have fun with your brand and extend it, but do it in a positive manner. In the end, a lot really depends on your culture and your brand. The higher your brand loyalty is, the greater chance that you have for a viral success. We typically opt for utility more often than viral engagement – not just because it has more long-term value, but also because it makes more sense to be able to articulate or connect more closely when you’re aligned with the brand itself. Utility tends to do that more effectively. But again, this ties into your brand.
This includes planting posts, mentions and comments in blogs, forums and social shopping sites. Injecting your brand in the social space can be effective, but remember that the game has changed. It’s still about publicists making contact with the media, issuing press releases and holding event-driven launches – but the definition of media has been greatly expanded. Publicists now work on developing relationships with influential bloggers and citizen journalists, too. The upside of this is that connections are much easier to come by and develop. Now, you may have to connect with three citizen journalists, one niche publication, and any number of followers you’ll need to cajole into spreading the word. But, since your message is much more targeted and already filtered by experts and actual users, when it spreads, it spreads because it should and not because you lunched with the right connection. There are two important rules that will keep you from embarrassment here. First, remember that this is a social medium. So your people – not your company – should be doing the seeding. Second, remember not to butt in where you’re not wanted. Have you ever been deep in conversation with a close friend about an arcane, inside event and someone who only heard the last sentence jumps in on the totally wrong track? That person’s credibility is shot, and, worse, they don’t know it. Apply this concept to social networking. There are conversations that started hours, days, weeks, even years ago and if people are kind enough to let you in, you better understand the context. The good news is, new conversations are starting everyday and you can be an authentic part of them. Another piece of good advice is this: make good associations. Just like when you were a kid, if you hung out with a certain crowd, teachers, parents and your peers would perceive you to be of like caliber. In the new landscape, business connections are similarly 76
transparent. It’s critical for businesses to make the right connections. This may be no surprise, but the companies best suited to help you with online outreach and influencer outreach are actually traditional PR firms. It’s in their DNA. Unlike traditional fullservice agencies, which are facing a challenge in shifting to the web, PR firms seem to have made the leap fairly gracefully. That may be because their business was always about relationshipbuilding. That lends itself really well to navigating the social networks and making contact with influencers such as bloggers. Online PR really has two aspects: social interaction and news releases. News releases provide you with great natural search exposure regardless of the wire source you use. Particularly good pickup for your release in reputable news outlets gives you even more bang because backlinks on higher-reputation sites can boost your overall search rankings. That can increase traffic for you and also get you into some of the social or news marketing sites like Digg. The potential residual exposure you can get from improved SEO ranking as a result of backlinks is great – and it only increases the return on your original investment. I would suggest putting some of the pieces of the ecosystem in place before you go out and try to stimulate activity. You need to have the hooks to ensure that activity is going to be continuous and ongoing. You also need to have a website that’s able to provide some level of engagement, able to share some utilities or tools with users, and able to stimulate a conversation – whether it’s among users or with the company – via commenting or feedback mechanisms. The key is to have something there to keep users coming back. To use a retail analogy, you don’t want to send people into a store that’s empty. No matter how big the sign is outside, if the store has nothing to sell, there’s no reason to be there and absolutely no reason to come back. Just as importantly, you need to be able to 77
close the loop with email and other contact strategies. Make sure that as many of those components as possible are in place before you do too much outreach.
Communities and Platforms
The first rule here is that you can’t build a community. They grow organically. The second rule is that communities are also fundamentally tribal. Thus, the tribe leaders are the big influencers. If you, by some strange twist of fate, become one of those leaders, remember that dictators die hard. So allow dissent. In fact, hug it. Hug it until it no longer exists. You will have a new client/customer and respect from all in attendance. One thing to keep in mind is not to foster a community around your brand if it already exists elsewhere; this may actually threaten your legitimacy. Platforms like Facebook, Twitter, LinkedIn, WordPress, wikis and other similar networking platforms can be enormously helpful. But we’ve seen too many marketers put up a Facebook page on their company and then ask all their employees to go and become fans of it. It’s obvious the company is forcing its employees to be fans and that gives a negative impression. It’s more important to consider whether Facebook is even the right outlet for your brand. Does it lend itself well to brand loyalty? Everybody wants to have brand loyalists. But you need to think about what your product does, think about the culture it serves. Is that culture truly intertwined with your brand on a regular basis? If so, maybe Facebook is the place for you. If not, leave it alone. LinkedIn on a B2B level is a little bit stronger for marketing, sales and human resources efforts. There is definitely potential for creating applications that can improve the business workflow there; that might be interesting enough to ultimately yield some activity for you. Just don’t lose sight of what the brand value is. 78
Social opportunities aren’t a magic bullet that will solve all of your marketing problems. Product won’t suddenly be flying off the shelves just because you do a Facebook page or app. But it is good if you do create an application that has great value. It should have that value first and foremost, and the value should be closely aligned with your core brand value. That will get some exposure and has some viral potential, too. It’s really the same story with Twitter. It’s about getting some exposure. Twitter is interesting in that there’s this great uptake, but there’s also huge attrition. And you need to consider the ongoing maintenance that is required if you have your CEO or another prominent member of your team constantly tweeting. There is also potential negative fallout if the activities of some of the core people within the organization are not necessarily aligned with some of the messages that you’re trying to deliver to the market. Imagine you’re out there knocking on doors at the Department of Defense, saying, “We’ve got a really squeaky clean team and that’s why we’re great for government contracts.” Then your executives are tweeting about being out all night drinking and partying. Don’t pass up on the exposure if it makes sense. But consider how it’s going to tie in with your brand and whether it’s really worthwhile. The same is true for seeding activities that occur outside your brand ecosystem (or at least outside the areas of the ecosystem that you maintain.) This includes things like postings to forums and conversations via commenting fields on other sites. Make sure the people who act as social seeders understand their role as brand stewards. See that they have the right messaging and are able to converse in real-time with people while keeping brand values and beliefs intact through the conversation – as well as the ability to proactively solve problems as they come up. The latter is particularly important. If your representative engages with the
public and then can’t deliver a solution, you’re going to lose credibility. When they see issues come up in message boards (and they will) those seeders have got to have the authority to be able to solve the problem or at least fix it (up to a certain budget limit or a certain crisis level.) They have to be able to fix things immediately, without red tape, because by the time it needs to go through multiple levels of approval, the conversation has already moved on. Readers will be left with the negative idea of whatever the issue was and a negative association with your brand stamped in their minds. Can’t you go back and fix it? Yeah, but it’s probably going to be too far down the thread to make any difference. That’s why it’s so important that you be able to address those types of things immediately and give people the authority to do so. Have individuals active in the blogosphere and make sure they identify themselves are members of your company. This is necessary to maximize your exposure in blogs and maintain credibility. There are many opportunities to do that as well as tie in directly with your corporate blog. If you have something to say on a regular basis, it’s a great way to get it to the market. It’s a good opportunity for expression in an informal setting. You should not use the blog as a way to publish, say, key medical studies, but it can be a way to give people insight into your brand in real time. You can use it to show them what some of the possibilities are. A corporate blog is still very much an informal gateway to your brand, however. Keep in mind that if you start to formalize it and put structure in place there, you may be losing the pure purpose behind the blog itself. Once it’s subject to the same controls and pressures as your main corporate site, it’s going to have less value. The other important aspect of the corporate blog is overhead. Make sure before you start that there’s a long-term commitment 80
to keeping it freshly updated. This is a multi-year commitment that may not pay dividends for months or even years. There’s nothing sadder than seeing an abandoned blog, where no one’s posted or commented in months. That tends to say nothing much is going on anywhere in the company – even though it’s probably due to the fact that you are too busy to post. Another aspect of the corporate blog that can be challenging is making sure you have outside links coming in as well as comments going out to other blogs. This stimulates activity between bloggers and also helps you in terms of search visibility. But it also takes a fair amount of time. One final bit of advice… seeding is fine, but remember that you want a solar-powered machine or at least a hybrid, not a gas-guzzler. If you find yourself having to put gas in the tank too often, then reassess your strategy. The topics need to be engaging for your team as well as the audience which will keep everyone engaged.
With online ads, it’s a little more challenging to impart value. You’ve got to serve a higher level of engagement in the ad, but you can impart value through the rest of the organic ecosystem via utilities and content. So, spend your energy on the creative elements of online ads, including the storytelling, and focus on being able to engage the user. Again, while your online advertising needs to be in alignment with the brand, this is the one area where you don’t need to be as serious. You can have a bit of fun. Reach out to your core in places that they wouldn’t expect to find you. Many studies have shown that advertising out of context can be much more effective because your ad will be differentiated from the rest of the noise on the page. There are specific things you can do with online ads that are more effective. For example, in scene one you can do an engagement, in scene two give a punch line, and then in scene three have a call to action. That pattern has proven successful in online advertising. 81
Just keep in mind that you need to maintain a very high level of engagement in online advertising.
Engagement includes things like iPhone apps, mobile platform advertising and streamlined versions of your site/microsites planned specifically for use on mobile devices. Inherent to many new mobile devices are GPS systems. The proximity detection makes mobile even more critical for multi-location business like restaurants, insurance agents, and retail chains There are some smart, new ways to impart value with mobile applications. Obviously, there are great successes coming out of the iPhone, where you’re getting millions of downloads for very specific applications. The cost to develop some of these popular apps can be anywhere from $10,000 to $250,000 – but you’re getting many, many, many times the return in impressions on a long-term basis than you would if you just put that money into traditional advertising. The advertising dollars could be used up in a couple of weeks, whereas these applications might be on the users’ iPhones for years. And that includes the maintenance cycle for some of these applications, not to mention all the data that you collect from them. There are wonderful opportunities here.
Opportunities includes affiliate marketing and procurement intermediaries, as well as submission to social venues and comparison engines. Although you may make significant headway building your own user base due to providing value-added tools or other content to your lifestyle segment, leveraging existing user base holds a lot of potential. Map out the touch points of your lifestyle group first. Are they using comparison engines? Are they frequenting content sites that are well off your radar?
Depending on your content strategy, there could be potential syndication of content that you’re producing or utilities that you’re developing. This can perpetuate your brand message, drive house ads through to you, and even help you work together with partner companies to create some kind of co-branded applications. Syndication is a great way to get things to market and get distribution for your content and the thought leadership that you’ve created. Affiliate advertising is another way to go. It’s primarily for product-related companies on the consumer level, but you get some brand exposure when you’re getting distribution through their efforts (in exchange for sharing a piece on the CPA level.) You do need to take steps to maintain your brand. This means watching to make sure that affiliates follow your creative guidelines and style guides. You don’t need to go to an affiliate network, either. You might be able to develop relationships directly with a couple of other sites and tie them into your brand, give them a great value for working with you. There are other alternate approaches you might consider as well, based on your brand and what makes sense given the community it serves.
Traditional methods of advertising continue to hold their merit if you are using them in a way that draws the user into an extended conversation with your brand. Think of the traditional advertising process as nudging users toward your brand and its online ecosystem. Once they’re within reach, you can pull them in and convert them. Awareness-based advertising is a decreasing margin endeavor, so you certainly don’t want to devote the majority of your budget to it. Worse, it not only doesn’t add value, but also takes something (time, attention) away from your customers and prospects. You want to be adding useful tools and enjoyable experiences, not stealing something from your customers. 83
With that said, advertising, in some form, is often required to get things started. In small creative doses, it can kick-start the introduction of your value to the market. Here’s an example. Many multi-channel retailers use direct mail and/or catalogs to reach out to potential customers. Typically they print a glossy product catalog with lovely, unrealistic lifestyle shots that are often disconnected from the customer. The message, essentially, is buy this product by calling this 800 number or visit our website to place an online order. There’s absolutely nothing wrong with this. In fact, it may be required for profitable conversion numbers. However, why not engage your precious prospects or customers with something that touches their senses or stimulates passalongs? It won’t be interactive, but it can be engaging. Suppose you’re a jewelry company and you want a high gloss catalog. Instead of doing a standard 11x17 fold-over that won’t, why not print the catalog on a dozen or so postcards that are held together with a neat elastic band? It could even be something that doubles as a bracelet (potentially a bracelet for a cause.) The cards are separate, so they can be passed out among friends or significant others. People may hang onto them and use them as hints near a birthday or anniversary. Each can have your site URL for web orders, as well as the 800 number for telephone orders. You could even punch out one of the cards to use as a ring sizer, kept by the boyfriend for a future date that may or may not include a proposal. And, instead of hammering the customer with product, give them a story behind the company and the product. The tale of how your buyers found a special piece, for example. Or how about a card for designer bios? You can create a card that is all about one of the employees who personifies the culture of the company. You are not only creating goodwill among your staff, but also subtly tying the characteristics of the employee to the strengths of the company. That’s positive brand reinforcement. You can do a lot of things creatively with some of the traditional mechanisms, but the goal is really, more than anything, to get these media flowing into your organic ecosystem so you don’t 84
have to continue to pay on an impression level. By stimulating activity, giving users ways to engage with your content, and providing a feedback mechanism, you’re actually creating more activity, more comments, and more content and utility usage. That’s going to give you data on user activity as well as usergenerated content, both of which enhance the organic ecosystem. In their early days, Patagonia used to provide some great articles and how-to instructions in their catalogs. This was a way of relating to the people who were at the core of their connected culture. They were doing nothing more than sharing with their peers. Finesterre is doing something similar today in the surf community. They feature articles about real watermen, not necessarily the most sponsored or most attractive, but they combine that effort with related interest stories and relevant product. But, too often, when capital comes first, efforts are driven entirely by conversion needs, and those are too often driven by operational missteps behind the scenes, such as running ahead of the market with staff size or capital investments. The Patagonia case was classic – a simple product created by people who wanted to make their climbing and their friends’ climbing safer. Their laboratory was established after they already had a loyal following. But many companies who try to copy the Patagonia formula lack that core of authenticity and heart. They disregard what’s best for their customers (and ultimately their brand) over the long run in exchange for short-term conversion improvements. No wonder customers jump ship so quickly. Brands are commoditizing themselves right out of consumer hearts. Think longer term, and if you are part of an organization where the culture is truly aligned with the core value, you can rest assured that what is in your culture’s best interest is likely also in your customers’ best interest.
A Honey Pot strategy means looking out for the best interest of the customer – so that everyone comes out ahead. If you are using an in-store kiosk, for example, don’t just install one to save on customer service time unless you plan on passing along that savings to the customer. If cost-savings is within your company DNA, then the customer will accept the skimming of service in exchange for an enhancement of your value proposition. If not, they’ll just be annoyed at the wait time. And make sure that kiosk can be used to get public reviews on products, browse inventory across stores/warehouses, review service history and compare prices. Don’t think for a second that your users will remain uneducated. If you neglect to provide them with the information they need, they’ll just get it elsewhere – and possibly make their purchase there, as well. This kind of thinking can translate into improvements across all your marketing channels. If you are doing outdoor displays, why not put the forecast on the billboard? You can select the best days to visit your theme park, museum or restaurant on the water – and then do something unthinkable – give an alternate suggestion on the less appropriate days, like stay home and color with your kids. Remember, people are shutting out your messages anyway. So if you can’t be memorable, at least be useful. Ironically, that’s what just might make you memorable. Need an idea for your company-based CD-ROMs? Stop printing them. Maybe you’re thinking that if you could just get one in a prospect’s hands, you’d be virtually guaranteed their undivided attention. It’s not true. Maybe you think that at the very least it’s an additional brand impression, a coaster, or a Frisbee. It isn’t. Those CDs are too slippery for coasters because there is this weird cohesion thing that happens. Plus they really hurt when you get hit with one (I have; it may have been yours.) If you really want some mindshare and must have that CD, then follow a Honey Pot strategy and give something of value as the 86
primary impetus, not as a trick to get a user engaged. Include a full version or pre-release of something, provide useful tools or software. You can even entertain users with a video that can be repurposed for other venues (such as online or at a tradeshow) Just remember, it isn’t about you. It’s about them. Another important point, don’t blindly mail existing customers your latest product extension promo. If your customer just bought a white plastic mailbox from you, are they going to be in the market for a black mailbox? Probably not, but they might be in the market for a new fence or a new welcome mat. Put yourself in their mindset and deliver accordingly. Don’t be afraid to collaborate with other companies that can deliver value for your customers, as well.
Honest communication of your core value is absolutely essential. Exaggerated claims get you leads that aren’t qualified or that you aren’t qualified to serve. That wastes a lot of time, too, because it gives you the impression that you might be getting more activity, even though that activity doesn’t convert (or worse, converts into unhappy customers.)
Communicate Your Core
What’s the core messaging you want to convey throughout the ecosystem? Maybe you have different messages for different market sectors. B2B websites often have to do multi-layered targeting so they can address different application verticals and speak to retailers/distributors while also addressing consumers. B2C websites may want to message, a set of specific personas, based on a particular product. It’s important to make sure that the components of your ecosystem support your messaging. For example, if you say that you have the best customer service, then the customer service 87
mechanisms on your site need to be robust. Or, at the very least, you need to have an account section on the site that anticipates major concerns and provides a smooth, streamlined flow so customers can have all their questions answered quickly and easily. The functionality you provide has to be consistent with what’s been promised by the brand. This meets the user’s expectation of the brand and also creates a home for tactics that will bring users back. It’s fine to serve the brand expectations with self-contained applications, but you do want to make sure that users still flow back to the website. It doesn’t need to be everything to all people – you can use applications, landing pages, extranets, intranets and microsites in the extended ecosystem – but the main site should serve as a hub.
Have a Conversation
Your communication strategy should flow from core value and cultural alignment. It’s really important to understand that you’re not trying to create a broadcast platform. Rather, this needs to be two-way communication. In other words, conversation. This is something that many marketers are talking about and feel they need to be doing, but they just aren’t sure how.
Use Search for Research
Individuals reveal intent through search activity, making it a wonderful resource for research into what your users want. Don’t just use keyword research for your paid and natural search strategy, but also for uncovering trends in your space. Are users searching for a phrase in greater volumes than you would expect in your industry vernacular? Are there heavy searches on keywords even when there is no competition for them? Are there search queries popping up where no solution exists? Keyword trend research can give you some interesting insights. For example, you can do a side-by-side report of keywords that are ranking well for competitors and driving traffic to their sites, but falling short for you. This 88
intelligence will help you do some tuning. Also be sure to measure the impact of branding and other direct response campaigns on your branded search campaigns. Remember, the point isn’t to look smart, but to communicate effectively.
Stop Talking! Read and Listen
Remember, your brand communications can no longer be monologues. They need to be part of an ongoing conversation between you and the individuals who choose to participate. So stop talking and learn to listen. This new approach to marketing requires all the cleverness of the past plus the ability to think in another dimension. Today’s dialogue is open. Whether users speak to you in clickstream, transaction or spoken words, they want to be heard (and responded to.) Similarly, pay attention to reviews and ratings. These are also ways to hear customers – or potential customers – talking to you. You can become part of the conversation by injecting yourself at a micro, not macro level. For example, say a customer posts, “I received my shipment from ABC three days late and missed my wife’s birthday.” They posted it not just on their blog, which would have been bad enough, but also on an e-commerce review site. A proper response deals with the problem first: “I am Jane from ABC company and we sincerely apologize for the late delivery. We would like to do blank to make up for it.” Then there might be an opportunity for just a little applepolishing: “ABC prides itself on blank.” What would a totally improper approach be? It goes a little like this: “ABC company provides great customer service. Click here for a 10% off coupon.” That’s worse than comment spam. Keep your ear to the ground and gather up intelligence by listening in. There are many online vehicles that can be your barometers: blogs, search trends, buzz meters, community forums, reviews, ratings, profiles, and so forth. Ignore them at your peril; they are often the voice of your customers. Call it proactive customer service. 89
You might not have a process for it, yet, but with or without you, a discussion is going to happen. Will you be part of it? There’s a tremendous amount of feedback available that can be gathered from blogs, review sites, your own boards, or from any feedback mechanisms or utilities you have on your site. It can also be revealed in your site metrics – what the clickstream is, where people are connecting, whether there are any social interaction points on your site or off-site. You can also do a lot of monitoring of search trends as well, based on what people are talking about and looking for. That’s going to give you quite a bit of feedback on how you can improve your own messaging. Even something as simple as keyword intelligence or back link analysis can reveal the things users are looking for in your brands.
Converse to Succeed
Although companies do have control over a number of the ecosystem areas, we are quickly coming closer to a connected landscape where the most a company will be able to do is create value and let it work its way through integrated channels naturally, ultimately leaving you with nothing more than an ongoing assignment of monitoring the adaptation of your brand and tweaking the output objectively. So instead of having a day filled with running A/B tests, modifying copy and running focus groups for messaging feedback, a marketer’s day will likely increasingly involve working with the R&D and customer service team.
It all comes down to honest and clear communication and knowing your own core. Users want to know what they’re getting, and they’ll appreciate clarity. So, are you selling them fun? Are you selling them a solution to their problems? Are you looking to give them a utility that makes their lives easier? Don’t tell them
about something that doesn’t exist, don’t exaggerate, and don’t over-dramatize. Ultimately, when you deliver an honest message, you’ll get such wonderful information to improve your product and brand, and you’ll get continuous praise as a feedback loop. This can be really positive for your internal culture. I love the old movie Crazy People, with Dudley Moore, just because it’s such an exaggerated account of what can happen to your brand when you start telling the truth. Moore plays an ad exec checked into a mental hospital by his employer when he breaks under the stress of the business. The other patients in the hospital help him write a new batch of ads – which accidentally get sent to print. Of course, sales go through the roof and the agency wants a piece of the magic that Moore and his new friends created. That magic was the truth – yes, our product tastes like crap, but it might save your life. Who wouldn’t believe that?
What’s the Story
Do you have a story? Is it authentic? If your business began as a solution to a problem, is there any real emotion tied to that solution? If the answer is, “well, a half-dozen of us sat around the conference table dissecting Gartner/Forrester research and we determined that this product/service was needed” – well, that’s not much of an emotional story. If the answer is, “my Dad couldn’t get out of the chair because of his hip arthritis. He is a proud man and it hurt me to see the defeat in his face when he had to ask for help to get out of a chair. So, I used my background in mechanical engineering to design a comfortable chair that uses simple physics to help a person get to his or her feet.” – then you just might have a story that people can relate to.
What is the reason, the motivation and the desire? If you figure this out, you will likely uncover a story that can be interesting and inspiring.
So much time is spent figuring out how to position your brand in the market. But sometimes the positioning just doesn’t matter. The exploration of positioning is certainly a good exercise for a new product or company launch. For existing brands, however, your position is what the market has already determined it to be – and the best thing you can do is understand and embrace it. Trying to be something else requires retooling of your organization and changing your value. This is perfectly okay and in fact some evolution is always good. But don’t confuse value exchange with telling the market you provide a value that only moderately exists just to get a larger market share or to drive a wedge between your competitor and your customer. Your DNA is your DNA. It’s uniquely yours and it contains some destiny. If you find yourself positioning, it is likely against a perception or perceived threat.
Content and Contact Strategies
Your content and contact strategies also factor into balancing the ecosystem and how it relates to your brand. For example, if you’ve determined that your particular audience needs a very high knowledge value, then your strategy will be driven by a need to provide informative, research-oriented content – something that’s actually building up that value in a way that meets audience needs. At the same time, you may need a contact strategy that keeps the user in the fold if there’s an exceptionally long sales cycle. So, 92
interspersing bits of content according to a timeline – on a quarterly, monthly, or even biweekly basis through the sales cycle – will potentially result in increased conversions. But again, this is not about making sure your users have more advertising in front of them. You don’t want to be bombarding them with messaging when they’re not ready for it yet. It’s about creating content that’s valuable to users – whether it’s produced directly by your firm, drafted by a hired copywriter or syndicated from other sources. There are other ways to provide your user with value through content, too, by leveraging user-generated content, as well as widgets and things of that sort, if they fit with your brand. The advantage of a strategy based on providing content that doesn’t need to be highly produced (such as the content developed directly by your staff, syndicated content or user-generated content) is that you can continuously impart value at a very low cost, at the same time tying that in with a low-cost contact strategy via email. That supports your contact strategy because it will allow you to reach out to a user with purpose and reason. The continued contact will keep them in the sales cycle and keep your costs low. While there are sites that have real gold in terms of native content, not everyone is going to have that kind of material to offer. Don’t automatically sell yourself short, though. If you have an office full of engineers, you might think you’re really going to have a hard time coming up with compelling content, but maybe the best behind-the-scenes and how-to content can come from a solid engineering staff. If you don’t believe that, check out the magazine Make. One thing that’s essential is to make sure you have a clear set of objectives before you try developing your content strategy. Unless you need to speak to a highly technical audience, keeping your 93
content bite-sized is the most important factor after remaining on brand message. Other questions to ask yourself: Are you trying to be sticky or convert visitors? What types of content assets are actually available? Regardless of your strategy, keep it short and keep it relevant. It’s also a good idea to seed your content with important keywords. You may even want to think about things like syndication. Remember that developing an in-depth content strategy isn’t for every company. If it isn’t in your DNA – and, just as importantly, if it’s not useful to your audience – then don’t force it. Just work with a publisher to get the impressions you need elsewhere. But if you do have natural talent or content that creates an experience, then by all means, use it. One final caveat on content. It’s tempting to count entirely on user-generated content to build your site. But don’t. First of all, the number of active contributing users on the web is a lot lower than you probably expect, and for any specified demographic it could be significantly lower. Second, many of those individuals need a stage for their expression –whether they are doing it for popularity, or notoriety. Unless you can provide a sizable audience, you won’t be an attractive venue. Moreover, without a large audience, it’s unlikely you can find a democratic way to determine whose contributions should rise to the top. This lessens your chances of building out a content base with user-generated contributions.
Feeding and Syndication
Almost every company has a blog these days. But in order to syndicate that content, it needs to be unique and valuable. The question is, “Does my target want to read it?” 94
Before you jump to build feeds or line up syndication partners, consider whether your particular audience is really hungry for your content. Providing an RSS/Atom option without first considering the value of the content to the end-user could hurt your credibility. If you get it wrong, it tells the user that you don’t understand what is important to them. Instead, it might be better to offer drill down feeds if your content hits multiple targets with different objectives. Another consideration is, will a feed of your news give more value to your customers or to your competitors?
Your contact strategy needs to be just right. Although there are other means of maintaining contact, it’s likely that your online ecosystem will be tied into email and/or RSS. To create the optimal contact strategy, allow your visitors to tailor their experience. After asking for first and last name, and email address, add some secondary steps for segmentation by areas of interest, and ask for a desired frequency of communications (daily, weekly, or monthly.) Remember the parameters: too many mailings and you will have high attrition; too few mailings and recognition may wane. Depending on your content strategy, the frequency for reaching out may be predetermined. For example, if you are pushing newsworthy content daily, then a condensed daily mailing may be in order. If you find that the user checked lifestyle and left business unchecked, then make sure you design your email to bring the most relevant lifestyle information to the top of the screen page – above the fold. Also keep your typical sales cycle in mind as you craft an appropriate call-to-action. You can almost drill it down to a one-to-one level, or at least to a specific segment of the total population within your house list. You may have predetermined actions in your CRM system that dole out emails based on certain milestones in a sales cycle or based on events in the CRM. This approach is usually most 95
appropriate for business-to-business players with heavy lead flow and a large, fragmented sales force. Bottom line, you want a contact strategy that will balance immersion with function. You want contact to stay on-message, even in the nooks and crannies (metatags, form validation responses, auto-responders.) And you want to make sure it: speaks to the target and their mindset; matches their place in the sales cycle appropriately; provides an appropriate experience; picks the right spots aligned with core value; and delivers on brand promise – no more, no less.
One particularly important point to keep in mind as you plan your contact strategy is that you are building up expectations among your users. If you ask for contact information with every reader request, then users will likely expect you to get in touch with them at some point in the future. This assumption may even prevent them from bookmarking you, either they assume a connection has been made or because it requires more effort – and you’ve already used up some of their goodwill making them fill out your contact form. Follow up quickly. 48 or 24 hour return phone calls and email autoresponders aren’t fast enough anymore.
Most metrics and analytics efforts look toward one primary goal – conversion improvement. For the sake of clarity, let’s define conversion here as anything that leads to a goal action – be it a lead, a sale, a newsletter sign-up or a registration. First and foremost, keep your conversion strategy simple. The best way to improve conversion is to steer clear of confusion. Be the horse with blinders on. Keep attention focused on the core message from initial brand touch (banner, search result or other contact) through their action. 96
It’s natural to want to tell the whole story, and you will get an opportunity to do that once your conversation begins, but for right now you have the fish on the hook and throwing more bait into the water won’t help you land it. Keep your message/creative/branding consistent from touch point to landing page or microsite, and create simple formintegrated landing pages (often centered forms have the best conversion.) Create stepped forms for long sign-up processes to gather core initial data. At a minimum, get first name, last name, email, and opt-in permission. This allows you to market to that individual later even if they get distracted or disenchanted with your sign-up process. If you need to provide more information than a landing page to convert the user (depending on the value you are looking to pull from the consumer), then develop a concise microsite around the offer or value proposition. But be careful not to stray from the offer and don’t put too much information out there prematurely. If you must drive users to your main site, make sure there is a clear path with a call to action that is relevant to your primary driving message and make sure that message supports a specific user goal. Another way to improve conversions is to keep as tight a profile as possible around the personas that you have predetermined. By doing this, your message will be more concise and the value that much higher for each user.
Performance Tracking and Metrics
The great thing about the online ecosystem is that it actually allows us to measure how things are going while we’re at work engaging audiences and imparting value. Metrics tracking is an essential part of your infrastructure. Everything – all of your various strategies and tactics – will be pulled together by tracking. You’ll want to get metrics for two reasons. One is simply that 97
you’ll need metrics to further the relationships with publishers and partners. And second is that you’ll be using metrics yourself to adjust your ecosystem tactics. Metrics can tell you where the greatest ROI is now, and then show you change in ROI over time as the ecosystem gains steam. That said, while analytics are important, the numbers themselves are not always critical. Their importance is determined by what kind of company you want to be. Do you want to be a marketing company relying on efficiency or a company that serves up a compelling value? Focus on the intelligence you get out of metrics more than meeting some arbitrary benchmarks for traffic levels or click-through rates. Ultimately, less volume of more qualified traffic is always better than more volume of less qualified traffic. With the dizzying array of measurable bits and bytes available, it is no wonder that companies often get mired in not only analytics implementation, but also in coming up with a process for reviewing, analyzing and presenting metrics that initiate change in an organization. New methods of turning analytics into action pop up all the time, but typically, we are making this more complex and arduous than it needs to be. The change curve (combination of business strategy, brand position, product/service, user needs, and site changes) for most organizations is still evolving too fast to benefit from analysis of arcane data that may improve conversion by 2% if and only if all other variables stayed the same. Instead of getting swept away with sexy pie charts and the newest analytics buzz words, focus on what matters. Develop key performance indicators (KPIs) based on absolutely critical business metrics. Ask real questions like, did the average sale increase? Is our cost per acquisition increasing or decreasing? Where exactly on a contact form are we losing people? If your site is not transaction-oriented, your questions may revolve more around brand exposure or time. How long is the 98
average session? What was the interaction level and time with the AJAX/Flash application? How many visitors were repeats? Do yourself a favor and ignore everything except your key performance indicators. Keep focused on the questions that matter. I have seen way too many managers at good companies stall on progress because they get caught up in worries about conflicting data points. After much debate and a lot of wasted time, most end up going with their gut anyway. It’s also a good idea to make sure the analytics tools you put in place are able to get you what you need, not more. The sheer effort required to get complicated metrics tracked accurately with a plethora of moving parts surprises most companies. A few of the well-known, enterprise-level packages are WebTrends and Omniture. But don’t discount a simpler solution like Google Analytics (GA.) GA was adopted quickly by a lot of small and medium-sized companies because it was free, but larger organizations are considering it, too. It’s hard to ignore the simplicity of integration combined with a focus on metrics that really matter. While they may lack some of the bells and whistles (like funnels and conversion-oriented tracking) many of the analytics packages that come with hosting services are actually quite sufficient for many companies. Add in the Google Analytics tracking code and you will probably be able to satisfy some of the most demanding KPIs. The most important thing to remember as you build out your ecosystem is that you’re making a long-term investment here. You’ll want to come out of the box with the best-architected and designed ecosystem you can – creating an ideal user experience across the entire ecosystem that really ties in with the brand experience and employs the best set of tactics, applications and utilities to engage users. But, chances are, you’re going to have to 99
do this incrementally. You’re going to have to show stakeholders that there are high levels of engagement and that your acquisition costs are better than previous campaigns. You’re going to have to defend the ecosystem until it starts proving itself. This is where metrics really come in handy. The numbers can help you make an argument against wasting advertising dollars. Yes, the real reason you want analytics data is for continuous improvement of messaging and user experience. But metrics will also show you ways to optimize the tactics you use and help you figure out which tactics work best for your brand. Like a living organism, the ecosystem is a very flexible, malleable thing. As trends change, tactics can change in response. As new opportunities arise, new mechanisms can be added. When you can justify this all from a metrics standpoint you’re going to find that you enjoy your job more. Creating a positive, brand-reinforcing effort will be imparting more value to your users, bringing more value to the market in general and lowering marketing costs in the long run. Ultimately, what we’re looking for the ecosystem to improve marketing by making a positive impact on the economy in general, the individual economies of companies and the cultures within those markets.
Balancing the Budget
What you do as far as tie-ins will ultimately rely on budget (in most cases, at least.) How do you decide what portion of your budget should go to the core elements of the online ecosystem and what part to the traditional tie-ins? The tie-ins are only meant to act as stimulators to drive people to the ecosystem itself, but they can be critical in starting the snowball effect that the organic ecosystem tends to have.
If you’ve got a generous budget, you can afford mechanisms to engage rather than simple call-to-actions and trade ads. But it really has a lot to do with what your brand is, what your market is, what your culture’s open to. If your budget is tight, then you’ve got to put most of your money into the organic ecosystem itself rather than these traditional tie-ins. You don’t necessarily want your marketing dollars to drive what your messaging or your medium is, but often that’s just the way it works. So depending upon where you are, whether you’re B2C with a high engagement factor or B2B with a high call to action or a long sales cycle factor, you’ve got to weigh that in when you consider how to use some of the other formats. Keep in mind that you’ve got to get people into that ecosystem and keep them over a relatively long period of time. You can do that with a compelling core value.
Chapter 5 Where This May Lead
Where will Honey Pot thinking take you? Hopefully, toward higher ROI, better retention and greater brand loyalty. And, in the long run, maybe to some other positive changes as well. It should be said that there are likely consequences to excessive Honey Pot thinking. Your technical staff might actually start enjoying this new sense of having a conversation with your customers. And when they make that kind of connection with your customer base – well, it has been known to cause innovation. It’s also possible you’ll stop thinking of marketing as something separate from the core “real business” of the company. Once that happens, your marketers may start suggesting lots of ways to improve your products, and you just might see the marketing and product teams cooperating more. Again, it’s been known to happen. Other interesting changes can occur as well. The consequence that’s the most exciting to me is this: putting more emphasis on creating value can lead you towards developing your own intellectual property.
While I’ve focused mostly on interactive here, the reality is that there is more and more integration across different media. Integrated marketing takes advantage of that. Yet consumption behavior still differs across different media – TV, radio, PC, mobile and print . It’s important to understand the best use of each medium, because that will help you determine what provides the most “value” to a user in a particular medium. Here’s an example. Ever use your iPhone or another mobile device to view a website? Sure, it can be useful, but you don’t really want to do that all the time. Scrolling madly to see a whole site in tiny pieces gets annoying pretty quickly. But while most users may still prefer to go to a full screen to experience a full site, that’s not always practical. So you scroll madly for a while – and then you start wishing the website would provide a streamlined experience with just the functionality pertinent to you when you’re in a mobile state. Say, just enough functionality to search for a product or find a store location directly through the mobile device. This is why iPhone applications have really taken off. They solve problems in ways that are uniquely relevant to the user in a mobile state. Take, for example, the Sit or Squat app. The folks who came up with this originally brought their idea to the web as a rather idiosyncratic blog. They’d been online for a year or more with fairly limited visibility. But as soon as they came up with an iPhone app, the name was suddenly everywhere. Why? Because an app matched the utility value of the idea perfectly. When you’re on the road, you really do want to know where the best and cleanest restrooms are. And what better medium than a mobile? Using this app when you’re parked in front of your computer makes little sense, but when you’re on your mobile phone? It’s brilliant.
Another thing that’s interesting about integrated consumption of media is how much different media cross-pollinate each other. Commerce and content have started to mesh, too. Add semantic tools to the mix, and you get something with amazing potential. When you can discern a user’s intent on the fly, based on what they might be watching or reading or listening to, you can offer them highly relevant product and even have the ability to tie that back to a CPA calculation. The sooner you see that there is little division among different types of media – just unparalleled and ubiquitous access to your audience – the sooner you can think creatively about how to engage and deliver more value at different stages of the buying cycle Wireless broadband, widely available cheap screens, a trend toward unified search and other factors have led to simultaneous multimedia consumption that’s even blurring the line between online and offline. You might think you are offline, but you’re not really. That new billboard you look at while you’re stuck in traffic is getting fed real-time weather data and switching from water park advertising on a sunny day to movies on a rainy day. Plus you’ve got a web-enabled GPS device that feeds traffic data, a watch that resets with the tides, and a cell phone sending you coupons for local eateries when you drop pins for restaurants on a Google map. And this is just the beginning. Integrated consumption isn’t just cross-media integration. It’s also a combination of interactive experiences and tangible/non-tangible concepts that are a lot less linear than we might imagine. Here’s another possible scenario – a user looks up the Mets score via mobile after missing the game the night before, and there happens to be a link to video of David Wright’s bottom of the ninth home run to win the game. Maybe, just maybe, the user is interested enough to watch a 12-second clip. So you may be able 104
to squeeze in some links for Mets merchandise and tickets, or even the top ten plays of the week. But I wouldn’t put all my eggs in one basket. You just can’t place an ad in any given format, walk away and expect money to roll in. It’s your responsibility to think, not just filter down to select the best publisher to work with. Build a rich online ecosystem that’s is completely integrated in both the physical and digital space (not just media-based.) Then use selective media buys to stimulate activity. We are approaching a stage of merging media types. TV bleeds into the Internet, where there are tie-ins to radio and print, and so on. Even outdoor billboards and in-store kiosks have gone digital, which means they can integrate all the more easily. There’s a meshing of content and commerce in media – and it’s all coming together into one harmoniously perfect experience.
Some of the smartest companies out there are making the move toward nimble manufacturing and niche products. They’re removing themselves from the middle of the chain and putting themselves at the front or the back of it, perceiving that the value proposition of being an enabler will only belong to a chosen few – the efficiency machines. It means making an about-face on a fifty-year-old business strategy, but trend-savvy companies are retreating from choices to use China and other developing nations to manufacture a large number of mass marketable SKUs. Instead, they’re designing and developing their own unique product lines and then built them in their own facilities, many in small batches, on demand. From customer service to fulfillment, the standard formula for getting product to market and servicing it has changed. What used to serve as a barrier to entry is now a ready-made, pay-as105
you-go path for intellectual property to speed into the market. Furthermore, the ability to shift mindshare to differentiating factors, rather than expending it on repeatable processes (like fulfillment, customer service and distribution) allows a greater focus on specialization. Companies like Shipwire and Amazon exemplify this. Shipwire, an order fulfillment and warehousing solution, helps e-commerce companies stay lean. They’re able to fulfill orders for very small quantities of a wide variety of SKUs. In effect, they can use their core value to complement yours. Send a pallet, a gross or even just a dozen, and Shipwire will take care of the rest. From warehousing through shipping, the entire process is available on demand, so you can send as few SKUs as you like and pay as you go. They have an API that allows you to connect your web store or catalog operation directly to their order fulfillment process, so you can bounce back status to your system to pass through to the buyer, making the entire user experience and customer management process seamless. For a long time now, it’s seemed that Amazon is one of the ultimate efficiency plays. They stock, store, distribute and fulfill – and they do it smarter and faster than anyone else. They also deliver efficiencies with a solid matching, search and recommendation system that squeezes as much revenue out of a potential customer as possible. Their core value isn’t merchandising or customer experience; it’s their system and process. Recognizing that core value, Amazon now offers direct use of their customer service, warehousing and fulfillment to others. You can add products directly to their database. That connects you with their highly effective matching system and imparts a high level of credibility. Offering their real core value to the market in this way was a smart move on their part, and one that can benefit you. But with acquisitions of famously customer-focused companies like Zappos, Amazon has also shown an understanding of what’s 106
possible with a completely different model – one that depends on a deeper level of user engagement and more social transparency. Zappos, in particular, cultivated a powerful amount of goodwill and customer loyalty simply by exposing the heart of their corporate culture and showing what was in their DNA. They built a culture of authenticity and alignment, letting customers see that their core values actually drove the way they did business.
No Barriers to Entry
Today there is a way to get product/services to market on even the smallest scale. In the past, due to prohibitive infrastructure costs, you needed to hit a certain number to break even, but now you no longer have to look to the mass market to develop products. It is now possible to be profitable with very few pieces because there are so many avenues to get product to the consumer – microwebstores, collectives, digital malls and even mini-spaces within retail stores. Faced with the alternative of mass-produced product and brands that are becoming more and more diluted, consumers are turning to individual producers. Additionally, consumers who are individual producers themselves or might aspire to be one by nature are loyal to the individual producers. What may have started as swag on Cafepress has evolved artistically and culturally to such a new level that even some of the most well-known brands are having trouble retaining the talent to design their product. Why would a designer commute to work for a salary that they could double on their own? Why would they work for a boss who constrains their creativity when they could have complete freedom? There are some exceptions, of course, especially with complex product. However, even those rules are changing. We are getting more and more connected, and those with genuine stories and real talent have a direct and ubiquitous connection to a market that wants their products/services.
Monkey in the Middle
From retailers to brokers, the value of the middleman is being replaced by enabler systems, including automated matching systems and knowledge bases. A middleman used to be a necessary translator and provider of basic information for complex purchases, like buying a home, an insurance policy or a diamond. But much of the translator’s value is negated when enabler systems can offer a clearly defined process with necessary information and an ability to save money, too. That’s why many web-based business are automating business processes and connections to create greater value or more speed. The cost-savings that result ultimately get the end-user closer to the end-producer (whether that end-producer is an insurer, a manufacturer or the other side of an equity or bond trade.) Although the need for middlemen will persist, the role itself will continue to get tougher. Need a few examples? In finance, look at E*Trade. In insurance, SelectQuote. Looking for diamonds? BlueNile. Need a business broker? BizBuySell. And in real estate – well, there are so many examples in real estate, it’s hard to pick just a few.
Less Infrastructure, Less Investment
A resurgence of individual producers, a glut of efficiency platforms, consumers hankering for unique product. How can a business that once relied on a large middle market expect to thrive or even survive? One way is staying nimble with less infrastructure investment. We live in an age where market validation can be tested without setting up factories, call centers, or going through an 18-month ERP installation. Scale when you are forced to support a rapidly growing business, not to create one. Sheer scale doesn't necessarily bring customers or clients, but it does cost money to maintain.
The same is true when it comes to enriching your online ecosystem. You don’t need to build out all the elements of your ecosystem at once. Remember the 80-20 rule (Pareto’s Principle): 20% of your efforts will most likely yield 80% of your success. That’s true more often than you’d think and that’s why I often counsel clients simply to look for that one “thing” that will get them the most bang for the buck. By the “thing” I mean the utility application or whatever it is you come up with that will yield the most impact. “The thing” should be something that’s completely aligned with your culture, has value because it addresses a real user need and can elevate your brand by hooking into a current trend or touching something in the psyche of your users.
Renewed Focus on Intellectual Property
As commoditization flattens the business world, ideas become increasingly important landmarks. Infrastructure is commoditized, customer service is commoditized, and distribution is commoditized. Even user experience has limits in the long tail economy. So what now? Focus on your intellectual property. What is it that you can do or produce that no one else can? Do you have an intellectual property pipeline? You better. Build a base of solid intellectual property – be it content, a design, a book, or a new product. Originality is key, but so is connection with your markets. It’s safe to assume that shortly after you come up with some nifty business concept, someone else will figure out how to do it better. Even small, incremental improvements get to market quickly and easily these days, then spread like wildfire. That means it’s absolutely critical to focus on creating more value in your products and services themselves, in ways that are essential to the lifestyle of your products/services.
A combination of factors has led to intellectual property – ideas themselves – becoming more critical than ever. These factors, as mentioned throughout the preceding chapters, include the commoditization of infrastructure, nimble manufacturing that can create small runs of unique products, fulfillment houses that will ship tiny quantities of only one or two items, and, most importantly, the ability of consumers to connect directly to the products they want. Something they can now do from many different platforms, including the web, phone and mobile device. A lot comes down to the fact that it’s getting harder to get margins just by finding faster or cheaper ways to run your business, but there’s still market opportunity for smarter (better vetted, better aligned, problem-solving) ideas. At the end of the day, all of these technological innovations are leading people toward products in a way that lowers acquisition cost to the point where the long tail economy really can ensue. A product can now more closely resemble that unique fingerprint of the individual. And we’re not only talking about personalized product here, but niche products. While these niche products appeal to smaller markets and account for less volume overall, they can yield better margins since the web provides a cheaper avenue to markets. We’re also seeing the inevitable flattening of the supply chain as the web lets consumers access manufacturers directly, often completely cutting out retailers and distributors. Companies don’t have to go through the process of coming up with a distribution infrastructure and a channel for it, because the overall infrastructure’s already commoditized and available. Because of collapsing supply chains, intellectual property itself is becoming even more critical. To find value, you need to focus on developing intellectual property that solves a problem and is needed in the marketplace (or partnering closely with those who do.) Ultimately that promises more longevity, because regardless 110
of what happens as your supply chain flattens, you have the ability to at least own the primary value to the user. As we get more direct access to these products, the value of sales and marketing itself is also getting flattened. People can now get connected with product in a fashion that gives them more value with less messaging. Maybe right now there’s still some way that your company can bring goods and services to market more efficiently than your competitors can through automation. The best hedge against losing that advantage is to leverage your core differentiator. Develop your own intellectual property and be the best so you can be the only. The one sure way to thrive in the midst of this marketing shift is simply to provide more and more value.
above the fold — Positioned in the top half of a page for prominence and visibility. This is a holdover from the print world, when newspaper editors aimed for placing the most important stories in the upper half of the front page of a broadsheet so they’d still be visible even when the newspaper was folded. On a webpage, the best placement is also said to be above the fold, meaning that a user doesn’t need to scroll down to see it. active traffic — The people who visit search engines and actively search for specific keywords or key phrases. Because they’re already actively searching, all you need to do is place your brand in their path. That’s why search engine marketing (SEM) works well as a performance marketing vehicle. Using “long-tail” search terms, you can target people who are farther along in the sales cycle or decision path. app — Application software running on a computer, a mobile device or other platform (for example, an iPhone or Facebook.) App is really a generic term for any standalone bit of software. backlinks — Inbound links pointing to a webpage on your site, either from pages on other domains or from other pages of your own site. conversion rate — The number of visits to a website that result in a sale, a subscription, a request for information or other desired action. This is often expressed as a percentage. For example, if a 112
web site has 50 visitors and 10 of them convert, then the site has a 20% conversion rate. CPA — Cost-per-acquisition or cost-per-action. CPA may refer to the cost of acquiring a customer or it may describe a pricing model where what online advertisers pay is based on the number of qualifying actions (when a visitor completes a sale, subscription, registration or other desired action.) When used in the latter sense, a CPA is a unit cost. CPC — Cost-per-click. The unit cost in a PPC (price per click) pricing model where an advertiser pays whenever someone clicks on a link leading to their website. CPM — Cost-per-mille. This means the cost-per-thousand ad impressions (literally, cost per mille with the M coming from the Latin word for thousand.) A CPM pricing model is a system where advertisers pay for the number of times an ad is viewed. The unit cost is typically expressed not as a price for a single impression but as a price per thousand impressions because ad views are often sold in blocks of 1,000. CPM pricing originated with print advertising, but also applies to broadcast media, direct marketing and online advertising. CTR — Click-through rate. This is the percentage of people who see a link and click on it. Typically, only immediate responses are counted, so CTR may not reflect the cumulative effect if there are delayed responses (meaning that someone sees a link and goes to that URL directly later.) creative — When used in a noun form refers to the creative components of an ad: typically, the copy and the images. house list — The list of users who have signed up to receive email communications from you. This is typically a permission-based list where users have opted to join. You can use your house list to nurture customer relationships, market, cross-sell or up-sell. 113
impression — A single ad view. Note that cost per impression is generally expressed not as a unit cost for a single impression, but rather as a cost per thousand impressions (see CPM.) keyword — A word used in a search engine query. The amount of traffic a page gets from search depends to some extent on how relevant the page content is to the keywords used in search queries. A keyword phrase is simply a multi-word phrase used as a search term. keyword density — The number of keywords that appear on a page expressed as a percentage of the total number of indexable words on the page. keyword research — The process of investigating what keywords are appropriate for a site and analyzing which may yield the highest return. landing page — The specific webpage a user is sent to when they click on a link. Attempts to improve conversion rates often involve testing different landing pages to see which perform best. metadata — Information placed in the code of a webpage (using metatags) in order to pass information to search engines and browser software that describes the page. This typically includes a page title, a page description and keywords. Metadata is rarely seen by customers and prospects visiting a site. opt in — Choosing explicitly to join a mailing list or permit mailings to be sent to you. re-tweet (RT) — Pass along a Twitter message that someone else posted originally, usually giving credit to the original poster. ROI — Return on investment. This refers to the profit generated by an activity expressed as a percentage of cost. For example, if the 114
total cost of a pay-per-click campaign was $200 and the revenue generated by the campaign was $1000, then the ROI of the campaign would be 500% ($1000 profit divided by a $200 investment multiplied by 100.) search algorithm — A set of rules used by a search engine to determine the order of the results returned for a specific query. The reason that search results can vary depending on which search engine you’re using is that each search engine develops its own unique search algorithms. seeding — Typically this refers to a strategy of increasing visibility by leaving comments, links, or other entries in blogs, forums and other online venues. Seeding can also refer to a particular kind of online outreach that seeks to engage the individuals behind influential blogs, but that’s a less common meaning. SEM — Search engine marketing. This includes both natural search (the organic results of a search) and paid search (paid advertising that appears on search engine results pages.) SKU — Stock keeping unit. An acronym that refers to an alphanumeric identifier used for specific products stocked by a retailer or wholesaler. URL — Uniform resource locator. The address of a specific webpage (not just the overall domain.) UX — User experience. This encompasses all aspects of an enduser’s interaction with a company, its products or services. In a more limited usage, user experience can also refer specifically to the experience of a digital environment (like a website or software application.)
acquisition cost 52, 98 advertising 7, 11, 15, 22, 23, 24, 25, 40, 41, 42, 43, 47, 52, 55, 56, 62, 63, 65, 70, 79, 80, 81, 91, 98, 102, 111 alignment Amazon 45 20, 24, 57, 104 brand value 7, 12, 15, 45, 46, 61, 62, 65, 66, 76, 77 Cafepress 105 commoditization 46, 107, 108 connected landscape7, 65, 88 connectedness 21, 30 conversation 9, 12, 31, 32, 57, 62, 74, 75, 77, 78, 81, 86, 87, 94, 100 conversion 22, 42, 43, 45, 50, 57, 58, 70, 82, 83, 94, 95, 96, 97, 110, 112 core 11, 19, 33, 38, 40, 45, 46, 47, 48, 49, 50, 51, 54, 56, 61, 65, 66, 67, 71, 77, 83, 85, 86, 88, 94, 95, 98, 99, 100, 104, 109 CPA 42, 43, 44, 52, 81, 102, 111 CPM 31, 41, 42, 43, 44, 52, 111, 112 crowd-sourcing demographics 116 10 24, 26
applications 36, 63, 66, 67, 76, 80, 81, 86, 97, 101 authenticity11, 12, 45, 46, 83, 105 BizBuySell blogs BlueNile 106 8, 17, 23 106
brand 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 25, 28, 29, 31, 33, 38, 39, 40, 43, 45, 46, 47, 48, 51, 52, 54, 57, 58, 59, 60, 61, 62, 64, 65, 66, 67, 68, 70, 72, 73, 76, 77, 78, 79, 80, 81, 82, 83, 84, 86, 87, 88, 89, 90, 91, 94, 96, 97, 98, 100, 107, 110
email 13, 33, 43, 52, 62, 63, 67, 68, 75, 91, 93, 95, 111 engagement 31, 57, 60, 66, 73, 75, 79, 97, 99, 105 extranet 63, 64, 67 Facebook 8, 26, 29, 30, 36, 37, 66, 76, 110 feeds 92, 102 fragmentation 18, 21, 22, 28 HoneyPot strategy 11, 12, 13, 15, 16, 18, 47, 48, 56, 83, 84 house list 68 identity 12, 13, 21, 26, 29, 47, 48, 51, 54, 59, 60 individual producers 23, 28, 105 individual voice 24, 40 intellectual property 18, 100, 104, 107, 108, 109 landing pages LinkedIn list rental long tail Make 64 76 68 11, 69, 110 91
55, 62, 65, 69, 70, 75, 76, 80, 84, 87, 96, 98, 99, 100, 101, 109, 110, 111 media landscape 7, 11, 18, 30, 51 metrics 29, 40, 41, 42, 43, 44, 50, 69, 88, 94, 95, 96, 97, 98 microblogs microsites 8, 17, 23 63, 66, 95
mobile devices 8, 31, 34, 63, 80, 101, 102, 108, 110 MySpace 8, 66 natural search 66, 69, 70, 71, 72, 75, 86 New York Times newswire services niche communities 8 8 22, 29
niche markets 22, 25, 26, 32, 51, 52 online ecosystem 10, 11, 12, 13, 15, 16, 17, 18, 23, 44, 45, 48, 49, 52, 54, 55, 56, 62, 63, 64, 65, 67, 71, 72, 75, 77, 79, 81, 82, 83, 85, 86, 90, 93, 95, 96, 97, 98, 99, 103, 107 organizational culture paid search Pareto’s Principle personal fingerprint 51 69, 71 107 25, 26 117
marketing 7, 9, 10, 11, 12, 13, 15, 16, 18, 31, 32, 35, 38, 39, 40, 41, 42, 48, 49, 52,
privacy profiles seeding
26, 27, 29, 30, 36 8, 13, 26, 27, 37, 87 22, 74, 77, 79, 113 106 18, 102 104
8, 36, 76, 77, 112 13, 59, 113
SelectQuote semantic tools Shipwire
value proposition 46, 84, 95, 103 viral widgets Zappos 33, 63, 72, 73, 77 8 64, 91 104 Wall Street Journal
social networks 8, 23, 28, 37, 57, 75
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