Thursday, July 19, 2007

The Marginal Pain Equation and Credit Cards

Again, superb find from the Social Customer Manifesto. Research is showing that customers weight up how much they want/desire/will derive pleasure from a purchase right now, and the pain it will cause them right now when it comes to handing over the money.
Loewenstein hopes to follow up his research regarding the "pain of paying" by exploring a growing and looming problem in the United States–why so many people run up so much credit card debt. Much like he did in the study with Knutson and Prelec, he wants to see what goes on in the brain when someone pulls out plastic instead of money when making purchases. His hypothesis is that credit cards numb the brain's pain center (i.e., reduce activity in the insular cortex) because no currency is exchanged and costs are postponed, thus weakening the body's built-in defence mechanism against unnecessary purchases. He believes that MRI testing could provide definitive answers."
It certainly is an interesting perspective on the traditional models of trying to understand the decision making process. Given that other books are saying that emotional connection plays a much larger part in any buying/voting decision than rational evaluations, it certainly plays into the idea that offering customers all the emotional support you can to overcome this "pain point" is important. Perhaps studies will show that talking to a customer service representative provides this, even through click-to-talk solutions.

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Wednesday, July 18, 2007

Buzz Differential

The internet, and more recently, the "blogsphere" is supposed to be a great way of generating "buzz" about your product or service. I've never really bought into that line of thought. Personalities aside, not many companies are, or should be, willing to build their brand on the mugshot of their Head of Marketing. It might be more useful to think of the Blogs, feeds, and websites as a good way of building potential or opportunity for conversation. After all, the battle is for the customers attention, to attract feedback, and to be more agile than your competitors. Even the internet search engines are moving towards rankings based on "degree of conversation". In this respect, understanding which particular event signal the potential requirement for an interaction, is probably a good place to start from. Large enterprises with professionalised marketing follow such "event triggers". If you are looking for a mortgage you are probably also in the market for white goods (kitchen refits). If you are a company that is announcing a merger, you are probably soon in the market for an IT integration service. Nielson BuzzMetrics has released a report that I am sure will become a kind of bible for evaluating the use of "buzz marketing". It helps if your product or service is used "frequently" by the intended audience (i.e. daily if not weekly). But the report is still surprisingly shallow in its approach. What I took from this report is that companies need to build real product differentiation, support that with intelligent, if not outstanding communications strategies, and realise that "Internet Buzz" will not make an OK product sell any better. But we all knew that, didn't we. Gaining, or creating the opportunity for understanding your customers "event triggers" is probably a better starting point for building interaction potential, and thus overall "buzz" around your product or service.

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Monday, July 16, 2007

Credit Cards and Culture reports on a CityBank Study on Credit Card Payments and Usage. Intrestingly, the real point here was that their are actual cultural differences in how people want to use their card, and what rewards they want to receive from them.
Culture's influence Citibank's report highlights the role culture plays when it comes to choosing a credit card. In some countries the appearance of a card is key and represents status, but in others discounts and rebates are the main attraction. In Australia the interest rate is the number one feature, in South Korea it's low fees and in Malaysia and China it's security features and fraud prevention that tops the list. The loyalty reward Cash rebates were the preferred type of reward in relation to loyalty and reward programmes with a 57% response. Second was discounts on products and services at 12%. Numerous questions were asked in relation to the future of credit cards. When asked if credit cards could double as a form of personal ID, India and China were most in favour, with "strongly agree" responses of 47% and 43% respectively. Australians and Malaysians were most opposed with 33% and 43% respectively saying they 'strongly disagreed'. The option of using a credit card to pay taxes was met with most enthusiasm in South Korea and China where 53% and 41% respectively said they strongly agreed. However, 38% of Australians said they strongly disagreed with the idea
It certainly opens out the potential to create niche cultural services based on the implicit value of the Credit Card as an ID Validation Mechanism. Of course the same thing could be said of PayPal and Google if they went that extra step to offer you a Payments Card valid at any store that used/integrated Google Checkout into their online/offline presence. Now what if, when you walked into a store, and Google Checkout/Analytics knew that "this store" had a "special offer on Nike", and you, the customer, had recently been browsing for new sneakers, would it not make sense to push an offer to you AND enable you to pay for it right there with Google Points?

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Wednesday, July 11, 2007

Liquid Services (and I don't mind drinking)

Blognation report the link up between ParkatmyHouse and Nestoria. A terrific example of where two services can combine for mutual benefit. I love these services because they also create market liquidity where there was none before: did you know you could make money by renting the space outside your door? I am sure this model is applicable to a whole range of services such as Holiday Home exchanges. By adding a few tweaks to the service moving forward you may even be able to receive offers on your car space only when it goes over a certain value, or track the open market value of car spaces so that you can price that into the sale of your home. Now that practically everyone carries a mobile phone its pretty easy to see how alert services are useful in this example. I wonder how much "a space" in a good local school would cost :)

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Friday, July 06, 2007

Do You Have A Phone Number On Your Site?

So, do you have a phone number on your site? with opening hours? and the ability to take orders there and then? Why not use a simple Click-To-Talk service like VoiceSage where you can specify all these elements, never miss a call, and take the friction out of your purchasing process. Its a simple thing to do. Hat Tip: Kelsey Group.

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Stupid Scam That Misses Real Opportunity

Kelsey Group Blog reports on an absolute scam, and its more the pity, because there was an actually useful business service that could have been delivered. Apparently, Merchant circle were autodialling small businesses, telling them that there was an unfavorable review posted on them on the internet, and by going to the Merchant Circle address, and putting in their phone number, they would be able to see it. Of course, there was no review. Now talk about missing an opportunity. Besides the fact that it is easy enough to set up a Google alert on your company name, and have an sms sent to you, there is a fairly good service capable of being delivered if you offered to phone people and tell them there is a bad review of them somewhere. How hard would it be to create a service that called you when their was actually something negative written about your company, and would give you the opportunity to reply there and then? Not hard. Not hard at all. If this kind of thinking interests you drop me an email, and I'll tell you something.

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Thursday, July 05, 2007

Why do people drop out of online shopping?

Marketing Sherpa reports why: Many e-commerce checkouts are suffering from design problems which can be easily rectified. These include hidden charges, lack of clear delivery details, or poor usability. Business processes within the checkout area give customers problems User registration, shipping costs that customers consider too high, or overlong checkout processes. Some carts are abandoned for reasons beyond the control of the retailer. Some people will add items to their basket and reach the checkout when comparison shopping, with no intention of buying. Overall, some 60% of us abandon the process. Ultimately, you have to think that we are making the customer jump through hoops just to figure out if we are giving them value or not. At VoiceSage we made a decision early on: log on, use it, hear your phone ring, go wow! all functionality is clearly there, hopefully, easy to use. We can always make it better and if anyone has any comments on how we can improve this process, please let us know. Chances are, we can turn it around really fast.

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