McDonalds and Loyalty

I keep hearing rumors about McDonalds finally introducing a loyalty program next year, and I believe it will happen in 2010. I wrote about the fact they should do it 2 years ago, and if they do it next year they will have only taken 3 years to follow my advice.

McDonalds will definitely see a sales increase from this type of program. Just as frequent flyers always fly the same airline for the points and the benefits of status, McDonalds can easily get certain people to go to McDonalds more often (every day?) on the points and status system.

More important to McDonalds is the data. Who are your customers? When do they spend more on food? When do they spend less? Give customers a reason to let you track them. Give them a web site where they have to provide some more data (age, location, marital status, more) and it makes the data even more valuable.

Just do it, McDonalds. I’ll even let you track me.

Bell Effectively Fights Off Rogers Attack

In Canada, most of our major telecommunications services are controlled by a duopoly. As interesting as it is to watch them fight it out, I wish there was a close third to choose from.

By telecommunications, I am referring to television, home telephone, internet and mobile telephone services. And the Canadian duopoly is none other than Bell and Rogers.

Bell Canada started its life as a telephone company. It was once a true monopoly, having exclusive domain over local and long distance services in Canada. But in the late 1980’s and early 1990’s, the government took several measures to encourage competition. Including restricting ways the company could compete in long distance until other providers had a reduced Bell’s market share to 65%. It was government-forced competition, and Bell had to wake up and start competing for the first time in 100 years.

Rogers Communications started life owning a radio station but quickly got into cable. By 1980, it was the largest cable TV provider in Canada. In 1985, it also expanded into the mobile phone space as the government was actively encouraging new mobile providers to start up. In 1989, it entered the long distance phone market, again by the encouragement of the government. As you can see, 20 years ago the government was anxious to break the Bell monopoly.

Fast forward to today, where Rogers has not only entered the long distance market, but they have entered the home phone market as well as a not so small player. Bell, on the other hand, entered the satellite television market and has its very successful mobile business as well. Both companies have high-speed internet service offerings. (As an aside, to reinforce the point that Rogers is truly everywhere – Rogers owns many cable tv and radio stations as well, along with The Toronto Blue Jays baseball team and Skydome stadium. Of course, not to be outdone, Bell is a major investor in a national TV network and newspapers.)

So basically Rogers and Bell compete head to head all over the place in the telecommunications space.

What’s really fascinating to me is all the subtle and not-so-subtle things they each do to aggressively compete (ie: attack) each other from time to time.

The most recent example of this is that Rogers is making a major marketing push into Home Phone. They are actually advertising their phone services as $25 a month cheaper than the comparable plan at the big phone company. That’s significant savings. Almost anyone would jump at the chance of saving $25 if they could keep there phone number and get the same service and services.

But wait, Bell effectively strikes back. They are offering their satellite cable services at $25 off the comparable service at Rogers.

They’re even using the same red/blue couch metaphor in their advertising.

True competition is good – it just so rarely happens among big companies like this. More often it’s co-opetition. Consumers win in the end.

 

Subaru versus The Snuggie

First, the commercial at hand here: http://www.youtube.com/watch?v=rKBbgH2AU0Q

It’s quite bold for the advertising agency (is it DDB?) to have Subaru Canada to use the first few seconds of the real Snuggie commercial as the hook before taking about their product. “Go outside more.” It’s actually a bit of a dig at the Snuggie product as being for couch potatoes. (Who needs a blanket with sleeves? Can’t believe that company has made millions of millions on that.)

But back to the matter at hand. Can the car maker use a few seconds of another commercial without violating copyrights and possibly trademarks?

Clearly not.

The Snuggies people must have a decent sense of humor, and accept a 5 digit check for the use of their brand name. Free advertising, as they say.

Anyone know for sure?

Has Apple Lost Its Mind?

This might be slightly off topic, but there is a marketing angle to this.

Apple has been getting a lot of slack recently in the blogosphere and even the mainstream press for it’s monopolistic business practices and anti-competitive behavior. Apple, however, is not truly a monopoly and so this is not illegal. If customers don’t like how restrictive the iPhone is, or how they can’t buy Mac OS X and install it on their own hardware, they can take their money elsewhere and buy any of the hundreds of other phones or buy a Windows box. All’s fair in that respect.

But the real fascinating story here is how a brand who was super-respected for proving that customers will pay more if you give them a truly magical experience is quickly losing its shine. The speed at which this is happening is incredible.

I logged into iTunes tonight, and noticed there was an update to one of my iPod Touch applications – PageOnce, a personal productivity application. But trying to download it, Apple gave me a pop-up warning that this application required me to certify that I was 17 years or older due to adult content.

This took me by surprise. A personal productivity application, that allows me to check all of my various phone, credit card, bank accounts, air miles, and other points card balances in one place – is flagged for adult content.

And when I went into the iTunes Store to visit the application page for more information, this is what I see:

Let me get this straight… “realistic violence”, “horror/fear themes”, “cartoon/fantasy violence”, “alcohol, tabacco or drug use or references”, “mature/suggestive themes”, “profanity or crude humor”, and “intense sexual content or nudity”.

APPLE, YOU HAVE GOT TO BE KIDDING WITH THIS!

It’s a productivity application. It contains none of those things. Your entire content ratings system looks like a joke. It’s one thing to annoy developers with your odd application rejection practices. But the above screen shot makes you look downright incompetent and foolish to your customers. Really. You’ve dropped a few notches of respect with me tonight. I’m truly stunned.

I know this one thing will probably get lost among all the other things Apple is doing right now to destroy it’s once stellar brand. But it’s a perfect example of taking a good thing and ruining it.

And I feel sorry for the people at PageOnce. A really useful web site and application.

Insurance Commercials

Ever notice how all car insurance commercials state the following statistic:

“Customers who switched to us saved an average of $342 off their car insurance.”

There’s an old saying. There are three types of lies: lies, damn lies, and statistics. The advertising slogan above is basically a statistic. And as such is meaningless. It’s meant to imply in the consumer’s mind that this insurance company is the cheapest one you can find, when in fact it does not prove anything at all.

Car insurance is basically a commodity. If I presented you with two policies, with the same amount of coverage in every respect, and one was $1000 and the other was $1200, you would take the $1000 policy. Even the brand name of insurance, AllState, has only a small market share of the overall market. The brand name doesn’t mean much. Price is the determining factor – it’s a commodity.

So it’s a “given” that people do not generally switch auto insurance companies if it costs more money. So the reverse is true as well - almost every customer that switches companies saves money. Every car insurance company on the planet can make the claim that the average customer that switches to them saves money because only customers that save money switch to them!

The other axiom about car insurance is that you can almost always save more money by shopping around. There are dozens of insurance companies competiting for your business. Most people simply renew with the same company year after year. But it’s pretty much a guarantee that if you shop around a little bit, you can save money. Even only a few dollars, but there’s a 98% chance you can save at least $1 by switching to another company.

There are two reasons for this. The first is there are dozens of variables that go into determining the price of insurance (the year, make and model of your car, your address, your age, marital status, driving record, local crime rates, coverage, deductible, etc.) and no single insurance company is the cheapest for everyone at any given time. One insurance company might be cheaper for people over the age of 40 who drive a minivan and live in the suburbs, while another might be cheaper for people over the age of 45 who drive an SUV and live in the city. You might have been with the cheapest company for you last year, but this year your car is older and you are older and even the car theft rate in your city street has changed a couple of decimal points. All of these small changes means that you are probably not with the cheapest company any more.

The second reason is car insurance prices are not static. Companies change their prices, to try to manage their profits (hopefully increasing them year after year). Also they know most people do not change policies year to year. So it is a legimate strategy for them to offer “the cheapest rate” to married, 40-year-old minivan drivers, and then raise those rates steadily year after year until enough customers start shopping around and realizing they are no longer paying the best rate. Year after year, the companies can focus on a different market segment (there are dozens) and then raise their rates by 5%, 10% year after year. That’s how they maximize their profits. Simply being the cheapest company for a single segment year after year will not lead to the highest profits.

So the next time you see a commercial by Allstate actor Dennis Haysbert claiming drivers that switch save money, roll your eyes and say “Show me ONE company where people lost money by switching. Show me ONE. I dare ya!”

The Twitter Addiction

It’s somewhat funny looking back 18 months ago to my January 2008 post on Twitter. Back then, the biggest concern was the stability of the service. There were some real questions in terms of if the service would commit suicide by not being stable enough for users to maintain their loyalty.

Those questions have largely been solved. Twitter is stable. The “Twitter Fail Whale” is on a well-deserved vacation, and with some celebrities approaching and passing 1 million followers, things seems to be going well for the service.

It wasn’t so long ago when Ashton Kutcher was begging and pleading his way to 1 million followers. Only a few short months ago. Currently he has 2.7 million followers. It seems usage of Twitter has doubled and doubled-again and keeps growing.

How many of those accounts are active remains a mystery. Some research has suggested that more than 50% of Twitter users have never “tweeted”. But you can be an active Twitter user and never say anything. Other research suggests around 9% of Twitter accounts show true signs of inactivity. That’s not too bad all things considered. But the truth is only Twitter knows and so far they’re not saying anything.

On the marketing front, Twitter’s effectiveness as a marketing platform has become more muted. That doesn’t mean it’s impossible, just that it’s becoming more difficult to get your message across in a sea of marketers and spammers. The key to effective marketing on Twitter is still through two-way interactions with your customers (“conversations”) instead of having a program auto-post press releases to an account.

Part of the problem, for me at least, is that the more you use Twitter, the more likely you are to follow more and more people. It’s only natural that you add people who communicate to you, add people who you find intresting through search, and add people who you have heard or read about who have Twitter accounts. The flow of information coming in to a particular users Twitter stream increases over time.

I have taken to start removing people who publish too much. If I log in to Twitter and notice 8 of the last 10 tweets are from a single person, and I don’t find anything particularly interesting in those 8 tweets, I will unfollow that person. That might sound like an unfair policy, especially if people are logging into Twitter only once a day and then replying to individuals that have sent them messages. But I don’t like the idea that one person can dominate my stream.

There is an old concept in computer science (probably from ham radio or older technology) called “signal to noise ratio”. If you are following someone, and out of their last 100 tweets they only had one or two interesting things to say, that’s a fairly low signal to noise ratio. That is, that’s a lot of noise for not much benefit. That’s why I prefer people who tweet less often, but may deliver more interesting content.

So for marketers considering using Twitter, I would try to avoid sending out too many messages in a day. It’s often counterproductive.

Countdown to the Death of Facebook, Part Deux

Well it was about a year ago when Facebook fumbled the launch of Beacon, it’s follow-you-anywhere ad service. The public reaction was pretty heated, although as expected it blew over quickly. Facebook toned down it’s release, and many of the most threatening features (from a privacy advocate’s perspective) never came to be.

I do not see “Your brother Joe just bought a 50″ Sony Plasma television. Click here to buy one too!” links littering my FB feed. That just hasn’t happened. Facebook is not following my every move. (Well, maybe they are but Google is worse.)

But Facebook appears to be dying from another problem. Lack of revenue.

Given how much Facebook knows about me, you’d think they would be able to target some ads at me that are HIGHLY relevant. When I update my status to say “going to watch a movie tonight”, it should bombard me with movie ads and trailers. “I’m hungry” should be responded with ads for Pizza, Subs, McDonald’s and all the food under the sun.

Instead I get “Free Samples?” ads. Not sure what traits about me suggest I am likely to give up my personal information in return for a tiny pouch of shampoo. And of course the ubiquitous “Find Sexy Singles Online” ads. Facebook knows I’m married – not sure why I am the target demographic for those ads.

Maybe I turned the privacy settings too high? Maybe there’s somewhere in the settings that lets me avoid these useless bits of junk that I would never in a million years click. I’ve probably screwed myself out of some nice fast food discounts because of my own paranoia.

No the truth of the matter is that Facebook has millions of pages to serve daily. I think I read they have surpassed or matched MySpace in traffic according to some metrics. Millions of pages, and very few of those ads get clicked. Most of them are probably mistakes where the user thought they were clicking something useful and their finger slipped and they clicked an ad by mistake. 

As it stands now, Facebook can never monitize it’s emerging dominance in this space. Applications have been killed off for the most part. They’re hidden away on some distant tab under some unrelated section somewhere. And despite it’s continuing popularity, they have no ability to turn that in cash.

Well, at least not billions and billions that they need to justify their costs. Don’t get me wrong, I’m not saying they have $0 revenue. I’m saying their revenue can in no way cover their costs, and since people don’t go to Facebook to click ads it never ever will.

Except by accident.

Twitter On Its Way Out?

It’s amazing to me, but the buzz around the Internet over the last couple of weeks has been over a new Twitter-like site called FriendFeed.

Jason Calacanis, who is a highly-respected entrepreneur in the new social media space has written that FriendFeed is actually better than Twitter feature wise, and has suffered none of the down-time that Twitter has.

Leo Laporte, who has one of the largest followings on Twitter with 46,000 followers, says he doesn’t use Twitter much any more. That he uses other tools like FriendFeed and Twirhl that link into Twitter.

It seems that Twitter is on its way out with the highest-profile users. Now I’m not going to call for the “death” of Twitter. But the scenario I see happening is that Twitter will become the underlying infrastructure and people will prefer to use other tools to interact with the service instead of the web site Twitter provides.

Now obviously if Twitter continues to have stability problems with it’s infrastructure, then other services will come along (and they have) to fill the void. If Twitter @ replies have been taken offline for a bit, people will start using another commenting system.

From everything I have heard about FriendFeed, it has some very compelling features Twitter doesn’t have. Time will tell if this new service will take root and take over. But it might not be that much time before we know. Stay tuned.

(Add me on twitter, at http://www.twitter.com/scottjduffy or FriendFeed at http://www.friendfeed.com/scottjduffy )

Tom Peters is a God

Tom Peters is a world-renowned writer, sparking imagination and creativity. This is from a couple of years ago, but it’s still as relevant today as it was in 2005.

 

100 WAYS TO SUCCEED #39:

BLOG AS IF YOUR LIFE DEPENDED ON IT!

 

Blogging, I firmly believe, is the premier emergent marketing-brandbuilding-lovemark-creating tool of our times! It is the premier way to have intimate-engaging-informative-WOWing “conversations” with Clients and prospects! This all goes double for small enterprises and niche enterprises; and goes triple for the Professional Services; and works wonders in the Public Sector as well.

 

Do you see Blogging in these exalted lights? If not, why not? Please…Blog-As-If-Your-Professional-Success-Depended-On-It. (Hint: I think it does.)

 

Begin today! Appoint yourself Chief Blogging officer. Or, better yet, Chief Intimate Client Conversations Officer!

 

 

Twitter Five Months Later

Way back in January, I wrote about Twitter as a new type of marketing medium.

I mentioned that Robert Scoble had 5000 followers at the time. Well he now has 26,000 followers. That is 26,000 people who regularly read the short 140-character posts that he puts out. He’s not even the biggest any more. Leo Laporte has 40,000 followers.

By the way, if you want to follow me on twitter, go to http://www.twitter.com/scottjduffy and click follow.

Twitter has suffered technical problems caused by its rapid growth and popularity. The site is down all the time, or painfully slow. They are working on it. They recently got a ton of funding to make it better. But they don’t seem to be working on it very fast.

Anyways, the power of using twitter to broadcast to your most loyal fans has grown. Moreso than just a blog, twitter is turning out to be a conversation. People are twittering AT people. And they are getting answers.

For instance, the communications giant Comcast has someone on twitter – comcastcares. His name is Frank, and he is paid by Comcast to monitor twitter, and help customers having problems with their service out. He has been getting a lot of good reviews, helping solve customer problems. One guy. Single-handedly raising Comcast’s repuation among the leading bloggers and Internet thought-leaders who use twitter.