Thursday, June 26, 2008
About a month ago we called your attention to the fact that airlines had decided to charge passengers for checking their luggage. That tactic has done some real damage to airline brands. What’s worse is that the surcharge hasn’t created the substantive income flow they were hoping for.
But, following the tenet that it’s always darkest before the dawn, the airlines have high hopes. And as we provide predictive loyalty metrics, here’s a conversation you’re likely to hear in the near future:
Attendant: Welcome aboard à la Carte Air, sir. May I see your ticket? You're in seat 12B. That will be $5, please!
Passenger: What for?
Attendant: For telling you where to sit.
Passenger: But I already knew where to sit.
Attendant: Nevertheless, we are now charging a seat locator fee of $5. It's the airline's new policy.
Passenger: That's the craziest thing I ever heard. I won't pay it.
Attendant: Sir, do you want a seat on this flight, or not?
Passenger: Yes, yes. All right, I'll pay. But the airline is going to hear about this.
Attendant: Thank you. My goodness, your carry-on bag looks heavy. Would you like me to stow it in the overhead compartment for you?
Passenger: That would be swell, thanks.
Attendant: No problem. Up we go, and done! That will be $10, please. The airline now charges a $10 carry-on assistance fee.
Passenger: This is extortion. I won't stand for it.
Attendant: Actually, you're right, you can't stand. You need to sit, and fasten your seat belt. Seat belt rental is $5. We're about to push back from the gate. But, first I need the $15 you owe us.
Passenger: No way!
Attendant: Sir, if you don't comply, I will be forced to call the Air Marshal, and you really don't want me to do that.
Passenger: Why not? Is he going to shoot me?
Attendant: No, but there's a $50 Air Marshal hailing fee.
Passenger: Oh, all right, here, take the $15. I can't believe this.
Attendant: Thank you for your cooperation, sir. Is there anything else I can do for you?
Passenger: Yes. It's stuffy in here, and my overhead fan doesn't seem to work. Can you fix it?
Attendant: Your overhead fan is not broken, sir. Just insert two quarters into the coin slot in the armrest for the first five minutes.
Passenger: The airline is charging me for cabin air?
Attendant: Of course not, sir! Stagnant cabin air is provided free of charge. It's the circulating air that costs 50 cents. We were going to institute a $20 charge for the use of air masks if there was a sudden change in cabin pressure, but that pesky FAA wouldn’t let us. Something having to do with safety regulations, so you see, you’re getting away easy!
Passenger: OK, but I don't have any quarters. Can you make change for a dollar?
Attendant: Certainly, sir! Here you go!
Passenger: But you've given me only three quarters for my dollar.
Attendant: Yes, there's a change-making fee of 25 cents.
Passenger: For crying out loud! All I have left is a lousy quarter? What the heck can I do with this?
Attendant: Hang onto it. If you purchase a $6 can of soda, you’ll need it later for the lavatory.
There was a time when this would have been considered comical. Not any more! From a loyalty perspective, it’s probably worth reminding the airlines that loyalty is engendered by best meeting – even exceeding – customer expectations. It’s also worth remembering that, given the current brand flight plans, it’s also always darkest just before it goes completely black.
Tuesday, June 24, 2008
We are back from Munich and blogging today from the Advertising Research Foundation Audience Measurement 3.0 Conference in New York City. Brand Keys and ABC Television Network, will be presenting “Blending Broadcast and Digital: How to Measure It and What Happens to Sales?”
The study presents a new way to measure multi-platform campaigns and provides sales figures for Discount Retail (for the Target brand) and CPG (Listerine mouthwash) verticals based on ad exposure via a digital format, traditional broadcast, and a blend of the two. That “blend” is a version of cross-media consumption, integrated communications, and/or new marketing.
Call it what you will, but the findings prove that a medium – or combinations of media – that better engage consumers ultimately better reinforce brands’ values and consumer attendant behavior.
Looking at our predictive engagement metrics and the results of the market study, we found the following correlations for Listerine:
Awareness - 0.88
Brand Imagery - 0.79
Purchase Intent - 0.90
# Purchased - 0.97
Brand Imagery - 0.79
Purchase Intent - 0.90
# Purchased - 0.97
For the Discount Retail category we saw our assessments correlating with a 33% increase in average 30-day spend, so we are extraordinarily pleased with the results, which is only further proof that there are new ways to predict the effects of your media planning in today’s new marketplace.
Peter Drucker wisely noted, “If you want to do something new, you have to stop doing something old.” This has never been more true for today’s complex media ecology, where “new” is the watchword for both media and measurement.
Thursday, June 19, 2008
Grüße aus München. Customized brand publishing is not the only touch point growing on this side of the Atlantic.
Online ad spending in Europe grew to $17.4 billion last year. And apparently this figure represents an average year-on-year growth rate of 40%. That’s across 16 countries here versus a fairly steady slowing growth rate in the U.S. (26%). Germany, where we are presenting this week, accounted for about 22% of the overall European spend (followed by England and France. Those 3 countries account for about two-thirds of the European spend).
But spending your ad dollars and getting some return on them are two different things, no matter what country you’re talking about. It turns out that advertisers in the U.S. spent more per Web user than our counterparts overseas. The European average weighs in at $125 per person, compared with $143 per person in the U.S.
ROI is one of the most important issues facing marketers world wide, and we can, happily, offer a thought that may help: Add some engagement and loyalty metrics to your marketing toolboxes and you can’t lose. In the language of our hosts, “güte ist die einzige Investition, die nie versagt, loyalität ist geld in der bank” (goodness is the only investment that never fails, but loyalty is money in the bank!).
Alle freundlichen grüßen aus Deutschland.
Tuesday, June 17, 2008
Guten Tag from Munich, Germany. Today’s blog is entitled “Engaging the Consumer” and Brand Keys is presenting at the Europas Grösster Corporate Publishing Kongress. This year’s theme is “Corporate Publishing Goes Global: Brand Journalism for a Changing World.”
We’re always pleased when Brand Keys insights reveal themselves in the marketplace, but this time one particular trend is being discussed on a global scale. “Customization” – in the form of customized brand publications (what they call “brand journalism”) – has been recognized as one of the critical media touch points for the foreseeable future.
We are proud to say that we identified this trend a number of years ago. It was borne from consumers’ heightened feelings of control and the commoditization of almost everything. The convergence of these trends has morphed into not only increased desires for more customized products and services, but tailored information about the brands that provide them.
In our presentation today we’re citing the measures from our Customer Loyalty Engagement Index, and looking at the 1997 to 2008 shifts in values in this area. We discovered that the percent-of-contribution that ‘customization’ makes to product and service engagement and loyalty- and consequently profitability- is currently 18%. That’s nearly 5 times the contribution than when the value was first measured 11 years ago.
Well, änderungen der werte zu erwarten, or “changes in values should be expected,” as our German hosts might say. But predictive engagement and loyalty metrics allow you to have a real head start when it comes to dealing with shifts in consumer values. Months and sometimes years before they show up in traditional research efforts. And we guarantee that if you use predictive loyalty metrics you’ll maximieren sie Ihren gewinn (maximize your profits).
And that’s a good thing in any language.
Thursday, June 12, 2008
While it’s typical that not quite as much money is spent on fathers as it is on mothers (do we really have to explain that one!?), the sluggish economy is making itself felt right at home this year. The average, anticipated spend for Father’s Day 2008 is down versus last year – with fewer consumers (70% versus 77% in 2007) actually celebrating the holiday.
Those that are celebrating will be spending an average of $115.00 to recognize Dad. That’s down 8% over last year. Consumers reported planning to spend their hard earned dollars on:
Gift card - 30%
Clothing - 25%
Tools - 13%
Electronics - 10%
Wine/Alcohol - 9%
DVDs - 8%
Phones - 5%
Far fewer electronics and tools than in previous years. But whatever they buy, consumers still intend to “connect” with Dad via phone (50%), Personal Visits (30%) and On-line (20%).
The bad news is that personal visits are down 5% since last year, which may reflect not so much a lack of caring as much as the cost of gasoline to make a personal visit.
Of course, the good news is that there’s one thing that never changes. If you ask your Dad what he wants for Father’s Day, the most likely answer you’ll get is, “nothing.”
Tuesday, June 10, 2008
The idea that packaging can be a vital part of marketing success is almost axiomatic in its simplicity. The image of a brand that first springs to consumers’ minds is usually the packaging.
“Eye appeal” is, of course, critical. But packages also protect and provide convenience. And with increasing competition for shelf space, success is often more dependent upon packaging than product, especially when commoditization rears its ugly head.
It’s estimated that the average grocery product gets 20 billion potential exposures a year. That’s “billion” with a ‘B’ and would cost upwards of $100 million in conventional media (if there is such a thing anymore). But from a loyalty perspective, and depending upon the category, a package can contribute upwards of 15% toward product engagement, purchase, and loyalty.
So we understand why designers work so hard at getting packages “just right.” Why they are so proud of the advances they make in their craft. How they become “one” with their creations. But here’s an act of loyalty our metrics had not encountered before.
Dr. Fredric J. Baur, a retired organic chemist and food storage technician who specialized in R&D for P&G, was so proud of having designed the container for Pringles potato crisps that he asked his family to bury him in one. And they did just that. Last week.
All of which only adds a somewhat new meaning to the eulogy comment by A.A. Milne: “What I say is that, if a fellow really likes potatoes, he must be a pretty decent sort of fellow.”
Resquiat in Tuberosum.
Thursday, June 05, 2008
Last month the three biggest U.S. carriers raised ticketprices again. This was done to recoup rapidly rising fuelcosts and the increases by American, Delta, and United now total around $130 for roundtrip flights. That means passengers on some cheaper flights will end up
paying more in fees and taxes than for the airfare itself.
And, it hasn’t stopped there. Airlines are charging for amenities such as snacks, aisle seats, and extra legroom. Well, OK, it’s a tough economy and consumers certainly can understand having to pay more for fuel. But in the wake of soaring costs, the airlines have had the brilliant idea of imposing fees for checked bags. That used to be free, but not anymore. It will cost you between $10 and $35 to check more than one bag on most airlines.
Here are some “baggage surcharges” you can look forward to:
But here’s where your frequent flyer points can come in handy. Some airlines will exempt elite frequent fliers from the baggage surcharges. You just need to remember to ask for it.
And, of course, you can always carry on a bag and one “personal item” like a purse, or laptop. You just need to make sure that your luggage is around 45 linear inches (10” X 15” X 20”) and less than 40 pounds in weight. And airlines haven’t limited the amount of items you can carry on your person. So while new charges are bad news for travelers, they’re good news for retailers selling new, sleek carry-ons and 30-pocket travel jackets.
These days we suppose the safest route would be to follow the advice of author and aviator, Antoine de Saint-Exupery, who observed “he who would travel happily must travel light.”
Tuesday, June 03, 2008
Last month Dunkin’ Donuts ran an ad on its Web site featuring celebrity chef Rachael Ray holding a cup of iced coffee while wearing a black-and-white fringed scarf.
A few weeks later a conservative blog pointed out that Ms. Ray’s scarf was the type typically worn by Muslim extremists and that the ads “casually promote the symbol of Palestinian terrorism and the intifada, the keffiyeh, via Rachael Ray.”
Now if you’re like every other right-thinking American consumer all of this probably confirmed what you’ve been thinking for a long time: Rachel Ray is a traitor and a terrorist. One of those home-grown type terrorists who’s been insidiously boring into the fundamentals of liberty and freedom. Think about it. All that high cholesterol food. The unsaturated fats. The caffeine. Weaken American health and you undermine the foundations of democracy. The signs were right in front of us all the time and we ignored it. It took a stylist at an advertising shoot to reveal the truth!
To paraphrase a statement President Bush made last year, this shows how working with our partners and allies, and costume designers and stylists worldwide, can break up terrorist cells and save American lives. It’s also worthy of note that with a 2008 Homeland Security budget of $53 billion dollars, you’d think that somebody could have ponied up 99 bucks for an American Flag scarf for Rachel Ray!
As you sit at home watching TV or just trolling for terrorists on-line, remember the immortal words of another President, Thomas Jefferson. He said, “the price of freedom is eternal vigilance.” Or in this case, a better fashion sense. On perhaps a more practical note, it’s also worth remembering that much like the rantings of paranoid bloggers, fashion is generally something that goes in one year and out the other!