Month: August 2009

What makes Apple marketing insane (ly great)

Consistent and thorough (you might also say obsessive) are words that describe any Apple marketing effort. I got an example when I decided to treat myself today to the just-released Snow Leopard upgrade, speed and various new features for an affordable $29. Was near an Apple store (Knox Street in Dallas) so stopped in.

They had a little VIP line with a delicate white chain set up in the middle of the store. (Which, as Apple stores usually are, was packed. What are all those people doing in there? How many visits does it take to buy a computer or iPhone?) You move quickly through the line and an employee hands you your DVD case, shakes your hand, says “congratulations.” Another employee handles the receipt and puts a little payment confirmation sticker on the case that says “Lucky You”. And the door employee (who introduced herself by name as I entered) repeats the congratulations on the way out.

Compulsive and obsessive are signs of mental imbalance, right? Is that what Steve Jobs means by “insanely great?” But it’s also very effective marketing because it makes customers feel smart and special.

Why it pays to market during a recession

When times get hard, marketing is one of the first things to get cut. Consumers have less money, so why market to them at the same pace? And with a smaller budget, are those people in the marketing department even necessary?

As a matter of self-preservation, marketers like to counter that a recession is actually a great time to sell more aggressively. When others are cutting back, you can gain market share at relatively low cost by doing the opposite. And we’ve always had a few juicy stats to prove the point, with an article in yesterday’s Wall Street Journal providing fresh fodder.

In Q1 ’09, New York Life grew its market share to 5.4% from 3.9% a year earlier. It did this by increasing its advertising budget by 24%, and telling its agents they had a “moral obligation” to present the company’s strength to clients. Ads changed from a sentimental teddy bear theme to a serious message about financial stability. By second quarter, the firm had leapfrogged from ninth to second place in revenues from premiums and annuity deposits as many clients put extra money into their life insurance policies.

Bed Bath & Beyond was equally aggressive, increasing advertising expenditures to 3.7% of revenue in 2008 from 3% in 2006. Much of that money was invested in targeting the 100 key stores of a major rival, Linens ‘n Things. Linens coupons and discounts were matched dollar-for dollar. The payoff: Linens ‘n Things went out of business. And with its increased marketing share, sales at Bed Bath & Beyond were up 2.8% for its quarter ended May 30, compared to an drop of 13% in the home furnishings sector overall.

If you’re a marketer, sink your teeth into those stats next time you present to the money people—and be sure to tell them you need some strong creative help to get the right message to your audience. WSJ reminds us that Campbell’s Chicken Noodle Soup (comfort food) and Revlon nail polish (affordable luxury) are products of the depression that are still successful today, born of aggressive marketing and a well-told story at a time when others were cutting back.

Lies, damn lies and statistics

The lead story in the Specialty Foods newsletter today really caught my eye. “Some 52% of consumers are monitoring the amount of sodium in their diets and 26% read labels for sodium.” This seems simply incredible on the face of it, especially in the context of my new home in upstate New York where 77.8% of the populace pays no attention whatsoever to what goes into their gullet.

Seeking understanding, I follow the link to its source — Mintel, “a leading global supplier of consumer, product and media intelligence.” Here I find out that:

  • 22% [of consumers] restrict the amount of salt that they add to food, but don’t watch the much greater amount of sodium that is in foods and beverages
  • 18% say that “food and beverages low in sodium are one of the three most important components of a healthy diet”
  • 26% read labels for sodium, and may make some decisions based on this info, but they are not following a regimen to control sodium in their diet
  • 34% do not pay attention to sodium

Except for the last stat (which seems low), none of these numbers seems at all credible to me on a seat-of-the-pants basis. Do they to you? Perhaps this is some research from a survey that is skewed to make a particular marketing point? So let’s look at the original source material, the verbatim comments from the survey. Oops, they aren’t available. Instead Mintel offers a link to a webinar where we can learn about “Sodium: The Next Trans Fat?”

High school debaters learn that with a little digging, they can find a “statistic” to support any point of view. Perhaps in the Mintel survey, and I’m stipulating that there was one, they asked people “do you ever think about the amount of sodium in your diet?” and 52% said yes. That would still be a high number, but I’d accept it. Then maybe some creative marcom copywriter changed it to “monitor” which recasts the same stat as alarming or fascinating news.

One of my earliest bosses promised he was going to teach me to “lie with statistics”. I didn’t last very long at that position and don’t know what happened to that boss. Hmm…

Price elasticity in the moving and storage business

U-Haul's moving billboards, deployed nationwide by willing customers.
U-Haul's moving billboards, deployed nationwide by willing customers.

I recently completed a pretty intense cross-country move. I rented a 24 foot Budget truck (that’s the size of the box, not counting the cab) and when it still wasn’t big enough I shipped an extra container of stuff with Door To Door Movers.

I was amazed at the price differential. The Budget truck cost half what I was quoted by U-Haul. And on a square foot basis Door to Door was 60% of the price of a competitor, Pods.com.

How come the disparity? I don’t know enough about the pods type containers to have a strong opinion, but when it comes to trucks it’s definitely MARKETING. Every U-Haul truck or trailer on the road is emblazoned with ads about how easy it is to load, to drive, etc. If I’m thinking about a move, I sure am going to notice those free ads… being driven down the road by customers like me. And sure, I’ll check U-Haul first. But I assume most consumers go no further, or they couldn’t charge this kind of premium.

As a mover, I’m glad I took the extra time to find the low priced spread. But as a marketer, I’m pleased to recognize advertising that seems to be working so well.