5 Common Habits of Successful Retailers in a Recessionary Economy

As we move into Holiday of 2008 during a recession, what will separate the successful retailers from those that struggle or go out of business?

I'm going to group retail brands into two categories although they don't all fit cleanly this way. Retailers that sell:

1. Products/services we want
2. Products/services we need

In times of economic uncertainty consumers often heavily reduce spending on the products/services we want category and trim back to a lesser or greater extent on the "need" category. However, there are common habits of successful retailers from both categories even when sailing into a stiff economic headwind.

These common habits include:

1. Strong value proposition for a "best" customer segment that is sufficiently large enough to create economic prosperity for the company. Be focused.
2. The ability to introduce new and relevant products/services that are affordable and "low" risk. We know consumers want to take fewer risks when they are worried about their job and 401K but do we offer lower risk products. Reduce risk.
3. Trigger marketing programs that will allow customers to provide clues on their needs and the company has the communications infrastructure to engage the customer based on those triggers (this could be lack of activity that signals the customer may churn or recent activity that suggests the customer may have additional unmet needs). React to their triggers.
4. The ability to actively "listen" to customers and quickly meet their needs. This could be through formal guest loyalty research or by using online tools to dial into what the most passionate participants are discussing online either on your site or in a forum that attracts other similar consumers. Listen and participate.
5. A nimble structure to move quickly and apply the learnings to ensure the value is delivered in a timely manner. Move fast.

Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

How Could The Kansas City Star Reinvent Itself?

Dear Editor,





Your paper is struggling. Not for lack of talent. Not for lack of cost savings measures. Sure the economic headwinds are having a significant impact but that's just exposing the underlying problems you face and have faced.


There are two major reasons The Kansas City Star has struggled beyond the economy:

1. You aren't able to easily allow advertisers to measure the ROI of their investment



2. You haven't asked the fundamental question -- what would the business model look like if the "paper" was delivered electronically without a printed version coming at 5am to my doorstep?

Imagine that.

The Star would need an economic model that allows the "paper" to provide local news and information electronically on a daily (or more frequent basis). The elimination of printing and delivery of the paper saves a lot of trees and gasoline -- Think Green.

How would you attract advertisers? subscribers? Could you find a way to make this more valuable than the printed paper? Would you be able to enlist "I reporters"?

Fun stuff to think about as we head into Thanksgiving.

Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

5 Tips to Make Your Blog Relevant

I was recently speaking with Michael Gass, a leader in effective blogging. Michael had five suggestions to keep your blog relevant and fresh.

5 Ways to Improve Your Blogging Efforts:

1. Have a target audience in mind when you begin.


2. Provide helpful information that is a rich resource for target audience’s marketing, advertising challenges.


3. Develop a strategy for your writing and write to specific categories.


4. Write often to keep your audience coming back for more. 5 to 7 post per week is a good standard.


5. Write with SEO in mind so that your target audience will be able to find your material.

Perhaps you have other suggestions. Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

7 Ways to Drive Value For Your Brand Online

As the digital marketspace continues to evolve, here are seven things you can do to ensure you are creating extra-ordinary value:

1. Utilize search engine marketing effectively
2. Develop "fresh" content including both user generated and brand generated
3. Participate in the social media that your brand fans are utilizing
4. Ensure that your site is SEO friendly
5. Learn to be an authority in usability/user experience
6. Measure, analyze and refine your efforts in real-time (data and insights are critical)
7. You need to give control to your brand fans and respect their power

Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

Club Libby Lu & The Five Pillars of Retailing

Saks, Inc. announced that they were closing the Club Libby Lu chain. At an earlier point in my career, I worked on a team with Mary Drolet, founder of Club Libby Lu.



Why did Club Libby Lu fail?
What are the five pillars of retail success?

Sure the economic headwinds of 2008 were very difficult. The company didn't close due to a recent drop in the U.S. stock market.

Club Libby Lu closed because there was no buyer for the business, the brand didn't create a strong value for their core users and Saks obviously didn't think it was a viable business model.



I work off a premise that there are FIVE PILLARS OF RETAIL SUCCESS. Truly strong brands that create EBITDA for shareholders and passion with their fan base understand that by dominating one of the five pillars they are able to deliver extra-ordinary value. Those five pillars are:

1. Customer Service


2. Price


3. Convenience


4. Product Innovation


5. Overall Experience

Typically, a strong brand can enjoy success against one pillar. By dominating one pillar, the brand will mitigate the opportunity for a competitor to flank them using the same pillar as their core strategy. Let's think about successful brand examples for each of the five pillars above:

1. Customer Service -- Men's Wearhouse, Enterprise Rent-A-Car


2. Price - Wal-Mart, Costco


3. Convenience - Quiktrip, Amazon.com, Walgreens


4. Product Innovation --Three Dog Bakery, Apple & NIKE retail stores


5. Overall Experience --Build-A-Bear Workshop, Disney

The challenge for a brand like Club Libby Lu is multi-faceted:

1. Club Libby Lu operates two store concepts (one is an 1100 square foot store and the other is a store within a Department store)


2. Club Libby Lu is owned by a corporate parent Saks, Inc. (symbol is SKS) that is publicly owned and needed to focus on driving sales and EBITDA in the core business not this small chain they acquired years ago


3. Club Libby Lu tried to offer both Product Innovation & Overall Experience but didn't have the retail footprint to deliver on the Overall Experience value proposition. Trying to deliver on more than one pillar is challenging.


4. Club Libby Lu enjoyed some success in 2007 when I worked on the business but they were largely riding the success of a partnership and the strength of those brands -- Hannah Montana and Disney. Unfortunately, Club Libby Lu didn't own either of these properties and didn't control the partnership relationship.


5. The innovation that created Club Libby Lu initially was not something that was consistently repeatable or scalable. There was a Big Bang wonderful idea created by the founder, Mary Drolet, but not the necessary follow up innovation that would deliver enough value to cause a guest to return and recommend the brand to their friends.

Ultimately, the market place has spoken.

Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

Three Ideas To Reduce Churn

We were working with a global client recently -- a successful brand that lost nearly as many customers as they gain in a typical year.





Their challenge wasn't that they weren't gaining customers. In fact, they gain many thousands of customers annually. The challenge was:





They had a shallow, transactional relationship with their customers.





A transactional relationship means they provided the service the customer wanted but offered no added value opportunities to engage the customer beyond the quid pro quo of the purchase.





Three ways a company can avoid this problem:


a) identify high value added services that the customer may want


b) surprise and delight the customer after they have made their initial purchase. A customer isn't "really" a loyal customer just because they've made a few purchases


c) find the triggers that cause loyal customers to stay and what are the missed triggers that cause other customers to leave

Feel free to provide examples of each of the items a through b above and we'll use them in future blog posts.



Jeff Fromm

jfromm@adamson-usa.com

14 Tips For Active Listening

After talking with my collegeau Geoff Pickering (Digital Czar) and evaluating some "next" practices (as opposed to best practices), the following are 14 practical tips to leverage information from listening to consumer conversations:

1. Track and retool the launch … before the product hits the shelves



2. Ignite your Web site or corporate blog.



3. Prime your search engine. Building on this, most brand search engines, especially in the consumer-packaged goods (CPG) category, fail to integrate topics or issues that show up in external consumer conversation



4. Add precision to search engine ad buys. Half the game in buying targeted ads on search engines is to figure out what's relevant, hot, and timely in the long tail of consumer curiosity and conversation.



5. Reprimand, reward, or re-script the call center. A very high percentage of visible CGM directly implicates call-center or feedback collection processes. Call center scripts, FAQs, and e-mail feedback forms are often hopelessly out of touch with consumer discussion and expectations.



6. Tweak your messaging. We recently completed a study for a client suggesting consumers are most viral when they feel betrayed over false ad claims. Use CGM to tweak and optimize messaging to ensure your brand isn't over-positioning, over-promising, or making itself vulnerable to public attack.



7. Focus the focus group. CGM is constantly turning up issues market research doesn't probe or explore in traditional focus groups or studies. Take the key findings from how consumers really talk and make sure your half-million dollar research study isn't missing the obvious.



8. Slap or stroke the supplier. CGM is like a pool of gold stars or black marks to put on the foreheads of suppliers, vendors, or agencies that, through their work, catalyze positive or negative conversation or word of mouth.



9. Use CGM as part of your evaluation process. If the rebate program backfires, package the CGM for reprimanding whoever executed that program.



10. Slice your sponsorship fees. Sponsorships can be really expensive. A spokesperson may cost millions per year to endorse or use your product. Consumers never miss a detail in the CGM space, so use their due diligence on the background or traction of a spokesperson to strengthen your own negotiation leverage. Shoot for saving 10-15 percent off the base.



11. Retool the profiling. Almost all big brand survey or feedback forms fail to profile by influence or depth of "virality." And yet they ask every other demographic question under the sun.



12. Use CGM to motivate the folks designing the surveys to reengineer the questionnaire to better flag the Jeff Jarvis's out there. Are they active online? Where? Do they blog? How often?



13. Scrutinize the spend. Brands waste money all the time. Most new ad models are largely unproven, and CGM analysis is a great way to vet out what's working and what's not based on the buzz's volume, tenor, and virality. Think twice about spending big bucks on sponsorships, or other high-priced events if nobody talks about them.



14. Track your competitors. Consumers are the very best source of competitive intelligence. If your competitor is screwing it up or doing something fabulously well, organize it, package it, and send it everyone in the organization who's losing sleep over their next move.http://www.clickz.com/showPage.html?page=3560271

Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

Reinvent The Franchise Business Model

I have several current and past clients that want to build their brand and increase their retail footprint through franchising.

Of course, there are traditional methods to generate leads:

1. Hire a reputable franchise business broker to help the company
2. Generate positive buzz and media coverage about the brand
3. Advertise offline and online in key verticals
4. Utilize SEM to generate qualified leads
5. Attend franchising shows and events

Is there an alternative to the traditional franchise methods? Yes!

What if our current franchisees were so highly and completely satisfied with the business model and corporate support that they were our best sales agents to prospective franchisees? They constantly talked about the brand in their stores, on their blogs and to their friends.

What if current franchisees earned a modest fee for helping to train the new franchisees to operate their new franchise? Current franchisees could give the "newbies" the inside scoop to quickly learn the ropes.

Is this a game changing way to reward our current franchisees, increase the company's retail footprint and provide "street smart" thinking to the new franchise owners.

Feel free to add your comments.

Jeff Fromm
jfromm@adamson-usa.com

Map & Define Your Customer Journey in 5 Easy Steps

We all want more and "better" customers. This is a snapshot of the five key steps you need to wrestle with to achieve that goal.

1. Customer Definition:
Who are your best customers/prospects?

2. Experience Mapping:
What is the customers' current experience?

3. Moments of Truth:
What touchpoints most impact success?

4. Experience Design:
How can I make their experience exceptional?

5. Experience Monitor:
Are we delivering the desired experience?

This approach involves applied research, business/marketing creativity and then measurement to ensure you are listening to the participants and continually meeting their needs.

For a more detailed view of these five steps please be in touch.

Jeff Fromm
jfromm@adamson-usa.com

Brand Velocity is Needed to Reach Customers

Would you rather have a customer that spends $100/week but doesn't tell their friends about your brand or a customer that spends $70/week and tells all their friends about the wonders of your brand?

Obviously having the customer that only spends $70 per week but becomes your brand evangelist is worth more. THIS IS WHAT PROPELS A BRAND AND GIVES IT VELOCITY.

Defining brand velocity is critical:

Velocity = (Reach X "Passionate Participants") Less Churn.

Creating brand velocity is more difficult. You have to discover that magic bullet that will give your brand velocity. Below are three ways to discover your brands' velocity.

1. Listen to the conversation in blogs about the key topic that is impacting your customers.

2. Observe how your customers are behaving while they use your product/service.

3. Ask your customers if they would recommend your brand to a friend and listen to find out why or why not.

Feel free to comment.

Jeff Fromm

jfromm@adamson-usa.com

Five Top Digital Marketing Observations

Having just returned from the stimulating Ad Tech digital marketing conference (http://www.ad-tech.com/ny) in New York City November 4- 6, 2008, here are five observations:

1. All of the digital marketing rules are going to continue to change.
2. Metrics like click through rate are irrelevant.
3. Innovation and content will be king. That content may be user generated or brand generated but great content is just that.
4. Importantly for marketers, the consumer, or as we say "participant," is firmly in charge.
5. REACH, RELEVANCE & ENGAGEMENT are the big three circles that we all know are critical. Finding the intersection of all three and setting up "listening posts" will determine the next generation of big winners.

As you think about your business and brand growth opportunties, think about giving up control to gain more participation with passionate participants ("consumers"). Enabling their participation then listening to the conversation will fuel your innovation and brand velocity.

Want a concrete example? Barack Obama. Doesn't matter if you voted Republican or Democrate. Obama understands how to find the intersection of reach, relevance and engagement in order to tap into passion.

Jeff Fromm
jfromm@adamson-usa.com