marketing


I’ve heard this phrase–the long tail–tossed around, and I never fully grasped what it meant until I started reading the first four chapters of Chris Anderson’s The Long Tail. The long tail basically refers to niche marketing and its importance in our current economy. Thanks to online companies like Netflix and Amazon that rival their store-only competitors (well, what started out as store only), these online giants have perfected the idea that people can customize their profiles and have their choices actually come to them rather than seeking out movies, books, etc.

I loved the way Anderson opened his book with the example of the mountain climbing book. A twenty year old book has been given a second chance thanks to generous online distribution, niche choices, personalized suggestions, and its presence on the long tail. Amazon turned the book into a best seller by coupling it with a similar selection. Like this book? Try this one, too. It works. And so does the long tail.

long-tail-graph.gif

In a world where virtually everything–information, books, knowledge–is easily accessible, the long tail demonstrates that niche marketing and consumption is as important as ever. Everything around us is personalized now–from our Google homepages to our Nike shoes to the engraving on the back of our colorful iPods. Most of the websites I use every day require some kind of log in information, and continue to provide me with choices that will be of interest to me.

The long tail is important because we’ve come not only to expect a vast selection of choices but to demand it. It’s frustrating to go into a store and be turned away because the selection you want isn’t in there…and it’s so easy to log in to your Amazon account and find not only what you’re looking for, but also a few more options you didn’t even know pertained to your interests.

What’s popular in our culture (iTunes Top 10 Songs, and so on) will continue to attract the majority of people, but after a certain point the choices taper off. Those choices to the right of the graph–away from the head and defining the tail–contain niche fragments. Consumers can belong to different parts of these niches. The overload of information and the sheer volume of choice makes these niches absolutely essential to our lives as consumers and online users.

Amazon and Netflix both started out with overwhelming choices, personalization, and customization. Others such as BN.com–which started as physical stores and later tapped into the online world–have followed suit with more selections offered online than in the stores. Blockbuster succumbed to the pressure of Netflix by offering their own expanded online mail services for movies.

I’m all for the long tail and niche marketing, but I can’t help but wonder what will happen as more companies adapt a bigger inventory in an effort to customize and personalize the selections for their customers. Netflix and Amazon have been so successful because they were the pioneers of this new type of economy. I am interested to see what will happen as this slowly becomes the norm, and the tail might taper off for the big guys so that the newcomers can participate in the long tail.

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Scoble and Israel’s focus in Naked Conversations is on how companies can integrate blogs into their businesses and make them more successful. But what happens when this goes awry?

The authors discuss L’Oreal’s Vichy blog campaign, which focused on the character of Claire. After Claire debuted in the blogosphere, bloggers were up in arms about the credibility of Claire as a consumer. Was she real? Was she merely the production of L’Oreal advertising? Vichy reacted to the outrage by ultimately shutting the website down, apologizing to their customers, and starting over from scratch.

But it’s interesting to see what the drama said about blogging culture. When it comes to consumer products, people want to know the truth–they went to know what’s real. They want the Avon Lady to give them her honest opinion on new products, and they want Claire to be a real person and NOT just the faux spokesperson of a new marketing campaign. People feel deceived when blogs are anything less than real and tangible reflections of a person or company.

Hmm…interesting, especially considering the popular surge in CEO blogging. Do we really believe that CEO blogs are the handiwork of a reputable CEO? That’s like saying that speech writers don’t exist, and that everything politicians say is straight from their own mouths. As students in a Communications program, we know the value of press secretaries and speech writers. Since blogs are quickly becoming the staple of communication, it would be hard to believe that a CEO doesn’t get any help with their own blogs. Are we holding CEOs of companies to a higher standard than we do to PR and advertising campaigns?

The issue comes down to trust. We want to believe that a CEO or politician is sitting as his desk pouring his or her heart out. Nice thought, isn’t it.

Let’s take a look at lonelygirl15. This started out as an online YouTube diary featuring a teenage girl. After popularity and fame, it was discovered that it was all a hoax. Multiple YouTube videos emerged saying what a fraud lonelygirl15 was. Again, the issue came down to trust. People who tuned in to watch lonelygirl15 believed that she was a real teenager discussing her life; exposing something otherwise caused feelings of deception. One might think that whoever was behind lonelygirl15 would be paralyzed by this scandal…but far from it. Now with a functioning website and new acting careers, the actors and crew behind lonelygirl15 were able to turn a bad blogging fiasco into a phenomenon. Had people known from the beginning that it was all an act, would as many people tune in each time? And as something so informal, should lonelygirl15 have displayed a caveat?

It’s hard to separate fact from fiction in the blogosphere. Some things are purely for entertainment (think: Dwight’s Blog from The Office, an obvious way for viewers to stay engaged in the TV show) while others require trust from the readers. With so much information permeating from every computer we look at now, I think we need to absorb everything with a teeny tiny grain of salt. We can’t hold CEO blogs to a higher standard that advertising or public relations campaigns because we have to keep one very important thing in mind: the CEO blog is itself the product of a PR campaign in some shape or form.

Gone are the days of one way memos and letters from companies to customers; ushered in is an era of two way communication and consumer feedback. This has become the crux of the internet revolution.

Scoble and Israel’s Naked Conversations tap into the online phenomenon of blogging for business. According to the authors, businesses can benefit exceptionally from this method of communication.

Scoble and Israel list six pillars of successful blogging:

  1. Publishable: the consumer has the ability and freedom to publish their voice
  2. Conversational/social: a two-way method of creating and sustaining a dialogue
  3. Findable: the information on the blog is indexed in search engines
  4. Viral/Shareable: making things shareworthy; information that is spread through multiple blogs
  5. Syndicatable: RSS friendly
  6. Linkable: the ability to link to other bloggers

SpreadFirefox, or SFX, is a great example of taking a marketing campaign and letting it excel through blogs. Just a few years ago, Mozilla Firefox was a no name company attempting to make their internet browser the new Microsoft Explorer. Through the SpreadFirefox campaign, they were able to use the six pillars of a successful blog to let the internet browser spread organically through cyberspace. The success of SFX is attributed to sustainable word-of-mouth and not to buzz marketing; the difference between the two shows a marked difference between SFX and other followers that unsuccessfully tried to spread their initiatives organically as well. Companies have been made or broken in the past few years, depending on their ability (or inability) to blog.

Microsoft started a blog called Channel 9 to help humanize their big company. Channel 9 fosters a sense of community among Microsoft employees and customers alike, and encourages an ongoing conversation and a collaborative wiki that users can participate in. This discussion forum model has been extremely popular, with all sorts of users participating on the website. The most successful blogs seem to be those that deliver information to consumers, while also allowing customers to contribute to the conversation. This allows for a dynamic exchange and sets a platform for feedback and support. As Ben McConnell and Jackie Huba discuss in Citizen Marketers, it is this exchange between the company and the consumers that generates the power and importance of citizen marketers.

CEO blogging has also flourished in the past few years. Corporate blogging is the pipeline of success between a company and their consumer. Companies from GM to Whole Foods have all actively engaged in this level of blogging by putting their CEOs at the forefront of their image. CEO blogs are the closest that people will get to seeing the face of the company–the importance of corporate blogs shouldn’t go unnoticed.

There are so many aspects to business blogs–whether it’s a CEO blogging about the daily goings on of a company, the spread of new initiatives and ideas through viral blogging, or creating a platform for developers, employees, and consumers to get together, business blogging has proved that communication is a two way street.

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.

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.