From Webcast to VODcast

In July 2001 our cost per attendee for a public or private event skyrocketed to $589 per attendee from previous year average of $70. Attendance at our events dropped like a bag of wet cement… from an average of 125 to 25. The change happened almost overnight and we knew that the recession was ”ON”… as you probably and painfully know travel budgets and event spending are one the first things to be cut.

As a professional services firm that sells services through the dissemination of intellectual property we couldn’t just turn off speaking at events. Seminars and events drove close to 40% of our leads so we made the decision to shift almost everything online. Typically, we would do at least 30 plus events a year. In the second half of 2001, we ran 14 web events and 2 live events. It turned out to perfect timing because 9/11 put a nail in the coffin of live events. By the end of the year we were able to double our average attendance and our cost came back down to $100 per attendee plus…we add 700 names to our “opt-in” list.

Fast forward to 2008, we haven’t done a webcast in the last three years. Why? Because the format became overused and the effectiveness of reaching our key audience has been severely limited. Also, business has been good…we didn’t need to.

Yesterday we did our first VODcast and more are planned. Why? Because what is old is new again but this time you can see the presenter. A bad economy means the business slows, pipelines begin to get thin and business development using events is uneconomical…see above. But here’s something else we have noticed, people are going back online looking for free advice that they used to get from “experts” when they had budgets to pay for it.

We also learned during the last down turn that when you use a new technology there is the “novelty” factor. People will tune in just because they’re curious which boost your registration/attendance rate but it doesn’t last long…you have maybe 6-8 months before the novelty wears off.

So I happened to be the lucky guy (if you want to call it that) that got to go first. I found the experience to be very challenging… much harder than doing a live event and/or traditional webcast. Here are a few things I learned from the experience…starting with the basics.

• What is a VODcast – it stands for “video on demand” and it’s a pre-record video that may or may not have other assets integrated into it.


• Shorter is better – the VODcast came in at a little over18 minutes, for a 45 minute presentation I did live at a conference…and it’s still too long. If I had to do it over again, I’d chop it up into 2 minute segments and make it a series…still might.


• Personality/Sizzle – you need it, and I obviously had none. I get energy from the audience…the camera gave me nothing and it shows. Got to work on that, rehearsing into a mirror sounds hokey but I think it will help. Open to suggestions here…


• Color and lighting matter – we used a conference room with bright lights and burnt sienna colored walls…not good. Learned that lesson the hard way.


• Bandwidth matters - depending on the length of the video and the number of viewers you may need to check with the IT folks on the impact on your IT infrastructure. We had to move the video to a host server to handle to the load.


• Communicate the format – because this is a new format you have to explain how it works…a lot. We had calls from folks asking for the dial-in number. Communicate instructions often and on everything (email, registration page, under the event listing on your website, etc.).

All in all, this is the future, so you might as well try it. I’m convinced that it will soon replace traditional web and podcast. Additionally, it provides the viewer with a much better experience…there is no call-in number, no applet to download, it eliminates many of the technical issues of the past. In fact, I’m doing a webcast today for client. I’ve already received three emails asking for the call-in number….it was sent to them days ago. Bring on the Video!

Best Practices from the Last Downturn

Every “expert” and every business publication seems to be giving advice on how to manage the downturn nowadays and it’s great to have those thoughts and ideas. It struck me the other day that we’ve gone through this before (remember the “Dot.com” bubble) but no one seems to be talking about what we’ve learned from that past experience.

So I became interested in learning if there were any “best practices” that we could use to help make better decision this time around. I’ve talked to a few clients, folks here and looked at some work we did with clients during the post bubble burst years (2002-2003). From that research I’ve pulled together nine “best practices” and have listed them below.

1. Cut Fast and Deep – the last go around folks were very optimistic that the economy was going rebound quickly so they delayed decision or cut less than they should have given the reality of the situation. We did exactly that and went through three rounds of RIF’s needless to say it was painful and demoralizing…ever heard the expression “There are two ways to die: get shot or bleed to death?” Well, we choose the latter. This time around we went back and looked that the low point of the recession, the point at which our revenues bottomed out (let’s say it was 30%) and we took that percent and cut expenses to that level last month, even though our revenues are off forecast only by… let’s say its 15%. It gives us a cushion in case things get worse and allows us to preserve cash which we didn’t do the last time…which is the next topic.
   
2. Cash is King – got to have it, keep it and watch it like a hawk. Customers will take liberties with payment terms and there may be nothing you can do about it. If DSO starts to tick up, pull down on a line of credit (if you have it…and do it now) to give yourself some cushion to absorb cash flow issues. This killed thousands of small business during the last go around.
   
3. Little Things Mean a Lot – as you tighten the belt be careful what you cut. Yes, you should control travel cost and really asked yourself whether or not to you really need to be there but there are little things that you may be tempted to cut things that may mean more to your employee and/or customers than you realize. If you experience a RIF, be careful not to cut other little things that may demoralize the remaining staff. For example, if you have bagels or donuts brought in one day a week continue to do that. The cost savings is minimal and the unattended message that you may end up sending is that the company has cash flow issues…spooking the folks that remain. Keep in mind their senses will be heightened and if you have inexperienced staff (recent graduates, for example) it will kick in the fight or flight reflex. The last thing you want is the remaining employees to be unproductive because they’re job hunting.
   
4. Strengthen the Core – this is a great time to refocus your core business, customers, partners, markets and employees. In the good times companies have a tendency to drift away from their core…what built the business. If you’re a software company focus on building, supporting and refreshing your offerings…put the transition to a “services” company on hold until the recovery. Take a long hard look at your customers, partners and markets…are these the folks you want or will need in the future? If the business is hard to get or maintain it is expensive…think about what you can really afford. I heard through the grapevine that a profession services firm recently pulled out of 15 markets, including Asia. Their comment on doing it…”those markets will be there in the future we can reenter when its right.” This can help guide your decision with bullet #1 - Cut Fast and Deep.
   
5. Take a “Pit Stop” – many companies have been operating with inefficiencies in their go to market engine for years. The demand for meeting quarterly performance has kept many CEO’s from taking the car off the track for a “Pit Stop.” Now is the time. It’s a good chance your stock is down and not going anywhere soon regardless of your performance so take advantage of this situations to do some work on the engine, flush the systems, and get the car ready for the next 500 miles. Actively look for opportunities to gain greater efficiencies even if it means setting aside funds as a write off. Take the hit now, MasterCard recently announced their 3rd quarter earnings and they took a $500M after tax charge to settle a lawsuit with Discover card. That lawsuit had been out there for years and was settled a while ago but they took the hit this quarter…there’s a reason. We’ve spoken to a number of CEO’s recently who said that they regret not doing this in the past.
   
6. Adjust Your Message…Carefully – yes, you need to realign your value proposition to today’s economic reality but be careful. The temptation is to jump to a “cost” message but not all of your customers maybe feeling the pain…yet. If you abruptly switch a message from “growth”, “revenue performance,” etc. to one of “cost savings, “ be forewarned that it can damage your brand and/or confuse your customers. Know how your customers perceive your value and how it varies by segment or type of customer (and don’t guess, do your homework) and finds ways to enhance it with key messages that play today around value for the money.
   
7. Focus on Strengthening and Deepening Relationships - the good thing about a downturn (if there is one) is that it’s a great time to strengthen and expand your relationship with your best customers…and it’s worth the investment. A “spending freeze” takes the pressure off your interactions with customers. It can go from you trying to sell something to them, to you talking to them about their situation and needs. Customers may no longer be in the “buy” mode but they very well may still be in the “learn” and “shop” phase of the buying cycle so take advantage of that to introduce them to new information, services, and employees (senior executives in particular). This “value added” period can go a long way in growing your business when they start buying again.
   
8. You May Have to Give Some to Get Some – your customers may need to do business with you differently during this down turn. You don’t have to go to the extent of a Microsoft or IBM in creating special demand generation and financing programs to help partners and/or customers but think about their situation and how you might be able to help. Chances are the gesture will speak volumes and relating to the bullet above goes a long way in deepening the relationship and increasing customer loyalty.
9. Lastly, Prepare for the Upturn NOW – bad times, just like good times don’t last so start preparing your recovering plan now. Many companies use times like these to create an aggressive plan to gain/buy/steal share from competitors as soon as they sense the start of a recovery. Don’t become financial myopic and only focus on cost reduction. Something that we have learned from the past is that companies have a tendency to turn over the keys to the CFO in times like these and for good reason…they drive out cost, watch cash flow, etc. Unfortunately, they can hang onto the keys a little too long. As Beth Comstock, the CMO of GE told me (in her first stint on the job) during the recovery after the “burst”; ”...finance did its job of controlling cost but it impacted growth… the CEO is looking at my role as being the Chief Growth Officer…” .

Draft a plan and have your organizaiton commit to coming out of the downtown stronger, leaner and more aggressive than you went in to it. It will help focus the organization during this challenging time. To do that you'll need to learn from the past (see above) and be ready to invest. Now get started!

Direct Marketing Done Right

Click on the image to the left. Now this is how you market in a down economy. Over the past year I’ve focused on the virtues of Web 2.0, but it’s time to give a “shout out” to ol’ school direct marketing, especially when it’s done this well. It’s from Boden, a children’s clothing catalog company.

This letter is a virtual clinic on how to do DM right.

Things to love about this piece:

• Quick Service Number – immediately connected to my account info…none of this nonsense of explaining who I am, they know me as a customer…and that I’ve bought, a lot apparently, in the past. Most likely, it also serves as a tracking code as well. Bonus incentive: if I use it when I call I get free shipping, which I probably would have received anyway but they’ve given me an incentive to give them the tracking code.


• The Opening Sentence/Paragraph – it’s about me (actually, my wife) right out the gate. You’ve maybe got 2-3 seconds to connect with the reader nowadays, and you can’t start out with what you want or who you are because the reader doesn’t care. I also know what you thinking, how is it that your wife shared a letter like this given the comments that we bought “armfuls” last year and we were “one of their best customers.” Two reasons; 1) she’s an ex-agency person and appreciates a good piece like this, and 2) the letter mentions that we’re not buying as much this year…there’s the positive spin.


• Use of Levity/Comedy – this is extremely hard to do well and it is a bit edgy but I love it…makes you want to read more. The use of British humor (this is a UK based company) also adds to it. Folks have been saying for a while that the best creative has been coming out of London for years. Got to admit I’m seeing more and more evidence of that…but I also have to giving credit to the Geico Gecko (the Martin Agency) for paving the way here as well.


• Personalization – from the owner/founder Johannie Boden herself. Have no idea what her first name is or even if she’s even a real person… could be Tommy Bahamas’ sister for all I know, but I like the personalization. Hands down, DM from an individual to an individual always has the best response rates. Writing good copy that sounds likes it’s coming from a real person and not just a signature, that’s another story…maybe even another post.


• Customer Buying Behavior – they’re obvious tracking and have noticed a change in my wife’s habits; this is critical in a down market. Watch your best customers and their transactional behavior…probably should have started last year but it’s never too late.


• The Solution/Offer – Dolla, Dolla, Bill Yo…Cash Money$$$. Look up DM best practices and “the experts” will tell you that you should test multiple offers… 50% off, half off, or buy one get one free, and you should, but in today’s economy real money is a real winner. Simple, real and it can be combined with other promotions. Ol’ whatshername came up with a custom solutions just for us. She determined that the most likely reason we haven’t been buying lately is price –and she’s dead on…their cloths are on the high end. Back to school this year meant going to Macy’s with a hand-full of 10-20% off coupons.


• Limited Time Offer – yep, got to have it. And the time period is getting shorter and shorter. Seeing an interesting trend with the use of limited time offers. This use to be the go to “hook” for PC manufactures and mass merchandisers now I’m seeing it in all kinds of retail situations, and most interesting is it's use in fund raising. Mobile opens up a whole new dimension look for that next year on Google’s G1 phone. Instant offers feed by GPS that expire very quickly…use it now or lose it.


• Creative – notice that the offer gets a third of the page, and is very colorful with offsetting large and small images. The $20 offer is supersized and next to information on where to redeem it. Your eyes are drawn to it immediately and it’s the motivator that determines whether you’ll invest the time to read the text above it. It is also perforated and complete, so if I only read the offer and tossed the top, I would have everything I need to understand and use it. Notice how they personalized the offer…”…I run out soon.” Love it!

At the end of the day the ultimate measure of good DM is performance/results. In my house, it killed but then again we were an easy target…they knew us all too well.

US Airlines…Nickle and Dime Nosedive

Last week I took a flight to Orlando. Since I fly a good bit and I have reached a preferred status (whatever that means) on USAir, I got bumped up to first class. Big deal! No meal, a 30-year-old plane, a terminal and jet port that looked out of a third-world country. I know I sound like a whiner, but hang on, I have a point.

The industry that led the way on defining the customer experience in the glory days of “jetting” and customer loyalty with reward cards has lost its way. In particular, the U.S. carriers are lost in a forest of bankruptcy. As the rest of the world moves towards enhancing customer experiences and building customer advocacy, the airline industry seems to be doing everything it can to move in the opposite direction.

For example, the airline I mentioned above now charges $15 dollars for the first (yes, the first) bag checked. As a result of that brilliant money making idea, we now have flights delayed because everyone is trying to jam their bag into an overhead. Or how about charging for water, tea or coffee? Brilliant. Yes, on this same airline coffee and sodas will now cost you two dollars. On the flight down the price of beer and wine was $6; two days later on the return it was $7. It’s probably close to $10 by now.

Maybe you’re saying that they have to do that because of fuel cost, labor cost, etc. Well then, how is it that Virgin Airlines, in particular Virgin Atlantic in the States is able to make money in this industry despite its new planes, expansion of routes, etc. Because Sir Richard knows it’s about the Customer Experience!

Southwest Airlines has turned this into a whole campaign. The strong, well managed will make the weak pay for this approach. The bottom line is that “nickel and diming” your passengers/customers isn’t going to make the airline profitable again. In fact, it will probably do the opposite.

What will help restore profitability to the airlines? Well I’ve a got a few ideas: how about we start with Innovation…and then good management practices and …and then decent labor contracts, etc.! BusinessWeek ran an piece on the performance of innovative companies in its September 22, 2008 edition (see image to the left) . Companies known for delivering innovative customer experiences have an average stock return of 2.5% and revenue growth of 5.1% from 2004-07. Those with innovative business models were more impressive with a 16.6% return and 7.2% growth.

So I say to the airlines, to get flying again…innovate yourself out of this nosedive…and give me back my free coffee!

Digital Dissonance

The Digital Disconnect in Financial Services

I’ve just returned from the Financial Services Marketing Symposium in Orlando where I saw and heard some really interesting things.

First, I saw an affinity card program from a company called ServerSideGroup that can be issued for small groups, like a church congregation or a local school. Second, I heard the CMO of CapOne, Bill McDonald declare that “Web 2.0 is about consumers selling to consumers” which I think is great way to describe it. So if you look at these two things together you see a potential revolution in the way credit cards are marketed. In one scenario, you have the marketing scientist at CapOne trying figure out the “killer” value prop that will get you to open the third DM piece they sent you that week and fill out that credit application; all based on sophisticated models that try to figure your “profile” based on various data sources that really don’t know you from Eve.

In the other scenario you have Betty, who teaches your children at Sunday school, calling you about the new St. Joe credit card that will become a valuable fundraiser tool for your church…you don’t need divine powers to figure out which value prop will win. Look around your industry and you’ll probably find a similar analogy.

So you would expect FS companies to be all over Web 2.0 right? Well you would expect that, but you’d be wrong according to our research. MarketBridge just completed an industry research project on the use of Digital Marketing in the Financial Services industry. The research was conducted in partnership with SourceMedia the publisher of American Banker , The Bond Buyer and other FS focused publications. The study drew nearly 250 respondents across a variety of titles and functions within financial services. Nearly 40% had executive-level titles and close to 20% had marketing budgets of $100 million or more.

Here’s what we found out;

• Marketing is in the Driver’s Seat… More than 60% of respondents said they had a “reasonable” to “very good” understanding of digital marketing. When asked how organized their companies were to plan and implement digital marketing strategies, more than half said they were “adequately” to “well organized.” Over 90% of the respondents said Marketing was the key influence in driving the Digital Strategy. Nearly two-thirds of the group said that a Centralized Marketing organization owned the strategy, and nearly that many said Marketing owned execution.


• But it’s using Web 1.0 tools and platforms… Half of the respondents said they spend 0-10% of their budget on digital. The majority of respondents (65%) are spending the most on what they are familiar with, mainly their own Web sites. Relatively few (15%) are spending toward “Web 2.0” vehicles like blogs, social networks, video, etc. The situation in the Insurance industry is even worse, with Insurance companies on average only spending 2% of their advertising budgets on the Internet.


• Why? It’s not the reg's or the legal department, only 35% cited regulatory issues as a top concern. The majority of respondents said their top concerns were lack of experience with new digital marketing platforms, and the inability to prove ROI.


• The Root Cause… They’re not investing enough time, money and resources to do the necessary piloting to learn how to use the platform and tools, develop processes or do reporting . It’s a chicken and egg thing. Spend on those things that have a proven result even though they are, for the most part, only measurable at the tactical level and not at the campaign or program level. Show short term results vs long term success.


• The Fix... Long term programs (…and I’m talking a year or more) aimed at key market segments with clear value props. By taking a long term approach marketers will be able to experiment with Web 2.0 tools because they work best over time, not in a short term campaign. Think I’m making that up? We’re working with a leading Insurance company now on a 3 year long program. It involves a dozen or so partners, aimed at Boomers for a product that they won’t be able to sell to some folks in the segment for another 2 years.


• Why? In the current environment, FS institutions have to be focused on creating deeper more meaniful relationships with customers. They need to be focused on creating customer “advocates.” Firms that take a “wait and see” approach to going Digital will see their customers disappear and their traditional marketing tactics become less and less effective as they sit on the sideline waiting for the perfect ROI. Creating Customer Advocates for the brand, products and services is the goal because it's all about…or soon to be all about Consumers selling Consumers.

Got to go, Betty’s on the line…