Christopher S. Penn – Marketing AI Keynote Speaker

Author: Christopher S Penn

What World of Warcraft can teach you about customer quality

One of my favorite parts of World of Warcraft is the in-game marketplace known as the Auction House. Inside the AH, you can see relatively free markets at work with minimal regulation by the game’s owners. You can especially see how market forces create supply and demand, and if you’re good at understanding human nature, you can make a fair bit of virtual money.

Right now, there’s an in-game Valentine’s Day event going on. Below is a picture of the Auction House and the price of a Buttermilk Cream chocolate. The current asking price in the marketplace is $54, and demand is so high that none are currently being sold – the marketplace is empty of this item.

Yes, $54 for a single chocolate. Suddenly the real world holiday doesn’t look quite as expensive. My character here is about to sell 3 of them for $163.

Here’s the funny part: the in-game quests needed to obtain this item take about 5 minutes, total. (dropping off a charm bracelet to another character and offering 10 characters some perfume samples) So why does the price of this chocolate seem so very high compared to the relative amount of work needed to create it? This marketplace item can teach us a lot about customer quality and behavior.

Some players may not know how to obtain it besides the marketplace. They simply buy everything in the marketplace. These, however, are long-term poor customers, because the moment they get clued in, they will stop buying from marketers and start creating their own items. True, as the old gangster saying goes, you can’t wise up a chump, but that’s not the sort of customer you’d want to rely on or build a business on.

Some players like the convenience of one-stop shopping, and will pay a premium just to be able to buy everything in one place. These are better customers because they have a persistent need (convenience). This makes them a better long-term prospective customer as they have a need that will always need to be met. The downside is that these folks are usually very price-sensitive, so a competitor who prices the same goods at even a penny less will beat you to the sale. If supply is a greater issue than demand, unless you’re always the lowest price, you won’t sell anything.

Some players just don’t like questing, period. They pay a premium in the marketplace – sometimes a very high premium – to not spend a single minute in the game doing things that aren’t fun for them. If you can provide exactly what they need, when they need it, you’ll develop a reputation in-game for being a useful sort of marketer to have around, and the kind of person who they will approach directly whenever they need to buy something. These folks will even ignore marketplace prices and just pay you obscene premiums directly because they know you’re reliable and can get them exactly what they want. It almost goes without saying that these are your very best customers in the long-term.

We have, in short, three kinds of customers – the sucker who may or may not even buy, the customer who wants convenience but is super-sensitive to price, and the premium buyer who wants to outsource everything they don’t want to do.

Which do you want as a customer? Common sense should dictate that if it’s long-term maximum profitability you’re after, you want the premium buyer. It will require more work on your part to develop reputation in your community for being the go-to marketer that has exactly what someone needs, but if you put in the time and effort in your marketplace, you can escape the always-lowest-prices race and make a ton of money.

Now, would anyone like to buy a Buttermilk Cream? Only three left…

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February 9, 2010
The danger of the dabbler

Reading this blog post by Mr. Brogan, something bubbled up from years of martial arts training.

Chris argues that the goal is the focus, not the method. Kenpo karate is the method, kicking the other guy’s ass is the goal. If you threw out all your methods, the goals would still be there.

Well, sometimes.

There are goals which are intimately tied into methods. How you get there is part of getting there. Abandon the method every so often for what seems to be a faster, easier, cleaner, newer, better method results in you becoming a dabbler. You’re reasonably okay at a lot of things. You’re not excellent at one thing. You never actually get to your destination, because you keep changing roads, cars, outfits, maps, GPSes, traveling companions, and take every detour imaginable because it seems faster.

Ever done this? You see a traffic jam ahead, get off at the next exit, and spend 30 extra minutes on side and back roads to go around the jam… which in reality is only a 10 minute traffic jam? I have. My hand is up. Guilty. This is the dabbler. This is the person who fails too fast.

The problem with the perspective of goal, goal, goal only (which isn’t what Chris is arguing, but which a lot of people will take away) and books like Seth Godin’s The Dip is that it’s too easy to quit early. It’s too easy to give up soon, to fail fast, when in fact you may not be failing at all, but working through your own limitations.

The other day I tweeted about the Dunning-Kruger effect, in which incompetent people are so limited by their abilities and lack of competence that they don’t realize they’re incompetent. The converse, that the competent are the last to get the memo, is also true. When it comes to goal-only perspectives, here’s the thing – your lack of meta-cognitive awareness about your limitations means that if you give up all the time, if you abandon ship too fast, you will NEVER reach excellence. Ever.

This is the danger of the dabbler. Before you give up, consider whether you’re not actually generating results because the method isn’t working, or because you haven’t amassed sufficient skill yet to make the method work for you. Admitting that is hard. Admitting that means forfeiting some ego and being willing to accept that you still have work to do, you still have more time to put in to achieve excellence…

… and as the Dunning-Kruger effect proves, you may be the last to get the memo about your excellence. Keep going!

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February 8, 2010
Why you should install MY iPhone app
Yes, folks, download my iPhone app! (iTunes required)

It’s got some AMAZING features that will make it stand out from every other iPhone app out there:
- It will regularly track your movements via GPS and silently upload them to my Google Earth master map, letting me watch wherever you are on the planet in real time.
- It will silently disable the airplane mode so I can track you in flight. Take that, TSA!
- On a regular basis, it will silently sync your contacts to my secret mailing list database and mark them as double opt-in with your phone’s IP address as the confirmation IP for verification purposes.
- Your phone will automatically sort through all the photos in its library and using a brand new algorithm, will mail me the most incriminating ones. As a bonus, you’ll find them all in iPhoto tagged with “blackmail”.
- Taking advantage of the iPhone’s powerful GPS and media capabilities, any time the phone detects that it’s some place important, like Congress, your bank, or your corporate headquarters, it will silently activate the microphone and camera, record everything that’s going on, and mail it to me.
Of course, all of these innovative features will happen behind the scenes, so to make sure YOU get some benefit out of my iPhone app, it will randomly display pictures of adorable kittens. Meow!

Yes, I’m joking (or am I?). That said, every time you install an app on your iPhone, you have absolutely no way of verifying the codebase or knowing what you’re putting on your phone. You don’t know what the app does behind the scenes.

If you have anything of importance on your phone, personal or corporate, think real carefully before loading it up willy-nilly with third party applications, even ones “blessed” by Apple, Google, or others. If you don’t need it, uninstall it. Better yet, don’t install it in the first place. From time to time, back up your device, format it, and restore your data and current applications only.

Enjoy the kittens.

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February 5, 2010
BBC Commentary on the news

Outrageously funny and sadly true.

Hat tip to Mr. Brogan.

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February 5, 2010
Your ACE in the hole: Energize!
We talked last time about what marketing, sales, and product & service groups are supposed to manufacture. Let’s talk about the verbs that go with them, so that you have an idea if what you’re doing is in alignment with those verbs, and one verb in particular. Quick review:
- Marketing takes audience and makes qualified leads
- Sales takes qualified leads and makes customers
- Product design and customer service takes customers and makes evangelists
So let’s take a look at the verbs of this funnel. In short: ACE.
- Attract.
- Convert.
- Energize.
Attract is what marketing does. Create demand for your ideas. Attract attention to what you have to offer. Assuming it’s good, people will pursue a line of inquiry and become a qualified lead. Attract also helps filter out some stuff – is what you are doing likely to attract leads? Billboards attract eyes, but unless they’re hyperlocal (Eat at Joe’s Next Exit), their value is questionable. Are you attracting the right people? You may be getting all the buzz in the world for your event, but if no one can afford to attend it, those thousands of visitors and millions of pageviews are worthless.

Convert is what sales does. Convert puts the emotional and rational values on the table with the qualified leads, the prospects, and helps them to convince themselves that your product or service meets or exceeds their needs. Again, convert is a useful verb. Is a sales practice converting? Do you know what converts and what doesn’t convert?

Energize is what product design and customer service do. We used to call this retention, but when you think about it, retention kind of implies that your customers are fleeing your products and services. It implies they want to run away as fast as they can, and you have to pull out all the stops to keep them from doing so. No, if your product doesn’t suck and your customer service actually cares about its customers to any degree, then you’re not talking about retention as much as you are talking about energizing your customers.
- Energizing them to use the product or service to its full potential.
- Energizing them to give you unsolicited suggestions about what would make it even more rave-worthy.
- Energizing them to tell everyone who will hold still long enough about your product or service as your unpaid word of mouth marketing department.
Energize is where all your profit is, long-term. If your product sucks, it will not energize customers to do anything more than pay the bills – if that. If your service sucks, it will only energize customers to hate you, very publicly and very loudly. Energize is what will destroy the other two departments, marketing and sales, because marketing will not be able to attract audience due to your stigma in the community. Sales will not be able to overcome fear, uncertainty, and doubt in what few prospects you have. Eventually, you’ll either have to make even more ethically questionable marketing and sales choices just to keep the lights on or go out of business.

The flip side is the fun part. Products that are raveworthy and service that is insanely great means that marketing just has to get people to the web form to sign up. Marketing can clock in at 10 and clock out at 2 with an hour martini break in the middle of the day because existing customers are raving about what you’ve got and forcibly dragging friends into your showroom. Sales has to triple its manpower just to process the paperwork, and prospects need little guidance except perhaps what color ink to sign on the contract. All of this comes from energizing your product design to be great and your customer service to be the best thing anyone has ever experienced.

Unsurprisingly, energizing product design and customer service is really, really hard. You as a company must be committed at every level, in every way, to putting your customers first and foremost. Everyone from the janitor who answers the phone late at night while cleaning to the CEO must get it, must understand that the vast majority of your long-term focus must always be on doing right by the customer. The moment that you lose that focus, you lose your ACE in the hole, and until you get it back, you’re on the path of the corporate death spiral.

Attract. Convert. Energize.

Profit.

Photo credit: DotBenjamin

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February 3, 2010
So, where am I headed next?

Well, let me tell you…

Yep, to Blue Sky Factory, an email marketing provider, as Vice President of Strategy and Innovation.

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February 1, 2010
Financial aid swansong: Massachusetts College Goal Sunday

Financial aid swansong: Mass. College Goal Sunday

It’s fitting that my last work in the world of financial aid was to volunteer at Massachusetts College Goal Sunday. This year’s CGS was significantly different for me personally than in years past for several reasons.

First, this is the first year I’ve presented at College Goal Sunday.

Second, this is the last time I’ll be working in the financial aid industry after my departure at Edvisors.

Third, the differences in the FAFSA and FAFSA on the Web worksheets this made for a more complex, more challenging College Goal Sunday than ever before.

Let’s start with the first – relatively late in the process of creating this event, I was asked to present for the Framingham/Metrowest site. I spent some time reviewing and editing the presentation beforehand, working with the national College Goal Sunday committee to make it a little more streamlined…

… but the projector at our site didn’t work, so I ended up winging it instead. The truest test of a presenter is when everything goes wrong and that lovely slide deck you made just flat out doesn’t work. How well do you know your stuff? I’m proud to say that having none of my slides didn’t compromise the presentation at all – and in fact might have helped because the audience then HAD to listen to me and couldn’t mix up their verbal brains trying to read slides and listen to me talk at the same time.

On the second point, I can say pretty much whatever I want now that I no longer work in the industry. This is rather liberating.

Here’s the biggest challenge that we had at this year’s College Goal Sunday. The form given to students and families, the FAFSA on the Web Worksheet, is basically not worth the paper it’s printed on. It’s supposed to make the FAFSA process easier and more friendly, but instead makes it deeply confusing and frustrating for many students.

If you look at the slide deck for presenters, there are half a dozen slides which are all labeled, “Important question not on the worksheet”. That the College Goal Sunday committee had to go to these lengths is a sad commentary on how poorly the government’s forms were created with regard to the online application. Things that are omitted? Well, for starters, questions like assets (cash on hand, in savings and checking – vital financial aid information) don’t appear anywhere on the worksheets but are in the online application. Someone just using the worksheets would be rather startled to be asked for a bunch of information that isn’t in their preparatory worksheets.

Other questions that are deeply flawed? One of the biggest showstoppers – and one that caused more than one FAFSA application to completely fail – is the question about income tax paid in 2009. Again, this doesn’t appear anywhere on the worksheets. However, the wording in the online application is incredibly vague:

“Enter the amount of your income tax for 2009”.

This single question caused more errors and blowups in the application than any other, of the families I worked with. What should the question actually say?

“How much did you pay to Uncle Sam in taxes (NOT withholding, not your annual income, not anything other than what’s on line 55 of your IRS 1040) last year?”

Very few of the families who completed the FAFSA got this question down in the first attempt. Many got to the end of the application and were confronted with an error correction screen saying that the numbers in their application didn’t add up.

Another doozy, one that can affect your financial aid significantly in some cases? There’s a question about your adjusted gross income in 2009. In the online application, there’s a “helpful calculator” which supposedly can help families estimate how much their AGI is. As far as I can tell, this calculator doesn’t do anything useful, which is a shame since there are several adjustments that CAN change your adjusted gross income, which in turn can change your financial aid eligibility, such as the tuition and fees adjustment or the student loan interest adjustment. None of these are accounted for in the online application.

There are also some interesting interface issues with the online version of the FAFSA, one of which is a dealbreaker of sorts for people looking for help. Along the righthand side of the application, there are floating help boxes that change contextually based on what question you’re on. Lots of students and families today said they couldn’t find the help system at all…

… because they thought those boxes were ads. They’re strategically located in almost the exact same spot as you’d run a skyscraper banner ad, and if you look at studies of how our brains interact with web pages, we nearly automatically ignore advertisements like banner ads.

I’ve nothing but positive remarks for the staff and volunteers for this year’s College Goal Sunday. As usual, everyone who volunteered did so out of the goodness of their hearts, giving up a Sunday afternoon to help students and families figure out the world of financial aid and get them started on that path. I commend the folks at MASFAA and its partners for continuing to make this important day happen every year. I just wish Uncle Sam made it easier for those families to get through the paperwork to accomplish their educational goals.

Finally, College Goal Sunday was a great note to end my career in financial aid on. Nothing’s better than helping other people, and that’s a great way to go out.

Stay tuned tomorrow at noon eastern time for where I’m going next…

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January 31, 2010
The only marketing metric that really matters

I’ve said in the past that marketing is the art of creating demand for your ideas, but in terms of something measurable and impactful, what does this mean? What does marketing make? Yes, it creates things like ads, Twitter accounts, email, etc. – but those are the tools to execute the mission of marketing. What does marketing actually do that’s measurable and meaningful?

Throw out all your other metrics. Followers on twitter, hits to your web site, mentions in the media. Toss them all.

The only metric that matters is this: qualified leads.

On the continuum of business, marketing (which includes marketing, advertising, and PR) takes media and audience as its raw materials and makes qualified leads.

Sales takes those raw materials, those leads, and makes them into customers.

Product design and customer service take those raw materials, those customers, and turns them into evangelists.

Everyone and everything that’s doing marketing makes qualified leads. We may not call them as such – we might call them volunteers for the non-profit, new members to the congregation, new players in the Warcraft guild – but they are.

I’m being a little facetious when I say toss out everything else – but not by much. Things like site traffic, media mentions, etc. are good diagnostic measures to tell you what’s happening with individual tools and processes, but at the end of the day, the only metric that shows you the results of your actions is the number of qualified leads that you pass on to sales to convert. For small businesses especially, marketing, sales, and service may be the same person, the same sole proprietor, but the count of qualified leads is an important number, not to be missed or glossed over.

Finally, metrics that are really trendy and popular, like ROI, are built on qualified leads. You can’t compute Return on Investment if you have no idea what the Return is, and you can’t get a Return on your Investment until you have some leads for Sales to turn into business. Worry later about ROI and worry more now about how many leads Sales has to work with.

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January 29, 2010
The iPad will be legendary for sales and marketing

Steve Jobs and gang did a phenomenal job introducing the iPad for consumers. Books! Movies! Music! Games!

…but…

The iPad has the potential to make sales and marketing people into legends. Take any sales demo you’ve ever done. Take any presentation you’ve ever done. Now take it on the road. Got a prospect you want to chat things over with in a coffee shop? Bring out your Keynote app (iWork for the iPad) and you’re showing your deck or demo on a glass 10 inch screen without all the hassle of keyboards, mice, remotes, or other crap. Just open your leather binder and show the show.

… and then …

Remember: iPhone apps run on iPad out of the box.

So you swap from your slide deck to your Salesforce.com iPhone app. You take the order right there. You’re done, and you’re on a device that looks as slick as your product or service hopefully is. No Salesforce? Use iWork’s Numbers app and fill in your order spreadsheets, or fire up Safari and complete the lead form on your web site because you’ve got 3G wherever you’ve got good mobile service.

Professional speaker? The Keynote Remote app for the iPhone will run out of the box on the iPad. Instead of squinting at your iPhone while using it as a remote for your Keynote presentations (because your laptop is tethered to the projector), you have a gorgeous way to display your speaker notes and control the show from the podium. Just slap your iPad on the podium and swipe its screen to change slides, see your speaker notes, and not miss a beat. If you’ve ever presented professionally and wished that the venue could provide a speaker’s screen, the iPad is now that screen for you regardless of venue.

Image: Engadget

Yes, you’ll be able to handle all the mundane things that iWork and other iPhone apps can do, but the large, large screen will be perfect for when you’re at trade shows, conferences, and coffee shops as a way of showing your customers and prospects all the goods you have to offer without lugging an entire IT department around with you. Anyone who’s ever hung out with me at a conference knows that I lug a server farm with me – and I probably still will to some degree, but this device certainly will make life easier for the working professional. As a bonus for conference-goers, when the venue Wi-Fi implodes – as it always does – your iPad will feed your data addiction with its 3G connection.

I can’t wait to get my hands on one of these.

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January 27, 2010
Start with a mobile browsing strategy
Everyone and their cousin in marketing is panicking about your mobile strategy.
- “We have to get our sites ready for mobile!”
- “Mobile computing is the future of the Internet!”
- “Mobile devices will be the #1 web browsers real soon!”
Some of this is true. Before you rush headlong into deploying mobile everything and trying to convert every last bit of marketing collateral you’ve got into something mobile, think. Think for a few moments about mobile. What things do you like and not like about mobile?

I’ll give you an easy one. Take a look at the FAFSA form, the financial aid form that I’ve spent the last 7 years studying, presenting, and guiding people through. This form is about 108 questions long.

No matter how good your mobile platform is, no matter how awesome or shiny your mobile device is, you will not fill out the FAFSA on a keyboard – real or virtual – that’s the size of chicklets and retain your sanity after 108 form fields. Now, will there be one or two users among your many that will try? Of course. Is the amount of time and effort needed to develop a pure mobile implementation of the FAFSA justified for those two users a year? I’d have to say probably not.

Start with a mobile browsing strategy.
1. Look at your content, look at what you have that people can look at but don’t necessarily have to interact with. That’s where your mobile work should start.
2. Use plugins for your WordPress blog – I’m a fan of the free WPTouch plugin.
3. If you have something location-based, make sure you’re set up with Google Local Business Center and have updated listings on all the major local services.
4. Check your analytics to see what percentage of users are browsing using a mobile device – find this in the screen sizes section. Look for really small screen sizes.
5. Create content with mobile in mind. Instead of giant blog posts, break topics up into sections, segments, or pieces so they can be consumed in snack size or all at once.
It’s absolutely true that mobile will be an integral part of your online marketing strategy over this year and coming years. We haven’t even scratched the surface of what’s possible. That said, the desktop/laptop isn’t going anywhere either – so don’t throw everything away for a future promise that isn’t here just yet (though it’s arriving more every day).

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January 26, 2010

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