Tuesday, 31 May 2011

Treating customers like they're your girlfriend (or boyfriend)

Closing the stable door after the horse has bolted is not a phrase you want associated with your marketing strategy but it came to mind today after receiving an e-mail. I had allowed a subscription to an online content provider to end without renewing and although I had used the service, there were few reasons for me to renew immediately. It was then that the horse bolted.

In the week since my subscription ended, I received three e-mails reminding me about renewing and then a further three e-mails about the quality of content on the site and why I should come back. All very efficient except I hadn't received any such e-mails over the previous 12 months.

I was subscribed to the newsletter, so would have weekly updates, however I received nothing to remind me about why I was subscribed - nothing targeted and no reminders about why I'm paying money for their service.

I actually felt like my ex-girlfriend was reminding me about how great we were together. If only she had put the effort into the relationship, maybe we would never have split up.

In reality that's not a bad analogy because we are in a relationship with our customers, particularly for subscription and direct marketers. Ignore them and they'll leave, show them too much love and they'll feel smothered and leave. It's about finding a balance and reminding them why you're together and what you offer each other without forgetting your anniversary.

And needless to say that the old saying 'treat them mean, keep them keen, doesn't apply here. 

Sunday, 22 May 2011

5 reasons why Amazon's Kindle books outsell print by 2 to 1

Amazon released further stats this week to underline the success of its Kindle adoption with the headline news that its .co.uk site is outselling print copies by more than 2 to 1. The site now sells 242 Kindle books for every 100 print books sold.

According to Jeff Bezos, Amazon's CEO, they "never imagined it would happen this quickly." So what has led to this juggernaut of adoption? Here are five reasons to help explain how they did it.

1. The aggressive Christmas campaign

Launched in the UK in August 2010 to much fanfare, Amazon backed the Kindle aggressively. It reserved the prime advertising slot on the homepage to promote its availability and price, as it had done with previous success on its .com site. 

Direct emails promoted Kindle editions and their immediate availability against print, searches produced Kindle editions next to print - both in the drop-down search box and on the results page. Amazon was committed to making the Kindle its number one selling gadget and format and this top-down backing resulted in success from these integrated campaigns. 

Availability is also an important factor that encouraged Christmas sales. If the weather behaves itself, December is the traditional month for media stories about the shortage of that year's top-selling presents. The Nintendo Wii, Sony's PlayStation 3, Nintendo DS and others have all been blighted by speed of production and distribution issues. While the Kindle wasn't immune to this, it managed to handle the volume of sales in a more efficient manner.

2. Clever advertising

Amazon's UK launch was backed with the company's first television campaign. This featured a couple sitting on a beach, positioning the Kindle not only as your ideal travel companion but firmly against the iPad and other mobile devices. Its E Ink screen enables you to read in direct sunlight, something the iPad can't compete with. 

3. In-device purchasing

The Kindle's easy in-device purchasing with one-click checkout has pushed sales much in the same way that Apple grew its app sales. It's just as easy to buy your books through the Kindle as it is on Amazon's website - and importantly, personalistion and upselling make it just as tempting. 

4. The Kindle App

Even if you don't own a Kindle, you can buy Kindle editions from its app. Enabling and encouraging iPad as well as laptop, netbook and PC users to buy and read Kindle editions meant sales weren't restricted to Kindle reader owners.  

5. Cheap pricing of Kindle books

With Amazon pushing the Kindle as the number one selling present for Christmas 2010, many publishers took advantage by dropping prices. Amazon also took a loss on many titles by increasing the consumer discount, making many book purchases an easy decision. This stimulated sales and encouraged consumer migration from print. 

Despite many Kindle editions now being more expensive than the paperback version, the convenience of in-device purchasing, and its convenient masking of print price, means that many consumers have found it difficult to go back to print. This is Amazon's real achievement. 

Saturday, 21 May 2011

Competitions don't help sell your products

We often receive requests from websites for some of our books to give away to their visitors. If the target audience is right and the site big enough, we often agree - after all, they can be a good branding exercise and great publicity for the book. However we seldom hold competitions on PacktPub.com for our own books. Why? Because they stop people from buying.

I first came to this conclusion almost ten years ago as a naive young graduate fresh out of Uni. I was working for Wrox Press and had organised a competition on its website to give away a new book written by one of our more higher-profile authors. My goals were to lift visits into the site and sales of the book. I surpassed expectations with the first but failed miserably with the second. From memory, we sold one copy of that book during the course of the promotion.

The results were marked down as great publicity if anything else, but I couldn't stop thinking about why this didn't convert. After discussions with a colleague (thank you Linda Taylor!) we came to the conclusion that competitions stop people from buying.

If you think you're going to win something, why would you buy it?

Pretty simple really, but wouldn't the losers from the competition come back and buy the book once the results have been announced? Like a dog chasing its tail, I've run separate competitions over a number of years to continue testing this theory and on each occasion I got the same result. Sales go down and the when the competitions end, sales don't surge with losers buying a copy. We had lost that initial impulse to buy.

I even tested sending the losers a consolation email including discounts to go on and buy the book that they didn't win. This didn't turn around sales either. The consolation prize only exaggerated the disappointment of losing.

This is why, on Packt's website, we rarely give away our own books as prizes. We've given away Kindles, iPads, iPods, cameras and most commonly, discount codes, but we'll never go back to using our books.

Monday, 16 May 2011

Apple pips Google to world's most powerful brand... but where's Nokia?

Millward Brown has recently announced its annual list of the world's top 100 brands, with Apple pipping Google to the number one spot. However it's the continued fall down the list for Nokia that makes for more interesting reading.

This is the first time in four years that Google hasn't topped the rankings with Apple moving up to first from third. Seven of the eleven newcomers in the top 100 are from the BRIC countries (Brasil, Russia, India and China) and while these are all significant and important changes in the list, it's Nokia's fall from being one of the world's most powerful brands that represents the biggest talking point for me.

This is the sixth year that the list has been published and Nokia has featured in each one. At it's current rate of descent, it won't be for much longer. This highlights how steep the fall has been:

Nokia's results in the top 100 most powerful brand's list:

Year    Rank
2006    14
2007    12
2008    9
2009    13
2010    43
2011    81

Contrast these with Blackberry's results, one of it's close competitors, and the picture is looking less than rosy for Nokia:

Blackberry's results in the top 100 most powerful brand's list:

Year    Rank
2006    DNF
2007    DNF
2008    51
2009    16
2010    14
2011    25

So where has it all gone wrong for Nokia? What has driven this descent down the list? Let's take a look at the formula Millward Brown used to calculate it's top 100. This is how they describe the list:

"The BrandZ Top 100 Most Valuable Global Brands is the most comprehensive annual ranking of brand value. Developed by Millward Brown Optimor, the ranking analyzes the world’s leading brands and the economic and competitive dynamics that influence value fluctuations."

The methodology is neatly outlined in this simple formula:

Okay so it's not all that simple. Many of these factors are pretty difficult to determine and calculate. However it's relatively easy to pinpoint that Nokia's brand growth potential has weakened over the last two years.

Nokia actually remains the number one manufacturer of mobile phones with a global market share of 29%, although this is down over 5% on 2010. New entrants have made the market more competitive and that has squeezed Nokia's share somewhat. Added to that Apple's ubiquity and the emergence of the Android Operating System (OS) and you can begin to understand why this potential for growth has diminished.

Consumers had always been loyal towards handsets, however as phones got smarter so loyalty shifted towards the Operating System. Apple understood this and locked consumers into both. The open source release of the Android OS in 2008 gave manufacturers the opportunity to exploit this change in behaviour, making for a much more competitive marketplace.

Nokia had a similar plan in mind for its Symbian Operating System, releasing its codebase on an Open Source license in early 2010. Two years after Android did the same thing. It soon emerged that some of its important components had been licensed from third parties, which prevented the source code to be released fully. These delays and limitations prevented mass adoption, which is where Android stole its march.

This isn't the only time that delays blighted the adoption of a Nokia product. The launch of its Booklet 3G in August 2009, six months before Apple launched its iPad, only highlighted its lack of forward thinking. Nokia was reinventing the wheel while Apple was shaping the future.

In fact it's this lack of true innovation that has eroded much of Nokia's brand value. The mobile phone market has always been fast and constantly changing, from smaller and even smaller handsets to smarter and powerful portable computers. Nokia were always at the forefront of these changes, however not any more.

In fact Nokia's 'connecting people' slogan is further evidence of a lack of forward thinking. Mobile phones are not simply about connecting people anymore, they have become personal computers with communication between people being only one feature.

While the iPhone introduced a touch screen and apps, Nokia focused on improving existing features. Its phones introduced high spec cameras and a handset that 'comes with music', which didn't prove to be the features that encouraged the anticipated migration.

So it would appear that Nokia has been left behind and is playing catch up. So where does this leave them and how do they stop their falling market share and subsequent descent down the list of powerful brands?

In September last year, Nokia appointed Stephen Elop, the then Head of Business at Microsoft, as its new Chairman. Less than six months later, the company announced a new alliance with Microsoft to replace its Symbian OS with Microsoft Windows 7. This is an interesting partnership and will position the OS as the closest competitor to Android and iOS. Despite this, Nokia's share price dropped 14% on the announcement. Too little too late?

With Android and iOS taking up so much of the smart phone market, and the attention of developers to work with them, it will take a hugely innovative handset from Nokia or a OS from Microsoft to make any significant dent. However I believe the biggest opportunity actually lies in the one thing that neither Android nor Apple will be able to compete with and that's Office.

Through this link up Nokia could be the first to offer the Office suite on their handsets, immediately encouraging business user migration from Blackberry. If I was Microsoft, I would be inclined to go against the established model and make it a free feature on the mobile OS for an introductory offer. This would do more to encourage its adoption than anything else, giving Microsoft the opportunity to reach mobile users and Nokia an opportunity to grow again.

Whatever is decided, it's clear that this alliance with Microsoft and their next release together is crucial for Nokia. With 4,000 redundancies announced at the company recently, it feels like they're hitting last chance saloon time.