Marketing Decisions

The blog of LHL Partners, LLC. The blogger is (often) Rick Lightburn, Chief Knowledge Officer of LHL Partners, with his observations about marketing. Our main page is at http://www.lhlpartners.com

Monday, October 22, 2007

AT&T Rebranding Effort

In today's (October 22) Ad Age, there's a front-page story with the headline AT&T Rebranding Effort 'a Failure of Epic Proportions'? It features a lot of typical advertising agency myopia about branding, and is therefore rather silly.

The history is that AT&T, by acquiring Bell South, owned all of Cingular, which previously had been a joint venture. Faced with the prospect of either supporting the Cingular brand name along side of the AT&T brand name (and introducing that brand name into international markets) or converting the Cingular brand into the AT&T brand.

Since the Cingular brand had been well supported and well recognized, this conversion was decried by some. The Ad Age story cited above is one instance: one research vendor, who tracks consumers' awareness and attitude towards the brands of "12,000 companies," described the conversion as a "failure of epic proportions."

Most brands exist to generate awareness and liking for the products and companies that bear those brands. Most brand gurus seem to think that because brands can create value (in some categories), the creation of brands with high awareness and likability is the objective of all marketing. It isn't: the objective of marketing is sales. In many instances--but not all--the challenge of generating sales requires a brand with high awareness and likability. When sales challenges are not addressed by increased awareness and likability, then branding isn't important.

This is AT&T's situation right now. For AT&T to increase sales, it needs to focus on other things, such as reliability, coverage, and technical capabilities. Branding isn't going to help here.

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Monday, October 08, 2007

CRM Growth

An interesting article in destinationCRM of September 26 that while the survey firm AMR Research forecasts a substantial 16% growth in spending on CRM systems in 2008, 29%0 of companies surveyed report at least a glitch in CRM implementation, and fully 25% of all the licenses for CRM software go unused.
So there's a lot of wasted effort in CRM, even if there's growth in spending. (Smells like an opportunity to me!)

How come there's such waste?

The article only hints at that. Apparently that wasn't in the objectives of the study. But the director of the study at AMR Research make a few observations. The Information Technology departments of many organizations are primarily developing CRM deployments, but the priorities for CRM adoption are unlike many previous successful projects. The priorities in CRM successes are usability, easy reporting, analytics, and integration with desktop productivity tools. Sales and marketing departments will go off and use something else if it's easier. So while CRM deployments might develop CRM programs, they don't really control CRM programs.

This is aggravated by the availability of "software-as-a-service" among CRM programs. Some CRM systems can be completely 'housed' outside the organization, and developed and controlled outside of the organization's IT department.

Perhaps some sales and marketing departments can only poorly articulate what they need out a CRM system, leaving IT departments holding the bag with licenses for software that once seemed might work, but didn't in the longer term. Sales and marketing departments might have evolving, different or even conflicting requirements, which a fixed CRM deployment might not meet.

There remains big challenges in CRM adoption.

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Monday, October 01, 2007

Exit Engagement

An item in today's Advertising Age tells of Joe Plummer's exit as the Advertising Research Foundation's Chief Research Officer. Plummer was a big (if not the biggest) advocate of the concept of "engagement" and had led a long and large effort to find some universal metric for it.

"Engagement" was a big buzzword, as the article notes, back in 2006, and it was only a buzzword in my opinion, empty of any meaning, which is why the definition of any advertising industry-wide metric eluded Plummer and the ARF.

To find any metric one must consider the process one want to measure. Are there any universal cross-advertising processes? Well, there's exposure to the ad, and there's attending to the ad. Exposure is pretty easy to measure, and in addition doesn't depend on the advertisement's content. Attention is rather harder to measure, and certainly seems to be dependent on the content of the ad. But what process was supposed to be captured by the concept of engagement? Something like the response of the customer exposed to the ad. Was this response just clicking on a web ad, or going to the store and putting down money? And engagement was supposed to be independent of content, and specific only to the medium.

Beyond exposure, different ads work (when they work) in different ways, with different processes. The metric that works for one process may not work for another. The search for a universal "engagement" metric is futile. I hope it's over.

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Brand Building on the Web

A recent Forrester Research report on Brand Building on the Web gets the key point of branding right.
To convince consumers that their offerings are worth the prices they command, sellers of high-consideration products and services need Web sites that do two things: 1) communicate value in an emotionally engaging way, and 2) deliver value by offering useful, usable content and function.

The point of building a brand (or even having a brand) is to increase sales through increased sales effectiveness.

For high end products (like luxury automobiles), this turns into the two objectives listed in Forrester's summary: communicate value and deliver added value. These objectives aren't right because they somehow feel right, they're right because the obstacle to increased sales for nearly all products is customer trust, and the customer's trust can be created by branding.

There's value in Forrester's report for Brand Building off the web, too. The role of branding is the same on and off the web. After all, brands exist in the customer's mind.

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