Thursday, April 27, 2006

Reader's Choice = Marketing Measure?

A number of technology publications have Readers' Choice awards. This is where companies nominate their own products, the magazines do a basic vetting of the applicants and then open up the voting to their readers, via the Internet.

Most companies then make sure they send the link to the voting mechanism to customers, partners and other allies, encouraging them to pull the lever for them. Often, these voting mechanisms require nothing but checking a box for your "favorite" product in a category - no satisfaction rating, no quality measure, just a click is all required.

So, as a result of this process, you could argue that success is not entirely dependent on the quality of the products, but rather on the ability of the company to turn out voters. Readers' choice awards may then actually be a relatively decent measure of your success in marketing specifically to your existing customer.

I don't just mean getting them to buy more of your product, but actually getting them to want to tell others about it. Yes, insert customer as evangelist reference here. But I really do somehow doubt that most publications' actual readers rush to the websites to vote in these readers' choice awards, without a certain company or product already in mind.

I suppose this is where you could argue it goes back to the actual quality of the offering - your customers have to truly believe in the product in order for you to get them to make even the minor effort of visiting a website and clicking on your name.

And I'd agree that the offering's performance will most often bethe first determinant. But that alone won't inspire people to action. They have to get a warm, fuzzy feeling they get when they think of your company. And they have to be reminded of this feeling once the joy of the neat new toy wears off, or once the relief from the stressor that prompted them to purchase is long forgotten.

One of my clients does a particularly good job at communicating with the actual users of its products, and uses a blog as a key tool to accomplish much of this. It's not very pretty. It doesn't have bright colors or fancy feed aggregators or use tags. But it meets the audience's needs precisely - one that is made up almost entirely of systems administrators with no time for marketing blather nor love for flashy websites. It's updated frequently and is made available via RSS. It provides both company and technical product updates as well as larger market trends and stats. It's what they need, and little they don't. Every now and then, subtly enough, posted there are reminders for the readers on why they are using the product to begin with - stats on cost and time savings, case studies, user satisfaction ratings, etc. These are the things that give systems administrators the warm fuzzies.

In doing so, the client has finished laying the groundwork (that began with a strong product) for asking of the favor of casting a vote in a reader's choice award contest. It's created an exisiting dialogue that makes it much easier to say, "Hey, hope you liked the research we're sharing with you - by the way, we could use your help in winning an award," rather than having to say, "Hey, remember us, who haven't said a word to you since you got our boxed product up and running two years ago? Can you do us a favor?"

The client I'm talking about also sent out this week what I thought was an excellent email asking customers, partners and friends to cast a vote for his company's offering for a magazine's readers' choice award. It was light-hearted, friendly and got my attention.

The subject line: "Vote for Pedro." I certainly did. (Only once, I swear.)

By the way, I'd like to announce a call for nominees for the "From the Frontlines of PR" Reader's Choice awards for best PR bloggers over six feet tall with brown hair
who work in Washington, play the guitar and love the Cubs. Special consideration will go to those who should really post more often to their blogs.

Thursday, April 06, 2006

I'll Gladly Pay You Tuesday

Morgan McLintic has delivered a favorite among PR bloggers this week with his how-to list on ways to be a bad client. His last point, on paying late, is one I was just discussing with a friend in another service business the other day. He does foreign language translation work, and he runs into the same problem - companies that think it's okay to pay their bills whenever they feel like it.

It seems that late-paying is an accepted evil of the commercial world and we were wondering just why that is. I can't be two days late with my credit card bill, or not only will I be charged for late payment, but it will appear on my credit record and I will have future problems.

Businesses seem to be maybe half as worried about prompt payment - especially when it comes to services.

Maybe the lack of concern for late payment abounds because when it comes to services, because nothing physical leaves the supplier's "inventory" and enters the customer's facility. Perhaps there's a sense that the supplier hasn't diminished anything with a finite supply, and so there's less perceived urgency. Of course, our hours are in fact in a finite supply, but hours don't have shiny buttons or get packed in fun-to-play-with bubble wrap. But there are plenty of companies that sell product that deal with late-paying businesses too.

So maybe businesses pay late simply because they can get away with it. And it's not irrational to say that if they can, they should. They earn extra interest on their money and can delay paying it on anything they would have to borrow. So as long as the provider isn't diminishing the quality of the offering, it's actually quite rational - especially if they're not charging significant late fees - because, hey, low interest loans are great! Businesses also deal with small companies more often than the average consumer - and small companies are less likely to arm themselves with the tools required to threaten the credit record of a commercial enterprise.

Moreover, in the service industry, smaller companies are forced to take on the risk of getting stuck holding an empty bag because they often feel they can't afford to alienate a client that might spend more in the future. It's usually less costly to keep a late payer (as long as they do regularly pay) than to go out and get a new client.

In the instances in which I've dealt with this issue, only a few times has it been because the company was struggling financially. Usually, it's because of an adminstrative bottleneck.

Sometimes billing departments work on a cycle of a duration different from that which the bills follow - i.e., they pay their bills on the 30th every month and yours comes due on the 15th. They're still gonna pay you on the 30th; they're not afraid of you.

Other times contacts don't route invoices promptly to their billing departments. Next thing they know, there are two of your invoices in their inboxes and they're a bit nervous themselves about dropping them both at once on their accountants. They're afraid of their own bean counters; they're not afraid of you.

So should you try to make them afraid? It's probably not worth it, either.

I've heard a variety of techniques, both stick and carrot, from offering attractive discounts for bills paid on time (euphemism for late fees), to halting work immediately upon a certain number of days without pay, but no magic bullet.

Smaller companies react better to the discount for late payment - but only sometimes. And in bigger companies, the contact often views it as chump change in the grand scheme of things.

Halting a program over debt is like saying you're going to hold your breath if you don't get your toy. Even if the client pays the debt in the end, you've lost ground on your program and the results are less likely to impress them enough to keep them paying you later. So you're the one who runs out of air in the end, not them. Sure, the client loses out too, but again, because they can't physically grasp what they're not getting as a result of a stop-and-go program, they often don't even realize the damage they've done. They figure they can always just go get another firm and start the cycle again.

So maybe that's what we need to do - help them understand what they're losing.

Clients need to understand that when they delay payment, they delay result, and not because of any consciously punitive decision by their firms. Late payers essentially are removing hours from inventory that were intended for the actual work of the account and throwing them toward administration that lends no value to their programs. Clients should see that it is not irrational for a firm to pay less attention to an account that doesn't pay on time.

In short, they need to understand that in most cases, they aren't really "getting away with it" when they don't pay. They're getting away without it.