Do you really want to be friends? An argument against relationship marketing

“Like us on Facebook!”, “Follow us on Twitter!”, “Join our super-special VIP friendship group!”

Whether they are in the business of making coffees, selling clothes or providing car insurance, it seems as though every brand wants to have a relationship with its customers.  No longer satisfied with simply extracting money from transactions, businesses want to take their relationships with customers to ‘the next level’.  The logic is understandable: as consumers engage more with the brand, they grow to like it more, become more loyal and tell their friends etc.  Thus, the brand becomes ‘stronger’, the marketing department is vindicated and shareholders are happy.

This seemingly prevailing logic is not surprising.  Given the well documented expenses of generating new business, customer retention is a high priority for most firms.  Armed with new technologies, in particular social media, relationship propositions are cheaper and easier to deliver than ever before.  Consciously or not, you’ve probably encountered various relationship propositions numerous times today.

However, what happens when things go wrong and when the brand doesn’t deliver on the relationship as promised?  If a customer has agreed to enter into a social contract with the brand, they will inevitably feel more let down.  It’s this existing contract which makes transgressions feel worse.  A faulty product isn’t simply shrugged off, repaired or refunded; it’s considered a breach of trust and an insult.

Furthermore, these social contracts can make it harder for a brand to deliver hard news to consumers when they have to.  As a bank manager, would it be ‘easier’ to tell a customer they had defaulted on their loans if they were seen as a friend of the bank, or simply another account?  One can think of many more examples when ‘friendships’ between brands and consumers can make the normal course of business harder.

No matter the cause of the brand-consumer relationship failure, consumers often complain loudly, tell their friends and vent on social media.  Like gossip among friends, people are hurt and reputations are damaged, and often irreparably so.

Often by making relationship propositions, brands are offering a social contract that they can’t fulfill and are setting themselves up for more costly failure.  Repairing lost relationships is often more costly and than cutting and running from acquaintances – it’s why getting into an argument with a friend feels more emotionally charged, as opposed to one with a complete stranger.  Business is often easier when the transaction isn’t complicated by a complex social relationship.

Many brands should re-evaluate if they are willing to invest building relationships with consumers beyond business transactions.  Sometimes, simply offering a good service at a good price is enough to build a successful brand.

// Alec Schumann

Modern music festivals: A branded experience

There was something liberating about music festivals of the 1960s and 70s.  They were predominately about music, love and various social (and often anti-commercial) causes.

Fast forward to 2012 and the modern music festival has evolved to become a different experience.  There is still music, but many festivals have increasingly become branded experiences as companies compete to connect with and engage an increasingly fickle and distracted young marketplace.

Festival goers at the recent Splendour in the Grass in Byron Bay Australia were able to shop at Sass and Bide, Quicksilver, in between having a Grill’d Burger and a drink at the Smirnoff Cocktail Lounge or the Jagermeister Hunting Lodge.

Splendour In The Grass: peace, love and brands

Is this commercialisation and ‘branding’ of music festivals a good or a bad thing?  And what does it mean for both companies and consumers?

Corporate sponsorships and commercial partnerships can help promote up-and-coming festivals with the spill over effect of publicizing new acts.  The NME “Generation Next” tour is a good example of this.  Many acts would not gain this level of exposure without a strong commercial promoter.

Corporate sponsorships can also make established festivals more affordable by offsetting the high costs of paying artists, venue and equipment hire, insurances and staffing etc.  It would be extremely hard to fund major festivals like Glastonbury and Coachella without significant financial support from corporate partners.

However, over commercialisation and excessive branding may have a negative effect on the ongoing viability of music festivals.

Many consumers go to festivals for a break from work or study and to enjoy music, friends whilst indulging in various recreational vices.

What’s more, after paying well over $500.00 for tickets, accommodation and transport to a festival, most consumers won’t be able to afford to indulge in a $600.00 Sass and Bide skirt.  And will get annoyed at being repeatedly asked.

It is also about congruence with the event.  Put simply does your brand “belong” and have a right to be at the festival?  Most would agree that the Jagermeister Hunting Lodge had a greater sense of belonging at Splendour in the Grass than the Sass and Bide retail outlet.

Consumers will accept and even embrace a small to moderate level of commercialisation, but if it goes overboard, companies can expect attendance at festivals to decline and engagement with their brand to decrease.

Consumers won’t pay exorbitant festival prices to go to a shopping mall with musicians.

// Alec Schumann

Tom Waterhouse: gambling on online gambling

The Waterhouse family is synonymous with Australian horse racing and is one of Australia’s most iconic sporting brands with an impressive stable of personalities.

Enter son Tom, self proclaimed as Australia’s leading on-course bookmaker, and who has been eagerly waiting his turn in the spotlight.

Grill’d Burgers: Just how healthy are their “healthy” burgers?

Perhaps it’s the cynical marketer in me, but I have always thought that Grill’d Burgers claims of selling ‘Health Burgers’ are somewhat suspicious.  Don’t get me wrong, I love a good hamburger – but I get a bit cheesed off when I’m sold something, which is marketed to be ‘healthy’ but in reality is anything but.

Why the Arctic Monkeys should release a compilation of b-sides.

Arctic Monkeys won’t be releasing a studio album in 2012.  And if Alex Turner turns his focus to his Last Shadow Puppets side project, the earliest fans could expect a new LP of Monkeys tunes could be sometime in 2013/2014.

How can blogs address the divide between marketing practice and academia?

The distinction between marketing as a practice and as a research is often cited a shortcoming of the discipline.  It is argued that neither side really contributes to the other; for example, practitioners often disregard academic research as esoteric and academics often don’t engage with or attempt to influence the current trends in the marketplace.

Lulu – Lou Reed & Metallica: 5 reasons why it won’t work. A marketer’s perspective

In a previous post, I touched on how the hip-hop industry “co-brands” many artists to create synergies from a marketing perspective, essentially growing two ‘brands’ at once.

Well the latest round to be fired out of the music industry’s co-branding cannon is Lulu, the collaboration between Lou Reed and Metallica.  And as many of you would know by now, Lulu has streaming in full here, ahead of its imminent release.

It is not easily listening.  It’s a lyrical and musical assault on the ears – and not always in a good way.

Lou Reed and Metallica: they will intimidate you into buying Lulu

Combining the iconic Reed with Metallica, one of the biggest metal/hard rock bands of all time is a bold venture.  However, it is undoubtedly a high risk strategy from a marketing perspective given the current state of the music industry that thrives on well known ‘brands’ playing it safe and catering to as many people as possible.  For example, the latest releases by Coldplay, Beyonce and Lil Wayne can hardly be criticised for pushing the creative envelope.

By composing an album based on an opera about a German prostitute, Lou Reed and Metallica should be congratulated for taking such a big risk.  In many ways it’s what the industry needs – two big ‘brands’ combining to take a risk by pushing the creative envelope and challenging people’s commonly held beliefs about what popular music should sound like.

But as desperately as many people (myself included) want this to work, it will most likely be a commercial and critical failure.  Here’s five reasons why from a marketing perspective:

5. Initial reaction via social media

Social media is a tenuous place for risky brands.  Evidenced by the caustic reaction to the track “The View” and some highly negative reviews, a bad image about Lulu has spread through social media even before it’s actual release.

Albums can succeed or fail on the strength of their lead single and if initial reactions to “The View” are anything to go by, many people will not give Lulu a chance.

4. Fickle consumers and the online environment

The online environment has simultaneously expanded consumers’ musical horizons whilst reducing their attention span.  Consequently, the ability for bands to make a good initial first impression and grab consumers in a short timeframe is essential.

As I said earlier, Lulu is tough listening.  There are no catchy hooks or sing-along choruses, and only 2 songs come in at a YouTube and radio-friendly 5 minutes.  Rather it contains, long and convoluted songs, some of which are over 10 minutes long (and one which is almost 20 minutes).

Although some of these tracks have some of Metallica’s best work in years, (Dragon for example), most people simply won’t bother to sit through these songs when another song is just a click away.

3. The complex and polarising Lou Reed

Lou Reed: Much cooler in the Velvet Underground era

Indie hipsters refer to Lou Reed with a type of effortless cool and it is not a reputation he earned by accident.

With the Velvet Underground Reed put out some groundbreaking material: “White Light/White Heat”, “Loaded” and their debut “The Velvet Underground & Nico” (which contains “Heroin”, which might be the most haunting song about drug addiction recorded).  And also as a solo artist has also released some material, which will stand as classics, e.g. “Transformer” and “Berlin”.

But he has put out some terrible music too; think Metal Machine Music (an album of distorted feedback loops which made him the laughing stock of the industry for some time).

Given his track record, nobody really knows what to expect from each release. This makes him a big risk from a marketing perspective.

Loud Reed is a complex and often polarising character whose relevance has faded.  He is simply too difficult for the mainstream audience and instead of helping this album succeed, he will contribute to its failure.

2. The subject matter

For a mainstream release, the subject matter is about as mainstream as the Frank Wedekind play on which the album is based.  Many albums start innocuously but Lulu begins with:

“I would cut my legs and tits off / When I think of Boris Karloff and Kinski / In the dark of the moon”

Lulu: A tough mistress.

And perhaps NME said it best with “There’s a time in every person’s life when they have to listen to a 69-year-old man pretending to be a submissive girl begging to be beaten”.

It’s not dinnertime conversation and it’s not the type of things which Facebook or twitter posts are made of.  Lulu is simply not the sort of things that people relate to or will feel comfortable telling others they like.

1. The Metallica ‘monster’

Despite their many detractors, Metallica released some outstanding material in the 80’s.  The rapid fire “Kill ‘Em All”, the thrash metal classics “Ride the Lightning” and “Master of Puppets” and the technically impressive (and personal favourite) “And Justice For All…”, stand as some of the pillars of heavy metal and rock music.

And in 1991 Metallica simplified their sound and went “mainstream” with their hugely popular self-titled album (also known as the Black Album).  Containing instantly recognisable songs such as “Enter Sandman” and “Nothing Else Matters”, Metallica gained millions of fans and grew to epic proportions (albeit losing a few of their core thrash metal fans who thought they had sold out).

However, every release since 1991 has been burdened by the ‘Metallica’ behemoth and all the expectations that come with it.  And in the eyes of many fans and critics, these albums have not lived up to their earlier material either commercially or critically.

Lulu is much more Lou Reed than Metallica and there is little on here for the Metallica’s core fans to instantly fall in love with.  And if their past hostility towards previous “sub-par” Metallica releases is anything to go by (think St Anger) this album will be largely shunned by their core fans who will go back to listening to “Master of Puppets”.

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Although both Reed and Metallica have produced some exceptional material in the past, a marketing perspective suggests that this album is destined to fail.

As brands, they are fading entities that have drifted a long way from the core values which made them successful.  Lou Reed has lost the effortless cool Velvet Underground mystique and Metallica have long lost the energy and passion they had on “Master of Puppets”. 

Although they are cultural icons and destined for rock and roll immortality, the seemingly inevitable failure of Lulu will demonstrate that their contemporary relevance has faded.  Feel free to prove me wrong.

// Alec Schumann

Mascara, Apple and the limits of rationality: A behavioural economist’s take on marketing

The theory and application of economics: a vague mystery to most, but a highly rigorous and mathematical discipline to a select few.

Economists have weighed in on many things: from the apples vs. oranges debate, to why China produces more clothing than the USA.

But what do economists have to say about the application of marketing?

Our economic consultant Jennifer Leslie-Barrett explores.

Mascara, Apple and the limits of rationality: A behavioural economist’s take on marketing

As an Economic Consultant I became frustrated with the strict assumptions placed on individuals’ preferences, and the concept of rationality. Mostly my frustration came from the knowledge that I myself was anything but rational.

Any woman who has ever gone to buy a replacement mascara and found herself coming home with the mascara, an unwanted lipstick and the piece of marketing genius that is the gift with purchase will understand what I’m getting at. I can’t begin to tell you how many mystery day/night creams have sat in my bathroom cabinet for a year before finally being thrown out. But economics says that we should know our preferences, we should be able to see what our future selves will want, and is tragically quiet on the subject of the little buzz of happiness I get leaving the store with my bag of mystery products.

Is mascara a rational purchase? Maybe.

You may wonder why, at this point, I didn’t just leave the lucrative field of economic consultancy and accept that rationality and I were not a good mix.  By some happy chance in my search for an island getaway I ended up at a conference on behavioural economics (it also met my criteria of free cocktails).

I found that this area of economics was able to explain almost all of the supposedly irrational behaviour I had observed in myself, and to analyse it and consider the consequences in an economics framework. Marketers have informally known behavioural economics for far longer than economists. But by taking advantage of the systematic study of peoples’ irrationality, we can use this knowledge to enhance brands. Behavioural economics is a very wide field, so for now I’ll just outline one of the key concepts, which is already used in marketing, but which we can take advantage of more effectively by having a better understanding.

The economics of Apple: What's your reference point?

Reference dependent preferences

Basically this says that individuals are not merely risk averse. They are in fact loss averse, relative to some mental reference point. What this means is that if we are able to incorporate our product into the customer’s reference point, their loss aversion will make them unwilling to leave the store without the product.

Apple takes advantage of this phenomenon. Mac stores are designed such that customers are able to use the product in the store. The customer incorporates the product into their reference point, and does not want to face the loss of leaving the store without it.  An action as simple as getting a customer to try on an item of clothing or jewellery begins the process of adapting their reference point.

But we can take advantage of reference dependent preferences to a greater extent than just introducing a product into the customer’s reference point. The aim of any effective campaign should be to incorporate your brand into the customer’s reference point.  If you can, customers will feel attached to your brand and be unwilling to leave the store without it.

<< Jennifer Leslie-Barrett

“Create your own brand”: how customization can foster greater emotional engagement with brands

Inspired by the recent #MMchat on emotional branding, I’ve been kicking around some ideas with the team about what emotional branding actually is and what it does to the product or consumer.

The traditional logic would suggest that emotional branding is something which is ‘designed into’ the brand as it is produced.  For example, a chocolate company might want to imbue their brand with positive emotional connotations of happiness and relaxation and try and incorporate this into their design, packaging and marketing communications.

Emotional Chocolate: Does it make you feel happy, guilty, loved or even shameful?

However, branding, and emotional branding in particular, is not something we as marketers can necessarily do to a product.  Rather, our brands are “things” that customer s do things with.  We may want our customers to associate our brand with particular emotions however this is something which is very difficult to achieve with any consistency.

Let’s return to the chocolate example.  Although the company might want consumers to associate these positive emotions with the brand, it is likely that the consumer will form their own emotions once they start engaging with the brand.  Someone on a diet might experience feelings of guilt or shame for indulging, whilst a child might feel loved by his mother and proud to eat the chocolate amongst fellow students.

Clearly, emotional branding is clearly not something we as marketers have complete control over.  At best all we can do is provide customers with the tools to experience the emotions we want our brands  to evoke.  Emotions are feelings which come alive through experiences, not “things” which can be manufactured and attached to products in a factory.

But how can we increase emotional engagement with our brands?

I’ll conclude with another chocolate example.

What if the chocolate company allowed customers to go online and customize the packaging of the product for gifts?  Upload a photo of your mother and her face is printed alongside the logo on the packaging.  It is delivered to her and she feels loved, and the customized chocolates reinforces this emotion, creating strong emotional engagement with the brand.  Throughout this process of customizing the chocolate brand and using it as a means to achieve an emotive goal, both the gift giver and the recipient are emotionally engaged with the brand.

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Any other suggestions?  What brands do you think foster emotional engagement through customisation?

//Alec Schumann

5 reasons why your brand’s Facebook page needs a ‘dislike’ button

Facebook.  Just about everybody is on it.

Consequently, many firms are joining the ever expanding and evolving social networking platform to put their brands where their current  and potential customers are.

Typically the goal here is to use Facebook to encourage consumers to positively engage with your brand, share content with their friends, and generally ‘do the leg work’ of traditional marketing – but with a much higher level of interactivity and often at a lower cost.

A common way that the success of Facebook campaigns is measured is through the amount of ‘likes’ it gets.  If a consumer ‘likes’ your page, it typically shows up on their profile page and in their public newsfeed, promoting their friends to see it.

‘Likes’ also provide feedback  about brands and marketing campaigns, and provide a simple quantitative measure of success.

But whilst it’s always valuable to know who likes your brand, in many cases it would be equally valuable to know who dislikes your brand.

So what about a ‘dislike’ button? And why would it be valuable for your brand?

Alec looks at 5 surprising ways in which your brand could benefit from a ‘dislike’ button.

1. Gain a better understanding of marketing effectiveness

What do you Dislike?

Your brand might have 1,000 likes.  Great.  But in reality it might also have 2,000 ‘dislikes’ which are essentially invisible.  Therefore without a way to track this via a dislike button, you might be inflating the success of your brand and its marketing campaigns.

Therefore, a ‘dislike’ button would facilitate a more accurate and accountable net measurement (i.e. likes minus dislikes), rather than just a gross measurement (total likes) of campaign effectiveness.

2. Get to know who doesn’t like you

A great deal of marketing research, although valuable, is about discovering, understanding and profiling who likes your brand and regularly purchases it in, thus allowing you to better sell your brand.

However, it can be equally as valuable (if not more so) to better understand the people actively dislike like your brand.  It would enable you to more clearly define your target market and may highlight ways to improve your product or service.

3. Recover dissatisfied customers

A ‘dislike’ button may highlight customers who have had a bad experience and require some feedback from your firm.  Synch your Facebook page with your loyalty database and you have a ready-made list of high traffic customers who may now ‘dislike’ your brand, without lodging an official complaint.

This would give your firm an opportunity to recover dissatisfied customers.

4. Novel ways to connect with and surprise customers

Consumers who click the ‘dislike’ button would demonstrate that are aware of and to some extent, engaged with your brand.  In many ways a lot of the hard work is done.  Now you just have to provide a reason for the consumer of turn their frown upside down.

What about sending a surprise voucher to all the customers that ‘dislike’ your brand? Crazy?  Perhaps, but it would certainly turn some heads and maybe convince some non-believers to try your brand for the first time or give it a second chance.

5. Embrace your brand’s enemies

The "us against them" nature of brand loyalty: The more 'dislikes' the better

This may not be effective for every brand, but for some brands it would foster loyalty amongst supporters to have a vocal and visible crowd who dislike your brand.  Many brands thrive on having enemies and a ‘dislike’ button would be a way to identify this common enemy.

Think sporting teams for example: Manchester United, the New York Yankees, the LA Lakers, the Dallas Cowboys and the Collingwood Magpies, are some iconic brands which thrive on the love/hate mentality of their respective marketplaces , whilst encouraging an “everybody against us” mantra amongst their fans.

Thus, they are examples of brands which would benefit immensely from thousands, if not millions, of dislikes.  And if your brand thrives on a common enemy, a ‘dislike’ button could be the best thing Facebook has done for your brand.

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So what do you think?  Feel free to let us know if you ‘like’ or ‘dislike’ this article.

// Alec Schumann