By Rick Knecht
Posted: Apr 16, 2013 8:12am ET
On Tuesday, April 2, the public web-based secure digital file delivery service YouSendIt lost access to half its functionality: files couldn’t be downloaded. Users got error messages. Work couldn’t be completed. What happened? How did the company handle it? Is YouSendIt about to be YouEndIt?
Mistakes happen. Things will go wrong — it’s not a matter of if, but when. No matter how you try to foresee all fail scenarios, or create backup plans, you’ll never anticipate every possible contingency. What’s important is how companies cope with challenges when they occur, so they don’t turn into brand-destroying disasters.
YouSendIt’s business was disrupted for part of the day, which in turn inconvenienced their users. But it’s likely that there won’t be much fallout, because the company responded in the right way.
YouSendit apologized, within 48 hours. They sent out a public apology, signed by a high-level staffer. It was clearly and plainly worded and took responsibility for the problem. They explained what happened — a database table could no longer accept new information — and reassured users that their files were safe and undamaged. The company followed up by saying they’d fixed the problem, so it wouldn’t happen again, and finished with another apology and a personal invitation to contact a senior staff member with any concerns.
YouSendIt was faced with what was nearly an existential failure in a critical system, and came out with continued customer goodwill.
There are eight important lessons to be learned here about how to handle a potentially significant stumble so that it doesn’t blow up the brand you’ve spent so much time and effort carefully crafting.
The key part of this apology is to say, “We’re sorry.” The word sorry is non-negotiable. Without the actual apology, apologizing is useless. And you can’t go the passive-aggressive route of saying, “We’re sorry if anyone was offended” (or inconvenienced, frustrated, etc.). Assume that your customers are offended, inconvenienced, or frustrated, and act accordingly.
- Apologize in a timely manner.
“Timely” is dependent on context. A rude tweet posted to a corporate account should be removed immediately upon discovery, and the apology should follow right on its heels. Conversely, in the face of a disaster like a database collapse, you may need a day or two to figure out what happened, but no more than a few days. Apologizing weeks or months later looks forced, no matter how sincere the regret is.
- Explain what you’re apologizing for.
This may be the hardest part: own the mistake. Go into detail about what occurred. Acknowledge that your clients were inconvenienced or hurt. You aren’t going to cover yourself by trying to deny or downplay anything. Don’t make excuses or try to shift blame. Take responsibility and say what happened, in plain language.
- Have the apology come from one person.
That person should be someone high up in the company food chain. “WidgetCo is sorry that we shipped defective widgets to our Minnesota stores” is insufficient. There needs to be a spokesperson attached to the apology, because that helps to humanize your brand. The vague corporate WidgetCo isn’t going to catch much of a break, but Jane Smith, CEO of WidgetCo, sending a personal email to all registered widget owners apologizing for shipping widgets which weren’t waterproof, will be looked on much more positively.
- Consider the tone and wording of the apology.
Being straightforward will go a long way toward earning back business. Today’s consumers, particularly Millennials, value authenticity and honesty. Don’t lie; it will only make things worse when the truth comes out (and it will). Owning up to the error and telling your customers that you recognize their pain can help engender their sympathy and loyalty — after all, everyone makes mistakes.
- Fix the problem.
You have upset customers. How are you going to make them whole? A refund, a credit, free shipping, replacement goods? You must offer something to the customers who were hurt by your mistake.
- Ensure the problem doesn’t happen again.
Sometimes the fix for the past is also the fix for the future, like a software upgrade. Sometimes you need to change policies or methodology, like requiring that all social media posts are screened by a senior staffer, or more thoroughly vetting a product with beta testers before releasing it to the public. But you need to reassure your customers that this was an anomaly, not SOP.
- Apologize again.
It’s not about your brand; it’s about your customers. You failed them, so they need a reason to forgive you and come back.
Brands can survive blunders (Apple Maps giving people bad directions), miscalculations (O.B. tampons going missing from shelves for a few months), and even poor product itself (Domino’s) if you play it straight.
By Bill Duggan, Group EVP, ANA
Posted: Apr 3, 2013 12:00am ET
ANA has just released the results of our latest Recession Survey, a survey initiated in the depths of the recession in 2009 (hence the name!) and repeated annually since. The objective of the survey is to understand how the current economic atmosphere is affecting client-side marketers.
Here are topline findings:
- Marketing budgets continue to be under pressure. The great majority of marketers surveyed (82 percent) agreed that with the current economic conditions, they are challenged with identifying cost savings and reductions within their marketing and advertising efforts. The economic outlook for marketers appears to have entered a “new normal” period. There will always be pressures on budgets, even in the best of times. Marketers will continually be challenged with identifying cost savings and reductions in their marketing and advertising efforts.
- The top strategies for reducing costs of marketing and advertising efforts are departmental travel/expense restrictions followed by challenging agencies to reduce internal expenses and/or identify cost reductions. That was the focus of my last blog.
- Marketers are not overly optimistic about the future, as stable or decreasing budgets are expected. Over half (56 percent) of those surveyed say their advertising budgets will remain the same in the next six months. Just over one-quarter (27 percent) said their budgets will decrease, and the remaining 17 percent of marketers think that their advertising budgets will increase.
In this new normal period there is a short-term focus and higher levels of uncertainly — and that affects budgets. Those budgets must work harder and incremental dollars will be more difficult to come by. This will put a spotlight on marketing accountability. The “winners” in this new normal environment will be those companies that relentlessly optimize their marketing investments and media budgets to drive even greater accountability.
The complete Recession Survey results are available to ANA members.
By Ken Beaulieu, vice president of marketing and communications, ANA
Posted: Apr 1, 2013 12:00am ET
As a mother of three children, Dell CMO Karen Quintos has learned that there’s a real difference between hearing and listening, a difference that also applies to the business world. For example, if your company is monitoring conversations on Facebook and Twitter but not acting on the rich insights, you’re not really listening, she says.
Too often, Quintos notes, marketers look for the “silver bullet” — the new and most innovative aspect of their products, services, or brand — but the best marketing organizations validate the richness of a brand through a maniacal focus on listening. This is especially true at marketing powerhouses such as Dell, Procter & Gamble, Coca-Cola, Zappos, and Amazon, among others.
“There is no question that listening enables us to continue to deliver great products and services while simultaneously building customer relationships that inspire,” Quintos says. “When I talk to customers, I ask them fundamentally the same questions: Why are you loyal to Dell? What has you coming back to do business with us? Delivering great products and solutions is certainly a big part of it, but it’s also the constant focus on the customer, doing what’s right for the customer, really caring about customer outcomes, and understanding how technology can change our world. It’s about making every decision with the customer at the center. And listening becomes a cornerstone of doing just that.”
In 2006, Dell launched the blog, Direct2Dell, with a focus on customer conversations. A year later, the company introduced the website IdeaStorm, which allows customers to not only evaluate Dell’s products and solutions, but also offer ideas to improve its business. The best ideas are then incorporated into future products, services, and marketing. Dell also monitors the 25,000 conversations about the company each day through its award-winning Social Media Listening and Command Center.
“Listening and acting on customer insights helps us deliver the technology solutions that give our customers ‘the power to do more,’” Quintos points out. “Whether it’s to listen or proactively ask for customer ideas, social media allows Dell to put the customer at the center of all we do. We’ve come a long way. But every day there is a new development in the social media space, and every day I learn something new about the way Dell can use these communication channels to improve our listening, ultimately, to better serve our customers.”
By Bill Duggan, Group EVP, ANA
Posted: Mar 26, 2013 12:00am ET
ANA is about to release the results of our latest Recession Survey, a survey initiated in the depths of the recession in 2009 (hence the name!) and repeated annually since.
The survey asks (a) if advertising budgets are increasing/decreasing; (b) if marketers are challenged with identifying cost savings and reductions in their current marketing and advertising efforts; and (c) if so, how specifically they are planning to reduce costs.
Interestingly, the top six strategies for reducing costs of marketing and advertising efforts have remained consistent for the past three years.
It’s no surprise that departmental travel and expense restrictions continue to top the list (noted by 58% of respondents). The next most prevalent cost reduction strategy is to challenge agencies to reduce internal expenses and/or identify cost reductions (55%).
Meanwhile, the strategy of reducing agency compensation is way down on the list. Only 15% of marketers surveyed said they plan to reduce agency compensation. This is a significant decrease compared to past surveys, especially from 2009 (when it was 56 %). It’s possible that many marketers have reduced agency compensation as low as possible and now instead are challenging their agencies to reduce costs internally and/or identify cost reductions which, of course, could then indirectly lower agency compensation.
Look for full results of this Recession Survey to be released next week.
By Bill Duggan, Group EVP, ANA
Posted: Mar 22, 2013 12:00am ET
This week’s Advertising Age features a terrific article by Alexandra Bruell reporting on a panel discussion at the recent 4A’s Transformation Conference. The panel featured six media agency heads and a contentious debate on agency trading desks. ANA agrees that there are indeed transparency concerns with agency trading desks.
In late 2011, ANA released a white paper titled,"Agency Trading Desks: Basics Marketers Need to Know & Questions to Ask." Its purpose is to help educate ANA members on agency trading desks including what they are, what they do, potential benefits, questions to ask, and more.
Most importantly, the paper advises marketers to be educated on how their company's money is being spent. Every holding company (and independent) does things a little bit differently, so if working with a trading desk, marketers need to understand their agency's model and make sure they are comfortable with it. The following questions and action steps are important.
- Have a conversation with your agency and understand if a trading desk is being used for your business. Comment to agencies - the use of a trading desk should be clear and transparent with a client and discussed with a client before a trading desk is engaged. Agencies need to initiate discussions re: the value proposition of the trading desk and its compensation.
- Understand the business model of your trading desk. Ask your trading desk, "How do you make money? What are the costs for service? Costs for technology? Costs for data?" Determine whether or not the trading desk marks-up the cost of media.
- Understand which media is purchased via a trading desk. The agency trading desk model was initially trialed on display but is also now actively buying online video, mobile, social media, and search (plus digital out of home and addressable television in very limited instances).
- Be clear on metrics. Those could include cost per lead, cost per acquisition, ROI on sales, or some other quantitative metric. Understand how the performance of the trading desk compares with previous buys not executed via a trading desk.
- Ask if there are mandates, real or implied, for your agency to use its holding company's agency trading desk. An alternative would be for your agency or you to work directly with a DSP.
- While there may not be competitive issues within your media agency, remember that the trading desk can work on behalf of all the media agencies within the holding company. Understand how the trading desk addresses competitive conflicts. Ask how pricing is handled in an instance when two competitors are vying for the same inventory, "first rights" for premium inventory, and about the existence of firewalls.
By Marni Gordon, vice president of committees and conferences, ANA
Posted: Mar 19, 2013 12:00am ET
Last week, The Wall Street Journal reported that Facebook is working on incorporating hashtags as a way to group conversations. Hashtags, one of Twitter’s key symbols, are already prevalent within Instagram which was acquired by Facebook last year.
This has implications for ad targeting as well as opportunities to build out Facebook’s graph search product, which currently relies on the “like” as an indicator of brand interest. This tends to be a weaker measure as users may “like” a page if they are in fact interested in the brand, but other reasons could include entering a one-time contest or to “like” a page as part of a social obligation. In addition, the main barrier for Facebook to widely adopt the hashtag is their high levels of privacy for publishing user content.
If Facebook’s hashtag efforts are successful, they could be a formidable competitor to Twitter and even other third-party television ratings providers like Nielsen in the social TV ratings game. Twitter is already becoming aggressive in this space with their recent acquisition of Bluefin Labs. Twitter also mentioned last month that half of the 52 national commercials that aired during the Super Bowl included a hashtag within the advertisement.
However, Twitter is only a fraction of Facebook’s size. Facebook’s mass reach combined with using the hashtag to group conversations around TV programs could potentially provide a substantial sample size for real-time social TV ratings.
It will be interesting to watch the battle between Facebook and Twitter continue to unfold and how this could impact television and even cross-platform ratings in the future!
Learn more on social media from senior marketers at companies including Unilever, Taco Bell, Virgin America, Pepsi, MasterCard Worldwide, and Reckitt Benckiser at the ANA Digital & Social Media Conference on July 14-16!
By Bill Duggan, Group EVP, ANA
Posted: Mar 15, 2013 12:00am ET
We’ll define innovation as “identifying emerging trends and bringing new ideas to the organization.” So how does procurement drive innovation?
At the ANA Advertising Financial Management Conference we will share results of our “2013 Procurement Value Metrics Survey” which identifies the metrics used to measure the success / contribution of the marketing procurement organization. Innovation is one of the metrics we looked at.
Forty-four precent of respondents noted that innovation is indeed a metric used at their respective companies to measure the success / contribution of the marketing procurement organization. And the more mature the marketing procurement department, the more likely that innovation is a success metric.
What are some specific examples of procurement driving innovation? We’ve heard lots in the area of production including creating rosters for preferred suppliers such as production companies, editing, trafficking, as well as consideration for shooting in states that offer commercial production incentives. And we’ve heard great examples of procurement driving innovation by centralizing digital asset management and scope of work templates.
Cost reduction and cost avoidance will always be part of procurement’s role. But procurement must not have tunnel vision and only be interested in cost reduction / avoidance. Rather, procurement should think more strategically and embrace the role of driving innovation to improve marketing ROI as that is the path to long-term success for marketing procurement.
By Ken Beaulieu, vice president of marketing and communications, ANA
Posted: Mar 5, 2013 12:00am ET
In 2011, Liberty Seguros, the Brazilian subsidiary of Boston-based Liberty Mutual Insurance, was announced as a national supporter of the 2013 FIFA Confederations Cup and the 2014 FIFA World Cup. This year, the property and casualty insurer became an official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams. These partnerships represent Liberty Mutual’s first major foray in the burgeoning world of sports sponsorship.
I recently asked Chris Sloan, assistant vice president and senior corporate counsel at Liberty Mutual Insurance, for his perspective on the legal implications of sponsorship. As you might imagine, there is much that brands need to be aware of.
“You really have to pay attention to the rights granted with the sponsoring entity,” said Sloan, who will participate in a panel discussion on sports sponsorship and brand promotion at the 2013 ANA Advertising Law and Public Policy Conference, March 19-20, in Washington, D.C. “Are you getting the right rights, and how can you exercise them? How do those rights fit into your overall media and advertising plans? The rights around your specific category — or bubble, if you will — need to encompass everything you touch as a company. In other words, you must make sure that how you define your category, how you define your bubble of exclusivity is correct.
“On the activation side, there are several legal issues that can crop up along the way. For example, you need to clearly understand how and where you can use the sponsorship logos and materials, including photos, films, and athletes; how you moderate and control messaging in the fast-paced world of social medal; and how you protect your exclusivity. You have to be able to react quickly, and have a plan for how you control something that may be going off track.
“One of the biggest issues is ambush marketing,” Sloan continued. “There is quite a bit of anecdotal evidence of how non-sponsors find ways to leverage big events without purchasing the rights to do so. The rights to take action against an ambush marketer — say, a competitor — generally rest with the sponsorship organization, since an ambush marketer will try to find some way to create the illusion that it is affiliated with the sponsorship or the event. So, it’s not so much that they’re using our logo or our trademark; they’re using the sponsorship organization’s trademarks to create a false affiliation. But in doing so, they’re stepping on our exclusivity bubble. It can occur innocently, maybe a restaurant throwing up a sponsorship sign or a larger company trying to create the illusion that it is one of the partners by showing up close to a sponsorship event or in close proximity to the event advertising. Those are the ones we really have to pay attention to. So when you negotiate a contract, this is one of those areas you really need to understand. In FIFA’s world, they often get legislation enacted in the host country giving FIFA special rights and special expedited avenues of recourse through the court system to get cease and desist and restraining orders against marketers that stray over the line. Ambush marketing has become almost a subspecialty in trademark enforcement.”
By Bill Duggan, Group EVP, ANA
Posted: Mar 4, 2013 12:00am ET
Gerry Preece (former P&G marketing procurement) and Russel Wohlwerth have recently published “Buying Less for Less … How to avoid the Marketing Procurement dilemma” and the key thinking in the book is outlined below.
Too often good procurement pros have approached the marketing space with misguided goals – goals to cut costs and reduce spending. After much diligent work, some think they succeed, but that is an illusion.
They think they can achieve buying more for less. But because talented people are the core of marketing costs (and talent has a cost), the new low prices actually translate into procurement buying less for less.
The marketing procurement dilemma is that the job isn’t to procure; the job is to invest. Marketing is not a cost to be minimized. It’s an investment to be maximized. When procurement adopts the mindset of an investor, they contribute greatly and CMOs and brands win. They succeed when they “invest” more and when they “buy” less.
The book is worth the investment (it’s not a cost!) and is only $9.95 on Amazon.
Gerry will be a speaker at the 2013 ANA Advertising Financial Management Conference.
By Bill Duggan, Group EVP, ANA
Posted: Feb 28, 2013 12:00am ET
ANA’s inaugural Media Leadership Conference was just held in Miami, attracting 350+ media mavens. Here are some highlights from the event.
Subway: Content has a foundational role in the Subway media plan as that provides greater “attentiveness” versus solely running ads. For Subway, this is message integration and not product placement and must (1) seamlessly integrate into the story line; (2) be non-intrusive; and (3) increase brand likeability. The reward here is shareable, talked-about content. (Tony Pace, CMO)
Kellogg: Kellogg asked, “What capability must we excel at to effectively and efficiently steward media investment and brand growth”? The answer – insights! Kellogg defines insights as “a fresh and unique understanding of a person’s thoughts, feelings, beliefs, or motivations that leads to actionable brand and category opportunities”. Human insights are the connective tissue that should guide how Kellogg invests in technology, uses data, and thinks of its channel mix. Kellogg’s best brands, best work, and best results have rich insights at the core. (Jon Suarez-Davis, vice president of global digital strategy and North America Media)
Unilever: Discussed the three principles to craft brands for life: (1) Put people first – and do that by getting real insights to make a real difference in people’s lives; (2) Build brand love – to maintain and grow brands while being true to their strong equities, and ensure they are brands that people cannot live without; and (3) Unlock the magic – develop an expertise, a mastery that pays as much attention to the precision, the rigor of marketing, as to the passion for the magic of the end product. (Rob Candelino, vice president of brand building)
Macy’s: Recognize the importance of authentic, exclusive content. The Macy’s Thanksgiving Day Parade and “Yes, Virginia” (a musical) are prime examples. (Jennifer Kasper, group vice president of digital media and multicultural marketing)
Chrysler: Chrysler was once again a major Super Bowl advertiser. The company ran two sixty-second commercials that we both ranked among the top five most popular per the USA Today poll. It was noted that many advertisers took advantage of the “online playing field” with pre-game postings of teaser content. Many advertisers used video ads on YouTube ahead of the game, to complement their game-day media, to drive early brand buzz. (Neville Manohar, head of emerging media)
Deutsche Telecom: Consumers respond best to engagement campaigns when they feel they are part of something bigger than themselves. The presentation stressed the importance of the emotional over the rational. (Gerhard Louw, senior manager of international media management)
MillerCoors: One of the key media principles at MillerCoors is “Taking Multicultural Mainstream.” The company subscribes to total market planning. It’s not enough to just have Spanish language activity. These consumers are part of the mainstream and reaching them in broad communications is also essential. (BradFeinberg, media group manager)
Two other themes were woven through many of the presentations:
- Shopper marketing and its increasing importance
- You´re only as good as your partners! Media and agency partners.
The 2014 ANA Media Leadership Conference will be March 30 to April 1 in Boca Raton, Fla. I can’t wait!