Back Seat Marketers

Quite interesting to be a part of what my company is going through during this downturn.

In fact, many companies and industries are digging into themselves to find what makes them unique and whether that means anything in this new market. Consumers have changed what they are buying and companies are having to shift gears to line up with those new needs and expectations. For the nimble and lower engineering development companies, shifting product and service programs can be done on the fly. For higher tech companies, shifting gears will take months if not years.

What has happened is a downshift to value based products and consumption, v. premium products and upselling. Having a role in value retail is showing me that the market is hot in sectors. Family Dollar and WalMart can thrive, while Abercrombie hopes teens can get jobs this summer so they can continue to buy $80+ jeans.

I’m amazed right now at how many companies are reeling from poor performance and are not sure where to find growth. Data driven, CRM companies know the score. They are driving business with their existing clients and know how to grow new ones profitably.

Get the word out with your customers that you’re on your toes (and still in business). Use SEO to get found for free. Find the products that you can add on to previous sales. At a time when everybody is struggling to justify buying anything, those that are trusted are going to survive.

Let’s be honest, the stock market turmoil makes great fodder these days. Feeling like we’re getting out of the woods one day leads to punishment the next. I’ve learned to just tune it out and use a few tools to guide me on where things are headed for the economy.

First, The Conference Board posts a month survey of consumer sentiment:

The trend line where the US consumer stands is more important than the single points each month. While not perfect, retail sales and consumer shopping tie into this pretty well.

I’ve also learned over time who to trust when it comes to where the stock market and the consumer divide. Even though the consumer feels better when the stock market goes up, it isn’t the only factor in driving up confidence, thus consumer behavior. Top of the list is Mauldin primarily because he doesn’t post every day, provides analysis instead of reposting of news and is not truly main stream.

I’m believing more and more that the 24×7 news cycle is creating momentum swings faster. We’re getting to the same end point, but are facing a lot more churn in the process. Turn all the noise off, watch the long term trends and stay sane.

The Pew Research Center has found that the one-time and regular use of social networks by older parts of the US population are starting to take hold. This chart is the true sign of technology taking hold:

While many older parts of the US are not as well penetrated as younger ones, what we’re starting to see is the likes of Facebook gain the benefit of network effects and is likely the gateway to deeper use of such tools. The adoption of these tools will create a chance for business models to shift to the much written about referral based, pull demand from consumers instead of push marketing to the masses. In short, conversations, positive experiences and then sales instead of a shotgun and a falling bird.

This year, financial targets are already blown. Any idea of guessing, er, budgeting for 2009 is extremely difficult. Intel does the right thing and forgoes a 2009 projection and with it, the CEO reminds internal and external constituencies that there is work to be done during the downturn:

“Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward,” Paul S. Otellini, chief executive at Intel, said in a statement.

Most companies focus on both strategic and financial goals. This year is different and all but the most basic financial goals (=positive cash flow) are out the window. For managers, we’ve reached a time to focus on the strategic, non-financial targets like picking the right fields of play, ROMI, innovation relevance, organizational alignment and market share.

Windows 7 is launching in Beta and not soon enough. Generally, Vista was a bad launch in that it was years late, obsoleted in-market PC’s, and wasn’t well adopted. Honestly, Vista gets positive impressions from users that have done the switch, but the company struggled with getting demand for its system to make the switch. The passion to switch to Microsoft products back in the early 90’s was based on ubiquitous backward compatibility has been lost to incrementalism and a heavy user belief that everybody buys a new PC every 2 years.

In areas of tech equipment, I’ve tried to buy high end and less frequently and with Apple, that has paid off because OS X is improved frequently in small doses. With Microsoft, big steps are taken in 2-4 year steps with the belief that the 2-4 year old PC isn’t worth keeping. That ignores a user reality, even in companies, that the older PC gets downgraded to a kid or a new employee (sad, but true). Microsoft would do well to take heed to this trend as it isn’t about losing out on new upgrade revenues, but more about the expanding use of PC’s.

Instead of driving new PC pricing into the ground to further substantiate throwing away the slightly older, but still usable machine, software and hardware providers should embrace this new market with replacement parts, service programs and software support (for a value fee).

With everyone hoping to get better value, maybe companies in the PC and software markets will embrace a reality for 2009 and 2010 that the new PC and software market are going to be traded off with extending the life of the equipment we’ve already got and wished we didn’t have to upgrade to use. This is blog post is written from a focus group of one. I bought a Dell Precision 670 in 2005 and now have a graphics card that isn’t compatible with Vista, and won’t ever be (thanks, Adaptec). Upgrading now is another $500 or I just never do it. Bummer, its a really good machine that has been forced to the dump bin years earlier than needed.

Updated thought: Wouldn’t it be cool if Microsoft, Apple, or some open sourcer figured out an lightweight way to make a media box that used an old PC?

Is it too late for the Detroit 3 to tune up its marketing strategy? In good times and bad, having Unique Selling Propositions (USP’s) are important part of maintaining and growing share. USP’s create a reason to talk to consumers via advertising. In bad times, brand campaigns for the sake of brand recognition die, but ad campaigns that talk about products that are different need to keep on talking.

Unit volume declines for US auto sales are off by so much that I’m not sure you can advertise a way out of it. The New York Times reports that unit volumes may be headed for a new low normal level which means people will be buying less cars, less often. What a company under stress does shows its character, and Ford is hinting that its stripes are in listening to its consumers and adding features that enhance the user experience. (See: the F-150)

While a frustrating time, and a reason for GM and Chrysler to pull back. Ford is running a solid F-150 advertising campaign that makes me think that it is the one of the D3 that will do better through the recovery than the others.

By comparison GM is further piercing the corporate veil of its brands, thus reducing each brand’s uniqueness.

GM will have to ask itself if GM will be its master brand for national advertising while Saturn, Buick, etc. will end up being sub-brands. Are they unique anymore? Once brands start getting presented on the same web page and TV screen, they start to be considered replaceable which doesn’t create uniqueness.

Back to Ford: On track and nice work.

[PhotoKeith’s shoot of Josh Ritter at Southgate House on Flickr]

I was talking to PhotoKeith this past week who is a [very good] professional photographer about different ways to grow his business and we both realized just how much value there is in combining a traditional micro-marketing database driven marketing approach combined with Facebook and MySpace.

Professional service businesses face opportunities and threats from the explosion of online networks and businesses.

* For businesses that haven’t shifted to an online model (e.g. most personal services that require being in person), then social networks allow for a changing of the guard. Specifically, with an increased use of a social network or referral site, the opportunity to be the leader is a new one. Existing leaders may or may not be able to adapt. For professional services, the person really is the brand.

* The online arena is empowering more information, more tools and more ways to share. While this means that the market for certain services like the occasional photo shoot goes down because people can shoot and edit a picture with a lot of tools, really this just means that professionals need to identify more clearly where the value exists for services. Most people aren’t going to watch a video to learn to cut someone’s hair, so professionals are certain to continue to have a place in the market, but certain kinds of jobs in each profession are going away.

Online social networks are getting much more user friendly and as the ease of use of the platforming moves from early adopter to the majority, we’re going to see far more networkers leverage a new kinds of business model to grow business. Specifically, a database driven marketing model where the customer’s data is retained and the service provider uses technology to stay on top of needs and can recommend services as needed and get referrals for being very good.

While we’ve covered the purpose driven brands, the next two years will also mark the beginning of brands being driven by the people at the companies they work for, or their own businesses. Gary V. is the story worth learning on how a person can drive the sales and marketing of a business by creating content everyday that builds into a contextual marketing platform.

Companies are going to need brand meaning as told by a person that can be trusted. Steve Jobs is an easy example, but, in reality, all but one company don’t have Steve Jobs and need to understand how to create a role for a trusted communicator for the business. Having one personality will be hard enough, but scaling that role into more than one person will get even more complex. In fact, Google has done exactly that by allowing multiple people to be the voice boxes for the company exemplifies how the activity generators can directly communicate with their target audiences. To be sure, Google has a more formalized process for how employees are to communicate on their own.

Organizations have built traditional infrastructure around communicating outside the company in a polished way for a reason: the message is created by professional creative folks, approved by management, tested with consumers and launched in a controlled way.

Companies turning to employee talent for communications have benefits and risks. The benefits are:

• Speed of interaction between the line managers and consumers and with it discovery of more problems/solutions,
• Increased lead user identification, and
• A higher rate of communications.

The risks can create real reasons to question implementation:

• Loss of senior management control over message content and timing,
• Increase of employee talent awareness within a company by outsiders, and
• More visibility to vision, commitments and failures after the fact.

These risks are real and leading brand driven companies have succeeded by building a product driven brand based on less personalized, indirect communications (e.g. TV and radio). As blogging and social networking take hold, how many layers of communications infrastructure (=PR, agencies) will be needed go-forward? Tools to empower communications will definitely continue to roll out to meet this area much like Salesforce.com did for the sales process in many companies over the past five years.

Let’s face it, if you’re reading this, you’re likely as addicted to being connected as I am. One thing I’ve realized in 2008 is that one place that needs to be off limits for my online presence is in my car. I’m going to make a conscious effort in 2009 and beyond to avoid driving and using my Blackberry, my iPod, my wife’s iPhone or any other ‘heads down’ display. Honestly, auto makers have a lot of innovation room to grow in this area (and Sync is only the beginning) as I’m quite interested in using my dead time in my car, but really need to be focused on the task and not on a page load or typing a quick tweet.

Join me in my resolution, or add a comment on any other plans of your own.