Monthly Archives: December 2009

managing, pitching, social media-ising, social networking

Live Pitching and the Economics of Free: the genius, tragedy and slippery slope of Toyota Yaris’ social media pitch

so you're a car brand that's after a social media agency.  what to do?  hold a pitch of course.  but rather than waste time getting lots of agencies into your office and getting them to pitch their ideas with some creds and test out the chemistry, why not just get them to do the work and put it out there in the real world.  see which ideas work the best and appoint that agency.  my favourite – for the record – is Iris' effort above.

genius…

you get to see how real ideas work in the real world – the most important metrics are how ideas actually translate into buzz and conversations, you get to measure these live in real time.  there's no or minimal media budget and production costs are low, so for not a load of investment you get a load of exposure.  you get feedback thru comments and posts, not from a focus group paid to tell you what they think you want them to think, but from real people fitting your brand into their busy lives.

its a genuinely innovative, real and interesting approach to take in both developing work for a brand and for establishing with which agencies you would like to work.  you get to judge agencies on what they produce, not what they promise.  our industry is the better for it.

tragedy…

its an irrelevance that each of the pitching agencies was given $15,000 to produce and deploy their work.  the fact is that this approach undermines the two most precious commodities in our industry; ideas and people.  you ask people to come up with ideas for free; OK, that's the nature of a pitch.  but then you ask them to create and deploy those ideas for free; in ways that will build and grow your brand, for free.

you may very well get an architect to pitch a building design for
free, you wouldn't get them to build you one gratis.  I could pitch a
movie idea to a Hollywood executive but I'd have to explain that I'd be
hard-pressed to make it for free.  I might choose a restaurant based on
its menu, but I wouldn't expect a chef to make my a meal for free (nb
I'd have a boyfriend for that).  in each case asking for product for free undermines the professionalism, expertise and product of the individuals that create it.

there's a strong counter argument to this – one which I am very much aware that I have made in the past – that people (who don't work in planning, advertising, ideas or comms agencies) are out there creating and deploying stuff on your behalf.  and that not only should brands acknowledge that but they should actively encourage it.  in fact there's an interesting model which is that everyone works on a project basis and ideas live or die on their own merit.  payment by performance taken to the logical extreme.

but the slippery slope is clear.  there's a conflict between the academic theory of the evolution of media and communications, and the agency model that underpins much of the work upon which brands – and brand equity – is built.  in the near future, agencies will all have to get used to and embrace the fact that our agency ideas increasingly exist in an ecology with others that came from somewhere – anywhere, everywhere – else.  but in that future we have to ensure that we nurture the people and ideas upon which brands in that future will be built.

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CRM-ing, data planning, IPA|ED:final - existing customers, researching, targeting

Doing and Saying: what a WOM study from HBR can tell us about understanding customer groups

HBR_WOM_formulas_v3 formulas for calculating CLV and CRV: copyright of Harvard Business Review / V. Kumar, J.Andrew Petersen, and Robert P.Leone

the joy above are two formulas, developed for an article by V. Kumar, J.Andrew Petersen, and Robert P.Leone published in the Harvard Business Review entitled How Valuable is Word of Mouth?  Mediation is a big fan of planning and incorporating WOM – in a structured way – into brand strategies, and have written a fair bit about it on this blog, so was more than a little happy when Mark H and Guy C sent me the above article.

the awesomeness of the above formulas get the authors to a place where they can compare CLV (Customer Lifetime Value) with CRV (Customer Referral Value), and something really interesting happens – there's no direct correlation.  it doesn't – I don't think – occur to planners often enough that those groups of customers who are valuable because they buy the most are not necessarily the some groups of customers who are valuable because they talk about a brand the most.

so on the basis that CLV added to CRV is not a good predictor of overall customer value, the authors develop and propose a rather useful matrix of low buying / low advocacy bottom left to high buying / high advocacy top right (with the obvious skews top left and bottom right).

…by splitting customer segments out in this way you get a very clear and potentially dual role for a strategy and schedule…  what's the plan (if any) for getting less vocal customers who buy a lot to talk more about your brand?  versus the plan (if any) for getting the less frequent purchasers but most vocal groups of your customers to buy more of what you're selling?

data, data, data … getting it and more specifically understanding and using it to illuminate what's going on in and across brands' customer bases.  better strategies, better plans and better schedules.  what's not to love.  you can get a copy of the report at HBR Reprints.

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