What Kind of Demand Are You Generating?

During a recent Marketing Roundtable presentation I moderated, one of the presenters touched on the idea of bad customers. His argument was that not only do bad customers consume valuable resources, they ultimately are significantly less profitable than good ones.

This premise set me wondering – are you chasing the GOOD customers? Or are you just running demand generation programs to drive numbers. In my experience, very few customers are doing the former. Do you even know the profile of a good customer? Few businesses seem to take the time, especially during an economic downturn, to find out. It seems to me that a few simple analyses would identify the good ones – total lifetime value, tenure, average sale, purchasing of multiple products or services, or even the classic Recency, Frequency, Monetary Value (RFM) model from direct mail modeling.

The presenter at this roundtable did say that in his past experiences he found some direct correlations between acquisition strategies and outcome. For example, customers acquired through pricing discounts had a high propensity to become bad customers. Was nice to see some data to support my long-held belief that price discounting as an outbound marketing strategy is a bad plan.

So, are you just generating demand? Or are you generating the demand from the customers your business most needs to be profitable?

Be Brave

Need to get noticed with a small media budget? Competing against entrenched competitors with huge market share? As my friend John Lichtenberg, Marketing Dude Extraordinaire for Wash College wisely says, “Be brave.” If you’ve seen John’s ads, you know what he’s talking about. This creative platform redefines the ordinarily poor world of educational marketing creative with the introduction of humor, simplicity, and power.

Even with a small budget, impactful creative creates a multiplier effect. As an example, when we were working with Citizens Insurance who needed to re-energize its brand with a small budget, we steered them to the bold and impactful creative platform over other more conservative ones. The result? Big results from a small budget.

In the consumer world, I have two heroes this year.

The first is Kia for their Sorrento compact SUV. Think Kia’s are just low-cost clunky Korean cars? Wrong, they’re hip, cool and edgy – this single spot completely re-positioned them in my mind. And someone at the clients had some chutzpah for approving them.

The second are the new short TV spots for Weber grills. Grilling should be all about fun, relaxation, personal expression, creativity, and more. Weber hits it without a single word of copy in this :30 second spot. Again, this was not “safe” creative.

All too often we see conservative b-to-b clients talk themselves out of bold creative (that they liked initially) and into safety. Safe has a time and a place, but if you’re trying to move up in the marketplace, give that slightly wacky idea we just delivered a second look.