I recently came across a business in Naples, Florida promoting ‘Wild Wednesdays’, with great deals and offers.  Problem was:  it wasn’t a bar like Hooters, offering draft specials and two for one shots.  It wasn’t a restaurant, offering a crazy party atmosphere while shucking oysters.

It was a dry cleaner.  It was wild by offering discounts on starched business shirts.  Which kinda prompts the thought that if retirement is all about having ‘wild Wednesdays’ at the dry cleaners, then keep working, man, keep working.

But the key point is this:  make the promotion theme make sense.  It’s hardly ‘wild’ to give a discount on starched business shirts in a climate where no one wears one (apart from doctors, realtors, and funeral directors).  And saying it’s ‘wild’ without doing anything at the store (balloons?  an inflatable gorilla?) is just a let down.  By all means, excite and stir the imagination with a theme.  But be real, and realistic, with the audience and offer you make.

Overclaiming leads to overdisappointment.

We’re all hearing everyday, from clients and prospects, how important it is to have a superior customer relationship.  “We must communicate one to one, engage customers, be more customer centric, coordinate touchpoints to deliver added value, blah blah blah”.  You probably hear something similar every day.  Or maybe you say it.

But what is interesting in this is the power of automation to actually deliver what marketers love to talk about.  The rise of new software applications, which help to make the process of engaging customers easier, are called ‘trawling software’ applications.  These clever little programs basically search customer data for changes or modifications, which then trigger a communication or action from the company according to an agreed series of business and engagement rules.  For example, if your customer tries a new product or service line, and your data can recognize that change, the software triggers an automated communication action – maybe its a customer service call, or a thank you letter.  You get the idea.

Interested in learning more?  We’re actually trawling for a number of clients at the moment, helping them navigate behavior based communication waters with ease.  What are we learning?  Quite a few things, including:

1.  Start simple.  Add complexity as you go.

2.  Don’t be afraid to test and refine, no one gets the response right the first time.

3.  Make sure the behavior you’re recognizing is valid.  For example, a trigger on ‘stopped buying product for last month’ may simply be a blip (ie the customer went on vacation to Aruba), not a cause to panic and deluge them with emails.

4.  Ask questions, get information.  With every touch.  And make sure the information is actionable.

5.  Measure, measure, measure.  Put some customers onto the trawling program.  Leave others off, at least to start.  Then gauge behavior.  And build the business case.

You’ll be amazed what you’ll catch with these new trawlers, and some canny fishing skills!!

Nice to see that the government is taking a not so invisible hand in stimulating the economy, moving beyond cash for cars into cash for old refrigerators and freezers.  Stimulate sales of many new Kenmore machines, that’s good.  Get rid of old, energy consuming equipment, that’s good.  Save money on electricity bills, that’s good too.

But what next?

In looking around the house for energy inefficient items, I’ve come across a few suggestions for the next round:

1.  The dog – she’s kinda old, just consuming her dog food and lays around.  Highly inefficient use of energy.  Doesn’t even bark at the mailperson anymore.  So maybe the government should give ‘cash for collies’, trade in your old dog for a young puppy.

2.  The teenager – not so old, but highly energy inefficient.  Leaves on the TV and lights constantly, always consuming power via Wii’s, cellphone, laptop (typically simulataneously, given the nanosecond attention span).  Call this one the ABC program (adolescent brings cash).

3.  The  house – unless you’ve got solar panels, a wind turbine outside, and a process for turning domestic manure into energy, you’re probably living in a highly energy inefficient house.  So here’s the idea:  government pays cash, we sell house to government, buy new house.

Wait a minute.  Soviet Union tried that.  Results weren’t too good for their economy.

Hot on the heels of the 1st Thriver Award given to Panera Bread, another standout performer needs to be recognized … Jos. A. Bank Clothiers. If bets were placed at the start of the current recession on who would thrive during this economic chaos, I think someone looking to make book on a specialty retailer of upscale, classic men’s clothing would have offered very long odds. Yet as department stores and most other retail merchants bleed red ink, Jos. A. Bank zips along racking up some very impressive results. Add to a chaotic economy a change in CEO on December 31st and another retail disaster might have been in the making. But not at Jos. A. Bank!

The Numbers Tell Part of the Story

The second quarter financials reported sales up 11.8% versus the quarter a year ago. Gross profit is up too, to $98.5 million from $91 million. Earnings have climbed by double digits in all but two quarters in the last 3 years. Considering what is happening to other apparel retailers and department stores, this is phenomenal.

Three Reasons for Success

Three characteristics of Jos. A. Bank Clothiers have made this success possible. First, they seem to possess a corporate attitude that is energetic and optimistic. Their sale ads don’t mention the recession or rely on cliches such as “our own economic stimulus package.” Rather they show great clothes at great savings. Quality is not compromised. (Interestingly, since they have managed to build such strong gross profit margins, they are not selling product at a loss just to generate traffic.)

Second, they have a nimbleness that others must envy. Jos. A. Bank freely admits they try a lot of promotional devices and then run with those that work. They have created an aura where customers actually look forward to the next announced sale such as Buy One Get Two Free and view it as a great opportunity. Other retailers struggle to read the effects of a promotion weeks after the event and have to push its roll-out through layers of approvals that can take weeks. Jos. A. Bank reads and reacts almost instantaneously.

The third reason is continuity. When Neal Black took over as CEO in December, he had been Chief Merchandising Officer since 2000. This was part of a planned succession and he had been actively involved in the development of strategies that have created an enviable track record. They could not have chosen better.

One Downside

The only downside I can detect is in the store. With the continuous steam of promotions I have seen some anxiety at the register. I don’t know if it is a POS problem, employee workload or an influx of new associates. The experience at the register can be slow and confusing for both the associate and the customer. The wide variety discounts may be pushing the limits of the POS system to keep up. But at least they try. I know of two instances where associates have contacted a customer at home hours after the sale to tell them that they had failed to take the full discount they were entitled to. They then offered  to make the adjustment. It brought the customer back and sent them away with a great feeling they told friends about. That’s how to build a brand.

Then again the problem may be too many customers. These guys are good!

Rest In Peace, Cash for Clunkers. Your time has come at last, but we’ll be forever grateful for the way you’ve revived retail auto sales. Now we can all look forward to a brighter future.

Or maybe not, because with Cash for Clunkers the government and the auto industry may have invited an 800 pound gorilla into the room.

Me-too marketers have already imitated government’s Economic Stimulus and Bailout themes. Think of it as trickle-down creativity. So now we’re watching for Son of Cash for Clunkers, born from the brains of private sector marketers who want to cash in on the visibility and popularity of trade-in programs. Since many product categories already do trade-in programs, it should be easy for marketers of computers/servers, phones, household appliances, cameras, dental supplies and more to create their own versions of Cash for Clunkers.

Before they start, maybe they should ask if Cash for Clunkers really was win/win for everyone. Consumers were sure winners. They saved, even if their old cars didn’t qualify as clunkers, because the program drove them to dealerships for other savings and rebate programs. The environment will be a winner too, as the program drives gas guzzlers off the road.

But for the auto industry, the outlook may not be so bright
In the short term dealers won big gains in traffic and sales, auto makers are ramping up production to fill depleted inventories, and auto workers are going back to work. But in the longer term there’s that 800-pound gorilla in the room – the potential negative impact of forward buying. By successfully driving a big burst of consumer buying now, Cash for Clunkers may have depleted the market of qualified consumer prospects, causing decreased demand later.

Uh-oh…could this mean a return to the tried and true giant inflatable gorilla, as auto dealers’ primary marketing tool?

Having come to believe that the light up ahead is the end of the recession tunnel and not a train coming towards us, I believe it is time to start selecting the winners and losers in terms of business growth or value destruction. In the months ahead I’ll be posting about companies that are merely limping out of the economic downturn and those that are accelerating out of it, those that preserved their brand and those who abused it.

Three Award Categories

There are going to be three “awards” for this competition with multiple winners of each: Recession Diver, Recession Survivor, and Recession Thriver. The Diver Award goes to companies and brands that were hammered into the dust by the current recession. Some will have fought the good fight and failed. Others were just clueless. They not only couldn’t attract more customers but often made the few customers who remained unprofitable. I have a pool of potential recipients prepared and am just awaiting confirmation of the distress. It will come as no surprise that many are current or former portfolio companies of private equity groups where financial engineering is the tool of first and last resort. Entering the economic downturn up to your eyeballs in debt was just as bad for Linens & Things, Circuit City, Eddie Bauer and Extended Stay as is was for thousands of first time homeowners.

The Survivor Award goes to those who are emerging from the recession with their souls and brands intact. They may have been forced to employ some pretty extreme measures to maintain revenue and income but they didn’t bastardize their authenticity or quality. You will find a number of them in industries hit very hard by the housing collapse and the credit crunch. For many, survival was all they hoped for. They will still face a long climb back to black numbers but at least they have a solid base of untainted business.

The Thriver Award

These are the companies and brands that are accelerating out of the recession. They will be the case studies at B-schools in the years ahead and the examples everyone will point to in the depths of the next recession. They show why it is important to keep marketing efforts up while struggling to survive.

Some of the companies that have managed to thrive during the recession have done so because of steps they took before it started. Many eschewed high debt loads and had cash on hand. They are extremely well run companies that take laser-like aim at the customer. They understand that there are only three ways to grow: 1) find more customers, 2) sell more to the customers and 3) make more on what you sell them. In short, they are very Warren Buffett-like in their approach.

Panera Bread Jumpstarts the Award Season.

I had originally intended to kick off these awards sometime in the fall in anticipation of improving signals that the recession is on the wane. But a Wall Street Journal article this morning put this first Thriver front and center. The very first Recession Thriver Award goes to (drum roll please) Panera Bread.

In its recent quarterly report Panera Bread showed increases in revenues, gross profit, operating income and nearly every other measure of performance. What earns them the first Thriver Award is not so much what they did but how they did it. Other restaurant chains have taken a knife to costs in hopes of at least being able to report some profitability in the face of declining sales. As a result, quality has often suffered. At the same time they have resorted to significant and frequent discounting to maintain foot traffic. Panera, on the other very profitable hand, has improved product quality, raised prices and introduced new products. As a result, transactions may be down somewhat but check average is up. And while catering is down, breakfast business is up. Though the latter usually represents lower check averages, it does fulfill the Second Tenet of Growth: Sell Customers More. It might just explain where some of the customers of Starbucks have gone. Well done Panera!

Stay tuned for more Thriver, Survivor and Diver Awards.

Eh. Ho hum. Yawn. How many times have your eyes glazed over, reading guarantees like this?

“Friendly service, clean rooms, comfortable surroundings, every time. If you’re not satisfied, we don’t expect you to pay. That’s our commitment & your guarantee.”

It’s from Hampton Inns, and it’s typical of the meaningless copy in too many marketers’ guarantees.

Not your typical tired old guarantees
But now some marketers are exploring new ways to add some intestinal fortitude to their guarantees.  They go way beyond the conventional “money back if performance promise is not met” or car dealerships’ “if you can find a lower price we’ll beat it ” offers.

•    The big breakthrough came early in 2009, with Hyundai Assurance: “Finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit. Sound too good to be true? Come and see us and we’ll put it in writing for you.”

•    “Me too!” marketers quickly jumped on the bandwagon. The Ford Advantage Plan offered 12 month payment coverage for customers who lost their jobs. Toshiba Computers’ No Matter What Guarantee told customers purchasing a laptop they could claim a refund should they lose their job within the first year of purchase, and keep the model purchased as part of the deal.

•    Harley Davidson’s We Ride Free Guarantee told bikers they could buy a new 2009 Sportster, ride it for up to year, then get the full purchase price as trade-in value.

•    California Lutheran University’s 4 To Finish Guarantee reassured parents worried about college costs – incoming freshmen will graduate in four years, or the college will pay for any remaining classes.

•    And back in 2007, Sonicbids rock band booking service’s Get A Gig Guarantee offered member bands a free 6-month membership extension if they did not secure at least one gig over the course of the next 6 months.

Between brand promise and brand promotion
These guarantees are proactive, not reactive, directly driving business during a recession, the right time for extra reassurance when the brand reputation may not be enough. They fall into a gray area between brand promise and promotion, and actually add to brands’ perceived value.  They’re stronger than generic “satisfaction” guarantees because they require a specific performance and offer a specific remedy. And they’re cost-efficient, because customers succeed when marketers succeed – it’s not in customers’ best interest to take advantage of the guarantees.

Turn failure into success.
Make lemonade out of lemons.
Turn a sow’s ear into a silk purse.
Snatch victory from the jaws of defeat.
That’s what the business gurus say we’re supposed to do. And everyone once in a while, someone actually does it.

Orpheus Records, Fran’s Book Store, T-Shirt Hell and Cyrus Rug Gallery each ran an old-fashioned “going out of business sale” to build business.
•    In Washington DC, Rick Carlisle, owner of Orpheus Records, reports that sales more than tripled. “It is good for business, I can tell you that. But I’m pretty sure it’s illegal to tell people you are going out of business when you’re not. Luckily I have the letters from the landlord proving that I’m not making up anything.”

•    Over the last three weeks that Fran’s Book Store was open, “cashiers took in more money than they had during the previous three months.”

•    Sunshine Megatron, owner of online retailer T-Shirt Hell, said “Not only did the last 3 weeks save jobs at T-Shirt Hell, they’ve opened up a whole new world to people who had never bought our shirts until now.”
•    And in North Dallas, “Going Out Of Business” was more than just a promotion headline; it was the original name of Cyrus Hassankola’s Cyrus Rug Gallery. “Customers rooting through the stacks of oriental rugs in the store he opened on a busy road in North Dallas would sometimes say how sorry they were that he was going out of business. ‘We’re not,’ Mr. Hassankola told them. ‘It’s just the name of the store.’”

These were actual retail sale events featuring discounted merchandise, not just elaborate tongue-in-cheek parodies like the notorious Barq’s Root Beer Soviet Union Going-Out-Of-Business Sale in 1992. But like the Barq’s promotion, they were successful – two of these small retailers did eventually go out of business, but two stayed in business and all four made money.

What’s the difference between these successful small retail promoters and Circuit City, Linen ‘n Things and other retail giants who’ve recently gone out of business?

Not just low prices. Shoppers could probably find comparable prices elsewhere. And not just “going out of business” – that’s just one way to get shoppers’ attention. What’s important here is that each of these small retailers built on a big idea, leveraging their unique identities as resources for recorded music, books, T-shirts and oriental rugs, then reinforcing those identities with limited time, last chance, unmatchable opportunities (or whatever you care to call it) for their customers.

“You made it up, didn’t you?” That’s the kind of responses we expect from the following quicky quiz, illustrating a few of our beliefs about successful marketing.

We freely admit the format is borrowed. It’s our own version of the popular Bluff The Listener quiz on National Public Radio’s “Wait, Wait, Don’t Tell Me” show, in which listeners are asked to choose the real bizarre news story from among the made up ones.

Marketing truth is stranger than fiction?
You choose: Which ones are real? Which ones did we make up?
1. A church offers a 2-for-1 special on two important sacraments when purchased together.
2. People’s bodies become an interactive broadcast medium for marketers’ promotional videos.
3. Major automobile brands use targeted marketing to reach a new audience of best prospects: Animals.
4. Responding to Coors Light’s color-changing aluminum can, a beer brand runs a “the difference is clear” campaign featuring its new transparent aluminum can.
5. A major supermarket chain offers “grow your own” baby chickens for customer to take home and raise.

They’re all true…sort of
We cheated a little here, because all five examples describe actual marketing programs. Or at least, potential programs for which the technology exists…they just require a willing marketer to take advantage of it.
1.    The Church of England is offering marriage and the baptism of children as an all-in-one package deal, in an appeal to cohabiting unmarried couples in an increasingly secular Britain. Sometimes successful marketing requires the sacrifice of sacred cows.
2.    The Greener Gadgets Design Competition unveiled a touch screen that can be tattooed under the skin, so marketers can use customers’ bodies to screen promotional videos. It’s the ultimate personal endorsement, where the medium is just as important as the message.
3.    Both Toyota and Honda are targeting dog owners with Fido-friendly special features and promotions. This is one way to market to decision influencers.

4.    Yes, now there is such a thing as transparent aluminum, so beer marketers will be able to leverage the taste perception advantages of glass without the cost and weight. The right packaging can put your product one up on competition.

5.    To satisfy demand for more locally grown foods, UK-based Tesco supermarkets will go beyond selling vegetable seeds, offering live chickens and egg-laying hens. This way customers grow their own product– what better way to build a relationship?

“What we have here is a failure to communicate,” says the evil prison warden Strother Martin as he sentences Paul Newman to a night in the box (a small, hot punishment cell), in the classic 1967 film Cool Hand Luke.

Fast forward to today.
Exactly the same words could be used to describe the disconnect between social media advocates and their prospective customers. Those advocates risk a night in the box – or maybe a box on the ears – when they fail to speak the language as CMOs, CFOs and CEOs. It may be one reason why so many Cs say they’re “sick of hearing about Web 2.0 and related buzzwords such as ‘blogs’ and ‘social networking’” in a survey by the Marketing Executives Networking Group.

You’d think that in the communications business, the value of clear, effective communication would be taken for granted. But you’d be wrong, because some of our contemporaries require constant reminders, as in this Small Business Trends post by Zane Safrit.  He reminds us that “The story CEOs and CFOs want to hear is the story of numbers that go up and numbers that go down.”

Speak to the Cs.
It’s an issue we touched on a few months back, when we said “Help them decide in your favor by demonstrating ROMI — Return On Marketing Investment.” Now we’re wondering if Rosetta Stone could create a special version of its language learning software to teach social media advocates how to speak the language of business. It would turn social media’s jargon into a fluent translation for real-life business:
•    From “tweets, trackbacks, links, rss feeds, feed readers, community members, blogtrolls, stalkers, spambots, and organic SEO…”
•    …to “qualified sales leads, conversion rates, sales per customer, revenues, customer churn and cost of acquisition.”

It’s late summer now — back to school season for many marketers. And time for social media advocates who want to sell to Cs to go back to school themselves, before they receive a big “F,” which stands for “Failure to communicate.”