Facebook’s free? Why didn’t I know this??

Although not quite an uproar, there’s a little nasty hum in the Facebook world over the changes that occurred yesterday. It’s a “circle of life” thing really… Fb makes changes, people complain, then others start scolding the complainers for grumbling over a free service that no one is forced to use. Wash, rinse, repeat.

People even take time to make cute little graphics about it.

I find this cycle mildly humorous, especially since the mental picture I get is of Mark Zuckerberg wearing a crown of thorns, suffering over the sacrifices he’s made to bring us, the humble masses, the great charitable service that is Facebook.

Puh-leeze. That dude’s suffering all the way to the bank.

Joking aside, I know Fb is free for users in the monetary sense of “free,” but don’t deny it: Facebook is big business.

For those of you living under a rock, the name of the Fb game is advertising. And, much like Google, the enticement for businesses to advertise on Fb is the wealth—like a crazy deep and wide amount—of information available, allowing them to target an audience with sniper-like ability.

And that information, my friends, is the price we pay to play in the Fb playground. So, while you may not be forking over cash to tell everyone you "Lurv @New Girl with @Zooey Deschanel," you pay your fare every time you post, like or update anything on Fb.

Ok, to make this blog useful then, what can small business owners learn from this?

It might be a little stretch, but I think it can apply to any business’s pricing model. I suggest you not think of the price of whatever it is that you’re selling solely in terms of a dollar figure. There are intangible costs that customers pay, whether or not they knowingly acknowledge it. In addition to cash, customers also pay in terms of the time they are/aren’t willing to wait, the level of quality they want, and the level of service they need.

Not a new concept, I know, but maybe a new way of looking at it. Consider this: why not offer a sliding scale that adjusts your price up or down depending on a customer’s requirements in respect to time, quality and service.

For example, businesses charge all the time for “rush service.” But why not flip that around and offer “now and later” pricing. Maybe instead of charging extra for rushes, your “regular” price is for the fastest turnaround you can accommodate, but then you offer a hefty discount for customers willing to wait a little longer.

Same could go for quality and service. If you, Customer, are willing to do your own X then we’ll take X% off the price.

So… maybe not entirely related to the great debate of Fb being free or not and our right to complain or not, but something to ponder nonetheless.

Good talk, Folks, now let’s go make some money…

~Sarah Warren, Emogen marketer

How to Plan Advertising Placement

When putting together an advertising or promotion campaign, one of the major decisions before you is how to get your message out. The options for promoting your message are many: traditional media (tv, radio, print), online advertising, social media, direct mail, sales promotions, sponsorships, public relations, events and trade shows, merchandising, and actual sales efforts. Enough choices to make you cross eyed. And broke.

Small businesses tend to focus on traditional mass media because it’s what we as individuals know best. We think: people still talk about last year’s Super Bowl commercials and nobody even remembers the direct mail piece they received yesterday, so TV must be king.

The trouble is that mass=money, so most businesses either opt to do nothing or opt to take out a second on their house, neither of which are good—or necessary—options.

The key is to figure out with whom you are hoping to communicate, and then determine the best way to start a conversation with them.

If you’re McDonald’s and your market is, say, 90% of the population and you need to make several thousand sales per minute, then mass advertising, like a run-of-network TV campaign across the entire US, is spot on (no pun intended!).

But say your prospects are people in Northeast Louisiana with a liquid net worth of $250,000 or more. That list quickly boils down to about 5,000 households. Then let’s say you really only want to do business with people in Ruston, LA. Now you’re talking about 750 households. Still a decent sized prospect pool, but say you only really need to gain one new customers per week out of that pool. Now we’re definitely not going to be able to justify the price of TV, even on the local networks.

Depending on the product/service being sold in the above scenario I’d mostly likely recommend personal (direct) selling, but let’s say that’s not possible for some reason (or maybe you HATE direct sales as much as most every breathing human out there does). Then I’d probably recommend direct mail (DM).

I love DM because of how well you can target it. Still, the typical response rate on most DM is something like 2%. But, if you mix it up and add well placed outdoor or radio advertising to a three-piece DM campaign, then you might be able to ramp up the response rate. Season in a little social media for brand recognition and we might be talking a great campaign.

Ok, so, I can go on and on with examples. Frankly, sometimes you need a chainsaw and other times you can use a scalpel. The concept I’m trying to hammer into your head is that not every channel works for every situation. The right channel depends on your target market and your goal.

Putting a little effort into defining your “who” and “what” will make figuring out the “how” much easier (and probably more economical to boot!).

~Sarah, Emogen marketer

… well, now that that’s done, time to write a blog...

All joking aside, I am well aware—and beating myself up—that it’s been m.o.n.t.h.s since I last blogged. To be fair though, I’ve been busy with several new babies (both figurative and literal).

In this past year we welcomed our largest client to date, whom we love, love, love working for and with. We welcomed the “twins,” Wes and Anna, to the e-team. And in the personal arena we welcomed home our first son. (Yes, yes, it was I who gave birth to a 12+ pounder naturally, completely without medication. I’m awesome, I know!).

All that and I’ve had writers block to boot.

Coming up with content that is “actionable and instructional” is difficult when my day job is selling that same info as my business’s service. So like, if I tell you how to do it yourself, then what am I supposed to sell you? See the paradox? lol

And so I was reduced (or allowed myself to be) to ranting about sales and marketing faux pas, which was just making me sound bitchy. Or maybe that was the maternity hormones typing…

At any rate, here I am, ready to blog away. But what to blog about?

What I’d like to propose is that you guys out there in cyber-land throw out some topics for us to discuss. Call it a round of intellectual batting practice.

Any takers?

~Sarah, Emogen market-eer

The Prisoner’s Dilemma

By Sarah Warren, MBA

Note: The following blog is a sneak peak of an article to be published in the upcoming Chamber Connection (April 2011), the monthly newsletter of the Ruston Lincoln Chamber of Commerce.

The Prisoner’s Dilemma is the granddaddy of all economic game theories.

Game theory is a way of predicting behavior in strategic situations. The Prisoner’s Dilemma applies to simultaneous decision making and helps explain why individuals/businesses don’t cooperate even if it’s in everyone’s best interest to do so.

It’s really best explained by the illustration for which it’s named:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated the prisoners, visit each of them to offer the same deal. If one testifies for the prosecution against the other (defects) and the other remains silent (cooperates), the defector goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. (Thanks to Wikipedia for help summing this up!)

Obviously the best outcome would occur if both suspects keep their mouths shut, but for all the reasons that make people people—namely self-preservation—the most likely outcome is that both will betray the other and get a 5-year sentence.

So how does this apply to marketing?

Take advertising for example. Holding everything else constant, two competitors are financially better off if neither one advertises. Here’s why:

Say two companies split their market 50/50. Realizing that advertising will allow it to acquire more customers than Company B, Company A begins to promote its services. One of two things is going to happen:

1) B will more than likely come to the same realization and make the exact same decision concurrently. Holding all things equal, A and B remain at a 50/50 split.

2) If for some reason B didn’t make the same move at the same time, A may briefly gain market share; but B will quickly follow suit to keep from losing its share to A. Again, holding all things equal, A and B are likely back to a 50/50 split.

In either situation, advertising causes both companies to lose profit because they are spending money to keep their original 50/50 split. The clincher is that neither can stop advertising unless both do.

Now, of course, that “holding everything else constant” is a big catchall and nothing is ever constant or perfect; however, it’s fair to say that if one company begins to advertise a competitor really has no option but to do the same. And really that statement applies to all strategic decisions… product line additions, service improvements, staffing changes, facility openings, social media participation, and so on. If one company in an industry does something, everyone in the industry should really do the same or risk losing market share.

But take a quick look back at scenario #2 from above. The quiet lesson here is that it’s better to make the first move because of the possibility of incremental market share gain; but, as that gets us into a “first to market” discussion, more on that will have to wait for another day.

Until then, consider what “prisoners’ dilemmas” face your industry and you’ll likely discover areas of weakness and opportunity.

Sarah Warren is the co-owner of Emogen Marketing Group, a full service marketing firm in Ruston, LA and can be reached at sarah@emogenmarketing.com.

On Marketing and Political Assassinations

By Sarah Warren, MBA

Note: The following blog is a sneak peak of an article to be published in the upcoming Chamber Connection (January 2010), the monthly newsletter of the Ruston Lincoln Chamber of Commerce.

A recurring discussion we’ve had with clients lately relates to using marketing messaging that speaks to the prospect about the prospect.

Often companies talk only about themselves, which feels right because we are all naturally inclined to talk about ourselves, pointing out why we’re cheaper, faster, better. Therein lies the problem, though, because prospects are also naturally inclined to think of themselves first. Hence the need to speak to prospects using WIIFM messaging; that is “What’s in it for me?” with the “me” being the prospect, not the company.

Interestingly, on the heels of these discussions I happened to catch a National Public Radio (NPR) report about a Secret Service study into what motivates individuals to attempt political assassinations.

In a piece entitled “Fame Through Assassination: A Secret Service Study” NPR reporter Alix Spiegel shared that in the mid-1980s, following numerous attempts to assassinate President Reagan and then Vice President George H.W. Bush, Secret Service leadership commissioned a study to look into the behaviors of assassins and would-be assassins.

Surprisingly, the study found that in most cases assassinations—or attempted assassinations—of political figures were almost never based on political motives.

Secret Service psychologist and co-author of the study, Robert Fein said, “It was very, very rare for the primary motive to be political, though there were a number of attackers who appeared to clothe their motives with some political rhetoric.”

Instead, most of the assassins “simply felt invisible,” and made their attempts for the purpose of being “somebody.” Political targets were chosen because of their notoriety, because people would notice when a politician dies and the person responsible would become instantly famous, or at least infamous.

And what of the targets? Study authors went on to say that political targets were preferred to celebrities because the assassins could craft a story involving politically-driven motivation, thereby making themselves out to be not such bad people, at least in their own minds.

Again, the idea is that the assassins would be depressed or otherwise upset individuals who, having made the decision to attempt an assassination to gain notoriety and fame, used political causes to construct a motive justifying their actions.

Ok, so not that this study is directly relevant to marketing, but it does help to underscore that if people can be driven to murder because of a WIIFM mentality, then they will most definitely be driven to choose their bleach, bank or bagels on the basis of what they stand to personally get out of it.

That’s not to say that there aren’t aspects about a company that are useful to a prospect when making a purchase decision; the trick is putting those details in terms of “you” and not “me.” The goal of WIIFM messaging is to put everything said about your business in terms of how it will benefit the prospect. If your business is cheaper, the prospect will save money. If your business is faster, the prospect will save time. If your offering is better performing, the prospect will have a better experience.

So, instead of saying you’re cheaper, faster and better, tell the prospect that they stand to save money and time and have a better experience with your product. A nuance in language, yes, but a critical one indeed.

The other interesting aspect of the assassin study that could be applicable to consumer behavior is the idea that the assassins constructed their motive after making the decision to act.

For prospects this could indicate that in some instances the purpose to buy is identified after the intent to buy has been established. This would certainly be evident in the case of non-essential, impulse buys, especially expensive ones. For example, an iPhone isn’t the only phone out there, but its bells and whistles are hard for some people to resist. I’m sure there have been some instances where an iPhone was so desired that the prospect sold themselves that the product would do all sorts of wonderful things that other options couldn’t provide. Key phrase: sold themselves.

To recap the lesson herein, marketing messaging must be put in terms of “you” (the prospect). But the goal, the cherry on top, if you will, is to have messaging so compelling, so irresistible, that prospects sell themselves on the purchase.

Sarah co-owns Emogen Marketing Group, a full service marketing firm in Ruston, LA, and can be reached at sarah@emogenmarketing.com.