We have ways of making you...buy

Where the famous line "We have ways of making you talk" actually came from (This Day in Quotes)

This week's hoo-hah about the Apple's iPhone's file that logs your historical whereabouts shows the fine line between our love and hate of what our smartphones can do for us and with us. We love applications that tell us how to get to where we want to go or find what we want from our current location. But we hate the idea that our whereabouts can be tracked and used by anyone else (even if we are only too happy to volunteer that same information, often with photographs, via Facebook).

Something else we like, nay demand, is that these smartphone services like maps or Facebook should be free. Yet we don't like the ads that generate the revenues that help keep these things free, nor the idea that they could be made more effective by using the data they collect.

For those already sensitive to data and location privacy, this article from Wired about persuasion profiling is not going to be a happy read. Persuasion profiling goes a big step beyond targeted ads. As Wired says: "It doesn’t just find content you might enjoy. It figures out how you think." Research has shown that people are typically more receptive to some types of persuasion than others. Some people are persuaded by expert reviews, others by time-sensitive deals, others by a simple sales message, and they are responsive to the same type of approach across multiple domains. By tracking what worked and didn't work with individual people in the past and then focusing on the best approach, researchers were able to increase ad effectiveness by up to 40%.

As marketers, the idea of being able to target the right ads to the right people in the right way sounds attractive. How great would it be to be able to nuance our brand messages based on our understanding of the consumer's needs and preferences? And, to some extent, it's not much different from principles already applied in direct mail. But our enthusiasm for such an opportunity has to be balanced by an understanding of people's concerns about their privacy. Starting with the name itself, it doesn't take much effort to make "persuasion profiling" sound scary. The Wired article takes that route, concluding: "Persuasion profiling potentially offers quick, easily transferable, targeted access to your personal psychological weak spots." That just sounds awful. All expeditions into this new territory must proceed with due caution.

"We don't charge fees for stuff that should be free" Southwest Airlines

Southwest has tapped into consumer resentment over the fees that other airlines have started to charge for services that used to be free with a commitment not to charge for those same services (e.g. "Bags Fly Free," "No Change Fee") and promotion of that commitment with ads like the one above.

In financial services, the other sector that has developed a large appetite for fees, Ally Bank has adopted a similar approach, marketing itself as the anti-bank and promoting its "no fine print" policy and no ATM fees.

For both Southwest and Ally Bank, their competitors dependency on fees (which generate more than one quarter of income in the case of fee-innovator Spirit Airlines) has opened up a great branding opportunity--it's relevant, differentiating and competitors are unlikely/unable to respond.

Whether this positive branding position makes sense from a business perspective is a different and more difficult question to answer. Both companies are walking away from a lot of money. As this Knowledge@Wharton article points out, U.S. airlines collected $2.1 billion of fees in just one quarter in 2010 and Bank of America made 10% of its total income from "service charge" fees in 2009. Both Southwest and Ally have to hope that the goodwill generated by their no-fee commitment translates into a higher share of market and more overall revenues.

But getting the best of both worlds is Ryanair. This Irish carrier has managed to carve out a distinctive position at the low-cost end of the market. Its CEO, Michael O’Leary, is constantly pushing the boundaries in terms of costs that can be take out of the system and gets plenty of publicity for his more extreme ideas (e.g. Standing Room only). The airline is also notorious for its huge array of charges, so much so that there's a need for posts like: Top Ten Ryanair Charges and How to Avoid Them. So, whereas Southwest builds its brand by resisting the temptation to charge fees, Ryanair can build its brand by coming up with new fees and new customer inconveniences. Brilliant!

Why, ebay, why?

There may be a good reason for this. But I don't know what it is:

eBay account update: Action needed

Dear Martin Bishop,

We noticed that you haven't signed in to your eBay account for quite some time, and we'd like to invite you back to buy and sell again. eBay's a great place to buy what you want, and sell what you have.

Unfortunately, since you haven't used your eBay account for a while, it will be deleted if you don't sign in within 30 days from the day this email was sent.

......

We appreciate your business and hope to have you back as part of the eBay community.

Thanks,
eBay

"We appreciate your business" so much that we've decided to launch punitive action against you. Does it cost eBay any money to maintain these accounts? I doubt it. Is it beyond their imagination to come up with a "carrot" approach? Apparently.

Why not something like: "We've noticed that you haven't signed into your account for a while. We'd love to have you come back and visit so here's an xyz incentive to encourage you to try us out"?

I just don't get it.

Photo credit

When a brand IS just a logo

So, for all those who you for whom "brand is not a logo" is a mantra, ponder this.  As reported by The Economist, what counts on designer clothing is the label, not the design.

Rob Nelissen and Marijn Meijers of Tilburg University in the Netherlands conducted a series of experiments taking a look at people's reactions to people wearing Lacoste and other designer clothing brands. As they report in a paper in Evolution and Human Behavior:

"Across seven experiments, displays of luxury — manipulated through brand labels on clothes — elicited different kinds of preferential treatment, which even resulted in financial benefits to people who engaged in conspicuous consumption"

In other words, buying expensive designer clothes may be a good investment strategy--the costs of the clothes covered by the benefits received. But the effect only works when the origin of the clothes is obvious (i.e. people can see the label).

Dr Nelissen and Dr Meijers think that people react to the labels as signals of underlying quality and propose that this is an adaptation of what goes on in the animal kingdom all the time--the peacock with the best tail wins. However, as The Economist points out, what works in biology doesn't work so well as a status-assessment mechanism. The label takes on more than its fair share of significance--it's our mental shortcut and proxy not just for the quality of the clothes but also for the character and value of the person wearing them.

So, a brand may not be a logo but a logo sure can be an important repository for a brand.

Every picture tells a story, don't it?

Dairy Cow With Problems (via Awkward Stock Photos)

So, nine times out of ten, while I write a blog post, I'll open up Flickr and see what Creative Commons photograph I can use to illustrate it with. But how about the other way around? How about starting with the photo?

@fritinancy pointed me towards this great new site: Awkward Stock Photos which has the most delightful and supposedly unusable stock photos--a great source of photographs to test my new approach.

Here we have, as you can see, a cow stuck on a fence so my first thought is the post will have to be about the dangers of sitting on the fence and not making a decision one way or another. Perhaps I could write a post about the dangers of compromise solutions that try and please everyone but which are udderly ineffective?

I actually have a brand architecture project right now which might fall in this category--half of the people want a house of brands solution where they keep their focused brands, the other half want to adopt a branded house solution with just one brand to save money and consolidate their efforts. But in this case, I think that an endorsement approach might actually be a viable option so what I need is a "cake and eat it too" picture and definitely not this cow on the fence one. Can someone find me one of those, please?