Archive for the ‘marketing’ Category

New York Life: How Traditional Approach Made for Great Marketing

May 19, 2010

This week, I got the May 24 issue of Fortune Magazine and skipped to this issue’s profile of one of the “World’s Most Admired Companies.” This time it was New York Life, the nation’s largest mutual life insurer. As I read the article, I was pretty intrigued by the company’s operation: very conservative. While New York Life is owned by policyholders, it didn’t follow the lead of other major insurers to invest aggressively for the sake of paying generous dividends. And the insurer chose to remain neutral in a price war on some lines of insurance, even though that meant losing some business in 2008. New York Life also invests in its own captive sales force – 12,000 agents strong – a practice so cost prohibitive to many publicly-traded insurers that they’re forced to rely on a network of banks, independent agents, and broker-dealers to push their insurance.

Fewer and fewer of us want to be viewed as traditional or passé, so one would think that New York Life’s conservative approach would have cost it a great deal of business. And in the go-go years, that seemed to be the case. But now, two years after a near meltdown in financial services, New York Life appears to have been vindicated: it had a record $15 billion surplus of cash in 2009; it has continued to pay policyholders dividends for the 156th year, and had an increase of 40,000 policies sold in 2009. Even better, it didn’t have to raise premium rates like many of its price war competitors.

Just look at the effective marketing system New York Life has built for itself. Recall the components of the marketing mix: product, price, position, promotion, and distribution. It’s easy to discern from the article that New York Life got all of these components right. While New York Life also sells mutual funds, long-term care insurance, and annuities, it has neither forgotten nor abandoned its core product: life insurance. In fact, the company still emphasizes it as an important part of a family’s protection. Because of its traditional investment style, New York Life’s pricing is competitive. In terms of promotion, New York Life turned its traditional operation into a distinct advantage, boosting ad spending by 24% and trumpeting how its conservative style was appropriate for these economic times. Distribution is handled through by New York Life’s own captive agent force – the only agents for New York Life, all New York Life, and nothing but New York Life. Every New York Life agent I’ve met knows its products backward and forward, and knows quickly which ones are most ideal for prospective and existing customers. Now positioning… New York Life apparently could market itself as the kind of insurance company that gives its policyholders great peace of mind. Policyholders can sleep at night knowing dividends will be paid consistently, premiums will remain stable, that they have the right insurance, and that the company will be around to pay out when they need to make a claim.

I am not a New York Life policyholder. I came very close a couple of years ago, but another company had a policy that was better suited to my needs. And I found it hard to reject the New York Life agent who had been working with me to find the right policy for me. But when my insurance needs change, New York Life is on my short list, a further testament of its marketing success: make a great impression on a prospective customer so that if he/she doesn’t buy now, there’s a good chance he/she will do so in the future.

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Introducing Analysights’ Small Business Solutions

May 11, 2010

I’m pleased to announce that Analysights has developed a line of solutions designed to provide high-quality marketing research services to small businesses at affordable rates. Much like large corporations, small businesses need to forecast sales, analyze and monitor their marketplace, and understand what their customers think and where improvements must be made. However, most small businesses don’t have the budget that larger ones do to get the insights they need.

Now they don’t have to!

Small businesses can now get customized marketing research services for a flat price! Analysights has introduced three lines of small business solutions: SurveySimple, ForecastEase, and PlanPro.

SurveySimple is our small scale survey solution, which includes initial consultation, questionnaire design, survey deployment, data collection for 100 to 300 responses, and analysis and reporting with recommendations. You can choose from a Silver, Gold, or Platinum package, depending on the number of people surveyed and/or the length and complexity of the questionnaire. Find out more about SurveySimple.

ForecastEase is a customized sales forecasting solution for small businesses. We use your past sales data to build a forecast model that will help you predict what sales will be in the both the short- and long-term. We then provide you with an Excel spreadsheet powered with the model, so you need only plug in a few numbers to get estimates of upcoming sales, making it easier for you to schedule employees, order supplies and inventory, and make plans with more certainty. You can have sales forecasts made on a daily, weekly, monthly, or quarterly basis. ForecastEase also has a flat price, depending on the periodic basis chosen. Find out more about ForecastEase.

PlanPro is geared towards any small business or entrepreneur preparing a business or marketing plan. The “Market Analysis” is a critical, but often difficult, section of a business plan to create. Analysights takes the drudgery of the Market Analysis section off your hands. We will consult with you and then research your market, examine industry’s trends, competition, and regulatory environment, develop projections for the next couple of years, and provide you with the findings. For a small fee, we will even write the Market Analysis section of your business plan for you. Find out more about PlanPro.

With Analysights’ Small Business Solutions, the question is no longer a matter of “can you afford to do marketing research,” but of “can you afford not to?”

Americans More Trusting of Online Social Networks than Brits and Canadians, Survey Finds

May 7, 2010

MarketingProfs’ article, Social Networks Influential, Not Always Trusted, provides the highlights of a recent survey by Vision Critical, which found that consumers are still quite wary of social networking sites in terms of information trustworthiness and privacy. The survey, which was conducted of consumers in the U.S., Canada, and the U.K., found these concerns consistent among the three countries. Of all respondents, 80% found family and to be either “Completely Trustworthy” or “Very Trustworthy” sources of information; 70% also trusted their friends. Just 12% trusted online social networks such as Facebook, LinkedIn, and Twitter.

Yet, what I found interesting was the breakdown by country, which was presented in tables within the article, but not really covered. The omitted narrative was very telling. Nearly two-thirds of Americans are concerned about their privacy on online social networks, and 55% worry about those sites selling their personal information to advertisers. British respondents were slightly less concerned than Americans, but Canadians were much more worried – 77% and 69%, respectively.

Americans, however, were more inclined than Canadians and Brits to view social networks as good places for brands and products to advertise, to learn about brands and products, and as a source where they can become more informed purchase decisions. Americans were also more inclined to have higher trust in brand placement on social networks, especially if the placement was in context of discussions and/or recommendations by family, friends, and contacts, or if the placement involved coupons. These numbers were still in the minority, but they are sizeable minorities. Generally, Americans were more willing to give up some privacy if doing so meant getting promotions that were relevant to them.

I think that tells us a couple of things:

  1. Although American consumers are concerned about privacy and trustworthy, they still consult the sites for information, so there is still value in your company’s having an online social network.
  2. Companies that focus on increasing the perceived credibility of their social networks – encouraging fans to pass their sites and info along to friends and family, and providing timely, objective, and thorough information – both online and offline will have a better chance of monetizing their social media marketing efforts. While only 18% of Americans bought a product through a social network, increasing credibility of the network can bring that percentage higher.
  3. Just because Americans are less concerned about privacy and trustworthy than Canadian and British respondents, that doesn’t mean that they are not concerned. Social networks need to increase their credibility and demonstrate that they are still ensuring privacy at the same time.
  4. There’s a real market opportunity to develop social network trustworthiness in Canada and the U.K. Even greater efforts in increasing credibility and privacy are needed in those two countries than in the U.S., but those efforts can pay great dividends. The trick here is finding the real issue behind the wariness and seeing how best to go about alleviating those consumers’ core pain points.
  5. Americans are more open to consulting several different sources of information when making purchase decisions or other judgments, and online social networks are a complementary piece of that decision making process. Increased credibility on these sites can increase that piece’s relative importance in the decision process.

Conducting Market Research Without an Underlying Business Purpose Wastes Time and Money

April 21, 2010

The other day, a question was directed to me on the AllExperts.com Website, where I am a participating market research expert.  A student from the Netherlands was preparing a graduation thesis based on a large scale market research project he was doing for a manufacturer of water cooling systems for power plants.

His thesis topic was, “What does the northwest European market for cooling water systems in power plants look like?” 

While the manufacturer was good with the topic, his thesis advisor was not.  The advisor felt the topic wasn’t strategic.  And the advisor was right!

Market research has no value if a company can’t act on it.  Market research findings need to be taken to the next step – a recommended course of action for the client.  If the power plant water cooling system manufacturer knows what the market looks like, that’s great, but what does it do with that knowledge?  Many companies, for this very reason, end up suffering from “analysis paralysis.”

So I advised the student to reformulate the thesis topic into a strategic initiative, something like, “How can Company A achieve an X% share of the power plant water cooling systems market in northwest Europe?”  From there, he would still answer his research questions to understand what the market looked like, but then the findings would lead him to determine the strategy he should recommend to the manufacturer. (See his question and my response here).

Knowing what initiative the client wants to achieve is the starting point.  Once you know the business purpose, you can then determine the research questions that must be answered.  Once those questions are answered, you can then come up with the recommendations that lead to achievement of the business purpose.  Insights that can’t be acted on waste everyone’s time and money.

Marketing Manna: Minimizing the Recession’s Bite at the Collection Plate

August 30, 2009

The church has long been a pillar of support for persons of all faiths to call on in times of hardship. In addition to spiritual development, churches often provide food, clothing, bill payment assistance, and counseling to parishioners who have fallen on hard times. Churches have traditionally financed these services through donations at the collection plate, capital campaigns, and other church fundraisers like bake sales and raffles. But now, with so many people out of work, churches are finding themselves squeezed at both ends: church collections are decreasing, while the need for church services is increasing.

Fortunately, churches can turn the tide against the recession, stabilize donations, and set the stage for increasing contributions through a simple, commonly used marketing method: RFM. RFM (which stands for Recency, Frequency, Monetary) is a formula commonly used in direct mail marketing and is especially popular in nonprofit marketing. Basically RFM is predicated on three principles:

  • Someone who has donated recently is likelier than someone who has donated sometime ago to give again in the near future;
  • Someone who donates often (frequency) is more likely to continue donating; and
  • Someone who donates a lot (monetary) is more likely than someone who gives less to donate again.

With just the giving history of their congregants, churches can identify ways to:

  • Increase the average amount their parishioners give;
  • Increase how frequently they give; and
  • Revive donations from donors who have ceased to give.

Increasing the average donation amount 

Obviously, one strategy churches can employ to increase donations at the collection plate is to entice their regular donors to give more than they presently do.  Nonprofits such as colleges and universities, foundations, and other charities have mastered this tactic by establishing “clubs” –  providing donors different levels of recognition and treatment based on their contribution levels.  For example, a church might print the names of all members who have donated at least $500 during the past 12 months in their bulletin.  However, parishioners who have given $1,500 or more might be in a different club, where they not only have their names published, but also get invited to brief events to hear advance news on church initiatives.  Still, people who give $2,500 or more might receive other forms of donor appreciation.

The “club” tactic is often effective in enticing parishioners to increase their contributions, as recognition and feelings of contribution and inclusion often motivate them to give.  Churches might start by sorting their parishioners by the total amount of money they gave in the last 12 months, and tailoring their marketing efforts based on the donation level.  So, if the church has a parishioner who gives $100 per month, it might encourage the parishioner to give $125 per month by inviting him/her to be part of a “Supporters Club,” which is comprised of those parishioners who give $1,500 during a 12-month period.  By stressing the benefits of being in the “Supporters Club,” the church can increase the likelihood the parishioner will increase his/her offering.

Increasing the frequency of donations

Imagine having two parishioners who each give the church $1,200 per year.  Are they worth the same to the church?  Not necessarily!  If one parishioner gives the church a monthly donation of $100 and the other an annual lump sum of $1,200, the former parishioner is more valuable!  Why?  Because people are more likely to give small gifts more frequently than one-time large gifts.  Also, the one giving a small gift each month is more likely to have established a routine, or habit, of giving.  The one who gives $1,200 in one lump sum is more likely to lapse, especially if he or she gets hit with an extraordinary expense in the month he/she normally makes that donation.

Churches should sort their members by how frequently they give and identify how much they gave in the last 12 months.  Then the church should try to encourage more frequent giving among those who don’t give as regularly.  If the church notices that a parishioner gives $100 every two weeks ($2,600 per year), they might send an appeal asking him/her to give $60 per week.  The club concept can also be employed here.  If the church can convert that parishioner to giving weekly, it can increase the parishioner’s annual gift to $3,120!

Reviving gifts from lapsed donors         

Next, churches should look at the recency of their members’ donations, sorting them by when they last gave.  Parishioners who have ceased to give in the last 18 months might have been impacted by the recession.  Churches can these parishioners personal letters informing them of church services available to them, such as bill payment assistance, food banks, job referral services, etc.  If positioned correctly, the church can benefit in three ways: 1) earned recognition by letting parishioners know that the church is looking out for their well-being, 2) setting the stage for these persons to start donating again once they get back on their feet, and 3) reviving donations from parishioners who’ve lapsed for reasons other than hardship by informing them of the services their donations pay for.

That last benefit can be expanded.  For parishioners who have ceased to give for other reasons, a “win back” appeal can be conceived.  Churches can send a letter to these parishioners requesting a small gift.  The church can then work towards rebuilding its relationship with the donors who respond to the appeal, and work towards graduating them to higher giving levels.

WARNING!

Although churches should embrace such marketing methods to increase donations at the collection plate, their efforts will be futile if they do not communicate the value or benefit their parishioners will receive by giving more.  Most people don’t buy an item at the store if they don’t see how the product will benefit them.  The same applies to charitable giving.  If parishioners don’t see how their donations are being used – or feel some psychological benefit of giving – they won’t give.  In its appeals, the church should not only state the services parishioners’ donations pay for, but also how many people were helped, how much was given to a cause, how the community benefited, and so on.

Conclusion

Churches can minimize the recession’s impact on their donations by employing a marketing tactic like RFM.  By increasing both the amount and frequency parishioners give, reactivating lapsed donations, and stressing the benefits of the services they provide, churches can begin to reverse the economy’s squeeze on their bottom lines.