Electronic delivery might be too inexpensive

At the beginning (way back in the 1990’s), when people began to access the World Wide Web, many services were ‘FREE’.   Different industries were impacted to varying degrees. Publishers of printed materials like newspapers and magazines can tell you all kinds of stories about how it ‘used to be’ and their own response to putting their content out digitally at the same time as it was being printed and shipped. Many of those publishers didn’t make it and the ones that remain have adapted and will continue to adapt, or they will perish as well.

Most marketers know that giving away something for free and then trying to charge for it later is difficult at best. This does not include free trials since the offer is for a trial period and then there is no longer access provided unless the user pays for it. Pay walls are here to stay but consumers are still adapting to them. The advantages of digital delivery for publishers are many with the most significant being not having to produce or ship anything physical.

Electronic delivery is cheap. You know this because all day long you send and receive text messages, email and social media messages with no concern about how many you send or receive. It costs the same right? NOTHING! But imagine if you paid a small fee to send an email for instance? A penny an email? A penny doesn’t seem like much even if you send 300 emails a day that’s only $3. I truly hope that nobody reading this is sending even 100 emails per day but it’s possible. Enterprise services like Slack and Google Hangouts don’t normally have costs associated with them paid by the day-to-day users as their company covers those costs.

The United States Postal Service has been in dire straits for years. The loss of First Class Mail volume has been going on for years. That’s why the USPS is delivering packages for other companies. After all, the mailman still comes to each residence and business 6 days a week.

At one point in the past 20 years the USPS considered giving each citizen an usps.gov email address. They even had a revenue model per email. Clearly that did not go over well since you probably never even heard about it. An interesting article from Bloomberg in 2016 notes how the USPS almost became a big email provider.

So electronic delivery remains really cheap. This is great right? Well yes and no. How much more unsolicited email do you receive today than you did years ago? Even with Can-SPAM’s protocols and rules, in my opinion the email senders are way ahead of the regulators. Why not email everybody and his brother since you may pick up a few customers along the way?

And then there’s LinkedIn. Two and a half years ago I wrote a post Who are you? And no I’m not going to accept your LinkedIn invitation. Some commented that I was being overly negative. I actually thought that was fair and that my own experience might be different from others. But it’s only gotten worse. LinkedIn claims to have rules in place to curtail unsolicited offers and invitations. However there’s lots of evidence to the contrary. Every single day (including weekends) I receive offers to ‘connect’ and talk to a service provider who wants to help with ‘warm’ leads, accounting, financial and other services. The solicitors appear to have little to lose in spraying and praying that someone like me will reply and become a warm lead myself. If those solicitors had to pay for each email their behavior would change and they’d use more discretion. And wouldn’t that be grand? (they probably are paying linked in – I can’t imagine it’s free)

For those that do not know, when companies or individuals rent email lists of those they would like to reach out to, they rent the names for an agreed to amount of uses (one or more), and the provider of the email names sends the email to their chosen audience. This way the buyer does not have actual access to those names/email addresses unless someone replies to the email. You pay a fee for that which can range from $.10 per name to more than $.50 per name depending on how refined are the data sets. The more refined the more expensive. This works pretty well and marketers decide on email as a channel based on its ROI just like everything else.

When there’s low cost to send – as in the case of electronic mail and social media messages etc., discretion goes ‘out the window’ as there’s no reason to be discreet. Paint the world and hope you catch a few along the way.   It’s a lousy model and we the recipients of the world feel there’s little we can do about it.

Maybe revisiting charging a sending fee should be revisited? What do you think?


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Can brands be built concurrent with taking day-to-day orders?

When it comes to marketing, I am first and foremost a direct marketer. In today’s language – I am a D-T-C proponent and advocate. Over the years I’ve worked with companies that have cared little about their brand identity (just get the order and we’ll find other items for that new customer to buy) and focused on beating break-even numbers as quickly as possible. Investing in a brand was and is time consuming AND expensive.

Companies that were interested in building a solid brand understood that careful planning and execution had to be undertaken in order to create and maintain the desired brand identity and promise. Ten years ago this meant driving consumers to purchase the product most of the time at a retail location. The Direct to Consumer marketers were running all different types of media promotions incentivizing consumers to stop what they were doing and call and buy now. The incidences of reverse engineering a brand to begin as a DTC and move to a full-scale retail brand were rare. Tempur-Pedic mattresses on which I worked for many years was a rare exception and today for the most part has forgone its direct response roots.

In the last ten years companies like Warby-Parker, Harry’s, Dollar Shave and others have disrupted the retail AND the direct response landscape. As an agency owner the fallout has come in some unexpected ways. More than one client has expressed a desire to create a good and ‘cool’ brand but at the same time they all need orders to sustain their growth and spending. These companies are not funded by venture capital or private equity so they feel they have to straddle the line between brand and direct. This is fine for our shop as we often discuss the idea with clients and prospects that we stand at the intersection of brand and direct response.

But there’s a catch. It ain’t easy and there’s not a magic formula that can be plugged in that will guarantee success. Oh sure, clients will say they understand that success is not guaranteed but that’s not completely true. Every company is hedging their investment to protect the downside risk. That’s just smart. But can straddling the line between brand and direct response actually be successful?

The answer is YES – with a caveat (of course). Understanding and mapping the customer journey is the key. And it is not always immediately transactional – despite what we all would like! Depending on the product or service, the promise, look and feel of a brand’s appearance must be aligned with the consumer’s personal journey. For some products it’s a one step and one stop solution – i.e. cool product that’s useful, easy to buy and needs no further information. The support for a product like this can be simple, straightforward and more promotional than a multi-step sale in which the consumer will research, check other information and more carefully consider purchase options.

There are inherent difficulties in attempting to capture customer orders while building a lasting and valuable brand and they do not always work in concert. Professional major sports teams are a good example of brand building while being transactional. Sure it’s great to have a good year where lots of people buy tickets, subscribe to watch, and pay for team merchandise. But many teams survive despite a lack of on the field success and over time the value of their brand (franchise) increases whether they have a winning tradition or not. Unfortunately the model that works for pro sports teams is not easily replicable for most other businesses.

Building a lasting brand of value requires a longer-term plan. Quality products, a good value proposition, and great customer service are all critical elements that make up a successful brand. If getting people to ACT NOW! is all that matters, there can be a big disconnect in laying the foundations of a successful brand while trying to make incremental sales in order to keep the lights on. How can this be done? Very carefully with detailed planning and execution.   I said it wasn’t easy but creating something of lasting value is rarely easy.

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Advertisers first and foremost must do no harm

You’ve heard the expression as part of the Hippocratic Oath to which physicians abide. ‘Primum non nocere’ – First, to do no harm.

As it relates to marketing and advertising the basic tenet should hold, but does not always. Since advertising deals with the art of persuasion there are lines that can be crossed, but shouldn’t be. Millennials and Gen Z’ers are smart and are not putting up with old-fashioned low-brow advertising come-ons. This is a good thing overall and raises the bar which certainly can use raising. An inarguable fact is that when promoting a product or service we always want to portray that product or service in its most positive fashion. Sometimes advertisers go too far, but sometimes community outrage also goes too far.

Recently my favorite middling baseball team, the New York Mets, ‘sold’ the space on the foul poles which prior were painted Met Orange and BTW they should actually be called ‘Fair Poles’ since if a batter’s fly ball hits the pole it’s considered a home run. The new sponsor is Chick-Fil-A and now they are being called ‘Fowl Poles’. Hey c’mon that is funny.

I am not a giant fan of Chick-Fil-A, but I think it’s a brilliant ad space purchase. The Mets have been accused of ruining the game and being only about the almighty dollar but I ask – what harm is there really? Nobody is being tricked here and one can choose to simply ignore the ad (but it’s not easy since it’s RIGHT THERE on the pole where before there was…nothing). I am sure that there are many advertising folks that thought – ‘Why didn’t I think of that first?’

In contrast I’ve been following Hubble Contacts and recently it came to light that perhaps their great pricing on contact lenses are related to an overall lower quality compared to what people have come to expect.  Their offer is compelling but If their lenses could damage your eyes, just being cheaper isn’t much of a bargain.

As a strategist and amrketer, promoting a  product that is of no value to a consumer or user, or worse, can hurt the person in one way or another is being PART of the problem

As marketers, let’s agree to first do no harm. Then go sell something.

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How monthly subscriptions have infiltrated your life

The publishing site Quartz.com laid off more staff this past week. It’s not that Quartz hasn’t found a revenue model; it has already decided its best revenue future is via monthly subscriptions. Quartz like many others knows that bleeding you bit by bit over time is much less painless and less noticeable. The risk is having people experience financial pain by a thousand cuts.

In the past publishers preferred to get their subscription revenue on an annual basis but that also was a way for them to deliver controlled circulation for advertisers.   As print advertising continued to live but wane, actual subscription revenue became increasingly important.   The ‘get a few free’ before demanding pay-to-view is now the default for many publishers.

I’m quite fine with publishers and content distributors charging real money to access their platforms and associated content. But there’s only so many platforms that people can possibly follow and derive value from. We’ve come a long way from twenty-somethings having expenses outside of food and rent be not much more than a phone bill and a power bill. The monthly subscription fees that add up for you today are probably much more than you are aware of or would care to admit.

Clearly there’s more high quality content out in the marketplace than ever has been the case prior. It’s just…well who has the TIME to view it all? Read it all? Listen to it all? When you think – ‘hey’ it’s only $5/month’ you are likely not thinking that you will try it for a month and if you don’t get your $5 you will cancel. A year later you have paid $60 for this subscription that you hopefully have used to some degree. $3/month here, $6/month there, it all adds up more quickly than you might realize. Add your precious wireless bill to that, Hulu, or cable, or Dish, or whatever, and for an individual, monthly subscriptions are on the way to being $200 or more.

Do I have an answer? No and I don’t know that there is an ‘answer’. Maybe controlling the urge to sign up would be a place to start. Subscription deals are not always so easy to cancel if you know what I mean. But if the content is really good even only some of the time there’s that feeling – FOMO if you abandon ship. I’ve got some work to do on that one. Since it’s the Fourth of July Holiday this week I will celebrate by NOT reading everything.



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Vitamix blenders show how it’s done to build a successful brand

So how does a company like Vitamix proudly charge WAY more for its product than almost all the other market competitors?   Without a substantial advertising budget? In the past Vitamix has run TV spots – but I’ve not seen one air in real time.   There are other brands like Blendtec, Hamilton Beach, Lancer, Waring, Bullet, Ninja, Froothie, and Vortex, but Vitamix remains the market leader.   Almost all of the competition sells at a lower price and in some cases a MUCH lower price.

I remember when we bought our Vitamix blender after seeing it demonstrated at Costco. The in-store demo was cool and it was clearly expensive at between $400 and $500. We also bought it more than eight years ago. It’s a little battle worn but works just as well as it did the first time we used it. For something that gets used in our house every day, multiple times per day sometimes, the expensive one time cost has ended up being not so expensive. The noise that it makes is loud and obnoxious when it’s crushing ice and whatever else we put in there. But it works. And it’s generally very easy to clean.

I found this review on CNET and I had no idea that Vitamix had been around for more than 80 years and was a very early TV advertiser – an infomercial at that! They were originally a direct response company and that kind of warms my heart!

William Grover Barnard, the founder of Vita-Mix, released his company’s first blender in 1937, but it wasn’t until television came around that Vita-Mix was able to introduce blenders into the American vernacular. Buying 30 minutes of airtime on WEWS-TV in Cleveland, in 1949, Vita-Mix ran what the company says was the first-ever infomercial — before long, blenders were flying off of the shelves, and Vita-Mix was rerunning the ad in markets across the country.

Today, the Vitamix craze continues, with a small army of brand loyalists who swear by the things, insisting that they’re worth every penny. That’s quite a claim, given that a model like the Vitamix 7500 will cost you exactly 52,900 pennies ($529). We’ve already looked at some impressive blenders from competitors like Ninja, Breville, and KitchenAid, all of which will cost you around $300 less than the Vitamix. And don’t forget about the ultrapowerful Blendtec Designer Series WildSide Blender, of “Will it Blend?” fame — it’s competing with Vitamix too, and at a price of $454.95, even it costs less. Is a Vitamix blender really a justifiable purchase?

The article goes on to note:

For some, I think it will be, but for most, it’s probably an unnecessary splurge.

For me the # 1 reason Vitamix leads the pack is that VITAMIX CLAIMS TO BE THE BRAND OF PROFESSIONALS – Vitamix has claimed the ground that it is and always has been the blender of professionals. It’s very, very powerful. Take a look if you visit a cocktail bar and more often than not Vitamix is the blender of choice. The fact that Vitamix can take the almost constant use in a bar or restaurant, is a big confidence builder for non-professional buyers like me.

For those with the means, it’s rather unsurprising that people will pay 3x or more for a Vitamix than other products on the market. If you can afford the best why settle for less? Yet the durability of the product has proven to me that it is more valuable over time. I am sure that a Hamilton Beach blender of the past or an Osterizer of the past could not handle the punishment we put the Vitamix through. Today those companies have ‘pro’ series blenders that are much more powerful than the versions of 30 years ago. I could not find one Osterizer priced above $100. There are none as powerful as the Vitamix in terms of horsepower. But I am guessing they work just fine for most home uses. As for their durability I can’t say as we’ve never used a blender as much as the Vitamix nor have we consistently challenged our blender with ice, frozen fruit, whole vegetables etc. so I have no frame of reference on how these less expensive blenders hold up.

Blendtec which is referenced above, did a brilliant advertising campaign starting back in 2006 called ‘Will it Blend’ and they would blend unusual items to show off the power of the Blendtec. It was fun and did a great job demonstrating the product. Blendtec is the closest competitor to Vitamix reviewed by Consumer Reports –  and other comparative sites like Blender Versus … They cost about the same. Vitamix has more market share and has consistently good ratings.

How long should a blender last? If my personal is any barometer – a long time as I recall having blenders last more than a decade. And in pre-smoothie days, we never put the older blenders through what we now routinely do with the Vitamix.

Product demonstration as advertising and excellent ratings and reviews have enabled Vitamix to stay on top even without what might be seen as traditional advertising. Coming from the high ground Vitamix occupies, Imagine what they could do if they did?

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Hong Kong’s future is pre-ordained

HK protests June 2019Hong Kong is part of China. That may seem obvious and yet recent news has confirmed for me that the Hong Kong of the not-too-distant future will be nothing like what people remember.

Having traveled to Hong Kong more than a handful of times, I regretfully have not been there in nearly 5 years as my professional travels have not included Hong Kong and China for some time.  Now this week, as nearly everyone has seen, Hong Kong is experiencing new protests from citizens three years after the ‘Umbrella Movement’ or ‘Occupy’ movement ended nearly five years ago – with no changes made to the way electable candidates were chosen.

I will keep saying that Hong Kong is one of the most interesting cities I’ve ever visited. It’s a fascinating mix of cultures, history and human behavior and there’s no place like it elsewhere on the planet. The current protest movement centers on the possible extradition of Hong Kongers and anyone visiting HK, to China. While the current Hong Kong Governor Carrie Lam has seemingly backed off on the impending vote, the die had long ago been cast, as the Chinese government remains fixated on ‘managing’ Hong Kong since the handover from the British in 1997. Years ago my friend Tom who lived in Hong Kong for 5 years remarked that China would rather have Shanghai as the financial center than have it be Hong Kong. It made sense to me at the time and still does today. That makes me sad. People that I know have told me that Hong Kong is definitely ‘not the same’.

The function of Hong Kong as an international financial center has been eroding ever since China re-took control more than 20 years ago. The Chinese government is smart. Smart enough to know it could not just arbitrarily shut down Hong Kong as a banking and finance center. However that does not mean that China can work to deemphasize Hong Kong’s importance. Changing laws to make Hong Kong more ‘Chinese’ have been part of the effort.

Westerners like myself can be more than a bit melancholy when thinking of the way Hong Kong was in 2007 much less 1997 and before. The mix of Europeans, local Chinese and all kinds of Asian people is what makes Hong Kong such an interesting melting pot. The melding of food cultures is particularly amazing in Hong Kong. The area itself from Victoria Peak to Kowloon Harbor is both beautiful and sometimes mysterious. Trips to Lantau Island and Macao are very pleasant memories for me.

What happens next will be up to the Chinese Government. However it’s inexorable that China will continue to exercise more controls on Hong Kong as there’s little or no chance of any form of a truly ‘democratic’ Hong Kong happening under the current Chairman if ever. I am hoping that ten years from now, when visiting Hong Kong, it will have echoes of the diversity of culture and interaction that has been its hallmark for such a long time. Hoping for, but not counting on it.


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Direct response has to go beyond ‘just get the order’

In the classic sense, direct response has always been about getting the first order, meeting or beating breakeven, then keeping that new customer in the funnel long enough to actually make a profit. Keeping customers in for a couple of cycles and THEN losing them was acceptable.  Winners and losers are the only scorecards. CLTV – Customer Lifetime Value is the scorecard of consumer direct response. At least it used to be.

It’s not that CLTV has become unimportant, but the importance of customer satisfaction has become the new driving force as inertia is no longer a strong enough force to keep customers from canceling and saying good-bye. There are a number of reasons for this which include increased consumer sophistication and ease of returns on platforms like Amazon.com. Returning something used to be a much bigger hassle than it is today. That puts power back in the hands of consumers (a good thing) and forces marketers to deliver a better product, offer better service, and create a sense of trust between the customer and the company.

As a side note this does not mean I personally like getting emails from EVERY Amazon company from which I buy something asking me about my ‘experience’ and also asking how many stars would I give the company. I received something I bought in the mail when promised, as promised. There was not one exceptional thing about the ‘experience’. And that’s fine! Marketers on Amazon could do a much better job of following up than asking for a rating every single time.

Yet it’s not a bad thing that companies from which I buy things on Amazon are interested (seemingly) in my satisfaction. It makes them try harder. Although were I to be unsatisfied, I surely would not be waiting for a rating email to get me to contact the company to try to rectify the problem.

I am seeing this from friends, customers, and associates of mine who are longtime direct response professionals. For them the days of ‘go get the order and we’ll hang onto them as long as possible’, whether that be by mail, TV, radio, digital or otherwise, are waning. The idea of creating a brand – and one of high value, is finally intersecting with the transactional nature of direct response advertising. This can be seen in the approach of the new guard of direct response advertisers like Casper, Harry’s, Dollar Shave, Warby-Parker and others. The products from these companies are for the most part unexceptional. The creation of a cool and interesting brand along with compelling offers (a big direct response element) makes for a deeper and longer lasting customer relationship. These companies will have to continue to deliver value for their customers even when the customer is not an active buyer. You might not be in the market for another mattress but there are other bedding products that Casper would like to sell you until you’re ready to buy another mattress.

Even if the model is to create and sell a variety of products direct-to-consumer, creating a strong brand to support product sales is more important today than ever before. It’s where I’ve always stood and where we stand as a strategy and execution shop. We’re in the right place at the right time and the trend in my view is positive.

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