Do Location-Based Social Networks Work for Your Company?

Should retailers check out location-based social networks and let their customers check in to their stores? An AdAge.com post on Forrester Research’s recently released study advises companies to take a second look as to whether LBSNs are right to include in their current marketing mix.

The study reports that only four percent of U.S. online adults use location-based mobile apps such as Foursquare, Gowalla and Loopt. Only one percent update these services more than once a week. Even more, a good majority of respondents—84 percent—claimed they were unfamiliar with the apps, a number to surely make companies rethink how necessary it is to start a marketing campaign using LBSNs.

Those numbers may seem like LBSNs aren’t a great investment at this time, but the report calls for another look. Among location-based service users, almost 80 percent of them are male and about 70 percent of them have a college degree and are between the ages of 19 and 35. Even more importantly, Forrester discovered these users are highly influential. They are far more likely to research products and read customer reviews and frequently have family and friends coming to them for advice before purchasing a product. In this sense, companies in the gaming, electronics and sportswear industry that target their marketing plan to men may want to include an early adoption of LBSNs.

Still, plenty of companies have launched marketing plans with location-based apps that aren’t just for the guys, including PepsiCo and Starbucks. When deciding whether LBSNs are right for you brand, consider your demographic and marketing plan’s goals. Weigh whether you want to establish yourself early in the location-based marketing playing field or whether you’d rather sit in the bullpen and wait until the user numbers grow to give it a try. Like every other marketing plan for a retailer, whether it be holding a sweepstakes, advertising or social networking, location-based mobile apps can be just another tool in a well-stocked toolbox.

Facing Up to Facebook

The Big Money.com has published their list of 50 companies that are making the best use of Facebook called “The Facebook 50″. Incidentally, they also have a “Twitter 12.” Not surprisingly, many top brands and retailers made the list.. Coca-Cola stands at the top. According to a story on the PROMO Magazine website, these companies are using the technology to raise the bar on establishing loyal customer relationships, key to a brand marketer’s success.

Included in the top 10 are: Coca-Cola, Starbucks, Disney, Victoria’s Secret, iTunes, Vitaminwater, YouTube, Chick-fil-A, Red Bull and T.G.I. Friday’s. The criteria for this list was having at least 200,000 friends, employing a dedicated social media staff, length of Facebook presence and amount of money spent on social media.

In general, these companies have continued to offer fresh and original Facebook content and material resulting in a tremendous amount of interest from followers. The ratings also found their Facebook presence to be well integrated with a broader marketing approach.

The names on the list speak volumes about the need to engage in establishing a touch point with consumers via social media. Major brands are embracing the philosophy and are seeing great reward.

Chasing the Fidelity Mirage

In his new book, “Trade-Off: Why Some Things Catch On, and Others Don’t,” and in a recent CNN Money article, author Kevin Maney explores an interesting phenomenon that can happen while pursuing two key qualities in the customer experience. The tension in his example exists in the space between fidelity and convenience.

Maney defines fidelity as the total experience of something and uses Starbucks as an example of a brand that initially mastered the art of creating an authentic Italian coffee bar culture in the U.S. Convenience is defined as just that, something that is readily available. At the start, there was nothing convenient about Starbucks, but it didn’t matter because usually consumers are willing to make a trade-off between fidelity and convenience. In fact, most successful brands do one or the other.

Here’s where Starbucks ran into trouble. There rapid expansion took something that was a special and unique offering in the marketplace and made it ordinary. Once it became ordinary, it lost its aura and customers began to figure out many other more convenient ways to get a comparable cup of coffee. They were trying to live in a no-man’s land that Maney calls the, “Fidelity Mirage,” and have been scrambling to turn back the clock.

This is a textbook example of how the customer experience defines success or failure. Understanding your customer and what they are looking for from your brand and category are essential to your growth strategy. Nobody can be all things to all people and even the attempt to do so can confuse and frustrate your customers and eventually drive them away.

Starbucks isn’t the first and not likely the last to try to pull off this “Fidelity Mirage”. McDonald’s attempted to offer gourmet foods and failed. It’s ironic that McDonald’s is now offering gourmet coffee. Levi Strauss offered a successful Dockers brand only to almost kill their base, blue jeans business.

The way to avoid this paradox is to fully understand your customer and why they are attracted to your brand. A deep understanding of the customer should drive marketing and growth plans. Blind ambition will only create obstacles such as the chasm between fidelity and convenience.

Coffee Wars Continue

You are going to have to be a hermit this week in order to miss the large scale marketing campaigns by Starbucks and McDonald’s. The fast-food king will be taking on the coffee king to win consumer’s tastebuds.

Earlier this year, Starbucks introduced a cheaper instant version of their gourmet coffee to appeal to cost conscious consumers. The chain has also initiated several in store campaigns with Pikes Peak and emphasizing the “coffee house” feel of the interior. Starbucks has valiantly worked to maintain the top level position as coffee king while consumer shopping habits and attitudes have jumped all over. This week’s campaign is geared to remind consumers that Starbucks brand is the premier choice.

McDonald’s has slowly rolled out the McCafe starting this earlier this year. This week starts the major marketing campaign that has even AdAge impressed. McDonald’s is using demographic and shopper behavior science behind their campaigns. Some of the ads where developed with Hispanic and African-American preferences as the focus. Overall, the campaign will be using radio, TV, print, and internet to saturate the market just before summer kicks off and icy drinks are popular. McDonald’s understands it will have to prove the quality of their coffee to win over leery customers.

What’s the customer say?
The marketing campaigns may get consumer’s attention, but the deciding factor will be the customer’s experience. Both McDonald’s and Starbucks will need ensure customer satisfaction is extended beyond the flavor of their coffee.

McDonald’s will need to focus customer experience on the entire ordering process. As the fast food king, there is plenty of room for errors to occur when a minivan full of soccer kids order and the mom decides to try a McCafe coffee. One mishap, can ruin the entire customer experience and negate the efforts of their marketing campaign.

Starbucks will need to look beyond being the established coffee specialty house. In-store promotions to highlight other menu items such as pastries or teas could help extend the brand beyond the coffee. Starbucks strong point will be consumers searching for the “coffee house” experience not just caffeine. This is one niche Starbucks should make the effort to ensure experiences exceed expectations.

There’s no better time to rev up employees to provide the best service, ensure quality control, and maintain a positive attitude then during a mass marketing campaign. What the customer’s experience will be the deciding factor.

Starbucks pulls a U-Turn back to loyal customers

Imagine your brand is a car driving along picking up customers on the way. In your journey you expand product lines, store, and different marketing campaigns. Next thing you know, the loyal customers are hearing advertising which claims your brand is too expensive. You stop and make a U-Turn back to your loyal customers.

This is what Starbucks new marketing campaign is focusing on – loyal customers. The past year, Starbucks has been the target of media claiming the brand is too expensive. Providing an opening for competing brands to market as the cheaper coffee choice. Starbucks is aiming to change that assumption.

Starbucks new strategy is to focus on it’s existing customer experience. The company opened a store in Seattle with a new look that resembles the golden era of a “coffee house.” The brand is not touting frozen drinks but putting the good old Starbucks coffee blends in the spotlight. Coffee promotions and store layouts will be focused on what attracted Starbucks first customers: the coffee.

In an article by the Wall Street Journal, Howard Schultz, CEO is quoted ” The issue at hand … is the cost of losing your core customer…It’s very hard to get them back.”

Loyal customers will be the ones to carry you through tough times and be your evangelists in good times. It’s always important to listen to your customer’s voice, they will be the ones who will tell if your headed off track.

Starbucks to Open Stores in European Travel Markets

Starbucks formed a strategic licensing partnership with SSP, a beverage and food concessions leader for travelers in Europe, to open more than 150 Starbucks stores over the next three years in key European markets.

For More Information Click Here