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Archives for March 2014

The Most and Least Engaging Brands of 2014

blackberrySince 1997, Brand Keys has conducted an annual study to examine customers’ relationships with brands. The 2014 Brand Keys Customer Loyalty Engagement Index ranking was compiled based on results from a survey of over 30,000 U.S. consumers between the ages of 18-65. As part of the survey, respondents self-selected the categories they shop in and the brands they shop for or engage with in some manner. It’s a comprehensive study that included telephone (70%), in-person (25%), and online (5%) surveys throughout January of this year.

As you would expect, Brand Keys reports that brands which actively engage with consumers experience better sales results than brands that have little engagement with consumers. To be considered a successful brand for the purposes of this study, brands had to score 85% or higher in the engagement index. This year, Brand Keys analyzed 555 brands in 64 categories. Scores are determined using a proprietary fusion of psychological and statistical analyses, including both rational and emotional factors that influence behavior.

The Brand Keys report explains, “The brand whose drivers come closest to meeting (or even exceeding) those of the category ideal is always the one whose customers will demonstrate the highest levels of engagement and loyalty over the next 12 to 18 months.”

Following are some of the brand winners and losers of the 2014 Brand Keys Customer Loyalty Engagement Index:

Most Engaging Brands of 2014 by Category

Following are brands that had the highest engagement rates for a select group of the 64 categories included in the study.

  • Airline: JetBlue
  • Athletic Footwear: Nike
  • Automobile: Ford and Hyundai (tie)
  • Bank: JP Morgan Chase
  • Computer/Laptop: Apple
  • Ereaders: Kindle
  • Instant Messaging Apps: WhatsApp
  • Online Music: Pandora
  • Online Payment Service: PayPal
  • Online Retailer: Amazon
  • Online Travel Site: Expedia
  • Online Video Streaming: Netflix and Amazon (tie)
  • Quick-Service Restaurant: Subway
  • Retail Store (Apparel): Victoria’s Secret
  • Search Engine: Google
  • Smartphones: Apple
  • Social Networking Sites: Facebook and Twitter (tie)
  • Soft Drink (Diet): Diet Coke
  • Soft Drink (Regular): Coca-Cola
  • Tablets: Apple and Amazon (tie)

Least Engaging Brands of 2014 Overall

Following are the 10 brands that ranked as the least engaging in the Brand Keys study. The least engaging brand overall is listed first below.

  • BlackBerry: 52%
  • Quiznos: 57%
  • Kmart: 59%
  • Sony E-Readers: 60%
  • WOW Search: 60%
  • Sears: 64%
  • American Apparel: 65%
  • Budweiser: 70%
  • Coty Cosmetics: 71%
  • Volkswagen: 79%

For comparison, the least engaging brand, BlackBerry, scored 52% in the Brand Keys index while the most engaging smartphone brand, Apple, scored 81%. The second least engaging brand overall, Quiznos, scored just 57%, which is far below the score achieved by the most engaging brand in the quick service restaurant category. The top spot went to Subway with a score of 90%. Similarly, the Sony E-Reader scored 60% in the brand index while the most engaged E-reader brand, Kindle, scored 96%. Interestingly, two brands owned by Sears Brands, LLC (Sears and Kmart) appear in the list of the least engaging brands of 2014.

What do you think of the rankings of the least and most engaging brands? Leave a comment and share your thoughts.

Image:  Karlis Dambrans

Guidance, Part 2 – Thinking Through the Process

pros-consIn my last post I wrote about the uncertainty surrounding the thinking about whether or not companies should engage in the practice of giving guidance to investors. Of course what it boils down to is a careful examination of the factors surrounding each company’s situation. And while this sounds like a bunch of waffle language coming from a cautious lawyer, I believe there are some general guidelines that can help companies think through the process.

Here then are reasons a company should consider giving guidance to investors:

  1. You are a small cap company and have low sell side analyst coverage. One of the big issues for small cap stocks is simply getting on the radar screen of analysts and getting coverage. Anything a company can do to improve their chance of coverage (read: make life easier for the analyst), including issuing guidance, should come into play in order to gain the increased trading volumes, liquidity and visibility that come with increased sell side coverage.
  2. You are in a predictable business with good insight into near term revenues and profits. Companies with recurring revenue streams or large backlogs of orders to be fulfilled in the near future are an example here.
  3. You are in a predictable industry that is not prone to large swings due to economic factors or trends where virtually everyone else issues guidance and you would stand out like a sore thumb if you did not also give guidance.
  4. You don’t want to give continuous updates on your business in between quarters. The more transparent you can be on a continuing basis, the less you need to help the street by giving guidance.
  5. Management has the intestinal fortitude to run the business to plan and not manage the earning to hit guidance. Accounting is full of subjective judgments and timing issues. It is possible to move revenues into the current quarter or fiddle with loss reserves to make earnings look better in the quarter so you hit your guidance. This is almost never a good thing, but the pressure to “hit the numbers” can be overwhelming at times. Don’t issue guidance if it is going to warp the way you run your business.
  6. You recognize that occasionally you will be wrong with your guidance and are willing to make the necessary corrective announcements.
  7. You figure that the market is going to make a forecast anyway, so why not take control of the process.

On the other hand a company is not a good candidate to issue guidance under the following circumstances:

  1. Don’t give guidance if you are in an unpredictable business. This should be obvious, but you see it all the time. For example, property and casualty insurance companies are in the business of underwriting uncertain risks. They don’t know when the next natural disaster will wreak havoc with their earnings, so it makes no sense for them to be giving guidance on earnings.
  2. Don’t give guidance if you are not very good at it. If your company has given guidance in the past, but you find that you have to constantly revise the numbers downward, or you are wrong more than you are right, guidance is more trouble than it’s worth. Find a better solution.
  3. Don’t give guidance if it will cause management to engage is short-term practices that are not in the best long-term interests of the company. Jiggling things around to “hit the numbers” is a slippery slope at best and the road to perdition at worst.

In my next post I will talk a bit about alternatives to guidance a company can give.
 

Brands to Benchmark on Twitter – JetBlue, ASOS, and Dell

Twitter smartphone mobile appIt wasn’t that long ago when people asked, “Which brands are on Twitter?” Today, the question is “Which brands aren’t on Twitter?”

Twitter has become an integral part of an integrated marketing plan for most large companies around the world, but some are performing much better on Twitter than others. Who Is Hosting This? put together an infographic in an effort determine which brands rule Twtter. You can check out the infographic below. Following are some highlights from the data.

Customer Service via Twitter

JetBlue takes the top spot for providing customer service on Twitter according to the data in the infographic. The company has the largest Twitter following of any airline, but it still manages to have the quickest average response time to customer tweets at just 13 minutes (79% average response rate).

Other companies that perform well for providing customer service via Twitter are Ford with an average response rate of 75% and Microsoft with an average response time of 42 minutes. Nike also performs well with an average response rate of 80% but a much slower response time of 140 minutes.

Sales via Twitter

ASOS was declared the winner for sales via Twitter based on the infographic data. The online fashion retailer’s award-winning 2013 digital Christmas campaign drove more than $7.8 million in sales to the company. During the campaign, U.S. search engine queries for ASOS increased by more than 50%.

Social Commerce via Twitter

Dell took the top spot for social commerce via Twitter thanks to the success of its @DellOutlet Twitter profile that generated more than $2 million in sales during the first two years after it launched. The company also reported a 34% conversion rate through its @DellCares and @DellCaresPRO Twitter profiles, meaning 34% of complaining “ranters” were turned into satisfied “ravers.”

Brands on Twitter Infographic

Today, consumers expect brands to be available to answer customer service questions via social media at any time of the day or night, and they expect responses from brands to be immediate. Take some time to benchmark the brands that are getting it right and achieving great results using Twitter as a customer service, sales, and marketing tool, and leverage some of the lessons you learn for your own brand’s social media marketing strategy. You’ll surely see an increase in your return on investment!

Image: Frank Mitchell

The Ups and Downs of Social Media Advertising for Brands

bar graph line graph declineSocial media advertising on sites like Facebook and Twitter is still evolving and competition is fierce. As more social media advertising options are launched, prices for ad space drop. Social media sites are moving from a premium-priced, small quantity of ads model to a lower-priced, large quantity of ads model.

This week, a few key stories made the news about social media advertising that create a clearer picture of what’s coming for brands that want to invest in social media advertising in the short- or long-term.

Organic Reach on Brand Facebook Pages Plummets

First, Cotton Delo of Ad Age reported that a new study from Social@Ogilvy found that organic reach of content published on brand Facebook Pages is dropping quickly and steadily. Delo reports that the average reach of organic posts that brands publish on their Facebook Pages, which are not supported by any type of advertising investment, is half of what it was in October 2013 (down from 12.05% in October 2013 to just 6.15% in February 2014). Note that in 2012, Facebook stated publicly that average organic post reach was 16%.

What’s causing the rapid decline? Speed and clutter could be the biggest factors according to the Social@Ogilvy report. News feeds move very quickly with a massive amount of content published by huge numbers of people. That means Facebook users can’t keep up with all of that content and non-ad-supported posts get lost. The report warns brand marketers to prepare for a time when organic reach on Facebook will be zero—a sentiment that Facebook supports. Delo shares a point made in a Facebook presentation given at last year’s fMC event in New York where Facebook warned brands to look at Page fans as, “a way to make paid advertising more effective, as opposed to a free distribution channel.”

Twitter Ad Rates Plummet

Another social media site seeing a drop in a key ad revenue metric is Twitter. According to Arif Durrani of Campaign, Twitter is attracting more ad buyers and ad revenues grew by 110% in 2013, but ad rates plummeted by 67% in 2013. Looking back a bit further, ad rates were down by 81% from 2012.

Twitter offers more advertising inventory for ad buyers, but in keeping with the laws of supply and demand, all of that added inventory brings prices down. Twitter explains the positive aspect of this decline in prices as providing lower cost advertising options, such as Promoted Products, which attract small businesses, international advertisers, and advertisers with smaller budgets to Twitter.

Tumblr Looks to Expand Sponsored Posts

Since Tumblr was acquired by Yahoo! last year, it was only a matter of time until the site that once boasted it was against monetizing through ads would roll out a full-scale monetization process, including ads. The monetization has begun and this week, the Wall Street Journal reported that Yahoo! plans to take those efforts to the next step by setting up an ad network that would distribute sponsored posts to third party sites. The first stop on the sponsored posts distribution train would be other Yahoo! sites and other sites that Yahoo! owns with expansion to third-party sites as the next logical expansion.

According to Harrison Weber of Venture Beat, Tumblr might also roll out an ad exchange were advertisers can target audiences using demographic data, similar to Facebook advertising offerings.

Bottom-line

One thing is certain, social media advertising will keep changing. Brand marketers need to view social media advertising as a single tactic within their social media marketing and content marketing strategies. Test, analyze, modify, and test again until you find the right marketing mix to drive the results your business needs.

Image: Wagner Magni

Do Your Employees Buy Your Brand?

shopping bags mallInternal branding is critical to brand building success. If your employees don’t believe in your brand promise, why should anyone else? Internal branding leads to online and offline brand advocacy that too few companies are leveraging.

Taking that concept a step further, internal branding and vocal brand advocacy from employees will be minimally successful at best if your employees don’t actually use your brand. How can they truly talk about your brand, advocate your brand, develop appropriate new products, and sell your product if they’ve never or rarely used it?

Before you say, “I can’t afford to give my product to every employee,” the key here is getting your employees to use your product so they can better advocate the brand based on personal experience. Not every company can afford to give its products to employees for free. In fact, it’s more likely that very few companies can afford to give their products to employees for free.

Consumer products companies get around this obstacle by providing company stores in their larger office locations and intranet stores where employees can purchase brand items at a discount. A small discount won’t do much to motivate people to purchase your brand over competitors’ brands, but if the store is in the building they work in, the convenience of buying your brand is often enough to turn employees into customers.

Be creative with how you enable employees to use your branded products. If they’re like most consumers, once they try your products (and assuming they like your products after trial), they are likely to become ongoing customers. However, they won’t all like your products or want to advocate your brand.

This is why internal market research is so important. A completely anonymous survey that asks employees to explain why they buy the brand (or why not) and what could be improved to motivate them to buy the brand is an effective tool to identify problems with your products and your brand promise. Again, if your employees don’t believe in your brand promise, why should anyone else?

Your employees are your most untapped marketing opportunity. Employees who believe your brand promise give you free publicity by advocating the brand. They’re also more committed to your brand and company success and are better able to make sell, and support your products and brand strategic objectives. Are you leveraging this powerful marketing asset?

Image: pipp

Email Marketing Keeps on Growing with Coupons Taking Center Stage

email marketing list segmentationEmail marketing continues to grow with no signs of slowing down. According to the 2013 Q4 Email Benchmark Report released by Experian Marketing Services, email volume increased by 11.2% year-over-year during the fourth quarter of 2013, nearly doubling the 5.2% year over-year growth rate recorded during the fourth quarter of 2012.

The fourth quarter 2013 email marketing growth rates marked the fourth consecutive quarter that brand marketing email volume and open rates increased. Following is the year-over-year data collected by Experian about open rates, click rates, and more:

  • Total Open Rate: 24% (up from 23.6% a year earlier)
  • Unique Open Rate: 16.4% (up from 16.3% the prior year)
  • Total Click Rate: 2.9% (down from 3.5% the year before)
  • Unique Click Rate: 2.1% (down from 2.9% in the previous year)
  • Click-to-Open Rate: 12.5% (down from 14.4% a year earlier)

Looking at transactional data, Experian found that results were slightly down. Revenue per email in the fourth quarter of 2013 was tracked at $0.10, which was a decline from the $0.14 tracked in the prior year. Similarly, the transaction rate was reported at 0.08% and the transaction-to-click rate came in at 4.6%—both were down from the prior year. At the same time, bounce rates came in at 2.2% and unsubscribe rates were tracked at 0.12%—both slightly better than the previous year. Finally, average order value stayed the same year-over-year at $179.33.

In a special section of the Experian report, there is a detailed analysis of the performance of coupons in email marketing for the fourth quarter of 2013. Experian found that coupons performed better year-over-year across the board. Here are the key findings:

  • Unique Open Rate: up 14% year-over-year
  • Unique Click Rate: up 34% year-over-year
  • Transaction Rate: up 27% year-over-year
  • Revenue per Email: up 48% year-over-year

Comparing email marketing messages that included coupons that could be redeemed in-store, online, or both, you might be surprised to learn that in-store only coupons had the highest unique click rate of 3.3% (1.8% for online-only and 2.7% for online or in-store). Interestingly, most email marketing messages sent by the brands tracked in this study included in-store only coupons (80%). Only 70% offered online redemption of any kind.

The report shows that some email marketers are actually catching on to the importance of mobile. More than one out of five brands included in the coupon study (21%) enabled consumers to redeem their coupons by showing their mobile devices to an employee while they were in-store. This is a number that should grow very quickly in the near future. Unfortunately, it might not grow as quickly as it should since many brands are still not giving mobile the attention and budget it needs. What do you think?

Image: Ilker