Someone thinks your company sucks.

(Another reason your company needs a social media presence.)


Microsoft sucks. So does The Home Depot. Ditto Dell, Target and Dominos. And while it may not surprise you to hear that Wal-Mart sucks, you may not have heard that beloved brands like Apple, Ikea and Starbucks suck as well.

The fact is that despite you or your company’s best intentions, somebody out there thinks you suck. In fact, if you’re one of the companies listed above, there are multiple people that think you suck. And they’re not shy about telling people what they think.

I know this because I went to Google Blog Search and typed up every company name I could think of with the word “sucks“ after it. As you may have guessed, it’s just about impossible to find a company that someone somewhere doesn’t think sucks.

It’s something that my friend Bill Hanifin refers to as negative passion. While every company yearns for passionate fans and promoters of its brand, the flip side is there are people out there who don’t like your brand and won’t think twice about attacking it via a blog entry, or even an entire Web site.

Of course, after reading many “your company sucks“ postings, there are at least a few cases where the rants seem to have some merit. But there are even more examples where the attacks feel mean-spirited, or have little substance behind them, like one posting that says Wal-Mart sucks because “they don’t have big Pyrex measuring bowls“. Huh?

The net: Your need to pay attention to what people in the social media sphere are saying about you, your company or your brand. If there are legitimate issues or concerns, address them. If there are problems that can be solved, fix them. And if there is misinformation out there, by all means do all you can to counter it.

These days, if you’re not paying attention to what’s happening in the social media space, you’re not just standing still. You’re losing ground. There are people out there saying bad things about you, but there’s no easier way to neutralize them then to jump into the social media sandbox and beat them at their own game.


This post was previously published 9/7/09 on Loyalty Truth by Tom Rapsas. Tom can be reached at tomrapsas@gmail.com or on Twitter @tomrapsas.

The Ford Fiesta Movement. Take 2.

Earlier this year, I blogged about the Ford Fiesta Movement. As you may recall, the Ford motor company gave new Fiesta automobiles to 100 social media-savvy drivers for six months—hoping they would post videos and blog about the Fiesta, to build some buzz around the car’s early-2010 launch.

I really hadn’t heard much about the promotion since then, probably for good reason. None of the participants are within my social media universe and a search of Google News reveals the Movement has gotten scant post-launch coverage from the offline or online press, aside from a few well-placed stories.

They popped up on the TV show Extra when host Mario Lopez helped launch the Movement's “Social Activism Month” by donating items to a local charity while riding in a 2010 Ford Fiesta. They also placed a new Fiesta with a writer from Motortrend who made the equivalent of a head nod to the Movement while taking the car on a successful 600-mile trek through the mountains of Utah and Colorado.

Yet, while each of these stories gave the 2010 Fiesta some valuable press time, none featured any news about the participants themselves. What were those 100 Fiesta Movement social media mavens up to?

As it turns out, the 100 so-called “agents” in the program are not hard to find. Ford hosts a Fiesta Movement Web site with links to all 100. There are Live Feed pages that selectively highlight the latest tweets, videos and blog posts provided by the program participants. And a quick glimpse of these pages makes the program look like a buzz-worthy success with constant updates pouring in. It’s all Fiesta all the time!

But this got me wondering: how was this social media experiment working in the real world? Might I be exposed to the Ford Fiesta Movement message if I never visited the Ford Web site but was a quasi-follower of one the Movement agents?

As a quick test, I began looking specifically at about a dozen different agents’ blogging sites. What I discovered is that I had to do some real digging (or in this case, scrolling) to find news about the Fiesta or the Movement.

That’s no surprise really. The 100 agents in the Fiesta Movement were chosen because they already had a social media presence. And it appears that most involved are again writing about the things that made them Movement-worthy in the first place. The extreme spots dude is again writing about extreme sports. The hip-hop girl is out clubbing again. And just like in the real blogging world, one guy has seemingly packed it in, without a single post on anything in over 3 months.

I don’t think there’s anything wrong with this lack of Fiesta news, as Movement participants themselves have reported they are under no pressure from Ford to comment favorably on the cars. (Although there does appear to be an attempt by Ford to “sponsor” conversations, as one agent blogger mentions picking up 8 points for a new post.)

Still, I imagine the folks at Ford are feeling a little underwhelmed by the participation of some of the chosen 100. I also wonder if Ford's 100 agent pool is deep and wide enough to reach beyond a small sliver of what I perceive to be the millennial target market. With hundreds of thousands of bloggers and video posters on the scene these days, it strikes me there's a certain self-centered, party-on sameness to the Fiesta Movement agents.

But, bottom line: I think we have to give Ford an F-250 truckload of credit here for going where no other major marketer has gone before. This truly is a groundbreaking effort and a sign of things to come. More and more, social media will be used as a customer acquisition tool and will be every bit as important as other online and offline efforts when it comes to launching a major product.

Looking ahead, I see two key questions that still remain to be answered:

Will the online activity turn into offline success? Despite its noble effort, I’m wondering if the Fiesta Movement has made a big enough impression for a national product launch. Will it really deliver bodies to the showroom? Ideally, Ford is on top of this and is already getting a read as to whether this experiment is working or not. I also wonder if it wouldn’t make sense to feature the participants in more traditional advertising efforts, including print, banner or TV spots, that tell people about the Fiesta Movement and point them to the site.

Was launching the program a full year before product launch a bit premature? While the new Ford Fiesta is already the number two car in Europe, it won’t be released until early 2010 here in the states. And with the promotion scheduled to be over by late 2009, I wonder if they should have started the effort closer to the car’s release date. By early next year, the Fiesta Movement’s many tweets, blogs and video and picture postings may already seem like old news.

Look for another update to come in a few months.

This blog entry was previously published August 17, 2009 on Loyalty Truth.

Saturn takes a right turn.

Back in late-April, on these very Web pages, I called out the Saturn car company for its failure to engage with its customers. As rumors circulated about the company’s potential sale—or imminent demise—I pointed out there was a glaring lack of information coming from the company’s ImSaturn social network site, a place where many true brand fans would go to first for breaking news.

In my story, I cited a crucial two-week period in April when there was just a single posting on the ImSaturn site, compared to 20 entries at a site called Saturnfans. This fan blog was reporting all the news and rumors it could get its hands on while urging loyalists to “Save Saturn”. As I said in my post, it looked like “the brand fans are more passionate about saving the company than the brand employees.”

Well in the past couple of months, coinciding with Saturn’s sale to the Penske Automotive Group, I’m happy to report that things have changed. Since returning from its near death experience, Saturn has made a couple of moves that deserve to be applauded.

Good Move #1: They showed they were listening.

After the initial blog post, a Saturn executive in Detroit took the time to write in a comment to the blog where the story originally appeared, Loyalty Truth. He seemed genuinely concerned as he said: “We will take your observations to heart and examine if we can improve the information flow on the site. We were the first auto brand to have this type of site, and it has been a learning process.”

This comment showed that the folks at Saturn had their ears to the ground and were listening—and just as importantly, responding. And while talking to Loyalty Truth, apparently our Saturn exec also had a few words with the folks manning the ImSaturn site, because another change became apparent.

Good Move #2: They started talking again.
As a current Saturn owner, once the sale was announced I received a letter in the mail updating me on the news and “this new chapter in the Saturn story.” Upbeat and personal, it gave me a sense of promise and enthusiasm that was missing from the press reports.

This sent me to the ImSaturn site to see what was happening there and I came away impressed. The “Saturn team” who posts entries on the blog had picked up their output considerably, including updates on the sale and its aftermath. They also added a pleasing mix of comments from Saturn fans who were genuinely excited about the brand’s second life.

The Net: While Saturn still has an uphill climb, at least they’re back in the game and engaging with their customers again. Hopefully, they can maintain this new found passion and commitment as they move forward.

It just goes to show you that in social media, as in life, it’s never too late to make things right.

This blog entry was previously published July 22, 2009 on Loyalty Truth by Tom Rapsas. An independent Creative Director, Writer and Strategist, Tom can be reached at tomrapsas@gmail.com.

Is the Good Hands community a bad idea?

Regardless of your hobby, profession or even your belief system, these days it’s easy to find a group of people just like you. Go to online community organizer Ning and you’ll discover over 1 million communities, for everyone from sand volleyball enthusiasts to landscape architects to supporters of the Kwam Um School of Zen.

Now it seems more and more companies are getting into the act, especially those focused on the Gen Y market. From game maker Xbox to the Vans shoe company, companies with true-blue followings have created thriving online meeting centers where the devoted can exchange ideas, discuss products, solve problems and even schedule meet-ups.

But while social communities can work for some brands, it definitely feels like a stretch for others. So upon learning that Allstate had joined the fray with its Good Hands Community, I was skeptical. After all, who wants to join a community sponsored by an insurance company?

Yet, even before looking at the site, I saw how it might work—if Allstate didn’t stray too far from its core area of expertise, insurance. The Good Hands site could be a place where customers could engage with agents on insurance issues, from making sure they had the right coverage and deductibles to learning how to adapt policies to life changes like a new car, new house or new baby.

But the folks at Allstate appear to have set their sights on a much wider mandate. As the Good Hands Web site states, it’s a community where you can “share your thoughts with others about hopes, dreams and challenges. Together you can share ideas about keeping families safe, saving money and preparing for what’s next”. (Share my hopes, dreams and challenges?)

The community home page feels a little more down-to-earth with menu categories that include “Making a Difference”, “Daily Spending” and “Personal Finance”, and discussions on “helping others” “stay-cations” and “living debt free”. It’s all well intentioned, but the topics feel a little off-base for Allstate and better suited for the Peace Corps, AAA or Capital One respectively.

For auto insurance policy holders, there is a category on “All Things Wheels”. But I can’t seem to find any discussions on auto insurance, as posts are concentrated on issues like checking my oil, being alert at the wheel and hybrid automobiles. How about helping me figure out how much collision I should carry on my 8-year old Saturn?

The other thing that doesn’t feel right is there is not an insurance agent to be found on the Good Hands site. You see, the chief bloggers and hosts of the community are Allstate employees Ben and Amit who are both identified by the title “Strategy and Content Manager”. No offense guys, but I think Allstate policyholders would prefer to communicate with honest-to-goodness insurance agents.

So overall, a kudos to Allstate for the effort. It’s a nicely designed site that really is trying to engage with current and potential customers. But let’s not forget, you’re an insurance company. And with so many potential communities for people to join these days, it feels like Allstate may be stretching its good hands a little too wide.

Final note: For a company that does an online community right, check out Intuit. Its Intuit community connects customers with small business owners and features discussions hosted by Intuit-sponsored business professionals. The Intuit community keeps the focus where it belongs: helping small businesses succeed.

This blog entry was previously published June 29, 2009 on Loyalty Truth.

For auto insurers, is retention taking a back seat?

Until very recently I worked on the acquisition side of an auto insurance account, where these days it’s all about the price—with virtually every auto insurer claiming they can save you $400 or $500. (Which makes you wonder, if everyone can save you money, which companies are ripping people off?)

But perhaps the most eye-opening aspect of auto insurance marketing is the lack of respect paid to retention. After all, if you believe the accepted adage that for every $10 spent to acquire a new customer it takes only $1 to retain an existing customer—why are auto insurers plowing so many millions into acquisition and spending next to nothing on retention?

It’s especially important to have a retention strategy these days because of the changing relationship between auto insurance buyer and seller. Once upon a time, most drivers had insurance agents who they had a one-to-one relationship with—but now, with independent agents becoming a shrinking breed, and with the rise of direct-to-consumer providers like Geico, 21st Century and Esurance, times have changed. Most customers have no interaction with their insurance company, unless they have an accident or are mailing in their premium check.

Seems to me it’s time for auto insurers to take a fresh new approach to retaining customers, one that begins building a relationship well before the auto policy is about to expire and the customer can be swayed by the latest “you can save hundreds” TV commercial.

Thought one. Adding a message on a bill insert, while a no-brainer, will do absolutely zilch to build a relationship with best customers. What’s needed is a more robust approach that includes a regular stream of print and/or e-mail communications with relevant information drivers can use like:

• invitations to online or offline tutorials on choosing the coverage right for me and my family
• info on safety recalls and maintenance tips for my particular vehicle
• Safety advice for teenage and senior drivers on my policy
• Reminders of why my insurer is the right choice and what it offers that the competitors don’t.

Thought two. Start engaging via social networking tools. With people so often confused by their auto policy details (collision? comprehensive? low or high deductible?), it seems like there’s an opening for an auto insurance provider to become the online source for honest, helpful information. So who will step up?

While some auto insurers are moving in the right direction by gravitating toward the communications opportunities offered by Web 2.0, many of the executions are weak at best and some companies have chosen to do nothing at all. A few quick observations:

• Market leader Geico barely exists in the Web 2.0 world unless you want to count a blog for the Miss Geico offshore racing boat—and a few “Screw Geico” entries from unhappy customers out in the blogosphere. Kash, the bug-eyed stack of money that stars in Geico’s goofy TV commercials, does have a Twitter account—but has just a single tweet over the last 4-months. (Kash may be the quiet type, but one tweet?.)

• Esurance icon Erin, animated hero of the company’s television commercials, has her own blog on the company Web site—but after a fast start in 2005, it seems like Erin may be all blogged out—she has a woeful total of three blog entries in 2009. (Is she busy on a TV shoot? Have her write from the set!)

• Then, there’s Allstate. Very active with Twitter, they appear to be doing a bang-up job of responding quickly to customer comments and concerns. They also appear to be the only insurer to set up an online community which can be found at goodhandscommunity.org. The community gets an A for effort, but the execution? In a future post, I’ll give it a full review.

This blog entry was previously published June 15, 2009 on Loyalty Truth.

I Love Premium Insurance Service!

The recession has truly set in...Not the obvious one in the economy...but the one in basic common sense.

Had picked up a small used car a couple of months earlier ( when the fuel prices made driving a larger car appear a criminal waste)

Unfortunately missed out on the insurance renewal date for the car...and was left looking for a new insurer and quickly. Having earlier worked with an Indian banking group, which also runs one of the largest insurance firms out here, called up an old colleague & friend and requested for some urgent assistance.

Thus commenced the comedy of errors...
a. The insurance premium quoted was about 10% higher than of the competition : Spoke with my ex colleague. He suggested I take the policy and assured me that the small premium was worth the high service levels

b. The surveyor arrived on a bright Saturday morning photographed the automobile extensively and left

c. The insurance chaps subsequently disappeared for a couple of days. After diligent follow ups and messages via several media, was informed that the policy had in fact been issued, but they had forgotten to send it across. Quite sweet of them considering that I had'nt even issued the cheque!

d. An email with the scanned copy of the policy arrives shortly thereafter.

e. A polite young manager, promising to carry the original copy, arrives the following weekend to pick up the check, but without the original. Am assured that the original certified copy would be forwarded via an express courier, which has not been received till date!

f. I realise to my horror, albeit a couple of days later, that the policy has been issued in the name of the previous owner, but with my residential address. God bless their verification processes!

g. Point this out to the young manager, who assures me of a prompt rectification. Not surprisingly he drops off the radar!

h. A discount cheque received a couple of weeks later, marked of course in the previous owner's name and to my address ( now this is salt on wounds!)

i. I catch hold of another chap ( not wanting to disturb my ex-colleague, to purely experience the joy of a privileged customer...) and plead resolution

j. Receive a call after another arduous week, and told that I need to pay a little more towards the premium amount as they had made an error in the calculation! Indicate to them that I have infact received a refund cheque, which of course they are not aware of! Silence for another fortnight

k. A delighted managerial call is received on a bright sunny morning, indicating that the breakthrough had been made! I would now have to pay a lesser incremental amount as he had fought with his senior management for the same! I suggested criminal and civil proceedings as a more civilised way of resolution. .....

l. Received a call that the policy would in fact now be modified, if only I could re-submit some of the earlier documents again...AND thus the story goes on.

The next time you're pitched premium service...you may like to reconsider the privileged life of ordinary citizens! I wonder when they are planning to launch a loyalty programme!

Can a little magic help Borders Rewards?

I’m a card-carrying member of Borders Rewards, the program run by book, music and movie seller Borders, who recently announced their rewards program had grown 23 percent over the past year and now totaled 32 million members.

I first discovered Borders via their bricks-and-mortar stores in the early 90’s and still love their open store layout and laid-back vibe. I generally find their salespeople to be well-informed and helpful. I’ve been to their Web site many times and opted in to their e-mail list years ago.

Yet I may be one of Borders’ worst customers.

You see, not long after Amazon.com launched in 1995, I became a regular there. As fans of Amazon know, they have the world’s best selection. Nine times out of 10, they have the lowest prices. And there’s plenty of customer commentary to peruse should I be on the fence about a specific book, CD or other product.

So it’s tough for either the Borders stores or Borders.com to measure up to market leader Amazon. Sure, I still visit my local Borders every now and then—but only after they send me a promotional e-mails with a coupon good for 40% off any purchase. (As I said, I’m not a good customer.)

Still, even with Amazon’s superiority in so many areas, Borders now possesses a potential game changer. If they can figure out what to do with it.

It’s called the “Magic Shelf” and it was launched by Borders just about a year ago, with little fanfare. This nifty feature enables registered customers like me to turn the Borders’ home page into my own virtual bookshelf. Through an attractive wooden shelf interface, I can quickly scan music, book and movie recommendations in several categories.

Importantly, it shows me selections based on my preferences, per an online survey I filled out, so the titles on my virtual shelf are personalized just for me. It’s a different approach than Amazon whose less attractive home page shows me items based on my past purchases, not my preferences.

So will the Magic Shelf make me more likely to shop at Borders or Borders.com?

Well, not yet. Old habits die hard and Borders needs to find a way to compel me to become a regular customer by better leveraging the benefits of the Magic Shelf. For starters, it would help if Borders both told and reminded customers about this very cool feature.

It also means Borders will have to move away from their current e-mail strategy, where it’s all about the discounts and latest money-saving offer. Currently, fully 75% of the e-mails Borders sends out are offer or price-based while most of the balance are for perks unrelated to their core business.

The solution seems simple: start sending personal, relevant e-mails, using information culled from each customer’s Magic Shelf selections. By filling e-mails with content that has real value—like info on new products I might be interested in—Borders stands a better chance of building a real (and profitable) relationship with me, because it will be based on my love of music, movies and books, and not my love of saving money.

With the proper use of the data gained from the Magic Shelf, it feels like there may be a small opening for Borders. Will they follow through on it? Or will they continue to beat their heads against the wall by trying to out-discount Amazon? Time will tell. But surely a personalized communications approach is a better way to go than continuing a price war against the mighty Amazon.

This blog entry was previously published May 29, 2009 on Loyalty Truth.

Ford Fiesta Movement & 100 Agents of Change.

Have you heard about the Ford Fiesta Movement? It may sound like a grass roots Buy American campaign, but it’s really a pretty ingenious ploy by the Ford Motor Company to generate some buzz around the stateside launch of the European Ford Fiesta model.

It seems that Ford has signed up 100 “agents” who have been given a new Ford Fiesta to test-drive for 6 months. In Ford’s words, they’ll be “lifestreaming their experiences, and completing monthly missions to show you what the Fiesta is all about”, via personal blogs, Twitter, Facebook and YouTube.

So who are the agents? As you might expect, Ford has smartly selected a group of new-media savvy individuals from Generation Y who had to post an application video to be chosen. A glance at these Millennial profiles seems to indicate most of the agents were selected for their online presence, as many of them have already established blog sites and a built-in audience.

Are these agents really just paid shills? It appears there’s no “pay-for-say” involved, although gas, maintenance and insurance are included with each vehicle. There’s also a little expense money thrown in to cover “mission” expenses. And Ford promises they’ll let their agents speak freely about their experiences.

So if all this is true, kudos to Ford. It’s obvious they have great confidence in the new Fiesta. And I can think of no better way to get the blogosphere buzzing about your hot new product than by seeding it with 100 hand-picked social media mavens.

Yet, as I applaud the effort, the proof of success will be in the excitement the Fiesta Movement is able to generate. There are lots of ideas, from reality TV shows to football game plans, that looked good on paper but fell apart in the execution.

Will the “missions” build the necessary excitement once the initial buzz wears off? (After all, this campaign is supposed to go for 6 months.) Will it be a non-step lovefest or will the agents be allowed to add a healthy dose of reality by complaining about a thing or two? Will the online buzz translate into offline sales?

Stay tuned. The missions just got underway this week. We’ll see if Ford is able to keep the Fiesta Movement humming in high gear.

This blog entry was previously published May 11, 2009 on Loyalty Truth.

Saturn and the perils of Social Media.

For most companies, starting a social Web site is a great idea. There’s no better way to strengthen a customer relationship than with an open and honest dialogue. But there’s a flip side to the coin. Once the lines of communication are open, it also means engaging when times are tough and the news is bad.

Which brings us to the Saturn division of General Motors.

Just over a year ago, Saturn launched ImSaturn, a social network site for Saturn “drivers, employees, fans and enthusiasts.” Early posts talked of snazzy new models and featured entries from happy Saturn customers. It was a feel good place.

But everything changed on February 17, 2009—when, if you’re at the controls of the ImSaturn site, a crisis kicks in. That’s the day parent company GM announces publicly that the Saturn brand is being discontinued after the 2010 model year.

Now if you’re a true blue ImSaturn follower, this raises some serious issues. Like: Is Saturn really going out of business forever? And: Why should I ever buy a Saturn again?

Cut to the ImSaturn Web site. Where it gradually becomes apparent that the Saturn company bloggers—who have been put in a difficult if not impossible spot—just don’t have the answers to the pertinent questions they need to address.

A February 18 post announces GM will investigate the “spin off of an independent Saturn”. A March 2 post says the same thing. On March 31, they continue to look at “the spin off of Saturn as an independent company.” Then, from April 1 to April 15, except for a blurb on a new TV commercial, the ImSaturn site has no posts at all.

What makes this is odd is that during the same April 1-15 period, on a brand fan site appropriately named SaturnFans, 20 posts appear. Twenty. Including several stories on potential Saturn buyout partners and an entry on a public rally to save the company. There’s even an online petition to “SAVE SATURN”.

It’s enough to give you a disconcerting impression: the brand fans are more passionate about saving the company than the brand employees.

Meanwhile, if Saturn wants to monitor negative chatter on the Web, it need not go far. It’s happening in a public posting area right on the ImSaturn site, where positive feedback is offset by entries like “I will never buy another Saturn!!!!” and “You built crap and America never forgives!” Posts that have so far gone unchallenged.

The takeaway is that while there’s a vast upside to social Web sites, as the Saturn experience shows there is also a small but real potential downside. Bad things can happen. They can begin to spiral faster than you can react to them. And even your best intentions can come up as empty as a gas tank on E.

This blog entry was previously published April 28, 2009 on Loyalty Truth.

Building loyalty without points.

I’m a member of several hotel rewards programs but an e-mail promotion I recently received from one of them really caught my eye. It was from a boutique chain called Kimpton Hotels, with about 40 locations spread across the US.

The deal was fantastic, an $81 a night weekend rate to commemorate the company’s 1981 start date, redeemable at any of the chain’s hotels. It’s a far cry from the normal Kimpton rate, about $300 a night for big city locations.

What really surprised me though was that I received the offer at all. You see, far from being a “best customer” of the hotel, I’ve stayed at Kimpton hotels a grand total of one night at The Muse, a chic but friendly small hotel in New York City’s Times Square district.

Even if I had been identified as a potential high value customer, I wasn’t offered the ubiquitous double and triple point offer, but something of much greater value: a premium hotel room at about a 70% discount. Thanks, Kimpton Hotels!

It raises the question of how to best build loyalty and strengthen the customer-brand relationship in today’s feeble economy. Are there more/better ways to build loyalty than a traditional points offering?

While a lot of companies have traditionally relied on points to lure customers into a relationship, it strikes me that the Kimpton chain—by making a generous price-focused offer to even new loyalty program members like me—is taking a much more aggressive approach.

Rather than waiting for me to show loyalty to the hotel chain through repeated stays before rewarding me, they’ve turned things upside down—they’ve shown me some love early in our relationship, and in turn, I’ve immediately put them into my consideration set, even though I can name three or four hotel chains where I have more points.

An article in a recent issue of Advertising Age titled “Redesigning Loyalty Programs to Last Beyond the Next Purchase” touches on this subject. Readers are advised to look for new methods to build customer relationships, including:

“…add(ing) customer benefits that are not explicitly mentioned. Unexpected rewards can have significant value as customers view them as gestures on the part of the brand rather than payments they are owed.”

The point is sometimes it makes sense to break out of the it’s-all-about the-points mentality and reward those who simply raise their hands and identify themselves as your customers. By boldly taking the first step in a relationship, Kimpton Hotels has made it more likely that I’ll take the next step—and consider a long-term relationship with their brand.

The (Loyalty) Gospel according to Seth.

Fans of Seth Godin’s blog know that while he often offers smart, I-never-thought-of-it-that-way insights, he sometimes states the obvious—but does it in a way that can serve as a fresh and useful reminder of the simple marketing truths we already know but may have forgotten.

In a recent post, Godin talks about the folly of spending more money to acquire new customers while ignoring the loyal customers you already have. These current customers represent two potential opportunities for growth, both by increasing their share of wallet and by mobilizing them as word-of-mouth advocates.

Here’s Godin’s take on companies now spending “more” for customer acquisition:

The reason this is a mistake is simple: it's expensive. Attracting a new customer costs far more than keeping an old one happy. Not only that, but an old customer is far more likely to bring you new people via word of mouth than someone who isn't even a customer yet.

Which is why share of wallet makes so much more sense than share of market. How much does each of your existing customers buy from you? Do they count on you for all the things they buy in this market, or just some? Does Toyota sell me every car my family drives? Does Chubb get to insure every single thing I own? Usually not. Because marketers are so focused on more that they forget to take great care of what they've got.

It’s a good reminder, in a bad economy or a good one, in loyalty and in life: stay focused on the things—and people—that matter most.

The last gasp of a dying brand.

As most US-based readers know, General Motors (GM), one of the “Big 3” US automakers, is now on the verge of bankruptcy. After receiving a $17-billion bailout from the government, GM is still losing billions of dollars each month.

To help stem the bleeding, GM recently announced a number of cost-cutting moves, including a plan to end production of a subsidiary brand called the Saturn Corporation by the end of 2010.

Launched in 1985 as a "different kind of car company", Saturn operated outside of the GM structure for many years. And during that time it really did feel like a different company. (In fact, I’ve bought two Saturn vehicles over the years and drove one to the office today.)

What made the company different?

Well, for starters there was an effective ad campaign that showed the company to be comprised of dedicated, hard-working men and women all pulling together under the common cause of making a better automobile.

There was a no-hassle, no haggling sales policy, by which the sticker price on the car was the actual price you paid for it—no tense back room negotiations by which some buyers got a better deal than others.

And importantly, there was an on-going customer communications effort to keep Saturn owners loyal to the brand. These included a regular stream of loyalty communications, including invites to an annual “owners” barbeque held at the brand’s main factory facility in Spring Hill, Tennessee.

But over the years, something changed.

As Saturn was slowly brought back into the GM fold, the warm and friendly correspondence disappeared. It was replaced by shrill and gimmicky mailings from the local dealer pitching the latest holiday promotion. And in time, Saturn didn’t feel a whole lot different than any other American car.

Now, there is a last ditch attempt to keep the Saturn brand alive.

Over the past year, a Saturn social networking site was set up with little fanfare in an attempt to reengage with owners. I recently stumbled upon it, and by the looks of the sporadic company postings, it’s not getting the attention it deserves.

Then, a few days ago I received a single-page, two-sided letter from a person identified as the General Manager of Saturn, a 22-year veteran of the company. In the letter she says that Saturn is investigating the option of forming an independent company, apart from GM, and to “stay tuned”.

There’s even an attempt to rekindle the old Saturn mojo, as the Saturn veteran pointed out “it feels a bit like it did back in the 1980s when the original Saturn project was being developed” and implores that “as loyal Saturn owners and enthusiasts, I know you support this brand.”

Only now, years after they’ve sent me a truly meaningful piece of communications, it feels like it’s too little, too late. The hard-earned emotional bonds of loyalty were taken for granted and over time slowly broken, replaced by, at best, ambivalence.

I’m reminded of the once classic car a friend has parked along side his driveway. He once planned on fixing it up, but never quite got around to it. And neglected year after year, this once sterling automobile is now a rusting heap, too far gone to ever bring back.

Will WOM kill advertising?

I’m currently reading a fairly entertaining, Google-worshipping book titled What Would Google Do? by Jeff Jarvis. But there was one passage, a lengthy endorsement of word-of-mouth (WOM) advertising, which stopped me in my tracks:

Here’s the goal. Eliminate advertising. Or at least fire your ad agency….every time a customer recommends you and your product to a friend is a time when you don’t have to market to that friend. It is possible today to think that one good word can spread as far as an ad word.

Here’s why that’s a bad idea: While every marketer’s dream is to have a product that is so good everyone is talking about it, real life rarely works that way. For starters, there just aren’t many category-busting companies like Google out there.

Unless you’re in a niche market with an established customer base (like my local seafood market which has no competition within 20 miles), some form of advertising is needed to assure your continued success—not just to attract and acquire a steady stream of new customers, but more importantly, to tailor relevant communications to connect with your existing customers.

A recent study by my friends at the loyalty marketing think tank COLLOQUY showed that the best word-of-mouth proponents for any business are its most loyal customers—most specifically a group they termed “Champions” who are most likely to spread a good word on behalf of your brand.

Yet, it’s my belief that Champions aren’t just born, they can be created. How? Through a steady diet of personalized communications via mail, e-mail and members-only Web sites, that show your most loyal customers you truly care about them and their individual needs. (After all, you’ve got to show some love before you can expect some WOM love in return.)

Another helpful tool in pumping up word-of-mouth: company blogs where you have an actual dialogue with customers, and don’t just try to market to them. Conversations in the new public square of blogs and social networks are just like the old one—bystanders are listening to every word—so the potential upside of these exchanges is amplified and could result in earning you additional brand loyalists.

So by all means, if you’re not happy with your ad agency, fire them as Jarvis suggests. But do it because you’ve found another vendor who can better meet your customer communications needs, who among other attributes can take the necessary steps to help your word-of-mouth efforts succeed. These days, you need all the help you can get.

The $100,000 Salt & Pepper Shaker.

I just finished listening to the audio book The Last Lecture by Randy Pausch, the moving story of a 47-year old college professor and the life lessons he passed on shortly before succumbing to cancer. In the book, Pausch tells the story of the $100,000 salt & pepper shaker.

It seems that when Randy was 12-years old and on a visit to Disney World, he decided to show his parents his appreciation for the trip by purchasing them a ceramic Disney salt and pepper shaker. 

Minutes later, a minor tragedy struck when he accidentally dropped the shaker and it shattered into pieces. On the advice of an adult who witnessed the accident, a hesitant young Randy returned the broken shaker to the store—and to his surprise, was given a new one. No questions asked.

So where does the $100,000 come in?

After the incident, Randy and his whole family were so impressed by the Disney staff member’s handling of the incident that they began to appreciate Disney on "a whole other level". They made Disney their permanent vacation home. And by Randy’s calculations, over the years his family went on to spend over $100,000 with Disney, never forgetting the symbolic importance of that one interaction. Hence, the $100,000 salt and pepper shaker was born.

What’s your brand or company’s $100,000 gesture? As this story illustrates, even the smallest actions can pay off with a very big reward—turning a current customer into a customer for life.

Lovely hotel. Tough loyalty program.

From November 2008 through early January of this year, I spent several weeks working in LA and was fortunate enough to be put up at the Fairmont hotel in Santa Monica. All in all, a really fine place to stay, with friendly attentive service, a pleasant lobby bar and comfy rooms with a view of the Malibu coast.

I of course joined the Fairmont’s loyalty program, the President’s Club, and for starters earned free Internet access throughout my visit, saving $10 bucks a day. A nice perk. But like most of us, I had my eye on the big prize—a free night’s stay.

I reviewed the program requirements and while they seemed a bit steep at 30 nights for eligibility, I racked up 25 nights in November and December 2008 and 5 nights in January ’09. By the end of the project, I had nailed the stay threshold for a free night on the nose. Yes!

There was just one issue.

Upon checking my President’s Club account in late-January, I discovered I only had a balance of 5 nights in the “bank”. My 25 nights from 2008 had been wiped off the slate. The reason: it seems the program resets at January 1 of each year, wiping out all nights accrued over the previous calendar year.

Now we can all understand accrued nights expiring at some point—but nights I had earned as late as December 20th had been wiped off my earnings statement, giving them a shelf life of a little more than 10 days. About the same as a container of milk.

I fired off an e-mail to a program representative and within 48 hours had a response. A nice one, indeed. I had been granted entrée into the top level Platinum Club, and with it received my free night’s stay—which I’ll soon be enjoying with my family at a very fine Fairmont hotel in New York City.

In the end, my faith was restored in the Fairmont and its loyalty program. My membership had been bumped to top tier status, I had received the reward I felt was rightly mine, and I will again stay at the hotel the next time business calls (as well as spread some WOM love, my brother just finished a stay there).

But as a loyalty enthusiast, I have a nagging concern in the back of my head: What of other program members in similar situations who may choose to protest their lost nights by switching to another hotel? Seems to me the Fairmont may want to do a little tinkering with the finer points of their program.

Can viral videos work in Loyalty?

At some point, you’ve probably seen a viral video, those short video clips that get passed from one person to another via e-mail or a media sharing Web site. They’re sometimes edgy, often humorous. And when they’re done right they can get people talking and generate a buzz.

The question I’ve been pondering: is it possible to create a viral video that works for your best customer base? One that’s personalized—and so good at capturing the essence of your company that customers want to share it with friends and associates, thereby cultivating new customers.

It could be a happy birthday video from the friendly wait staff at your local favorite restaurant. Or a thank you message from the pilot of your preferred airline. Or even a humorous “we miss you” video from a hotel you frequent, but haven’t been too lately.

It could be one more way to surprise and delight your best customer base—the people most likely to spread positive word-of-mouth about your company to others.

Grinding the Axe...

Consumers across the world have been receiving communications stating their reward points have been devalued, but few of them have stated why or what next?

Dropping the value of reward points, withdrawing privileges, reducing the life of points etc. are common techniques that come into play when strains appear on the bottom line. These are justifiable business measures and would make the finance chaps (and rightfully) rub their hands in glee.

As a preferred loyal consumer, if my lounge access were withdrawn suddenly, I'm clearly not going to be a thrilled loyalist. I would vent and unleash my angst on the brand and its stakeholders, as I've just been told that "I am not special anymore". And here lies the crux of the matter for the financial stakeholders in a company.....Surviving Today v/s Sustaining Tomorrow.

When the tough call of diluting / withdrawing the benefits of a programme are undertaken, take a moment to switch your views and talk to the consumer in you.

A few aproaches that you may like to consider:
1. All OR Some : Do you need to grind the axe on the benefits for all the customers or some? Apply Pareto and compute impact.
2. Price : This may actually be an opportunity for you to price some of your services. Convert a challenge to an opportunity (sounds cliched but quite true). The customers who see true value may actually pay you for it
3. Why are you doing this? : Have a dialogue with your customers. Tell them why you're doing this. Assure them that you're with them over the long haul and this is a temporary blip. They may not like it, but they would understand, which is equally important.
4. What does your brand stand for? : Ensure that your actions are in line with your brand's value system.
5. Measure long term Impact : Its great to compute immediate impact to your bottom line. But also measure and be aware of the future economic impact of losing customers and the cost of getting them back on board. You may still take the call, but be sure to inform yourself and the other stakeholders.

Is the Free Ride Worth It?

A motorcycle manufacturer in India, with over two million loyalty customers, has one of the largest customers bases for a loyalty programme. The customer proposition is quite simple and relevant to the target audience. However what makes it different, is that its a paid programme. Customers need to pay upfront for a three year membership.

Most loyalty programmes have very low entry barriers / qualification criteria for its customers. The benefits via ease of enrolment for the customer & for the brand owner easy access to a large customer base to which it can communicate and potentially convert to increased wallet share and hence revenues are quite obvious.

In any loyalty programme, there is a clear pyramid of customers that is formed within 18 - 24 months, wherein the Pareto principle quickly falls in line...Less than 20% of the customers contribute to the value from the overall base.

Which takes me to the set of (existential) questions.....
1. Do they clearly understand the value proposition...OR rather...Do they take the time enough to understand the benefits of the programme?
2. Does the customer actually value the benefits that your are offering her...(OR is that too brave a question to ask for the programme manager?)
3. Does this customer take your programme seriously enough?

The third question is the most vital for the success of any programme. It is vital that the customers views a clear give and take in this relationship and has his skin in the game. You may believe that her business over the life of the programme is the "skin", but it may just not be it.

Most loyalty programmes have attained success via word of mouth from its loyal consumers and not as much from the programme communication. Hence the programme is always susceptible to a risk of failure if the word of mouth does not reach the customer in adequate and frequent dosage.

So, why leave it to chance? Pricing the access to a loyalty programme has the following potential benefits:
a. It ensures that the customer clearly understands and believes in the value of the programme
b. Ensures that the organisation stakeholders are more involved in the customer engagement and education at the time of enrolment
c. Gives your P&L immense latitude, by covering huge administrative and financial costs that you would incur.

Pricing a programme would face huge resistance across internal and external stakeholders, the programme size build up would take substantially longer, but the P&L does look rather different.

Take your customer seriously, but they should take you seriously too!

p.s. There is a difference between a customer communication programme and a loyalty programme...

New Is In...Old Is Out!

The over-obsession with new customer acquisition, often at the expense of existing customers is quite perplexing and worrying.

I've shifted residence recently, and was seeking to transfer my DTH (Direct to Home) connection. The experience has been quite hilarious and often painfully frustrating. The engineers arrived promptly and indicated that there would be nominal shifting charges and some other installation charges. I questioned the rationale for the latter, and did mention that I have been a customer for over four years, subscribing to their premium packages. Also did bring to their notice that my subscription had been live for over three years and this was the second time in this period that I was required to incur these charges.

The team quite obviously did not take well to my questioning their irrational installation charges and disappeared without a trace! I waited patiently for over a week and then contacted the local sales team. I was politely informed by the chap, that the engineering team had updated the system as "customer refused to pay any charges" and hence recommended that my service be deactivated.

The saga continued for over a week, wherein I was assured repeatedly that the installation team would arrive, but they just did'nt turn up. I did shift my business to an alternate service provider, but I continue receiving warm marketing messages from my old friends highlighting new offers and services. Quite clearly they do not know that I am no more their customer.

I've had several other similar experiences and has forced me to take a hard look at the business that I manage as well, and often believe that we do not spend as much time as we should on our existing customers who deliver revenues and contribute to the bottomline.

These are challenging timelines, and budgets for large customer acquisition would be hard to come by. A reality that we tend to ignore quite often...the impact of incremental investments on existing customers are often higher than those on new customers.

Keep your eye on the ball and don't take your existing customers for granted. This is perhaps the fundamental basis for creating customer loyalty.

The Walls Come Tumbling Down.

I can recall when I first ventured into loyalty marketing there were clear lines of delineation between the various advertising disciplines and agencies.

General advertising was the “brand” stuff, home of the big TV budgets and glossy print advertisements. DM or direct marketing was advertising that called for a response, whether it was via a mail package, banner ad or DRTV spot.

And then there was loyalty marketing, which I soon learned had a different perch in the advertising hierarchy. While working in direct marketing we often complained about getting the budget crumbs from the general agency, in loyalty we often had to settle for a single crumb.

Furthermore, the CMO at our client companies were often not even involved in the loyalty marketing effort, as he or she busied themselves with the more high profile brand work. Often, the management duties for loyalty were assigned to a marketing subordinate well down the hallway from the corner office.

For one creative assignment it wasn’t uncommon to have three different agencies and three different creative directions involved. (Four agencies if a digital shop was in the mix.)

But today the walls are tumbling down.

I’ve just wrapped up a TV campaign for 21st Century auto insurance comprised of TV spots that push the brand while selling (brand DRTV). In addition, the key premise of the campaign is being integrated into the company Web site, and will soon appear in customer e-mails, acquisition direct mail and even viral videos.

In the past, this work might have been spread over three or four different agencies. In this case, it’s being done by one. The result: a stronger, better integrated, more coherent campaign.

Today, especially as new forms of digital media enter the marketing fray, the old dividing lines between general and direct and loyalty and digital are becoming hazier than ever. And for all involved, that’s a very good thing.