July 2007


It seems like everybody is a blogger these days. With so many citizen journalists online, PR professionals have to cooperate with bloggers more than ever before. Building long lasting relationships with journalists is still important, but building those same relationships with bloggers is just as vital to a PR campaign. So many people check out blogs every day, so it’s crucial to get news about a product and company into the hands of those avid bloggers.

Pitching bloggers doesn’t differ too much compared to pitching the traditional forms of media. The key to establishing these relationships with bloggers is to be casual yet professional. Understanding the landscape of the blogosphere will help PR pros build those solid relationships, while continual interaction with the bloggers—whether you have a story coming out or not—will ensure that the relationship has been cultivated and secured.

Nikon D80

Nikon took an interesting approach when they wanted to gain media attention for their product, Nikon D80. According to Jaffe‘s blog, “this has been the best example of blogger outreach I have either experienced (first hand) or read about.” Nikon originally sent a bunch of Nikon D80 cameras to Flickr users and emphasized consumer generated content (CGC). The pictures were then used in a three page spread in BusinessWeek (among other pubs and mags).

Engaging the consumer obviously paid off, and Nikon followed up by giving the camera to fifty bloggers. Jeffe argues that this act “helps continue to legitimize the blogosphere and the new influencers.” With minimal effort, Nikon successfully participated in rebranding their camera and their overall image. The distribution of their cameras encouraged recipients to take pictures and share their experiences online.

Nikon benefited from this project because they made their product relevant to the consumer—and to the blogger. By reaching out to 50 influential bloggers (instead of journalists), they were setting a standard for this new type of blogger/marketing/PR relationship. Nikon has made known their blogger outreach efforts, and are therefore being heralded for trying out new ground with their product. Unlike the Edelman and Microsoft partnership before it, Nikon and MWW Group made sure they understood the blogosphere by first testing out their trial on the Flickr users.

Nikon was sure to cover any and all ground:

“…The only request we have of you is that you please make sure that, if you choose to write about the camera, you make it clear how you got it. We would never ask you to cross any ethical lines, so openness and honesty on all our parts is in everyone’s best interest.

The camera is essentially being loaned to you for six months at which point you have three options:

1. Return it to us
2. Re-up for another six month loan period, or
3. Buy the camera at a significantly reduced editorial discount.

Should you opt for #1 or #3, the camera or the purchase price will then be donated to a photography education program that Nikon supports. That’s it.” (retrieved from http://www.whatsnextblog.com).

Nikon wanted the camera to do its own advertising once it was in the hands of bloggers. This marketing approach may have gained more attention than the actual product– which will inevitably lead to more interest about the product. These bloggers have become brand ambassadors for the program, whether they choose to blog about the product or not. Other companies and PR/marketing professionals can learn a a lot about blogger outreach from this program—the number one rule being: know the blogosphere and you’ll know your audience.

If business ethics refers to the goings on in the typical corporate world of cubicles and corner offices, where do we extend the practice to the online world?

It’s pretty ironic that Whole Foods—a brand synonymous with organic and wholesome foods and general “goodness”—would be the latest topic of an online business ethics debate. From 1999-2006, Whole Foods’ CEO John Mackey used a pseudonym in which he bashed Wild Oats, a competitor, on Yahoo!’s finance message board. Whole Foods has recently proposed to acquire Wild Oats, which has caused the message board scandal to come to light.

Was this Mackey’s way to boost his own brand, or are we dealing with deeper issues of business ethics? WOMMA, or the Word of Mouth Marketing Association, clearly dictates a cut and dry philosophy when it comes to blogging and online word of mouth. While Mackey’s comments were not necessarily “blog posts”, they still fall under the guideline of online communication and general word of mouth information. In fact, Mackey clearly violates the second rule of ethics on WOMMA’s website: “I will fully disclose who I am and who I work for (my identity and affiliations) from the very first encounter when communicating with bloggers or commenting on blogs.” WOMMA suggests configuring an ethics code that follows a basic business model of ethics.

It’s hard to think that Mackey was just trying to champion his own product, when his motives seem remarkably evident. Coming down on Wild Oats in an effort to lower their profits for an inevitable buy out violates all sorts of business ethics—whether online or off. Mackey obviously attempted to capitalize on the online world to maximize his company’s image and promote their products; in doing so, he violated a very simple code of ethics.

Despite what Mackey says did or did not happen (that he wasn’t representing the company, that he was sometimes playing the devil’s advocate, blah blah blah…) the entire situation raises the bigger issue of business ethics online. This crisis demonstrates the sheer ease with which anybody can create aliases and personas (if Second Life wasn’t already a bizarre indicator of that). As The New York Times put it “On the Internet nobody knows you’re a dog — or the chief executive of a Fortune 500 company.” But with this anonymity, where do ethics come in? With so many companies reaching out online to their potential consumers, it is crucial to perfect this new kind of Business Ethics 2.0.

The adage of capitalism: business is business. No matter what brings in profits, the bottom line is that companies thrive off of revenue.

Fred Reichheld would argue, however, that there is a substantial difference between good profit and bad profit. In The Ultimate Question: Driving Good Profits and True Growth, Reichheld focuses on customer satisfaction and how it fosters company growth. Relationship marketing is the foundation of this model.

It’s simple: Good profit—driven by promoters–relies on loyalty and word of mouth to build the company’s reputation. Bad profits—driven by detractors– make a business vulnerable to competitors and therefore undermine long lasting growth.

The “ultimate question” posed on Reichheld’s book is: “How likely are you to recommend Company or Product X to a friend or colleague?” The answer can be found by using NPS: Net Promoter Score. Behind the notion of NPS is that customers are the #1 promoters of a product. According to the equation, P-D=NPS, where P=Promoters and D=Detractors. The higher the NPS score, the higher the number of promoters the company has. Reichheld believes focusing on long term growth rather then short term profits. Building customer loyalty pays off in the end.

Amazon.com used this structure to ensure a loyal customer base. Unlike other websites of the dot com era, it took Amazon.com several years until they were able to make a profit. They used that time to generate satisfied customers through incentives, competitive prices, free shipping, and personal recommendations rather than pouring money into advertising efforts. The more promoters they had—and the less detractors—helped Amazon.com come out on top of the dot-com boom and finally begin to accumulate good profit. Jeff Bezos, CEO and Founder of Amazon.com, said “if you do build a great experience, customers tell each other about.” According to Reichheld’s research, Amazon.com has an NPS efficiency rating of about 50-80%. While there is still room for them to grow, they serve as a model of an effective NPS structure.

Like Amazon.com, JetBlue Airways focuses on their customer service initiatives. JetBlue is known for their consistently low cost airfare and customer satisfaction. On February 14, 2007, however, JetBlue garnered media attention when an aircraft was left on New York’s JFK airport for almost nine hours—without allowing any passengers to exit the plane. A number of other JetBlue airlines were delayed, setting off an immediate backlash. JetBlue tried exceptionally hard to regain their loyal customer fan base. David Neeleman, JetBlue’s CEO, issued a public apology and took an admirable stance. Rather than getting defensive, he acknowledged the problem and even issued a Passenger Bill of Rights. They turned their less than desirable situation into one that promoters would support.

Their tactics obviously paid off—JetBlue is still voted as one of the best airlines for customer satisfaction. The entire crisis shows that JetBlue’s NPS score must be high since customers are continually happy with the airline.

Maybe money shouldn’t be the number one priority of business—customers should be. It’s the customers who rant and rave about products and service, who write on their blogs and forward emails to their friends. In the digital world of hyper communication, the citizen marketer has more of a voice than ever before…so maybe “business is business” isn’t so cut and dry after all.

Hello?

The popular release of Apple’s iPhone exhibits the latest example of market research at its prime. Since the announcement of the iPhone earlier this year, a media frenzy has been covering the entire unveiling of the iPhone. Through the hustle and bustle of Apple’s latest product, many other marketers can learn from this example.

iPhone image

The initial reactions after the announcement of the iPhone seemed promising. As early as January 11, research was already being conducted to see if the iPhone would be well received. By associating the product with the iPod, many potential consumers already believed that the iPhone would live up to its name. Merging together two everyday products–cell phones and iPods–attracts potential consumers to the product.

Apple took three dominant steps in projecting the iPhone buzz: using different types of media, giving the product a recognizable brand name, and a vigorous word of mouth campaign through a series of pre-announcements. In using the media, Apple was incredibly savvy with using the television, print, and internet sources to spread the word about their product—which therefore led to the word of mouth campaign. Brand recognition and reliability association iPod and iTunes made the name “iPhone” linked to these products rather than an Apple name. Market research concluded that consumers are more likely to recognize i-products than Apple products, thus making the association with iPod and iTunes the obvious choice.

Many questions have been asked about the product: Who will be upwards of $500 for a cell phone? AT&T has a monopoly on the product—how many people will switch their network provider? Is it smarter to wait for the second generation iPhone to come out? The results of a survey conducted two months ago to about 1300 cell phone users concluded that about 6% of the population would purchase an iPhone despite cost, carrier, and novelty of the product.

According to a Google Groups market summary of Apple’s iPhone plan, “The iPhone targets consumers who need to store information and communicate or people who want entertainment on the go.” Apple obviously conducted a great deal of market research to target the primary and secondary audiences. Apple states in their market report that “Staying close to the end user and listening to the customer will be paramount to our success.” Focus groups and surveys are among the many tools that Apple is using to determine what would attract a potential consumer. In tandem with their research, Apple was able to make a business plan that carries the iPhone through 2010.

Apple has followed the pillars of market research by thoroughly using their resources. Apple did not focus on one kind of market research–they used surveys, interviews, focus groups, and even searched Apple fan websites online to see what people were saying about Apple products as well as their competitors. Quantitative and qualitative research were both used in addition to a great deal of descriptive and exploratory research. The results of the research were taken into consideration to develop the iPhone.

Apple has perfected the art of market research by getting to the root of the consumer. As a major new purchase, the iPhone may hit certain obstacles along the way. By being familiar with these problems before the release of the product, Apple effectively used SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) in preparation of any potential difficulties.

Apple’s market research has obviously paid off. Despite some expected criticism, most of the hype seems valid. Apple’s popularity stems not only from their respectable brand and products, but also their execution and thoroughness of market research. It’s no surprise that a media frenzy follows wherever Apple rings.