Monthly Archives: March 2009

Walgreens Stops Inertia

WalgreensWalgreens challenges people to reconsider their habits by giving them a reason to rethink their drug store.

Today Walgreens announced that through the end of 2009 their Take Care clinics will provide basic tests and routine treatments to people who are unemployed or uninsured.

While the success of this program won’t be noted for some time, the fact that Walgreens is providing something of value to thank their loyal customers and to attract new customers is the type of marketing that should pay dividends for them in the long run.

This program brings Walgreens’ customers back to Walgreens instead of shopping elsewhere for cheaper services or not shopping at all.

Additionally this program helps attract new customers by giving them a reason to choose Walgreens instead of just going to the same place they always go.

As marketers we know some of the greatest challenges rarely come from another competitor, they come from inertia and the difficulty in changing someone’s habits.

Walgreens has created a reason to change habits and it could provide Walgreens with some easy, incremental revenue.

So to determine if this program is worthwhile let’s look at some conservative numbers:

  • Take Care Clinics have served 1.2 million customers since November 2005 or an average of 400,000 a year. 30% (or 120,000) of their customers were new to Walgreens.
  • If Walgreens can capture a 10% increase in new customers from this program it would equal 12,000 new customers.
  • For this program to make money all those 12,000 new customers would have to do is purchase $60 worth of merchandise over the course of a year to cover the $59/per visit gross cost.

Walgreens has created good will among its new customers who, in turn, will likely become regular customers of Walgreens not to mention the PR value this program provides.

So why should you care?

In today’s tight economy people are being forced to rethink their lives. This disruption creates the opportunity to consider new options and if your company can provide them with a new option that satisfies their need, you can gain a new customer.

The question is what are you doing for your target audience so that you can change their habits?

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Market Share is Not Recession Proof

I was reading the Three Minute Manager in the March 30 issue of Fortune magazine. The first question asked to the CEOs of Staples, TD Ameritrade and Head of Global Customer Strategy for Bain & Co was “Is it really a good time to go after market share” and their answers were a resounding “yes”.

Most of your competitors are in the same place you are – focusing on revenue and expenses.

You may have gone through your first, second and maybe even third round of cost cutting.

The last thing on your mind is market share. You figure your competitors are most likely cutting their marketing budgets so things should remain status quo except for the one or two weaker competitors who go out of business.

Since when is status quo okay for business?

A recession – especially a deep recession – is the best time to increase market share since it is significantly cheaper to stand out compared to your competitors who may no longer be marketing.

Think about share of voice – similar to market share but determined by your share of media impressions.

For example, everyone in your industry spent a total of $10,000,000 in advertising last year. Your ad budget was $1,000,000 giving you a 10% share of voice.

This year your industry’s ad spend is only $5,000,000. If your budget remains at $1,000,000 you grow your share of voice to 20% thus taking a more dominant role in your industry without increasing your cost. That increased share of voice leads to greater awareness and ultimately more prospects. (Sorry, but it is still up to you to close the sale).

If you reduce your budget by 25% to $750,ooo you are able to achieve a 15% share of voice – thus spending less, yet achieving a greater impact than the $1,000,000 investment made the year prior.

By continuing to market your company, you can actually gain market share more cost-effectively and be in a stronger position when the economy rebounds.

But you have to continue to market because if you stop marketing – even to your customers – someone will take your share of the market.

It is your job to market frugally, but not so much so that it is ineffective.

Here are some things you should consider to hone your marketing effort:

  • Look at what tactics are having the greatest return on investment. (A previous post on tracking speaks to what you can do to know what marketing tools are working best.)
    • For example, if you are in a service industry like plumbing, HVAC, etc, the thought of cutting Yellow Page advertising is terrifying, so move slowly by cutting your ad from a spread to a single page and track the changes.
  • Continue to aggressively pursue inexpensive ways to market to your customers.
    • Email newsletters
    • Service reminders
    • Phone calls
  • Implement a customer referral program
  • Look for affiliation marketing opportunities.
    • For example, if you belong to your local chamber of commerce, provide all other chamber members a discount on your products/services.
  • Volunteer/Donate services – the free publicity will help you reach a broader audience

These are just five ways you can market smarter so that you can gain market share while it is cheaper to do so.

We hope you’ll use the comment section to tell us how you are gaining market share during the recession.

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Filed under Competition, Customer Marketing, Marketing ROI, recession marketing

Monetizing Twitter

Twitter is the “hot” thing in social marketing.

The concept is simple: Provide people with quick updates called tweets (140 character limit) in this one-to-many microblog. You try to attract as many people as you can to follow you on Twitter so more people can “hear” what you have to say.

Fame on Twitter is often measured with how often you are “retweeted” – when someone tweets your tweet – and/or how many people recommended you on Follow Friday.

But like most social media, the question always remains: how does a company monetize their efforts?

Twitter has created a cottage industry of search engines, alerts, popular topics and an advertising mechanism: TwitterHawk.

TwitterHawk allows you to send a marketing message to someone who tweets about a market you serve.

For example, if you are a credit union, you can send a marketing message to anyone who tweets about a negative experience about a bank.

The cost is an incredibly reasonable $5.00 for 100 messages. You can set your message to automatically respond or you can go through the send queue to make sure your message is truly targeted by viewing the potential message recipient’s twitter profile.

The latter is more time consuming but much more effective, especially if your company serves a limited geography.

As Facebook tries to figure out its advertising model and LinkedIn’s model focuses on keywords, TwitterHawk has found a way to reach people at the exact moment they comment about something.

So if someone tweets about their car breaking down, Ford can send them a message to capitalize on the situation.

I am not certain it is the most effective marketing tool, but to be able to hone in on that “pain” moment in a cost-effective manner may become a great way to market smarter.

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Is Your Point of Contact No Longer Empowered?

One of the recent trends facing B2B companies is the shift in power back up the corporate ladder.  In the past a mid-level manager may have had the authority to purchase your product or service.  That responsibility now exists farther up the food chain where you may or may not have relationships.

So how do you get the ear of the executive suite?  In the March issue of Harvard Business Review, authors Philip Lay, Todd Hewlin, and Geoffrey Moore cover this topic in their cover article called “Provoke Your Customers“.

The article talks about changing how you sell – from solutions-based to provocation-based.  You need to sell by understanding your client’s “critical issue” beyond what your product or service provides them.  What are the bottom line issues that their business faces and how are you the company to solve it?

Once you identify that critical issue, you need to find a path to the executive in charge. Unfortunately, your current point of contact may be a hindrance since most people don’t like admitting they no longer have the influence they once had.

This is where your sales training goes beyond the typical lead generation.  The authors go on to talk about the importance of using your referral network to get you a meeting.  My advice to you is opening your pitch with “this is going to benefit your bottom line” – as return on investment is critical now more than ever.

People mistake marketing as the final product people see. In fact, it is the thinking and knowledge behind the final product that shows you know how to market smarter.

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Brand Consistency on LinkedIn

LinkedIn is a popular social network for businesses and professionals.  Use the site’s search engine for your company and you may be surprised at the number of employees using LinkedIn.

While mainly used for networking and business development, LinkedIn can be a great brand building tool when used properly.

Each person on LinkedIn has a profile.  Look at your employees’ LinkedIn profiles, do they describe your company in a consistent manner?

If not two things come to mind.

1) If they aren’t describing your company on a consistent basis on LinkedIn you can be confident they are describing it consistently in person either.  Which may mean they do not have a clear understanding of your brand.

2) You are missing out on a simple, free branding opportunity.

Help your company maintain a consistent message in the market by making sure your employees use LinkedIn (Plaxo and Spoke are other business networks) and describe your company in the same manner.

Just like any marketing tool your presence on these business social networks needs to be consistent and you can’t leave it to chance.

Using LinkedIn to support your brand position is a simple way to help you market smarter.

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