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Welcome To My Den
This is the new, improved and reincarnated Dunn's Den. This blog is about marketing, advertising, social media and the goings on in my local community; from MY VIEW!
I look forward to connecting with you!
I came across an article the other day in the New York Times (it was sent to me by a fellow Town Planner Publisher) which asked a simple question: “Does it pay to advertise during a recessionary period?” My first thought was why would someone (especially the New York Times) write about advertising in a recession when we are not in one. A recession is defined as two straight quarters of contraction (I knew my Economics degree was going to come in handy some day). As of this writing, there has not been one quarter of contraction, much less two. I guess when you work for the media you actually start believing your own hype! Never the less, I did find the content of the article very, very, very interesting. It is nothing new, revolutionary or something that has not been said for hundreds of years. YES, you MUST ABSOLUTELY ADVERTISE in a recession.
I know, I know…I sell advertising, so what else would I say? No?? While it is true that I sell “Kick Ass Advertising”, another company actually came up with the findings. No, that company does NOT sell advertising. The name of the company is McGraw Hill Research. They actually use this thing called math to figure it out.
In a nutshell what they found is this: After analyzing 600 companies from 1980 through 1985, those who advertised the same or increased their advertising averaged significantly higher sales both during the recession and after it. My first question was this: What does significant mean? According to McGraw Hill, significant means 260% over those who stopped advertising. If you don’t believe me, see the graph below.
Lastly, the article went on to explain that a company by the name of Meldrum & Fewsmith found that advertising during a recession not only increases sales but increases profits as well. How can this be you ask? Simple…it is called Top of Mind Awareness. When I say car, what do you think of? How about TV or computer? That is called Top of Mind Awareness. If you stop advertising for one second, you risk the chance of losing Top of Mind Awareness.
Still don’t believe me? I guarantee you that every single one of your answers was influenced by advertising. How many of you came up with TATA Motors? (Go on and google it.) Unless you have lived in India, you are not familiar with them. TATA Motors does not advertise in the USA, so how could you be?
As always, please post your thoughts and comments. If you would like to see something covered in a blog, shoot me an email or give me a call.
Second Life, for those of you who do not know, is an on-line virtual world launched by Linden Labs. You must download a program which gives you access into the on-line virtual world. Residents are able to interact with one another through the creation of Avatars. You pick your own screen name and create an Avatar based on the many choices the program gives you. After creating an Avatar, the resident is teleported to the virtual world where he or she is able to meet other residents, explore, socialize, join groups and trade virtual property with other residents.
In a nutshell, it is a lot like day-to-day life, only in a virtual world on a global basis. Because virtual property, goods and services can be purchased or traded, companies are using Second Life as a way to promote their products. One of the biggest splashes made in Second Life last year was Coke. Coke went out to the world and let anyone and everyone come up with a design for a virtual Coke machine. They then picked a winner and implemented the virtual Coke machine in Second Life. Depending on who you believe in terms of the number of members of Second Life, potentially Coke has a target market in excess of 12 million people globally.
What I like about Second Life in general is this: EXPOSURE and THE VIRTUAL EXPERIENCE!!!! Albeit the target market may be a bit broad for your local business, it still allows you and your business exposure to 12 million people. You never know how your next customer will find you or where they will come from. Being part of anything with 12 million people can only help create brand awareness.
The other thing that I like about Second Life is the ability to create everything from the ground up. Land is purchased, buildings are built and products are created on-line. Once created, people experience your grid for things such as conference calls, educational seminars, product roll outs, etc. It is simply another way for your customers and prospects to experience you and your business virtually. (Yes, Dr. Michelle…Second Life would be a GREAT place for you to put on seminars to a global crowd. May I hang a Town Planner Calender in your Second Life office?)
A basic account with Second Life is free. To be able to purchase land (or islands), you must purchase the Premium membership for $9.95 per month. As is the case when creating most things, the difficult and time consuming part is the building process. Once created there is virtually no maintenance involved. Now for the kicker. Even though you are in the virtual world, there is a very real economy. Your Avatar is able to buy and sell many of the products and services consumed in real life. Instead of using dollars (or whatever your local currency is) your Avatar uses Linden Dollars. There is even a virtual exchange which allows you to cash your Linden Dollars into real currency.
Check the Second Life website at: www.secondlife.com and see what you think. Feel free to post your comments for all of us to view.
On a side note, if anyone would like help in setting up a community in Second Life please give me a call!!! See you in Second Life.
I came across a couple of interesting articles yesterday. The first is that Dunkin’ Donuts has launched an on-line customer loyalty program that offers a cash back program and company news. My first reaction is: WOW- a customer loyalty program….what a novel idea. This is truly a cutting edge, out of the box idea on how to connect with your customers to keep them coming back. NOT!!!! Second, I read that Starbucks is offering FREE refills in certain stores and coffee for only a buck($1.00). The company spokesperson for Starbucks says they too are looking for ways to connect with the customer. Um-mm, I don’t feel a better connection with you Starbucks. It is going to take more than free refills and a buck for that.
Let me get this straight. Two established brands want to connect or re-connect with customers and this is the best they can come up with? An on-line rewards program and $1.00 cups of coffee. In my opinion, this is a knee-jerk reaction when revenue tapers off and the company does not want to invest (spend) money back in itself.
While I applaud the fact that Dunkin’ Donuts realizes (after all these years) the need for a customer loyalty program, how does a customer loyalty program drive NEW customers? When Starbucks decided to offer free itunes cards to it customers, how many NEW customers came into the stores because of that program? My guess is not many. Why offer $1.00 coffees one month later? Our existing customers are the life blood of all of our business, I understand that. However our existing customers can only purchase/consume so much. I am not going to drink 10 cups of coffee in a day when I normally drink 2. An increase in sales must come from NEW customers. See where I am going with this?
As for Starbucks, you are playing with Pandora’s box when you go from a position of a market leader to just another Joe. Do you really want to compete with McDonald’s for coffee sales? So what they are putting coffee bars in their restaurants. Step up to the plate and create something of value for your customers. What message are you sending your TARGET market? That after all these years of paying $2.00 for a cup of coffee, the coffee is really only worth a $1.00? How much money has Starbucks spent developing their brand and does $1 coffee fit it? (I think you get my drift here.)
In my opinion, both companies need to go back to their Unique Selling Proposition, define their target market and create a message that their target market understands. Their current customers already identify with the message and NEW customers can too if they are exposed to it.
Lessons: First, EVERY BUSINESS MUST HAVE A CUSTOMER LOYALTY PROGRAM. If you do not have one, stop reading this now and make one. (If you need help, give me a call. I have helped other businesses with this). Second, knee-jerk reactions can have long, long, long lasting effects on your business. Lastly, when you have a down turn in business ALWAYS, ALWAYS, ALWAYS revert back to your Unique Selling Proposition. It is the reason why you started the business in the first place….right? Playing into your competitions hand almost never works.
Dunkin’ Donuts, if you are reading this, please click play below and listen to the message. It is what built your brand.
$18 million bucks for 9 beer commercials being aired over the course of 4 to 5 hours on a Sunday night. I know, I know…those guys at AB need to put down their beer steins and jump into reality. Or are they already in reality?
Let’s see. According to the boys at Nielsen Media Research, a reported 93 million viewers tuned in to watch last year’s Super Bowl making it the THIRD most-watched telecast behind only Super Bowl XXX and the M*A*S*H series finale. 93 million viewers…the stand-out television event of the year!
Now, down to the math. Let’s just say that of the 93 million viewers watching the Super Bowl one-third of them drink an occassional beer or two or three. (After all, a bottle of Opus One and wings do not sound enticing.) Now we have 31 million beer swilling, Super Bowl watching consumers. Talk about a qualified target market?? I am getting goose bumps just thinking about it.
If a third of those 31 million go out over the course of the year and buy one case of Bud or Bud Light that would be roughly 10 million cases of beer AB sells this year. A case of Bud or Bud Light runs somewhere in the $18.00 range. This means that AB generates over $180 million dollars in revenue over the course of the year. Not bad for an $18 million dollar investment.
The obvious lesson here is simple: know your target market and find advertising that reachs them. The not so obvious lesson has to do with the time value of money. How many cases of Bud are sold in the month of February? Lastly, what is the time value of money for AB? Cash collected in February goes a long, long, long way to a strong balance sheet, expansion and a profitable year.
$18 Million doesn’t seem like such a bad investment after all. What investment are you making TODAY in your target market?
AB… if you guys are reading this, I am available to be a taste tester.
Let’s face it. If you have not been living under a rock for the last 3 to 4 years, you are familiar with the term “Social Media”. What comes to mind when you think of the term? A bunch of 20-something year olds sitting in front of their computers text messaging each other? If so, you are really not that far off. Social Media as defined by Wikipedia is ” Participatory online media where news, photo, videos, and podcasts are made public via social media websites through submission.”
Knowing these forms of media and understanding how to best use them to promote you and your business is in my opinion the biggest question we struggle with. That is, how to use the power of these groups of people to promote your products and services. Or better yet, are these even viable medias to promote your business in and do people care?
My answer to the above is simple: YES. Yes, social networking is a new way to reach your target market and yes, people do care what you have to sell. So, if we accept that Social Media is here to stay…how can you the business owner use it to your advantage? Easy. By trying all social media outlets and figuring out which ones work best for your business. In other words, you must take some form of action with each media and implement a strategy for your business. You must first decide which social media outlets cater to your target market.
In my next posts, I will be covering Second Life (what is an Avatar?), Facebook, Linkedin and Twitter. All social media networks that YOU have the ability to use to promote your business. Some our all may reach your target market so lets figure out ways to use them. If you have questions about these medias, or would like help in getting your business in a social media please feel free to contact me directly.
