Measuring Up

Where everyone knows your name…

That line from the title song of the 80s sitcom “Cheers,” represents such a positive feeling to most who remember it.  It means something entirely different to me, though.

Saturday was my birthday. I had a really nice day. But, I also received about a half dozen emails like the one in  this caption all wishing me a happy birthday. Ecommerce sites, web vendors and other  service providers are just so sweet. They all must have really caring customer service people who spend their days writing down customers’ birthdays just to send us e-cards with a smile, right? Not. Instead, the reality is that they’ve acquired every bit of data and information on our personal lives and habits. Thus, sending me a birthday email probably takes very little effort. But for some marketers, it’s a smart way to establish closer bonds with audiences they care about.

Here’s the rub about this specific one. I hate Quicken Loans. Quicken wasted my time for over four months this summer when I tried to refinance my primary mortgage. Quicken deceived me and Quicken lost me forever as a customer or someone who will ever recommend its service because at the 11th hour, this banking intermediary told me that the type of mortgage I had been accepted to receive, was now dead and buried. That’s right. I had a closing basically scheduled, when Quicken pulled the rug out from under me and said it could no longer finance this product.

I’m pretty busy. The only care I have when doing anything like this, is that the service provider is dependable and makes it simple, quick and, ultimately, shows me the money. In the end, Quicken did none of that. Ironically, one month later, I chose another mortgage broker who promised me much of the same. You know what? This time the promise was realized in just three short weeks. I had a new mortgage. It was so easy, very quick and I got the money… at a much reduced rate.

What’s the point of this post (you might be wondering)? I had put the distasteful Quicken experience behind me. Then, I received this email. Some idiot there never took me or my private information out of the Quicken database, even after I ranted and raved for a few days at them when the fiasco happened. So, because this company has reengaged me, I’ve decided to now let everyone know that I hate Quicken.

Of course there is a marketing lesson in this tale.  Mass marketing without any quality control can have some very real consequences to a brand. Problems always exist when a company promises one thing in its marketing messages but delivers a totally different user experience?  I think it's such a huge problem that we're actually beta testing a possible solution.

I am not a fan of this company. Many people there heard my roar. Someone should have removed me from this smiley face database before this automatic email went out. Before, I was simply done with Quicken and the brand was no better or worse for it. Now, I’m actually an anti-fan who is passing on a negative experience to anyone else interested in hearing about it.

Am I fat or is my belt tight?

Today's guest post is by Peppercommer Milos Sugovic.

It all comes down to framing. No matter what policy or program is being put into place, how you frame it limits or defines the inferences that individuals make about the message. The audience likes to pick a side, even though two seemingly conflicting alternatives are at the core no different. Take for example the Fed’s latest attempt to jump-start the economy – which the media calls QE2 or Quantitative Easing 2 - in which it recently decided to buy $600 billion in long-term Treasuries over the next eight months and reinvest an additional $250 billion to $300 billion in Treasuries with the proceeds of its earlier investments. These bond purchases will culminate in Q3 of 2011 and will inject about $900 billion into the U.S. economy.
 
Such a move by the central bank invariably creates downward pressure on interest rates, making borrowing cheaper. In a healthy economy that’s like taking a fat kid to a candy store. It stimulates short-term growth by encouraging businesses to borrow for the purpose of investing in capital and machinery, while it gets consumers to spend…and then spend some more. However, in an ailing economy, such outcomes - even though highly desired - are just wishful thinking.
 
The U.S. economy is a fat diabetic that has become irresponsive to insulin. A body suffering from type 2 diabetes needs insulin, but like all medication, its effectiveness diminishes beyond a certain level and can become fatal. The U.S. economy is no different: it has become desensitized to the central bank’s flood of liquidity and cheap credit. No surprise, quantitative easing isn’t working. And that’s because the problem isn’t a lack of credit, or that it’s too expensive. The problem is that our accumulated and excess dead weight- also known as debt- has been transferred from bubble to bubble. Replacing that “old” 40” LCD TV, which you borrowed money for in the first place with the new and improved 42” LED model that comes with those scarce necessities like Google, Facebook and Twitter, will do only one thing: increase your debt. 
 
Unfortunately, the American Dream allows for no nightmares. So, the Fed is responding to consumer desires and is delivering cash in the form of "easy money" to an economy which has no need for it, except to gamble with in the financial markets. But blowing bubbles now and worrying about the consequences later is bound to backfire, as we have witnessed time and time again. Driving borrowing rates down to zero will obliterate the interest income for consumers with savings accounts and low-risk fixed investments. It is also likely to increase inflation, which will further eat away at the value of that shrinking interest income, especially because wages aren’t rising. Together, these forces will create a real interest rate equal to zero and incentives to take on more risk to earn a greater return – the same urge that got us into this mess in the first place. Is it any wonder that investors poured more than $18 billion into hedge funds in October, the highest level in 11 months?
 
“Lucky” for us the economy, like the body, has a way of correcting for imbalances and restoring equilibrium. The high unemployment rate is one way the bubble deflates itself. And no matter how hard the Fed and its troupe of chubby Americans try to swim against the current, they’re bound to fail. What’s needed is instead some tough love: some sweat, tears and then some more sweat.

But how does one sell such a message? No spinster can make lower spending and unemployment sound good, not even Mark Zandi, the chief economist and co-founder of Moody's.  At the end of the day, it all comes down to framing. What got us in this mess is, paradoxically, high spending and excessive risk taking when investing. So, what will get us out of it is lower spending and a higher tax rate on risky investments – but such policies are doomed to face severe criticism. On the other hand, advocating for higher savings and lowering the tax rate on stable, long-term investments will do only one thing – generate applause. The funny thing is, the former is no different from the latter, apart from how it’s framed.  That’s why, for us PR folks, it’s all about the formulation, not the logic, of an argument.

Do you miss Hooters Air, too?

Today's guest post is by Peppercommer Matt Purdue.

What do all of these have in common?
•    Hooters energy drink
•    Colgate Kitchen Entrees
•    Google Print Ads
•    Willie Nelson biodiesel fuel
•    Ben-Gay aspirin

That's an easy one. They are examples of brand extensions gone horribly wrong. Yes, these are real products and services that once upon a time came to market. Thankfully, we've forgotten most of them. But imagine the millions of dollars and thousands of hours wasted on these.

From a PR perspective, it is one of the most difficult challenges: helping a client with a trusted brand break into a new market. Public relations is essentially based on trust. When a PR agency is tasked with promoting a brand extension, the first questions to ask are: Why should key influencers trust that our client knows enough about this new market to succeed? Why should key influencers trust that the brand really cares about the end-consumer?

As a former journalist, whenever I was pitched by a PR agency about a brand extension or partnership, my B.S. meter lit up like a Christmas tree. Any smart journalist believes that a brand extension has one, and only one, ultimate goal: to make even more money for the company behind the successful brand. So, as a reporter, I was always loathe to give any of these companies what amounted to free advertising.

So how to convince the ever-skeptical journalist that your client's brand extension is worth covering? Check out Procter & Gamble's latest foray: Tide-branded dry-cleaning stores. P&G's PR machine landed the project on the front page of the New York Times business section in what William Randolph Hearst used to call a "puff" piece. What made P&G so successful?

1. Don't tell me, show me: P&G already has four Tide stores up and running. What better proof of concept is that? A press release announcing a brand extension filled with nothing but projections, hopes and dreams isn't worth the digital ink it's written with, so have some real-world evidence ready to go.

2. Let me experience it: It’s clear from the NY Times article that the reporter visited a Tide store and had unfettered access to customers and neighboring businesses. No press junkets here. There’s nothing like firsthand experience to get a reporter on your side.

3. Lift the lid: Clearly, P&G walked the reporter through the entire process of choosing the dry-cleaning industry for their latest brand extension. “Four years ago, FutureWorks began considering franchise opportunities…,” the journo writes. That type of background gives the reporter the perception that he is getting the scoop on his rival scribes.

4. Push the benefits, not the brand: When you pitch, forget for a moment that you’re pitching a well-known brand. Pitch the project as if it is a stand-alone program. That means emphasize the benefits of the new product or service over the brand. The NY Times’ coverage of Tide Dry Cleaning notes features like 24-hour pick-up, drive-through windows and eco-friendly cleaning products. The Times bought it hook, line and sinker.

While no one can predict whether or not Tide Dry Cleaning will end up in the dustbin of marketing history alongside Donald Trump steaks, no one can argue that they’ve achieved a PR coup.

Going global?

Every few months, I find myself in situations where the same ‘global’ questions are raised by corporate marketers to their agency partners. Just recently, this emerged at some different meetings and lunches where a few clients and prospects asked their agency partners (which included Peppercom) what their global capabilities are and/or what’s the best strategy for leveraging agencies on a global scale.

In one meeting, a few different agencies from the advertising, digital and PR world proudly touted the breadth and depth of their 30 and 75 office global network. They walked the client through global campaigns that had been launched for other clients, dazzling the client with how simple this feat was and how the same natural replication could take place on this client’s behalf.  I really didn’t say too much during these conversations, because although we do have an international partner network (comprised of good like-minded agencies across the globe,) on the surface it doesn’t trump wholly owned global offices.

At the end of one of these conversations the client finally came around to me and asked why I’ve been so quiet on this matter. (She clearly is used to my never shut up attitude.) She also asked what I thought could be the best solutions for her company as it needs consistent communications and branding around the world. My answer was simple. I exclaimed that there is no silver bullet solution to leveraging agencies to do this. I further elaborated by explaining that while global agencies have a ton or resources, the reality is that most have been put together through acquisitions creating offices in different markets that specialize in quite different services and core capabilities.  At that point, I could feel the tension in the air from my agency partners (one actually gave me a pretty negative smirk.) But, I was on a roll and figured it was time to talk reality here.

So I explained my experience at the ‘biggest of the bigs’ (J. Walter Thomson) as a case in point. I told her that when we needed to offer strategy and/or execution for a consumer product client in 25 markets around the world, my experience was far from positive because the Frankfurt office only had financial services people working there and the Paris office really only focused on fashion. Thus, it was almost impossible to really offer in-depth experience and knowledge that could provide value to our client’s need consistently across the globe.

Now, I was feeling completely toxic among this group (for speaking the truth). But, hey… that’s what the client asked for. Naturally, her next question was, “OK, what should we do, then?” I reiterated that there is no one stop shopping, easy answer. My suggestion was to have one lead agency enforce the strategy across the globe and find the best partners in key pockets that have the same mind set and experience to become good local partners. Some of the local partners would undoubtedly come from offices of the agencies sitting around the table (including our International Partner Network,) but we may need to go outside this group to find a few new ones in areas where real gaps exist.

Interestingly, the dynamics changed among this group at that point. This was mainly because the client was starting to think differently about her situation and what she needed to do (and everyone saw that.) Any jockeying for position as the ‘one stop global agency’ stopped (at least at that meeting,) and we all started working together to figure out which shop had what pieces to make this puzzle complete. While I don’t think that anyone there (except the client) appreciated my candid thoughts, it served to open up a valuable lesson learned for this client.  Easy to implement, ‘one stop shop’ global solutions for clients simply don’t exist. (Note to all clients: If you are being sold this bag of goods now, I’d think carefully before agreeing to anything.) As I wrote, there is no simple solution.  But, if a variety of agency partners are willing to truly work together using an integrated philosophy (it will take a lot of work,) but the job can still get done.