The Consumer Matters is the blog of Leslie Grandy, aka Gearhead Gal.  My passion is creating and delivering compelling products that delight customers through simple and elegant user experience design.

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Entries in marketing (12)

Sunday
Apr152012

Guest Post: How Luxury Brands Can Prepare for Affluent Millennials

This guest post is written by Lior Levin, a marketing consultant for a company that provides a to do list app for businesses and individuals, and who also consults for an inspection company that offers various Pre shipment inspections in China.


Millennials, meaning those between the ages of 18 and 29, are easily the fastest-growing market for luxury goods. Not only did they spend 31% more on such goods in 2011 than they did just one year prior, but due to their age, they have the potential to continue that growth for a lot longer than their older counterparts.

Clearly, Millennials are going to be a core target for luxury brands, however, they also pose an interesting set of challenges. Simply put, Millennials don’t buy luxury products in the same way as baby boomers or other generations nor do they value the same things in a luxury brand.

If luxury brands are going to appeal to Millennials, they need to start thinking about how to shift their marketing and their message to prepare for a very different type of consumer with very different wants and needs.

Luxury Alone is Not Enough

One of the biggest differences between Millennials and boomers is that, for Millennials, saying that a brand is a luxury and pricing it accordingly is not enough to convince them to buy.

Previously, buying a luxury good was as much about showcasing wealth as it was buying a superior product. Simply pricing something higher and marketing it as exclusive was enough to get most luxury buyers in the door. However, Millennials want to know what they are getting for the extra amount they are paying and how it will benefit them.

A recent study by Luxury Society found that shoppers favored quality, craftsmanship and design over brand name when promoting a luxury brand, making these elements key to showcase in any promotion.

If you can’t convey clearly why your brand is worth more than cheaper alternatives, Millennials will not be likely to spend their money with you. They simply feel no need to show off their wealth and will gladly buy a cheaper product if they feel it’s of the same quality and meets the same needs.

The Human Element

Luxury brands that do well with Millennials, such as Whole Foods, do so in large part because they focus on the human element of selling and marketing.

This includes both telling the story behind their brand and their products (including how and where it was made and who made it), but also treating the customer with respect and looking out for their best interests beyond merely trying to get the next sale.

Whole Foods stores tend to be warm and inviting places, Apple Stores tend to have legions of well-trained staff, and they do so not to ensure that they maximize sales, but to provide the best customer experience possible.

However, this appeal comes at price. Whole Foods doesn’t carry a lot of high-margin brands that don’t fit with their image and Apple Stores tend to have a lot of wasted floor space. But like all human connections, it’s a matter of give and take. The brands that give more to their customers will find them more willing to buy from them.

Brands that have thrived on being exclusive and unapproachable are going to have to change their customer-facing operations to better appeal to younger consumers that seek out a more human connection with what they buy.

The Use of Technology

Obviously, Millennials are much more comfortable with and eager to use technology than their older counterparts. Millennials grew up in a post-Internet age, and they expect the brands they buy, especially luxury ones, to be tech-savvy as well.

This use of technology isn’t just about how brands promote to customers, such as with online campaigns or high-tech in-store displays, but also about how they communicate and maintain contact with them. Email newsletters, text alerts, live chats and even video conferencing are just some of the ways brands can keep in touch with customers or have their customers contact them.

Luxury brands need to be where their customers are, and this means online, on social media and on mobile devices. This not only increases convenience for the customer, bringing the brand to them rather than the other way around, but it helps keep the name relevant and modern, two things Millennials value.

If a brand can’t stay current, it’s likely to be left behind and forgotten by younger customers.

All in all, Millennials are far more demanding of luxury brands, and they don’t necessarily reward the brands that they do purchase with an increased amount of brand loyalty. Millennials, as a group, tend to enjoy exploring and trying new things, even if it means leaving behind a brand that worked hard to get them as a customer.

Turning Millennials into customers isn’t going to be a matter of creating an exclusive group and daring them to join. Even the wealthiest Millennials don’t feel the need to flaunt their wealth or be a part of a “club”.

Millennials want facts to back up their purchases, a real human connection with the company they’re buying from and to have access to their brand wherever they are and whenever they want to.

Providing that is going to mean making a major shift for many luxury brands but those that can do that, such as Apple, will be able to ride the wave of the fastest-growing and, most likely, longest-lasting growth segment for luxury goods.

Those that don’t, such as Cadillac, will likely find themselves being viewed as antiquated and struggling to reach a younger audience as their current target market ages.

Saturday
Jun252011

Will.i.am on Thinking Inside the Box at CM Summit

How does an artist like Will.i.am from the Black Eyed Peas take on a role at corporate technology giant, Intel, and maintain his personal brand as an innovative businessman? Oddly, he doesn't recommend thinking outside of the box.

Thursday
Oct282010

US Army Soldiers Blog And Tell - And The Brass Encourages It!

This post first appeared on Technorati.com

As part of a campaign in the mid 1940’s to educate soldiers and their families on the perils of too much information sharing during wartime, the military issued communication guidelines for writing letters home, while public service ads proclaimed, “Loose Lips Sink Ships.”

With the reputation for non-disclosure that the US military has, it’s somewhat unexpected that the US Army represented one of the biggest brands exhibiting at BlogWorld & New Media Expo this month. But the US Army appears to have leap-frogged many familiar brands in corporate America by embracing user-generated content as a way to connect with and convert potential customers.
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How did it come to be that the US Army designed a blog, Armystrongstories.com, to actually encourage soldiers to tell their stories? According to Lieutenant Colonel Andre Dean, Chief of Strategic Communications for the US Army Accessions Command, which is responsible for recruitment, it was possible because of the vision of one very savvy Lieutenant General who knows a little something about taking risks.

General Freakley serves as the Commanding General for the U.S. Army Accessions Command and Senior Commander of Fort Knox. The General has served the Army for almost 35 years at every level of command from platoon leader through division commander. He has led Soldiers in combat three times, serving in Operation Desert Storm, Operation Iraqi Freedom, and Operation Enduring Freedom (Afghanistan). So, what kind of risk could conversational media present to a guy like this?

General Freakley did have to get an exception to Department of Defense policy to enable his team to launch the blog nearly three years ago. Lieutenant Colonel Dean pointed out the same need exists today as there was during World War 2 to keep the US military efforts confidential so soldiers in the field are safe. "Our troops don't want to jeopardize operations or put anyone in harm's way. Very few people have time or access to blog from the battlefield."

On leave, or when they are back at base-camp, soldiers may go online and share stories about their experiences. And Army Strong Stories is not limited to just Active Duty soldiers, and welcomes contributions from Reservists, National Guard members and cadets. Indeed, many of the top bloggers are not actively facing or writing about combat. Popular occupations for Army bloggers are public affairs, human resources and the Army band. The most prolific blogger is a Major in the Army Medical Department.

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One frequent blogger is Major Benjamin Grimes of the Judge Advocate General, who is based in Tacoma, Washington. Major Grimes says he writes because “I really like what I do.” Struck by the transparency the blog provides, Major Grimes jumped at the opportunity to share both the good and bad about daily Army life. He is able to write about his disappointment in leadership and the responsibility that he feels to teach subordinate soldiers how to make tough choices. “Not every day is full of unicorns and rainbows,” he said. “By writing with Army Strong Stories, I help to give life and depth to many people’s image of a faceless, soulless Army.”

With over 1400 posts from more than 400 bloggers, and an additional 1300 comments to publish, you might imagine that the Army would have their hands full editing and fact-checking content, not to mention training soldiers fresh out of high school how to communicate effectively on behalf of the brand. But Lieutenant Colonel Dean says editorial work is limited to removing occasional content that doesn't comply with the site guidelines. "The biggest surprise has been that we have had to do very little of that. When we discover a story that is false we'll remove it, but for the most part the community polices itself."

Despite evidence that the site drives traffic to GoArmy.com and brings fans to Facebook, it has yet to ignite a social media fire across other branches of the military. Lieutenant Colonel Dean says the Accessions Command team recognizes the blog isn't only about the conversion metrics for recruits and is committed for the long term. "When the war began seven years ago, there was a lot of positive press about what our troops were doing." But with media coverage focusing on the economic battles US citizens face back at home, soldiers' stories are simply not being told as often. Soldier bloggers fill that void, and help maintain top-of-mind awareness for the Army brand.

Wednesday
Sep152010

The Four Steps To The Epiphany

One of my favorite new books is The Four Steps To The Epiphany, written by serial entrepreneur Steven Blank. In the book he outlines a model for "Customer Development" which he maintains is the key to success for other budding business creators. 

"In startups, the emphasis is on 'get it done, and get it done fast," Blank writes. Opting to lean into the advice of experts - VCs, seasoned executives - entrepreneurs rely heavily on past experience instead of learning and discovery from "earlyvangelists". In some cases, Blank references, the visionary behind the startup may feel that their innovation requires them to forge a new path or disabuse the market of a prevailing myth, creating a sense that any customer insight would be irrelevant. 

Blank recommends that companies understand that until there are active and engaged customers, who both value the startup's solution and will accept the risk of interacting with a nascent or untested business, there is a risk of premature scaling or unrealistic expectations. "'Build it and the customers will come,' is not a succesful strategy."

You can find The Four Steps to the Epiphany on Amazon. Or you can download a .pdf of several chapters to get a sample of it before you buy, by clicking here.

 

Monday
Jun072010

Favorite Tweets Of The Last Week

After taking a few days to listen to real, flesh and blood humans discuss the future of digital technology, I tackled a backlog of commentary from the Twitterverse. Here are some of the nuggets I found buried in my stream.

Genius! RT@cshirky My next book will be 'Wikipedia Brown', about a boy detective who solves crimes by getting his friends to do all the work.

Consumers with an income of $100,000 or more are among the most likely to use coupons http://bit.ly/blL1At /via @adwise << interesting!

RT @emarketer Case you missed this: How Consumers Balance Openness and Privacy - http://bit.ly/aj0RRI

 

Monday
May242010

Creativity Can Solve Anything

One of the things to love about Netflix on my TiVo is that when there is nothing in my Now Playing List I feel ike watching, I can investigate Netflix and usually find some independent film or cancelled television program that fits the moment. My recent exploration led me to "Art & Copy", a film by Doug Pray on the ad industry.

For those of you that don't know, the first 13 years of my professional life were spent on the set of commercial productions in Los Angeles - as well as exotic locales like Mexico, Dubuque, Laguna Seca raceway and the Mojave Desert - as a Second Assistant Director and Producer. The people featured in this film were responsible for some of the mini-movies I had the good fortune to work on during that period, and a few of them remain to impact the world of advertising today. Enjoy...

 

Tuesday
Apr202010

Searching For Value At ad:tech

At a trade show targeted at digital marketers, I spent the day listening to some of the worst marketing pitches I've heard: muddled value propositions, mushy messaging and murky benefits. Among the search engine optimizers, data analytics engines, and ad networks I wandered and repeatedly asked, what is it you do? How do you differentiate what you offer? How do you make money?

I was struck by the moments I felt like I might drown in data. It seems it isn't hard to marry a web crawler together with proprietary algorithim to analyze the data, and voila! You've got a cleverly titled social media buzz-o-meter. Benchmark and baseline with top 100 publishers, or buy their long tail inventory anonymously through a cookie marketplace.

You can pay someone to build a mobile app which you can distribute on whichever platform you want or you can build your own. Those same companies might sell you their ad inventory across a patchworked network of clients whose apps they also built. Or you can buy whatever ad product Google and Facebook offer within their properties. You can target offers in someone else's registration process and through rich media platforms.

And you can automatically generate campaigns and reports based on keywords extracted from data about your products, brand or target customers. In the end, as many of my engineering colleagues have told me over the years, isn't market-making and brand building more of a science than an art?

Walking around the Exhibit Hall searching for value, at times it felt like the industry had been taken over by used car salesmen.  I can pay someone $11 to write a sponosred tweet or $30 to write a sponsored Blog post. As a brand guardian, the rep suggested I shouldn't be worried if it is authentically delivered by the mercenary Twitterer who may or may not use the product, let alone actually care about it.  "You can just review all the proposed tweets and then publish only the ones that work for you." Garbage in, garbage out.

Impressions, reach, followers and fans. When you want to count something to show how many potential customers see your messages, there are many products to help you report on their cookies, their accounts, and their visits.  But which are the valuable metrics? Which predict loyalty? engagement? translate into revenue? After a day at the show, it feels like the volume metrics that social media has encouraged - gathering followers or fans - encourage quantity not quality measurements.  

Monday
Apr192010

Favorite Tweets of the Day

It's been a while since I posted any tweets that captured my attention. Here now is an eclectic group of ideas to ponder for a Monday AM.

RT @mindful_living “I am a very old man and have suffered a great many misfortunes, most of which never happened.” ~ Mark Twain

RT@innovate A Tribute to CK Prahalad - http://su.pr/1CpTRj - Rowan Gibson - #ckprahalad #strategy  #tribute #innovation Rethink the future

RT @eMarketer: Consumers Spent Less Time With All Media Except Mobile in 2009 [Stats]  - http://bit.ly/d93XSA

RT @themarknews Why Neuromarketing's Time Hasn't Come - April Dunford — THE MARK http://bit.ly/9r2lCO

RT @gigaom The State of the Internet: Now Bigger, Faster & Mobile http://bit.ly/caFgZB 

Friday
Apr162010

What's So Hard About Naming?

Does an operating system need a catchy name? Perhaps assembling some words that sound like conversational English might be helpful at minimum.

We Love Nitrozac & Snaggy!

Tuesday
Feb022010

Hey, Verizon, My USB Modem Doesn't Receive SMS Messages. But Then You Already Know That.

I try to imagine I'm a normal consumer when I do my job and when I post on this site, because it is important to me to exercise great empathy for the average user. However, I have to admit every now and then, that because I work in technology, and I love gadgets, I am not every consumer. The difference is an important one.

By way of example, I recently bought a Verizon Wireless USB Modem. I have no Verizon phones, because I own an iPhone, Blackberry Curve and NexusOne, and I didn't need another phone. (This is when my admission I am not every consumer is relevant.) I carry different devices for different reasons and different times, which I know is not average. Switching phones keeps me from getting too familiar or biased towards any one phone, or to any particular mental model. So, in my defense, I like to believe it keeps me from getting too jaded like early adopters tend to do.

In any event, I prefer to manage my wireless bills online, which brings us back to me being pretty average. I went to the Verizon Wireless site today to create an online account so I could keep track of my data usage and set up auto-pay. Again, nothing out of the ordinary. After asking me for my phone number, and asking me to identify myself as the primary account holder with the last four digits of my social security number, the site informed me that the account would  not be accessible till I retrieved the temporary password that was being sent by SMS to my phone.  Excuse me? That's right, I just got finished telling you in the paragraph above that I am not a Verizon PHONE customer. And who should know that better than Verizon? Didn't they just look up my account to verify my social security number as the primary account holder's before they sent that SMS? That same account could have told them what devices I owned, and that none of them could receive SMS.

Sure, Verizon plans to send me a hard copy of the temporary password through the good, old USPS. But the fact remains they missed the opportunity to ensure I will use the online portal at the moment when I was actively engaged and had the time to do so. Any marketer worth their weight knows that getting someone to come back and take action is much harder than working them into action once you have their eyeballs.

My issue is not about security and authentication. It's about the original experience. Why do I have to wait at least 3 days for the temporary password to complete the transaction? Sending a temp password by snail mail as a back-up may be the best way to "close the loop" and ensure a customers' privacy. But that's really just a consequence of a more foundational problem: either Verizon don't understand CRM or they have such a bias for their voice-centric network, that their CRM system doesn't support a use case for a customer with a data-only device that can't receive an SMS.

Sunday
Jan032010

Favorite Tweets of the Day

I've been doing some holiday message cleaning. And I found some gifts to start the year, which I am glad I didn't throw out with the gift wrapping.

@JasonSpector We need to be aware of why as much as how systems should be designed. http://bit.ly/7T5Gt6

@exectweets "The man who does things makes many mistakes, but he never makes the biggest mistake of all - doing nothing."--Ben Franklin

@edwardboches Comment to Millennial Marketing re: Will 2010 Be Digital Media Breakout Year http://post.ly/H814

@gigaom How To Present Like Steve Jobs http://bit.ly/7Q8p6z

@OpenHQR: 2010's Key Evolution: The Next Generation Web: To build something new, one may have to... http://ow.ly/SmtS

Thursday
Oct152009

Recipes for Product Bakers

As a product design and development professional, I think about the ingredients that make a great product with each roadmap and requirements document. As a customer, I'd rather not know. That gap made me realize something about the some of the flaws in the ingredients I've utilized for gaining customer insight for my product recipe. As a consumer, I may read reviews from strangers on Amazon or Yelp, and over time I may discover individuals that share my taste in restaurants or books. But the biggest influencers in my decisionmaking are folks in my various professional and social and family groups, or as the social media gurus call them, "tribes". People I actually know.

So why do market researchers interview individuals in quantitative surveys or invite strangers to gather and share focus groups? When unprepared for a series of survey questions, I may answer the questions in isolation of the expertise or opinions I'll seek when actually confronted with seeking a product. In a room with other strangers being asked to talk about my lifestyle or product usage, I am reticent to reveal my answers, if the group's answers indicate I'm old or out-of-touch.

Predicting customer behavior is the goal of market research, and most customer-centric product managers would tell you their users' insights are represented if they use qualitative and quantitative research tools to prioritize feature lists. In a new book - the size of a children's book, admittedly - by Alex Bogusky and John Winsor called "Baked In", this approach to developing and marketing great products is considered "old school." They maintain that by integrating your marketing strategy into a product's design from the concept and prototype phase, you close the gap between what you build and the story you tell about it.  The authors maintain that gap creates the undifferentiated oblivion into which many mass marketed, mainstream products fade. Click here to watch a video Q&A with Alex and John in which they explain how they've used their own recipes with the creation of this book. Let me know what you learn that you didn't already know, or if there was a recipe you really liked.