The Gilman Company Blog

Behavioral Marketing

No sophisticated marketing strategy goes without an effort to leverage behavioral marketing and no sophisticated behavioral market campaign, these days, goes without a strong commitment to technology.

Put simply, behavioral marketing is intelligent marketing. It's informed marketing. Presently, the king of behavioral marketing or "behavioral targeting" is Google. There is no commercial organization that has invested more in developing an effective behavioral marketing machine. Whether you're a search engine selling ads, a non-profit or a start up, at the core of any behavioral marketing campaign is the collection of data.

Create an incentive to collect data
In Google's case, an organizational gateway was created. If you want to leverage this organizational tool, you have to provide data in the form of a search query. Type "cupcakes" and get all types of paid ads with your search results, Betty Crocker to handmade and delivered gourmet cupcakes.

Collect even more data with advanced incentives
Learn more about the behavior with additional services that require customers to provide more data. If the services are valuable, your customers will tell you more about their behaviors and your marketing can be especially on point and more effective.

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Pricing Strategies: Branding

What happens to Coca-Cola when you take the brand away, when it can't be called or referred to as Coca-Cola anymore? Really. What happens? You're not left with much. You can't sell 20 ounces of carbonated water, sugar and vanilla extract for $1.50 anymore.

Once upon a time there were "brandless" grocery products. Remember those? A white label aluminum can with plain blue letters that read "COLA." Those aren't around anymore. The power of "brand" was just too strong for truly generic products to exist in every product category. Now, in many cases, for many grocery products, we're left with the odd little term "generic brand." Even generic is a brand now.

Back down memory lane. Recall, just a short time ago, when entire buisness models were based on brand. Brand development, brand statement, brand value, etc. Just about everything in a business model can be discussed in terms of "brand." Why is brand so important? It's important because at the core of brand lies "value." If the folks at Pepsi or Coca-Cola had one last dollar to spend, it would be spent on maintaining the brand.

The bottom line. If you're starting from scratch, and unknown brand is better than no branding at all. If you're already branded, the trick is to increase the value of the brand, such that you can charge a premium for the product or products associated with that brand.

Look for other "Pricing Strategies" posts here.

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Google Adopts "Innovation Reviews"

Flipping through the print edition of the Wall Street Journal, it's interesting to see that Google is reorganizing its effort to leverage the ideas its employees come up with. The fact that Google encourages its staff to take one work day a week to work on projects that are not related to their jobs has led to some interesting innovations. But how do you harness the value of those ideas? After all, Twitter was developed by former Google employees. If your Google, you harness those ideas by managing your innovation resources. Here, the company has drawn more dotted lines to senior management and executives and a process is developed that lets innovation easily trickle up for review by executives.

This process certainly puts more responsibility on senior management and executives, but when your competitors are biting at your heels and you've invested a lot on employing the best of the best, you want to make sure that very little or none of the innovation you're paying for slips away. This issue of managing innovation, also marks a unique problem for rapidly growing companies and intellectual property.

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The First Time is the Hardest

 Some business firsts of notoriety.

1. You've decided to leverage social networking sites like Facebook, Twitter or Squidoo to expand your online presence.

2. You're developing or expanding to a new product category for your business.

3. You're knocking on the door of an all-new associate or business partner.

5. You're going to establish a corporate blog.

6. Your going to make the leap to a start-up.

7. Or, God forbid, you're finally getting a website.

Whatever first it is, it goes without saying, that the first time is the hardest. You can expect whatever your doing for the first time in business to take more resources, things like your time, money and your resolve, just to name a few. What you don't want to think is something like this: "If this is what having a website is like, it's not worth the trouble." Or, "expanding my sporting goods line to include clothing is a bear of a project." Getting started is the hardest part.

Bonus tip: Plan your "first" strategically based on market conditions and your company's position. Also, understand that normal operations of your "first" will be much easier than getting it started was.

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Shocker of the Month: Soap Brands Expand Advertising on Swine Flu News

Earlier this month, brands like Dial, Lysol and Purell ramped up aggressive advertising print and TV ad campaigns in light of the swine flu buzz. A pretty logical marketing response to an epidemic that has every MD in the world saying that the best preventive measure is covering mouths and washing hands.

Every now and then the media hands your company a slam dunk. When gas prices went through the roof, bicycle sales and small car sales followed suit. When President Obama announced his intent to ban certain types of firearms, sales of those firearms exploded. The list goes on and on.

What types of news might your business prosper from and are you ready to respond? Chances are one or more of your competitors are.

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Apple Diversifies: Pass the Chips

Apple's recent moves to beef up its own chip development segment shows a very important corporate strategic move. There are many ways to look at this move, one of which is Apple's ability to build on its current success while other technology companies are still trimming the fat.

Obviously, the more control you have over your products and the fundamental elements that make up your products, the more you have to leverage in your market. Now, you may not be Steve Jobs, but there are still many companies that are weathering the economic downturn successfully and how those companies leverage their unique positions to advance during the downturn is important.

Another angle to this is expansive thinking from a product perspective. If you're selling clothing based on your designs, you may not know anything about manufacturing, but that doesn't mean that if you're doing well, you shouldn't consider controlling your own manufacturing, since manufacturing is a critical element of the clothing business. Apple made its way designing functionally compelling and visually appealing technology products, not by making the chips at the heart if Apple products.

By controlling product categories or services related to your core business, your core business gains a competitive advantage. One last example here. eBay and PayPal. Credit card processing is not auctioneering. However, long ago, eBay saw an opportunity to streamline its core product, auctions, by acquiring a payment processing company that made it's service easy for eBay shoppers and sellers to use. EBay tried to do the same with Skype, given that communication between buyers and sellers on eBay was another angle. Here, eBay couldn't successfully integrate Skype into it's core business, so that one failed. Stray too far from your core business and experience the pitfalls.

Diversify your product model...

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Pay What You Can: The New Kid on the Revenue Diversification Block

No, it's not a traditional pricing model, but if your product or service can stand some revenue diversification, "pay what you can" is a great way to shake up your market presence.

In some cases, it's a great way to reduce production costs, which is exactly what the rock band Radiohead did with an album release. Go ahead and download. Then pay whatever it is that your willing to pay for our music. "It's up to you," the band wrote. 1.2 million downloads and the band grabbed some serious attention.

Another one is events. Trade related events are taking a major hit now. However, if you don't get people to your event, you're toast. Some organizations are applying a "pay what you can" model, then turning it around on vendors, sponsors, advertisers and visitors for some creative revenue diversification. If your model is particularly compelling, and "pay what you can" is compelling, others will want to leverage (and pay for) the opportunity to be involved.

Bonus tip: make sure you're marketing related to any "pay what you can" promotion is heavy hitting. "Pay what you can" is an eye opener, but only if you do something to get in front of those eyes.

Design an effective "pay what you can" promotion...

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Stephen King, Sending Email and Heavenly Bliss

Stephen King has written that he believes Hell is repetition. Any guy that has the wherewithal and talent to sell a bazillion books has to be onto something, right?  What does that have to do with your business and sending email, you ask? It has to do with you becoming more productive, efficient and avoiding repetition Hell.

Repetition Hell
You type out several virtually identical emails a day or every week that are virtually identical in content. Essentially, you're responding in the same way to inquiries or you're reaching out with the same type of message/information.

Purgatory (You're Almost There)
Who doesn't deplore needless typing. It's a waste of your time, your life and your abilities to be exceptionally efficient and productive. So, you type a message template once, copy and paste when necessary and throw in an occasional and personalized nice-ity. Better than repetition Hell, but aren't you really wanting Heavenly Bliss?

Heavenly Bliss
Create a unique page on your website with an easy alias URL related to the type of information you're getting out. Now, your three or four paragraphs turns into a line or two of personalized greatness and a short and easy URL.

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Minimum Pricing Deals on the Block: Manufacturers Tame the Internet

That's right. Consumers have gone to the Internet in search of better deals and online retailers are giving it to them. Now, since some who use the Internet to sell products have found ways to increase efficiencies, reduce supply chain costs and make a profit by selling for way less, the U.S. Senate, responding to manufacturer complaints, is considering a bill related to fixed pricing.

The problem, if you're a big name manufacturer, is that some online sellers have innovated to the extent that they can offer a pricing model that turns MSRPs upside down. If you sell enough Gucci handbags at 40% off, this starts to change the retail value of Gucci handbags in the minds of consumers. Retail forums like eBay are a perfect example of this. As manufacturers attempt to control pricing and manage consumer values, some merchants are going so low that pricing alone is causing accusations of counterfeiting.

Of course, there is a line separating manufacturer pricing policies and Antitrust, but it's nearly impossible, especially for smaller retailers, to show that certain agreed upon manufacturer minimum pricing policies are illegal.

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Grocery Store Membership Cards

Dear Chain Grocery Store CMOs,

Yes, membership cards seemed like a good idea at the time. But let's face it. There is no value in grocery store membership card programs for customers and your not realizing the type of value that seemed to exist from a conceptual perspective. Here are a few reasons why you should drop your membership card program first and take credit as the industry leader who did so:

1. Obviously, all of the retail chain grocery store competitors in your category have the same program.

2. A lot of the data you collect is bogus.

3. The rewards you offer aren't compelling and unique enough to retain a customer that you wouldn't retain without a card program.

4. Now you have a duty to inform people when they may have purchased bad food. "Dear Valued Customer, we sold you some bad food."

5. Your card program is a hassle for potential new customers.

6. You give so-called preferred treatment to some customers and the others are chopped liver.

7. Wal-Mart has been expanding grocery sales since "Go" and they don't have a card. Although customers will still come in for your extensive mustard selection...unless it's cheaper at a card-less discount grocer.

8. You can reduce your marketing budget by eliminating membership cards and have something new to talk about or pass the savings along to customers.

9. Unless you're a discount chain, the real value in your local stores is location, personal service and selection, not membership. Spend more money marketing that stuff.

10. Relating to the people who come into your stores as "customers" is more important to them than relating to them as "members."

Get a Gilman consultation.