Influence at Work

I'm currently reading the book, Influence: Science and Practice by Dr. Robert Cialdini, in which he describes his 6 weapons of influence. The book is a very good read, giving scores of examples and research on influence. It wasn't until I recently attended a "free" stock seminar from Rich Dad Education that I saw all of these weapons pointed at me. I was as interested in learning about how to do technical analysis of stock charts as I was in watching them fire off these weapons into the crowd. The premise of the "free" seminar was to tease us with information and get us to pay for the $500 3-day seminar. So below is a list of the six weapons of influence, and how Rich Dad Education used them:

1. Reciprocity - People feel an obligation to repay favors.
• I was greeted with a free USB drive (a paltry 128mb) loaded with useful Rich Dad info (or propaganda). And of course the free seminar which covered just a couple topics. In theory, I'd feel an obligation to sign up for the seminar to reciprocate all that they've given me.
2. Commitment and Consistency - When people commit to an idea or goal, they are more likely to honor that commitment. 
• After pounding into our heads that education is an invaluable asset, we must've done at least 20 audience fill-in-the-blanks where the answer was education. They had us verbally commit to our education, and write down our financial and personal goals. Of course for $500, they would provide us the tools to meet those goals. So by not paying for the course, we're then being inconsistent with our commitment to education and to achieving our goals.
3. Social Proof - People often decide what to believe or how to act in a situation by looking at what other people are believing or doing.
• We did a show of hands toward the end of who was seriously interested in buying into the seminar (about 1/3). They were excused to the back of the ballroom to sign-up, leaving all us non-committal free-loaders to look at all the believers.
4. Liking - People tend to say yes to people they know and like.
• The speaker tried his best to be likable. He talked about how he helps his dad with his retirement account, how his goals are to spend time with his family, travel, and play golf - which is why he does these seminars 20 weeks of the year and spends the rest of the time doing what he loves. How can you not like that.
• We also got to see a few video testimonials of different types of people we could develop an affinity with to follow their success - the engineer, the salesman, the stay-at-home mom.
5. Authority - People tend to obey authority figures.
• Robert Kiyosaki, the face of Rich Dad Education and the author of several Rich Dad financial education books is branded as an authority figure and expert. 
6. Scarcity - People assign more value to opportunities when they are less available.
• Sign up today, at this "free" seminar, it will only be $495. If you wait, and register over the phone, it'll be $995! Think of the value this is mentally creating; you get a $1000 course for only $500. I can't wait or else I'll pay double.
• But wait there's more... you'll also get this stock analysis software for free! (except you have to pay $40/mo to get the stock data feed or else its useless). The speaker claims its worth at least $2000. So I'm getting $3000 of value for only $500. Score!
• But wait there's more!... Act now, and you can bring a guest for free! Now its $4000 of value for $500, and I can split it with a friend.
• Seats are limited on a first-come-first-serve basis.
• We're only doing 2 workshops scheduled in the area.

Fortunately, Dr. Cialdini's book, Influence: Science and Practice, makes you more aware of these weapons for you to use as a marketer, but also gives some advice on how to defend, resist, and see through them. For me, the free seminar was enlightening and cost-effective; I got to see the principles of influence in action while getting a little bit of general financial knowledge. Not a bad way to spend two hours.

References:

Cialdini, Robert B. Influence: Science and Practice. 5th ed. Boston: Pearson Education, 2009.

Perception

Quality, more often than not, is based on perception more-so than the actual quality. Toyota had a great overall quality perception a year ago, but with the recent revelations of some poorly handled recalls, Toyota's are now ticking time bombs.

My wife displayed a great example of this quality perception idea. Where we live, there are only a few major supermarkets - the closest is Berkeley Bowl West, a local market that is great for produce and organic stuff, but their meat selection, while impressive is really really expensive (I don't personally place much more value in grass-fed beef or free-range chickens). The next closest supermarket, is called Pak 'n Save, which is owned by Safeway, though you wouldn't know it from the outside. Inside, it is essentially a big Safeway, the only real difference, is that you bag your own groceries at the end of the process (get it? you Pack and save). They sell all the same stuff as Safeway including Safeway branded products, use the Safeway bags and packaging, and use the same Safeway Club Card. Granted, there is a less upscale feel that the newer and remodeled Safeways have, that this one lacks ... which conveys a Physical Evidence that doesn't reinforce quality.

My wife hates shopping there and would rather drive an extra few miles to the smaller, crowded Safeway or pay more at the organic market. She is suspicious of nearly all their products, making sure to double-check expiration dates of whatever we buy. She's convinced that this is where all the unsold products go to die. I personally don't mind, because its closer, usually a faster checkout, and I don't have awkward encounters in tight aisles where my cart is in somebody's way.

The thing to think about is this: While your business and product/service may be on the mark. How do your customers and prospects perceive it? What are you doing to manage that perception?

Email Fail

As you know, I recently moved from Phoenix to the SF Bay Area. I was looking up options to set up television service, my default was to just get cable, but I'm not sure if satellite dishes are allowed or will work from my location.

Perfect timing, I get an email advertisement from DirectTV. $29.99 for 12 months and 150 channels, not bad. So I click on it to learn more and read the fine print and it takes me to ...



Having managed several web sites in my day, I can appreciate and understand the challenges of getting a site up and working and functional, but for the entire site to be inaccessible while you update, is not good for business.

The lesson - beta test your sites somewhere else and migrate the new and improved site quickly. Oh, and always know where your email ads take the user.

Questionable Questionnaires?

I recently received an online survey from an organization that I'm affiliated with. It was a pretty standard survey about customer experience, intent, and expectations. So as I got into the survey, it was 9 questions - I hit submit - and I get 12 more questions - submit - 7 more questions... submit - 11 more questions ... and it went on, with no end in sight. Additionally, the questions were redundant, asking essentially the same question in four slightly different ways. Here's a snippet of questions 11-14:

• I possess the necessary skills to attain my goals
• I have what it takes to reach my goals
• I have the necessary knowledge to reach my goals
• I have the ability to reach my goals

This survey ultimately went on for 101 questions, and with every 'Submit' I clicked, I prayed it was the last. Normally I would've bailed at about 35 or 40 questions, but since I was affiliated with this group, I felt an obligation to fill the survey out in its entirety.

Which brings me to a guideline for conducting a questionnaire:

1. If you don't ask, you can't get an answer
2. If there is something wrong in the questionnaire, the survey is a waste - Test your survey with a smaller audience first to make sure they're written to elicit the type of response you're looking for.
3. Think about multiple answers
4. Avoid leading questions - You want unbiased true answers, not leading the respondent to the answer you desire.
5. Minimize open-ended questions - While they offer a wealth of insight, they are much harder to analyze.
6. Use simple, direct, and familiar vocabulary - The folks at Google did a survey in NYC and asked people on the street "What is a Browser?" - less than 8% got it right.
7. Avoid unique or ambiguous meanings.
8. Start with easy questions, then move onto specific questions later.
9. Create an expectation of time and progress - Most web-based survey sites have a progress bar, or you can be up front about how many questions there are before they start.
10. KEEP IT SHORT - Don't ask for anything you won't actually use.

New Website Completed

Wingman Marketing Communications has just re-launched our website at http://www.wingmancommunications.com. Our old site was dark and rough around the edges, but that was reflective of our nation's economic death spiral. The revamp has been long overdue, and reflects our fresh new outlook on the future of our business, our lives, and hopefully the rest of the economy. We really think there may be a correlation.

Anyways, check out our site, fish around. We've tested it, but if you come across something weird, please send Ray a tweet @rayhuang.

Targeted Email Marketing

We all receive a lot of email these days, a majority of which is junk, some of which are marketing emails from businesses that you are a customer of.

These companies, depending on the sophistication of their databases, have some information about you - what you bought, where you live, stuff like that. And that's not a bad thing as a customer, to have opted-in to promotions from a company that has an idea of what you like. Its great that Southwest Airlines knows I fly from PHX to SFO regularly and notifies me of deals. What I'm not interested in is getting prescription drugs, making my penis larger, or taking HGH. That's what separates email ads from outright spam.

I recently got this email promotion from an online printing company I've used several times over the last few years. They do decent printing at a low price and are great for my value-conscious clients. As an opted-in existing customer, why on earth would they send me a promotion for new customers only?

Furthermore, I've noticed a lot of companies sending more email promotions out. I'm a fan of email marketing, its cheap, and when targeted and executed properly can be very effective. But even for someone like me that has a higher tolerance for receiving opt-in mail, many companies have worn out their welcome by sending information too frequently.

So 2 rules of thumb to leave you with...

1. No more than one email promotion per week if you legitimately have something new, unique, and relevant. Most companies should do so even less.
2. Target your emails. Most email distribution companies have rudimentary ways of classifying your master list into multiple categories. Sort your list, and send your customers what they are interested in.
   

On Commercials and Entertainment

My last post, several months ago, chronicled my experience with auto insurance, which ultimately led me to drop my insurance company to go with Geico. I've noticed over the last several couple years, that Geico has a unique multi-pronged advertising campaign.

The current landscape only brings three, maybe four prominent auto insurance ad campaigns that come to mind, All-State, Progressive, State Farm, and Geico. Geico by far is the most active, with so many different themes going on at once.

At first I questioned their strategy... so incohesive and seemingly disjointed. But each of their campaigns has a series of print and and TV commercials behind it. They realize that their brand is known, and they want to keep it top of mind with several commercials, aimed to reach you and touch you in different ways ... mostly through comedic entertainment. You may have fast forwarded through the entire commercial break with your DVR, but if you're old-school like me, and usually channel surf during commercials, I rarely will switch away from a Geico commercial. They do a great job of keeping the ads fresh and entertaining, with a little bit of shock and awe.

	All-State - featuring actor Dennis Haysbert (or as I know him, Pedro Cerrano from Major League movies). These ads typically recount all the simple and common things we do that can cause accidents and then he tells us cpecific features of the All-State coverage.
	Progressive - featuring Flo, the "Progressive Girl," played by actress/comedian Stephanie Courtney. She takes a light-hearted approach to letting you know about different features and types of coverage.
	Geico Caveman Campaign - One of Geico's most successfully entertaining campaigns
	Geico Kash Campaign - "I always feel like, somebody's watching me."
	Geico Gecko - He used to just hang out quietly, then he was stalked by a clumsy old documentary host, and more recently has gone corporate.
	Geico Celebrities - features real customers alongside professional celebrities, Burt Bacharach, Peter Graves, Don LaFontaine, Little Richard, Charo and Verne Troyer.

A Customer Service Story (Part 3/3)

Previously I posted about my customer service experience with 21st Century Insurance, and I sent an email to their executives demanding some reasoning [click here to read that post]. Then I wrote another post about my search for a new insurance carrier [click here to read that post]. And in Part 3 of this customer service story, I get a response from AIG, 21st's parent company

21st/AIG’s Response
A day before my imposed deadline, I got a call from someone at the executive offices of AIG (most likely not someone important, seeing as how their stock was in a 98% freefall, they surely have more important things to deal with). So he calls to apologize and explains that they’ve reviewed my information and they can reinstate my auto insurance policy. He also informed me that their system shows I had initiated the online payment, but did not complete it… confirming my suspicion that I got distracted (by something shiny most likely).

None the less, he still needed to confirm some information to reinstate my policy. I told him I’ve already started a new policy elsewhere, and I wouldn’t be interested unless they could offer me a better price for this term at least. He said he’d need to enter all my information and whatever the computer spits out is what the policy has to be, which I understand by their underwriting procedures, but really… how could they win me back when they’ve already proven to me that they are not willing to compete on price, they’re customer service is suspect, and their parent company is full of doom and gloom. Besides, their response to keeping me their customer is to make me jump through the same hoops of reapplying for a new policy again.

I still feel wronged by their lack of proactive steps before canceling my policy. His explanation did not make me feel any better and he didn’t offer any incentive to stay with them. This whole situation could have been averted if the first CSR I spoke with had empathized with my payment not being processed (and not setting blame on either party), and then putting me on hold for a minute while she got someone else to bring on the line that could reinstate me, or otherwise make it seem like I was being reinstated even if it was technically going to be a new policy. Here’s how that would go down:

CSR 1: Mr. Huang, I apologize that your payment hasn’t been processed, but give me just a moment while I get someone on the line to reinstate you.
Ray: Sure. [placed on hold for a minute or so]
CSR 1: Thanks for holding Mr. Huang, I’ve got Daniel on the line that will be able to help you out with that.
CSR Daniel: Hi Mr. Huang, so I just need to verify some information.

At this point, he could be signing me up for a new policy, and I wouldn’t know the difference, and then let me know that my rate has been adjusted by a few bucks if it has. That is something that I can tolerate, because I was willing to pay a late fee upfront anyway to be reinstated.

So the lesson to be learned is this – make sure your customer service is always top notch, and that your representatives have the authority to make necessary decisions to remedy situations. As soon as a customer walks out that door or hangs up that phone, the problem should be solved to the best of anyone’s reasonable ability. If you let that customer leave disgruntled, the repercussions could potentially be hugely damaging, especially with online tools available today like blogs, Yelp, Myspace, Facebook, and Twitter out there.

A Customer Service Story (Part 2/3)

Previously I posted about my customer service experience with 21st Century Insurance, and I sent an email to their executives demanding some reasoning [click here to read that post]. But before I sent that email, I looked for other auto insurance companies.

The Customer’s Actions
On my end, not wanting to be without insurance, I spent the next hour or so hunting down a new insurance carrier. Being a marketing guy, I sifted through the junk mail bin and saw an unopened letter from a local State Farm agent. My wife had State Farm before we got married, and had no problems or claims, so I gave the agent a call on a Saturday afternoon (this was about 15 minutes after hanging up with the 21st CSR). Unfortunately, it rang through to voicemail, and at that point I didn’t bother leaving a message. You snooze you lose. Perhaps that is a problem with their business model of having individual agents (though I’m sure their service is much better because of this).

Next I went online to probably the usual suspects. I knew I didn’t want to go through a broker, because my experience in the past is that I’ve ended up with some small-time company that may not be solvent enough or responsive enough in the event of a major claim. So I got quotes from Progressive, AllState, and Geico. Progressive and All-State were slightly lower than what I was previously paying at 21st, but within 10%. But with Geico, I really did save 15% or more on my car insurance! In fact I saved 35%. So I signed up and paid for a new policy. It was actually quite easy to switch.

What happened Next? Read Part 3...

A Customer Service Story (Part 1/3)

Auto insurance companies spend a lot of resources to acquire new customers; but as many professionals will attest, it is far more important to continue to satisfy your existing customers and do what you can to keep them YOUR customers, or they will defect to your competitors. I wanted to share my recent experience with 21st Century Insurance (who recently merged with the troubled insurance giant AIG) as a long time customer of 5+ years, as it relates to their customer service.

I received a renewal notice and bill with all my relevant auto insurance documentation a month before my expiration date. I went online soon after, started the online payment process and somewhere along the line it failed to be processed. In hindsight, I admit it may be an error on my part for not clicking all the way through or something else distracted me – these things happen. None the less, I am left with the impression that I had paid for the policy in full, while the 21st system says I have not.

Now, two weeks after my policy had officially expired and not been renewed, I get a notice in the mail that my policy has been canceled. Not "going to be cancelled" or "you have an outstanding payment due," but a "Cancellation Confirmation Notice." I had not had any letter, email, or phone call since the renewal bill had arrived 6 weeks earlier. But what's done is done, I figure I’d call in and catch up on the payment and get the insurance reinstated, right?

Wrong. I tell the CSR that I'm paying the policy in its entirety, plus whatever late fees. She tells me that she cannot reinstate my policy. However, she told me she would transfer me to another AIG auto insurance company to get a new policy. I get into it a little with the rep, but she still can't reinstate it. I ask to speak with a supervisor or manager about the subject, “Well you can, but he'll tell you the same thing, because the system won't let us reinstate you.” Well it sounds to me like there is something wrong with THE SYSTEM. Would I still like to be transferred to an AIG sales representative? No, I'll take my business elsewhere if I need to jump through these hoops again.

But I suppose I should thank them and the brilliant architects of THE SYSTEM for such blatant disregard for THEIR customers. For years, I had blindly been renewing my policy with them because I usually got good service, though I never filed a claim; so now I've been forced to look elsewhere, and managed to get a policy that was a 35% less expensive for similar coverage. Having slipped through the crack in their system - let me rephrase - Having been forced out of the hole in their system, I may have been spared from any future gaps and lapses in their customer care system, had a real problem arose.

I put this all in an email to their customer care team as well as 21st Insurance’s CEO and Senior VP of Customer Care (took a little digging to find them), and gave them until Wednesday to respond and see what they would do to try and resolve my experience complaint.

A disgruntled customer can be your worst enemy, and how a firm responds is critical in mitigating any further damage. My next post will be what comes of all this… [Read More]

Getting the Creative Juices Flowing

Dear Wingman,

I love a lot of your design work. Where do you get your creative inspiration from?

-Vikram R.

To be honest, a lot of what was do comes to us organically. We take your ideas and vision, and then we determine the needs of a design and see what we're trying to accomplish. Sometimes we sniff around for inspiration from everywhere and anywhere. When we're really low on our creative juices, we import them.

The Power of Branding (Part 2/2)

Dear Wingman,

Is “branding” a valuable information-providing tool for consumers, or a tool by which firms persuade consumers to pay premiums for goods that they don’t really need?

William B.

A brand provides a guarantee of reliability and quality. Consumer trust is the basis of all brand values. So companies that own the brands have an immense incentive to work to retain that trust. Brands have value only where consumers have choice. Think back to the last time your mobile phone dropped a call, either you kept blabbing for a a minute before you realize the person you called stopped giving you the obligatory, "uh huh," every other sentence. Well whatever mobile phone provider you have, you've always been promised a very good network.

• "America's most reliable wireless network" - Verizon Wireless
  
• "The country's largest and fastest digital voice and data network" - AT&T
  
• "The largest voice calling area and the largest mobile broadband network" - Sprint
  
• "Stay connected across the nation with America's Largest Network" - Alltel
  

When your competition is touting the same or similar features in their brand, what are you going to do to differentiate? Here's what some of these companies did:

• Verizon Wireless has been conducting ongoing field testing, and that they've been pounding into our heads for the last several years, "Can you hear me now? Good!"
• AT&T Wireless is actually not the old AT&T you grew up with. SBC (who owned Cingular Wireless), bought out the old AT&T Wireless business, and changed all those old customers to Cingular customers. After SBC completed the acquisition of the rest of AT&T, they strategically changed they rebranded it as "the new AT&T." It created some confusion to some with all the name changing, but ultimately, AT&T is a stronger and longer known brand, and they wanted to leverage that. Strategic partnerships with other great brands like Apple and their iPhone also helped boost their own brand.

What do people think of when they think of your brand?

The Power of Branding (Part 1/2)

Dear Wingman,

Is “branding” a valuable information-providing tool for consumers, or a tool by which firms persuade consumers to pay premiums for goods that they don’t really need?

William B.

Suffice to say, branding is both, and so much more. Its primary purpose is to increase awareness and familiarity of a product’s existence and secondarily, to differentiate or provide information about a product. When done properly for long enough duration, branding differentiates a product from its competitors and makes a product less of a commodity.

In the case of cola, there are probably hundreds of cola makers out there, but branding has led us to only think of Coke and Pepsi primarily, and each has their dedicated following. For me, I understand the flavor differences of Diet Coke and Diet Pepsi, and they both taste fine to me and I usually will only purchase whichever is on sale at the given time that I am at the grocery store and in want of 12-pack of diet cola. My diehard Pepsi drinking friend, Andy, will purchase the Pepsi pretty much at any price if he was out of Pepsi at home. Of course, Andy rarely runs out of Pepsi, because when it goes on sale at 3 for $10, he’ll literally fill his cart up with 12-packs, take them home and stack them in his garage (he once had two twin towers that were 8 feet high (true story).

Branding plays a key role in these two examples of cola drinkers. I, as a consumer, will only choose the Coke or Pepsi brands when they are on sale, but I am not likely to purchase R.C., the store brands, Jones, or some micro-brew cola at BevMo. Andy will only purchase Pepsi, because he’s been brainwashed as a consumer to thinking it is a superior product, and his mom may have put it in his bottle as a baby.

Certainly we can make the argument that we don't 'need' to be drinking soda, but branding and repetition has made us want to drink soda. We stick with the brands we know because of the consistency of the products and the expectations that we have come to learn.

Time is on Your Side... Yes It Is.

I was recently reminded of a great entrepreneurial success story on how a change in your competitive and marketing mindset can open up doors you've never seen before. Unless whatever you do or whatever you sell is completely unique, there are always going to be other players out there that you would consider your competition. If you work for XYZ Dental, your competitors are all those other hundreds of dentists within 10 miles of you as well as those major dental companies. If you own Billy Bob's Oil Change-o-Rama, you're competing against every other grease monkey in town, probably offering a $15.95 oil change.

But consider who you're really up against in the mind of the customer. Sure at the most basic level, its all these other companies that do what you do ... but at a much higher level, before they even consider which dentist to go to, and before their car goes from 3000 miles to 4000 to 5000 or more (you know we've all let it go this long), its often a battle for time. Between work, kids, errands, and whatever else people have going on in their lives, most of your customers are pressed for time - and that is the reason they've been putting of going to the dentist or getting the oil change. Time - thats your real competition.

By realizing that time was their competition, Dr. Arnold Keiles, conceived of providing dental care right where his patients worked in a business now known nationally as Onsite Dental. The company manages the nation's largest fleet of Mobile Dental Practices that make regular visits to major corporate campuses like Cisco, Google, Genentech, Yahoo!, and Sprint. The premise was to make going to the dentist quick and convenient.

Similarly, Office Lube has used a similar business model, providing oil changes at company parking lots. Both are wildly successful companies built on the the premise of saving their customers' time.

Market Research - Quantitative (Part 3/3)

Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

So previously we discussed market research, informal research techniques, and qualitative market research. Now we get to the meat of market research, quantitative market research – hard data that can be numerically calculated.

While you can ask the same questions in both qualitative and quantitative studies, quantitative research requires you to survey a larger number of people in order to obtain statistically reliable information. The larger your sample size, the greater your accuracy, but be sure to get at least 30 randomly selected respondents, preferably 100 or more.

A well designed study involves developing the right pool of respondents, asking proper and well-stated questions in the right order, utilizing the right communication vehicles. Of course a professional marketing or market research firm may be able to help you along with setting up and executing the research study, though you can still conduct quantitative studies on your own. Small budgets, small sample sizes, and non-random samples mean a less accurate, though still reliable set of results.

If you maintain a large mailing list, you can send surveys to customers’ homes or businesses. Direct mail campaigns typically have a low one to two percent response rate, though it may be higher depending on the relationship you have with your customers. To maximize your response rates, keep your surveys focused and simple, and offer your customers something in exchange for their participation, such as a valuable coupon for those that complete the survey. If you have a web-based business or a strong online presence, you can more inexpensively collect data from web-savvy customers. Many affordable web applications offer basic marketing research surveys that you can use at a relatively low cost.

In closing, understand that customer habits shift over time, making it important for you to continually be in touch with them. Don’t view your results as the end of the process; it should be an ongoing component of marketing strategy. By staying on top of what customers think of your product or service, you can fine tune your marketing strategy to keep up with your customers’ changing needs.

Market Research - Qualitative (Part 2/3)

Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

To continue our conversation (this is part 2 of 3, read part 1 here), I previously wrote about the need for market research along with some informal information gathering, which is a start, but may not provide the insight you might need. Formal marketing research makes the process more orderly and more concrete. Marketing research falls into two categories: qualitative and quantitative.

Qualitative research is best when you want to get a subjective feel for something. It can help evaluate how key customers think about your product and what motivates them to make a purchase.

An easy way to conduct qualitative research on customers is through a feedback form. You can gain valuable insight by asking your customers how you are doing, asking for suggestions, and asking for their opinions. You can provide the form in your store, attached to the receipt, or on your website.

Another qualitative method is through conducting focus groups – essentially a moderated discussion with groups of target customers. If you are planning to start carrying a new product group in your store for example, your focus groups may be composed of local adults or computer enthusiasts, whatever your primary target is. Small business owners and manager have an advantage of being much closer to the customers than bigger companies that usually hire agencies to recruit and conduct the group. Offer your best customers special offers or free products or services in exchange for an hour or so of their time. For a small investment, the information you receive can be priceless.

Some limitations of qualitative research, is that you may gather some soft data on your customers, and give you a direction or trend to follow. However they are not statistically reliable, meaning that you can’t make quality inferences to a larger population.

Next time I’ll elaborate more on the quantitative side of market research.

Market Research (Part 1/3)

Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

Regardless of the size of your company, successful business owners must know their industry, competitors, and customer needs in order to stay competitive. Marketing research can be one of the more important functions in getting key information about your potential customers’ preferences so as to market your products or services more effectively.

Do you know what U.S. company spends the most money on research and development? You’re probably thinking its Boeing, G.E., or one of the pharmaceutical companies. Well these guys certainly spend a lot. But the company that regularly spends the most on R&D is McDonalds.

I’m not saying its necessary to spend 13 billion dollars on market research, in fact, a separate marketing research department is usually beyond the budget of most small businesses, but you can still gather facts and opinions about your customers in an objective way. Knowledge is power, and having objective information can help focus your business on what people want to buy, not simply what you have to sell to them.

A good place to start your research is to look at the information you already have. Sales records can give you insight to buying trends or cycles if you’ve been in business for a few years. Receipts or other records that can show where customers live or work can give you insight where to focus your advertising and on what products. Employees also can be a good source of information about customer preferences and trends. Be sure to keep open lines of communications with your employees so they can report back to you on customer complaints and attitudes about the business, product, or service.

I’ll touch a bit more on qualitative and quantitative methods of market research next time.

Is Email Marketing Better?

Dear Wingman,

Is email marketing more effective than direct mail?

The real answer is... "It Depends."
It depends on who you're trying to reach.
It depends on your type of business.
It depends on what you're trying to achieve.
It depends on your budget.
It depends on how you measure effectiveness.

For local B2C companies, email marketing may not be very effective unless marketing to your existing client base. Purchasing personal email lists are hard to come by for very local markets, and consumers are very quick to write off unsolicited email as spam, no matter how brilliant you think your subject line is. Generally speaking, I'd recommend direct mail for B2C companies with a local or regional reach. But it can be expensive and require a lot of repetition.

B2B email lists are far easier to generate or purchase. Lists are available by industry, by geography, and by profession. Plus you can tap into industry sources and associations for some of these prospects. Its considerably less expensive and allows for better tracking and customization. But don't over do it. Its a trap that a lot of over zealous small businesses run into. An email every few weeks is already too much. I generally recommend no more than once per month. And like all branding, the message needs to look consistent, professional, fresh, and of course... make sure there is a call to action on all of your communications.

So there really is no clear answer that email marketing is more effective. The truth is, if you're in question, you probably should be doing both... and a lot more.

How To Get More Referrals

Dear Wingman,

When I started my chiropractic office 4 years ago, I spent a lot of money on local advertising and mailers to get traffic. Now that I have a decent patient base, I want to encourage these patients to refer their friends and coworkers. What is the best way of going about asking, and getting, referrals?

-Dr. Bill

To start, we need to consider "Why" people refer services, people, or companies - primarily it is because it makes them feel good, an emotional decision. Despite todays shut-in culture, people by nature want to help others. So if Andy knows that Jared has a sore back, and Andy has been a happy patient of XYZ Chiropractic, he'll let Jared know. If and when Jared seeks out XYZ Chiropractic and finds it a valuable solution... then Andy has in effect helped his friend Jared by being bart of the value chain. So Jared feels better, Andy feels good, and XYZ Chiropractic got a new patient.

The referral process is a very emotional decision or response, that is backed by logic. Andy needed to consider if XYZ Chiro was the right treatment, the right quality, at a reasonable price. Andy's experience had to be very good in order for him to refer Jared.

In order for your business to be considered referral-worthy, you need to satisfy both the logical and emotional experiences. People need to believe you can help, have great service, and great pricing (logical); and they must also feel good about helping you, the service provider, and trust that their friend will be treated well, and also enjoy the experience of doing business with you (emotional).

That's why money offerings alone for referrals are not good motivators, and usually generate referrals that are not a right fit for you or the person being referred. It is a far better decision to work on making your business more likable at the emotional and logical levels to make your business more referable before you go out and start offering incentives for referrals.

Make your service experience remarkable, make a personal connection, and provide more value than your customers expect. And when they do refer someone, then reward them. This shows that you value their referral and that you truly appreciate their help.