Interact with Your Customers

Once you have identified your customers and differentiated them by their value to your company, your next step, say Peppers and Rogers, is to interact with your customers to learn more about their needs, interests, and priorities. Your major objective in this step is to initiate an ongoing dialogue with your customers through all communication channels available to you including

• Promotional offers.
• Collections/invoices.
• Web-site contacts.
• Complaint handling.
• Orders/purchases.
• Customer inquiries.
• Direct sales calls.
• E-mail.
• Faxes.
• Telephone calls (inbound and outbound).

In respect to these and other opportunities you might have to interact with your customer, Peppers and Rogers say you should ask yourself whether your employees are taking advantage of these exchanges to learn more about the customer and his/her particular needs, engage the customer in a dialogue, and use the experience and understanding acquired from the exchanges to develop a stronger and more long-lasting relationship with the customer. They add that during all of these exchanges, you should keep three things in mind:
1.The interaction should be accomplished in a way that minimizes the customer’s inconvenience.
2. The exchange should result in some outcome that has real benefit to the customer.
3. The results of the exchange should influence your company’s specific behavior toward that customer in the future.
Seth Godin adds that you should seek the customer’s permission before attempting to start such a dialogue. In the past, says Godin, when mass marketers communicated with customers or potential customers, they engaged in what could be called “interruption marketing.” They interrupted what the customer was doing—“Now a word from our sponsor”— and asked them to take some action—“Buy Super-Duper Dog Food.” In contrast, CRM insists that you stop interrupting and start asking permission. Godin uses an analogy of getting married to explain the difference:

The Interruption Marketer buys an extremely expensive suit. New shoes.
Fashionable accessories.Then,working with the best database and marketing
strategists, selects the demographically ideal singles bar.
Walking into the singles bar, the Interruption Marketer marches up to
the nearest person and proposes marriage. If turned down, the Interruption
Marketer repeats this process on every person in the bar.
If the Interruption Marketer comes up empty-handed after spending the
entire evening proposing, it is obvious that the blame should be placed on
the suit and the shoes.The tailor is fired.The strategy expert who picked
the bar is fired.And the Interruption Marketer tries again at a different singles
bar.
If this sounds familiar, it should. It’s the way most large marketers look at
the world.They hire an agency They build fancy ads.They “research” the
ideal place to run the ads.They interrupt people and hope that one in a
hundred will go ahead and buy something.Then, when they fail, they fire
their agency! The other way to get married is a lot more fun, a lot more rational,
and a lot more successful. It’s called dating.
A Permission Marketer goes on a date. If it goes well, the two of them
go on another date.And then another. Until, after ten or twelve dates, both
sides can really communicate with each other about their needs and desires.
After twenty dates they meet each other’s families. Finally, after three
or four months of dating, the Permission Marketer proposes marriage.
Permission Marketing is just like dating. It turns strangers into friends
and friends into lifetime customers. Many of the rules of dating apply, and
so do many of the benefits.

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Differentiating Idea—Simplicity

Here is one more differentiating idea that Trout does not mention. It was suggested by Steven Cristol and Peter Sealey in their book Simplicity Marketing. What’s interesting here is that while Cristol and Sealey begin with the same observation that Trout made about the proliferation of choice, they come to some very different conclusions. Rather than seeing positioning as an answer to the consumers’ and brand builders’ problem with the tyranny of choice, they see positioning, at least as it has been traditionally done, as the cause of the problem. They write:

Like capitalism itself, contemporary marketing has been based on an unflagging
belief in giving customers more and more choices.The choice curve
ramped up in the post–World War II economy, when packaged goods manufacturers
set in motion a relentless juggernaut of product proliferation
and line extensions.The cumulative result of a half century of bombarding
customers with an overload of options is that their mental circuit breakers
are beginning to trip—in both the consumer and business worlds. In a
pressure-packed buying and selling environment, the line between choice
and overchoice has become increasingly fine.
By the early 1970s, marketers were already desperately hungry for
ways to ensure that their brands could stand out amidst the swelling
marketing noise created by more choices and more media pervasiveness.
It was then that the concept of positioning rippled through the
marketing world. Positioning focused on the importance of differen
tiating a product, service, or company from its competition. It brought
to the marketing planning process a new sense of focus on carving out
a proprietary space in the customer’s mind. During the three decades
since, sustained success has come to those brands with a unique,
relevant, and credible positioning consistently supported by aggressive
marketing.
But many such successes are now threatened by overchoice.A new imperative
for the positioning discipline has emerged: that marketers look for
ways to connect their brands to simplicity. The interaction of two forceful
tides—extreme choice proliferation and an exponentially increasing pace of
change—creates a combustible combination that at once brings customers
unprecedented opportunities and unprecedented anxiety . . . [In] the most
developed economies of the twenty-first century, the next generation of positioning
successes will belong to those brands that relieve customer stress. That
means simplifying customers’ lives or businesses in ways that are inextricably
tied to brand and product positioning. It means becoming the customer’s
partner in stress relief.
Brands that do this will be the customer’s heroes. Brands that don’t will
be nuisances.

If you want to position your brand as a relief from stress, say Cristol and Sealey, there are four ways you can do so—Replace, Repackage, Reposition, and Replenish.

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Choosing a Brand Name

Here is a list of what works and what doesn’t work when it comes to brand names according to Frank Delano, author of The Omnipowerful Brand.
What Works

• Beginning and ending the brand name with the same letter—Delano says that makes the name easy to remember. Examples include Nissan’s Altima car, Ortho chemicals, and Elle women’s magazine.
• Adding a vowel to the end of a word, transforming a common word into a proprietary trademark—An example is Lyrica, the name of a drug used to treat psychotropic conditions.
• 
  Ending a brand name with the letter “a”—Delano says the letter “a” makes the name sound friendly, like Humana.
• 
  Ending a brand name with the syllable “va,” particularly if the brand needs to have an international feel—Delano says “va” means “to go forward” in Latin-based languages. Some examples include IBM’s Aptiva PC and Polaroid’s Captiva instant camera. Delano cautions that you should be careful about the prefix or stem syllable that is linked with the “va” suffix. For example, Chevy Nova means “no go” in some languages.
• 
  Starting a brand name with the letters “ch”—Delano says brands beginning with the letters “ch” mirror such familiar words as church, charity, cheerfulness, and children, thus bringing to mind thoughts ofjoy, goodness, and fulfillment. An example is Cheerios.
• Ending the brand name with the vowel “o,” particularly if you want the brand to appeal to men—Words ending with the vowel “o” are more masculine sounding, according to Delano. One example is the name Terrano for Nissan’ s 4 x 4 sport utility vehicle.
• Beginning the brand name with the letters “Q” or “J”—These letters are supposed to convey the image that the brand is something special, for example Infiniti’s Q45 and J30 lines of cars.
• Beginning the brand name with the letters “se,” particularly if you want the brand to sound sexy—Delano says the letters “se” carry a sensual overtone as in the examples of Gillette’s Sensor razor and Secret deodorant.
• Incorporating the letter “z” in the name—Delano maintains that the letter “z” conveys the image of advanced technology, scientific breakthrough, or superior performance. An example is Zantac, the antiulcer drug.
• Using only one syllable and three or four letters—Shorter names like Fab and Tide detergents are easier to remember. However, adds Delano, a name with multiple syllables and nine or more letters, such as Primerica or Microsoft, can convey stature and importance.
• Combining two words—For example, FedEx is a better name than Federal Express.
• Using a name that sounds like the product’s generic name—Examples include Duracell for a battery cell and Ziploc for a plastic storage bag.

What Doesn’t Work

• Using a syllable in a brand name that can be spelled in more than one way—For example, sym can be spelled sim, cim, or cym.
  
• Ending the name with the letters ”is”—Delano notes that the names of most illnesses end with these letters. If you don’t want your product associated with such things as syphilis, gingivitis, halitosis, and so on, then don’t end the name with “is.”
• Names that sound like a curse word—Delano notes that the makers of a brand of jams and jellies faced this problem head on with an inventive ad campaign that went, “With a name like Smucker’s, it has to be good.” However, it is preferable to avoid this problem if possible.
• Names that try to be cute—Examples include names like Cow Chip Cookies or Dog Poo Shampoo.
• Overused words and symbols—Delano notes that names of over 1,600 banks in the United States begin with the words “First National” and another 584 start with the word “Farmers.”

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The Mating Dance: Searching for the Right Joint-Venture Partner

Embarking on a search for a joint-venture partner is a bit like the search for an appropriate spouse. You should carefully and thoroughly review prospective candidates and conduct extensive due diligence on the final few whom you are considering. Develop a list of key objectives and goals to be achieved by the joint venture or licensing relationship, and compare this list with those of your final candidates. Take the time to understand the corporate culture and decision-making process within each company. Consider some of the following issues: How does this fit with your own processes? What about each prospective partner’s previous experiences and track record with other joint-venture relationships? Why did these previous relationships succeed or fail?

In many cases, smaller companies looking for joint-venture partners wind up selecting a much larger Goliath that offers a wide range of financial and nonfinancial resources that will allow the smaller company to achieve its growth plans. The motivating factor under these circumstances for the larger company is to get access and distribution rights to new technologies, products, and services. In turn, the larger company offers access to pools of capital, research and development, personnel, distribution channels, and general contacts that the small company desperately needs.
But proceed carefully. Be sensitive to the politics, red tape, and different management practices that may be in place at a larger company but will be foreign to your company. Try to distinguish
between what is being promised and what will actually be delivered. If your primary motivating force is really only capital, consider exploring alternative (and perhaps less costly) sources of money. Ideally, the larger joint-venture partner will offer a lot more than money. If your primary motivating force is access to technical personnel, consider purchasing these resources separately rather than entering into a partnership in which you give up a certain measure of control. Also, consider whether strategic relationships or extended- payment terms with vendors and consultants can be arranged in lieu of the legal structure of a joint venture.

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Business-Format Franchising

Franchising can be viewed as an alternative growth strategy because the original founders of a company avoid dilution of their ownership and are no longer directly responsible for the financial investment needed to fuel growth and expansion. Instead, this financial responsibility is shifted to third-party franchisees and area developers who pay the franchisor for the right to use its trademarks and systems in exchange for initial franchise fees and royalties. Over time, this income stream can be a very valuable and lucrative asset around which an estate plan can be built.
Over the past three decades, franchising has emerged as a popular expansion strategy for a variety of product and service companies. Retail sales from franchised outlets make up about half of all retail sales in the United States (estimated at more than $1.5 trillion) and employ nearly 16 million people. (See sidebar.) You don’t have to have the ambition to become a national or multinational corporation to consider franchising, which can be an especially effective option for smaller businesses that cannot afford to finance internal growth. But franchising as a method of marketing and distributing products and services is appropriate only for certain kinds
of companies. A host of legal and business prerequisites must be satisfied before any company can seriously consider franchising as a method for rapid expansion.
Many companies prematurely choose franchising as a growth alternative or exit strategy, then haphazardly assemble and launch the franchising program. Other companies are urged to franchise by unqualified consultants or advisers who may be more interested in professional fees than in the long-term success of the franchising program. This has caused financial distress and failure for both the growing company and the franchisee, usually resulting in litigation.
Current and future members of the franchising community must be urged to take a responsible view toward the creation and development of their franchising programs.

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Values and the Concept of a Preferred Life Vision

One way to conceptualize a system of values is through the concept of a preferred life vision. Levi-Strauss points out that people are sensitive to contrasts in the human condition.5 Examples are seeking excitement versus being bored, being rich versus being poor, or being healthy versus being ill, and so on. People seek the life that captures the more preferred polar extreme. But, as all aspects of the good life cannot be pursued with equal vigor, the consumer’s value system reflects the particular weightings he or she attaches to various components of the preferred life vision. These weightings have some stability but can change with circumstances and cultural drift. Indiference to any contrast is equivalent to giving equal weighting to the polar extremes: a possibility that can be dismissed for all practical purposes. Rokeach spoke of both terminal and instrumental values, though this distinction has not caught on, presumably because values, as the concept is being used here, are usually viewed as terminal by definition. If we were to tie values to consumer buying, they might look like the following for many people:

• Preference for a less-pressured over a fast-paced lifestyle
• Preference for an environment less threatening to health over a more technologically driven way of life
• Preference for a more meaningful, simpler life over a more materialistic one
• Preference for more solidarity, face-to-face communication, and sense of sharing with others over mere luxurious isolation (bowling alone is not pleasurable)
• Preference for more to be preserved from the past than overthrown in the name of progress
• Preference for staying young-looking rather than old-looking

There is no complete homogeneity of values, consumer or otherwise, within a culture—simply a family resemblance. Consumers attach diferent weights to various values; hence psychographic segmentation, which is based on diferent values and lifestyles. Values difer among social classes and difer among people of diferent generations within the same class, depending how refined our categories of values are. Sharp diferences in values between generations have led to “generational marketing” and “cohort marketing” in segmentation. 6 While diferent generations are separated by about 25 years, cohorts are formed by common defining experiences in their history. As a consequence, cohort groups are assumed to be “value-bonded” by similar preferences. Thus the “postwar cohort” came of age between 1946 and 1963, experiencing a time of family togetherness, economic growth, and social tranquility. In spite of the Korean conflict, it was an experience of security and stability. Marketing campaigns to cohort members exploit nostalgia with symbols of the experiences behind the bonding. Such symbols can incite a good deal of nostalgic emotion.
Accepting that early emotional experiences are most involved in molding the consumer’s system of values, the question becomes: How influential are common cohort experiences in shaping values? Are they suficient to direct preferences? Values can be poor predictors of buying until or unless beliefs are taken into account. Consumers can have the same set of values but show diferent buying patterns because they have diferent sets of beliefs about the appropriate means for promoting their values. Values operate like goals for the individual, but the paths to goal attainment are many. Thus a consumer may place a high value on buying the “best tennis racquet money can buy,” but this depends on beliefs about the criteria that reflect “bestness,” while other beliefs about personal finances and buying opportunity will also play a role in what tennis racquet is bought.

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