Monday, November 14, 2011

QR CODES: Need to be done RIGHT!

QR CODES: Need to be done RIGHT!

            QR stands for Quick Response; and that is exactly what companies trying to engage with consumers need to do.  We are lucky to live in the world we are in today. We are fortunate that our hands carry a world of information. With over 80% of local search being done online there is no arguing that Smartphone’s have lead to this increase. In the next couple of years mobile internet usage will have surpassed that of desktop.
            Due to this shift it is imperative that companies give their targets a Quick Response to their wants for more information. The development of the QR Code has provided the opportunity to do just that.  There are plenty of APPS out there for Droid and iPhone users that allow them to scan QR codes and be directed somewhere that the companies want you to go. Anyone that knows me knows that I am consumer focused and therefore I believe it is not where the company wants you to go it is where the consumer wants to be taken.
This QR Code is an example of what most companies apply to their advertisements or publications. If you scan this one in particular it will take you to my companies website. Many companies will use a free QR Code generator and the outcome is exactly this. A standard black and white code and traditionally they lead to your website.  I recommend that a very important change occurs. Coca Cola is one of many companies that have found ways to differentiate their codes from the standard black ones thus increasing uniqueness and engagement. Todays world dictates that in order to stay competitive you need to be innovative and not follow the norm.  At VR Marketing Consultants  LLC we have  the ability to break the black and white standard and shift to the graphically designed codes with one other game changer. A mobile landing page that is not just a typical website. A mobile landing page is essentially a website that fits the size of a cell phone screen appropriately. 
            If a consumer scans your code they usually have had some interaction with you before, thus not needing to go to your website to see what you do. They want a QUICK RESPONSE and some incentive for going the extra mile to connect with your brand or product. We allow our clients to create a mobile landing page that offers consumer’s a promotion or some exclusive information that may not have yet received wide spread exposure.
            QR Codes are a great way to stay up to date in new technology and yet many think they are phasing out. In my opinion the concept of these phasing out is due to the lack of originality in their use. It is time to be different, and keep this great tool around by using them appropriately not abusing their simplicity. 

Saturday, October 29, 2011

Why Offer Check In deals?

Facebook and Foursquare offer some great ways to reward your customers. 

     I wrote about how daily deals can be damaging to your business. I also said there are ways to utilize and capitalize on the benefits that daily deals do have to offer.  Showing that you value your customers is a great way to make an impression. One way to to reward your customers for interacting with you is through "check in" deals.

     Facebook allows you create  one of four types of deals.
            -Individual: This allows you to reward customers for checking in to your location. As a merchant you can offer a percentage off their bill or provide some sort of incentive to thank them for checking in. I always say make sure the reward is valuable. Consumers know when you are trying to take the cheap way out.
            - Loyalty: This is a great way to thank your customers for their frequency of purchase. For example after every 5 times you check in you get a free admission to your theater or 40% off your dinner. It is less expensive to increase the frequency of purchase on your current customers than it is to try to acquire new ones.
           - Friend (group): The way to utilize this deal is to offer something of value to a group of up to 8 people. The benefit of creating a friend deal is that the customer must tag all the individuals they are with in order to redeem. For example: your a bowling alley and you will give a free game to all parties of at least 5 people. One person checks in and tags all four other people and then they are able to redeem the free game. Now, all 5 of these customers wall displays that they are at your bowling alley. Great exposure, considering the average Facebook user has 130 friends (multiplied by 5 and you get 650 pairs of eyes).
          - Charity: A merchant can show their Goodwill by offering some sort of donation for every check in by a customer. This can be completely tailored to what every value the donation is and the amount you will cap your donations at.  Example: Every time a customer checks in to our shoe store we will donate $1 to the Maine Entrepreneurs Start Up Foundation up to $50,000. This is not a real charity, as far as I know (hmmm, maybe it should be).

     Foursquare works very much like the platform that Facebook has with the biggest differences being that customers can share on twitter and Facebook and you, as a merchant, can run two different deals at a time whereas Facebook your allowed to run just one. The other great thing about Foursquare is that the customer with the most check ins becomes the Mayor of your location. You can create rewards for the mayor and this will entice others to keep checking in and sharing so they can receive this exclusive reward. I recommend that a Mayor receives incentives of fairly significant value. The greater the value the more customers are going to desire it and try to strip the title of mayor away from each other. Increased desire leads to increase in activity. Maybe the mayor gets a free bag of popcorn for every visit to the movie theater, or a free soda every visit to your restaurant. Be creative and make it fun.

Lesson: Create value and your customers will do the best thing for you in return, TALK ABOUT YOU.

Monday, October 17, 2011

Are daily deals hurting your business?

Are daily deals hurting your business? What are some of the options and alternatives?

            Daily deals offer businesses the “opportunity” to reduce their products price by a minimum of 50%; to be sold by an agency that will then take an “advertising” expense of at least 50%.  Ok, do the math, 25% is now the amount of revenue you will produce off your product or service.  The daily deal agency is getting 25% of your products value for utilizing their e-mail database.  I think many businesses are aware of the cost associated with an e-mail software. It is very inexpensive and has a very low rate of exposure.

            Say I have a movie theater with $10 admission and I decide to utilize a daily deal service. My overhead is the same whether I am open for 5 people or 500 people. I decide that I want to increase my weekly, daily, or monthly, traffic by reaching consumers that may not necessarily come otherwise.  Is this going to work?

Argument 1: YES! I am going to reach an audience of individuals that would not try my products or services if it was not for this discounted rate. Out of all the people that use the discount, hopefully my customer service will convert them to more frequent users.

Argument 2: NO! I am devaluing my product to a price point that anyone can take advantage of.  Now, I have cut my profits due to this advertising stunt to obtain customers that are deal hunters and will only use my brand because of the discounted rate.

            Now, the two arguments on daily deals are on the table. What else needs to be considered? What are some of the options?

            A. Is your product considered a premium brand? 
                        If you see yourself as a premium brand do you really want to devalue your product so anyone can be a user. If you’re a company that’s Customer Lifetime Value depends on the longevity of the consumer; you may be wasting resources on something that will not provide much/any return.
            Alternative: Consider increasing your customer interaction. Create value within your “deals” to increase the satisfaction of your current customers and provide them with incentives to bring friends and family. Let your customers be your advertising. Hop on the social media bus and get the word out there and create that conversation with your clients. Don’t use a strangers e-mail database; target the one device that is always on your consumer, their CELL PHONE! Text message marketing is effective because of the 97% open rate of a text. Try a company like TXTWave and give your current customers an incentive to bring others with them. You don’t need to be handing out coupons to attract business.

            B. How much can devaluing your product hurt your business?
                        It can be a significant downfall for businesses. Some businesses can get addicted to daily deals, literally, they can. A business will try one and see this significant increase in traffic for the next week or two and decide to do it again. That one provides the same result and then they do it again. Ok, now have you really increased profitability and longevity or did you just provide a product at a price point that people will only utilize when given the discount. If daily deals get used and abused by a company; eventually consumers will start to think: “Why would I ever pay full price, I’ll just wait for another deal”. CRASH and BURN: that, in no way, is the solution a business can be looking for.

            C. Say I do decide to go with a daily deal because I think I can get non-users in the door and convert them. Which one do I decide to use?

                        There are many different daily deal platforms and it is important to find the one that will benefit your business the best.  The question is what differentiates one channel from another. Typically, the size of the database, and very little else. Until Now, Gannett Media has decided to take this standard and re-create it with a platform called DealChicken. Deal Chicken in Portland, Maine said that their platform is not just a daily deal; it is part of a “Consumer Acquisition Process”. In Maine, DealChicken has partnered up with 107.5 Frank FM and 99.9 the Wolf radio stations in order to help create brand awareness for their clients offerings. Gannett owns Portland’s channel 6 and runs quick segments on these deals throughout the day.  DealChicken is run a little different region to region but they keep the same philosophy of offering brand awareness and not just a reduced price.  If you are going to take a 75% hit to your product then there better be some advertising value and DealChicken provides that.

            Going back to my example of a movie theater owner. If I was to become one of those daily deal addicts than I would start to ruin the value of my product and could possibly lose my profitable customer base. If I kept using daily deals for the sake of increased exposure it could get to the point that I now have to lower my price to $5; law of economics says the market sets the price.  If no one is willing to pay $10 anymore my addiction has killed my business. However, instead, I decide to utilize ONE daily deal site and I decide to take an active role and visualize this as an one time opportunity to create a memorable experience and convert these deal hunters in to long term users. Consider some special treatment to all the DealChicken redemptions such as; some bundles or kickback rewards that entices them to come back again. Now, this one time discount has given you an additional opportunity to get them back without having to pay that 50% advertising fee.  

            In conclusion, use a daily deal as an advertising opportunity to get that traffic and then use your own resources to engage the consumer and condition their emotions. Turn them in to conversions not dollar savers and maintain the value of your business.  

Tuesday, September 27, 2011

The Beginning: The Making of the Mainetrepreneur

Day 1:     The Start- When I was a kid growing up I loved sales. I loved the idea of product margins and negotiating. I may not have known exactly what  a margin or a markup was but, I LOVED IT.  It all started after Halloween when I was in 5th grade. I had a lollipop and another student from my class asked for it. I declined, yet I thought to myself there is a new NOW cd coming out and I wanted to purchase it. I made an offer to my classmate; "50 cents and this lollipop is all yours". What do you know my very first sale.  Literally the beginning. 

Day 2:     Start Up- One transaction made me start to think. I received this lollipop for free from going out on Halloween and I just made 50 cents Net Profit. Did I really think like that? Sure, but maybe not as scientific. I decided I was going to take the risk and I was going to purchase lollipops and sell them at school. This is where I would encounter my first business dilemma. I had no start up capital. I went to the first place I could think of. MOM! What parent can deny their child's first business endeavor, even after looking up the school handbook and seeing the no solicitations policy. She took me to the grocery store and we decided to go with a big bag of tootsie pops. Now, I needed a price for my product. I figured that the cost of a lollipop was about 12 cents so I would charge 50. 

Day 3:     Creating the strategy/Market Penetration- My price was set but how am I going to make a sale when my business goes against school policy? Easy, Scope my market. I decided to pay close attention to the goings on of the school day. I would take notes on when the teacher was most likely to look away or leave the classroom. I would be attentively taking notes on the force of gravity, just kidding, when the teacher was most distracted by other students. By the end of the day I had created my market penetration strategy. It was perfect, the end of the day getting ready for the busses to be called, the teacher was running around helping students get their jackets, shoes and class work. She was way to busy to notice me. 

Day 4:    Advertising- I now needed to promote my business, but how would I do that when I was breaking the rules. Well, I would start with the student next to me and then the two from across the table. I opened my desk and just happened to make my giant bag of lollipops visible. "WOW, can I have one" the student to my left asked. "NO" I replied, "They are mine and I'm saving them". If there is a mischievous face to be visualized, do so here. I am creating demand. I closed my desk and I said, "well, I didn't want to give them away because I purchased them myself but I guess for 50 cents", "OK!" he replied, and BOOM starting to see that ROI. Now, let my WOM Marketing strategy takeover from here. The kids across the desk see me take out my bag of lollipops and give one to my neighbor. Now they want one. Cha-Ching, another $1 of lollipops sold. The growth was incredible, in 15 minutes while waiting for the busses at the end of the day I made $10. The lollipops only cost a total of $4 thus leading to a net profit of $6. 60% profit and $10 in my first day of operation. Needless to say I got home off the bus and "MOM, we need to go to the grocery store". 

Day 5-8:     Repeat the process: buy, markup, resell.

Day 9:    Market Challenges- My business was growing nicely. I had a great clientele and had established the ground rule that no one could talk about where they were getting their lollipops or there would be no more. The first rule of lollipop selling in 5th grade is that we do not talk about selling lollipops. If you take nothing else away from my story at least remember that. My problem was that my customers started to catch on to the less expensive alternatives to my lollipops, buying their own. There was mumbling about being over priced and my daily sales volume was starting to decline. I made a quick decision to lower my price to 25 cents. I listened to my customers concerns and made the proper adjustment. The beginning stages of learning Customer Relationship Management. 

Day 10:    The Up-Sell- Before my price reduction my customer daily value (CDV) was 50 cents. Since my price reduction, my CDV was still 50 cents, however, my profit had dropped because they were purchasing 2 lollipops for what was the previous price of 1. My costs are increasing so I needed a strategy to generate more sales. I decided to create bundles. Instead of surviving off of my 50 cents per transaction I was going to try to average $1 from each customer. New pricing options: 25 cents per lollipop or 5 for $1. Now promoting my new purchasing options the cost of a lollipop just dropped from 25 cents a unit to 20. My customers were thrilled, but not as thrilled as I was. My CDV had just skyrocketed. I was getting an entire dollar from each transaction.

Day 11-20:  Business as usual- Everything was great the Up-Sell strategy was working and growth was great. Buy-markup-resell.

Day 21:       Business was good until it wasn't- My competition was low, the barriers to entry were even lower yet one weakness in my model brought my business to its end. FACULTY! When 20 out of 20 students in the classroom have a desire for your product and they are all walking around at the end of the day with lollipops, well look for the kid with 20 bucks and no lollipop. Life lesson: A bar owner should never be a drinker = a lollipop salesman should never be a sucker. Ofcourse, I wouldn't be wasting product I could be making $$$ off of it. 

I learned a lot about business in my first venture. I had an amazing ROI and walked away with profit. I also learned that sometimes the government can be a huge problem in doing business, am I right or am I right.