Sunday, 30 November 2008

Is Twitter for twits?

I have generally avoided too much comment on social networking in this blog as it is amply provided for elsewhere. My colleague, Sam McArthur, posts some excellent content in her Savvy Marketers blog, which we include in our blog list.

Twitter, however, is one phenomenon that leaves me increasingly bamboozled as to what its best use might be.

For the uninitiated, Twitter is a social networking tool that asks the simple question ‘what are you doing?’ You then have 140 characters to say exactly that. You can ‘tweet’ as many times as you like and cover things as inane as putting the kettle on to as profound as saving the world. You can follow other twitters and other twitters follow you.

I signed on to Twitter in August in the interests of exploration and since then have miraculously acquired 12 followers. 10 of the 12 I have never met in my life. Quite why they are interested in what I have to say, I don’t know, but they are welcome. There was a mini-surge in followers after I posted a Squidoo lens on Corporate Social Responsibility, which, in itself, provides a clue as to the types of people who are sharing their lives on Twitter. Rather sinisterly, I have received 3 notifications this morning of new followers whose profiles I discover are under investigation by Twitter for strange activity. I’m not sure what this means, but it makes me cautious.

Some discernment is required in deciding who to follow. Blindly agreeing to follow anybody who follows you only leads to your Twitter page being filled with rubbish. I am following 4 people: the best user is Ethics Blogger, aka Chris McDonald,
who provides regular tweets on ethical malpractice that he discovers around the world. I only wish I had time to read more of what he promotes. LouiseBJ on the other hand shares with us that she is logging on in the morning, un-jamming the printer and logging off at night. Very chatty and Louise is no doubt posting some very useful tweets amongst all this minutiae. They are, however, lost and I for one don’t have time to sort the wheat from the chaff.

The Marketing Eye tweets have generally been business focused, covering promotion of posts on this blog, developments with clients and recommendations of services or web content that I have discovered. Perhaps this is too straight-laced, but I want anything that I impose on the rest of the world to add value in some way.

As marketers we have a responsibility to explore and be at the leading edge of new methods of communication. At the same time, we have to avoid undermining our profession with the promotion of activities that won’t deliver a commercial return for our clients.

So, where are the business-related benefits?
  • Twitter for common interest groups could provide some payback: the prompt and succinct sharing of information and updates with agreed terms of engagement about what is to be posted would aid communication and not waste people’s time with nonsense.

  • I can see too, that Twitter has benefits as an online PR tool as it is very popular with journalists. This then demands the same focus on quality as would be applied to a press release. I don’t see ‘The dog needs a leak’ cutting it as a press release, so why should it cut it anymore as a tweet?

  • As a brand builder, Twitter can reveal the person behind the company. This will only become genuinely useful, however, when Twitter is adopted beyond the world of marketers and social entrepreneurs. A client in the demolition industry will need some convincing that they need to start tweeting to reveal the human side of their brand to their target audience.

The clue for Twitter, and large parts of other social networking media, is in the title. I read in yesterday’s Guardian that Twitter has been used extensively in India over recent days to appeal for blood for the injured in Mumbai. This is an undeniably brilliant use of the facility. Barak Obama used Twitter widely in his presidential campaign to mobilise the population to vote. If it can enfranchise the disenfranchised, we are looking at something very powerful indeed.

Some forms of communication are designed to be ‘social’ and need to remain that way. Care and moderation needs to be applied when seeking to exploit them for commercial purposes.

Tuesday, 25 November 2008

Cut VAT? Will somebody please explain

So, the great white hope is a cut in the rate of VAT.

Forgive me, but aren't prices set according to supply and demand (or has the free market gone for ever too)? Every shop in the High Street is already cutting prices by 20%, 50% or more in an attempt to stimulate demand, so what difference is another 2.5% going to make?

And even if we do all feel a little warmer at the thought of paying less VAT, are we really going to spend the money or are we going to save it?

From a business perspective, I just don't see where the benefit is. We collect and reclaim VAT, so it's going to be the same exercise with a different number. Instead we'll have to make changes to our accounting software to accommodate the change, get confused by what rate to charge over the intervening period and then go through it all again in reverse in 12 months time.

The big opportunity was to defer the collection of corporation tax. We, like many businesses, have a March year end, which means we've got a corporation tax bill to pay in a few weeks time. Deferring the collection of these monies for 6 months or longer would put much needed liquidity immediately back into a large number of small businesses and reduce their reliance on the banks - who can't be counted on to help them out in any event.

We are fortunate that our liquidity is OK, but none of us knows how long or how deep the recession is going to be and when we will be tested.

All of the measures announced today will take a long time to trickle down into the pockets of businesses and their customers. In the absence of cash, the hope has to be that the budget will instill confidence, whether it's real or perceived, because that is what is missing at the moment. If consumers and businesses are confident they will buy more and the economy will start moving forward again.

Thursday, 20 November 2008

Our first award!

The website that we have designed and developed for our client Ultissimo has been awarded 5 stars and Best Developer Website, Italy in the 2008 CNBC Property Awards.

Naturally, we are all delighted. Jo Allen, our creative director, has worked extremely closely with Ultissimo since its inception to define the brand and create a visual identity that reflects the quality and style of Ultissimo developments while at the same time evoking a true sense of life and living in Italy.

The website is an integral part of Ultissimo's business and we have worked hard with our client to marry distinctive design with informative content and ease of navigation. Like all of the best websites, the Ultissimo site has never stood still and there has been an on-going programme of new content and improvements.

Paul Belcher, Managing Director of Ultissimo, said: 'This is fantastic news and congratulations must go primarily to Jo for her amazing creative design work and execution. Our whole launch of Ultissimo really has been amazing. Quality has been a hugely important driver for our business and the public recognition of our successful teamwork makes me really proud.'

We are feeling pretty proud too!

Programming by Irene Soler

Thursday, 13 November 2008

Brand value

I was at a talk yesterday, given by Paul Fifield, visiting professor in Marketing Strategy at Southampton University. Paul’s style is witty and down to earth, which made for an entertaining address. His lecture centred on the importance of engendering passion and loyalty into our brands – all sound stuff as the economy goes into recession.

Chatting to Paul afterwards, our conversation got on to Ryanair. Paul asserted that there was no value in the Ryanair brand; a view that seemed instinctively wrong to me at the time and has remained so ever since.

I believe there are 4 contributors to a brand's value:
- Awareness
- Loyalty
- Understanding
- Stretch
Or, in the language of the psychiatrist’s couch: am I known, am I loved, does anybody understand me and what could I be doing with my life?

Applying these measures to Ryanair, we get some interesting results.

Awareness: Ryanair has phenomenal brand awareness in the UK and Europe. Ask anybody to name a budget airline and the chances are that Ryanair will be among the first mentioned. This means, love it or loath it, there is a good chance that you will check out Ryanair prices if you are looking for a cheap trip in Europe. Score: 10/10

Loyalty: Fair enough Paul, you’ve got me here. Tales abound of poor customer service and a sense of being ripped off by seemingly unavoidable extras. Most people will treat Ryanair as their carrier of last resort. (This said, we travelled to Italy with Ryanair in the summer, admittedly because there was no alternative, and found it surprisingly acceptable – we’ll use it again). Score: 2/10

Understanding: People are very clear about what Ryanair offers: it has become synonymous with low-cost and no-frills travel. Michael O’Leary’s abrasive style leaves us in no doubt what the brand promise is. To paraphrase him: ‘If you want to fly to Italy for a tenner, don’t expect me to serve you champagne on the way’. Score 10/10

Stretch: Could Ryanair take its brand into other markets? Of course it could. The low cost, no-frills approach has a place in many different markets, be they travel or otherwise. Easy Group has been at the forefront of this, admittedly with varying success, but it isn't the brand that has been the weak link in the failures. Score 7/10

Total 29/40

Paul will argue that value is transient and, in the absence of brand loyalty, it will migrate as soon as anybody new comes into the market with a better ability to meet customer needs.

This opens up a whole new debate about barriers to entry, but, let’s not argue the point that if Ryanair could sort out the loyalty element of its brand, its position would be even more unassailable. (That said, attracting 32 million travellers a year seems to demonstrate a pretty keen understanding of customer needs – do we really want pampering or price?).

Far from demonstrating that reducing your offering to a commodity destroys brand value, Ryanair does the exact opposite: the key is to become number one in your chosen market, by whatever route. High levels of awareness; absolute clarity about what you offer; sufficient stretch to support entry into new markets and high barriers to entry for new players combine to put a very meaningful and resilient figure into the balance sheet.

Wednesday, 5 November 2008

Successful sponsorships

An article on sports sponsorship by the banks appeared in the Times last Friday. What I expected to be a tirade against chief executives enjoying hospitality at the tax-payers expense turned out to be a very balanced piece by Ashling O'Connor on the benefits that sponsorship brings to the sponsor and sport at all levels. A link can be found at the end of this post.

The article coincided with a meeting that I was at yesterday with marketers in the professional services industry. There we discussed how to get the most out of sponsorships.

The problems faced by some members of the group are by no means unique: a portfolio of small, largely client-driven sponsorships with no cohesive link tying them together, the absence of an effective plan to get value from the sponsorships and intangible benefits making the return difficult to prove.

There are a number of guiding principles for using sponsorship effectively.

Let's start at the beginning - is it a sponsorship?
Many imposters masquerade under the heading of ‘sponsorship’: donations to charity and tactical payments to oil the wheels of client relationships are among the most common. Let’s be clear - these aren’t sponsorships. A sponsorship is something that is entered into in the expectation of a commercial return. Anything else should be recognised for what it is and not taken from the marketing budget!

What is the strategy – the real strategy?
A sponsorship should always be entered into as part of a wider business strategy. Too often a sponsorship is agreed and then a strategy of sorts is formed around it. Vodafone has a strategy to become one of the most recognised brands in the world. Sponsorships of Man Utd, The Derby, the England cricket team and McLaren Mercedes have all been part of this bigger corporate strategy. Vodafone didn’t sponsor the assets first and then decide how it might use them.

Have clear objectives
Typically the objective will be:
- Brand awareness
- Hospitality
- Brand positioning
Be clear from the outset what your objectives are and then think how the potential sponsorship can be made to meet them.

Work in partnership, be creative and be fair
Think creatively and work in partnership with the owner of the asset to develop a package that meets everybody’s needs. Don’t just settle for a standard package: great sponsorships are created, not bought.

And aim for a win:win. The holder of the cash is usually in the most powerful position, particularly in the current climate, but negotiating to drive the owner of the asset into the floor is rarely a recipe for success.

Invest to leverage
Writing the cheque and hoping that it will magically turn into a quantifiable return is like hoping the tooth fairy will arrive in the night. You need a plan and you need a budget to support it. A common rule of thumb is to match the financial amount of the sponsorship with an equivalent amount of expenditure on leverage activities.

Think hard and work with the owner of the asset to make sure that every ounce of value is being extracted. Areas to look at include:

PR – create a plan for press releases – not just when the sponsorship is signed, but throughout the life of the agreement.
Websites – profile the sponsorship on your website and make sure the sponsored party clearly identifies your business as a sponsor on theirs. Is a separate micro-site justified?
Marketing collateral - integrate the sponsorship into your brochures, direct marketing and advertising. Use the imagery and the values that your sponsorship communicates to create cut-through and brand preference.
Access to data – does the sponsored party have a database of its own that you can market your products and services to?
Hospitality – what opportunities are provided or can be created for client and prospect hospitality?
Event branding – take every opportunity to get as much branding up at events as possible. Think about the obvious and then the not so obvious - and don’t be intimated if you’re not the lead sponsor. A creative marketer can steal the thunder of a lead sponsor by lateral thinking and simply having the audacity to ask.
Staff engagement – a really successful sponsorship will work well internally as well as externally. Look for scope for staff incentives, motivational talks or for members of staff to become involved with the sponsored activity. The sponsorship should feature regularly in internal communications.

Measuring the return on investment
The return on the investment is likely to be derived from the leverage activities, not the sponsorship itself. Measurement options include:
- Advertising value equivalent of PR coverage
- Number of clients and prospects entertained (with data on new business wins if your systems are sophisticated enough)
- Returns on marketing campaigns geared to the sponsorship
- Market research to measure movements in brand awareness, understanding and preference.

To attribute an individual sale to a sponsorship is often very difficult. This doesn’t make sponsorship an illegitimate part of the marketing mix. Marketing is about an integrated set of activities linked to a common goal and a well planned and well executed sponsorship can be one of the most sophisticated and effective tools in the box.

Bail out the banks and invest in sport - Ashling O'Connor October 31 2008