MackCollier.com

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The Backstage Pass is Moving to Substack

A bit of housekeeping: I am moving The Backstage Pass newsletter from Mailchimp to Substack.  Effective next week. If you haven’t yet subbed to The Backstage Pass, please do so over on Substack.

Why the change?  Substack has two key advantages over Mailchimp for me:

1 – I can add more social elements. I’ve growth and nurtured The Backstage Pass for over 10 years now. One of the nagging problems I’ve had with the newsletter is the lack of interaction I can have with subscribers. Unless a subscriber reaches out to me directly or vice versa, I have no clue if the content I am creating is resonating with them. Other than looking at Clicks or Open Rates and guessing.

But with Substack, I can add social elements. We can have chats for each newsletter issue, discussions about each topic. It’s so much easier to connect directly with subscribers. Now, they do need to be on Substack in order to connect with me on Substack, but the signup process is as pain-free as it is on any other social channel. Please follow me here if you join Substack.

2 – Substack has monetization options built right in. As a result, I will soon be offering a premium version of The Backstage Pass, which will have more ‘premium’ content. This will also allow me to devote even more time to the newsletter, which is something that I’ve always wanted to do. But prior, it was hard to justify spending more time on a stream that isn’t producing revenue. Substack will help me solve that problem.

 

So if you haven’t already subbed, please do so.  As for Substack itself, I have to say, I am really enjoying the experience there. There’s a strong community vibe, it feels like early days excitement there before all the ‘influencers’, marketers and gurus find it.  I’m sure that’s coming, but for now it feels super cozy. In fact, it really feels like what I think a lot of us wanted to see blogging become: A way for us to connect and support our favorite writers and content creators.

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Research: 97% of Loyalty Programs Fail Due to This Simple Design Flaw

loyalty programs fail

Would you believe that 97% of loyalty programs fail? And 77% of them fail in two years or less.

Why? It’s due to a basic design flaw that many loyalty programs suffer from. It’s a design flaw that reflects a fundamental misunderstanding of why people participate in loyalty programs.

The reason why the average loyalty programs fails is because it is designed to drive purchases from its own members. 97% of Loyalty programs rely completely on transactional rewards. If you participate in the program, you are rewarded with a free product. Or more likely, a discount toward the purchase of a product.

This indicates a fundamental misunderstanding of what drives real brand loyalty. Loyalty is created AFTER the purchase, not before. If you offer rewards to incentivize a purchase, you are building loyalty TO THE OFFER, not to your brand.

Customer Acquisition vs Customer Retention

The average loyalty program is designed like most marketing initiatives; The focus is on customer acquisition, with little or no thought given to customer retention.

Which goes completely against the concept of loyalty.  Customer loyalty IS customer retention. They go hand-in-hand.

When loyalty programs offer solely transactional rewards, the rewards build loyalty to the offer, not the brand. If you tell me that when I collect 1,000 reward points that I can get a free cup of coffee, I might push to get another 200 reward points to add to my 800 point balance to get that free cup of coffee.

But after I get it, my balance goes back to zero. As does my excitement for starting all over to get the next 1,000 reward points for the next cup of coffee.

Now this isn’t to say that transactional rewards don’t have a role in most loyalty programs. They absolutely do, but transactional rewards should be one tool in your loyalty program toolbox, not the whole garage.

Design For Retention, Not Acquisition

True brand loyalty is build after the purchase. It’s built by having a connection with a brand. And those connections aren’t built via coupons and discounts.

They are built by experiences. By access. By understanding. By shared values and passions.

If your loyalty program is rooted solely in transactional rewards, then the program with the best discounts wins. I will only be loyal to your loyalty program as long as you give me the biggest coupon. As soon as your competitor gives a bigger discount, I jump ship. That’s why the vast majority of such loyalty programs fail within two years.

So the key to creating a loyalty program that members are actually…loyal to, is to focus on rewards that offer a better experience for the member.

  • Access to the CEO and key executives at the brand. This communicates to members that they are special, and helps elevate them in stature as being equal with key decision makers at the brand.
  • Free webinars with SMEs. This is a nice perk for your members, and it helps them connect with and understand your brand. For instance, let’s say your brand offers a unique presentation tool for businesses. Having a free webinar with a top presentation expert not only benefits the members directly by educating them on how to become better presenters, it also helps them better understand your presentation software. And that helps them become better salespeople for your brand. And more motivated ones!
  • Early access to new products. This is a big-time perk that creates value for members, and it can be leveraged to create buzz for your new product’s launch! If your technology company has a loyalty program, 3 months before your newest laptop launches, give members early access so they can create online conversations about the new laptop to build excitement for its release. Then pick 10 members and give them the laptop for free to use and review. This will also generate excitement and buzz for the laptop building up to its launch, and that will generate more sales at launch.
  • Free training on how to use your products and services. For instance, if you sell cooking utensils, offer loyalty program members a free workshop with a top chef who shows you how to cook meals using your cooking utensils. This creates value for members, but it also helps them understand how to better use your cooking utensils, which makes them better salespeople for your products!

Notice that none of these rewards are transactional. Yet all will help the loyalty program members forge a deeper connection with your brand.

The best part? You are incentivizing your loyalty program members to sell more products for you. You are giving them rewards that help them better understand your products, and how to use your products successfully. All of the 4 hypothetical rewards above are experience-based. Yet all of them will increase the ability of your program members to generate more sales!

That makes them better salespeople for your products AND makes them more willing to happily promote your products to other customers.

So by simply shifting the focus of your loyalty programs rewards from transactional to experiential, you create more loyal customers AND more sales. 97% of loyalty programs fail because they focus on transactional rewards for members. The 3% that succeed focus on designing a loyalty program that creates amazing experiences for its members.

Is your loyalty program struggling? For the past decade, I have worked with companies like yours to optimize their loyalty programs to achieve greater success. I show companies how to increase signups and participation while also reducing churn rate. If you need help, email me today and we can discuss how to increase the efficiency of your loyalty program.

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Every Sports Franchise Needs a Chief Storyteller

Every sports franchise should hire a Chief Storyteller. This point was driven home recently as I re-watched one of my favorite movies, Moneyball. It’s written before about the business and marketing lessons you can learn from watching Moneyball.

If you aren’t familiar with the Moneyball story, at the end of the 2001 season, the Oakland A’s lost its two star players, Johnny Damon, and Jason Giambi, because the New York Yankees and Boston Red Sox could offer them more money. GM Billy Beane went to the A’s owner and implored him to please give Beane more money to spend on payroll so he could get better players.  The owner refused, and this left Beane scrambling to figure out how to keep the A’s competitive with far less money to spend than other ballclubs.

This led Beane to meet Peter Brand on a trip to meet with the Cleveland Indians. Brand had developed a system for identifying talented players who were undervalued due to ‘biases’ against them. Such as being ‘too old’, having a ‘funny pitch’, or whatever. Beane was intrigued by Brand’s ideas, so he hired him to be his Assistant GM. Together they began working on building a roster of 25 players who were undervalued, but still talented enough to make the A’s competitive.

As Beane began acquiring his desired players, even his own scouts had never heard of them. The movie shows A’s fans reading the paper prior to the start of the season and asking ‘Who are these bums?’  So obviously, the A’s had a brand awareness problem when it came to their new acquisitions.

And as the season started, the losses piled up. But after the All-Star break, the team started to click.  And they started to win.  A lot.  In fact, in September at the end of the regular season, the A’s actually set the American League record (at the time) for consecutive wins at 20. Here’s a recap of that 20th win, which could have been a movie all in itself:

So I was curious as I was watching Moneyball again, how did the success of the A’s in 2002 affect revenue?

Turns, out, not by much. Revenue for the A’s in 2001 was 90 million, and it increased to 96 million in 2002, an increase of roughly 7%. But in 2003, revenue for the A’s increased to 110 million, or 15%. Since the A’s 20-game win streak didn’t happen until the end of the season, much of its impact on revenue for the year was negated. Yet the excitement for how the 2002 season ended no doubt carried over into excitement for the 2003 season, contributing to the larger boost to revenue for that year.

While the 2002 A’s didn’t have many ‘star’ players, the pursuit of the record for most wins became the ‘story’ that sucked fans in. Unfortunately, not every sports franchise will have record-setting seasons that become stories that sell themselves. This is why sports franchises need to invest in Chief Storytellers.

The Chief Storyteller needs to first tell the story of the players, then tell the story of the fans. First with the players, we all follow our favorite sports teams, and as we do, we develop a fondness for certain players. We appreciate their accomplishments, especially if they overcome setbacks to help lead their team to victory.

Here’s an example.  The 2012 depth chart at RB for Alabama was loaded. The starter was Eddie Lacy, who would go on to have a long NFL career with the Packers. A pair of 5-star RB recruits TJ Yeldon and Kenyan Drake were added to the mix, both of who would also go onto have solid NFL careers. While TJ Yeldon was able to come in and immediately contribute in the 2012 season, Drake didn’t do as well, and was relegated to 3rd and 4th string on the depth chart.

Starter Eddie Lacy opted to go pro at the end of the 2012 season, so that should mean Drake would be due for more carries in 2013. However, in the 2013 recruiting class, Alabama signed the top running back in the nation, Derrick Henry. Drake’s production did increase in 2013, but Yeldon was the clear starter.

As the 2014 season began, Drake was beginning to grow into his role as a true all-purpose back.  Through 5 games in the 2014 season, Drake was averaging over 5 yards a carry, and a staggering 31.8 yards per catch. In the first 5 games, he had 6 touchdowns and averaged 10 yards every time he touched the ball. It looked like Drake was finally going to live up to the 5-star potential that Bama fans had been waiting to see since he signed with the Tide in 2012.

But in that 5th game, tragedy struck. Drake suffered a gruesome leg injury that ended his 2014 season just as it was getting started. At the time, it looked like it may have ended his career as well.

As the 2014 season progressed, Derrick Henry began to blossom. When the 2015 season started, it was obvious that the Alabama running game would be built around the future Heisman winner. Henry had an absolutely monster 2015 season, rushing for over 2,200.  The most amazing thing about Henry was that he never tired. It was not uncommon for Henry to get over 30 carries in a game in 2015.

Which meant Drake’s production as a running back was further limited. In fact, the Bama staff had to move Drake to field kickoffs just to find a way to get him on the field and producing in some way. And even that move didn’t bear fruit, as through his first 18 kickoff returns in 2015, Drake was averaging a very pedestrian 22 yards a return, with 0 TDs.

But all that changed on his last kickoff return of the year:

Just like that, Drake had scored his first, and only kickoff touchdown of his career. And Drake’s touchdown put the National Championship game firmly in Alabama’s control for the first time.

Alabama fans were aware of Drake’s story because we had followed his career. We knew he was a top recruit when he signed with Bama, we saw him finally coming into his own in 2014, before he broke his leg against Ole Miss. We were deflated to see how that might end his career, then elated for him when he scored this touchdown, that ended up being the score that clinched a 16th National Championship for the Crimson Tide.

A Chief Storyteller would be in a position to tell us the stories of our team’s players. If done correctly, it can almost become like a movie for each player. I am focusing on Drake’s story and how he helped Alabama win a National Championship, but there could be a parallel story to be told about how Derrick Henry finally realized his promise in his 2015 Heisman campaign. Or what about QB Jake Coker? He transferred to Alabama after being a backup at Florida State. He came to Alabama in 2014 as the presumed starter, and instead ended up being the backup to Blake Sims, who as the 3rd string running back the year prior. But Coker preserved, eventually won the starting job, and led his team to a National Championship.

So many player stories to tell, and each one helps the fans become more attached to their favorite team. Likewise, a Chief Storyteller could tell stories about the fans. Who are they, how long have they cheered for their favorite team? A Chief Storyteller should work to seek out stories from fans so they can be highlighted. This will help the team identify and connect with its fans the same way the fans connect with the players.

It’s all about using the power of story to build a deeper connection between the team and its fans. Because when you have that deeper connection, success is the only logical result.

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Grow Your Business By Growing Your Customers

training your customersYour happy customers are the best salespeople you have.

They just are. There has been a raft of research into most trusted sources of marketing communications, and the findings are always the same: We trust our friends and family more than we trust your brand. This is why companies that embrace their customers and empower them to market for them, typically have higher sales and revenue than companies that do not.

So, if we accept that your happy customers are also your best salespeople, what do we want our salespeople to have?

The best training. Therefore, if you are training your best customers to increase their knowledge and understanding of your products and services, you are also improving their ability to sell those products and services to other customers.

Right?

So this is truly a win-win we are talking about here. By giving your happiest customers training on your products and services, you are not only improving their ability to SELL those products and services to other customers, but you are also providing value to those customers. You are improving their sales ability, but at the same time, you are creating something of value for these customers, which deepens their loyalty and affinity for your brand. A true win-win.

 

The Secret Language of Happy Customers

Before we go any further, I want to make a book recommendation. Please buy and read Badass: Making Users Awesome by the brilliant Kathy Sierra. Badass teaches us that products that enjoy sustainable sales success do so because that success is driven by its users. So if you make your customers ‘badass’, you are simply increasing their ability to drive success for your products.

And customers who are highly skilled in using your product act differently and speak differently about that product.

Think of your favorite movie. The one you have seen so many times that you can recall entire scenes, you have the dialogue memorized. Now if I had only seen that movie once, what would our conversation about the movie sound like? I mean, I would be aware of the general plot, maybe I would remember the main characters and actors, but that would be it.

Now think about how that same conversation would be different if you were talking about your favorite movie with someone who loved it as much as you do? You would have a completely different conversation with that person. You could discuss the plot in detail, you could speculate on what happened in the story after the movie ended, maybe find out that you are both members of an online community of fans of the movie.

Now think about what would happen if you and I were both discussing that same movie with a friend who hadn’t seen it. While I could barely explain what the movie was about, you could go into minute detail about what the movie is about, and why it’s awesome. You could do a much better job of promoting the movie to others than I could.

This is an example of why your happy customers are your best salespeople. Because they love your products and services, they are knowledgeable about them, and they have a passion for seeing other people use and enjoy your products and services as they do.

 

A B2B Example of the Value of Training Your Customers

A few years ago, I worked with a SaaS company to design a customer advocacy program, which was primarily designed to increase subscriptions to the software, as well as reduce the customer churn rate. With this particular company, many of its customers sold marketing services to small businesses that included training on the same software.

So we created a customer advocacy program that offered expert training on the software as one of the perks for being involved. This training created value for the company, because it gave customers an incentive to not only attract more customers, but to also stay longer as customers themselves. Thus reducing the churn rate. It also created value for the customers, because as they became more knowledgeable of the software, it improved the level of training they could in turn pass through to their own customers.

By creating training for the company’s current customers, it gave the company a way to not only scale its sales (customers selling to other customers), but also its customer support. As customers received training on the software and became more adept at using it, they would also become more adept at troubleshooting problems that they and other customers encountered while using the software. So they could actually deflect calls or requests to customer support that the company would normally field. Which would result in a cost savings to the company!

 

A B2C Example of a Missed Training Opportunity

Many years ago, I participated in an influencer program where I was in a small group of influencers who were given a very expensive camera in order to use it and, ideally, promote it to other people. The company wanted to give the camera to a select few people it had targeted as being influential in their space, and then have them create content (and pictures!) in order to promote the camera to other potential customers.

The problem that I quickly encountered upon receiving the camera was that I had absolutely no idea how to use it. It was a beast, and it was a professional quality camera meant to be in the hands of a professional photographer. Which is the last thing I am! In the hands of a pro, this camera could have created magic, but in my clumsy hands it created out-of-focus and blurry disasters.

Ideally, I would have received some training on how to use the camera before I received it, or soon after. Just remember if you are crafting an influencer program, make sure the influencers who will be receiving and promoting your products have enough familiarity and understanding of the products to promote them successfully. To be fair to this company, this influencer program was done over 10 years ago, and was one of the first efforts of its kind. So they learned a lot, and went on to improve their efforts I am sure!

 

How to Incorporate Product Training in Order to Create Value For Your Customers

So let’s think about how we could add product training to our marketing and communications efforts in order to create value for our customers, and how this would also create value for our company.  To help simplify how training could be incorporated, let’s view the training as having three levels:

101 Level Training – This is basic product/service training. It’s designed primarily to handle basis issues and problems that might arise from a new customer, as well as to address questions they might have. The level of instruction will be very basic, and this will help eliminate requests to customer support by letting the customer solve their own problems, via this training. The idea behind this level of training is to help the current or potential customer become familiar with the basic functions of the product, as well as helping them solve common problems that other new customers have faced.

This level of training should be free and available to all current and potential customers. Think of this type of training as being an extension of you FAQ, or Frequently Asked Questions. It could include white papers or articles with detailed instructions, or videos that show how to use your product in a particular way, or how to solve a basic issue with using the product. This level of training will serve to not only save costs by deflecting requests to customer service, but it will also lead to more purchases as the most basic questions that potential customers would have are answered prior to purchase.

If we were selling a high end digital camera, the training at this level would focus on getting the customer familiar with the core features of the camera. Basically, here’s what you need to know to turn the camera on and start taking pictures.

201 Level Training – This is more advanced training that’s designed to teach customers how to use your product to its full potential. This level of training is typically not available to all your customers, as not every customer will want or need more advanced training. It can often be offered as a reward for engaging in some pre-determined activity. For instance, if you sign up for a loyalty program, this level of training could be a perk for doing so.

If we go back to the example of selling cameras, this level of training could focus on helping the customer improve his ability to use the camera in certain ways. Such as taking pictures of wildlife, or taking night time pictures in urban areas, etc.

301 Level Training – This is your most advanced level of training. Only a select few customers will want or be offered this level of training. This can also be offered as a reward or perk, for instance if your company has a brand ambassador program, members could have access to this level of training.

Customers who receive this highest level of training are typically the ones you also want to empower to sell your product for you, to other customers. So you could reward referrals or additional sales with more training, if warranted. Remember that the more proficient your customer is at understanding how to use your product, the better, in theory, they will be at understanding how to sell and promote it to other customers.

 

How Does Your Company Benefit From Training Your Customers?

Let’s close by looking at the benefits that training your customers creates for your company:

1 – Reduced customer service costs. One of the earliest adopters of corporate social media use was Pitney Bowes. The company justified using social media in part because it found that every social interaction it had with a customer about a support issue deflected a call to customer service. And at the time, Pitney Bowes placed an internal cost of around $9 per call, so each call that was averted, was a cost-savings of $9 for the company. So if you train your customers on how to better use your products, they can in turn provide support directly to other customers. Which further lowers costs for your company.

2 – Reduced Customer Acquisition Cost. As your trained customers are engaging with other customers, they become better at selling and promoting your products to other customers. So they are literally creating new sales for you, all the time. Think of it as passive income for corporations. By training your customers on how to better use your products, you turn those customers into an additional sales staff, one which generates new sales for you, while you sleep!

3 – Improved Customer Satisfaction and Increased Brand Perception. If your customers are trained on how to properly use your products, they will have less complaints about them. A good portion of most customer complaints are simply due to user error. The customer thinks there’s a problem with the product, when in fact the product is fine, they just aren’t aware of how to use it properly. Training your customers reduces complaints about your products, while at the same time increasing positive mentions. This can have a massive impact on overall brand perception.

 

Training your customers is completely worthwhile. It reduces costs, while increasing sales. As a result, the training more than pays for itself.

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Here’s the 1% of Your Customer Base You Should Grow

In 2005, Alabama football started the season with an unexpectedly strong showing. The Tide, coming off a 6-win season in 2004, jumped out to a 4-0 start and #16 ranking heading into an October 1st matchup against #5 Florida. The game was in Tuscaloosa, and the excitement was palpable. Adding to the intensity, was the fact that all week heading into the game, the fact that Alabama had never beaten a Top 5 opponent in Tuscaloosa was repeated endlessly.

As you might expect, ticket prices for the game were through the roof, but I decided to go to the game just to be on campus and soak in the experience.  Due to traffic I got to the stadium a few minutes into the game. Outside the stadium there were multiple televisions set up so fans could watch the game. The game was being broadcast on CBS, and I began to circle the stadium heading toward the nearest television so I could watch the game.

The game was in the first few minutes of the first quarter. As I was walking, I could hear the roar of the crowd, it was very loud. A play started, and I then heard what almost sounded like a gasp from the entire crowd then what can only be called an explosion of sound. The sudden roaring of the crowd was so loud, that I could literally FEEL the audio waves coming from the stadium as I walked outside it.

This is what was happening inside the stadium at that moment (volume UP):

 

In 2018, Twitch streamers Nickmercs and Aydan were competing in a Fortnite tournament, and one of the perks was that if the team could eliminate a certain number of players in a specific time they could collect a $30,000 prize bonus.

As the duo got closer to winning the Make It Rain bonus, they were having trouble concentrating because debris from the ceiling kept falling on them as they was playing.

The crowd’s roar was so loud as Nickmercs and Aydan kept eliminating players that the ceiling was vibrating, and it was causing debris to fall down on the players.

 

We all start at zero

I’ve always been completely enamored with how entities and personalities in music, entertainment and sports/esports can create fans that are as passionate as the fans you see in the above two clips. One of the reasons why I wrote Think Like a Rock Star was to help companies understand how these fans are created, so those businesses can also create passionate fans.

One of the biggest misconceptions businesses have about creating fans is the belief that fans just ‘happen’ for people and companies in certain industries like sports, music, and entertainment.

Nickmercs is one of the streamers in the above video.  He’s also one of the hottest streamers in the world right now, and a few weeks ago he had over 400,000 viewers for one stream.

But recently, he tweeted out a reminder that in 2014, he was celebrating the fact that he had hit 170 viewers on a stream:

And he was excited about having 170 viewers, because he started with 0. All Twitch streamers do.

All businesses start with 0 happy customers. We ALL start at 0.

Reverse-engineering the Roar

Another huge misconception businesses have is that they can’t create fans like Alabama football does, or like Taylor Swift does or like Nickmercs does.

Let’s go back to the first example in this post of the Alabama football game. It’s easy for your business to look at that and think, “We could never have fans like that!”

Are you SURE about that?

Let’s break down that example. How many people are there that would claim to be Alabama football fans?  I have no earthly idea and it would be almost impossible to measure. For the purposes of this post, let’s say there are 10 Million people who self-identify as being Alabama fans.

The above Alabama-Florida game had roughly 80,000 people in attendance. Let’s say there were another 20,000 fans outside the stadium and in the area.  So for the purposes of this post, there were 100,000 Alabama fans who were passionate enough about the Crimson Tide to come to Tuscaloosa to see that game.

100,000 is 1% of 10 Million. So that means that only 1% of Alabama football fans were passionate enough about the Crimson Tide to come to Tuscaloosa on October 1st, 2005, to see them play.

So all the passion and electricity you saw in that video above, that wasn’t Alabama football fans.  That was the 1% of Alabama football fans who are the MOST PASSIONATE about the Crimson Tide.

Think about your business. How many customers do you have?

Let’s say your VP of Marketing wants to create a conference just for your customers.

Could you get enough customers to attend to make the event viable?  Maybe not.

But do you think you could get 1% of your customers to attend?  Yeah, that’s a possibility.

Then how is your business different from Alabama football or NickMercs or Taylor Swift when it comes to creating passionate customers that love you?

It isn’t. The difference is, Alabama football and NickMercs and Taylor Swift do a better job of ENGAGING their fans than your business does.

 

Excitement breeds excitement

Let’s say your business has 1,000 customers. 1% of 1,000 is 10. So you have about 10 customers that absolutely love your business.

Who are those customers? You should know who they are, their names, what they do. Your business should be in constant contact with them. Your business should empower those 1% of your customers to tell others about your business.

Let your most passionate customers be your best salespeople. Let them sing your praises to others. They are already doing this (because they love you), your business just needs to be smart enough to give them better tools to do what they are already doing.

That will lead to more customers for your business. And once your current customers see how you are engaging with, embracing and empowering your 1%, it will make them want to join that 1%.

What if your business could grow its customer base by 10% a year, and increase its 1% of customers that love you by another percentage point every year?

So start out with 1,000 customers and 10 customers who love you.

The next year, you have 1,100 customers and 20 customers who love you.

The third year, you have 1,210 customers and 30 customers who love you.

The fourth year, you have 1,331 customers and 52 customers who love you.

The fifth year, you have 1,462 customers and 73 customers who love you.

 

So in just 5 years, your customer base could grow by almost 50%, and the number of customers who love you could increase over sevenfold.

Think of the impact that amount of growth could have on your business. And it’s not just growth, it’s cumulative growth, fueled by engaging just 1% of your customers, and letting them spread their passion for your business to others.

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Monster Energy is the Red Bull That You’ve Never Heard Of

If you’ve attended a marketing, business or content conference in the last decade, you know how successfully Red Bull uses content marketing. They are experts at content marketing, in fact I used the brand as one of the key case studies in my book Think Like a Rock Star. Red Bull also invests heavily in extreme sporting events, as well as mainstream sports like NASCAR, and even in the thriving E-Sports industry.

Red Bull doesn’t market its product, it markets what happens after you drink it. The brand sets the standard for successful content marketing, and its focus on sponsoring and helping to grow the sporting events that its customers love is absolutely brilliant.

Red Bull does everything right when it comes to marketing, and it’s no surprise that they dominate the energy drink space.

Except…they don’t. In fact, Red Bull may not even be the market leader in the energy drink industry by the end of 2021.

monster energy

Meet Monster Energy, the Red Bull That You’ve Never Heard Of

What makes the energy drink industry so fascinating is that it doesn’t have one brand doing exceptional marketing, it has two. And this exceptional marketing has helped catapult both brands to own the energy drink industry.

Heading into 2021, Red Bull was the energy drink market leader, with just over 40% of the market. Monster Energy was right behind them with just under 40% of the market. However, Coca-Cola acquired a 17% stake in Monster Energy in 2014, and Monster Energy will be benefiting from Coca-Cola’s distribution channels as part of that relationship. This has led to speculation that Monster Energy could actually pass Red Bull to become the energy drink market leader in 2021 or 2022.

But the purpose of this post isn’t to prop up Monster Energy or really Red Bull either. What I wanted to focus on is how both brands have created incredibly effective marketing strategies. And in some ways those strategies are very similar, and in others, they are quite different. I want to examine those strategies in detail here because there are some key lessons that you can take from both brands to improve your own company’s marketing and give you a competitive advantage in your space.

 

Red Bull and Monster Energy Both Market Sporting Events, But in Very Different Ways

Both Red Bull and Monster Energy invest in sponsoring athletes and teams at sporting, extreme and esports events. This is very smart marketing, and it helps both brands show customers that they have ‘skin in the game’. It also communicates to customers that these brands are committed to seeing these events grow.

While both brands are active in these events via sponsorships, their marketing efforts are slightly different. Red Bull works to associate itself with the athletes. Their marketing message is that they help fuel these amazing athletes and help them accomplish these amazing feats. Red Bull sponsors the athletes and then leverages their accomplishments via content marketing. These athletes give Red Bill access to thousands of hours of amazing content, which is a big reason why Red Bull’s content marketing is viewed as some of the best work by any global brand. But make no mistake, the underlying message from Red Bull’s marketing is that these amazing athletes doing amazing things, are doing it because they drink Red Bull.

Monster Energy takes a slightly different approach. The brand does sponsor teams and athletes at events. But while Red Bull’s branding is more about the athletes and how Red Bull helps fuel them, Monster Energy is wanting to position itself more as a lifestyle brand. Monster not only sponsors events, teams and athletes, but the brand also has a major presence at these events. The brand will offer product sampling at events, goes out of its way to connect directly with fans, and also has the famous (infamous?) Monster Girls at their events. While Red Bull is positioning itself to align more with the athletes, Monster Energy positions itself more to interact directly with their customers via events.

 

Red Bull is All-In on Traditional Marketing, Monster All But Ignores It 

‘Red Bull gives you wiiiiings!’ You’ve probably heard that tagline from Red Bull’s commercials many times over the years. The brand heavily invests in broadcast commercials, and it has created some stunners.

When’s the last time you saw a commercial for Monster Energy?  Have you ever seen one?

Both Red Bull and Monster Energy are attempting to connect with the 18-30 year-old demographic, especially males. This group has a highly tuned bullshit detector when it comes to traditional advertising and marketing. So both brands are mindful of that in their marketing efforts.

Red Bull works with and associates itself with extreme athletes, and then uses them as sort of ‘influencers’ to connect with the end customer. Red Bull’s broadcast and print marketing efforts focus on the athletes and their amazing accomplishments moreso than the brand itself. This approach of letting the athletes lead the marketing and Red Bull takes a backseat has resonated with customers, who don’t see it as marketing, but rather as awesome content.

Monster Energy focuses more on connecting with customers directly. As you might guess, the brand all but avoids traditional marketing in trying to connect with the 18-30 age group it covets.

Marianne Radley, Monster’s Senior VP of Marketing, explains: “We’re very hesitant about doing interviews for no other reason than focusing on building the brand one can at a time with intimate consumer connections. Our marketing has always been very below the line. We’re mindful of that, so we try to keep our time with the press minimal just so it doesn’t look like we’re pushing so much in your face. Everything we do is genuine and sincere, and we try to keep that for all points of communication.”

Notice Ms. Radley’s comment about how Monster doesn’t want to appear to be ‘in your face’ with its marketing. She’s speaking to her customer base. She knows young males hate promotion, so the second one of her customers thinks ‘this smells like marketing’, they will tune out, and Monster has lost a chance to connect with that customer. As you can see from her quote, the brand is very mindful of how it connects with its customers.

red bull

 

Red Bull and Monster Energy Market Differently, But the Result is the Same

While the two brands market and position themselves in slightly different way, there’s one key element that’s the same. Both brands invest in supporting the athletes and events that are important to their customers.

At the end of the day, both brands are courting the coveted 18-30 year-old male category. This age group is very resistant to traditional marketing efforts, as mentioned earlier. So both brands use different tactics to reach their customers. Red Bull does traditional marketing, but it’s not traditional in how it’s structured. The focus isn’t on Red Bull’s products, but on the athletes and celebrities that use those products. That makes the marketing more interesting and palatable to millennials.

Monster Energy all but ignores traditional marketing. Instead, the brand focuses on connecting with their customers personally at events and through non-traditional marketing efforts.

The results speak for themselves. Both brands command roughly 40% of the energy drink market, and they control over 80% of the market space combined.

 

What’s the Key Takeaway For Your Brand?

Focus your marketing efforts on what’s important to your customers. Years ago, Fiskars was looking for a way to revitalize interest in a centuries old brand that made a very boring product; scissors. Fiskars started by doing market research into who its customers were, and how they used its product. What the brand found surprised them; Their customers were actually much younger than they assumed, and Fiskars scissors were quite popular among scrapbookers. Fiskars took what it had learned, and applied that to its marketing. They built a community for scrapbookers, and let some of Fiskars most avid scrapbooking customers, run the community.

The community, which was dubbed The Fiskateers, ended up being quite successful for Fiskars in building sales and brand awareness. The lead members of the Fiskateers community were highly sought after by crafting stores across the country. Crafting stores always enjoyed a boost in sales when a Fiskateer appeared and spoke to the customers. Fiskars’ success with The Fiskateers was because the brand invested in the activities and communities that are important to its customers. Just as Red Bull and Monster Energy invest in sporting events, Fiskars invested in growing the scrapbooking community. In doing so, the brand created something of value for its customers, which in turn, created value for the brand.

Think about how your customers use your products, and for what reasons. How can you incorporate your customers’ behavior into your marketing efforts? What are your customers passionate about and how can you sponsor those passions and help them grow?

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A Key Marketing Lesson That Most Businesses Completely Miss

When I wrote Think Like a Rock Star, I spent a lot of time researching how rock stars connected with their fans, and the marketing strategies they employed. One of the biggest lessons I learned is that most rock stars are excellent at understanding this key lesson to building a successful business:

Reward the behavior you want to encourage. 

Rock stars love their fans, but they also view every fans as a potential driver of business. They know that every fan they have will promote them to their friends and family. As such, every fan will help drive ticket sales, merch sales, and album sales. Rock stars trust their fans and empower them to market for them.

Rock stars want fans to engage in particular behaviors: Such as promoting them online, and offline. So rock stars go out of their way to connect with their fans directly, because they know this connection will build trust and admiration for the rock stars, and will encourage them to promote the rock star to their friends and family. And it also serves as the reward for fans that have already done so.

Every year as part of the CMA Music Awards, country music stars will participate in a Fan Fair. It’s a chance for fans to meet their favorite artists and get a picture taken with them or an autograph signed. Typically, an artist will stay for a couple of hours, maybe a bit longer. In 2010, Taylor Swift stayed for an incredible 13+ hours to sign autographs for her fans, occasionally stopping to perform music for them.

But that pales in comparison to what Garth Brooks did in 1996 at Fan Fair. In 1996, Garth Brooks was the face of country music, and one of the biggest music stars on the entire planet. He was not scheduled to attend Fan Fair in 1996 and wasn’t promoted as being there. During the middle of Fan Fair, he showed up, unannounced, and went to an unmarked tent to start signing. He stayed for a staggering 23 hours straight signing autographs for every single fan that showed up. He never left the tent, not even to use the bathroom. Security at Fan Fair tried multiple times to end the session so Garth could leave, and each time he told them no.

Rock stars view their fans as promotional partners and they trust them enough to empower them to market for them. As a result, they act differently toward their customers, and they treat them differently after they engage in the behavior that they are trying to encourage.

 

Now, how does this apply to your business?

Think about the types of behaviors that you would like to see your customers engage in.  Such a list for most businesses would probably look something like this:

  • I want customers to buy from my business
  • I want customers to continue to buy from my business and become repeat customers
  • I want customers to increase the amount of every order
  • I want customers to generate positive Word of Mouth about my business

 

Now think about your marketing strategy in terms of:

1 – What can I do to get my customers to engage in these behaviors?

2 – What can I do to reward my customers for engaging in those behaviors?

 

Many businesses focus only on getting customers to buy. But if you look at the above list of desired customer behaviors, there’s a natural progression, isn’t there?

You want customers to buy from your business. Customers that buy more than once become repeat customers. Customers that buy repeated from a business tend to purchase more from that business, because they trust them. Customers that trust your business, will promote you to others, generating positive Word of Mouth.

So if your business had a mechanism in place to reward customers for engaging in the behaviors that you desire, that would not only encourage them to CONTINUE to engage in those desirable behaviors, but it would also encourage them to move to the next stage of desired behavior.

Let’s look at a couple of examples:  One of the desired behaviors above is “I want customers to continue to buy from my business and become repeat customers”.  Then create a Loyalty Program. A loyalty program would not only encourage customers to become repeat customers, it would reward customers for engaging in the behavior of making repeat purchases.

Another example: One of the desired behaviors above is “I want customers to generate positive Word of Mouth about my business.” Then create a Customer Advisory Panel. Dell did this in 2010, they identified customers online who were creating content around the Dell brand, and invited them to come to their world headquarters in Austin, TX. This happened again in 2011, and I was lucky enough to work with Dell to facilitate and moderate both events. During the 2011 event, the customers that attended were surprised when CEO Michael Dell joined briefly to say hi to the group and answer questions.

Introducing CEO Michael Dell to the DellCAP group

By holding this event, and having Dell’s CEO and CMO speak to the group, it communicated to the customers that Dell valued their time and feedback. This improved the customers’ perception of Dell the brand, and rewarded them for engaging in the behavior that Dell desired, and at the same time encouraged the customers to CONTINUE to create positive word of mouth about the brand.

So much of marketing for many businesses is simply focused on getting a sale. Just get someone to buy once, that’s it. Few businesses think about what happens AFTER the purchase. How do they ensure that the customer is satisfied, maybe even thrilled with the purchase? What reward is given to them for engaging in that behavior? How do you encourage the happy customer to continue to engage in the behavior that you want them to?

:What happens after they buy?” is a question every business should be asking. What do you WANT to see happen? Do you have the process in place to make sure your desired outcomes are met?

Shouldn’t you?

 

Are you subscribed to my newsletter, Backstage Pass? If not, now is the perfect time to get on board. Backstage Pass is delivered straight to your inbox every Friday morning. I’m working on this week’s issue right now and I gotta say, it’s gonna be a gem! I will be covering how your company can create an educational system for your employees to boost their skills, productivity, and keep them longer at your company. Such a vital process that very few companies make the investment in. I’ll give you the roadmap to do so, along with examples of companies and organizations that have done so successfully. Want in?  Just click the image below!

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Monday’s Marketing Minute: All Eyes on Clubhouse, Kroger’s Smart Shopping Cart, B2C Marketing Priorities

Happy Monday! Hope you’re ready for an amazing week, off to a rainy start here, but at least it’s not bitterly cold! By the way, a quick thought, I know a lot of us are really worried about everything that’s happening in the world right now and even locally. A few weeks ago I was driving and listening to the news and just felt overwhelmed with all the ‘bad’ news and stories. Suddenly, I had this thought come into my head ‘You are responsible for your own happiness”. That thought has given me a lot of comfort and calm since, as well as a feeling of empowerment! I hope it does for you as well!

On with the news…

 

So I’ve always had this rule when it comes to ‘new’ social media tools; I usually wait a month or so to try them out. This is because marketers being marketers, we want to overhype every new social media tool, each tool or site immediately becomes the new Facebook killer or the new Twitter killer. So I generally wait a while for the hype to die down, then see if anything sustainable is left.

But I’m jumping in a little faster with Clubhouse simply because the tool offers a different experience than most. If you aren’t familiar with Clubhouse, in a nutsell, it’s an app (only for iOS currently) that has audio chat rooms. You pick a chat room and LISTEN to everyone, you don’t chat by typing. The app is super hot, even though it’s in closed beta and you can only join if given an invite, it still has over 2 million users. I think this speaks to how we are hungry for new offerings in the social media space. 10 years ago, it seemed like a hot new social media tool came out every 3-4 months that everyone gushed about. We haven’t seen that environment in a long time, but I think the pendulum may be swinging back. Clubhouse has some obvious monetization issues to work out both for itself, its investors and hosts, but the future looks bright. For now.

 

Ok I would love this if it came to Wal-Mart, which I only shop at when I have to. The biggest reason why I can’t stand Wal-Mart is going to checkout and seeing those massive lines. But a new ‘smart’ shopping cart that Kroger is testing could make the buying process in grocery stores so much easier! It lets you scan items as you place them in the cart, link up your loyalty cards and coupons, even pay with your credit card! That would help eliminate the biggest detriment most people have to grocery shopping, the checkout line. It’s all about finding and addressing the pain points that your customers have.

 

This always blows my mind. I saw this story from Marketing Charts on top priorities for B2C marketers in 2021.  The top three priorities are: 1 – New customer acquisition, 2 – increasing engagement, 3 – increasing customer loyalty. These are pretty standard, and new customer acquisition is almost always the top priority for all marketers. Yet the same marketers that plan to focus on customer acquisition, loyalty and engagement typically won’t invest in the customer advocacy programs that drive all three. These same marketers could deliver on all three by investing in advocacy programs such as Voice of the Customer, Brand Ambassador and Customer Loyalty programs. And the hell of it is, such advocacy programs are much easier to create, execute and measure in a B2C environment.

So those are some stories that caught my eye on this Monday! Hope you have a wonderful week, check back tomorrow, I’ll have a new post up on how the push to decentralize social media is underway, and look at two people that are making it possible. One you will expect, the other will definitely surprise you! See you tomorrow!

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Monday’s Marketing Minute: NBC Universal’s Marketing Bet on The Office, How Morning Brew Got a Million Readers

Happy Monday, y’all! Hope everyone had an amazing weekend. Last week was my birthday, so I decided to take Monday off, then on Tuesday I got a bit sick and decided to rest for a couple days and before I knew it, it was Friday and I’d lost the whole week here!  So sorry, I will try to make it up to you this week, starting today!

 

So NBC Universal is doing something interesting with its new streaming service and its hit series The Office. I found this story in The Hustle newsletter and unfortunately they didn’t tweet a link to it. NBC Universal is actually building out the service around one show; The Office.  They have a freemium plan that gives you access to the first two seasons of The Office. If you want more, you pay for it, and get all the seasons as well as additional ‘superfan’ content. It will be interesting to see if more streaming services move toward packages built around individual programs. I could see certain very popular shows having enough of a fanbase to add in bonus content, maybe access to Zoom calls with actors from the show, etc, and that being a standalone product. If this was done around shows that are in the catalog, this could really work well.  A package for Cheers fans, or Friends fans that includes Zoom ‘reunion’ calls with the actors, or something similar.  For your business, think about your more profitable product or service, and how that could potentially be a draw to attract new customers.

 

This tweet is a few months old, but I’m just now seeing it and it had such good lessons that I wanted to share. The Morning Brew is a wildly popular business newsletter that last August reached a milestone of having one million people open a single newsletter.  If I have 500 people open mine, I’m thrilled! There were many key takeaways from the article, but the two I noted were that they didn’t focus on number of subscribers, they focused on levels of engagement. Their goal was to get each subscriber to open that first email, with the thinking being that when they do, that greatly increases the chances of them being an engaged reader.  One thing they do that I think is genius (but really won’t work unless you have a huge list) is they send out 4 different subject lines for each newsletter to a small subsection of the list.  Then, they see which subject line led to the most opens, and pick that one to send out to the remainder of the list. Another smart thing is they promote the newsletter via other newsletters! The thinking was that people that like newsletters, will read multiple ones, so advertise where their attention already is, on reading another newsletter!  Check out the article for some great insights on building your own newsletter audience.  This is definitely a priority for me in 2021!

 

Finally, let’s wrap up with a share from the fantabulous Kelly Hungerford. You can never go wrong with Kelly! She points to a CoSchedule study that found that 32% of customers would leave a brand they claim to love after just one bad customer experience. Showing empathy for your customers via your content and interactions can go a long way toward keeping unhappy customers!

 

Thank you so much for reading, I will be back tomorrow with another post, and remember that tomorrow night on Twitter we will have #ContentCircus, starting at 7pm Central! Be safe and be careful this week!

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How to Create Customer Loyalty After the Product Purchase

Let’s say for every product you buy, there are one of three outcomes as far as your satisfaction with the purchase:

1 – Indifferent. The product does what you expected it to do, no more or no less.

2 – Upset. The product doesn’t meet your expectations.

3 – Excited. The product exceeds your expectations.

 

If you are indifferent toward your purchase, the odds are that you aren’t likely to praise or criticize the purchase to other customers. Likely, it was an inexpensive purchase, and you really didn’t have high expectations for it to begin with. For instance, if your purchase cost a dollar and was a complete disappointment, well you are only out a dollar, so you are less likely to be as upset with the quality of the product.

If you are upset or excited with your purchase, then that means you want to talk about it.  You want to share your experience with others. Interestingly, Guy Winch has found that 95% of the time when a customer is upset with a purchase, they will tell other customers, and won’t tell the company that made the product! According to Winch:

“Research has found that 95% of consumers who have a problem with a product don’t complain to the company, but they will tell their tale to eight to 16 people,” he says. “It’s unproductive because we’re not complaining to the people who can resolve our issue.”

Venting also floods the bloodstream with cortisol, the stress hormone. “We tell ourselves that we need to get it off our chest, but each time we do, we get upset all over again,” he adds. “We end up 10 to 12 times more aggravated.”

Isn’t that fascinating, in a depressing sort of way? But it makes complete sense that retelling a negative experience with a product to other customers would make us more upset with the purchase. And the customers we are talking to would likely want to be supportive and sympathetic toward our anger, so they may say they agree that the company was in the wrong, which would make us even MORE upset with the purchase!

Which is honestly a bit unfair to the company, when you think about it. Because we didn’t reach out to them and give them a chance to help us with our problem.

Let’s come back to this in a moment and talk about what happens when you are excited with a purchase. You tell other customers, right? We know this is true from our own experiences for many reasons. We want to share with others what worked for us. Also, we probably want to ‘brag’ on ourselves to a degree by sharing what a ‘smart’ purchase we made.

The point is, we talk to others about our purchase in either scenario. But if you think about it, even when we have a positive experience with a purchase, are we really that likely to reach out to the company and communicate that to them?  Probably not.

So the onus, rightly or wrongly, is on the company to do everything it can to encourage the customer to give feedback on the purchase. If the customer is indifferent toward the purchase, they will likely ignore the request.

But if the customer is either very upset or very excited with the purchase, an invitation to give feedback will be greatly appreciated.

Now, many companies aren’t thrilled with the prospect of hearing from angry customers. It’s just human nature. But, if you can give a customer the support they need post-purchase, you greatly increase your chances of converting the upset customer into a happy one.

And remember, happy customers are your best salespeople. They acquire new customers for you!

So think about how you can better connect with your customers after the purchase. This will only improve and enhance your customer loyalty efforts. And if you want to learn more, we will be discussing this topic tonight during #ContentCircus on Twitter, starting at 7pm Central. Follow me on Twitter, and watch my tweets, the topic will be How to Create Content For Each Stage of the Buyer’s Journey!