Using Showroom Magnet, dealerships are able to deliver gift card incentives to online leads in exchange for a visit to the showroom. Automated reminder emails and online web marketing continue to encourage the lead to visit the showroom until they act on the incentive and redeem the gift certificate.

“ShowroomMagnet is our answer to a problem many clients have experienced with lead to show ratios.  As leads rise, it becomes increasingly difficult to keep show ratios increasing at the same rate. With ShowroomMagnet, Lead to Show ratios quadruple, in some cases over 80 percent,” said Larry Bruce, president of OnlineDrive.

ShowroomMagnet also closes the loop for all marketing channels by giving the client end to end accountability in marketing. Through ShowroomMagnet, dealership personnel can see and track Lead Conversion Percentage, Show Percentage, Working Deal Percentage and Closing Percentage.  The tracking feature enables users to research sales back to the keyword or marketing campaign that produced the initial interest, helping refine marketing campaigns and reduce dollars spent per lead.

“Finally, with ShowroomMagnet we are realizing the full potential of our online marketing.  The targeting capability of the solution is great for conquest,” said Kenn Volz, dealer principal of Volz Auto Group.

Andy Wright, vice president of Vinart Dealership agrees, “ShowroomMagnet is exactly what we have been asking for.”

ShowroomMagnet is available now, for full details visit www.tryshowroommagnet.com.

• There is not ONE ZMOT in Automotive there are TWO
• People spend as much time consuming online media as they do off
• Targeting is getting better & faster online, you can now target display like you target adwords
• Offline marketing is just pushing consumers online so you have to be in both and understand where you are pushing them
• It doesn’t matter how good you are at adwords or display, if your ad sucks you won’t get the click no matter how relevant you think your message is to the keyword
• It doesn’t matter how good you are with your adwords or display and even your ad if your landing doesn’t match what you promised you won’t get the conversion
• Remarketing is valuable if you use it right, if you just send the consumer back to the same page they didn’t like before it’s NOT
• IT TAKES A COORDINATED STRATEGY ONLINE AND OFF TO WIN, NOT JUST AN INTEGRATED OR BUNDLED ONE

At the end of the day, I still see a lot of “Marketing Partners” who have a product, widget or new shiny object to sell not a coordinated service offering to help the dealer sell & service more cars.

At Digital Dealer 12 in Orlado April 3-5 will will explore the data behind ZMOT and how to execute it in your store to increase lead volume and most importantly Show Rate in the dealerhips.

Click Here to attend my Digital Dealer 12 Session “Marketing By The Numbers” Executing ZMOT in your dealeship

Here are the slides from DD11 SEO VS PPC “The Epic Battle”

 That kills a General Manager it’s what he doesn’t know!

 Those words spoken to me by one of the smartest dealers I ever worked for, Jay Marks, have stayed with me since 1996.   Same principal applies in every position of the dealership but particularly in marketing.

 Let’s face it Marketing is quickly becoming a dealership position. It’s a complicated dance between traditional and  digital, the dealership and its partners. What is most alarming to me is the lack of basic information dealerships and  their marketing partners have about the dealerships market and customers behavior. It’s always amazing to me that  so many dealerships can operate even profitably and know very little about their market or their customer behavior. Even  more alarming is the “Marketing Partners” they are using know less than the dealership, “They are not at the store!”.

The data is all there, in my earlier post “The Secret Weapon” I discussed the massive amounts of data that are available to dealerships and how you can leverage some of this data. I also talked about “What a Relational Marketing Database should do.”

One of its first functions is a “Market Analysis” you historical data will tell you a ton about
   • Where your customers are willing to come from
   • What cars they are willing to spend the money for
   • What cars they are getting rid of
   • Where your customer are will to come from for service
   • What cities you have the best penetration in
   • What vehicles make you the most money
   • How and who to increase customer pay service with

I could go on and on but the post would be overwhelming.

Bottom line – If you are interviewing a marketing partner… and that is what it is an interview, and they can’t show you where the marketing & conversion leaks are, they can’t tell you where they think they fit in your marketing plan and can help then you already have your decision, it’s the same one you would make in an employee interview.

Finally if you don’t have a basic market analysis you’re throwing darts in the dark… STOP even if your current “Marketing Partner” cant supply you with one you can do this yourself in excel.

Here is a link to a sample marketing analysis you can download that will at least give you the basic data to make good marketing decisions on. GET A SAMPLE MARKETING ANALYSIS. 

Before you go chasing “Spinner Bait” (the shiny object) get your foundation right. Start with the data, get your market analyzed and look at who you need to target and how those people find you. Get that right then you can start to tackle the more advanced and subtle areas of marketing like social media, advanced content marketing, mobile etc.

Hope this helps,

Attend my session at Digital Dealer 12 “Marketing By The Numbers, Executing ZMOT In Your Dealer

If you are one of the best dealers in the country you are using 10% of your Secret Weapon…what is it?

DATA!

Your DMS is full of it, but that’s just the tip of the ice burg. Your OEM has 10 years of your dealerships customers you need to get it. Polk has data you can use, there are 1000’s of people that hit your website every month who leave trails of billions of bits of behavioral data, your call tracking provider has data you can use I could go on but you get the point…

OR DO YOU?

In a recent Automarketing tweet chat (you can catch it every Wednesday 12pm Central time on Twitter, shameless plug) we discussed why a CRM application should not be your marketing database. There was a lot of discussion on this but the integration of  all these silos of data is one of the biggest reasons I think they cannot be the same thing.

Should they integrate? YES

Bottom line where ever you have your Relational Marketing Database (in this case I use Relational in the sense of the relationship of the customer / prospect to the dealership and the data it has about them) you need to have one.

What should it do?

• The following at a MINIMUM:
  • Contain all your DMS customers, all your CRM customers, the data you procure from your OEM and it should segment these customer based on their relationship to the dealership (Existing or Potential Customer). 
  • Segment these customers based on their market status and relationship to their trade cycle or service cycle
  • Allow for automated email communications (there are actually 44 touch points over the life cycle of a customer it should automate)
  • Allow for Email content distribution
  • Allow for Email Marketing
  • Allow for Direct Mail Marketing
  • Track all Channels (Email, Direct Mail)
  • Give you a Sale ratio and an ROI

I don’t know of a single CRM vendor who can do all of this and these are the MINIMUMS, we haven’t gotten to the hard stuff.

The database of your future is here today and will be used in the presidential campaign of 2012.

I was reading a post this morning by Dave Levinthal “Obama’s 2012 Campaign Is Watching You” it talks about the various offline databases the Obama campaign is using to collect millions of dollars in campaign funding and to persuade people for their vote, that is the marketing database of the future.

Earlier in this post I brought up just a few of the offline databases that have good data dealers can leverage, there are many more and would make this post very long. Suffice to say for now the data integration and uses for retail automotive like what is being done for Obama 2012 will be here before then end of 2012, count on it.

What should you do?

• • Get the minimums above done as best you can
  • Look at who’s getting your data and what they can do with that data when they get it
  • If they are using your data outside of helping your dealership in anyway, at the very least tell them you want data from them… Qui pro quo. All data is has uses some you just may not have thought of yet.
  • Make sure that where ever your data lives you can get it if you want to move to another solution
  • Ask what plans do you have for the future to leverage this data? At the end of the day if you are partnering with a vendor, you should be doing it based on their vision not on what they have now. What they have now everyone will have soon.

Data is the foundation of a good marketing strategy, online or off. Begin the process of building a Relational Marketing Database in some form as best you can and look for a marketing partner that can deliver a vision of using that data to help your dealership grow.

Hope this helps,

I have had a few dealers reach out to me lately on Microsites being a bad idea and even one of the largest industry providers asking me if dealers using them will be “Black Listed” by Google…REALLY?! 

In this video Matt Cutts from Google explains his OPINION on microsites and calls out a post by Vanessa Fox “Microsites A Bad Idea Most of the Time”.

Before I break down some of the miss-guiding in the video by Matt and the post by Vanessa let me say I have tremendous respect for them both as SEO Practitioners and Marketers in their own right and I can certainly see their points for poorly designed, built and executed microsites / landing page strategies. 

Therein lies the first point.

“A well designed, well executed microsite / landing page strategy will outperform your website with targeted channels & campaigns every time.” However as with most strategies if it is not well designed, thought out and executed properly it won’t work…duh!

You lose brand identity and audience engagement

Ok let’s get real here… Most businesses don’t really have a “Brand Identity”, they do not define the brand they sell as Coke defines soft drinks and Google defines search, so brand identity isn’t our goal when we advertise on Google and it isn’t the main reason or even a secondary reason we want to be found on Google or any other search engine.

Why we advertise…Why we want to be found… is to sell something!

To be quite honest with you most of the time the reason a visitor gets to us is because they want to buy something NOT because they want to “Engage with us as a BRAND” So sending a visitor back to your RANDOM ACCESS WEBSITE where they get entangled in the web of everything other than what I was searching for is well… in a word “SILLY”.
Where I am going to promote “audience engagement” and “brand identity” is in my blog first and foremost then use social media for support and conversation on my brand topics, NOT in my site.

Vanessa there is no doubt brand awareness and credibility go a long way toward getting the click and the visitors perceived value goes a long way to getting the conversion, but when they are in the mid and lower funnel to buy I want to provide them relevant information, easy, quick access to that information not drop them on the Encyclopedia Britannica the is my main website, especially if I am making a specific offer.

You lose the ability to leverage your audience

“Let’s say you launch an awesome site with a fantastic user experience, great products, and unrivaled customer support. For instance, let’s say you’re Zappos. Someone writes up a positive article about you in say, the NY Times. Readers start clicking over to your site. They see you sell running shoes. They just read about how great you are, so they feel confident about purchasing some products from your site. But maybe those same readers also need some clothes to go running in. If you had a separate runningclothes.com microsite, you’ve just missed a great opportunity to reach a targeted and motivated audience.”

The example above is absolutely what I mean by a poorly designed and executed microsite strategy. If they would have done it right the ad campaign would have targeted keywords “running shoes” and that would have dropped them on to a microsite that would have asked “What kind of running do you do” the choices would be under men or women and had links like “Sprinting, Long Distance, Cross Country etc.” that would have taken the visitor to a specific page for each shoe type and maybe even deeplink the visitor into the main website after the microsite has qualified them. In the end when the running shoe transaction is done the site should suggest running apparel and link them to another microsite or into the main site (depending on the situation) about running apparel.

The main point here… Don’t confuse the visitor from what they were looking for in the first place with other offers or links for them to get lost, help them get what they came for quickly and easily then suggest others. 

I can’t begin to count the number of sales I have missed over the years not staying focused on what the customer wanted in the first place and muddying the water with other products.

The moral of your example… don’t launch microsites for the sake of having a microsite, HAVE A THOUGHT OUT PLAN.

Let me add to this “NEVER BUILD MICROSITES AS A LARGER NET TO SOMEHOW GET MORE TRAFFIC” that is the biggest “BS” for the use of microsites propagated throughout our industry.

You confuse people and search engines

Here again Vanessa is confused by the poor microsite & landing page strategy. Mostly because I would not allow a microsite to ever be featured in the NY Times in the first place. If it was over your main website then you really need to take a look at your main site because you have bigger problems than microsites. Microsites are never used as a substitute for your main site and should never be what a media company like the NY Times wants to feature unless they are doing a story on the effective use of Microsites!

Let me add here Microsites are not built or meant to rank, they are meant to have a traffic driver like PPC or Email and convert. Therefore that “Loving Touch” as Matt puts in the video is done for the offer not the site, nor do you worry about search engine indexing because SEO is not your traffic driver here.

Bottom line this confusion has nothing to do with microsites and everything to do with poor microsite strategy or a poor main website design, in either case it’s bad.

You may have to spend substantial additional resources

“As you build out the content of both sites, you have to decide which content to put where. And decide how to spend marketing, PR, and advertising resources. When you issue a press release, which site do you talk up? All of them? What if you have 20? And you likely are doing social media. Do you now maintain 20 Facebook pages and 20 Twitter accounts? I’m tired just thinking about it.”
C’mon Vanessa really?

• How do you decide Marketing, PR and advertising resources? – Based on if your marketing or advertising is making a specific offer and how you want to track that channel.
PR well if your “Press Release” is about a specific product send it to the microsite for that product, even better send it to your blog with more content about the specific product and use links and banners in your blog for offers on the product that go to microsites that convert that traffic into sales or leads.
• Do you maintain 20 Facebook pages and twitter accounts? – Surely Vanessa you realize that Facebook and Twitter just support & distribute content, what would make you think you have to have a Facebook page and/or Twitter account for every microsite?
Again the above examples are functions or a poor microsite / landing page strategy not of microsites themselves.

“It’s a poor carpenter that blames his tools”

You cobble your search acquisition efforts

If you are trying to rank microsites then you are using them wrong. I think I have explained that enough in this post.
It can be difficult to match promotions to search visibility

“The trouble comes in when that promotion sparks search interest (which it undoubtedly will). I’ve observed this with the Super Bowl commercials in both 2009 and 2010. In 2009, several sites, including Hyundai and Sobe advertised taglines that had corresponding microsites, but those domains redirected to the main domain. Advertisers expected that viewers would type the URL into a browser address bar, but instead, many people typed the tagline or domain into a search box. Since the domain didn’t actually exist, the advertiser didn’t show up in search results. You can see this, for instance, with Hyundai’s Edit Your Own campaign.”

Here again a Poor Microsite Strategy having nothing to do with using microsites for what they are supposed to do. If the agency that did this promotion for Hyundai would have understood a good microsite strategy and knew what they were doing they would have done the following.
Built a true “Edit Your Own” Microsite with the goals of the visitor in mind who saw the ad, instead of a URL and splash page just to see how many people saw the ad and acted which is what I am sure was the agency’s and Hyundai’s goal there.

Their goal should have been to provide good information in the microsite aligned with the ad and the visitor intent then collect leads based on an offer of more information to come or special incentives or discounts, then distribute a content marketing campaign designed to follow up nurture those leads and distribute the high quality leads that bubble to the top to their dealer body.

Secondly it was a big mistake not to integrate a good Search Campaign with this ad. As Vanessa effectively points out in her post most of the off line advertising you’re doing is sparking more searches for the offer than the URL you put in the add if you don’t have an integrated search strategy with that offline campaign you are missing business.  

Vanessa here again you have an example of a poor strategy and a misunderstanding that microsites need to rank, not a problem with microsites. Microsites don’t rank, they’re highly relevant & they convert. 

You don’t get the search engine value you think you get

This is a really long explanation about how keword rich domains don’t carry the search engine value you think and I agree with Vanessa 1000 percent. Google is on to the keyword domain thing and it carries very little weight now, no matter what anyone in the auto industry tells you… IT DOESN’T there is too much data to support that.

But I will reiterate I DON’T CARE about the search engine value! If you have the right microsite strategy the only search engine value you do care about pertains to quality score, that’s it. SEO is not the traffic driver for your microsite strategy if it is YOUR DOING IT WRONG…STOP!

So let me wrap this up…

1. Your microsite strategy is NOT based on SEO
2. Microsites focus your visitor on the offer and logical path to conversion
3. If you are going to support offline advertising with microsites make sure you integrate PPC with it

 “A good strategy including the above, well designed microsites will out convert your main website every time”

Finally – Good microsites are closely tied to your keyword, to your ads and to your visitor landing making them highly relevant…what Google is all about! Any knucklehead that tells you that you will be black listed for doing that is a provider you need to stay very far away from as they are clearly clueless.

I hope my opinions here clear up some of the misgivings on microsites and help you think about them and your entire web advertising more clearly.

For more information on where to use microsites and landing pages see these links

Where Do You Use Landing Pages
Microsites & Landing Pages For Auto Dealers

About OnlineDrive:  
OnlineDrive is a Search to Show web marketing agency, helping auto dealers:
• Be found more in the right places
• Engage and convert more leads
• Get more leads to show at your store

 1. Could FREE shipping break open real eCommerce for automotive? I think it is certainly a big hurdle right now logistically and monetarily. Taking away the monetary factor may go a long way toward opening this up. Of course there are still some logistics involved and there is the tactile factor. The need to touch and feel the vehicle is diminishing slowly and logistics can be overcome… Thoughts?

2. Pricing in the palm of the customers hands. Like it or not that part of eCommerce is upon us, the whole TrueCar mess may have brought it to our attention on a large scale but it was going to get there anyway. It’s not yet main stream but customers walking around your showroom with iPhones in hand comparing your cars, dealership and prices is coming like a freight train. If you try to fight it you’ll just be run over by it. So here are a few ideas to help you embrace it.
                  a. Use SMS short codes on your window stickers. Better than QR code because customers are more used to it and because you get to capture the cell number of the customer and have a possibility to continue the conversation.
                  b. Use QR codes to direct customers to Google places to review your dealership and see your reviews. On your Repair receipts, on your envelope the license plates the customer gets, on posters in your showroom and just about any other correspondence you have with customers. It will pick up reviews. While you’re at it use QR to direct them to a mobile coupon as well, might as well get the service business there’s a little bit of money there.
                  c. Remember people do things with mobile not research so much so help them do those things. If they want to compare on your floor have an SMS short code that gives them a special discount or incentive and links to other prices…Remember they are on your showroom, you’ve got home court advantage and they’re going to do it anyway might as well direct the process to your advantage.

3. The day of the “Big Lot” is coming to an end. I can foresee a day in the not too distant future where there are small retail dealerships in high traffic down town locations where you pick out your vehicle; it is stored in a central much cheaper storage facility outside the city but it goes much deeper than that however. I can see this going to mass customization where you pick the car, and the paint job and the electronics package, the wheels, tires, ground effects etc. and there is an assembly line type factory on the storage facility site that customizes that car for you in a few days then delivers it to your house. I would love to see someone try this on a small scale it would shake up the car world.

These are a few thoughts that come to my head as I watched the video above, let’s here yours.

See the full comScore report below.

Below is the report from CNW

http://ebiz.netopia.com/cnwmr/cnwresearchstatedition/

Ignore the Human

Element of Marketing at Your Own Peril

Forget Product
Positioning, This is the Dawn of the Relationship Era

Published: January 01, 2012

New Year’s resolution: Stop living in the past.

Just jettison some old habits, such as trying to manipulate prospects. Stop
viewing purchasers as conquests. They are members of a community, prepared to
adore (or the opposite) not just your stuff but the inner you. Your essence is
transmitted continually via your relationships with consumers, employees,
suppliers, shareholders, neighbors and the Earth itself.

The Human Element is greater than positioning, unique
selling propositions and segmentation.

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Welcome to the Relationship Era. Say goodbye to positioning, preemption and
unique selling position. This is about turning everything you understood about
marketing upside down so that you can land right side up. This is about tapping
into the Human Element.

Begin with a simple experiment. Type “I love Apple“
into your Google search bar. You will get 3.27 million hits. If you type
“I love Starbucks,” 2.7 million hits. Zappos: 1.19 million.

“I love Citibank” gets you 21,100. AT&T
Wireless: 7,890. Exxon: 4,730. Dow Chemical: 3. Out of 7 billion human beings,
three! Just to put that into context, type “I love Satan” and you get
293,000 hits. Now consider that in the past 12 months, Citibank, AT&T
Wireless, Exxon Mobil and Dow have spent $2 billion on advertising. How’s that
working out for them?

The methodology here may not be especially rigorous, but the results
dramatize two immutable facts of contemporary marketing life:

1. Millions of people will, of their own volition, announce to the world
their affection for a brand. Not for a person, an artwork or a dessert but for
a product or service. Congratulations. People care deeply about you.

2. Whether you like it or not, your brand is inextricably entwined in such
relationships. If you were to type in “I hate Exxon,” you’d get 2.16
million hits–not counting the “I hate Exxon Mobil” Facebook page.
Though people are listening less to your messages, it doesn’t stop them from
thinking and talking about you. And each of those expressions of like, dislike,
ardor or disgust has an exponent that reflects the outward ripples of social
interaction.

In short, as you have realized but most likely not come to grips with, you
are being evaluated 24/7 in countless conversations that have zero to do with
your ad slogan. On the contrary, they are about your brand’s essential
self–which behooves you to think very hard about your essential self.

This has ceased to be an option. History has made that decision for you.

End of the Consumer Era

Mass advertising sustained marketers and media for more than 300 years. The
last stage of that epoch — from roughly 1965 to about five minutes ago — was
the Consumer Era. It was characterized by a shift from advertising and
marketing focused on the product (Brylcreem: “A little dab’ll do ya!”
Lucky Strike cigarettes: “It’s toasted!”) to getting into the heads
and hearts of consumers (MasterCard “Priceless.” Nike:
“Just do it.”).

It was a four-step process. 1) Ascertain through research what the public
desired. 2) Offer it. 3) Create advertising designed to seduce, impress,
entertain, frighten or flatter the target audience. 4) Place that advertising
in media favored by the target.

Why not? Where’s the flaw in selling people what they wish to have by
reaching them with messages they relate to in the places they like to be?
Thinking of others … isn’t that what Mommy and Daddy told us to do?

Yet, for three fundamental reasons, those universal marketing practices must
be discarded.

For starters — briefly, because this is no longer controversial — there is
the ongoing chaos scenario: the inexorable collapse of mass media and mass
marketing, and the hyper-fragmentation of their online successors. Meanwhile,
DVR fast-forwarding, spam filters and opt-outs have essentially reduced
audience measurement to a faith-based initiative.

It’s a paradox: a revolution that in one critical aspect moves us backward.
While digital tools have taken the power of the heavily capitalized Few and
distributed it to the Many, they have also nearly obliterated anybody’s
capacity to reach the Many in one fell swoop. The Industrial Revolution was
revolutionary because it created efficiency through scale. The Digital
Revolution, by contrast, has decimated scale.

So, yes, upheaval is violently altering the landscape.

The second reason is ecology. Think of the marketing environment like the planetary
environment. In the Consumer Era, business won customers by burning fuel. That
fuel was advertising. Drill, drill, drill. Burn, burn, burn. Sell, sell, sell.

Colossal reach made advertising and promotion seem efficient, yet their
effects were maddeningly transitory, a vast expense yielding little equity. Buy
advertising and sales went up. Stop advertising and sales went down.
Marketing’s effects, in ecological terms, were unsustainable.

Now, amid the collapse of Mass, the fuel itself is too expensive to produce.
The future requires a sustainable alternative. Resource management and the
disintegration of Mass argue against the status quo.

There is a third — nearly blasphemous reason — that the sun is setting on
the Consumer Era. We’ll get to that shortly. First, let’s meditate on the new
currency of commerce: trust.

According to the 2006 Edelman Trust Barometer, “quality products and
services” was the top response in identifying the standard of trust. By
2010, mere “quality” had dropped to No. 3. “Transparent and
honest practices” was No. 1 (with 83% of respondents citing it).

Core values, that stuff of essential self. Scan the signage at the Occupy
Wall Street encampments. Goldman Sachs takes a drubbing. Apple, very much in
the 1%, gets a pass.

Of course, how people represent themselves in surveys and at rallies doesn’t
necessarily reflect how they really behave. In political polling, for instance,
nobody ever declares himself a racist. Surveys of media diets reflect zero use
of porn.

So how to demonstrate that the public’s stated preference for honesty and
transparency squares with their actual choices in the marketplace? The answer
is the Brand Sustainability Map.

Researchers at Imc2 commissioned survey data on trust and plotted it against
market share for leading consumer marketers. The results are striking:

Charting customer “trust” as the Y axis and transactions as the X
axis creates four quadrants. The lower-left quadrant, “Limited,” is
the province of losers: struggling brands with flat or declining sales and
little respect from consumers. American Airlines lurks in the lowest left-hand
position.

To its right is the “Reluctant” quadrant, brands that command
little respect and generate little emotion, but whose price or competitive
advantage trumps a customer’s misgivings.

In the upper-left, “Emotional” is the home of companies that
maintain respect in spite of quality issues, limited distribution, high price
or other competitive disadvantages.

Finally, there is the Valhalla of the upper-right-hand quadrant,
“Sustainable.” This is where you find the likes of Apple, Costco,
Southwest Airlines and, in the upper-most-right-hand corner, Amazon.

In the Relationship Era, the big winners will be in Sustainable, whose
habitues typically spend little on advertising — because they don’t need it.
By contrast, indifference is expensive and hostility unaffordable.

Notice that three retailers in Sustainable — Amazon, Costco and Target
– spend an average 0.52% of sales on measured media. Sears, in the Limited space, spends 1.62% of sales
and loses market share doing it.

The power of brand identification verges on the perverse. A 2011 study in
the “Journal of Consumer Psychology” by Shirley Y.Y.�Cheng, Tiffany
Barnett White and Lan Nguyen Chaplin concluded that consumers tend to take
criticism of their most-admired brands personally, and circle their emotional
wagons around the brand under attack.

Toyota and Snickers enjoy the same reflexive
defensiveness from their devotees as the president of the United States, the
Dallas Cowboys and the state of Israel enjoy from theirs.

Clearly, those whom we trust and adore, we trust and adore a lot. It’s human
nature. Luckily, while the digital revolution was undermining Mass it was also
supercharging human nature.

Social media have taken the stolid, dependable old tortoise — word-of-mouth
– and transformed it into countless hares, multiplying like, well, hares. And
they’re zipping around not just the beauty parlor and the saloon but Facebook,
Twitter and Yelp at the speed of “send.”

David Rogers, Columbia Business School

Network effect

To David Rogers, executive director of Columbia Business School’s Center on
Global Brand Leadership, that network effect has changed the shape and the
physics of the traditional purchasing funnel.

“Awareness, opinion, consideration, preference and purchase” have
been supplemented by “loyalty” and “advocacy,” Rogers says.

The new imperative, according to Rogers, is “How do you, as a marketer,
get the subset of the loyal customer who doesn’t just buy your product again
but … writes those positive reviews? They share your links and retweet you on
Twitter and post a photo of themselves with your product on Facebook and
“like’ you on Facebook and generate all these network conversations, which
go back to the top of the funnel and influence other customers in your network
at their own stage of awareness, consideration, preference or action.”

Those echoes influence consumer behavior at every stage and create a sort of
perpetual-motion marketing machine. “I draw it as a funnel with an arrow
that goes from the bottom and feeds back to the top,” Rogers says.
“That’s the efficiency of it, if it works right.”

Oh, it works right. All you have to be is beloved, or at least respected,
for how you conduct yourself as well as what you sell. That truth was
documented by Rajendra S. Sisodia, David B. Wolfe and Jagdish N. Sheth in their
2007 book “Firms of Endearment,” a study of what they call
“stakeholder-relationship management.”

They selected 30 companies that they deemed driven by purpose rather than by
slavish devotion to quarterly earnings. Less paradoxically than it would
appear, in the authors’ view, these businesses built value for shareholders by
not obsessing about them. The companies included Honda,
Trader Joe’s, The Container Store, Southwest Airlines, Wegman’s Food Markets,
Commerce Bank, Best Buy, BMW, CarMax and eBay.

Lo and behold, over a period of 10 years, the Firms of Endearment wildly
outperformed the rest of the corporate universe and continue to do so. We
updated the FOE data to reflect the 15 years between 1996 and 2011. In that
span, during which the benchmark S&P average was 157%, FOE companies grew
an average 1,646%. During the past three economically disastrous years, the
S&P rose 3.3% on an annualized basis. The FOE index was up 21.06%.

Core values can’t be faked

Impressive, no? These kinds of numbers prompted some CEOs to look deep into
their souls for a corporate raison d’etre and many others to summon their PR
people to the C-suite to rewrite the mission statement — the latter approach
being a fool’s errand, of course.

All social efforts must flow from an authentic sense of purpose, not bogus
boilerplate. Core values cannot be faked, at least not indefinitely.

Scott Adams, creator of Dilbert, once devised a Mission Statement Generator,
which could be loaded with familiar buzzwords to automatically formulate
high-toned bullshit. (“Our challenge is to assertively network
economically sound methods of empowerment so that we may continually negotiate
performance-based infrastructures.”) Pretty funny.

But if you want a real laugh, check out the actual “values
statement” for Philip Morris. Item No. 1, as God is our witness:
“Integrity, trust and respect.”

Here’s another, literally etched in stone in the lobby of a corporate
headquarters: “Integrity. Communication. Respect. Excellence.” The
corporation? Enron. The message would have been longer, but the stonemason ran
out of room to chisel “Rapacious Jackals.”

And Dow? The company so loathed worldwide that it cannot muster even four
expressions of online love? You know what its slogan is?

“The Human Element.” It has a lovely ring, and Dow has articulated
ambitious plans. But for the chemical company that bought the chemical company
that gave us Bhopal, the sloganeering is at best cognitively dissonant. Dow’s
reputation is such that its sponsorship of the 2012 Summer Olympics in London
is roiling the games’ organization.

Hyping dubious humanity credentials is like lying to your psychoanalyst, a
pointless exercise. Yet so many marketers dangle one foot in the 21st century
while putting all their weight on the other foot, planted firmly on Rosser
Reeves’ grave. They squander the unprecedented potential of the online feedback
loop by conducting themselves as aloofly in social media as they always have in
paid media. Here is how one struggling fast-food chain has chosen to honor the
individuals who honor the brand by following it on Twitter:

KFC Colonel Everythin’s better with #bacon! Try a #KFC Cheesy Bacon Bowl
for just $3.99 + tax. (Limited time at participating U.S. KFCs)

“You are our fan,” KFC seems to be saying. “You are our
friend! So we’ll interrupt you as we always have with a sales pitch!” It’s
like being invited to your friends’ house for dinner only to realize over
dessert that they’ve suckered you into an Amway solicitation. Ugh. Cross that couple
off the Christmas-card list.

Trust is an asset, not a commodity. It cannot be purchased. It must be
earned. And it can dissolve before your eyes. But brands keep trying to
purchase respect points by, for instance, linking themselves to unassailable
causes, such as treating sick kids, in association with a finite promotion or
as part of a long-term “cause-marketing” strategy. This behavior is
cynical and often sordid, exploiting other people’s tragedy to buy borrowed
interest. Not so different from licensing “Iron Man” for a
co-promotion.

Others pay lip service to corporate social responsibility to inoculate
themselves against charges of venality, environmental rape, off-shoring or
other offenses. This is generally little more than PR window dressing.

Genuine purpose

What companies have available to them at all times, without having to come up
with faux philanthropies, is corporate purpose. If you can identify why your
company exists and what values it embraces, and if you live by those values
across all aspects of your enterprise–from hiring to choosing suppliers to
acting on civic responsibility–then you have the foundation for values-based
relationships that command loyalty and trust.

Do not confuse genuine purpose with other notions of differentiation, such
as positioning or USP, rooted in manipulation or contrivance. They are
“What can we say about our brand that sets us apart?” Marketing from
purpose is no less differentiating but it’s accomplished via a brand’s
demonstrated character. It can be banal or lofty “to make the most
delicious ice cream,” but you have to explain to all comers why you’re in
business.

Here’s how outdoors outfitter Patagonia defines its reason for being:

Build the best product, cause no unnecessary harm, use business to
inspire and implement solutions to the environmental crisis.

This has been the Patagonia way for 40 years, since founder Yvon Chouinard
set up shop to outfit lovers of the outdoors without contributing to the
destruction of the outdoors.

The company donates 1% of its gross sales to environmental causes, recruits
other businesses to follow suit, and engineers every aspect of its operation
toward source reduction and environmental sustainability.

Patagonia has progressive workplace policies, including in-house day care,
paternity leave and paid sabbaticals for environmental volunteerism. It also
enforces identical factory conditions, whether they’re in California or
Vietnam. Years ahead of regulators in committing to reducing toxic discharge in
its supply chain to zero by 2015, the company also made a costly decision in
1996 to use only organic cotton.

CEO Casey Sheehan recalls the corporate thinking at the time: “For a
period of years, our margins will suffer, our prices will be high. But we will
also tell the world that … if we don’t do this and the world continues down
the path of using conventional cotton, we are going to use up all the water and
turn these agricultural areas into pesticide-ridden areas.”

In the early 1960s, Volkswagen changed advertising with its wry,
counterintuitive appeals to inconspicuous consumption.

Fifty years later, in its 2011 Black Friday advertising, Patagonia further
mined that paradox and suggested that consumers not purchase even Patagonia
goods. “Don’t Buy This Jacket,” was the headline above copy detailing
the environmental toll of a single piece of Patagonia outerwear.

None of this eco-righteousness has ravaged the bottom line. On the contrary.

“The last three and a half years have been the best years in Patagonia
history,” Sheehan says. “And that’s from revenue growth, operating
income–all the traditional measurements. Our profit … back in the day [was]
2% to 3% annually. Now we’re up in the 9% range. That’s right on par with
public-company metrics.”

Its growth transpired amid the worst economy since the Dust Bowl.
Patagonia’s employee turnover is 5% a year; its share of rejected goods is 1%.

It’s not at all about “sitting around the campfire singing
“Kumbaya,’ ” Sheehan says. “It’s just that everything you say
and do … has the potential to affect everyone around you. The people you work
with, the people you contract with. It’s simple as that a happy CEO or leader
means happy workers, which means happy products, happy customers.”

That is why the Human Element cannot be isolated to the CMO’s office but
must be internalized by all management and must inform every corporate
relationship — from contract workers to securities analysts.

In a recent Harvard Business Review article, visiting professor Modesto
Maidique reimagined leadership by posing a seminal question to his top-level
audience: “Whom do you serve? Yourself? Your group? Society? Wall
Street?” We subsequently asked him what he was getting at. After all,
isn’t keeping the stock price up a CEO’s primary fiduciary responsibility?

“People assess corporate success based on stockholder returns,”
says Maidique, director of the Center for Leadership at Florida International
University. “You look at the [biggest] return, and that’s the best
CEO.”

But in a hyperconnected world, bosses must be stewards of the ecosystem.
Information is everywhere, and “the approach they take to their ecosystem
is going to be widely reported around the world.”

Whereas author and executive Pete Blackshaw has famously asserted that
“customer service is the new media department,” if Maidique is right,
everything you do is the new media department.

Perhaps you’re thinking, “Duh. People in glass houses shouldn’t lounge
around in their underwear.” Or maybe, “Sure, some whole-grained,
tree-hugging Mother Earthlings like Patagonia manage to build a business out of
twigs and bark, but aren’t they profiting from a pre-existing global movement
and have a customer base predisposed to buying in?”

Krispy Kreme

So let’s consider a different sort of enterprise, one that not only sells some
of the most nutritionally incorrect products on Earth, but has spent most of
this millennium as a Wall Street laughingstock.

We refer of course to Krispy Kreme Doughnuts. The stock plummeted from $44 a
share in 2003 to $1.15 in 2009 (when overexpansion, accounting irregularities
and investors’ loss of irrational exuberance ended what had been three-plus
years of Krispy Kremania). It has since climbed back into the $6 to $9 range,
on the strength of steadily growing revenue and profit, same-store sales and
enthusiasts’ devotion.

“You look at our fans and no matter what happens, they love us,”
says CMO Dwayne Chambers. “People like to eat doughnuts when they’re
really happy, and people like to eat doughnuts when they’re maybe worried or
… a little melancholy. We have one of those products that really fits a lot
of different needs and a lot of different emotions.” Just like a glazed or
jelly-filled friend.

Krispy Kreme’s resurgence began with the 2009 hiring of CEO Jim Morgan, who
presided over management introspection about purpose. What came out of the
process wasn’t particularly sophisticated but, if anything, resembled old-time
religion: “Touching and enhancing people’s lives through the joy that
is Krispy Kreme.”

The executives distilled the watchword from 75 years in the guilty-pleasure
industry. They decreed only that the joy ethic inform every interaction at
every level of the business, which is a bit like ordering a fish to swim.

Similarly, the idea of cultivating those human relationships ran deep in
Krispy Kreme kulture.

“The brand was always built on word-of-mouth, which was the social
media of decades prior,” Chambers says. “It was the man or woman
going to the barber or beauty shop and chatting about a product or business.
… But when you look at something like social media and the ability to engage
people in conversation … about what they’re interested in, all of a sudden
you are at a much deeper level.”

Well, as long as you know the difference between using social media to send
140-character ads and truly staying connected. Whereas KFC uses Twitter to
sell, sell, sell, Krispy Kreme uses it to engage, engage, engage.

krispykreme #Trivia: What are the names of our three different #coffee
blends on our website? (Hint: Check out ow.ly/7tRWd.) Anyone can play.

“If you are sitting in front of your computer and a friend sends you an
email, no matter what you’re doing, you’re going to stop and click on that
email,” Chambers says. “It’s a friend, and you want to know what’s
going on, because they wouldn’t send you an email unless there’s a reason. We
want to be in that category.”

A tall order. But a congruency between the expressed and observable values
of the brand and those of its constituencies instills a sense of belonging and
sets remarkable dynamics in motion.

The folks at Krispy Kreme not only find it easier to bounce out of bed at 4
a.m. but also require less and less expensive advertising to sell more and more
delicious cardiovascular time bombs. Chambers says that paid media represents
less than 5% of his budget. With 3.8 million Facebook followers, he does not
need big media budgets to engage.

Another outlier, sweet and irresistible? Maybe. But just as you don’t need
to be saving the world to cultivate brand values, so you don’t have to be a
deep-fried indulgence. What about, say, a deodorant? The sidebar here offers a
case history of a wholly unglamorous personal-care product redefining itself
around urging women to be fearless.

Conveniently enough, a recent documentary has its way with a competing,
distinctly less-evolved antiperspirant.

Morgan Spurlock

One of the more hilarious moments in our friend Morgan Spurlock’s 2010 film,
“Pom Wonderful Presents the Greatest Movie Ever Sold,” occurs when
the Ban brand management team is asked what the brand is about.

What follows is a long, embarrassing pause. It was not intended as a trick
question, but the silence speaks volumes. Movie theaters fill with growing
laughter. After what seems an eternity, a Ban manager offers, “It’s about
superior technology.”

All right, that’s an answer. Not a great one, but valid.

Spurlock retorts, “Yeah, but that’s not something you really want to
put in your armpit,” and that line brings down the house.

If you polled these audiences on “brand purpose,” many people
would roll their eyes at what seems like the most ludicrously tortured
corporate-speak.

Yet the tension and humor of the Ban-Spurlock exchange don’t flow from any
absurdity in the question “What is your brand about?” Rather, the
joke hinges on the public’s sense that brand stewards should, at a minimum,
know why they are in business. Viewers were laughing not at the notion of brand
ethos but that Ban doesn’t have one.

Which gets us to the third factor in committing to The Human Element. It was
always a superior model, because it is the natural order of things. Vast
libraries of consumer research illustrate that we respond to what we perceive
as authentic–not to the phoniness, sycophancy, contrivance, pandering and
panoply of other negatives associated with “marketing.”

In the words of that Danish marketing guru, Polonius: “To thine own
self be true.”

Counterintuitive as it may seem, a pillar of the Relationship Era is that it
is better to look inward than define your business as the accumulation of your
public’s often fickle, shortsighted tastes.

In 1885, what the public wanted was more-comfortable horse-drawn carriages.
Try as we might, we cannot recall any significant agitation 20 years ago for a
$4 cup of coffee. As Steve Jobs said in explaining why Apple hadn’t conducted
market research in developing products: “It’s not the consumer’s job to
know what he wants.”

Somewhat obnoxious, we’ll grant you that. But would you like to search the
entirety of the web and get a piddling 118 hits?

Type in “I love poseurs.”

Doug Levy

Bob Garfield

Doug Levy is CEO and founding partner of Imc2, a
purpose-inspired strategic and creative agency based in Dallas. He and Bob
Garfield are collaborating on the forthcoming book ‘The Human Element.’

Bob Garfield is a 26-year Ad Age contributor and
proprietor of a limited consultancy on marketing strategy and execution. He is
the author of four books, including ‘The Chaos Scenario.’

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