Wednesday, 31 December 2008

Selling Cars Online

The struggles of the global automotive industry are well documented and set to continue for a while. There is however one area in which car sales are growing healthily - online. Research group Xerfi reported recently that direct, online sales of cars are growing apace in France. Online sales grew 25% in 2007 and 31% in 2008. Xerfi predicts a slowdown during 2009 (20% growth) before picking up again in 2010. This is significant growth albeit from a small base. The US manufacturers dabbled in the online space a few years ago with little success mainly due to dealer opposition.

There are a couple of advantages to buying cars online. Primarily, it will allow the OEMs to manage (and optimise) the whole sales cycle and, for the customer, it will remove the most frequently contested part of new vehicle purchases - the dealer experience...

Monday, 29 December 2008

POS - Price Over Service

A recent study by Accenture indicates (once again) that price is less often the determining factor in overall customer satisfaction. The global survey entitled "High Performance in the Age of Customer Centricity" reported that more than two thirds of respondents who switched supplier in the last year, did so as a result of poor customer service. Among the survey’s other findings:
  1. Consumers were most likely to switch providers when they were dissatisfied with four key aspects of customer service, including:
  • whether service representatives were polite and friendly;
  • whether their issues were resolved in a timely manner;
  • whether service representatives took ownership for resolving the customer’s issue; and
  • whether customer service was available at convenient times.
Additionally, consumers were most likely to switch companies when they became frustrated by being forced to wait for a response after requesting customer service or when they encountered business policies that impeded the ability of customer

  1. Consumer expectations were met least often in the emerging markets. In China, there was a particularly notable decline in companies’ ability to meet consumer expectations, with only 32 percent of Chinese respondents in this year’s survey saying that their expectations were met frequently or always, down from 70 percent in 2007.
  1. Consumers in emerging markets were most likely to say that the increased use of technology has improved customer service. Nearly nine in 10 respondents (87 percent) in emerging markets said technology has improved customer service, compared with only 44 percent in mature markets.
  1. Consumer use of the full range of service channels has increased in the past year. While the vast majority of consumers still prefer to use the telephone to seek assistance (selected by 85 percent of respondents), use of other service channels — including e-mail, speaking with representatives at places of business, corporate Web sites, sending a letter and online chats — has increased across the board. However, satisfaction with service declined across most channels, with the exception being live online chat -- 43 percent of consumers reported that they were satisfied with chat services, up from 30 percent a year earlier. Even so, satisfaction remained highest when service was delivered on premise, with the largest number of respondents – 55 percent – expressing satisfaction with on-premise customer service.

Sunday, 21 December 2008

Mobile Couponing - The Time Could Be Now..

OK, I know we have been saying this since 2004 but...

American marketers offer in excess of 15Billion dollars worth of coupons every year and, in a time of generalised economic woes, consumers are more than ever motivated by promotions (see black Friday and cyber Monday's results). Having started bottom of the class, current mobile phone penetration in the US sits at about 85% and SNL Kagen see that growing to 100% by 2013.

So are the stars aligned?

Some of the opportunities for marketers in using mobiles to reach their consumers were outlined earlier this year in a JupiterResearch report.

"Mobile coupons are gaining traction among advertisers, and are no longer just a niche tactic, rather they are moving toward the mainstream to more common use. There are definite benefits to using mobile coupons such as real-time offers, geo-targeting, personalization, time-of-day redemption tracking, triggering impulse purchases, and a lower cost of delivery.

Friday, 19 December 2008

Display Ads are a Waste of Time - Aren't They?

Data from several sources indicate that click through rates on display ads (including rich media) have fallen dramatically in recent years. For static ads, a marketer can now expect to get a 0.1% CTR...

But it's not all bad news, a recent study by ComScore presented at the Empirical Generalizations In Advertising Conference (What a great name for a conference), demonstrates that while not generating immediate clicks (logical, since exposure to the ad - unlike search ads - does not correspond with a moment of intent) - the medium does have provide positive impact on:

  • Visitation to the advertiser’s Web site (lift of at least 46% over a four week period)
  • The likelihood of consumers conducting a search query using the advertiser’s branded terms (a lift of at least 38% over a four week period)
  • Consumers’ likelihood of buying the advertised brand online (an average 27% lift in online sales)
  • Consumers’ likelihood of buying at the advertiser’s retail store (an average lift of 17%)

Search & Display
In one category (retail), ComScore found that, due to the broader reach of display, it will often outperform a search only campaign. The synergies between the two types of advertising are such that, when used together, they deliver more sales than the sum of the components. And, we all know that conversion counts more than clicks...

Monday, 15 December 2008

More on Advertising & The Social Networks

The New York Times published an article this weekend (Advertisers Face Hurdles on Social Networking Sites), on effectively advertising on social media sites. The gist of the article is that banner advertising on the networks while cheap tends to be ineffective - "Members of social networks want to spend time with friends, not brands". A potential route from the high traffic low ad revenue trap, argues the article, is to create superbowl-standard ad content day in and day out....

Wednesday, 10 December 2008

The Two Chief Functions

Peter Drucker one of the fathers of consulting and the business re-thinking business has said many profound things about the way we do what we do. To me the most important (because, perhaps, it best suits my needs) is below.
"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."
This reminds me that even in difficult economic times, marketing is still an extremely important investment. We still need to seduce and retain new customers. As someone (also in marketing) once said, "you can't cost control yourself to greatness".

My company Rosetta, amonst others, is focused on the kind of marketing that will actually produce the outcome that Drucker indicates (creating a customer). Marketing that strives to be consistantly innovative (and always technology enabled). Relevant and interactive marketing communications to burst through the clutter, to reach the right potential customer, and to really understand the "when" moment.

Sunday, 7 December 2008

More Informed Marketing

According to a new survey by the CMO council, less than half of marketers polled have a good understanding of how profitable their consumers are, their lifetime value and how they might be retained. The focus tends to be on the individual campaign performance. However, it appears that the intentions are there to address this - more than 60% of the survey’s respondents put better segmentation, profiling and targeting strategies as a top priority for identifying and engaging core customers.

Other planned activities listed include:
  • Adding or improving database marketing systems
  • Acquiring new customer and market analytics capabilities
  • Personalizing multi-channel communications and customer touch points
  • Individualizing print, email, text messaging, call center or Web interactions
  • Building online customer communities and interactive channels
  • Capturing more customer information via the Web and at point-of-sale

The insights derived from analytics must do two things, while indicating where you are not performing as expected they must also highlight alternative paths... The essense of optimisation.

Wednesday, 3 December 2008

The Other Conversion...

...That of the accelerated transfer to digital from analog advertising.

Advertising overall will decline next year (I know that's this is not new news), this is true for the entire spectrum of advertising; from the cable networks to the New York Times...

An article in The Economist this week suggests that online advertising will escape the slowdown relatively unscathed. Clearly this is not representative of additional advertising dollars but of a reallocation from offline to online.
eMarketer, a market-research firm, predicted that online-advertising spending in America, which makes up about half the global total, will increase by 8.9% in 2009, rather than the 14.5% it had forecast in August. The firm thinks search advertising will grow by 14.9% and rich-media ads by 7.5%, whereas display ads will grow by 6.6%. In short, online advertising will continue to expand in the recession—just not as quickly as previously expected.

The article makes a further point in that online audiences are increasing in those areas in which publishers and advertisers have not successfully developed a business/monetization model: video and social media (see previous post)...