One Quick Question

Today I'm not offering perspective. Today I'm asking for your help. Today I want to know the one marketing question no one has ever answered to your satisfaction.

Would you take the few seconds it takes to ask the question?

Click here. And thank you.

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Recipe For Customer Churn

Over the years I’ve stopped doing business with quite a number of companies. Sometimes it was because my needs changed. More often it was because I was tired of being ignored.

It always amazes me how hard most companies will work to acquire a new customer, and how little they’ll do to keep him.

So, let’s take a test, shall we?


Why Customers Leave My Business

In each blank, please write the percentage of your former customers who left because of:

1 _____ Price.
2 _____ Customer needs changed.
3 _____ Customer service.
4 _____ Quality.
5 _____ Convenience.
6 _____ Functionality.
7 _____ Other.

Go ahead. Take your time. Since there can be multiple reasons, don’t worry about making the totals add up to 100%.

Finished? Shall we compare your results to those of 369 other companies surveyed by Right Now Technologies*, as reported in a recent white paper?

48%--Price.
35%--Customer needs changed.
21%--Customer Service.
17%--Quality.
17%--Other.
15%--Convenience.
14%--Functionality.

Do your answers look anything like these?

Then you’re in deep trouble.

Because while you’re reacting to a perceived price issue, or assuming that customers don’t need you any more, the customers have their own reason for not doing business with you. And their reasons don’t look anything like yours.

Here’s what 300 customers said in that same survey:

73%--Customer service.
31%--Quality.
25%--Price.
15%--Functionality.
15%--Other.
09%--Convenience.
08%--Customer Needs Changed.-

When businesses think that 21% of lost customers are are the result of poor customer service, but 71% of the lost customers cite poor customer service as the reason they stopped buying from the business, we have a recipe for some serious customer churn.

Have you followed up on your lost customers?

Do you know why they stopped doing business with you?

Do you even know whom they are?

* Source: RightNow Technologies,
The Loyalty Connection: Secrets To Customer Retention, 2005

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What's Your Story?

When we talk about building your brand we always project into the future, and what your brand will become.

Customers need time to buy, and use, and make your product part of their lives. It takes time for one generation to introduce your product to the next generation. It takes time to develop your company’s heritage. That heritage will then become a major part of your brand.

Heritage implies tradition, and a traditional way of life. Heritage includes history, but also status, class, and character. Heritage has value to this generation, and to future generations. Heritage grows in shared experiences and common history.

Brands share their heritage in the form of meaningful, memorable, and relevant brand stories.

People love good stories.

Our cultural heritage is built around stories. Our great art involves stories. Our politics revolve around stories.

Today, with more entertainment choices available than any time in history, people still choose to be entertained by great stories of other human beings. Side note: the huge impact of reality programming just goes to show that today’s taste in gossip - or should I say storytelling - tends to run toward unvarnished “truth.”

Ah. Truth. Truth is subjective, isn’t it? During the last election which story got more traction? The story being told about John Kerry’s military service in Cambodia? Or the story being told about George Bush’s military service in Alabama? Which was the truth? Was either? Both?

People love a good story.

Do you need a story? If you’re determined to develop a brand, you do.

Good brand stories involve the user, and do so on an emotional basis. Your brand story must not be about the product.

A name by itself, although it may have recognition, isn't a brand. Your brand must be more than a name. Your brand will become the sum of the values, the beliefs, and the actions of your company. Your brand story will be tempered by the experiences of customers in dealing with your company.

Good brand stories capture both the essence of a brand, and its desires for the future. Your brand story will tell the truth about your company. Maybe it won’t be today’s truth. Maybe it will be a truth that your company aspires to.

Disney’s brand story involves the past, present, and future. The past is portrayed as the ideal community with clean streets where no one is ever threatened. It’s present is safe, secure, and happy. In Disney’s future you’ll never grow old, get sick, or die.

Oprah’s brand story is that of American women’s best friend. Her show is made up of the back-and-forth conversation with emphasis on self-revealing intimacies that is the basis of female friendship.

McDonald’s brand story is one of families having fun together. A family outing to McDonald’s becomes a celebration. The food is secondary.

Your brand story must be consistent with everything your company does. Terrible things happen when the story you tell is contradicted by your actions. For instance, here is a different version of a brand story. You’ve no doubt seen it in your e-mail.

“When you forward this e-mail to friends, Microsoft can and will track it (if you are a Microsoft Windows user) for a two week time period. For every person that you forward this e-mail to, Microsoft will pay you $245.00, for every person that you sent it to that forwards it on, Microsoft will pay you $243.00 and for every third person that receives it, you will be paid $241.00 Within two weeks, Microsoft will contact you for your address and send you a cheque.”

Putting aside for a moment the realization that there are always going to be people who WANT to believe in fairies, in getting rich quickly, and in outrageous claims, why does this particular fraud continue to show up in our in-boxes? Perhaps it’s because many of us resent Microsoft.

Microsoft’s brand story is one of a rich company ruthlessly annihilating any and all competitors to maintain a monopoly.

Which leads to one more critical part of the equation: you get to write your brand story, but it won’t spread without the enthusiastic help of the ultimate users of whatever it is you sell. Brand stories originate with your company, but they belong to your customers. Once you’ve put your story into the marketplace, its’ no longer under your control.

We started this discussion by addressing folk heritage. The common stories of our heritage are what identify us as a people. The common stories of our heritage live in our minds, but even more deeply in our hearts. Brand stories become a major part of our common heritage.

When a motion picture, or a vacation destination, or an automobile, or a celebrity, or even a cleaning product becomes successfully attached to a powerful brand story, it enters our minds through our hearts to become imbedded in our memories. That's when it becomes a brand.

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What's In A Name?

Thirty years ago a pair of researchers, Herbert Harari and John W. McDavid gave eighty experienced teachers papers to grade. Eight essays, all of comparable quality were supposedly by boys named David, Elmer, Hubert, and Michael, and by girls named Adelle, Bertha, Karen, and Lisa. The names were rotated through the eight essays, so that some teachers believed David wrote the essay on Tarzan, while others noted that David wrote the essay on kites.

Result? When credited to names with positive stereotypes the papers got better grades than when credited to names with negative stereotypes. Michael always got a better grade than Elmer, for instance.

Interesting. Names make a difference in people's expectations.

That would lead a curious person to wonder if George W. Bush could have been elected had his name been Pépé LePetomaine. Would John Kerry have been his party’s choice of candidate were he named Percy Arbuthnot? Would our fellow citizens be supportive of sending troops into combat if the initiative had been named something other than the “War On Terror?”

Those who are very talented often make things look easy. When talented people are articulate, they make things sound easy, too. I think that’s the case with a post Chris Gloede authored on his Rants on Modern Marketing blog titled Product: Naming Isn’t Really That Important. It's what started me thinking about names.

I don’t disagree with Chris often. No matter how simple he makes it sound, I don’t believe that he would choose anything but a great name. Like I said, talented people just "do it," while others are wondering what to do. And I certainly agree with him when he says “having a good product supported by good marketing” is more important than the name of the business.

Still, I think names are important.

Everything in our world has a name. Every sound, every color, everything you touch, and every business you deal with. Some names have positive connotations. Others much less so.

It’s not likely anyone today would name a baby Francis, Edgar, Agatha, or Mabel. And yet, we see companies deliberately choosing such names as Vapid Software. (I’ll save you the trouble of looking it up. Vapid is a Latin adjective meaning “flat tasting, lacking liveliness, dull”).

There wasn’t much of a market for Chinese gooseberries. Say it out loud and listen to the sound of that name - gooseberries. It's so much more attractive now that it's been renamed “Kiwi fruit.”

Crazy Eddie^®, “with prices so low we must be insane,” sold massive amounts of stereo gear in New York in the 70s. It was a memorable name with a memorable advantage to consumers. But how likely are you to seek out an accountant doing business as Crazy Henry’s Income Tax Service? Would you make an appointment with a proctologist who calls himself Crazy Norman?

Names are important. A businesses name is the foundation upon which it's image is built. Are you more likely to purchase:

DieHard^®, or Gulf Star^® batteries?
Intensive Care^®, or Cornhuskers^® lotion?
Craftsman^®, or Imperial^® hand tools?

Care to guess which name in each pair sells more? Names are important.

Overstock Dot Com has a problem in trying to market themselves as a high end retailer. The television image of opulance and the good life clashes with the name. Go to their web site and decide which of those images is a lie. Either way, their name becomes the limiting factor.

Does The Body Shop^® repair cars or sell scented bath products? This one sells bath products, and the name works. By association with the other image of a body shop, the implication is that you'll find products to fix your body.

My Great Names List is heavily populated by Sears^® brands. In addition to Craftsman^® and DieHard^®, Sears names are such gems as Silvertone^®, Coldspot^®, Toughskins^®, and the now defunct Roadtalker^® CB radios. Sears understands naming.

Other names on my Great Names List include Right To Life Society^®, Bank of America^®, Sports Illustrated^®, and Pay Less Drugs^® (Yeah, I know. They’re Rite Aid^®, now. Pity. I understand Pay Less Drugs. Wanna explain to me what a Rite Aid is? Or how to spell it?)

A British energy company named Powergen? I like it. The Italian subsidiary of that company? Powergenitalia. That wouldn't be such a good name.

What do you think about Phartronics Engineering or Ascend Communications. (Try them out loud. It makes a difference).

Also featured on my You’ve Gotta Be Kidding Me names list are such gems as Badcock Furniture, Boozer Shopping Center, Beaver Cleaners, Dick Cleaners & Drapery Service, and Bea’s Ho-Made Products.

I want to see the workers on Bea’s assembly line.

For the record, I didn't invent these names to make my point. I’m not that clever. These are very real businesses. Well, except for Powergenitalia.

Names are important. Names establish the foundation of image. Names make a difference in people's expectations. Your child’s name is important to his future success, and so is your business’ name important to its future success.

In each case we use the name to affect public perception. Perception is reality.

And what is marketing, if not an attempt to alter perception?

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The Long And Short Of Persuasion

Researchers must be careful to neutrally phrase a question, so as not to influence the response.

My partner, Roy Williams, offers a perfect example. When a penitent asked if it was proper to smoke during prayer, he was told it was not. But when the question was rephrased as: “Is it acceptable to pray while smoking?” he was assured that prayer was always appropriate.

Sometimes it’s not the phrasing that controls the outcome. Sometimes people ask the wrong question. The wrong question, in this case, is “Which sells better? Long copy or short copy?”

I'm a long copy proponent. That is, I'm opposed to the "nobody will read more than 300 words" school of advertising.

Short copy has inherent risks. Because it has limited amounts of compelling information, response rates are frequently low. There’s also the risk of high numbers of cancellations and refund requests because the product or service wasn’t what the customer imagined.

The short copy crowd assumes that everyone is like them. “I wouldn’t read this,” they argue, “therefore no one else would either.” However, these people are not interested in what you have for sale. Without any interest, no matter how short the copy is, they will not read it. Will they read 300 words? They won’t read 100.

Fans of short copy are almost never successful copywriters.

When the copywriter ignores people who won’t buy, and concentrates on those who may, copy invariably grows longer. Be careful, though. Long copy in the hands of an unskilled writer becomes an excuse for sloppy, non-focused, undisciplined writing.

Long copy proponents have research on their side. Split-testing research shows that long copy consistently outperforms short copy. Additional research indicates that although readership does fall off dramatically at 300 words (when the non-interested browsers lose interest) it does not show further erosion until 3,000 words.

This argument over long copy vs. short copy has raged for years. Unfortunately, it’s a tangential issue.

It asks the wrong question.

To get to the right question we need to assess the customer’s perceived risk, and the emotional commitment necessary to persuade her to buy.

The biggest risk any purchaser makes is the possibility of wasting her money in a bad purchase – one that doesn’t suit her needs. The lower the price, the less risk. The less the risk, the lesser amount of emotional commitment. A lessened amount of persuasion becomes necessary.

We’ve all been in a check out line at a convenience store or a grocery. We’ve noticed the magazines, the candy bars, the breath mints. In retail, these are known as “impulse items.” No emotional involvement required. No financial risk. Impulse items are low priced items.

Long copy may well bore the potential purchaser of low-risk items.

Note that you won’t be able to pick up and admire the portable DVD players, or the jewelry, or anything with a stiff price tag as you wait in line. These things don't usually sell on impulse.

The higher the price, the less likely Miss Prospect is to purchase it on a whim. As price goes up, so does the risk that she’s making the wrong purchase. As risk goes up, so does the requirement for emotional commitment on the part of the buyer.

When our prospect is considering a major purchase, short copy may leave her wanting to know what she gets for her money.

So, in order to decide how long to make your copy, you'll need to determine the amount of reassurance Miss Prospect requires. If you’re selling candy bars, she won’t worry about the rent check bouncing. If you’re selling college enrollment, and asking for a commitment of $25,000 over the next eighteen months, she will require more assurance.

This leads directly to the right question: How much persuasion does the prospective customer require to be comfortable making the purchase?

Her comfort level will be directly proportional to the number of dollars in the "ask."

The length of your copy should also be proportional to the size of the ask. When asking for a small amount a simple easily remembered message is appropriate. When asking for a large amount your copy must anticipate every objection, every question, every doubt that your prospect has in you, or in the product or service you’re selling.

Of course, it must also be well written, persuasive, and compelling.

The message must be salient.

Salience is the relevance of the message to your prospect. It’s the most overlooked quality in advertising. It’s the reason for the long copy / short copy debate. It’s also the reason the debate is bogus.

Remember, your purpose is persuasion.

You’re trying to get a total stranger to open her purse and give you money. Write something that speaks directly to her. Give your message salience.

Write what needs to be said to convince Miss Prospect that owning your product or service will affect her life. Get her emotionally involved. Tell a story. Share testimonials. Use statistics. Boost your credibility by whatever means is available to you to remove as much risk as possible. Guarantees are golden. Add as much information as necessary to make the sale, and not a bit more.

Then start cutting any excess from your copy. Remove any word that can be removed without changing the meaning of the sentence.

Do you now have strong, persuasive, motivational copy? Long enough to make your points? Short enough to get right to them?

Assuming that you truly understand your prospect, and have written to her concerns, your writing will automatically be the appropriate length, whatever that length may be.

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Media's Dirty Little Secret

I’m constantly amazed by all of the media reps from all of the different media outlets that can help your advertising to “reach the right people.”

Why am I amazed?

Because they all reach the same people.

Don’t believe me? Start with radio - there’s more information available, and the radio reps are eager to share it.

Ask ‘em for exclusive cume figures. (Cume is the cumulative total of different people who tune in to the station each week. Exclusive cumes are people who don’t listen to any other radio station).

You’ll find, as I have, that the exclusive percentage is usually around 3% - 4%.

Occasionally you’ll find a truly unique format, like Christian, or Classical, or Korean. In these situations you may find exclusive cumes as high as 15%. But as rare as those formats are, exclusivity is even more rare.

Television? TV is harder to demonstrate, since people tend to watch programs instead of stations. However, that fact alone should make my case. No television station ever has an exclusive audience.

Newspapers? Not them either.

And not outdoor, or cable, or point of purchase, or “specialty” advertising (like calendars or pens or Rubic's Cubes with your name on ‘em).

Nope. Absolutely no medium, absolutely no media outlet, has an exclusive hold on the right people.

With only minor variations, everyone is reaching the same audience. According to Wizard of Ads research, approximately 70% of all of the radio stations in America, for instance, are suitable for advertising whatever you offer.

And yet, we keep listening to the “We’ve got the right people” pitch. We want to believe it. We want to believe that just a simple minor modification to what we’re already doing will make us incredibly successful. “We have a great offer. We just need to reach the right people.”

So we let the media reps perpetuate this nonsense.

We should hold them accountable for consultation on improving the impact of our messages.

Instead, we let them convince us that folks who read their newspaper, or watch their TV station, or listen to their radio station, or view their outdoor ads are the right people.

And they’re wrong.

No need to fuss at ‘em. Most are just repeating what they’ve been told. But they are wrong, none the less.

They don’t have a lock on the right people. They share the right people with every other media outlet in town.

Please don’t misunderstand. I’m not saying that it doesn’t matter where you place your ads. It does matter.

But not for the reason you’ve grown accustomed to hearing.

It matters because one exposure to an ad almost never leads to a sale. Regardless of the medium you choose, your ad needs to be repeated a number of times each week to make acceptable impact.

The correct media outlets are those that allow you enough exposures while staying within your budget. In other words: the less expensive choices.

They may well be the smallest media outlets in the market.

Can you reach enough people this way? You tell me.

How many additional sales each week do you need to reach your goal? Ten? Fifty? If you get the same response as direct mail and most internet sites, about two percent of the audience will purchase.

So for ten additional sales, you need to reach an audience of only 500. Is there a newspaper that doesn’t reach 500 people? A radio station? A billboard? A cable tv system?

For fifty more sales you’ll need an audience of only 2,500 – assuming that your offer interests them. It pretty much always costs less to reach 2,500 potential customers twenty times, than to reach 50,000 once. And as we said, very few things will sell on the strength of a single exposure to your ad.

Face it. Ninety-eight percent of the people in any audience have minimal interest in what you’re selling. How do you reach the two percent who are interested?

You write better ads. Then you put those ads into an efficient media buy.

You write ads that appeal to the right people.

But that’s a subject for next time.

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