Ron Lunde … Potpourri

A compendium of disparate topics, ideas and opinions

On Wed. Nov 9th at 2PM EST, the US Gov will interrupt all communications devices for 3 1/2 minutes. What would Eric Arthur Blair say?

On Wed. Nov 9th at 2PM EST, the US Gov will interrupt all communications devices for 3 1/2 minutes. What would Eric Arthur Blair say?

For the first time, new technology will allow a government to take control of all TV, radio, satellite systems, cable TV and mobile phones … simultaneously. The system test will cover the entire United States. The US Government test will temporarily interrupt all programing or services, but will not cut power off.

The test is for the Emergency Alert System (EAS) which replaced the Emergency Broadcast System (EBS) in 1994.

Eric Arthur Blair probably won’t have too much to say … he’s dead. But many of you will know who he was and what concerned him. If you don’t, it’s worth looking him up.

Discussion Question: What do you think of this use of technology?

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Shopper Centric Marketing: How to Drive the Top Line / Protect the Bottom Line

Shopper Centric Marketing               

Drive the top line / Protect the bottom line

Note: This is a modified version I wrote for Dr. Willard Bishop’s  Brick meets Click Blog.  Check it out … it’s going to be a lively discussion. http://www.brickmeetsclick.com/challenge-question-october-1


I am not trying for a white paper here … just a thought starter.

Drive the top line / Protect the bottom line

If a retailer wants to drive the top line while protecting the bottom line, shopper-centric marketing is the next requisite skill set.

Proof

Proof? Simply track the results of Tesco and Kroger over the last few years … include the ‘great recession’ years. Both are great operators … and both, with the help of Dunn Humby, have become 1st generation shopper-centric marketers. Compare their results to their peers … many of whom also are great operators … but traditional marketers. ‘nough said!

At the starting point

But they are only at the starting point of what is possible. The next generation of thinking, in my opinion, requires that you stop thinking of customers as homogenous or groups or buckets, but as heterogeneous. In other words, customers are like ‘snow flakes’ … all are apparently similar, but all are different and unique. You have to dump your dependent thinking on the Gaussian model of mathematics and move up to a different more relevant and appropriate concept. [There goes the mass media advertising model. Yet Ad agencies have their greatest potential revenue years ahead … if they adapt and adopt.]

The real value is found at the atomic level

When you look at data at the atomic level, you find that all customers buy something … but few buy the same things. You’ll find that very few SKU’s have a HH penetration rate of greater than 1/2 % of the shopping base. That means that all $80 baskets have $80 worth of product in them … but that that mix of items seldom is the same. It is a variety / mix of all the 50,000 to 100,000 sku’s the store carries. [For non-grocery industry readers … and $80 basket is a very good customer.]

Amazing insights

It means that the number 1 national brand is not necessarily the number 1 brand to a specific customer. That customer’s # 1 brand may be the 5th selling brand in the retail category hierarchy. Retailers need to be in the business of selling customers what they want to buy, not trying to get customers to buy what the retailer wants to sell. And that means you simply develop and deploy the technology required to offer customer specific programs by e-mail, text, Internet, direct mail, social media … whatever and however the customer has designated they want to be communicated with.

Shopper-centric marketing by the above criteria requires the ability for 1:1 marketing. The individual FSC is the key.

Why do you have to do this? Because the customer wants to buy … what the customer wants to buy. And … they have choices. Each of your $80 basket customers has choices … they don’t want a substitute for their preference … and as many of you know … they exercise those choices … often by shopping elsewhere. [Ask Wal-Mart.]

Increased marketing funds

This also means that every sku a retailer carries has the opportunity to market that specific product … which is a great opportunity for both the brand and retailer. Available marketing funds therefore grow exponentially. [I worked with the EITF and FASB in developing the accounting Issues for trade promotion marketing. Read them and you’ll see what I mean.]

Is getting the customer to buy something else possible

Does that mean that you cannot use marketing to get customers to try new products or services? NO! In fact, some exciting algorithms will find the most likely prospects for the offer. Does that mean you cannot detect and market to brand switchers and develop an appropriate strategy? NO! But those are stories for another day.

As far as worrying about what your customer buys elsewhere, Don’t fret too much at this stage … you can get a pretty good idea from your own data and a little 3rd party data. Start with what you know and build from that.

And remember, it not always about financial incentives. Often it is information a customer seeks … or it can be a combination of information and incentives. Technology exists to discover and deliver that which is appropriate to the specific customer.

Actually, the data technology and systems exists to accomplish all+ of what I have discussed.

Why commit to the shopper –centric model

Why go shopper – centric? Remember that just a 1% improvement in price realization revenue will often translate to a double-digit increase in net profits. [Go figure what that does to your stock value.]

So … I think shopper – centric marketing merits some serious discussion not just as an abstract intellectual exercise, but also the effort to turn the potential into a real every day strategic and tactical tool.

Peer Influence (Social Media) Effectiveness … Is There Such A Thing?

Peer Influence (Social Media) Effectiveness

 

Marketers, for some time, have believed that some customers have a disproportionate influence on others when it comes to purchase decisions. There is a growing belief, and some evidence, that contagion does exist … in other words there are customers who are influencers / opinion leaders and that they tend to influence the purchase decisions of others. [Is this true?]

Importance To Marketing Initiatives

 

Key questions for marketers: “How do I optimize my marketing communications MROI?” “Should I invest in Social Media / Peer Influence marketing?”

Consider … Nielsen Online estimates advertisers create slightly over 2 trillion online advertising impressions each year. People [Social Media / Peer Influencers] create about 500 billion impressions on each other about products and services each year according to a 10,000-person survey conducted by Forrester research concerning blog and social media usage habits. Internet sources state “78% of consumers trust peer recommendations when making purchase decisions, but only 14% trust advertising.” The Pharma industry dedicates, by some counts, 20% of marketing budgets to peer influence marketing.

 

The Challenges of Peer Influence Marketing

  1. Preliminary academic research indicates that contagion does happen … i.e. there are those who are opinion leaders, and they tend to bring other customers with them.
  2. Marketers have traditionally used “mass influencers” in mass media campaigns, [product endorsements] such as celebrities, sports stars, movie / TV personalities, academics, etc. to motivate sales based on the contagion premise. A major issue is that this approach is expensive and there, to date has been no ROI story for influencer marketing.
  3. Researchers, because of social media adoption, are now discovering “micro influencers”. Micro Influencers may not have ‘formal’ positions that validate their influences, but they can be recognized as being knowledgeable and trustworthy on specific topics. Some research indicates that they can generate three times more word of mouth communications than non-influencers. Social media such as Twitter, Facebook, LinkedIn and others have all brought a dynamic growth of information and capability that is beginning to allow for the scientific identification of patterns of influence.
  4. Research, in general, has confirmed that consumers form overall evaluations of each product using a multi-attribute screen and then choose the product with the greatest utility or satisfaction. Current analysis, however, typically assumes that one consumer’s attribute preferences and product choices are independent of the choices of others. Therefore, the ability to incorporate social interactions in multi-attribute decisions is a new and important area for research.
  5. There is a growing sense by marketers, both retail and CPG, that decisions are not just made with reference to traditional / ‘formal’ marketing. Understanding and validating informal influence networks is going to be the next stage in leveraging this understandingand establishing the incremental value of social media.

What’s Happens After What Comes Next?

What Happens After What Comes Next? … Targeted Interaction

 In two previous blogs, Efficiently Serving Customers Uniquely … the new power of digital communication (Aug 5, 2011) and Understanding the Digital Communication Tool Marketplace (Aug 7, 2011) I tried to identify What Comes Next … the overlay of digital communication tools … smartphones, tablets and e-readers and the fact that they enabled mass customization marketing.

 “What happens after what comes next?” is a line, written by a friend of mine, futurist Jim Taylor. That question became the title for a well-read book not too many years ago … and is the relevant question for this blog.

The Past is Prologue

 In 1995, Don Schultz, Stanley Tannenbaum and Robert Lauterborn wrote Integrated Marketing Communications Pulling It Together and Making It Work. The book challenged business to confront a fundamental dilemma in marketing ─ the fact that mass media advertising, by itself, no longer works. This landmark book revealed that strategies long used to deliver selling messages to a mass culture through a single medium were now obsolete.

Rick Fizdale, then CEO of Leo Burnett, said in the book’s preface …

  1. “The myth endured [mass markets] because we lacked the conceptual framework and tools to break down mass into more sophisticated, accurate, manageable, and profitable segments.”
  2. “It is feasible today and will become more so in the future to pare a mass down to a single individual.”
  3. “The database will prove to be a more powerful marketing tool than television ever was.”

What Comes Next?

 My two previous blogs, mentioned above, outlined the tools and technology that is moving into the market today. ProsperMobile has a great report on the deployment of smartphones, tablets and e-readers http://prospermobile.com/. USA Today had a very interesting article on mobile payments http://www.usatoday.com/tech/news/2011-07-25-mobile-payments_n.htm.  Google announced its acquisition of Motorola that will allow them to marry the Android OS with a mobile Smartphone http://www.usatoday.com/tech/news/2011-08-15-google-motorola-mobility-impact_n.htm. Mobile wallet payments will also get a major boost from the Google / Motorola mobile linkage. http://www.americanbanker.com/issues/176_158/google-motorola-mobile-1041177-1.html?ET=americanbanker:e7841:1477508a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=AB_top10_081911

We now have the technology and tools for ‘pulling it all together and making it work.’ In a relatively short period of time … individuals will be linked to the global internet with all of the communication, information, marketing opportunities coupled with safe, secure mobile payment options that opens wide the door for … What Happens After What Comes Next?

 

What Happens After What Comes Next? … Targeted Interaction

 What is Targeted Interaction … the ability to engage in a dialogue by providing relevant customers relevant information, incentives or a combination of both directly to those customers on the media platform of a customer’s choice coupled with the ability to capture responses. Targeted Interaction allows marketers the infinite possibilities of … creating customer value from the digital multiverse.

 Targeted Interaction likely changes everything … business strategy, competitive strategy, market strategy and marketing strategy. Products and brands are about to be based more on the customer relationship and less on the transaction. The center of innovation will shift from the manufacturer to the customer and a company’s marketing will be defined by its customers’ agenda.

 Why? How? I’ll discuss some of the new mysteries to master … Next Blog!

 

What John Maynard Keynes Really Said …

“We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time – perhaps for a long time.”

John Maynard Keynes,

The Great Slump of 1930

’nuff said …

R/L

Understanding The Digital Communication Tool Marketplace

Understanding The Digital Communication Tool Marketplace

What exactly does the digital marketplace look like?  Understanding the foundation is a critical initial step. 1st answers appear in new research from Prosper’s just released Mobile Insight Center. http://prospermobile.com/.

Click on the red box at the right of the screen and register … it’s free. Examine all the tabs. You’ll get a very good set of insights. One interesting insight for example, from a marketer’s perspective,  is the study on planned switching from one carrier to another and the reasons why. (Look for the tab at the top of the screen.)

The Prosper Data  Presentation … is Mass Customization

But most importantly, look at the data presentation. It is a true 1st tier example of Mass Customization. Data … customized … frictionless.  Data served up anyway you want it … just like Starbucks.

Turning Possibilities Into Opportunities

Digital devices are the ‘gateway’ tools for marketers to shift into the future. Those that successfully master targeted interactions will first gain insights from individual data perspectives and then go on to envision the power of each variable. These ‘sights’ will enable a marketer to build foresight and create tomorrow’s hindsight … today. These marketers will have an unfettered perception of what truly meeting customer needs looks like … hence the ability to turn possibilities into opportunities.

Efficiently Serving Customers Uniquely … the new power of digital communication

Mass Customization … is efficiently serving customers uniquely

“The ability to customize an offering on demand for an individual customer and produce it on an efficient, non-craft bases is known as Mass Customization.” Stan Davis in his book Future Perfect.

Example of Mass Customization? Think Starbucks!

Digital communication is THE link that enables Mass Customization  customer communication …

The Marketing Function Is About To Be Radically Altered

Smartphones, tablets and e-readers, digital communication tools,  are rapidly capturing the majority of American consumer market. Asia and many European countries are more advanced in penetration and apps than the US. The product shelf life is short as a constant parade of ‘better’ hardware and software continually hits the market. The consumer is demanding and unforgiving to laggards. Think Motorola.

As digital communication tools penetrate the market, many think the marketing function will be radically altered from the present form of mass communication to an approximation of 1:1 or Mass Customization. Products, information and incentives are all part of the Mass Customization mix.

Understanding The Digital Communication Tool Marketplace

What exactly does the digital marketplace look like?  Understanding the foundation is a critical initial step. 1st answers appear in new research from Prosper’s just released Mobile Insight Center. http://prospermobile.com/.

Click on the red box at the right of the screen and register … it’s free. Examine all the tabs. You’ll get a very good set of insights. One interesting insight for example, from a marketer’s perspective,  is the study on planned switching from one carrier to another and the reasons why. (Look for the tab at the top of the screen.)

The Prosper Data  Presentation … is Mass Customization

But most importantly, look at the data presentation. It is a true 1st tier example of Mass Customization. Data … customized … frictionless.  Data served up anyway you want it … just like Starbucks.

Turning Possibilities Into Opportunities

Digital devices are the ‘gateway’ tools for marketers to shift into the future. Those that successfully master targeted interactions will first gain insights from individual data perspectives and then go on to envision the power of each variable. These ‘sights’ will enable a marketer to build foresight and create tomorrow’s hindsight … today. These marketers will have an unfettered perception of what truly meeting customer needs looks like … hence the ability to turn possibilities into opportunities.

So … That’s it!

30 years and counting no more …

There is no more to American manned space shuttle flight!

See the last landing …

http://bcove.me/uwnu3sf4

See the last commander of the last flight comment …

http://link.brightcove.com/services/player/bcpid42806360001?bckey=AQ~~,AAAABvaL8JE~,ufBHq_I6FnzBUSGLmd_ayLQM0b50i830&bctid=1068484261001

It was fitting to return her to the Kennedy Space Center where it all started.

My wife’s brother was with the original NASA team in Houston. He is, unfortunately,  gone now … and so is the space shuttle program.

#30#

The Last American Rocket Ride ……

If you’ve never seen one go … it is an awesome sight. The ignition. A tail fire brighter than the sun. The smoke billowing. The impact of the shock wave. The awesome deep basso sound of rolling thunder. The lift off. The arc into the sky. There is nothing else quite like a NASA shuttle launch.

It all started with Sputnik in 1957. The Russians surprised and stunned the American psych. Then on April 12, 1961 Yuri Gagarin became the first man in space.  President John F. Kennedy in a speech to a joint session of Congress on May 25th, 1961 committed American’s to land a man on the moon within the decade … and we did.

“This Nation has tossed its cap over the wall of space, and we have no choice but to follow it. Whatever the difficulties, they will be overcome. Whatever the hazards, they must be guarded against.” JFK

50 years later, for the US, it ended last Friday as the Atlantis lifted to space. We went to the moon and back. The shuttle program built a magnificent space station … to which US astronauts, henceforth, will access by riding Russian rockets. Last Friday was the last American rocket ride.

President Obama ended the space shuttle program this year and also cancelled the Constellation program which was the planned successor to the shuttle. Republicans and Democrats stood silently bye. Our leaders left us with no task, no mission, no inspiration, no ‘what’s next?’

The space shuttle program cost the American taxpayer around $7 billion per year. That is a lot of money, but consider that Iraq cost around $10 billion per month … and US consumers spend over $154 billion per year on alcohol. And … we spend a little over $ 7 billion on dog food. So because American political leadership was not willing to spend per year what the American people spend to feed their dogs, some 9,000 of America’s smartest will be laid off in a few weeks and an exceptional American era will end.

Many of you will not remember John F. Kennedy as other than an assassinated President.  But for those of us from his era, we remember a man of ideas, courage and inspiration. He was a leader who could calm our fears, strengthen our resolve and galvanize a nation to action.

He talked about or Nation and why we should lead the world to the stars. Following is an excerpt from his September 12th, 1962 speech at Rice University in Texas. He had a majesty of words not unlike the majesty of flight of our former shuttle fleet.

“Yet the vows of this Nation can only be fulfilled if we in this Nation are first, and, therefore, we intend to be first. In short, our leadership in science and in industry, our hopes for peace and security, our obligations to ourselves as well as others, all require us to make this effort, to solve these mysteries, to solve them for the good of all men, and to become the world’s leading space-faring nation.

     We set sail on this new sea because there is new knowledge to be gained, and new rights to be won, and they must be won and used for the progress of all people. For space science, like nuclear science and all technology, has no conscience of its own. Whether it will become a force for good or ill depends on man, and only if the United States occupies a position of pre-eminence can we help decide whether this new ocean will be a sea of peace or a new terrifying theater of war. I do not say the we should or will go unprotected against the hostile misuse of space any more than we go unprotected against the hostile use of land or sea, but I do say that space can be explored and mastered without feeding the fires of war, without repeating the mistakes that man has made in extending his writ around this globe of ours.

     There is no strife, no prejudice, no national conflict in outer space as yet. Its hazards are hostile to us all. Its conquest deserves the best of all mankind, and its opportunity for peaceful cooperation many never come again. But why, some say, the moon? Why choose this as our goal? And they may well ask why climb the highest mountain? Why, 35 years ago, fly the Atlantic? Why does Rice play Texas?

     We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.

     It is for these reasons that I regard the decision last year to shift our efforts in space from low to high gear as among the most important decisions that will be made during my incumbency in the office of the Presidency.”

Below are links to archived speeches of President Kennedy that relate to our space program. Listen to the man and read his words.

http://www.jfklibrary.org/Asset-Viewer/Archives/JFKWHA-032.aspx

http://www.jfklibrary.org/Research/Ready-Reference/JFK-Speeches/Address-at-Rice-University-on-the-Nations-Space-Effort-September-12-1962.aspx

When I worked at Leo Burnett we were constantly reminded of Leo’s famous ‘motto’ quote, “If you reach for the stars you might not quite get one, but you won’t come up with a handful of mud either.’ I hope our leaders will keep us reaching for the stars.

 

A little research note: The US now spends more in 5 days in Afghanistan than the entire yearly NASA budget.

Haven’t We Seen This Movie Before?

This week … the debate over the budget ceiling continues.

As to the script … time has not changed it much.

“The budget should be balanced, the treasury should be refilled, the public debt should be reduced, the arrogance of officialdom should be tempered and controlled. Assistance to foreign lands should be curtailed lest Rome become bankrupt.” Cicero Roman

“Most of this new government created credit has been taken to finance the government’s continuing deficits. The truth is that the burden is absorbing the resources. All this is highly undesirable and wholly unnecessary. it arises from one cause only and that is the unbalanced budget and the continued failure of this administration to take effective steps to balance it. If that budget had been fully and honestly balanced in 1930 as it could have been, some of the 1931 collapse would have been avoided. Even if it had been balanced in 1931 as it could have been, much of the extreme dip in 1932 would have been obviated …. Would it not be infinitely better to clear this whole subject of obscurity – to present the facts squarely to the Congress and the people of the U.S. and secure the one sound foundation of permanent economic recovery – a complete and honest balance of the Federal budget?” Franklin Delano Roosevelt Oct 19 1932 Democrat

“We will never get anywhere with our finances till we pass a law saying that every time we  appropriate something we got to pass another bill along with it stating here is where the money is coming from.” Will Rogers American Political Humorist

“In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. This country’s own experience with tax reduction in 1954 has borne this out. And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous expanding economy which can bring a budget surplus.” John F. Kennedy 1962 Democrat

“Keeping a budget balanced is a lot like preserving virtue – you have to learn to say “no.” Ronald Regan Republican

Haven’t we  seen this movie before? Many times.  It seems like they just keep making sequels with a tweak here and there … the actors may be different, but the ending never seems to change.

R/L