The Reason: A marketers guide to engaging cliques

Happy New Year !!

About a week late, but wanted to say Happy New Year to my readers.  On a personal level, the last 12 - 15 months have been the best months of my life.  I really couldn't ask for more.  On a professional level, I'm looking forward to the many endeavors I have in the works for 2010.

I've been listening to you and yes, I will post more often this year.  More specifically, I'm going to do a better job keeping you in the loop on what's in the works for me.  So, with that said, here's a little taste of The Reason in 2010... 

1. Cliques -- the book.  My first marketing book will be released by Paramount Marketing Publishing. I'll be exploring how the ease of access to information online makes it easier to find and join groups that celebrate what makes us unique. As a marketer, it's essential to understand these groups - these Cliques, as I'll refer to them in my book.  While I've most recently been preaching the importance of telling a good story, ongoing research is proving that the future of marketing is in engaging and influencing Cliques through branded stories - sounds Reasonable, right? More updates as the book develops ...
2. UCLA Extension.  I start teaching a Diversity Marketing course, part of the Certificate in Marketing program, in less than 24 hours and a Social Media course in the Spring.
3. UC Irvine Extension.  I'll start teaching a Multicultural Marketing course in the Summer. 
4. And of course, my personal favorite ... continue building The Reason ... to be one of the leading agencies in Clique Marketing.

Lessons from a Daycare

I was talking to the woman who runs my sons' daycare about how she started her business.  Like most businesses, it was tough in the beginning for her to attract customers. The licensing agencies told her to hang flyers around the neighborhood to promote her business i.e. do what everyone else was doing.  She didn't.  The Reason --she knew what mattered to her customer.

As a parent, there were two things she knew about her customer (1) parents are risk averse and (2) parents are more than willing to tell other parents about products/services that make their life easier.  With this knowledge, she decided to reach out to family and friends, people who knew and trusted her, and offered to watch their kids.  By providing a great service, this strategy minimized risk and allowed her to benefit from word of mouth marketing.

The Lesson -- Do you have the insight you need to think like your customer?

UCLA Extension

I'm excited to announce that I'm a recently minted instructor at UCLA in their Business and Management Continuing Executive Education Program.  As I write this post, a Slick Rick verse comes to mind... "Teacher, teacher, tell me how you do it. It looks kinda easy like there was nothing to it." Ok, I'll stop writing this as a stream of conscience.   

I'll be teaching a class on multicultural/ethnic/diversity marketing beginning in January.  Executives who enroll will learn about resources to develop marketing strategies and how corporations, organizations and small business owners can tap into this $2 trillion market. 

Here's my class description...

"Diversity Marketing is the effort to communicate a believable story, celebrating commonalities and honoring differences across diverse consumer segments, to influence future consumption. How is this different than what is learned in Marketing 101? The fundamentals are the same, with the success of any marketing strategy relying on effective segmentation and sound understanding of your consumers. However, in Diversity Marketing, the key is to focus on the evolving implications associated with engaging diverse consumer segments – a focus to not be taken lightly or over-simplified."

YPulse Multicultural Mashup (Learnings)

So, what did I learn from my panel discussion… "Identity Politics - Marketing to Youth in the Age of Obama: In an era where youth identity is being influenced by online & mobile interactions, is Urban and Multicultural Marketing dead?" 

Companies need to look internally and determine whether their customer segments still make sense. Multicultural marketers have fought long and hard for the budgets allocated to Hispanic and African-American markets, but realize the marketplace is changing. And, after spending so much time justifying multicultural marketing budgets, no one wants to go back and say “hey, it no longer makes sense to just have an African-American or Hispanic budget because our campaign won’t resonate with the entire marketplace.” I know some people are reading this and saying this dude wants to give up on multicultural budgets. That’s not what I’m saying. I think marketers need to look beyond skin color and language, and also look at Rituals. Then marketers should figure out how their respective brand adds value to that ritual so marketing messages resonate with their audience. 

I know I just dropped Rituals in the last paragraph without a definition. Rituals is one of the steps in The Reasoning, our proprietary consumer engagement process. The point is marketers should entrench their brand into relevant rituals (meaningful activities); rituals in which your audience is actively engaged, physically and emotionally. Check out my Neutrogena for Men post for an example of Rituals.

So, does your current customer segment make sense in the Age of Obama… here’s how we build meaningful customer segments at The Reason... 

1. [name of your brand] adds value to [name of ritual] because __________  
2. Who is involved in this ritual 
3. Why are they involved in this ritual?   
4. When are they involved? 
5. Where does this ritual take place? 

YPulse Multicultural Mashup

I had the pleasure of moderating a panel at the YPulse conference last week titled "Identity Politics - Marketing to Youth in the Age of Obama: In an era where youth identity is being influenced by online & mobile interactions, is Urban and Multicultural marketing dead?"

Heavy title… I know.  First time I read it, I had a Black Rob moment… like whoa!!  I digress.  Here’s a quick summary of what I heard from the panelists.  I’ll talk tomorrow about what I learned.

 

Neela Banerjee, Editor 
at YO! Youth Outlook Multimedia

It's CRUCIAL for young people to see themselves in the world, so in that sense urban and multicultural marketing is important.

 

Roland Brown, Chief Cultivator at Parallel MVMT

Talk with, not to youth. This generation can speak for itself, and respects a two-way dialogue.  Being genuine, and growing organically is vital - being a part of the community you market to is important, and/or get people involved who really are.

 

Kevin Walker, Managing Partner at Culture Lab Creative

The agency system ill equipped to effectively market to this generation.  Agencies and clients still want to segment by race, i.e. Hispanic, African American, and Asian.  When in reality the younger generation is more segmented by lifestyle, interest, and what "tribe" they identify with.  Identity for young people in this day and age is more 
complicated than just their ethnic identity. 

Microsoft says “what’s beef?”

Microsoft reminds me of the bully in the hood always looking for beef.  They’re spending $300 million on their “Laptop Hunters” ads so Apple will stop making ‘em look like dweebs.  They’re fighting with Nintendo and Sony for console space in our living room.  And, they’re about to mount a $100 million marketing campaign to go mano y mano with Google and to a lesser extent Yahoo for web search.  By comparison, Google spent a total of $25 million on ads in 2008.

For those that don’t know, Microsoft currently does web search under the LiveSearch moniker.  Rumor has it that they will rebrand the site service as Bing. You know, it’s kinda like shorthand for Tony Soprano’s girlie bar.  As part of the re-branding effort, expect to see ads appearing on the web, TV, radio, newspapers and magazines.

I’m not a big fan of conceding, but I think Microsoft should concede desktop web search to Google.  And by concede, I mean Microsoft should focus on web search for emerging platforms like mobile devices.

The Reason… Strategy 101 – Compete where there is no competition i.e  be a monopolist.  While consumers are increasingly spending more time (and money) on their mobile devices, there is no established search provider cornering that market.  For the most part, you’ll just be paying slotting fees to mobile phone providers so “Bing” shows up as the default search provider.  But, that’s the low-hanging fruit, and The Reason is all about reaching higher, so … let’s look for the challenge here.

The Reason... Strategy 201 - Differentiate. Microsoft should leverage its previous $800 million investment in Tellme Networks Inc., a voice-recognition technology company -- a.k.a. your differentiator.  Spend your Bing marketing budget letting consumers know how easy it is to search on their mobile devices... "Just say what you want, and 'Bing' ...get your search results texted to you instantaneously.  This, of course, relies on the sophistication of your technology to decipher accents and colloquialisms, and the robustness of your database.  But, once you step on the court, no more excuses, right?  And for Microsoft, the money part comes from advertiser supported text messages.

Multicultural Marketing Stories: Black in America 2

Looks like CNN is coming back with part 2 to their special on what it's like to be Black in America.  Ford has signed on as major advertiser for the CNN special.  Smart move… the black community will definitely be buzzing about this special again.  Whether you liked the special or not, black folks were definitely talking about this special last year.  And, Ford will be front and center with its multicultural marketing efforts.   Source: Target Market News

Honda Insight vs Toyota Prius

They say imitation is the sincerest form of flattery.  From the picture below, it looks like Honda is flattering Toyota.  The 2010 Insight looks just like the 2006 Prius in my garage.  It must be tough

for Honda... Toyota is riding this green wave with the Prius, but Honda produced the first Hybrid sold in North America ... tough playing catch-up when you’re technically the true innovator.

Although I'd prefer for car companies to take more design risks (see Audi), I think the design jacking makes sense for Honda and this is The Reason...

• The Prius and its aerodynamic look is synonymous with Green. Honda might as well leverage this perception and put their badging on it... they'll at least please Honda loyalists who’ve been waiting for Honda’s Prius-fighter.
• Eco-Branding.  The growth in the auto industry is going to come from eco-friendly vehicles.  To stay competitive, auto manufacturers ...listen up Detroit ...have to manufacture fuel-efficient, eco-friendly vehicles. Assuming you meet this baseline, the next challenge is to communicate and deliver an eco-friendly brand -- which won’t be as easy as you might think.  Consumers and activists alike are skeptical of “Green” branding -- while the movement is strong, authenticity is often lacking. Toyota and Honda should leverage their Prius and Insight brands, respectively, to launch a full line of eco-friendly vehicles from sedans to SUVs.  Like I said… it’s an exercise in branding and consumers purchase the brands they trust.  

NY Times Betting on Neighborhood Blogs

The NY Times started experimenting with hyper local blogs this past Monday, says Brownstowner.  I think it’s a great way to leverage the equity of their brand at the local level.  People always want to know what’s going on in their backyard… from local news to cultural events to police reports.

Here’s why it’s a good idea…

• Search engine friendly.  It’s amazing how  search engines move you up in the rankings the more you talk about a specific topic and have plenty of inbound and outbound links.  Seems like a good place for local advertisers to reach people in these communities.

• Milk and Eggs Strategy.  I brought this up a few posts back so check it out, but essentially the Milk & Eggs Strategy says hyper local blogs are a great way for NY Times to expand its audience.  New readers begin making the association… NY Times = Relevant Content. 

Playboy: Monetize the Brand

I noticed an article on cnn.com about the death of Playboy.  Funny, I thought the “in memory of” sign was already put over the masthead like the other print mags that can’t make the adjustment to the digital age.  Doesn’t seem like Playboy has much of a value proposition nowadays…I mean, it’s awfully tough to get people to pay for adult content when they can find it free online. 

Playboy is coming off a year where they lost $156 million.  That number doesn’t mean much without perspective…so, let’s take a closer look.  Looking at their Q4 2008 Earnings Call Transcript (thanks Seeking Alpha), it looks like the downturn was primarily due to an 8% decline in circulation revenues and a 16% downturn in advertising revenues at Playboy magazine.  Not good, but overall circ is down 11% for the print industry so not bad either.  So, how does Wall Street view Playboy?  Well, their stock price today is $1.45, down from almost $9 this time last year.   And, market cap is $48M... which is essentially what the market thinks the company is worth.  Think of that number as a good baseline if someone was looking to buy the company.  Essentially, Playboy lost more money last year than they’re worth.

Well, that seems awfully bleak.  However, when looking at their operations, it doesn’t seem as though Playboy has fully monetized the strength of their brand.  I offer a bit of Reasoning...

• Licensing.  This is arguably one of the strongest logos in the world.  It’s up there with Apple and the Nike swoosh.  Playboy should continue seeking out reputable merchandisers and retailers who will pay handsomely for the right to leverage the Playboy logo.  One thought... they should rival Victoria’s Secret for women’s intimates.

• Location Based Entertainment.  There are tons of people who won’t buy a nudie magazine, but would jump at the chance to attend a Playboy-branded event.  The brand speaks to its audience and they know they’ll have fun.  The Maloof brothers know the strength of the Playboy brand and that’s why they opened the club in Vegas.  I’m not saying get into the club game, but leverage the Playboy name with credible entertainment properties around the globe.  I know Playboy failed at this in the 70s and 80s, but I think the right formula going forward is to have gaming be part of the mix.  From my time living in Hong Kong, I’d say Macau should be the next stop.

• Keep Printing the Magazine.  Ya, I said it… keep printing the magazine, but reduce the number of issues -- consider quarterly or bi-monthly production.  It’s a niche print brand and I provided The Reasoning for how these brands survive in my Jan Darpan post.  Continued printing of Playboy magazine accomplishes two things: (1) allows Playboy to continue defining their brand essence to their audience and (2) keeps Playboy relevant to advertisers. 

• City Guides.  This is a bit more long-term.  But, Playboy should begin laying the foundation so its core audience begins looking to it as a lifestyle brand and not just a nudie mag.  Nudie pics are a commodity. Other than having celebrity spreads, you can't really differentiate yourself.  Playboy should start developing lists... top 10 restaurants in Boston, hottest clubs in NYC, hidden gem gentleman clubs, etc.  These lists provide the foundation and allow for a transition to city guides (think Zagat's).  All of this should be geared toward your target consumer...  the discriminating, maybe metrosexual, upscale male.  And, none of this should be printed... it should be online or via apps on smart phones.  This can be monetized... follow the Citysearch model, but apply it to a smaller, more targeted group of consumers.