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Get Inside Consumers' Minds and Trigger Lifetime Results


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  • Privilege to be part of Xerox events, always world class and always leading the way to the next area of the DM industry. Believe all in a good place – despite daily economic news. Not a dreamer to say this. Statistically DM has continued to grow while all other marketing channels have declined. Last years TV/Radio revenue dropped to historic lows, papers out bs, 500+ magazines folded, and DM grew by nearly 4%. Today DM is 53% of all US ad spend. DM will continue to grow, survive and truly thrive because it is the only channel by which we can appeal to and influence the conscious and unconscious consumer minds. Our new job in this new era of marekting is to help our clients tap the power psychological of choice and loyalty. As we do this we can’t help but succeed. But first we must understand today’s consumer mind and its current POV towards brands. Thank you. Excited to be here and talk to you about my passion. DIRECT MARKETING. Principles discussed today are critical for succeeding now and in future. Industry is poised for growth and ultimately dominance as marketing changes. 525 magazines closed in 2008, around 400 in 2009, and numerous in the Q2 2010. Reason: ad sales plummeted because advertisers are seeking results, trackability, and proven ROI. DM is the medium that can deliver the above like no other medium available today. Poll 1: What is your most critical business goal for 2010? * Customer acquisition? * Customer retention? * Increase value of existing customers? * Create new revenue streams? GOAL TODAY: provide insights to enable us to become more agencies than printers, and to increase our credibility as advisors vs. vendors. To do this, we must prepare ourselves to sell programs that build brands vs. one-time projects that do little to build our bses or our customers for long-term growth. I will share marketing principles to help you do just this.
  • Other brands lOSing big time % if highly loyals - those who tended to buy only their brand:
  • Forced to eat cheerios and watch Lawrence welk on Saturday nights.
  • Why is this happening? Because of the huge and growing trust gap between brands and customers. Courting customers and courting romantic interests are very much the same. A book to be written? TRUST is FOUNDATION of all emotions…and its eroding for business. How many of you similar experience? All of you! Learned that we have to operate every day to earn the trust of our customers, never assuming anything. POLL: How many of you have conducted a trust audit with your customers?
  • Consumers’ ability to trust brands has gone down 50% Above before the BP oil spill and even the Madoff scandal. Build trust: build a customer-centric culture, and engage and empower employee, * Listen and engage customers * Put processes in place to measure and monitor performance The top two actions CEOs and their company’s could take to increase trust:* 72% point to “doing a better job delivering on their promises” and; *70% point to “standing behind their company’s advertising.” Fifty percent or more of Americans ALSO suggest: * Treat their customers and employees better (65%) * Better quality of service from employees (64% * Institute a code of conduct in the company (59%), and; Other potential CEO actions that could increase TRUST include: * Taking a more active interest in the community (40%) * Disclosing more information about their financials (36%) and; * Having employees get to know you (27%)
  • Our role as marketing advisors is to help our customers build trust through their communications, and through the programs and experiences they offer, just as we build trust for our own.
  • T
  • To gain back trust, we must understand how the human mind works. And to do this, we need to study and apply fundamental of human psychology. Above theory for 140 years…hold true. Once we build and establish trust, we then focus on applying principles of psychology and choice TO build trust and capture LTV, we Must understand basics of human psychology: WHAT IS THE PAIN your customes are trying to avoid when working with you? WHAT IS THE PLEASURE they are seeking? Quite often, what we seek is not related to the product function or business goal. B2B IS HUGELY EMOTIONAL. So much riding at stake thesy days – fear of job loss, fear of failing, fear of exposure.. In business, we want to avoid the pain of losing our jobs, not meeting our goals, of wasting money and resources, and so on. Alternatively, we seek the pleasure of recognition, the pleasure of achievement, of wealth, status and prestige. In the consumer world, we seek a wide array of pleasures and seek to avoid a wide array of pain.
  • Brain scans can now read up to 1000 viewed images and recreate on a computer screen. Working on dreams. Don’t like that but do like this image of scanning Superbowl ads. Test emotional response: sweat reactions, temperature changes. AUDIENCE QUIZ: which ad was #1 on the conscious list? What most people don’t know is that POLL 2: Which ad do you think had the most emotional reaction: Google had most emotional reaction with Paris Love Birds ad yet #43 in the conscious choices. INNERSCOPE testing lab. USA today’s favorite list does not match the list of most emotional responses.
  • I don’t like recreating brain images or dreams, but I do like studying the conscious and unconsicous impact of ads. Think back on some of your favority SP ads. Anyone have one to come mind as the most entertaining or top spot in the USA TODAY poll?
  • So powerful because this evokes the thrill of love – most powerful emotion we humans have. #1 on emotional response tests; 63 on USA Today favorite list
  • Our conscious minds and our unconscious are not always on the same page. Pepsi Test is a great example of this. Uncons. Blinded we chose Pepsi; consicously people denied that choice and insisted they liked coke more. What we say is not what we do…and we like to think of ourselves as one way when indeed we might not be. BUYOLOGY BOOK. All like to think we’re RATIONAL…but we’re not! Old story, but reinforces that what we say is not what we always think! And we are not aware of the contraction often ourselves. Consumers chose Pepsi when unaware, but insisted that Coke was their preference as they were consciously committed to this brand. Understanding conscious and unconscious biases helps us get closer to consumers’ mind sets So that we can develop messages that connect and support current ways of thought.
  • In Australia and New Zealand, cigarette warnings are much more graphic. Logic is that they have fewer smokers. WRONG. Cigarette smoking has gone up! Fear is not a motivator. It is a deterrent. Approach communiations like a teenager = use reverse psychology. Scientific evidence is not as strong as our minds, and our denial of things we don’t want to believe. When we use too much emotion or fear in our marketing campaigns we actually push consmers away from our brands.
  • Irrational behavior affects all industries, not just consumer behavior. Even the highly educated and scientific,. Its not about money; its about our lifestyel, family members lifestyle, securiety and so on . Letting go of an old stock that used to do well feels like letting go of grandma. RE tanked 30 years ago we I would never invest in RE when in reality it is the most stable. People with the least amount of emotion or psychopaths do best in fin. Invest. Nobel prize winner came up with diversified portfolio statistics and projects died poor from not taking his own advice.
  • Connect with your brand through reciprocity and experiences When we connect and feel positive emotions, we produce OXYTOCIN, a hormone that results in feelings of trust devotion We seek HIVES - to be part of groups with common goals, causes, efforts, feelings, OUR MARKETING PROGRAMS FOR CLIENTS must center around connections with brands and good things… Care for others - provide oppties to make a difference Create feelings of purity - Loyalty Reciprocity
  • IOWA Gambling Task: Neuroscientists hooked up people to skin conductance machines and gave them 4 decks of cards and $2000. Players had to turn cards over to see if they won or lost. Two decks were high risk: $100 pay out but big punishments - $1250. Other decks had smaller payout $50 but few punishments. It took 10 Cards before they showed signs of nervousness and fear - e.g. sweaty palms, faster pulse. It took 80 cards before they cold logial explain their choice to stick with lower risk deck. Rational people lost money, while emotional people made money.
  • WHAT DO YOU SEE HERE? Affective systems: born to see positive or take risks ad seek adventures or you were born to see negative and constantly be in survival mode? Most of us are negative…see the skeleton first yet our marekting appeals to the postive or person that sees the lady. DOES NOT CONNECT>
  • We learn from studying the mind is that we are all of the above, all the time
  • How many men here own a dyson vacuum? Vacuums with equal functions, ye the Dyson was designed to appeal to the Little Boy in Men by looking robotic. Sells for 4X the price and is huge seller among men. Direct Marketers must understand how color, packaging, and design of marketing materials affects our attraction to the message. Psychology of design – researchers find that we often associate human faces in products and tend to be more attracted to those we see that reflect our own persona. We are also more attracted to complex patterns, and symmetry as we seek BALANCE in life whether we realize it or not. THIS IS HOW WE CAN SET OURSELVES APART from other agencies. We can advise and deliver! Must understand psychology of COLOR and WORDs for starters.
  • WHAT COLOR IS YOUR LOGO? Audience poll. RED prominent; BLUE prominent, GREEN?
  • In DM, the PS is always red.
  • Do your homework on color psychology and share your insight with customers. Your sales training should NOT be about selling but ADVISING ON ISSUES no one else does. Teaching cstomers aboaut color combinations will significantly boost your credibility and ultimately sales. IF SOMEONE IS IN RED?BLACK ask them what they were thinking when they got dressed.
  • OLD CASE STUDY YOU”VE SEEN A MILLION TIMES…but notice the psychological appeal. Pantone produced customized postcards for targeted graphic designers and photographers. For multiple contacts in one bu Business, they received different pieces. Postcards drove targets to PURL.
  • Results: 81% increase in sales YOY 113% of projected sales from one campaign Colors are vivid and bright like the people they are targeting Colors speak wealth, success, trust, and power Graphics are relevant to the lifestyle and preferences of audience
  • Offer white paper.
  • IGEN Standing Room only: expected 30 got 110.
  • 8 page DM letter. Unheard of…worked. It was based upon minimizing the fear of what will happen to your family if you die early. The right emotional appeal with the right offer increased response for the same life insurance product by 300%.
  • Recipe cards: Brush script didn’t get engaged with like times new roman or arial. Our minds quickly connect or disconnect due to perceived time to read; ease of understanding, etc. 35% higher for simpler font.
  • Staples used personalized coupon and increased redemption by 150% and transaction value by 118% in one campaign. Use these statistics to sell your clients or supervisors on DM.
  • Polls:
  • Lifetime Value tool: Harvard Small Business Lifetime Value NPV, discount rates, and compounded interest and so on. In order to capture LTV, we must FOCUS ON CUSTOMERS NOT BRAND.
  • Power of emotions cannot be underestimated. Purchases are emotional. Even more so, LOYALTY is emotional. We adults are chasing the emotional highs of our childhoods. Customer-Oriented brands that succeed offer an emotional selling proposition: - Excitement, enthusiasm, security, confidence, self esteem, happiness, job, comfort, peace of mind. WHAT EMOTION DOES YOUR BRAND OFFER? Appeal to customers EQ – there is an emotional threshold over which customers won’t cross. Learned at Amex that if you instill too much negative or fear of something bad happening, people disconnect from your message altogether because they don’t want to think about it.
  • Psychology based marketing transfers to customer engagement. Integrate the five elements of happiness – connectedness, association with good, reciprocity, and value. Museum of Heart, designed to show off new CV ICU rooms, involved an entire community: radio station celeb and listeners, schools with art contest, patients as heroes, educators, associations, children, and more: expected 200 and got 1200! Broke elevator in first hour. 25 deep.
  • There are a lot of forces in our world today that fight for our attention and interfere with reading. Our attention is divided in so many directions. It is up to us to stop and focus. We have to decide how to spend our time and what to do with our minds. Reading expands your mind while so many other things don’t. Instead of falling into this trap, set aside time every day to read! And keep your mind creative, imagining and thinking!! To me, all of you here today are reading heroes. You took the time to read, you worked hard to get to this competition and you are role models to others!! Some of our heros….
  • Clearly Customer Service defines a brand experience and selection: Due to poor customer service: 46 percent dropped a credit card provider 43 percent dropped a bank 32 percent dropped an ISP 30 percent dropped a phone company 22 percent dropped a pager or cell phone vendor
  • Transcript

    • 1.  
    • 2. Get Inside the Minds of Customers and Get Lifetime Results ! Jeanette McMurtry e4marketing © Jeanette McMurtry, 20
    • 3. Old World: Loyalty and Trust were sure indicators of long-term success. New World: Brand Loyalty and Trust are fleeting and easily destroyed.
    • 4.
      • From 2007 to 2008:
      • 52% of “highly loyal” customers reduced or defected
      • 1/3 defected to a competing brand
      • Loyalty churn cost global brands more than 20% in lost revenues in 2008.
      • In general, only 40% of brands
      • retain 50% or more of customers year to year.
    • 5. © Jeanette McMurtry, 2009 In 2008, Crest Toothpaste lost some or all sales among 59% of it’s 2007 high loyalty customers. - CMO Council Report on US Consumer Loyalty
    • 6. In 2008, Cheerios lost 28.2% of high loyalty customers while 37.1% reduced loyalty. - CMO Council Report on US Consumer Loyalty
    • 7. Consumer Trust © Jeanette McMurtry, 2009 Broken Trust is the Number One Reason People Switch Brands. No method for regaining trust has been proven. Source: Yankelovich Partners
    • 8.
      • In God We Trust…But Not In Business
      • Globally, brand trust has slipped 50% in recent years
      • 80% believe business values profits over consumers
      • 66% believe business will take advantage of public
      • 63% believe big business can’t be trusted
      • 48% of US trust business;
      • 40% trust government (on par with Russia)
      • 25% of US trust banks, down from 71% in 2008
      © Jeanette McMurtry, 2009
    • 9. © Jeanette McMurtry, 2009
    • 10.
      • Tell others 76%
      • Stopped buying indefinitely 58
      • Told business concerns 55
      • Bought from competition 49
      • Reduced frequency 49
      • Cancelled store card 18
      • Wrote about on web 13
      • Complained to BBB or CofC 11
      • Did nothing 03
      When Trust is Broken © Jeanette McMurtry, 2009
    • 11.  
    • 12. Why ESPs work © Jeanette McMurtry, 2009
      • Human behavior is based upon two emotional premises :
        • The Avoidance of Pain
        • The Pursuit of Pleasure
    • 13. Emotional Relevance © Jeanette McMurtry, 2009 This year, at the UCLA Ahmanson-Lovelace Brain Mapping Center, Marco Iacoboni and his group used functional magnetic resonance imaging (fMRI) to measure brain responses in a group of subjects while they were watching the Super Bowl ads.
    • 14. © Jeanette McMurtry, 2009 Conscious Mind Choice
    • 15. © Jeanette McMurtry, 2009
    • 16. Irrational Behavior © Jeanette McMurtry, 2009
    • 17. Irrational Behavior © Jeanette McMurtry, 2009
    • 18. Irrational Behavior © Jeanette McMurtry, 2009 Investor Behaviors
      • Investors have fared well below the S&P from 1983 - 2000:
        • Gaining 5% when the S&P gained 16%
        • Fixed income investors gained 6% while Government Bond index gained 12%
    • 19.
      • The Happiness Hypothesis : All we need is to:
      • Feel connected to others
      • Making a difference
      • Associate with and experience “good”
      • Reciprocity
      • Fairness, Justice
      © Jeanette McMurtry, 2009 What Makes Us Happy
    • 20. Reward and Loss Triggers © Jeanette McMurtry, 2009
    • 21. Reality © Jeanette McMurtry, 2009
    • 22.
      • Neuromarketing reveals consumers are:
      • Self Centered: “Its all about me.”
      • Crave contrast: Notice edgy, irreverent
      • Lazy: Don’t make us think to get your point.
      • Story fans: Facts fade; stories stick.
      • Visual: Colors impact retention and action
      • Emotional vs. rational: Emotion trumps reason and common logic
      © Jeanette McMurtry, 2009 Christopher Morin, Author, Neuromarketer Neuromarketing
    • 23. © Jeanette McMurtry, 2009
    • 24. Power of Color © Jeanette McMurtry, 2009
      • Psychology and Color:
      • Within 90 seconds, consumers make an unconscious judgment of a product or environment
      • 60-90% of that judgment is
      • based upon color
    • 25. Impact of Color © Jeanette McMurtry, 2009
    • 26.
      • RED
      • + Energy, strength, power, desire
      • - Danger, anger, malice
      • Enhances metabolism, respiration rate, raises blood pressure
      • An accent to encourage quick decisions
      Meaning of Red © Jeanette McMurtry, 2009
    • 27.
      • BLACK
      • + Power, elegance, formality, prestige
      • - Death, mystery, grief
      • Creates a sense of authority
      • Makes other colors stand out
      • Makes you look thinner
      Meaning of Color © Jeanette McMurtry, 2009
    • 28. Color Combinations © Jeanette McMurtry, 2009
    • 29. © Jeanette McMurtry, 2009
    • 30. © Jeanette McMurtry, 2009
      • 7.9% of postcard recipients visited PURL:
      • 79% of PURL visitors entered drawing
      • 11% of HTML e-mail recipients visited PURL
      • Compared to prior year’s sales, the campaign generated an increase of 81%
      • Sales Quota: 113% of projection
    • 31.
      • Words must be about customer not the brand. Most emotionally charged words:
      • Approved Complete Discount Dependable Guaranteed Immediately Improved Limited Time Powerful Professional Recommended Reliable Unconditional Unsurpassed Urgent Wonderful
      Power of Words © Jeanette McMurtry, 2009
    • 32. © Jeanette McMurtry, 2009     
    • 33. © Jeanette McMurtry, 2009
    • 34. © Jeanette McMurtry, 2009
    • 35.
      • Amongst Internal Database:
      • Achieved an ROI 31 times the costs
      • Beat control by 640%
      • Overall Results:
      • Achieved an ROI of 20 times the costs
      Love the Results!
    • 36.
      • Boosting response by 300%
      © Jeanette McMurtry, 2009
    • 37.
      • If you don’t think fonts matter,
      • THINK AGAIN!
      Power of Fonts © Jeanette McMurtry, 2009
    • 38.
      • FUN
      Another Key Motivator © Jeanette McMurtry, 2009
    • 39. © Jeanette McMurtry, 2009
    • 40. It’s All About Me © Jeanette McMurtry, 2009
      • 58% online shoppers more likely to click through to personalized messages
      • 39% more willing to buy from recognized brand
      • Personalized DM pulls significantly higher than general DM (.5 to 9.0)
      • Personalized coupon increased redemption by
      • 150% for one retailer and transaction
      • value by 118%
    • 41. The Power of Direct © Jeanette McMurtry, 2009
      • DM to add over $143 trillion to US GDP
      • Average ROI per dollar spent:
        • $11.63 in 2008
        • $11.74 in 2009
      • 81% of HHs read/scan advertising mail
      • Growing at a rate of 4% annually while other channels are shutting down
      • Represents 53% of total ad spend
    • 42. © Jeanette McMurtry, 2009
      • Upscale Cars
      • Purchase frequency is every three years
      • Lifetime is 20 years ~ ages 40 to 60
      • Lifetime purchases are around 6
        • One car = $45,000 x 6 $270,000
        • Services = $1000/yr x 20 $ 20,000
        • Customer Worth $290,000
        • Referral Worth (3) $870,000
        • Potential LTV: $1,160,000
      The Power of Lifetime Value Lifetime value
    • 43. Deliver emotional thrills that create memorable experiences. © Jeanette McMurtry, 2009 Focus on customers, not themselves. Lifetime Brands
    • 44. © Jeanette McMurtry, 2009 ESP Brands
    • 45. © Jeanette McMurtry, 2009
    • 46.
      © Jeanette McMurtry, 2009
    • 47. © Jeanette McMurtry, 2009
    • 48.
      • (Source: Mobius Management Systems research, 300 respondents)
      © Jeanette McMurtry, 2009 Never Underestimate Service 0 % 3 dropped 6 % 4 dropped 3 % 4 dropped 2 % 3 dropped 6 % 4 dropped
    • 49. THANK YOU! Get a free Report and Join the dialogue on Psychology-Based Marketing LinkedIn Group - PBM [email_address] Twitter at @jeanettee4m © Jeanette McMurtry, 2009