I Can Has A Profit?

If laughter is the best medicine, then Ben Huh is Dr. Feelgood. Huh is CEO of Cheezburger Network, the wildly successful family of websites that feature hilarious captions of cats, dogs, human failings, and other common topics. How successful? Well, for starters, the company was profitable from day one. How many website start ups can say that? Second, the company is averaging 8.5 million page views a week and 11 million visitors per month. That’s how successful.

Fast Company recently interviewed Huh and asked what’s driving his company’s success. I came away with three lessons we marketers can learn from Huh and Cheezburger Network.

Make it relevant. Cats, dogs, and humans are always relevant. And finding something funny about them is universal, especially with an economy in the dumps, high unemployment, higher underemployment, and an over generally blah outlook in society. Huh has found a way to connect.

Make it a community. Users contribute photos and open it up to others to submit captions. It’s a place people want to come back to and bring friends. You don’t just stumble upon these sites. Someone tells you about them and gets you hooked.

Make it simple. The sites are all arranged similarly, so when you go to a new Cheezburger Network site, it’s arranged like the other ones and is familiar and comfortable. Also, there are few moving parts, just a caption and a photo or video. You either get it and laugh or don’t and move on to the next one. Usually, you get it and move on. That’s what’s driving their skyrocketing page views.

I’m a dog person, so my favorite is I Has A Hotdog. In 5 minutes I can get a laugh without wasting a lot of time, which is easy to do online. That’s the beauty of Huh’s sites. They add just enough content every day to keep you coming back, but not so much that you have to spend hours staying current.

Congratulations to Ben Huh for taking a simple concept and building a Cheezburger Empire.

Charging for a Free Lunch

No one likes to pay for something that used to be free. And no company likes to tell its customers they have to start paying for a service they got for nothing. Nevertheless, it happens all the time and, in many cases, it causes hard feeling and ill-will between customer and company.


The folks at Pandora, the online streaming music service that allows you to create your own radio “channels,” faced the same problem. Due to royalty issues with its providers, Pandora had to begin charging for some of their content. As a devotee of the service, I was leery about what was coming. After all, Jott used to be free, and after they hooked me, they cut off the free service.


Here’s an excerpt from the email I got from Tim Westergren, the founder of Pandora.

First, I want to let you know that we’ve reached a resolution to the calamitous Internet radio royalty ruling of 2007. After more than two precarious years, we are finally on safe ground with a long-term agreement for survivable royalty rates – thanks to the extraordinary efforts of our listeners who voiced an absolute avalanche of support for us on Capitol Hill. We are deeply thankful.

While we did the best we could to lower the rates, we are going to have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the web. Because we have to pay royalty fees per song and per listener, it makes very heavy listeners hard to support on advertising alone. Most listeners will never hit this cap, but it seems that you might.

Ok, so far so good, although I was expecting the big “but” that was going to nail me with big fees. This is what came next:

We hate the idea of capping anyone's usage, so we've
been working to devise an alternative for listeners like you. We've come up with two solutions and we hope that one of them will work for you:

Your first option is to continue listening just as you have been and, if and when you reach the 40 hour limit in a given month, to pay just $0.99 for unlimited listening for the rest of that month. This isn't a subscription. You can pay by credit card and your card will be charged for just that one month. You'll be able to keep listening as much as you'd like for the remainder of the month. We hope this is
relatively painless and affordable - the same price as a single song download.

Your second option is to upgrade to our premium version called Pandora One. Pandora One costs $36 per year. In addition to unlimited monthly listening and no advertising, Pandora One offers very high quality 192 Kbps streams, an
elegant desktop application that eliminates the need for a browser, personalized skins for the Pandora player, and a number of other features: http://www.pandora.com/pandora_one.

Tim goes on to add that a third option is to stop listening once you get to the 40 hour cap for that month. He closed the email by saying they’ve created a counter that will let you see where you are to date toward your 40 hour cap and by thanking me once again for using the Pandora service.


What’s the catch? There is none. Pandora has had to change their business model and did so in a way that almost makes you feel good about paying a small fee to continue being a customer. What did they do right and what can marketers learn from this? I see three things:

1. Lay out the issue clearly – Tim spoke of the royalty settlement and its impact on his business. No fluff, just straightforward talk.


2. Give the customer options – I now have three choices (four if you count stopping listening altogether). One of these three will surely work for me.


3. Give the customer time to react – I got Tim’s email in early July. His changes won’t be effective until August, giving me plenty of time to consider my options (not that this is a life-changing decision, but I do like my Bob Seeger and James Brown channels).

Product management’s role is to set pricing strategy. Part of that strategy includes how / when you change price. Pandora’s decision on how they increased their price says a lot about their brand and the type of company they want to be.


P.S. I responded to Tim’s email and got a prompt (less than 24 hour) response from Jasmyn, a “listener advocate” thanking me for my comments and my support of Pandora. Well done!

Making a Difference

Back from a mid-summer’s blogging break…..

One of the reasons I love what I do is that I get to work with passionate visionaries. And sometimes, these visionaries have an idea that could change the world, or at least a piece of it. I’m currently helping a start up that is trying to change the world for all the right reasons. InvoTek, a firm based in the small northwestern Arkansas town of Alma, makes assistive technology devices that help people with high spinal cord injuries use a computer. Their flagship product, AccuPoint, uses sophisticated laser technology to enable quadriplegics to operate a computer using head movements. This technology has changed the world of a small group of users who can now download pictures of their grand kids, send emails to friends, and organize a reunion of Navy buddies. For more on InvoTek, see the Fort Smith, AR City Wire article.

Here is a for-profit company with a non-profit’s vision. It shows in their products, their commitment to their customers, and even in their tag line: Compassion Driven Innovations. They understand that a solid business strategy starts with changing someone’s world.

It’s like a mentor once asked me, “Do you want to make a dollar, or do you want to make a difference?”

The More Things Change, The More They Change

For those of you who are a bit overwhelmed by the rate of change we’re experiencing, here’s more reason to overwhelmed. Did You Know? is a short video based on a concept by Karl Fisch that lists some enlightening facts about our exponentially changing world. For example:

• 25% of India’s population with the highest IQ’s is greater than the population of the entire US. That means India has more honor students than the US has students.



• Information doubles every 2 years. That means that for a student pursuing a technical degree, what they learn will be outdated by their junior year.



• It took radio 38 years to gain 50 million users. It took television 13 years to do the same. It took the internet 4 years, iPod 3 years, and Facebook 2 years to reach the 50 million mark.

Now, I’ll assume Mr. Fisch has his facts straight. I guess I could go to http://www.snopes.com/ and check to see if it’s an urban legend. But the point is we’re in a world that is changing at a breakneck pace. The amount of information (correct and incorrect) is exploding. The way we get that information (print, online, social networks, and so forth) changes daily. The winners in this race will be those who can best distill the information into “This is what it means” and then “This is what we should do about it.”

For marketers, this translates into helping our companies or our clients articulate why we can solve a problem better than the other guy. It’s not about features and functions or speeds and feeds, it’s about results. And it’s about doing if faster than the competition.

By the way, in the time it took to read this post, 198 babies were born in India. We’d better get busy!

Radar O'Reilly and Client Relations

I recently had the chance to speak to a group of communicators at one of the nation’s largest energy companies. Their leader was trying to get the group to add value to their internal clients instead of just taking and executing orders for press releases, newsletters, and the like.

The guy that came to my mind as a model for a client-focused, action-oriented employee was Radar O’Reilly, the Army clerk on the long running MASH television show. Radar was always one step ahead of Col. Blake, Hawkeye, Trapper, and the rest. He could anticipate what others wanted and, more importantly, what they needed before they could articulate it. I used this acrostic to prove my point:

Resourceful – Radar knew everyone. He knew the supply officer in Tokyo, the motor pool guy in Seoul and the secretary to the commanding general in the Pentagon. Consequently, he could get things done no one else could. How’s your network? Are you spending time growing the people you interact with? And by interacting, I mean giving them a bit of knowledge or a pat on the back or some other “gift” to form a bond with them.

Attuned – Radar listened aggressively and was sensitive enough to know the others’ motivations. What excited them? What scared them? What turned them on? Do you know what motivates your customers? What are their key metrics? How are they evaluated and compensated? Knowing what’s important to them, personally as well as professionally, puts you in a great position to solve their problems and speak to them in terms that mean something to them.

Deliberate – Radar always had everything ready for Col. Blake to sign. All of the Army forms in quadruplicate. All Blake had to do was scribble his name to a requisition or a promotion authorization. Are you disciplined enough to handle all the details for your client and make it easy for them to say “yes” or to sign the contract? Early in my career I worked for an executive that drilled into me the concept of “completed staff work.” That meant, I had done all of the research, presented all the alternatives, had the recommendation and everything the exec needed to make his decision. When we take the concept of completed staff work to our clients, it shows them we’re not only prepared but we understand their business enough to prepare them to make the right decision.

Active – Radar took the initiative to go to his “customers” and make something happen. He set the agenda for most of his interactions with Blake, Hawkeye, Trapper and the others. Do we set the agenda for our clients or do we wait for orders? I worked for the Chairman of the Board at one of the country’s largest energy companies and would ask to see him on occasion. After walking past his attack-trained secretaries, you entered the hardwood floor office, with the Persian rug and massive mahogany desk. It was pretty intimidating. At the end of the desk, facing you was a 3x5 note card that said, “What Do You Recommend?” You knew that if you came to him with an issue, you better have 2-3 alternatives, a recommendation, and your rationale for that recommendation. But he appreciated people who identified a problem and then offered a solution. What if we made it a habit to ask our clients, “What if…?” or “How about trying….?”

Relentless – Finally, Radar didn’t take “no” for an answer. He was results focused and wouldn’t stop until he completed his mission. When we focus on results instead of activity, we’ll do what it takes for our clients. We’ll break down whatever barrier stands in our way. And we’ll earn our client’s respect (and hopefully lots of additional business).

So, next time you think about building close client relations, think RADAR. He was more than the company clerk on MASH. He was the model for making you indispensable to your clients.

Desmond Tutu

Last Sunday, the University of North Carolina had Archbishop Emeritus of Cape Town, South Africa, Desmond Tutu as their commencement speaker. He was everything that most commencement speakers are not -- funny, encouraging, challenging, reverent, and irreverent.

This Nobel Prize winning champion of the anti-apartheid movement presented a message of hope mixed with urgency that transcends our current economic slowdown and the dismal job prospects most of these graduate face.

You would expect preachers to be effective communicators. After all, that’s a big part of their job. But Tutu’s address is a template all of us can use in our professional and personal lives as we attempt to get our ideas to others:

• Connect with your audience – it took Tutu all of 30 seconds to bond with the thousands in the stadium. Once he had us, he never let go. We were captivated and a bit disappointed when he had to end his speech.
• Humor is the universal language – Tutu’s jokes, stories, and often self-deprecating humor dissolved any age and cultural barriers that might have existed between him and the twenty-somethings in the caps and gowns or, as he called them, those “blue-clad creatures.” At one point he laughed so hard at his own joke, he almost lost his train of thought.
• Finish strong – I won’t spoil the ending, but his last words to us were more than memorable…they were haunting. As we communicate, we need to leave our audience with an indelible mark that won’t easily wash away.

As the father of one of those “blue clad creatures” I left the ceremony uplifted by Tutu’s optimism and passion and re-energized to be a better steward of what God has entrusted me.

And, by the way, guess who UNC’s cross-town rival, Duke University, had as their commencement speaker that same morning? Oprah. UNC wins again….

Reading, Writing, and Red Sauce?

A Pocatello, Idaho teacher is trying to do his part to fill his school's budget gap by offering advertising on exams. On a recent history exam, at the bottom of each page in 1" red letters was: MOLTO'S PIZZA 14" 1 TOPPING JUST $5. The principal wasn't thrilled, but Jeb Harrison convinced him that it helped to illuminate topics such as the Great Depression.

Molto provided 10,000 sheets of paper, valued at $315 for Harrison's five classes, with their ad on each page. I would suspect the $315 was more than offset by the PR storm the school had to handle.

I won't get into the merits (or demerits) of advertising and branding in schools. But you have to hand it to Molto Caldoro Pizzeria. They:

1. Understand their target market (teenagers)


2. Understand the importance of being first in a new channel (at the bottom of exams)


3. Understand the value and receptiveness of cash strapped intermediaries (school districts facing budget cuts)

As an instructor at a local university, and as a parent of a high school student, I don't want ads on the bottom of tests. But we marketers should all take a lesson from Molto and look for innovative ways to engage our customers.

March Madness 2009

For those of us who follow basketball, this is THE time of year, especially if our team is in the NCAA tournament (a special shout out to the Mississippi State Bulldogs). We will be glued to whatever media we can to get our fix of scores and analysis.

Every year at this time, the HR consulting firm of Challenger Gray puts out their estimate of the amount of lost productivity due to employees watching the basketball games during work. Last year the estimate was $1.2B for 2007 (a number widely ridiculed by Slate and others...see my post last year).

A funny thing happened this year, though. CG decided not to put out their estimate, citing the economy: “In light of the fact that employers and employees have more important things to worry about, we feel that any attempt to estimate the impact of March Madness
on productivity would be counterproductive and inappropriate," John Challenger said in a statement.

So, what about it? Are you still going to watch the games online while at work? How much time will you spend? I'll probably spend an hour or two per business day (more if MSU gets past round 2). Let me hear from you. And don't worry...I won't tell your boss!!

What Classic Rock Can Teach Us about Marketing in a Down Economy (Part Two)

This week we continue looking at what those sages from years ago (specifically the ‘60’s and ‘70’s) can teach us about getting through and thriving in this dismal economy.

#6 Tiny Dancer (Elton John) – Think small. Find and deliver small, high value projects for clients. In the baseball world, this would translate to “singles and stolen bases.” Our clients are very now focused, so find pain points that you can solve today. This cuts down the sales cycle, gives your client immediate value, and positions you either for another small project or a bigger engagement as we pull out of this recession.

#7 Light My Fire (The Doors) – Go on the offensive and make something happen for your clients. Customers are looking for creative ways to solve their problems or get what they need. Look for problems they might have overlooked and suggest a remedy. By staying connected with your customers (remember idea #2 from last week – Reach Out and Touch Somebody’s Hand?) you’re better able to uncover meaningful solutions to their problems.

#8 Different Drum (Linda Ronstadt) – Try a marketing channel you haven’t tried before. These are once in a lifetime (hopefully) days. Many of the economic theories and assumptions have been shaken to the core. So it is with marketing. Maybe now is the time to begin that newsletter you have been putting off. What about a sponsorship? Trade show? Perhaps volunteering to speak at different professional organizations will jumpstart your marketing efforts. Business as usual went out the door sometime last year. Now is the time to do the unusual.

#9 Good Vibrations (The Beach Boys) – Emphasize benefits over features…those things that “tingle” your customers. We know intuitively that customers buy benefits, not features, but these days highlighting benefits is even more critical. I know a company that took pride in discussing the fact that it had seven acres of raised floor space in their data centers. Cool factoid, but so what? How does that help the customer? Take a day to review your messaging, your collateral, and your website. Are you promoting “speeds and feeds” or are you talking about what’s in it for your customer?

#10 Thank God and Greyhound You’re Gone (Roy Clark) – Ok, so this is a country song, but it’s good advice. Some customers just have to go. You know the ones: you can count on them to return the product, tie up your customer service reps, pay late, and so on. Now is a great time to look at each customer and their profitability. If they’re costing you money (and time), fire them. And you can do so diplomatically, by raising prices, changing terms, unbundling your services, pricing for things that were free, etc. As hard as it is to lose a customer these days, losing an unprofitable customer is a win.

Make no mistake, we are in extremely challenging times. As I write this, the Dow is hovering around 6,800, the national jobless rate is now 8.1%, and 12% of home mortgages are under water. But solid, aggressive companies will survive. I’m optimistic about our future, so I leave you with advice from the (formerly) hardest working man in show business.

#11 Got Ants in My Pants and I Need to Dance (James Brown) – If we take care of our customers and bring value (in their eyes, not ours) to everything we do, our companies will be poised to lap the competition when the economy turns around.

What Classic Rock Can Teach Us about Marketing in a Down Economy

At our house, everything can be related to a classic rock song. For example, my son was getting ready to pick up his date for the homecoming dance and came out in his suit, tie, polished shoes, and somewhat combed hair. My wife and I immediately broke out the line from ZZ Top, “Every girl’s crazy ‘bout a sharp dressed man.” He rolled his eyes, but appreciated the compliment.
As bad as our present economic situation is, classic rock can give us direction for not just surviving, but thriving. Below is part one of my Top Ten list of what we marketers can learn and apply from the songs of our youth. Part two will follow next week.

1. Love the One You’re With (Crosby, Stills, and Nash) – Focus on your current customers. We all know the statistic: it’s three to seven times more expensive to get a new customer than to keep an existing one. Now is the time to make sure we’re meeting their needs, keeping them satisfied, and making it easy for them to stay with us. I recently called American Express about a billing question. After resolving the question, the representative said that since I’ve been a cardholder since 1980, he’d like to upgrade me to another card for less than what I was paying currently but one with more benefits. He didn’t have to do it, but it was a nice gesture. What made it even more appealing, is that two days earlier Discover notified me that my interest rate was increasing by a third. And, oh by the way, the increase was retroactive to the previous month. Guess which card is now my card of choice?
   


2. Reach Out and Touch Somebody’s Hand (Diana Ross) – In the down times, what do most organizations cut first (after training)? Marketing and communications. Yet, we need to reach out to current customers now more than ever. Not trying to sell them something necessarily, but to engage them. What would happen if you asked them what your company could do to help them? Short of giving your product or service away, probably nothing. But what if your customer had a problem and you knew another organization that could solve it? How do you think your customer would view you if they felt you were looking out for their success?
   


3. R-E-S-P-E-C-T (Aretha Franklin) – As you’re reaching out to them, make sure you’re abiding by the permissions they’ve given you. For example, are you honoring their opt-out preferences to your e-newsletter? What about respecting their sensibilities? The makers of Motrin found out the hard way that appearing condescending has some significant results. Customers are on edge. We need to respect them and the pain they’re going through.
   


4. Heard it Through the Grapevine (Marvin Gaye) – Lots of companies (and people, for that matter) are tempted to hunker down in bad times. They just want to get through. Successful companies take this opportunity to build networks, establish new relationships, and expand their circles of influence. They use social media such as LinkedIn and Twitter to make new contacts and reconnect with old ones. They understand how word spreads, and that take advantage of it.
   


5. Me and Bobby McGee (Janis Joplin) – As they are building networks, companies are discovering something amazing: there are partnership opportunities all over the place. I’ve found this in my practice. Firms I approached a year ago about a partnership are now contacting me. Why? Good companies want to differentiate themselves and find that edge. Take this chance to broaden your offerings by hooking up with another aggressive firm that complements what you do.
   

In part two next week, we’ll hear great advice from other songs from my college days. Stay tuned!

General George Patton on Image

This is the second in a series on General George S. Patton, famous American military figure during World War II. Last month we looked at what old Blood and Guts had to say about speed versus haste. This month, Patton talks about image.

“I am tremendously proud of your deportment, the way you behave towards private property. But the way you carry yourselves is shockingly bad. You, the soldiers of the greatest army of the greatest nation in the world, wander around like furtive pickpockets with your shoulders sloping, your stomachs sticking out, and your hands hanging down. The act of standing properly gives you that feeling of superiority which you have so nobly won. Show the world how great you are. Look like soldiers!”

What image do we portray? As marketers, we should know better than anyone about impact of a compelling “brand.” Do our companies “wander around like furtive pickpockets” in the market place? Our image includes everything from the way our employees answer the phone to our e-mail tone to our website to, yes, the way we dress.

In this challenging economy, most people will forgive you for becoming lax with your image. But they will remember you for standing tall and showing the market how great you are. Look like soldiers!

Fish = Sea Kittens?

Some topics just beg to be talked about. This is one. Our friends at PETA (People for the Ethical Treatment of Animals) have upped the ante on branding. A recent “Day to Day” segment on National Public Radio featured PETA’s effort to save the fish. They’ve started a campaign to get people to think of fish as Sea Kittens. To quote Dave Barry, “I’m not making this up.”


Campaign coordinator Ashley Byrne explained it this way, “PETA thought that by renaming fish sea kittens, compassionate people who would never dream of hurting a dog or cat might extend that sympathy to fish, or sea kittens.”


Make no mistake. I am not a fan of PETA’s mission or tactics. But you have to hand it to them for trying to remake an image that’s thousands or millions of years old (depending on your view of Creation). General Motors has been trying to change its image for years with no success, and they’re only a hundred years old.

From a marketing standpoint, they’re going about it the right way:

• Think small: the campaign is being tested in North Carolina before going nationwide. That gives them a chance to test and tweak positioning and messaging early in the process.


• Think long term: a cornerstone of their campaign is aimed at getting children to think in terms of Sea Kittens. PETA understands rebranding doesn’t happen overnight.


• Think emotionally: brands are nothing more than an emotional reaction to tangible and intangible stimuli. Fish don’t melt your heart. Kittens do (for some people).
  

It will be interesting to see how this plays out. If they can pull this off, what’s next? Used car salesmen will be rebranded yellow Labs? Lawyers become koala bears? This could become the “golden age” for marketing consultants!!!

What do you think about PETA’s campaign?

General George Patton on Planning

In June 1945, WWII was hurtling toward victory for the Allies. My father was a 27 year old Captain with the 101st Airborne, fresh from a historic defense of Bastone at the Battle of the Bulge. At the time the 101st was attached to the 3rd Army Division. The commander of the 3rd Army was General George S. Patton, “Old Blood and Guts.” Patton sent a memo to all of his officers encouraging them to finish the job and win the war. In his memo, I find several ideas all marketers can apply to our current troubled economy and companies. In the follow weeks, I’ll outline some of Patton’s wisdom. Here are his thoughts on planning.

“Don’t confuse HASTE with SPEED. It may take three to four hours to set up a battalion attack from two directions, but will get home in thirty minutes – that is SPEED. If you try to put on such an attack in thirty minutes, it may take several hours to get home – that is HASTE.”

Too often we fail to plan adequately and end up either failing or taking too long and costing too much to reach our objective (market introduction, brand launch, etc.). Patton’s advice would be to invest the time and money to do the research, create a workable plan, collect the needed resources, get in position, THEN attack. That requires discipline, a trait few companies have today. As marketers, it is our job to push back when leadership wants to act before the time is right. We have to have a sense of urgency but, as Patton suggests, not be hasty.

The former head of Product Management for Microsoft once described knowing when to launch a new software product was like holding a bowl of Jell-O. At first it wiggles and shakes, but as you hold the bowl still, the Jell-O settles down. At a certain point it’s still enough and that’s when you launch it into the market.

As we’ve heard all of our careers, failure to plan is a plan for failure.