Credits

When you visit one of the casinos on Las Vegas Boulevard these days you’re not going to find many machines that you can slip a quarter into. Rather, you’ll find that you need to buy a card loaded with credits. This reality does many things. It keeps your hands cleaner. It makes it easier to track your comps. It also makes you forget that those “credits” on your card are dollars.

Excuse the Yogi Berra style quote but, when you don’t feel like you’re spending money, you’re not afraid to spend it.

We’ve seen hybrids of this model with iTunes and Sony’s PS3 marketplace, but many of these successful implementations have happened around non-tangible goods. And when they have been tied to tangible goods they’ve come in the form of gift cards.

But…

-Most stores market gift cards for you to give to someone else.

-Stores that offer Gift Cards also accept other forms of payment such as cash or credit.

-Items that can be obtained through gift cards are still listed in “dollars.”

If stores were to switch to credit loaded cards only, my question is:

-What tangible goods could be sold under this principle?

-What price points would be too high where consumers would become uncomfortable with not being able to compare goods?

-Would the lack of accepting cash or credit ultimately destroy a business?

-Would this be seen as being deceptive? Or would a “comps” program make it worth it?

-If competitors started to copy this format would it become irrelevant?

Reverse Engineering. Taking Apart a Behavior, Building an Insight

Progressive marketers are far beyond the point of realizing their foothold in the space of consumer communication is slipping. Every day, the role of creating, distributing, and learning falls more under the control of the consumer, which also means the tools for which they choose to take these actions are being created to cater to them, and not to us (marketers). Because of this reality, the task that marketers are now facing is finding the root of consumer behavior. A task which is very necessary in order to be able to reintegrate themselves into forums which not only were they not intended to be in, but in many cases, purposely pushed out of.

“Reverse engineering is the process of discovering the technological principles of a device, object or system through analysis of its structure, function and operation. It often involves taking apart and analyzing its workings in detail to be used in maintenance or to try to make a new device or program that does the same thing without copying anything from the original. (Wikipedia)”

In other words, when an engineer is asked to dissect a new technology in order to rebuild it (without any instructions) they are doing so because the end goal is to be able to recreate a product or experience that they were not originally intended to be a part of.

Applying this to the current digital landscape, we are seeing the same needs from marketers. Most of those tools were never built with the role of the advertiser in mind and this presents a great challenge to that group. How does a brand balance the original function of a communication tool while trying to become an active member of it? This is where the concept of “reverse engineering” can come into play.

Dissect a group of people’s core need for participating in a certain experience (digital or otherwise) and you’ll have a clearer understanding of (and yes, sometimes IF) you can become a part of it.

Looking at YouTube as an example:

1) Consumer Need: The ability to share themselves with potentially millions of others through site and sound.

2) Consumer Behavior: Millions of people are uploading their thoughts, talents, and parodies onto a video sharing network. Even more millions of people are watching those videos (the majority of which are user generated, not professional).

3) Why is this behavior occurring?: YouTube made video distribution easier (on a mass scale) than ever before. It didn’t require hosting a server or website, or being isolated to sending your large files across flaky channels. From a content consumer perspective, YouTube and sites like it offer the depth and variety that professional producers simply cannot match. The quality (for now) of the content is obviously not comparable but consumers are willing to look past it because the content is original, very controllable, and often more personal.

4) Augment Behavior to include Brand: In the case of YouTube, countless brands have tried to leverage this video distribution tool to spread their own content to millions. To have it go “viral.” But perhaps the best use of this network was not for a brand to spread its own content, but help consumers share their own. After all, the initial consumer need identified above was the desire for consumers to share themselves with the masses. Wouldn’t it make more sense to empower them in continuing this behavior rather than competing against them? If successful, this takes the process full circle and makes the brand-infused behavior become part of the original consumer need.

What is a success? When a brand can improve or change a consumer’s behavior so it still satisfies their initial needs. What is a MAJOR success? When a brand can radically change consumer behavior in a way that makes it virtually inseparable from the consumer’s perceived need.

Fans of Apple don’t buy new versions of iPods/iPhones because the device they currently own is no longer capable of playing music. Apple revised the need so that people associated their desire for portable music with the need for the experience to be easy, integrated, and most importantly for Apple, very reliant on their brand.

The above example, while something most brands will never be able to equally replicate, is something that shows how the concept of reverse engineering behaviors can help them strengthen the relationship between themselves and their consumers who are spending more time in a place that brands don’t yet fit into. Successfully being able to enhance a consumer’s experience turns the people you’re advertising to, into people advertising for you. And when a brand can best disassemble why consumers are engaging in a certain type of behavior from an emotional, educational, social level, they will also be equipped to build the insights needed to compliment those experiences and strengthen the bond between brand and consumers as they reconfigure the experience to include themselves.

The Assassination of Zagat Guide by the Power Yelp.com

36 Months. That's all it took to essentially devestate the 25 year business that the Zagat brand has built. The main reason? They ignored the platform that eyeballs were shifting to. Yelp is available readily and quickly. I can access it from work at my computer before I go out, I can access it from my iPhone essentially anywhere. I do own a Zagat Guide book but it sits on my coffee table as more of a decoration than anything else. No one can argue that the content is more valuable within either product. One brings out the value of peer reviews while the other maintains the importance of "professional" opinion. Both could serve the specific niche they are after except for one major and fatal flaw that Zagat has chosen to ignore, it has not followed the market (and it's future customers) into the medium(s) that they play in.

So what can the CEO of Zagat Guide to take back some of the market share from the likes of Yelp?

1. If possible...Buy Yelp. I cannot imagine that Zagat has the capital to do this but this would probably be the easiest way to catapult their brand into the digital age. Combining their professional reviews with peer reviews would be a formidable force in the restaurant reviews category.

2. Build a killer FREE mobile application. Yelp's iphone application is pretty good, but if Zagat were able to blow away what Yelp has done with more functionality and options it would certainly bring more eyeballs to their site.

3. Go Where Yelp has not gone. As far as I could tell, Yelp is not on Twitter. If that is the case there are most likely many other avenues that their brand hasn't built up their social profile. Jump into those spaces IMMEDIATELY and build a following that will help promote your brand for you.

4. Strengthen grip on luxury market. If you can't beat them in terms of sheer volume, beat them on margin. What kind of incentive can you provide to luxury diners that a Yelp cannot compete with? As a 25 year old brand there must be relationships that have been forged and can be expanded on. There is a reason that people by Starbucks over Dunkin, BMW over Hyundai. What is the reason that makes the Zagat emblem more valuable that the 5 pointed orange blotch?

Some kind of change in business strategy is absolutely vital. Otherwise the below flatline will eventually fade away.

Where to Drink the "Haterade"

There is certainly no shortage of venues on the web for consumers to complain or offer suggestions to the brands and the products/services they represent. The evolution of this behavior started with users complaining on simple message boards, in chat rooms, and various other archaic word of mouth formats that lived prior to the explosion of "social media." Soon enough, certain brands became so notorious for poor customer service that actual sites dedicated to bashing that brand started popping up (some excellent examples can be found in Joseph Jaffe's Join the Conversation). Specific sites being built contributed to the aggregator sites which gave consumers the power to sound off on essentially any known brand. Although entities such as Consumer Reports existed before, the consumers voice is now much more powerful collectively than that of an editorial staff.

Now we have come to a point where brands are finally acknowledging this mass of thought and feedback. They are building their own destinations that in many ways mirror the original complaint sites such as Dell Hell and instead position them as places for "ideation" and "improvement." There goal is to bring the conversation, as much as possible, out of the 3rd party sites and into a playground where they can watch and have the most prominent voice.

The above is only a small sampling of places to either voice their complaint or offer their advice. It is to iilustrate the various overlapping funnels that the consumer and brands can now engage in. These are very specific and do not include the thousands of other venues where ones opinions can be heard (Yahoo Answers, Twitter, Personal Blogs, Facebook, etc.)

Via Six Pixels of Separation, interestingly only a small percentage of consumers are actually complaining online.

According to a study conducted by Harris Interactive for Tealeaf Technology  ...it turns out that people complain a lot more in person (74%) or while on the phone with family and friends (50%) compared to leaving a rating or review on a Website (16%), an online message board (8%) or a Blog or online social network (7% - which also happens to be the lowest ranked).

Although the above statistic doesn't indicate the majority of consumers are drinking the "Haterade" online, it shouldn't be overlooked by brands. That 7% of individuals are creating complaints that do not go into a dusty wooden box on the desk of a CEO, they are complaints that are public and essentially everlasting. They have the potential to populate a brands search results, and spur further negative discussion.

The forward thinking brands that are building their own communities will neve be able to ensure ALL conversation about their product/services are under their own roof, but there are steps they can take to move it as close as possible to that direction:

1) Don't ignore any funnel of the consumer feedback environment. Have profiles on the GetSatisfactions of the World and monitor what people are saying and how they are sayining. Learn how your own consumer platform can give users the same chance to express themselves and how yours can be easier and more interactive.

2) Respond. Simple enough. But rarely done. In your responses, drive people back to your own community to get further assistance.

3) Make sure your community manager is scanning the web (hopefully using social monitoring tools) to find the niche sites and microblogs to find specific topics of discussion. Are there alerts or newsletters that can be catered to the entire customer base and one that drives to the brand based feedback venue?

4) Talk directly to the "loud mouths." If there is a person who is quite vocal in a negative fashion towards your brand, don't just try to fix the problem or silence them, offer them a job. Make them a community director on your own site. You would be surprised at people's willingness to get on top of a bigger soap box if they have a chance.

5) Optimize your SEO by being ACTIVE. There are hundreds, maybe thousands of posts about your brand every day. The combination of encouraging activity on your own site, as well as pushing out useful content will help bring a brand's voice higher on Google's result page than lets say...this.

Consumer Feedback Links:

Web Gripe Sites

Fortune 500 Brands that are Blogging

Massive Compilation of Brand Social Engagements