Price Sensitivity

With gas prices higher than they’ve ever been (and the obvious consumer discontent associated) it got me thinking about the threshold that exists for price increases. Gas is obviously a commodity that people need to get around, but at what point do people get so frustrated with the cost that they look to alternative forms of transportation? In some cases high prices are bearable and not worth the additional effort necessary to change a daily routine. However; there has to be a threshold at which people decide enough is enough. In most cases that threshold will probably be dependent on the cost of switching to a different brand or in this example, method of transportation.

Often publishing companies that operate on a subscription model battle with the best approach to annual price increases. As a product’s readership decreases the price needs to increase to maintain consistent revenues. But at what point will the customers that purchase the product look for an alternative because the cost of the product is simply no longer worth the value they receive in return?

The Van Westendorp Price Sensitivity Meter is an approach to researching pricing that asks the following 4 key questions to set a range within which people will continue to purchase the product in question:

1) At what price do you begin to think a product is too expensive to consider?
2) At what price do you think a product is so inexpensive that you would question the quality and not consider it?
3) At what price do you think a product is getting expensive, but would still consider it?
4) At what price do you think the product is a bargain?

In the digital age, one thing publishers have struggled with is putting a value on “content”.    Most consumers expect that the cost of a book be significantly less on a tablet because there are no costs associated with a physical product.   By implementing a Van Westendorp Study, you can more effectively use customer feedback to set prices in the range that optimizes sales and keeps customers satisfied.

Want to be the Best in the World?

I recently had a debate with several colleagues about the following question; would you rather be the best in the world at one specific task or a jack of all trades? Viewpoints on the question were mixed.

On one hand, being the best in the world makes you an authority on whatever it is you are the best at. A jack of all trades may have a wide range of talents, but is unlikely to be called upon for knowledge on one particular subject.

On the other hand people that are the best at what they do spend endless hours perfecting their craft, but are often one dimensional. What does a professional athlete do after his or her career is finished? Malcolm Gladwell’s title “Outliers” suggests that it takes 10,000 hours for someone to master their craft. That’s over five years (based on a 37.5 hour work week) of working on only one specific task.

Product Management is one career path where it’s viewed as beneficial to have expertise in a number of areas. As the link between a number of organizational functions including technology, marketing and sales – having broad knowledge is important for developing the trust and support of the stakeholders Product Managers work with on a daily basis. A Software Product Manager without technical expertise may have difficulty communicating customer needs to the internal technology team. An effective product manager though, must also be able to communication benefits to the product’s end user in a way they’ll understand.

In Product Management, being the best in the world is not a matter of mastering one particular task. What are the key factors to perfecting your craft?

140 Characters

When Twitter first launched and I heard it had a character limitation I thought “how can users say ANYTHING meaningful in 140 characters?” Originally, Twitter seemed best suited to following celebrities and letting followers know what you were doing – serving a limited (not to mention easily duplicated) function at best.

Though it may have been slow to catch on, Twitter has evolved into something much bigger.

In business to business publishing, “news trackers” have become increasingly common to provide customers with relevant, timely information, with short headlines that help users filter what they do and do not want to read in greater depth. As the need for content on mobile devices has increased, limitations to the amount of content people want to view on their phones has pushed publishers to adopt a similar model to Twitter’s character limitations.

Today, even Twitter is used more as an information source than it is as a way to keep track of specific people. Rather than follow Chris Brogan to know what he had for lunch, we follow him for the the valuable knowledge and information to which he can connect us.

An evolution in the way Twitter is used has seemingly revolutionized the way that we filter information.

Where Do You Post-It?

If you’ve seen 3M’s latest efforts to sell Post-It Notes, you might be puzzled by what seems a non-traditional approach.  Post-It Notes’ current marketing campaign has targeted what was once a secondary customer group; the at home user.

In an increasingly paperless world Post-It Note usage in office environments will undoubtedly continue to decrease forcing 3M to proactively consider what other potential customers will contribute to revenue going forward.  While it may be some time before Post-It Notes are considered completely obsolete, the brand is smart to push for market growth in alternative customer segments.

Facing similar problems to the publishing industry, 3M is clearly attempting to make the most of it’s traditional business model while it searches for new revenue streams to fill the void that will one day exist in it’s office product line.  Innovative publishers must take a similar approach as they search for new opportunities in the digital space.

Setting a Precedent: Social Media Case Studies

Yesterday I discussed the difficulties associated with implementing a social media strategy without being able to attach a specific revenue figure to your efforts.  One of the biggest issues for many corporate decision makers is putting their support behind a project without a precedent.  It’s understandable that a marketing manager be skeptical of a campaign that they don’t feel is ‘tried, tested and true’.

Entrepreneur Todd Maffin recently launched a website intended to provide marketers with the social media precedents they’ve been looking for to help justify their online marketing activities.   CaseStudiesOnline.com is a database of over 300 social media case studies, searchable by numerous characteristics including, industry, demorgraphics and type of organization. The website is far from complete, but will continue to grow as more cases are added to the database.

The rapid growth of online marketing has made it difficult to track successful social media initiatives, particularly those that relate to a company’s specific scenario (demographic, industry, product type, etc…). Todd Maffin has completely altered this dynamic, providing a space that marketers can use to convince management that proposed online activities are worth the investment in resources. By finding cases that they can point to as proof of past success, marketers should have less difficulty justifying the long term benefits of engaging customers online. Now, it’s the job of marketers to set further precedents that build on these examples and continue to prove the long term viability of online customer engagement and social media marketing campaigns.

Giving Them What They Want

As companies search for what online strategies will work best, it’s becoming increasingly critical that they give thought to how they’re providing value to their target customer groups.

Static websites are no longer the answer. The ease of content production online has shifted the marketing landscape, in a sense, making us all publishers. Websites that are not regularly updated with new content give visitors no reason to return. Providing real-time value through online channels should now be an important part of any company’s approach to building a presence online.

Social media platforms have taken content production a step further, providing a tool for content organization. For example, think of Twitter as a personal content manager. If a person wants only to be updated on information related to the Olympics, they follow only those people that provide Olympic related content through their tweets. If they find someone they’re following isn’t providing them value, they can stop following them. The user controls the content with which they are updated.

From a company’s perspective, Twitter acts as a link to the value they’re providing online. If they don’t provide the value people are looking for, people will stop following them.

What’s valuable to one person may be completely irrelevant to another.

We should not lose sight of the fact that the number of people that follow us is far less important than who follows us. Content must be developed to attract the group of customers most likely to purchase your product or service. If you’re a meat shop, it doesn’t matter how many vegetarians recognize your brand. Providing value to your target customers must be your primary focus.

My E-Marketing Mix

Everyone had heard of the marketing mix.   A 4-P classification used to describe the elements that make up a complete marketing program; product, price, place and promotion.

A newer and less used term, the e-marketing mix, is often interpreted as the transfer of the 4-P marketing mix to an online landscape.

In reality; however, the fast pace at which technology has progressed and the evolution of business online has made any former interpretation of the e-marketing mix outdated.  Today companies must adapt to new technologies and new forms of marketing communication to keep pace with competition and keep in touch with their target markets.  While ten years ago ‘having an online presence’ may not have been high priority for many organizations, the view of the online world has clearly changed.  Online media has undoubtedly altered the way we do and think about business, and will continue to push us to stay up to date on the latest trends that affect our industry.

My interpretation of the e-marketing mix is not of something that is fixed, but rather a concept that will continually evolve and require constant attention by any company hoping to secure a market-leading position. Take mobile marketing for example.  Smartphones have completely changed the way we think about how to reach our customers.  People can access content on demand from virtually anywhere in the world.  Mobile marketing is clearly a significant element of the industry’s future and something everyone should be aware of.

This blog takes a closer look at important factors and developments that affect e-marketing today, and those that are sure to have an impact on the way we do business going forward.