Monday, March 30, 2015

Happy Holidays. To You and Your Brands

The upcoming holidays got us thinking about, well, holidays. And special events. Holidays provide us all with the chance to celebrate something special and special events provide brands with an opportunity to emotionally engage consumers.

While big events can be big deals, big event advertising is expensive, and to be successful brands have to leverage real category emotional values, because if they don’t, an ad may entertain viewers, but it won’t engage customers.

Want to see how big holidays like Easter and Thanksgiving, and big events like Super Bowl, the Academy Awards, the Olympics, and FIFA World Cup worked for brands like Budweiser, Pepsi, McDonald’s, M&M’s, Target and Beats by Dre?

We invite you to read “Engage emotionally with big event ads,” a Brand Keys study that measured emotional engagement and entertainment values of major brand advertising to see what correlated best with marketplace ROI, appearing in this month’s Admap.

The bottom line for brands looking to successfully invest in holidays and special events: Ads that entertain but don’t emotionally engage will leave brands with nothing to celebrate.


You, on the other hand, celebrate holidays and every day to your heart’s content.



Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.



Wednesday, March 25, 2015

Binge Viewing and Skinny Bundles. What’s A Provider To Do?



Commercial ratings for broadcast and cable networks were down about -12% each YOY. That’s the 5th month in a row. On the other side of the equation, consumers are complaining about having to pay for 500+ TV channels.

On the ratings side of things, industry pundits suggested Nielsen is having a hard time figuring out how to count viewing that doesn’t actually take place on a TV set. Maybe Nielsen could issue everyone little spiral pads and pencils and viewers could make notes what they’re watching on different mobile devices and mail them in. Or maybe something with a stylus. Other analysts have offered up the thought that the changes in commercial ratings and a desire for a smaller number of select shows are probably due to shifts in viewership habits à la mobile devices.

Well, some answers may be on the way that will change all that no matter what platforms consumer use. It’s something called “skinny bundles,” or Web services from providers such as Apple or Dish that offer just a small selection of very popular channels at a much lower prices. These skinny bundles  – so different from the traditional 500+ channel, pay-TV that ends up pairing weaker channels with stronger ones to boost revenue – feeds right into elements that emotionally engage consumer with streaming video.

The two biggest emotional engagement drivers that control consumer-viewing behavior deal with a desire for a range of original entertainment choices and providing viewers with an opportunity to “binge” on new shows, a relatively new value to the category and something that has become critical to audience preference and choice, particularly as it has to do with streaming video. Fees do come into play because consumers are tired of paying for stuff they never watch, and smaller packages  – especially if producers are building them to meet binge expectations – puts real pressure on content producers.

Streaming video is currently seen as better meeting overall consumer expectations so that their perception of the Price-Value equation ends up looking better than cable. And as consumer behavior correlates very, very highly with how well a brand meets consumer expectations, we weren’t surprised with the broadcast and cable declines.

For Video Streaming, here’s how actual viewers ranked their own services á la their very high expectations:

1.    Netflix
2.    Amazon
3.    iTunes
4.    Google Play / Hulu
5.    Crackle / YouTube
6.    Veoh / Vimeo / Vudu
7.    Iwatchonline
8.    Blockbuster / Cinema Now

This is where the issue of “brand” comes into play. Brand – however you define it – ultimately brings with it an “added-value” that similar offerings can’t make or can’t believably make. Netflix, for example, has increasingly become associated with new, highly creative original content like House of Cards, Unbreakable Kimmy Schmidt, and its newest offering, Bloodline. They’ve been upping the entertainment and consumer engagement ante by releasing nine new shows this year alone. To keep up other video streaming services will have to follow.

So what’s coming to a screen near you? Apple is going to debut an online service this year with about 25 channels and is in talks with broadcasters ABC, CBS and Fox to also provide Web-based TV. Viacom is experimenting with direct-to-consumers over the Internet. Dish's Sling TV currently offers 20 channels for $20 a month. Cable companies, already struggling as more viewers move to online streaming video are pushing Web-accessed skinny bundles, with local channels and HBO for as low as $40 a month for the first year to try and keep customers.

And the paradigm shifts keep coming!  The availability of skinny bundles may lead more people to abandon all those large TV packages that pose a threat to networks that aren't included in the new online TV services. Niche networks with already-slimmed down audiences are clearly at risk in a skinny-bundle world and may need to offer their programming over the Web.

Today the average home in the U.S. receives 189 TV channels. Currently advertised packages have a lot more, but again, most of which viewers never watch, let alone name. Guess how many they actually do watch. If you said, “17,” you’d be correct. But with binge viewing growing, that number may be too restrictive even for the most budget-conscious viewer. Maybe a “medium bundle” with a slightly slower binge metabolism will be the answer. 


Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, March 19, 2015

And Now For the Bad News: The U.S.’s Least–Engaging Brands


This past January, Brand Keys announced the top brands that 36,605 US consumers found to be most emotionally engaging. That meant consumers saw those brands as best meeting their very high expectations. It also meant that those brands were going to very profitable, and included Dunkin’, Hyundai, Apple, Netflix, AT&T, Amazon, Chipotle, and Discover. Unfortunately, as with all lists, there’s a top and a bottom, and this week Brand Keys released the list of the 10 least-engaging brands of 2015.

This is the kind of list that you’re going to find yourself looking at it, nodding your head, while a small voice whispers “Well, sure, I can see that,’ or ‘yeah, they really missed something there,” or “they couldda been a contender if they just could have gotten someone to buy something. Or anything!” That’s just the rational market effects making themselves felt. The brands just didn’t do well.

The brands ended up on the bottom of their respective categories because they were unable to meet the very high emotional expectations consumers bring with them to the marketplace and the brand engagement process and, well, to every category. You can’t hide those results. Sure, they show up in the marketplace and on profit-loss statements, but they also show up in how consumers see the brands and, more importantly, how they feel about the brands.

This year’s 10 least-engaging brands included the following (in reverse order, beginning with the brand with the lowest emotional engagement strength, versus their Category’s Ideal, calculated to be 100%. Brands that appeared on last year’s list are noted along with additional, associated emotional disengagement showing up this year.
  1. Blackberry (25%, down another 26% from 2014)
  2. Radio Shack (34%)
  3. Blockbuster On Demand (37%)
  4. Kobo (40%)
  5. Sears (42%, down another 22% from 2014)
  6. Tylenol (46%)
  7. McDonald’s (49%)
  8. Abercrombie & Fitch (50%)
  9. Coty Cosmetics (53%, down another 18% from 2014)
  10. Budweiser (58%)

Independent validations have proven that brands that better meet consumer expectations always win. They always see better consumer behavior toward the brand and should axiomatically result in greater sales and profits. But the reverse is equally true. Others lose badly. Nobody on the ‘Least Engaging List” is making money or growing share or making profits or creating any reasonable level so emotional engagement with their customers, unless they’re selling off assets – a short-term strategy at best!

There’s a saying that goes, “losers make promises they break. Winners make commitments they keep,” but when it comes to emotional engagement, it usually turns out that the losers don’t really understand what promises to make!



Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, March 11, 2015

Brand Keys Metrics Predicts World’s No. 1 Smartphone. Now What About The Watch?


For years we’ve written how emotional engagement and loyalty metrics were “leading indicators,” that is to say, they were measurable factors that change before the economy starts to follow a particular pattern or trend. To be more precise, emotional engagement and loyalty metrics are leading indicators of consumer behavior rather than economic indicators – indicating the pattern of how consumers will behave toward a brand – positively or negatively – 12 to 18 months down the road. Best example to date, and no surprise to us, Apple took the lead in the 4th Quarter as the #1 smartphone seller in the world.

Apple had the highest emotional engagement quotient in our 2014 Customer Loyalty Engagement Index (CLEI) for smartphones, and we expect nothing but increased growth this year too. Why? They were once again #1 in this year’s CLEI. Samsung was #2 and Lenovo was #3 and, while we do not position emotional engagement and loyalty metrics in the strict rubric of “market models,” they continue to act as leading indicators of consumer behavior. They can be used as input to traditional market models, but as they correlate so highly with behavior, it shouldn’t come as a surprise to anyone that from an actual market perspective, Apple ended up selling one out of every 5 smartphones in the world last quarter. That’s 75,000,000 phones, so a lot!

To be fair, Samsung has been at the top of our list in past years, but as markets follow consumer behavior, its market share is down 10% YOY. From an absolute sales perspective Samsung sold 2 million fewer smartphone in the same quarter, so also a lot. But the real value of real emotional engagement metrics is that they allow us to look at the expectations consumers hold for what drives consumer behavior, loyalty and sales in the marketplace, and those insights would suggest that Apple’s response to consumers’ increased expectations for larger screens and slimmer cases, was the biggest contributor to upsetting Samsung’s title and market share.

Axiomatically, as higher emotional engagement and loyalty always results in better consumer behavior toward a brand, i.e., more sales, purchases of other branded products, and other good things that increased, positive consumer behavior brings with it, the company ought to be very profitable. And Apple was. They reported a quarterly profit of $18 billion, the largest in their corporate history. Emotional engagement leading-indicators! You’ve got to love them!

Because as they say about engagement metrics, time always tells. And as the Apple brand is currently becoming so closely connected to time, watch for our analysis of Apple’s watch introduction too. Engagement of any kind isn’t static and it’s worth remembering that this time, last year was a different time too!


Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.


Wednesday, March 04, 2015

J.C. Penney Blame Game: Blaming Everybody Else Is Great Till There’s No One Left But You!


No, it’s not a new promotion, but it is the latest excuse for J.C. Penney’s holiday losses. OK, sure, the market hasn't’ been at its best, but shares of J.C Penney tumbled last week after the ever-struggling, emotional engagement-deficient retailer posted a loss for the holiday quarter, despite improving category sales trends.

We can’t quite figure out why people were surprised about the results, which was the way it was spun in the press. But we weren’t. Surprised, we mean. J.C. Penney had been at the bottom of our Customer Loyalty Engagement Index for a while now. A long while and rankings on our Index correlate very highly with how consumers are going to behave toward a brand, so being at the bottom of the list meant that it wasn’t likely that consumers were going to swarm to the store in the coming months. And they didn’t, a kind of retail version of the old Yogi Berra observation, “if the shoppers don’t want to come to the store, you can’t stop’em!” Well, actually, you can stop them. Just continue to market and brand just the way J.C. Penney has been doing for a while now!

You can also blame someone else! That’s always easier than actually coming up with an authentic and emotionally engaging strategy for the brand. Despite the improving sales trends seen by other retailers, CEO Mike Ullman noted in a conference call last week that the company is “still trying to recover from the self-inflicted wounds of the previous strategy.” The wounds Mr. Ullman was referencing were those of ex-Apple VP Ron Johnson, who, to be sure, made a muck of things when he was JCP CEO, and was a real nuisance of himself. We blamed him for the JCP debacle back then too. But to be fair, that was more than two years ago, and in a marketplace that moves at the speed of the consumer, Mr. Ullman et. al. haven’t exactly made many inroads. Maybe a tiny in-path, but not much more than that.

According to this year’s Customer Loyalty Engagement Index, J.C. Penney, –perennially ranked last in the Department Store category – has moved up to – wait for it.  .  .  next-to-last. Just ahead of Sears whose same-store sales were down nearly 10%, so a dubious achievement at best. But look, any increased level of emotional engagement isn’t something to be discounted, no pun intended, and our January 2015 category rankings look like this: 
  1. Marshall’s / TJ Maxx
  2. Macy’s
  3. Kohl’s
  4. Dillard’s
  5. J.C. Penney
  6. Sears
For the quarter, J.C. Penney said it lost $59 million, or 19 cents per share and shares slid almost 10% in aftermarket trading to $8.20. So the change of rank on the list is a precursor of some progress as regards consumer emotional engagement with the brand, a tiny glimmer of light at the end of the tunnel.

But as writer and social commentator Havelock Ellis noted, “What we call ‘progress’ may just be the exchange of one nuisance for another nuisance.”
And when your brand is wracked with nuisances like consumer disengagement, problematic product mix, confusing pricing strategies, and undistinguished and indistinguishable brand positionings and promotions, we’re thinking odds are 6 to 5 that light at the end of a tunnel really is an oncoming train.

Smart marketers never bet against emotional engagement metrics.




Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, February 26, 2015

Is Target Off-Target With Cuts To Minimums For Free Shipping?



Target, the discount retailer, well-known for its low-lower-lowest pricing strategies and low-lower-lowest same-store sales, has instituted a 50% cut to its minimum online purchases for customers to qualify for free shipping. Now all consumers have to do is spend $25 to qualify for Target’s free shipping, although handling fees may still apply.

And no, it’s not out of the goodness of their hearts. It’s a short-term shot at Amazon and Walmart, which currently have higher minimums. Why “short-term”? Well, it won’t take long for Walmart and Amazon to institute the same free-shipping pricing. In fact, by the time you read this both retailers will have likely changed their policies, which is a really good example of “retail poker.” You play for table stakes, or you don’t play at all. Someone “raises” and then the other players in the category have to raise or blink, and nobody every blinks! They just keep raising. It’s also an attempt to meet consumers’ increasingly higher expectations about, well, everything. So all in all, what we call an “easy fix.”

According to our new 2015 Customer Loyalty Engagement Index, in the online retail category “free shipping” accounts for a 15% contribution to brand engagement, up a third from last year, and something that has become a high- expectation item in the retail category. Zappos, who instituted the free delivery, free return policy set the bar pretty high for the rest of the online retailers. And anyway, “free” has always been a great engagement mechanism. Way before the Internet.

According to our 2015 Customer Loyalty Engagement Index, here’s how online and discount retailers rate when it comes to meeting expectations for added value à la shipping costs for their Ideal retailer (100%):
  1. Zappos (100%)
  2. Amazon (95%)
  3. Walmart (87%)
  4. Overstock (85%)
  5. Target (79%)
  6. Kmart (75%)
Based on current customer views about this particular category value, Target really does need to do something, but a 50% cut probably isn’t going to do it. Not for long anyhow. Necessity may be the mother of invention, but so is desperation!

Consumers aren’t stupid. They have very high expectations. If retailers like Target can offer free holiday shipping, consumers figure they can do that all the time. Why should they pay more? It’s their right, after all. Don’t they deserve it? And if a retailer doesn’t recognize that, there are lots of other retailers.

Anyway, consumers are on to all the tricks, especially membership programs. Join Amazon Prime and you get free shipping. Overstock.com has a membership program too. For Target, all you have to do is join their RED card program. You can get free shipping on bigger orders from Walmart, but you have to wait a week or so to get your stuff. Don’t think that going to go too far meeting customer expectations.

Target’s been having a tough time of it. The 2013 data breach didn’t exactly instill confidence in consumers, although it did inspire lawsuits. And last month Target closed all of their stores in Canada, which in fairness didn’t have anything to do with shipping costs. Lack of sales had to do with the fact that they got the product-mix all wrong, which was a really expensive lesson for them! So for the moment it’s only a cut in shipping minimums.

It was Sam Walton that said, “High expectations are the key to everything.” The tough part is you have to accurately identify what those expectations really look like and then meet them.

And today, that’s the hard part.


Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.