It's Pronounced Chookshaw

The semi-professional blog of Albert Ciuksza Jr.

Category: Marketing (page 1 of 4)

Only 6% of People Can Pass This Test

Welcome to the test that only 6% of people can pass. Only the most focused people are capable.

Ready?

You failed. You clicked on the link. You’ve interrupted your focus and set yourself up for another 30 minutes of aimless online wondering. If you want to make $100k/year, that will cost you about $24 (you’ll see what I mean below).

It’s not entirely your fault. Countless resources have been spent studying you, the internet user, to understand what it takes to get you to stop what you were doing and click on a link. Your limited defenses are being challenged by an army of hundreds of thousands of well-educated marketing experts and computer scientists, all of whom are highly-motivated to translate your clicks into revenue. You’re bringing a cup of water to a forest fire; it’s not even close to a fair fight.

But fight you must.

One of my favorite quotes is from Tony Robbins, who said that the defining factor of success is not resources it’s resourcefulness. He’s right. The corollary is that it’s your job to be focused enough to be resourceful.

I have found three ways beyond exercise (that one is well-known) that have helped me to focus.

My “Hourly Rate”

I have a financial goal for myself for what I want to make annually. Dividing that number by 2,080 (the approximate number of hours a full-time employee works), I know the amount of money I need to make in that hour in order to reach that goal. That’s my hourly rate. From there, I’m either doing something to earn that number, or I’m “spending” that money by doing something else. Would I pay that to watch an hour of cat videos? Probably not.

Meditation

After being diagnosed with some weird skin thing that flares up when I’m particularly stressed, I realized that I had to get things under control. So, I started meditating. Here’s the bottom line: it changes your brain for the better (read this and this). If you have never tried it before, check out Calm.com or one of their mobile apps. Start it today and never stop.

Learning a Foreign Language

I’ve started to re-learn Spanish, which is part unlearning some of the Spanglish that was part of my El Paso upbringing, and part simply learning the basics that I either never understood or completely forgot since middle school. In addition to a few great free learning resources (Duolingo and the Notes in Spanish podcast), I’m reading news at BBC Mundo and CNN en Español as well as watching football games in Spanish (¡Vamos a acereros de Pittsburgh!). It forces me to think about what I’m reading or hearing/seeing, rather than just passively consume. The unexpected consequence is that it has made me more focused in everything I do.

One last thing…

We’re in the early stages of what is about to be a brutal electoral season (at least in the U.S.), and it’s starting already. The only thing worse than allowing your prime attention resources to be hijacked by random quizzes and cute animals is actively sabotaging those limited resources by getting dragged into a political fight online. I call it Attention Sabotage Syndrome (ASS). Don’t be one. Quit Facebook or Twitter if you have to, but it’s just not worth it.

Validation

Startup confession: I hate validation with a passion. Not the process of it (whatever that process is, anyway), but the expectations that have been placed on it.

Validation is supposed to determine whether an idea is worth commercializing. The theory is that the innovator goes through a series of processes that lead to a black-and-white answer: either yes, this opportunity will obviously make me a zillionaire; or no, this opportunity should die on the vine. Validation becomes the insurance policy against failure and, with failure being a fate worse than death in many innovation circles, it’s be-all, end-all.

Let me be clear: no one ever, ever, ever does this.* Why else do you think that 90% of startups fail?

The problem is that we’re mostly wired to pursue the new and shiny, to say yes rather than no. Consciously or unconsciously, instead of validating the idea (i.e. empirically determining whether to move to the next step using a rigorous, data-oriented methodology), we try to rationalize all of the reasons to move forward. While we usually need about six positive messages to make up for one negative one, in our “validation” process, we tend to focus on all the data that we’ve got that says that we should keep pushing forward with commercialization.

There are plenty of articles about how best to validate (caution: whatever validation is, it is not a five-minute process), so I won’t duplicate the efforts of the many who are trying to sell you some sort of secret sauce. However, there are four big things that tend to be make-or-break when deciding to pursue a new idea. They are:

  • Degree of Differentiation – Your idea needs to be different enough to compete against other solutions while being tough to duplicate (technically or legally).
  • Market Size – The business needs to pursue a market big enough to meet your goals, whether that’s just to put food on your table or to make enough return to attract investment
  • Resources – You need the time to pursue it, a team that can compliment your strengths, and the financial resources to fill in the gaps, all from the first flick of the light bulb to the moment you put out the “for sale” sign.
  • Marketing 4Ps – Product, place, price, and promotion; they all need to work together to make the awareness-interest-decision-action cycle as short as humanly possible.

There’s other stuff, of course, but these are the big four. If you can rationalize this publicly with your right hand on a stack of enter-your-sacred-text-here, then you’ve done great work. This is what most people want when they want validation. They want some data, some third-party information that shows that you’re not a mad scientist.

For extra credit, I recommend one more step — the project premortem. The idea is simple; instead of waiting for things to get to their logical conclusion before doing an analysis of what went wrong, have a session with you/your team to talk about all of the reasons the project will fail miserably. When this is the goal of the discussion, everyone is open to talking through the potential pitfalls that they might otherwise be uncomfortable expressing in the face of the blinding optimism that comes with launching a new venture. It’s a fantastic exercise.

*This isn’t technically true, of course. Like how some people rotate their tires after every 3,000 miles or balance their checkbook every month instead of checking the balance online, it happens, but not often enough to discuss.

Macro Beer Champions the Silent Majority

Proudly a Macro Beer

Don’t Fuss Over This

Budweiser threw the first big punch with what The Atlantic called “The Super Bowl’s Riskiest Ad.” You probably saw it, but here’s the copy (and the video):

Proudly a macro beer. It’s not brewed to be fussed over. It’s brewed for a crisp, smooth finish. This is the only beer Beechwood aged since 1876. There’s only one Budweiser. It’s brewed for drinking. Not dissecting. The people who drink our beer are people who like drinking beer. To drink beer brewed the hard way. Let them sip their pumpkin peach ale. We’ll be brewing us some golden suds. This is the famous Budweiser beer. This bud’s for you.

Reaction was swift. Craft beer drinkers blew up in anger and snark on Twitter. Media cherry-picked tweets to maintain the narrative. Jim Vorel wrote thoughtful analysis about AB’s hypocrisy. Carla Jean Lauter (The Beer Babe) wrote an excellent point-by-point analysis of the spot. Dick Cantwell, co-founder of Elysian (recently acquired by AB InBev), was annoyed. It was spoofed almost immediately in a counter-ad. And even Bud’s marketing VP, Brian Perkins, said that he “meant no offense”.

From a Promotion-P marketing perspective, I think the ad was hugely effective. Instead of taking heed of MillerCoors CEO Tom Long‘s  2012 call-to-action for the industry to build “Brand Beer”, Budweiser took a shot at the very thing that is keeping brand beer in the running against wine and spirits, i.e. the taste- and brand-conscious attitude that, at times, puts off the silent majority of beer drinkers who like macro beers. The result was a celebration of a populist appeal that got exactly the reaction from craft beer lovers that the ad was mocking. Strategically, that’s one hell of a rope-a-dope.

The only shock is that it has taken this long for macros publicly challenge craft beer. Budweiser’s declining market share is well-documented, and Perkins has been on record saying that they want to go after 21-27 year old consumers with a new strategy. That demographic is rejecting macro beers at a rate much higher than other generations of consumers, and Bud is going for the long game that comes with early exposure. It’s giving up on the consumers who have driven craft beer demand in the hopes that younger drinkers will become brand loyal.

Maybe this ad will get craft breweries to realize what the macros have known all along — that building brand relationships with a wide range of consumers creates a hell of a lot of goodwill that can be leveraged into messages just like this one. Even if the Brewers Association hits its stated goal of craft beer making up 20% of market share by 2020, that means that the macros are still controlling 80% of the market. Combine this with macros’ craft beer brand acquisitions and you have a recipe for dominance in the channels craft breweries need to survive and grow. Unless craft breweries want to be left fighting over local bar tap handles and growler sales, they must figure out a way to pitch a bigger tent and welcome the folks who just want to enjoy a beer with their friends. If not, there’s a serious risk of losing the culture and variety that has driven nearly a decade of double-digit craft growth, effectively teeing up the macros to swoop in and win the war.

UPDATE: 1:47PM on 2/3/2014

Really solid analysis from Beervana that hits similar notes. With a read here.

My ‘Buying Local’ Mistake

For those who might not know, I host a radio show for my real job called Pittsburgh Impact Radio (click here for the iTunes podcast). In my most recent show, I interviewed Buy Pittsburgh First, an organization that promotes the idea that companies can, and should, buy from local suppliers. From an economic development standpoint, this is a huge opportunity — between 40%-60% additional economic impact is made when a purchaser buys from a local supplier vs. a national/non-local one. That translates to jobs, more consumption of local products and services, multiplier effects and other good stuff.

As an entrepreneur currently selling into the local and national market, I too have skin in the buy local game. It is easier for me to market and sell product to companies nearby (I can demonstrate how our product looks and works). It’s cheaper for me to fulfill my orders to local companies. And, in the (rare) case where something isn’t quite right, I can fix it personally. Our company is another case study in why buying local makes sense — the service is often far beyond any national vendor and we’re willing to go above-and-beyond in ways that are impossible for our other customers across the country.

So, my ‘buying local’ mistake. Somewhere in the radio interview, and I believe it might have been said multiple times, I mentioned that there is an obligation to buy from local vendors. Given the regional impact, and what it can do to accelerate growth, it sounds like something that is reasonable to say. Further, I have also worked in economic development for seven years, so I’m comfortable talking about connections between buying from companies and how that can impact an economy. But, after more reflection, I realized that I was dead wrong. There is no obligation. And there’s nothing wrong with that.

In any business transaction, the decision comes down to what option brings the most value. Some of these are objective measures (price, turnaround time), and some of these are completely subjective (brand, reputation). A commitment to buying local is decidedly a subjective perception of value. Regardless of how much value we might individually place on buying local, that doesn’t mean that we do it at each opportunity, or that it’s right to always buy local. Sometimes, the local option just doesn’t deliver the value we need, regardless of proximity.

I won’t say that it doesn’t hurt when a local company won’t take a meeting or consider our product. I’ll admit to getting irritated when a company decides against giving us a chance to prove our concept. But, the reality is that it’s not their fault for not buying. It’s our fault for not delivering enough value (or, worse, targeting the wrong market).

This doesn’t mean that I will not continue to be an advocate for buying local — I think it’s a great opportunity to have a disproportionate impact on the local economy (and get exceptional customer service at the same time). However, I have made a decision to stop making it personal, start delivering more value, and eliminating the words “should” and “obligated” from my vocabulary.

Actually, the New iPhones Are Awesome

Five colors to enjoy (plus a gold iPhone 5S)

Five colors to enjoy (plus a gold iPhone 5S)

I’m not an expert in technology and don’t want to give the impression that I’m capable of giving a careful analysis of the new hardware or software in the two versions of the iPhone that were launched yesterday. This post isn’t about the guts, or the new interface, or iOS7.

This post is about looks. And, from that perspective, I think this was a brilliant move.

The mistake that handset manufacturers have made, really since the beginning of time, has been that almost all phones look decidedly masculine. I remember a good friend of mine, Meghan Skiff of Mixy Marketing, complaining about how her then top-of-the-line Blackberry only came in masculine colors. “I’d pay serious money to get this in pink,” she said.

Until these iPhones were launched, the only way to make a mobile phone stylish was to add a case. Given just how long smartphones have been around, that is a pathetic record.

The books are right — when marketing to women, pink is not a strategy. But style is.

That is where Apple got this right. The gold tone iPhone 5S might have been widely panned and the multiple colors of the stepped-down 5C might be considered garish, but for the first time there is an iPhone that can appeal to both style and substance. 52% of adult women carry a smartphone. How has no handset manufacturer taken this into its design consideration?

Good design makes everything better. That means both style and substance. While there can be plenty of arguments about whether Apple has been as innovative in this generation of iPhones as years, they’ve clearly taken a step in the right direction in recognizing that style can be a competitive advantage in the mobile market. With so many women using smartphones, creating a line that appeals to various tastes is long overdue.

Groupon is Bad for Everyone

Yoga should be peaceful...

Yoga should be peaceful…

Yoga. It’s more popular than ever, with studios popping up on nearly every corner. Everyone does it. Hell, Troy Polamalu does it.

So does my wife.

My wife also used to buy Groupons (I’ve since convinced her to stop). And, unlike most Grouponers, who buy them for the awesome deal, my wife tends to go back to those places. She is the ideal situation for the small businesses who choose to do the daily deal dance.

Unfortunately, her recent experience with Groupon — and a business that didn’t understand what it was getting into when it chose to offer one — is a classic case study for why it’s easy for everyone to lose in the pursuit of new customers or a great deal.

The story goes as follows — my wife bought a Groupon for the yoga studio near our home (Yoga on Fremont) for $65 that gave her 20 classes. Unfortunately, due to a crazy schedule (she’s a physician) and lost password, she didn’t redeem any of the classes before the March 19th, 2013 expiration date.

In the early days of Groupon, having it expire meant that the entire value of the deal had been lost (i.e. she had paid $65 to get nothing in return). However, with lawsuits, the threat of lost customers, and any number of other factors, Groupon changed its terms of service such that the paid value never expires. This gave the business a way to limit some of the cost damages of offering a Groupon while insuring the customer against losing their money. Win-win.

When my wife went to the studio, she brought her Groupon with her, expecting to apply it to individual classes ($14 each) until she ran out of value. The owner, however, stated that the company policy for the expired Groupon is to honor what the value the owner received ($31.50), not the entire paid value. Despite a couple of emails between my wife and the owner, including my wife sending the actual Groupon that includes the text “The amount paid for this voucher ($65.00) with Yoga on Fremont NEVER EXPIRES” at the very top, the owner would only honor the $31.50 earned from the sale.

I don’t blame the owner of Yoga on Fremont for not wanting to lose any more money on her daily deal. Groupons are a horrible financial decision for small businesses. However, like most deals with the devil, you don’t get to change the rules when things get uncomfortable.

The net result is this — my wife is upset and won’t ever return to a yoga studio within walking distance to our home. She’ll get a refund, but does that really matter? And for the business, they’ve chosen to alienate a customer that could have not only become a loyal one, but a customer who works at a hospital that serves the community and regularly recommends yoga (and yoga studios) to her patients.

So, if you’re a small business thinking about doing a daily deal, just don’t do it. The implementation is difficult, you make 20%-25% of the revenue you normally would on a sale, and the Groupons tend to create more problems than new customers. And, if you’re someone thinking about buying a daily deal, please reconsider. It might be a great short-term buy, but it hurts the local small businesses you’re hoping to frequent for years to come. It’s a bad long-term deal for everyone.

BA323 #4: Bonus Journal – Value in Purchasing Decisions

What dimension of value do you use to make purchasing decisions? How will that change in 10 years?

What's the value?

What’s the value?

In last Wednesday’s lecture, we talked about the critical importance of value. Beyond simply the dollars and cents of it all, value is often defined by qualitative goals (how you feel) rather than something more quantitative (getting x amount of utility for $y).

Broadly, we identified four dimensions of value:

  • Performance – how well something is perceived to work
  • Price – what it costs vs. what one gets out of it
  • Relational – individual, personal relationship with the company/brand
  • Status – the reflected glory of owning/using the company/brand

In class, I asked what one dimension of value the students most often use to make purchasing decisions. I was surprised when most students mentioned performance and status rather than price (looks like the poor college student caricature might be waning).  At the end of class, I offered a bonus journal to further reflect on that question as well as share what they would expect to value ten years from now.

For me, price tends to be the first value on which I make purchasing decisions and that hasn’t really changed much in the last ten years. However, the way I look at price has changed, and has allowed me to also begin to look at the other areas more readily, particularly performance and relational.

Ten years ago, I was a year out of college and working in my first job trying to figure out how to pay bills. I left school with a mountain of debt, a car payment, and ancillary expenses like my cell phone and credit card debt. Like many recent graduates, I wasn’t making a lot of money and had to often settle for lower-quality, low-price products. In the following ten years, I had a few different careers, including one as a not-quite-successful entrepreneur, which made financial resources even more scarce. Even after getting a new job, it took years for me to settle the financial challenges that resulted from that setback.

Now that I’m a bit more established, I’m also aware of the importance of good quality, whether it be in vehicles, clothes, housing, etc. As such, I balance other areas of value, particularly performance, more heavily than I once did. I’m also incredibly loyal to certain companies or brands, especially in my community, so the relational value is more important to me now.

In a decade, I expect that I will still be financially prudent, though the other dimensions of value will likely be even more important or will trump price. Despite my experience in marketing, the status bug will likely bite me as I expect to have access to more financial resources, for better or worse. Even if I know I’m being duped, I likely won’t be able to resist.

What do you value now? Ten years from now? Do you think it will be the same?

BA323 #3: Journal #1 – What’s So Hard About Entrepreneurial Marketing?

As promised, I’m following the class with my own journal entries/blog posts about the subject. Our first is:

What’s so hard about Entrepreneurial Marketing?

As we covered in class, Entrepreneurial Marketing is (for better or worse) more than just the Four Ps (Price, Place, Promotion, and Product for those of you who can name three-of-four and inevitably forget one of them). Unlike traditional marketing, which can simply focus on who is going to buy the product, entrepreneurs must market to a variety of stakeholders: suppliers, customers, the end users of those customers, market intermediaries (gatekeepers that might exist in your market), investors/potential investors, and business partners/employees/potential employees. Each group requires its own strategy and tactics, all when resources are incredibly scarce.

Sure, the money problem is obvious, some of it can be overcome with good research, strategy, and tactical execution. What isn’t quite as easy is balancing multiple priorities among a diverse group of people who often have competing interests. Not only must entrepreneurs focus on selling their product or service, they must also be constantly thinking about how to market their business to raise money (through equity or loans). Finally, they must do this while promoting the overall image of the company, ensuring that suppliers and talent are both on-board as partners in the company’s success. Not an easy task.

Interestingly, most entrepreneurs seem to do this automatically. They work to build relationships with all of these people and tend to manage those relationships well. However, many entrepreneurs can suffer from tunnel vision — maybe focusing too much on sales while neglecting investors, or working hard to raise money without making sure the customers are happy. Coming back to the money issue, entrepreneurs often don’t have the capital to recover from a major error when marketing to any one of their diverse targets. This makes attention to all marketing strategies incredibly critical.

Personally, I find maintaining relationships with market intermediaries to be the most difficult, since they are acting as gatekeepers and offer third-party interference with your customers. When these relationships are good, they’re excellent. When they’re bad, they can make an entrepreneur’s marketing job much more difficult.

What do you think? What would be your biggest marketing challenge?

Premium Has to Stay Premium to Save Print

A little over a year ago, I wrote a piece on the Pittsburgh Post-Gazette’s then-recently-launched PG+ and how the model might be able to save print. The model of PG+ was simple — take a couple of its most popular blogs, most notably sportswriter Dejan Kovacevic’s PBC Blog, and shift it behind a $3.99/month (or $36/year) pay wall. My assessment at the time was as follows:

From my experience, the so-called ‘freemium’ model seems to be working for the P-G. Why? Because there’s genuine value to the experience. While superficial sports coverage and local news can be had easily and for free, the type of in-depth information that their paid site provides is well-worth the $4/month. In addition, I’m beginning to feel a sense of responsibility to the newspaper industry — like public radio, I know that these media are needed in a strong, well-informed democratic society (an interesting article suggested anecdotal evidence that the decline of the newspaper industry is having some impact on campaigns). While I think as much information as possible should be free, I have come to terms with the fact that I need to contribute my share.

Within the last year, much progress had been made at PG+. The site generally abandoned the blogs focused on subjects outside of sports (it seems subscribers were overwhelming consuming sports content) and Dejan Kovacevic was promoted to a post where he would write for all sports as well as run the PG+ operation. I had adjusted my morning routine accordingly, reading his pre-dawn PG+ blog post as I woke up each morning.

About three weeks ago, Colin Dunlap, the reporter who replaced Kovacevic on the Pirates beat, abruptly resigned. Last week, Dejan resigned after 25-plus years with the Post-Gazette to move to the competing paper, the Pittsburgh Tribune-Review. Within a month, a good bit of the value I had gotten out of the PG+ subscription had been lost. In addition, the print side lost a good bit of its top-tier baseball talent just as the Pirates are enjoying re-surging interest as the team flirts with .500.

From a purely marketing perspective, this has been fascinating to watch. Fans at the PG+ have used the comments function to threaten to leave or ask for instructions on how to cancel their subscriptions. Other members are wringing their hands at the possibility of supporting the Tribune-Review for reasons that have nothing to do with sports coverage. And Dejan Kovacevic, after championing the PG+ for more than a year despite its many faults, has taken to tweeting “site is free, comments easy to use” when referring to his new home.

In order for the PG+ to survive, it has to stay valuable to its rabid sports fan consumer. In its first chance to do so, it failed, as Dejan broke a story about a Pirates trade at 10:23 PM last night, about an hour and a half before the PG+ posted the news. Experience matters and, at this point, the PG+ doesn’t have the team to break those kinds of stories.

A year ago, I asked if premium can save print. I strongly believe the answer is yes, but it has to be able to provide exceptional value, like exclusivity, in order to be viable. I plan on continuing my PG+ subscription but worry that there will be enough defectors that the Post-Gazette decides there isn’t enough value in the model to keep at it. Let’s hope that there continues to be excellent sports coverage at the P-G and that they’re able to find the talent to make the PG+ a worthwhile investment.

The Brazenness of Qdoba’s Opportunistic Marketing

There are few things that are such obviously good news like a team of Navy SEALs successfully killing Osama Bin Laden. While it might not mean much operationally (the U.S. has successfully reduced the influence of Al Qaeda since September 11th), it is a great moral victory for the ten-year effort to root out terrorism around the world.

Leading up to the announcement and throughout the day, from the Phillies-Mets game last night to the front steps of the White House in the early morning, crowds are shouting “USA! USA!”. The spontaneous reaction to the news was overwhelmingly patriotic and a cathartic reaction to a ten-year battle.

Given this context, I was surprised to find the following email in my mailbox this morning:

Chanting USA! for a $1? Really, Qdoba?

Chanting USA! for a $1? Really, Qdoba?

Don’t get me wrong, I appreciate companies that are nimble enough to respond to current events. However, I feel like Qdoba stepped over the line here. We’re witnessing our nation celebrating a moral victory. It seems crass to exploit it to sell a few burritos.

For the record, I don’t envy companies that are competing for attention in the age of social media. There are landmines everywhere, as Kenneth Cole learned when his company was lambasted for attempting to take advantage of the events in Egypt to promote a new clothing line earlier this year. Even more challenging, companies need to be edgy just to get attention. It’s tough out there.

Being difficult, however, isn’t an excuse for getting it wrong. While I might join in the chorus of “USA!” that’s happening across the country, I won’t be doing it to get a buck off at a burrito joint. There’s a difference between being edgy and being opportunistic, and Qdoba landed with a thud on the wrong side of that line.

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