For less than a $1,000 you can launch a viral marketing campaign with the potential to reach thousands of people, if not millions quickly and almost effortlessly.

Take for example the Blendtec Company, a maker of food processors and blenders, who placed a series of YouTube videos called “Will It Blend?” Arising our curiosity and sense of dark humor Blendtec blended golf balls, an iPhone, and even a bag of marbles. It was fascinating to watch a glowing iPhone being reduced to black powder and shredded plastic. In a short matter of time Blendtec logged 8 million visitors while sales increased over 800%. Don’t we just enjoy watching things being destroyed?

Burger King launched an interactive video on their micro website with a man dressed as a chicken. In the message bar you can insert a command and the chicken-man would jump, run, dance, and play dead. You get the picture. People loved the creativity, fun, and sense of control. Within 24 hours the site received 1 million hits and by the end of the week eight million. Not bad for a chicken man.

Down in Orlando Florida, Universal Studios launched a new attraction based on the Harry Potter series. Instead of deploying expensive advertising through mass media, Universal teamed up with the author J.K. Rowling, to give a special webinar to the top seven Harry Potter maven fans. Afterwards, the seven maven fans shared their news on blogs and forums with great energy and enthusiasm. The media picked it up and ran with the story. Meanwhile, Universal setup a micro site for bloggers and the media to ascertain more information on the park’s new attraction. In just a few weeks this viral marketing tactic spread the news from seven people to over 300 Million. Of course, it helps when you have an established base of loyal Harry Potter fans.

TRUST: Content Democratization: We are migrating from push advertising to pull; allowing users greater access, participation, and control based on trust.

In the last ten years both the media and information technology industries have been migrating from a traditional push advertising environment (TV & newspaper ads) to interactive (pull) advertising using interactive content. The days of advertiser content dominance is being transformed into a democratization process whereby quality content is interacted, shared, and rated. The democratization process allows the consumer greater control and influence to recommend products and services to their peers. In the end, it’s creating trust between the buyer and the seller. Trust builds loyalty and repeat business. Trust is the glue that will cement the relationship and it’s done by allowing an interactive participation in the communication and collaboration process. There’s nothing more powerful and trustworthy than when a good friend makes a recommendation.

Using a combination of our imagination and creativity one can use viral marketing tactics within social media channels to capture the attention of millions. Of course, getting their attention is only half the battle. The other half is harder. The real challenge is converting their attention into sales or a call-to-action, and to sustain that effort over a period of time. This is what separates the amateurs from the professionals. As my mom use to say to me, “You get what you pay for.”

SOCIAL MEDIA ECOSYSTEM

Social Media on Web 2.0 is simply the ability to have conversations with people through a variety of communication tools and communities. By nature people are tribal and we seek to converse and share with other like minded people.

According to the 2009 Cone Consumer New Media Study, 62% of users polled believe they can influence business decisions by voicing opinions via new media channels. About a quarter have contributed their point-of-view on an issue (24%) or contacted a company directly (23%). 74% expect companies to join conversations about their corporate responsibility practices happening on new media. MediaPost January 22, 2010

Social media platforms can leverage the collective wisdom of the community to collaborate on a given objective, such as; to increase sales, create content, engage customer feedback, nurture a community, amplify your marketing message, and to develop peer relationships between manufacturer-distributor-retailer-partner-customer. Typically, the social media conversation is uncontrolled, unorganized, nor always on target with the message. Web 2.0 has become a democracy of information usage with a bit of anarchy thrown in.
The power of Web 2.0 allows the individual to spread their conversations or word-of-mouth in multiple formats; image, video, text, and audio. Individuals can leverage their social media communities, such as FaceBook, LinkedIn, Twitter, YouTube, Flickr, MetaCafe, SocialText and a host of others platforms. The most popular social media network activities ranged from posting messages, downloading and uploading music, videos and images. These communities and tools allow photo sharing, videos, communities, blogs, forums, articles, news, entertainment, news, and tutorials. They also allow individuals to use their collective intelligence to collaborate on online projects. The power of these tools is the ability share, create, and product from one-to-many quickly, effortlessly, and seamlessly. Good news can travel fast but with even greater trepidation; bad news can travel at light speed.

SCALING UP VIRAL MARKETING

Scaling up your viral marketing campaign requires an environment of easy access and collaboration. Ross Mayfield, founder of Socialtext, coined the concept of the, “Power Law of Participation.” In it, he describes that social media portals should make it easy to access, to read, and to share content. The intent is to accelerate productivity and creativity by engaging participants to use their collective wisdom in sharing their knowledge and intelligence. It’s a well known fact that the wisdom of the tribe will exceed the wisdom of the individual.

In James Surowiecki’s book, The Wisdom of Crowds: Why the Many Are Smarter Than the Few, the author explained that the collective decisions of the group far exceeds the individual and the added dimension of social internet sites offers a diversity of ideas. It can easily be said the world is our village. We see this today on Wikipedia where a community of people collaborates to create and share its knowledge base.

The new paradigm of Social Media marketing is to embrace the democracy of knowledge, respect the intelligence of your audience, and allow them the ability to participate and ideas going viral and establishing a collective intelligence to enrich creativity and productivity. Here are several suggestions to grease the skids for your viral campaign to generate a higher participation rate.
Make your content access free and easy to share
• Create multiple touch points for others to reach you: website, blog, Microsites, Twitter, FaceBook, LinkedIn, SharePoint, SocialText, and mobile applications.
• Engage and maintain the consumer’s conversations with the goal of closing the loop from the behavior to consider a purchase, to purchase, and finally, to encourage them to make recommendations.
• People want to be understood and recognize. Promote and encourage comments section and recommendations.
• Emotions move us to action. Make it personal. Stories paint pictures and have high retention and share rates.
• Building a community of like minded people can empower greater influence to change events politically, economically, or socially. For example, the Presidential election in 2008 was a milestone in using viral marketing in social media.
VIRAL MARKETING

It’s passion that motivates people to share something new. Think of your passions in politics, sports, religion, cooking, or movie stars. When something stirs your emotions you want to share it immediately.

Viral marketing offers a rapid and almost effortlessly dissemination of an idea (word-of-mouth) from one-to-many by leveraging both internet and communication tools from one person to millions. Think of tribal communication behavior, think of gossip, think of how people when empowered with special news want to share it with their friends and circles of influence. A viral message will spread rapidly when the idea is quickly understood and the person feels empowered to send it to other people. The best viral messages are emotionally charged stimulating the person’s desire of happiness, greed, anger, hatred, and other passionate emotions. Emotionally polarized messages moved quickly. Neutral emotions go nowhere.

To make viral marketing work you need the tools to spread it and the audience to receive it. As was previously mentioned the evolution of Web 2.0 offers great power, intelligence, services, word-of-mouth recommendations, and the delivery of relevant information in real time. Today, Web 2.0 can deliver multiple formats of content quickly, seamlessly, and effortlessly, which is; email, video, photographs, audio, and text messages.

EMOTIONAL AND BEHAVORIAL DRIVERS

Excellent viral marketing will seek common emotional trigger points to motivate a person into action. People like the sense of exclusivity and the power to invite their friends into the club. It makes them feel cool as you were one of the inside people. Other common emotional trigger points can be happiness, humor, anger, envy, pride, or greed.

For example, when EA Games launched their next generation soccer game called FIFA Soccer in 2006, they used tricksters from Toronto’s Ryouko mixed martial arts team to create an amazing video display of stunts and acrobatic feats. Using a combination of traditional and viral marketing, EA leaked the video to selected fans in Europe reaching a peak hit rate of 1.5 million fans.

Social activity and the underlying emotions that drive it are a means to an end, the tools that execute the logic of survival. Status, leadership, power, affiliation, reciprocal altruism, cooperation, sharing of knowledge, trading of goods, pair-bonding, and even aggression are all part of the social environment that help a group work toward that same survival end game.

At the base of this is a powerful drive to connect what is felt. Humans feel a strong need to connect with others to make sense of their world, to not feel lost in a sea of infinite possibilities and to share in mutual benefit. Though the subconscious motivation is survival, the conscious emotions are social.

In trying to take the guess work of anticipating people’s emotion, today we can use behavioral targeting to understand and predict user behavior and purchasing patterns. One way is using Internet software cookies which are placed on the user’s computer to track their behavior on websites to identify their unique tastes and interests. Cookie placement is like giving someone a unique cell phone number. You can analyze where and to whom. You can track when an online advertisement is served, and improve it based on the feedback and relationship you already have. The gathered information is then used to create audience segments, which enable advertisers to make reasonable choices about where to buy advertising space. For example, AOL Advertising offers behavioral targeting plus a host of services that can effectively target your audience with precision and the methodology behind it. Another favorite is AudienceScience which has methodically divided the global audience into many types of segments.

What doesn’t work? Social media is similar to having coffee with a few of your friends in your kitchen. When a man intrudes and announces his big sale at the furniture store its invasive and annoying. No one likes it. Early in the history of FaceBook this is what advertisers did, until they understood the nuances of their target audience. Advertisers discovered that FaceBook users rarely click through ads, but happily participated in events, communities, and causes. Now it’s easy to become a fan of Coke or a gangster in Mafia Wars.

Unlike direct marketing where you can predict a given response rate of 1-3%, viral marketing can be hit or miss. On the positive side, a viral marketing campaign can be done inexpensively. On the negative side, you might have to deploy multiple types and levels in a campaign. You may also have to engage traditional media to seed the viral messages.

Common elements for making a viral marketing campaign to work are:
• Make the content seamless and easy to send or transfer
• The content uses existing internet and telecommunications infrastructure
• Products or services are given away for free
• The content is emotionally charged: Polarized messages will motivate action in people
• The content can easily scale from a few people to millions
BUILDING YOUR VIRAL MARKETING

To be successful in social media and using viral marketing tactics requires the same discipline as any other marketing endeavor.
• Good planning and goal setting
• A commitment for the long run and the patience for campaigns to gain traction
• Ample dedicated resources to sustain conversations and offer a quality level of service.
• Being authentic, transparent, and honest. The end goal is to develop ongoing trust and loyalty.
• Make your touch points intuitive, easy access, and minimal restrictions.
Building your social media viral marketing campaign requires four major segments.
1. Start with the proper planning, messaging, target, audience, and budgets.
2. Build a story with wings to fly.
3. Select the media channels to disseminate your story.
4. Measure and manage user attention and participation.

STEP 1 – PLANNING, GOALS, TARGET AUDIENCE

• Identify and understand the needs and wants of your target audience – put each individual into segments based on actual behavior across the web.
• If your product requires consideration to purchase, then determine the level of research your prospects are doing today on the internet.
• Identify your competition. Determine what websites your target audience has been visiting recently and what draws their interest.
• If you’re going to advertise on other websites, then determine which of those sites are already converting ads into leads in your category.
• Determine which social media sites are attracting your best prospects and understand their behavior.
• Determine the health and reputation of your brand by tuning into relevant blogs, microblogs, and forums.
• On your website run A/B tests to measure messaging and conversion ratio.
• Monitor and measure the prospect’s conversation along the entire communications chain; from emails, live chats, recommendations, and call center. You’ll need strong interactive marketing software tools such as Aprimo, Eloqua, HubSpot, and Omniture.
• Close the conversation loop with your visitors by encouraging them to complete a comments or product recommendation.
• What are your goals?
• Sell something
• Build awareness
• Capture their attention
• Engage them in a conversion
• Call to action
• Retain customers
STEP 2- BUILD A STORY WITH WINGS

Every good viral marketing campaign requires an emotional story that is original or sticky. Video by far is the fastest and easiest tool to spread a story that sticks. In addition, a sustainable campaign will need layers of various components to keep the momentum going. Using the billboard affect, users will give you three to five seconds to receive your message to take action. All the elements of your viral campaign should have these attributes.
• GOOD STORY – You’re a story teller. Stories paint pictures and evoke emotions. Good stories are remembered, original, and begged to be shared.
• When the story catches on be prepared for sequel stories, bloopers, and behind the scene blog. Keep putting the logs on the fire.
• Be sure to have a comments section. Observe it closely. Sharing emotions is acceptable but edit offensive language and insults.
• Your goal is to engage in conversations and eventually a call to action leading to the fulfillment of your goals.
• Keep the conversation personal, for example don’t place barriers between your stars and audience. People want to connect directly to the artist or rock musician.
• EMOTIONAL – It must offer an emotional appeal. The more polarizing the emotion then the greater chance of becoming viral.
• ORIGINAL-Do not be predictable. Be original and creative. Fascinate them. Make them laugh. Make them cry. Can you make them say – wow?
• RELEVANT-The story must be relevant to your target audience. Soccer fans are fascinated with advertisement demonstrating a trickster pro team.
• WINGS–give it the wings to fly whereby the message is designed to be portable, scalable, and shareable.
• DYNAMIC-You need to develop momentum and sustainability. This requires multiple entry points to experience your message such as (video, blogs, TV, print, quality content, and tie-ins). A well done story will demand a sequel, behind the scenes production, bloopers, and interviews.
• CATCHY-You must have a catch to it that hooks people in and there will be reward in the end. Ask yourself, what’s in it for me? Does it entertain? Does it provide great information?

And two don’ts
• Please don’t compel people to forward their emails for viral marketing
• Please don’t use obvious commercials unless they are especially clever, entertaining, or funny.

STEP 3 – DISTRIBUTION CHANNELS

A successful viral campaign will have multiple steps and components. In 2006-7 Microsoft launched a ten month five-step marketing campaign for Halo 3 for the purpose of gaining new gamers and building brand awareness. Step One was an advertisement played on a Monday night football game using an attention getting reenactment of the Halo game. The ad reached 8 million households and another 3.7 million viewers when placed on YouTube. The advertisement triggered Step Two inviting gamers to be beta testers; they acquired 850,000 users. Step Three was a scavenger hunt using a combination of online websites and traditional media channels. Step Four was co-sponsorships with major fast food and beverage companies. Finally, Step Five was an impressive back story reenactment of combat action scenes. Altogether the campaign sold 3 million copies in the first week.

For a viral campaign to be sustainable it will require multiple steps, components and channels to build awareness, capture, engage, and convert your target audience. Naturally, your channels of distribution will be determined by where your target audience shops, researches, and socializes. You can begin to research your target audience at Digital Scientists or Audience Science.

USING FACEBOOK

Today, FaceBook is the fastest growing social media platform and a great starting point to launch a viral marketing campaign. In 2010, Pepsi announced they will not advertise in the Super Bowl. Rather, they will invest their advertising using Social Media platforms. Unlike the one-way push of TV advertising communications, FaceBook and other forms of social media allows you to capture your audience, engage them in a conversation, nurture the relationship, convert them into sales, retain their loyalty, monitor and shepherd their word-of-mouth recommendations, and scale peer approval ratings without restraint.

FaceBook Statistics for early 2010
• There are now 350+ Million users
• 50% perform daily updates
• Less than 1/3 are college students
• 30% of users are just in the U.S.A.
• The fasting growing segment is greater than 35 years old
 
VIRAL MARKETING IN FACEBOOK

The first place to start on FaceBook is to build your own profile and company FaceBook page. Naturally, you want to cross link all of your portals to one another; website, LinkedIn, FaceBook, and Twitter. FaceBook has excellent tools to identify and target you audience down to the granular and local level. Use it. Similar to tribes, FaceBook users with like minded interests will gravitate to stories and events. Always make your content with good quality. You want to be authentic and interactive.

FaceBook requires dedication, creativity, and interactivity. To compete for attention you must constantly provide a steady stream of content, promotions, events, and communications.

As a company you’ll have to define who you are to the market. What’s your brand and personality? Your purpose is not to sell but to inform and share knowledge. Through tacit approval FaceBook users will accept you and be your fan.

Engaging FaceBook users requires a two way conversation or being interactive. Feed them a good story or video to determine if they will click the “LIKE” button. Encourage them to comment. As your level of trust increases with the users, seek to convert their actions using promotions and discounts into joining a website or making a purchase.

Get your FaceBook fans involved in contests and promotions. Make them do things to share photographs or videos. Let them all share in the fun and discovery.

STEP 4 – MANAGE AND MEASURE USER ATTENTION

There’s a scarce commodity called the consumer’s attention. Some call it the “Attention Economy,” whereby a marketplace has developed such that consumers agree to receive services in exchange for their attention. If you want the attention of a consumer, just think of “what’s in it for me?” News feeds are a primary example where they provide a steady stream of current news in exchange that you look at their advertisements. The end game is to prompt a “call-to-action” from the consumer. Since you can never ask directly for a sale, you must provide a steady stream of relevant news, entertainment, knowledge, or tools. By using behavioral targeting tools you’ll be able to steer quality prospects to a call-to-action.
Gaining the attention of the consumer requires three important attributes:

• RELEVANCY – Your information is relevant to your target audience
• CHANNEL DISTRIBUTION – Channel the information through the appropriate social media channels where your target audience is available
• ENDORSEMENTS – Engage your consumers to be your trusted references through sneak preview webinars, product reviews, endorsements, and recommendations.

Once you gained the attention you need to manage, measure, and respond. Today there are many solutions to manage and measure your interactive marketing. These solutions will manage the entire lifecycle of a customer engagement to determine both your campaign’s Return of Investment, and the life time value of your customer. You’re also looking to manage the Consideration Factor. Before a consumer makes a purchase they’ll seek peer reviews and product recommendations. After the consumer makes a purchase they will experience the product and form their own opinions upon which they will cycle back comments for new consumers to review. Some of these companies include Aprimo, Eloqua, HubSpot, Omniture, Based on the 80-20 rule your goal is to seek your most profitable customers and understand the process to achieve these results.

MEASURING CUSTOMER LIFECYCLE

According to the 2009 Cone Consumer New Media Study, consumers are most interested in information that will inform their purchasing decisions. Respondents said they want companies to tell them what is in products and how they are made (85%) and provide additional details about information, labels and claims shared offline (e.g., in the store, on the package, in an advertisement) (83%). MediaPost January 22, 2010

The life cycle of acquiring and retaining customer has a predictable flow. Phase 1 starts with generating Awareness of the product/service through the use of various marketing channels and campaigns. Phase-2 is consideration of the product based on peer evaluations, recommendations, and other social media tools. After the purchase of the product the real heavy lifting begins to ensure the customer’s expectations are met and they have a satisfactory experience. Phase-3 is the formation and sharing the consumer’s experience with the product. Typically there will be three types of customers. (1) Immensely satisfied and willing to share their experience, (2) Satisfied and complacent customers with no passion to share, and (3) the Dissatisfied customer who will tell the world of their terrible experience as they seek to restore their balance in life through retaliation.

As we can see from the illustration, word-of-mouth recommendations are cycled back to the consideration phase for the next customer. It therefore becomes important to manage these word-of-mouth recommendations by ensuring a good experience, observing the results, and responding immediately to damage control.

If we can measure it, then we can manage it. As your campaign reaches your audience you’re looking to measure some key variables to ensure your message is reaching the right target audience, you captured, their attention, engaged them in an interactive process for purchase consideration, convert them into a sale, and finally offer the experience to steer and share their positive opinion. As such you are looking to measure variables such as; Traffic Visits, Click through behavior patterns, Conversion rates, and Source of visitors.

CONCLUSION

As a general rule, we are fearful of things we do not understand. As marketing and advertising professionals, once we embrace the idea of democracy and participation in sharing content to our target audience, we can enjoy the immense surge of collective wisdom and the loyalty of our fans. In building a business it’s expensive to acquire new customers and pointless to have a hole in your bucket when they constantly drain out. Embracing the power of Web 2.0, deploying viral marketing, and using traditional media platforms can give you a full complement of tools to reach a vast audience who are most interested in having a relationship with your organization. By increasing the ease of customer access and participation you’ll be able to build a loyal fan base that can deliver a steady stream of profitable revenue. As many business leaders have discovered, by taking care of your customers first, your profits can be realized.

When a bargain-brand product attacks your premium-brand space, is it still healthy to look over your shoulder? Will you trip over too?

In a robust economy it’s relatively easy to maintain profitable growth of a premium-brand product. Conversely, in today’s economy, the competitive forces are testing the best of us. We are entering a new paradigm of business and the days of conspicuous consumption are quickly receding. Since 2007 over 8 million jobs have been lost. We have chronic unemployment at 10%, or in reality its 17% when you add the people who gave up looking for a job. As fear, insecurity, and the need to be frugal enter the consciousness of consumers, companies are responding by introducing lower price bargain-brand products. What’s a premium-brand to do?

There are three strategies a premium-brand can consider; (1) Introduce your own bargain-brand, (2) Innovate a new value product category (3) Or, maintain status quo. Let’s consider the ramifications of deploying your own Bargain-Brand.

As Jacqueline Kennedy once said, “I don’t react, I respond.”
There’s a saying, “Never fight a pig because you’ll get muddy and the pig will enjoy it.” The same goes for a premium-brand looking to protect its market share against a bargain-brand. Every day we see new bargain airlines, bargain consumer products, bargain cars, bargain food, and bargain electronics. Be careful of the panic reaction when you deploy short term tactics in price discounting and couponing. It may only deplete profits. You can hold the line, but can you afford customers who defect to lower price brands. As Jacqueline Kennedy once said, “I don’t react, I respond.”

Seek your uniqueness
There are no right answers, but a journey of discovery will help determine your strengths, weaknesses, and uniqueness. In a recent book by Dr. Caroline Leaf, called, The Gift In You, this PhD. Researcher discovered there are seven layers of thinking processes in our minds. The seven layers of thinking processes are: Intrapersonal, Interpersonal, Math/Logic, Visual/Spatial, Music, Kinesthetic, and Linguistic. Starting from the most dominant thinking process, when a new thought enters our mind it will loop into the seven layers in a different sequential order. For example, someone who thinks first in music will be able to read between the lines to give meaning to it. While a logic/math dominant thinker performs pattern recognition in huge numbers and reasons in a precise order. We all see the world differently and think differently. We are all unique and so are our companies and the way we collective process our thinking. As such it’s fruitless to be like someone else such as Steve Jobs. None of us can think like him and nor do we want to. We must learn to be ourselves by knowing our uniqueness and using it to your advantage.

Are you an elephant or a cheetah?
As Shakespeare once said, “To thine own self be true.” In other words, do you have the competencies to compete as a Bargain-Brand?

When launching a new product you’ll have to adjust and adapt quickly. Is your company a cheetah that can move quickly and adapt to consumer and market changes? Or, are you a slow moving elephant that makes decisions at a sluggish pace? A slow moving elephant should think twice when competing against fast moving bargain-brand cheetahs.

GM was slow to introduce Saturn to compete against the Japanese, but Intel was quick to respond to constant AMD attacks. At first, Intel’s bargain-brand chips (Celeron) performed poorly, but they responded quickly to the market and beat AMD at their own game.

Will you divide and conquer yourself?
Julius Caesar’s strategy to overcome the enemy was to divide and conquer. When launching a Bargain-Brand, you might be dividing your resources and placing your entire organization into a weak position. Without sufficient resources, people, and focus, both your premium and bargain brand products could become diluted and fail. If the Bargain-Brand fails then you’ll have the added cost and time of cleaning up plus the cost and time to rebuild the Premium-Brand.

It cost GM $15 Billion to launch and maintain the Saturn division. Delta Airlines launched Ted Airlines and lost billions too. These two elephants didn’t understand their uniqueness nor able to response quickly to market changes. Rather they copied the competition thinking that would satisfy the market.

On the other hand, fifty years ago, Anheuser-Busch was facing a low-price assault from regional players which opened up a whole new market category. Anheuser-Busch responded by opening up another company that was completely separate from the parent company; perhaps you’ve heard of Busch Beer.

Are you looking at your customers or just your competition?
The famous basketball coach John Wooden won more college basketball championships than anyone else. Part of his success was to never allow one player to be compared to another. Rather, each player was judged by his own skills, performances, and productivity. Companies trying to copy Bargain-Brands don’t have the same competencies, people, collective thinking processes, and experiences like their competition. Look at Steve Jobs and his string of successful products; iPod, iPhone, iTunes, etc. Therefore, don’t copy your competition, rather seek what is good for the customer and use your uniqueness to develop your product.

Know thy customer
This is a key time to study your customer to determine their true needs and the perceived value of your offering. Advances in Neuromarketing have discovered that traditional marketing research can fall short in truly understanding how a customer receives your message. Each year billions of dollars are spent on traditional market research and still 80% of new product launches fail. Neuromarketing will give you insight on the emotional needs of your audience and how they will perceive your messaging and marketing.

The power of Neuro-marketing starts with the engagement of our seven senses; (1) Taste, (2) Smell, (3) Hearing (4) Touch, (5) Sight, (6) Humor, and (7) Intuition. To make it all work one must understand the power of association that directly impacts our emotional brain and how past experiences are recalled when we encounter a brand experience. Walk into a Whole Foods Store and you’re bombarded with a cornucopia of beautiful food, fresh baked bread, brewed coffee, and desserts turned into art. You’re flooded with emotions of mom, home, security, abundance, and happiness. The experience is frequently joyful and you’re willing to pay premium prices for their products.

The power of association will engage our senses to recall positive experiences that we will tie to the brand. Called somatic markers, they represent a total compilation of emotions, negative associations, and positive associations. When a woman is given a light blue box with a white ribbon, the Tiffany brand and blue color evoke strong feminine emotions. When we think of a well branded produc t, such as, Coke, Coach, Chanel, Harley Davidson and Tiffany, many of us experience an emotional and somewhat sensual positive response. A good brand tied to Neuro-marketing should offer:
• A great experience that exceeds customer’s expectations
• A clarification of the value of the product
• A decision by the prospect to consider purchasing it

How we associate products with past experiences can determine our purchasing considerations. Mr Lindstrom in Buyology highlighted a few examples such as;
• Light blue for a woman can be associated with engagement, marriage, babies, and fertility. Pink is associated with luxury, sensuality, and being feminine.
• Color will increase brand recognition by 80% and represents up to 50% in the decision making process to choose a brand product.
• People will buy more out of love (53%) versus sex (26%).
• Be authentic, transparent, and real. We buy from people we can relate to.

Don’t let your Bargain-Brand cannibalize the profits of your Premium-Brand.
If you decide on launching a Bargain-brand be sure you are capturing the right revenue. If one part of your target audience is not profitable with your premium-brand and your bargain-brand can capture that profit, then go for it. On the other hand, if your Bargain-brand is going to cannibalize your premium-brand profits then reconsider your options.

It’s essential that your bargain-brand have a different perceived value, messaging, and pricing. Years ago Kodak came out with a bargain-brand film that had little distinction from the premium brand. Customers went for the lower price product cannibalizing profits from the premium-brand. On the other hand, when P&G purchased Luv’s Diapers brand, it repositioned it as a bargain-brand. Their Pampers brand was given greater features and advertising thus creating a higher perceived value.

Must Develop a Difference in Perception and Value
If you offer a bargain-brand, then your goal is to offer two products with much separation in value and messaging. You’ll want to consider using Neuromarketing research techniques. It is essential that the premium product maintain its true value benefits while the lower-price brand act and look like a bargain-brand one. By acting like a bargain-brand, you’ll be able to cut costs on marketing, support, operations, and production and thereby creating the gross margin to compete effectively on price. You may want to use a hot button here to connect people to your article on Neuromarketing.

When Anheuser-Busch rolled out Busch Beer they created a whole new company and identity. They invested in new distribution, new trucks, and new sales people to ensure that the Premium-brand and Bargain-brand were not confused but optimized.

Don’t recreate the wheel or build a new organization unless there’s a market for it
GM invested $15 Billion in Saturn and it failed. Is your goal to market a Bargain-Brand or build a new company?

Consider your resources, sales volume, and gross margins. Your goal is to make a profit. If your Premium-brand cannot serve another large market, then a new organization, such as starting up a discount airline division or Busch Beer may be an answer. On the other hand, if your premium-brand can cover the market then re-consider your options. As I mentioned earlier, GM spent $15 Billion on the new Saturn division, when their existing product lines at Buick and Chevy reached the same target audience.

The Final Strategy to Consider: Innovate a new product category
A recent book called Blue Ocean Strategy stated that it is sometimes better to innovate a new product than to compete in blood thirsty waters or Red Ocean. Look at the crowded fields of electronic consumer products, automobiles and food. When you launch a new product in these categories how do you stand out?

Conversely, companies will innovate new products developing a new category where there is no competition; hence Blue Ocean. Years ago Sony launched the Walkman. Apple introduced the iPod and iPhone. An example in Blue Ocean Strategy was the Casella Winery from Australian who wanted to launch a new wine in a very crowded and snooty category.

A strategy based on innovation will look at different customers with shared commonalties. In the crowded wine business, more wineries did not think of looking for low budget beer drinkers. The Casella winery saw things differently and believed beer drinkers would want wine if the purchase decision was made simple and fun. Out came Yellow Tail wine in simple red and white versions.

A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. The innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.

The lesson I learned in the potato sack race was easy, keep your eye on the goal line not what your competition is always doing. John Wooden’s success was doing the best he could possibly do every day. As you consider your premium brand, think about the best you can do every day with it. As any typical SWOT (Strengths, Weaknesses, Opportunities, Threats) and PESTEL analysis (Political, Economic, Social, Technology, Environmental, Legal) you should consider:

Are you an elephant or a cheetah organization?
Will your Bargain –Brand cannibalize your Premium –Brand profits?
Do you have the resources to run two brands simultaneously at a profit?
Are you able to clearly define and communicate the different unique selling proposition for each brand?
Will the customer perceive the differences?
Will your current Premium-Brand cover this market? Or is the Bargain-Brand a new demographic?
Lastly, do you innovate a new product to create a new category and target audience?

As Jacqueline Kennedy once said, “I don’t react, I respond.” Panic and fear should not be part of your tactics, but a well thought out response that optimizes your resources, strengths, and uniqueness in meeting the needs and wants of your customer.

www.marketingscope.net
www.linkedin.com/in/tomdenegre

Two companies, both positioned to market commodity products in highly competitive industries, have realized significant revenue gains by deploying Neuro-marketing in their branding to achieve high name awareness, fan loyalty, premium pricing, and sustainable growth. In this short article, you will understand the basics of Neuro-marketing and how you can immediately make improvements to your branding.

Companies such as AFLAC (American Family and Life Assurance Company) and DuckBrand are using a duck as their mascot as part of their branding strategy. In a recent reported article in the Harvard Business Review (HBR), AFLAC saw their sales doubled in three years after the introduction of their duck in 2003. Almost immediately their name recognition increased to 67%. Brand awareness spending increased from $1 Million in 2003 to $65 Million today. As a result, AFLAC is the personal insurance category leader in Japan with 25% market share representing 70% of their global $16.6 billion revenue. Not bad work for a duck!

We all heard of duct tape. During World War II, The Johnson and Johnson Permacel Division introduced a military green tape to keep ammo boxes waterproof. It was later nicknamed, “Duck Tape,” because it repelled water. After the war the product morphed into a silver tape used in HVAC (Heating Ventilation and Air Conditioning). Duct tape became a commodity product with no customer loyalty or premium pricing.

Fifteen years ago a duct tape manufacturer named DuckBrand engaged a Disney executive who understood the magic in branding to convert a commodity into a branded product. Some of the key lessons learned were;
• Have your product engage as many human senses as possible.
• Develop a character that people will like and accept.
• Develop a story for the product and an exclusive community to join.
• Make the experience a delight and exceed the customer’s expectations with attention to detail.

Duct tape became Duck Tape and a cute duck mascot was adorned on all the packaging and marketing. Duck Tape was packaged to give the perception and tactile feel of higher quality while offering a practical use of stacking and storing. Duck Tape became a new story that quickly gained a higher perceived value and increased market share. No longer a commodity, Duck Tape drew a strong base of fans and most importantly, greater profits. As the fan base grew, DuckBrand challenged their fans to use Duck Tape in new and innovative ways. A club was born. Brand loyalty grew and fans adored the cute duck mascot.

What few people realize is the impact of neuro marketing. Intuitively the Disney executive knew from experience that using the five human senses with a product will engage the customer on multiple levels of emotions, experiences, mental associations with past experiences and values, and the use of the child’s imagination that still lives within us all.

Traditional versus Neuro-marketing Research

In Martin Lindstrom’s book “Buyology”, the author explained that each year $12 Billion is spent on primary marketing research whilet 80% of new products fail. In traditional consumer research surveys, people responded to questions in writing. Since consumers had little awareness and understanding of why they made the purchase, companies did not have the proper information to understand true buying behavior.

By studying people’s brain activity using MRI and other scanning devices, Mr. Lindstrom discovered that 85% of our brain runs on autopilot whereby most people are not aware of their emotions nor how they make decisions accordingly.

By using brain scanning devices it was discovered that different areas of the brain that were stimulated evoke different responses and behavior. Consequentially, if you want an accurate consumer response, then don’t believe what the person states, rather understand how their brain responds.

A brief view of Neuro-marketing

So let’s take a quick look at the brain and how it affects our behavior.

In simplistic terms there are three levels of the brain. First, there’s the largest section called the frontal cortex which handles matters such as reasoning, philosophy, math, and other high levels of thought. I’ll call him Mr. Spock for he is all reason and no passion.

The second level of the brain is the limbic system which is the seat of our emotions which I’ll call Doctor McCoy (remember Star Trek), where we find love, joy, peace, confidence, hope, anger, bitterness, and hatred. When our reasons and thoughts of the frontal cortex are merged with the emotions of the limbic brain then we solidify beliefs, loyalty, faith, and devotion, etc.

Lastly, near the base on the brain is our reptilian brain that runs most of our body functions on autopilot. It’s also the center of our self-preservation where the raw and powerful emotions of fear and sex reside. When we identify danger, our reptilian brain will take over and will either do one of three things; fight, flee, or freeze. Or, when it’s stimulated sexually, it will lust for its mate. The reptilian brain forms the basis that drives self-preservation. Many times self-preservation is driven by fear; sometimes it’s the fear of not having enough; called greed. Take a look at fallen companies such as Enron, whereby the best and brightest of the executive team was obsessively (fear and greed) driven by meeting quarterly profits. It’s amazing to see how the primitive reptilian brain took over the power frontal cortex to take down a powerful company.

Here’s an important rule of thumb. The greater the emotional stimuli to the brain (fear or lust), then the more likely that the lower part of the brain will take over. For example, when a lion is chasing you, you don’t have time to smell the roses. Fear takes over.

Understanding fear can work for you. For example, it’s difficult to sell to a prospect when they feel everything is okay and it’s more fearful to change the status quo. However, when properly motivated and reasoned, a prospect can realize that there’s greater fear in remaining status quo. To paraphrase an old movie quote from The Godfather, “you need to make them an offer they can’t refuse.”

The Power of Association in Neuro-marketing

The power of Neuro-marketing starts with the engagement of our seven senses; (1) Taste, (2) Smell, (3) Hearing (4) Touch, (5) Sight, (6) Humor, and (7) Intuition. To make it all work one must understand the power of association that directly impacts our emotional brain and how past experiences are recalled when we encounter a brand experience. Walk into a Whole Foods Store and you’re bombarded with a cornucopia of beautiful food, fresh baked bread, brewed coffee, and desserts turned into art. You’re flooded with emotions of mom, home, security, abundance, and happiness. The experience is frequently joyful and you’re willing to pay premium prices for their products.

The power of association will engage our senses to recall positive experiences that we will tie to the brand. Called somatic markers, they represent a total compilation of emotions, negative associations, and positive associations. When a woman is given a light blue box with a white ribbon, the Tiffany brand and blue color evoke strong feminine emotions. When we think of a well branded produc t, such as, Coke, Coach, Chanel, Harley Davidson and Tiffany, many of us experience an emotional and somewhat sensual positive response. A good brand tied to Neuro-marketing should offer:
• A great experience that exceeds customer’s expectations
• A clarification of the value of the product
• A decision by the prospect to consider purchasing it

How we associate products with past experiences can determine our purchasing considerations. Mr Lindstrom in Buyology highlighted a few examples such as;
• Light blue for a woman can be associated with engagement, marriage, babies, and fertility. Pink is associated with luxury, sensuality, and being feminine.
• Color will increase brand recognition by 80% and represents up to 50% in the decision making process to choose a brand product.
• People will buy more out of love (53%) versus sex (26%).
• Be authentic, transparent, and real. We buy from people we can relate to.

The sense of smell is one of the strongest and most motivating senses. One whiff will immediately stimulate both the limbic and reptilian brains. How many times have we walked into a store smelling fresh baked bread making us hungry? Like Pavlov’s dog we respond immediately without thinking. Mr. Lindstrom explained that in Samsung stores, they discretely aerate the store with honey dew melon that invokes the sense of relaxation while lowering your purchasing tolerance. Clever!

Ever notice how people like the sense of belonging to an exclusive group? It offers a sense of security and comfort which can create a sense of mission. We can think of Harley Davidson, Apple, and fans of music rock groups. Other examples include an exclusive offer to join the millionaire’s poker club at Harrah’s in Las Vegas; at DuckBrand, loyal fans can join the “Duck Tape Club” and share their stories of DuckTape innovations and fun adventures.

What lessons can we take to make our branding and marketing more effective?

By knowing your target audience, its needs and wants, develop your brand to engage as much of the human senses as possible. Brands can develop a higher appeal and bond us emotionally when we can identify with them. Personalizing your brands with a mascot can add depth, character, and appeal to our childhood imaginations. We prefer to buy from someone we like and we all like the duck at AFLAC, Snoopy at MetLife, Mickey Mouse, and all the others. By nature people are tribal and want to belong to the community. Like the “Duck Tape Club” think of ways for your fans to become involved with a brand that is surprising, exciting, and engaging.

Here are a few other take-aways to build your brand.

Using Neuro-marketing in your Branding
• Clearly define your key target audiences and learn about them and their lives.
• Engage as many of the human senses in your brand to stimulate both the areas of thought and emotions together.
• Make your brand personal and engaging. Give it a story and a personality that your target audience can identify.
• For a significant product launch consider using a Neuro-marketing agency for accurate responses.
• Consider the way your brand will invoke past associations to common human experiences.
• Create unique experiences, somewhat based on your products and services, that let people experience your brand as often as possible, throughout their lives. These experiences should also be accompanied with branded visuals, descriptive vocabulary and cool memorabilia.
• Your messaging and branding go hand in hand. Let your words create images and stories in people’s minds.
• Use the Power of WOW. Surprise is a story-inspiring emotion. It demands to be shared. How could you add surprise to your marketing mix?

Branding and Communications
• Keep your messaging simple and deliver a vision for an extraordinary experience that would make people believe in the magic.
• Clearly determine your brand experience. Is it bringing magic into people’s lives? It must have emotion and feeling!
• Remember the essence of a brand, especially a corporate brand, is the communication of the company’s positive and unique attributes expressed through the company’s” personality” to significant stakeholders.
• Messaging – using words and graphics and any other sensory stimuli available – is the verb used to convey the action of developing the integrated communication of brand. It is also the process of crystallizing the essence of the brand, of developing the “brand story” and expressing it uniquely
• People want to escape and find happiness. Disney offers a journey into the imagination of children turned real. They pay close attention to details and ensure the brand experience will exceed most expectations.

Sometimes it pays to be a duck or a mouse!

By working for a $350 million publishing company earning 35% net profits, I learned as a publisher the value of being customer centric.

As a magazine publisher I learned very quickly that I had a finite amount of customers and if I didn’t hold onto to them I could never grow the business. Customer service became paramount to our business. We became evangelists in customer service and even when our magazine produced poor results, our customers’ loyalty gave us the benefit of the doubt. Consequentially, our customer retention rate always exceeded 95%. We grew and our net profits exceeded 35%.

Each market had a fixed amount of large customers and it took years for new ones to appear. I use to tell my sales people that our market was similar to a high school class where everyone knew one another and word spread quickly; especially bad news. When we lost a customer based on poor results or service it could take years or a new customer replacement to get the account back. Today this experience has been translated into word of mouth dissemination on the internet. We see it every day in Amazon book recommendations, hotel and restaurant reviews.

Fortune 1000 companies have recently re-discovered that a strategy based on customer service versus building share holder value increases profits, whereby a long term strategy based on product value and customer service will yield sustainable growth and profits. Here are a few lessons I learned along the way of building successful magazines in multiple cities.

1. Customers are the dog (so to speak) profits are the tail. You are in business because you offer value to a person his/her organization. You have a relationship with a person; not a clientele or market share. Develop a process and mechanism to build and manage your customer relationships. If I can manage several thousand relationships before the internet, now you can manage more with the internet and interactive software tools.

2. We sell and market to people. People are emotional beings with a layer of rationality. People buy emotionally first and then justify the decision rationally.

3. Word of mouth is a key component to growth or death. The internet today offers your customers forums, blogs, product recommendations, and other community. Develop mechanisms to capture word of mouth and respond accordingly. Always respond ASAP to bad feedback. People will appreciate your understanding, respect, and response.

4. As Jacqueline Kennedy once said, “I never react, I respond.” When negative events occur, fear and reaction are your enemy. Think it through. Understand the other person’s position. Respond with understanding and empathy. Be in control.

5. There are three types of customers. (1) Raving fans, (2) Quiet satisfied customers, (3) Militant dissatisfied customers. Develop scoring profiles to monitor, manage, and respond to these types of customers. Always respond quickly to militant dissatisfied customers. They will inflict much harm if not appeased. Encourage your raving fans to say more about your products in other internet communities to spread the good word. Lastly, maintain vigilant customer service to keep the other customers satisfied.

6. Deploy internet interactive marketing tools to engage the customer and build a relationship. Take a look at companies such as Eloqua, Hubspot, and Aprimo who can offer a view of the customer from beginning to end.

7. Use loyalty or club cards to track customer store visits, purchases, local tastes, how they paid, and respond with one-on-one marketing offers. This requires interactive marketing tools and drip marketing tactics.

8. Monitor customer buying behavior. For example, when an American Express customer buys an airline ticket for the first time, AMEX will send an offer for a Platinum level card.

9. Leverage partner relationships with key buying behavior. When customers make significant life time purchases (home purchase), send offers via your partners. (i.e. furniture and carpet vendors). Or, when an insurance company sees a customer’s spouse pass away they’ll offer customized products.

10. Companies will grow if they can manage their leaking buckets. Consider making Customer Service a C-level position to capture the resources to maintain and grow the customer base. It’s far easier and cheaper to sell to the choir than poaching new accounts. Capture customer data and learn to offer customized products and services.

11. Migrate customers from entry level products to more profitable ones. In the B2C world, business leaders learn quickly that building customer value is more profitable than brand loyalty. It’s about building customer lifetime value versus brands that come and go.

12. All companies should be maximizing the value of their CRM Systems (Customers Relationship Management such as Salesforce, Siebel, Oracle, IBM, Microsoft, Amdocs, and SAP). Usually it’s the IT or sales department that controls the CRM. In B2C enterprises marketing should be given control to manage the entire customer lifecycle. Marketing, sales, and customer service should have one view to cultivate and build profitable customer lifetime value.

13. Nokia has 60% market share of the cell phone market. New bells and whistles are not the key. It’s understanding customer’s perception of value and usage. In short, it’s a myth to say “Build it and they will come.” Rather, engage both product development and developer communities to invite all ideas to collaborate new product offerings.

14. Measure. Manage. Measure. Capture and measure customer behavior and feedback. Learn to be ahead of the curve versus always reacting.

15. Measure and manage long term customer value. Don’t sacrifice short term sales versus the value of a long term customer value.

16. Avoid the pitfalls of competing for market share as you’ll start mimicking your customers and lose your identity and market differentiation. Rather be different and maintain your competitive difference which offers the value your customers enjoy. There’s a reason why Apple is profitable and PC laptops are commodities.

17. The Sigmoid curve preaches creative destruction. All products and organisms have their lifecycle of seeding, nurturing, growing, maturing, and declining. Learn the art of creative destruction and be your own best competitor.

18. Finally you’ll need new views on measuring success. It’s customer profitability replacing product profitability. It’s Customer Lifetime Value replacing current sales. It’s Customer Equity replacing brand equity. Lastly, it’s Customer Equity Share replacing market share.

By Thomas Denegre

http://www.tdenegre.com