Category: Drew’s Articles

CMO Insights: How A Cosmetics Brand Achieved Beautiful Growth in An Ugly Economy.

Posted on by Drew Neisser

When Ted Rubin grabbed the reins as CMO of e.l.f. cosmetics in 2008, he knew he was going to have to be inventive.  “There’s not a lot of margin in a $1.00 cosmetic,” he noted in my interview with him last week.  “I simply didn’t have a budget for paid media,” he added.  Yet despite this limitation, in just under two years Ted was able to help the company significantly increase its sales in one of the worst recessions in history, providing a textbook case for any aspiring guerrilla marketer.

1. Listen Up

Anyone who’s ever met Ted knows he’s a great talker who prides himself in responding to any query from any person as fast as humanly possible. BUT what they might not know is that he’s also a great listener, and he made listening his first priority when he arrived at e.l.f.  What he learned in his first 90 days provided the foundation for his subsequent success.  Scouring the web, Ted found hundreds of fans across multiple channels, many of whom provided invaluable feedback — feedback that he continued to seek as ideas began to percolate.

2. Sniff Out an Insight

Up until recently, e.l.f. cosmetics were sold mainly online, direct to consumers at an unbelievably low price point. Therein lay the challenge.  Even bargain hunters asked, “How could a one dollar cosmetic be any good?”  Ted realized that this rampant skepticism could not be overcome by any company messaging, and in fact would require extensive word of mouth in which one consumer reassured another that e.l.f. is indeed a high quality product.  Fortunately, during Ted’s listening period, he had found hundreds of delightfully chatty fans dispersed all over the web.

3. Hug Your Fans

Though e.l.f. had been early to the blogosphere, in late 2008 they had almost no presence on Facebook, Twitter or YouTube.  So this is where Ted started, zealously responding to any mention of e.l.f. and engaging customers with instructional content that emphasized conversation over sales pitches.  In the process, Ted discovered hundreds of consumer-generated videos that featured e.l.f. products and consolidated these on a branded YouTube channel and created a hub for them on the distinct AskELF.com url.  During the course of 2009, e.l.f. became a social media powerhouse, accumulating in excess of 50,000 Facebook fans, over 50,000 Twitter followers (including Ted’s presence), and an astonishing 2.3 million+ views of user-generated videos!

4. Hold the Right Hands

Lots of brands pay lip service to the influential blogging/micro-blogging community by parsing out chunks of content they hope will be repurposed.  Ted took a far more personal approach, “nurturing each relationship” to the point that many became his close friends.  They also became a sounding board for ideas, one of which became the “Make Up at Home Parties,” a program that delighted the targeted bloggers so much that after 70 such parties, there is a waiting list of 250, and a galaxy of party-related content including text, pictures, Whrrls, and video that has been shared and shared again by thousands upon thousands of e.l.f. fans.

5. Tap into Metrics

As e.l.f.’s social media efforts were starting to take hold, Ted realized that “just building a large base of fans was insufficient.”  He needed to understand who was really engaged and if/how this was affecting sales.  Fortunately, the news was good.  As the fan base grew, so too did traffic to their online commerce site from social media sites, 75% of whom ended up being new visitors.  These new visitors demonstrated their commitment by buying product and signing up for the e.l.f. newsletter.  In fact, the e.l.f. database nearly doubled to 2.3 million by the end of 2009, a metric that was music to the ears of the company’s owners AND prospective marketing partners.

6. Reach for Partners

One of the ways Ted was able to stretch every precious marketing penny was by partnering with a host of brands with shared interests.  Conde Nast’s Allure Magazine provided content and gifts for the House Parties while the SheSpeaks.com network of product testers and bloggers helped find party hosts that would spread the word.  ExploreModeling.com was the perfect partner for a marketing contest called the “New Face of e.l.f” which sought out 4 models of various ages. Viral by design, contestants garnered over 800,000 votes supported by 40,000 pictures that in turn gained 35,000 comments.  With results like these, it is little wonder marketers like Virgin Mobile and Warner’s Bra along with J.C. Penney reached out to e.l.f. for more cross-promotions, most of which cost e.l.f. next to nothing.

7. Kiss and Tell

In the 4th quarter of 2009, e.l.f. was suddenly in 1700+ Target stores with a 4 foot end-cap. For a primarily online brand this was a huge retail expansion. “Target was totally enamored with our social media presence,” noted Ted, who suddenly had a “currency” he could exchange not just with other marketers but also retailers eager to share e.l.f.’s social media cache.  Marveling at how quickly the product sold once in Target, Ted noted, “A good part of what we built in social media enabled that to happen.”  With over 400 blog posts about e.l.f. entering Target, 2000 retweets of the new retail presence and customers snapping photos of product flying off the shelf, Target was so thrilled with the results it helped e.l.f. secure a permanent in-line presence in a significantly larger percentage of stores in early 2010 than originally planned.

Final Note: Early in his career, Ted worked for “America’s Greatest Marketer” Seth Godin, who by then had already co-authored The Guerrilla Marketing Handbook. Clearly Ted learned at the feet of a master, one who instilled the guerrilla credo that inventiveness and elbow grease can make up for a small budget every time.  Ted is taking that same spirit of inventiveness to OpenSky, introducing Relationship Commerce, and something he says “will change the face of e-tailing.” Ted is also a proud member of The CMO Club.

CMO Insights: The Importance of Innovation

Posted on by Drew Neisser

In October 2008, Barbara Goodstein, Chief Marketing Officer of AXA Equitable was only slightly nervous as her company launched an unprecedented customer retention program called MyRetirementShop.com.  Creating a “retirement portal” more focused on “value add” than lead generation, Ms. Goodstein was moving her company into unchartered territory, delivering a “marketing as service” program that became far more successful than even she had anticipated.

Since its inception, MyRetirementShop.com has attracted over ½ million visitors who spend a whopping 11 minutes browsing highly relevant content from top experts like Kiplingers, Service Magic and MyRecipes.com.  Current customers were quick to thank AXA for this resource with not just words of praise but also by buying more AXA products, generating revenue far beyond the program’s cost. The press responded to this innovative marketing approach with over 200 stories that yielded an equivalent of $4.0mm in paid media coverage.

Since the old proverb “success has many fathers but failure is an orphan” also applies to marketing, it is often difficult to get the real story on what it takes for innovations like MyRetirementShop.com to come into being.  In this case, however, after an extensive interview with Ms. Goodstein in which she reviewed the development process, it became very clear that her journey has provided a textbook case on innovation, yielding the following seven critical elements of success.

1. Innovation Starts at the Top

Ms. Goodstein is no stranger to innovation.   Having guided the highly effective 800-Pound Gorilla advertising campaign for AXA into being four years ago, she knows a big idea when she sees one and she knows how to stretch a budget for maximum impact.  But she is also the first to acknowledge that “innovation more than anything starts at the top” and that if her CEO, Kip Condron, didn’t encourage and support innovation, her efforts would never see the light of day.  With senior management saying, “We should try multiple creative options and see what’s going to work,” and encouraging innovation with financial incentives, the virulent skepticism that typically inhibits new idea development is diffused if not silenced.

2. Listen to Your Customers

The impetus for MyRetirementShop.com sprung from an annual study AXA conducts among its customers. According to Ms. Goodstein, “We built MyRetirementShop.com on years of data that revealed the topics that were most relevant to pre-retirees, so we just had to take all of this content and make it accessible.”  Pre-retirees noted their interest in everything from home and family to health and fitness, from travel to finance, from self-improvement to entertainment.  So it came as no surprise to Ms. Goodstein that these topics gained traction with their target.  The only surprise was divergence between the expressed interest in volunteering and concierge services in the research versus the actual behavior on the site.  Ms. Goodstein speculates that disinterest in these areas may be more a reflection of current economic realities than the ultimate value of the content.

3. Make Sure It’s Truly Innovative

Before developing MyRetirementShop.com, Ms. Goodstein and her team did an extensive review of retirement portals and competitor’s websites.  When it was clear there was nothing like it out there, the AXA team then “did our own screening to find the best possible content providers.” According to Ms. Goodstein, “It took over a year to line up all the partners, and an internal SWAT team dedicated to every area of the site” to pull it all together. To insure relevance, they insisted that all the content had national reach and users could even “drill down by zipcode.”  And though much of MyRetirementShop.com content exists on other sites, AXA is the first to aggregate it all in one place, and is the only retirement portal without highly intrusive advertising.

4. Service First, Then Branding

The intention of MyRetirementShop.com from the beginning was to be a service – not an advertisement, a service that would help retain existing customers, and one that would reflect the deep expertise of AXA Equitable and its sincere commitment to help consumers with retirement planning.  “We wanted the site to be value add” noted Ms. Goodstein, “and we didn’t want it to be a commercial for us.” This commitment to service had a strong influence on the design of the site, which has almost no AXA ID other than their 800-pound gorilla who serves as “branding anchor and host.” The now familiar gorilla sits on top of each section and offers a “pithy audio message” that Ms. Goodstein anticipated “would create more of a connection” with site visitors.

5. Service First, Then Sales

Once the site was launched, AXA representatives were provided with a number of tools to share it with existing customers.  Direct mail, email and brochures described the content and invited customers to visit the site.  Then the unexpected happened, this so-called retention program started generating sales. “For $40 worth of DM, our reps generated an incremental $60,000 in sales,” added Ms. Goodstein with glee.  Suddenly the sales team that usually put the kibosh on programs considered “non-revenue generating,” embraced the site, acknowledging its power to increase sales among existing customers and even to attract new ones.  By providing a genuine service to its customers and prospects, AXA found a friendly way to break the ice and renew the conversation about retirement with a now receptive target.

6. Innovation Requires Perseverance

MyRetirementShop.com took over two years from conception to launch, with multiple hiccups along the way.  Getting the technology right was challenging and the site, which was developed by internal IT resources, went through several iterations.  “It took us a while to get it right,” acknowledged Ms. Goodstein and of course, she did not have “universal support initially.”  Importantly, AXA Global and top management voiced their confidence in the project, which Ms. Goodstein gained by outlining a clear vision, defining the content with crisp wireframes and by providing prototypes that fueled expectations.  By demonstrating what it would look like and never wavering from the quest, Ms. Goodstein and her team were able to build consensus from top to bottom, setting the stage for its ultimate success.

7. Don’t Rest on Your Laurels

Despite exceeding expectations on every metric, Ms Goodstein and her team continue to seek ways to improve MyRetirementShop.com.  New original content is in the works that will simultaneous enhance the visitor experience and increase the natural page rankings on the search engines. New content partners that could increase consumer appeal are being evaluated.   “We are also going to change the enroll button so interested visitors can reach us more easily” added Ms. Goodstein who marveled at the unexpected benefits of a true “value add” program, “Because we are willing to work so hard, people want to connect with us.”

Bottom line: Marketing innovation is neither easy nor linear, requiring support from the top, a clear vision from the start, steadfast determination along the way and ultimately a desire to do right by the consumer, a consumer that will thank you many times over with not just words of praise but also their pocketbooks.

 


The Ideas of March (are free)

Posted on by Drew Neisser

Caesar’s assassination aside, the Ides of March typically heralded the coming of spring and a free parade for all Romans. As befits this epic recession, here is a parade of free ideas that just might spring you into action.

Count your Clicks with Bodacious Bit.ly

Sharing links is a cornerstone of social media interaction, yet few take the time to figure out which links generate the most interest. Set yourself up on bit.ly and you’ll see how easy it is to track the response to links you share in emails, newsletters, articles, PDFs (yes, you can embed links), blogs, Web sites and of course, Twitter. You can also drop your bit.ly “API key” into Tweetdeck for easy tracking of the same link on Twitter, Facebook, LinkedIn and Plaxo. And finally, bit.ly has a Sidebar you can add to your browser to make the process of sharing/tracking links even easier.

Go Gaga over Google Analytics

This is such a ubiquitous tool that I hesitated to remind you of its potency. Then I remembered Sir Arthur Conan Doyle’s quote: “There is nothing more deceptive than an obvious fact.” The obvious fact is that Google Analytics can help you monitor the performance of your Web sites quickly, easily and for FREE. For example, we recently used Google Analytics to help cut the bounce rate on one of our client’s landing pages to half the industry norm. Sure, there are a lot more robust Web site measurement tools out there, but none that are as easy to set up and or as cost effective.

Monitor the Mayhem with Tweetbeep

Even it you don’t tweet or spend time tracking “tweeple,” you may still want to know what others are saying about you, your brand, your competitors and/or your category. Tweetbeep makes this easy allowing you to track up to 10 topics being talked about on Twitter for free on an hourly or daily basis. (Note: some prefer SocialOomph, which can provide the same kind of free tracking.) You could also use addicticomatic.com or search.twitter.com (which are both free) to track the same topics on a real-time basis but these are both a bit more labor intensive.

Trend Tracking and Topical Techies

With info overload commonplace, the need for insightful editors and trustworthy aggregators is more important than ever. For daily trend watching, I recommend TrendHunter on the cultural side and recent Emmy winner Shelly Palmer on technology. SocialMediaInsider and Mashable will keep you in tune on social media. And trust the folks at Trendwatching for a monthly dose of eye-opening insight, including the just-posted 6 Trend Videos for March.

Freebie Fridays in Your Future?

Our agency had a few spare hours the other day and decided to surprise a client with a little extra service at no charge to them. We labeled it “Freebie Friday” and have elected to make this an ongoing benefit of working with us. So far, our clients have taken this in the spirit in which it was offered, and haven’t sought to add freebie Mondays and Wednesdays. In the continual battle to maintain happy clients and healthy margins, sometimes you simply have to put one ahead of the other. Is there something you could do to surprise your customers with a little free love? For inspiration, check out how Tropicana did just that by erecting a “sun” over a light-deprived town in the Arctic Circle.

Insuring Success (with Net Promoter)

Posted on by Drew Neisser

When I was just out of college, my oldest brother sold me a life insurance policy.  He needed customers and I was too naive to say no.  Every year since, when that premium’s come due, I’ve cursed my brother and the company for whom he once worked. Had Net Promoter existed back then I would have been identified as a dangerous “detractor,” the kind of customer whose profit does more harm than good, and undoubtedly my brother would have been shifted out of sales sooner.

This annual experience had shaped my impression of the entire insurance industry until just recently when I had the pleasure of hearing executives from Progressive and USAA address their impressively relentless focus on customer satisfaction.  These presentations were part of a two day Net Promoter conference that celebrated the power of monitoring and addressing customer satisfaction at every point of contact.

Richard Watts, General Manager at Progressive Insurance, started his talk with a family story not unlike the one I told above.  Richard, being English, told of his “mum’s” disappointment when the company’s automated system deactivated her account simply because she’d forgotten to return what proved ultimately to be an unnecessary form.  By simply eliminating this form, Progressive retained thousands more customers and fulfilled a new internal rallying cry, “Would you do that to your Mum?”

Then Watts delved into the math behind their extensive customer satisfaction activities.  With $14 billion in annual sales, extending retention one month represents $1 billion in annual premiums.  That’s big money to any company but few have integrated customer satisfaction measures to the extent of Progressive.

An employee dashboard reports real-time satisfaction by customer, by product and by region.  Customer verbatims are treated like “treasures” and bonuses are awarded based on retention figures.  Employees with the highest Net Promoter Scores are also celebrated at annual events.

This attention to customer satisfaction has also led to the development of new services and coverage areas.   Progressive’s 52 “concierge” service centers across the country allow customers to simply drop off damaged cars, select a loaner and return when the repairs are completed. Additionally, Progressive added pet insurance, and did so much to the joy of their customer base, that can now share photos with fellow dog lovers via a community site the brand hosts. And their “name your price” offering was developed in response to customer requests via c-sat surveys.

Another insurance company that goes to extraordinary lengths to please its customer base is USAA.  Focused on the needs of men and women in the armed forces, USAA has over 7 million customers, 97% of whom renew their policies each year.  This puts USAA 9 percentage points ahead of its next best competitor in the insurance arena.  As one happy customer put it “USAA is the best relationship (next to my wife / she’s sitting next to me) I’ve had my entire life.”

At the Net Promoter Conference, Wayne Peacock, Executive Vice President at USAA, noted that his company’s dedication to c-sat starts with their mission “to facilitate the financial security of its members” and in the process be “the provider of choice for the military community.”  It’s also embedded in their tagline “we know what it means to serve.”  But this dedication to extreme customer satisfaction is far more than lip service.

Mr. Peacock noted how the company stays focused on its members and integrates military life into their corporate culture. It starts with the hiring process, with almost 1 in 5 employees having served in the military or having a spouse who served.  From there, new employees go through a sort of “boot camp” that includes wearing 40-pounds worth of field gear and consuming MRE (meal ready to eat) rations.  Executives and employees are also encouraged to attend military events on a regular basis and “respond with empathy” to any customer inquiry.

The result of this dedication to service is the extraordinary loyalty I mentioned above and the highest Net Promoter Score across all industries according to Satmetrix’s 2009 study.  With this kind of customer satisfaction, it shouldn’t be a surprise that 90% of military officers who sign up with USAA remain customers for life.  Like Progressive, USAA is avoiding the “bad profits” made from poorly conceived sales efforts (like my ex-agent and brother!), insuring both short-term and long-term success.

5 Savvy Guerrilla Marketing Ideas for 0h 10

Posted on by Drew Neisser

ADWEEK published its special report on Guerrilla Marketing a couple of weeks ago including a few quotes from your truly on how marketers are capitalizing on empty retail spaces. These quotes were part of a larger conversation I had with ADWEEK on overall guerrilla trends and the kinds of things you might see in 2010. I’ve collected those thoughts into this piece that looks remarkably similar to an article of mine that appeared in MediaPost this week!

More DO, Less SAY
Guerrilla used to be about “hit and run” stunts that in the best case yielded on-message PR. Like other forms of marketing, guerrilla is evolving into more complex experiences that DO something for the consumer rather than simply saying something to them. The HSBC BankCab (yup, its still driving brand love after seven years!), the Samsung Charging stations and Charmin’s Times Square bathrooms are three examples of the DO versus SAY approach.

Expect a lot more of this in 2010 with new twists that integrate technology and/or social media. For example, Charmin added a search for Tweeters to supports its 2009 “pottie platoon” and HSBC added tweets to the BankCab program.

Meet Up meets Flash Mob
At the heart of the most effective guerrilla campaigns is a physical interaction. Social mobile technologies enable new interactions that guerrilla marketers will undoubtedly exploit. A well-connected marketer will be able to take the notion of a flash mob to new heights, gathering people of extraordinary commonalities at a moments notice. Think Meet Up meets Flash Mob. It is easy to imagine a kitchen appliance company gathering left handed vegan cooks for an “equal rights” march through Bloomingdales that turns into a party to celebrate a new “leftist” friendly product line.

Foursquare, Loopt and Google Latitude all represent interesting opportunities for marketers to connect with likeminded consumers in fresh ways. These tools all create the opportunity for customized micro-events that could make prospects feel a part of something special. For example, liquor brands should have a field day partnering with Foursquare and/or Loopt to create an entire nights worth of experiences.

Pop-up not Pooped Out
With commercial real estate still in the tank, expect guerrilla opportunists to exploit empty spaces in all sorts of new ways. Suddenly these windows could become touch screen displays that are customized ecommerce enabled eco-systems. Smart video technology would assess the people walking by (i.e. male, female, young, old, short, tall) and serve up a customized visual experience.

For example, the video window could display an avatar of the individual walking by and then transport it to sunny beach in the Bahamas for a travel company. The consumer could select their own destination and place their image into it. This image could be emailed to the consumer along with a discount for a cruise to that destination. Less tech heavy uses of storefronts will include live mannequins, video projections and printed posters that change on a daily basis for a reason (weather reports, news items, drinks of the day, etc.)

Taking Tech over the Top
Look for augmented reality to creep into guerrilla programs. For example, a girl could virtually try on a dress she’s just seen via a guerrilla encounter, share that “trial” with a friend, get instant feedback, figure out who makes that dress and then order it on Zappos. Smart phone apps could include components found via a real life scavenger hunt. The consumer would have to find the “clue” and take a picture of it which would help them reach a higher level in the app. The variations on this are endless but all involve integrating mobile technology with a physical experience.

Little Luxuries
Guerrilla marketers have long pursued random acts of kindness as a means of gaining attention for their brand. Look for these random acts to become less random and more upscale, providing little moments of luxury in 2010. Concierge service in unexpected places, free transport in unique vehicles and exotic food samples for passersby are but three examples you can expect to see this year.

Little luxuries are always welcome and can be delivered on an increasingly personal basis thanks to advancing technology. For example, GPS mash-ups can enable everything from customized messaging to personalized walking tours. This messaging could be educational—like how do you get the best shot of a landmark (that you happened to be at) to what’s the best thing to order at the restaurant across the street. This level of customization will endear brands to their prospects thus transforming them into card-carrying brand evangelists.

Manufacturing Love: The New CRM?

Posted on by Drew Neisser

These days, it’s simply not enough to manufacture a good product. Those are the table stakes. If you make an inferior product, no amount of marketing can save you from the painful truth that will spread faster than you can say, “tweet tweet.” That said, in categories with several high-quality options the winners like Lexus, American Express and Apple are succeeding by manufacturing love, gaining share of heart not just share of mind.It’s probably not news to anyone that Lexus makes a high quality product. In fact, Consumer Reports consistently rates Lexus best of breed in just about every segment. What you may not know is how far it will go to satisfy its customers, even its used — excuse me — “pre-owned” vehicle customers. Ready to retire my trusty Civic at the end of last year, I found out first hand why Lexus has topped a University of Michigan study on customer satisfaction four years in a row.

Meet Keith. Keith mans the pre-owned section at Lexus of Manhattan and is my new best friend. Keith offered my wife and me beverages, comfy chairs and a complete explanation of our options when we first met. After identifying OUR car, we haggled over the price ever so pleasantly and then did a final inspection at which point we discovered deal-breaking scratches on the passenger door. Expecting a “take it or leave it” response, Keith surprised us with a “of course, we’ll take care of this” and scheduled the repair work. Evidently, this is par for the course at Lexus.

When I picked up the car a week later, Keith surprised me again by explaining how everything in the car worked and noting the additional repainting they’d done “just because.” Keep in mind, we’re talking about a used car lease here so I’m thinking that’s the end of the road. Wrong again. A couple of days later I received a “how’s the car running?” check-in call from Keith. Several weeks after that he phoned to say that we needed to schedule an inspection and when I couldn’t find the time, he offered to retrieve the car, take care of the inspection and return it in short order. He did all that, threw in a car wash and, in the process, became the poster boy for love-generating customer service!

Lexus is not the only brand out there manufacturing brand love. American Express has been after the hearts and wallets of small businesses for many years. Recently, its OPEN program has kicked into high gear, delivering invaluable content and networking opportunities via the OPEN Forum. Sure, lots of brands offer content online but as someone who pumps out a fair amount myself, I can assure you this is best of breed, including articles, videos and discussions.

I also witnessed the OPEN Forum in action as CES, at which live speakers attracted flocks of small businesses eager to fly higher. Even the sales people were helpful, explaining the benefits of OPEN and assisting in the registration process. The positive vibe in the American Express booth was palpable and every touch-point made me and my fellow small business peeps feel loved by this corporate giant.

Apple has been a beloved brand pretty much since its founding by making truly innovative products that were easier to use and prettier to look at than its main competitors. The iPod and the iPhone created entire economic ecosystems, reinventing their respective categories, transforming mere devices into holistic lifestyles. And most companies would stop there, thrilled to have unique goods on the shelf.

Apple did not. It created the Apple Store to control the entire brand experience and, about a year ago, added in-store concierges to further the romance. These orange-shirted wizards can do everything from fixing a broken key to directing a product search to ringing up your order and emailing the receipt all in a nanosecond. And these are just the tasks they did for me on my last visit, all of which assured my enduring love for all things Apple.

Lexus, American Express and Apple are all premium brands that deliver high-quality products AND exemplary service. In doing so, they set themselves apart not just within their respective categories but also in the marketing world as a whole. They make it their business to exceed expectations and, in doing so, have created legions of brand advocates ready to do their bidding. These brands are redefining the rules of CRM, manufacturing love at every touch point, gaining share of heart, mind and wallet in the process.