DM News recently announced a dubious marketing achievement:  A first-of-its-kind escalation of hostilities between dueling loyalty programs.

In the Oscar-nominated movie Up In The Air, Ryan Bingham (George Clooney) and Alex Goran (Vera Farmiga) spend some time comparing their airline and hotel loyalty programs. Normal behavior, if you spend your life on the road.

In real life, road warriors can also visit various websites to compare airlines’ and hotels’ loyalty programs. This is also normal – the pursuit of best value.

But the new Intercontinental Hotels “Luckiest Loser” campaign is anything but normal, in the way that it appeals to members of their own Priority Club Rewards program who also belong to competitor Hilton Hotels’ HHonors program.
•    The Intercontinental member with the most HHonors points receives 2 million Priority Club points.
•    The top 20,000 “lucky losers” each get up to 20% of their current HHonors balance in Priority Club points, up to 20,000 points.
•    All members receive 1,000 points for just for responding.

The upside and the downside
In the short term, we applaud Luckiest Loser; it’s a powerful, creative customer retention and upsell campaign. But in the longer term, it aggravates The Great Loyalty Program Trap.
•    Luckiest Loser puts Intercontinental (and Hilton, and other hotel chains) in the position of competing almost solely on the basis of their loyalty programs, rather than on the tangible features and benefits they offer to guests, or on the intangible value of their brands.
•    “Earn points, get rewards” stops being the tie-breaker it was intended to be. Instead it becomes the one criterion for a hotel purchase decision, taking the place of comfortable rooms, excellent dining, business facilities, convenient location, quality of customer service and so forth.

The airlines who pioneered loyalty programs already know this. For them and for marketers in other categories, loyalty programs aren’t just another kind of promotion. They’ve become part of the product itself. These marketers find themselves damned if they do (because they have to spend significantly, just to keep running a program that isn’t part of the core value that they offer) and damned if they don’t (because customers will leave if they cut the program back). We’ve seen many of these marketers jump through creative hoops, trying to find exciting ways to get members to redeem points at lower liability.

So Intercontinental’s Luckiest Loser is an ingenious promotion.  But it may be helping to dig a hole that’s way deeper than marketers ever thought possible.

Read these three names – do they sound familiar?
1. Declan Mcmanus.
2. Ralph Lipschitz.
3. James Osterberg Jr.
Never heard of them? Actually you have – because all three overcame obstacles to marketing success.

As a rule, changing a company, brand or product name is risky business for marketers. But sometimes it can be necessary, and it can make an immediate measurable improvement in marketing. A recent Wall Street Journal article reports how some luxury hotels have increased their business in hard times simply by dropping one word -“resort” – from their names, in response to corporate sensitivity about extravagant spending on conventions and meetings.

What were they thinking?
They were right. But many marketers change names for the wrong reasons.
•    Brinks, the home security company, became Broadview. This one was necessary because they had to give up the Brinks name. But did they really have to choose such brand blandness?
•    Here in Chicago, we saw the Sears Tower become the Willis Tower (but you can call it “Big Willie”)– ego-tripping on the part of the new owner of the (former) world’s tallest building.
•    In an exercise of inexplicable corporate silliness, Radio Shack changed its name to The Shack. Now I think of a rundown building, or maybe a basketball player.
•    And in yet another demonstration of high-tech business mumbo-jumbo, Gavitec AG became NeoMedia Europe AG.

The Ballantyne Hotel & Lodge and the Renaissance Orlando - neither of them named “resort” any more – are only two examples of name change for the right reasons.
•    The New York Times reports how a venerable Canadian history magazine had to change its name to dodge online porn filters. (Bet you’ll click through to this one.)
•    A detailed case study shows how leading non-profit changed its name to Legal Momentum, to overcome confusion about its mission.
•    A professor at the University of Florida makes a case for marketing delicious (but negatively-perceived) goat meat as “cabrito.”

As for Declan, Ralph and James Jr:  Celebrities become brands. The wrong name is a barrier to brand success. So to market themselves more successfully, they became Elvis Costello, Ralph Lauren and Iggy Pop.

You can find marketing innovation in the oddest places: A construction site along a main road in the western suburbs of Chicago.  And in oddest forms: a giant inflatable cat squeezing a hard-hatted worker in its fist. I had to stop and get out of the car and take this picture.

It made me forget about innovations like social media, segmented direct marketing and search engine optimization for a while, and give some thought to one of the dinosaurs (literally, in some cases) of marketing: the giant inflatable display.

They get attention by blowing up (excuse the pun please) a brand message, like the giant Firehawk inflatable does for Firestone tire stores. But I’ve always wondered what auto dealers were thinking, when they blew up those giant inflatable gorillas, Godzillas and so forth. The only message they deliver is “big.” Kind of redundant, in an auto dealership half a block long, with row upon row of shiny new cars, bright lights, string of colorful pennants and big, big signs. Local visibility and awareness is not a problem. Passers-by do not suddenly see a giant blue gorilla and say “Gosh! I was going to buy some paint at the hardware store. But that big gorilla makes me think I’ll stop and buy a Buick instead!”

The giant inflatable gorillas and Godzillas are an aberration; auto dealers’ usual attitude is that if it doesn’t work, it’s gone. But the giant inflatable cat is an innovation. It doesn’t support a brand (like the Firehawk inflatable), but it does deliver a very specific message. The fat cat inflatable is designed and built to support unions’ picketing of employers at job sites.

A marketing menagerie
It turns out that the fat cat is not alone.  A little Googling revealed there’s a wide selection of giant inflatables manufactured specifically to support labor vs. management messages: A rat, a pig, a cockroach, even a skunk.

They’ve been used in management vs. labor disputes all over the U.S., including baristas vs. Starbucks corporate at the annual meeting, and for striking movie and TV writers. There’s even a flickr photo posting site for fans of the giant inflatable rat.

Leave aside labor vs. management preferences and opinions about negative advertising for a minute.  Imagine the giant (inflatable?) light bulb appearing over the head of the innovative marketer at Big Sky Balloons or Inflatable Images, when he or she first thought “How can I expand my customer base beyond the business segment? What if…I created a product to satisfy the needs of the ‘other side’”?

I guess we should have gotten into the yard sign business after all. Who would have guessed it be an annuity?

You might recall that a few months back I contributed a post on the name change from Brink’s to Broadview and how it struck so many people as odd that such a great security name as Brink’s was being thrown under the bus. Lots of folks commented from a marketing perspective that it didn’t seem to make much sense. As it turned out the need for the name change was not driven by marketing but by Finance and Legal. When the home security business as spun off, a provision of the agreement allowed the new entity to be called Brink’s for only a short period of time.

Naming by focus group

Even with the contractual need to change, the Broadview name seemed to be one created by a few focus groups: kind of bland, not offensive, but not compelling. And the $120 million to be spent in support of the new name over two years as reported by Ad Age seemed  a bit excessive. Anyway, just when we were getting used to the Broadview Security name we find the company is now being sold to TYCO … and its name will be changed to ADT. It might be a good idea to forget about the window decals and yard signs for customers this time around. Perhaps an erasable white board would be more appropriate. The customer can just write the name of whomever is sending them a bill each month and hang it on the front door.

Oh, one more thing. If anyone can explain the flood of Broadview TV ads that have been running in the last few weeks, drop me a comment. Must have forgotten to drop the cancellation paperwork in the mail.

Later.

On January 18 BtoB Magazine launched their first Social Media Marketing Awards program. So we have to ask: Does the advertising/marketing business really need yet another way to congratulate itself?

And we have to answer: Yes…but only if:
•    BtoB is serious about choosing its winners based on the results that the entry form requires: “Describe how the program met or exceeded its objectives, including quantified results such as growth of brand awareness, sales, conversions, customer satisfaction, etc.”
•    Those results meet the needs of large businesses, which can have very different needs than those of small businesses using social media marketing.

To meet the needs of large businesses, the “quantified results” will have to go beyond the current criteria for social media measurement.  This is a subject we’ve beat over the head in previous posts - Social Media’s Failure To Communicate, Back To Basics for Social Media and Social Media Bubble – where we objected to the usual vague, soft, fuzzy feel-good results that social media gurus are so fond of quoting.  We’re not alone; we agree (well, maybe not 100%, but close enough) with:
•    Forrester Research: “It doesn’t matter that you have followers, fans, or a community; those are assets, not returns. It is how you use those assets that matters.”
•    Keith Kochberg in DM News: “While there are basic metrics available — number of Facebook friends, Twitter followers, blog mentions — they don’t necessarily correlate to increased sales or leads, which for an advertiser have historically been the true measure of a campaign’s success.”

Small business vs. big business
There’s already pretty good evidence that many small businesses can market effectively through social media and read the results. In most cases they’re marketing to a very tightly defined audience, and it’s the only marketing they’re doing. Barring some coincidence that can’t be predicted (like being part of a front page news story), if their business goes up it’s the social media marketing that’s driving it.

But it’s not so easy for a big business that markets many products and services to many kinds of customers in many media. This makes it difficult for them to read the results of any one tactic or marketing discipline they’re using. Right now many large enterprises are jumping onto the social media marketing bandwagon. They usually don’t even know why. Eventually they’ll jump off if they can’t see a direct relationship between the money they spend in social media and the qualified leads, new accounts, increased sales and above all incremental financial returns that social media marketing generates for them.

So far it seems like this new BtoB awards program is a step in the right direction. Because they’re specifically asking for quantified results. Business-to-business marketers are a lot less tolerant of BS than consumer marketers. Maybe social media marketing is getting down to business at last.

Back in August, I bestowed my second Recession Thriver Award on Jos. A. Bank. As loyal readers may recall, I based my selection on two things: the numbers and the attitude. Often when a blog post appears, it has a half-life measured in seconds. But that one generated enough sustained buzz that I thought a follow up was in order.

The Numbers

In August, the Jos. A. Bank financial results were impressive in the face of a continuing recession. As department and specialty stores continued to suck wind, Jos. A. Bank was awash in black ink. While most companies struggled to show any profit growth through cost cutting of every sort, they could not hide declining revenues. And as the recession deepened the anemic quarterly sales numbers were declines against the quarter-a-year-ago numbers that were themselves declines. But not for Jos. A. Bank. Revenues were up as were same store sales.

So now they have reported third quarter numbers and the performance is even better. Net income for the quarter is up 26%! Total sales are up 8.1% and same store sales increased 3.3%. And what they call “Direct Marketing” sales grew 21.2%. We’ll talk more about that last one in a moment.

These folks are smokin’!

The Attitude

The reason the numbers are soaring while competitors are contacting bankruptcy attorneys is twofold. First, the company-wide attitude is one of energy, nimbleness and smart risk taking. Over the last year, Jos. A Bank has tried every conceivable variation of price promotion to drive traffic. In rapid-fire order they have taken a shot at everything from “Buy One Get Two Free” to “Everything is 70% Off.” If one of them drives traffic and sales, they roll it out for a few days then try something else. They rotate the winners with velocity and create the perception that something is always going on.

The second reason is akin to keeping your foot on the throat of a fallen opponent. At a time when many of their competitors are contracting and literally hanging on by their financing fingertips, Jos. A. Bank is rolling out new businesses and marketing tactics. I mentioned above that they highlighted their Direct Marketing results. This isn’t email or snail mail to customers but the Jos. A. Bank shorthand for their Internet business. They have been aggressively expanding their web store and feature just as many value promotions with the same velocity. Their web wizards are a busy bunch.

The most recent business addition takes dead aim at Men’s Warehouse: tuxedo rentals. The press release indicates customers have asked for the service. But in typical Jos. A. Bank business fashion the introduction is going to be fast and risk managed. They are quickly trying the rental program in 5% of the store. If successful, they will have it in half of their stores in time for the spring wedding season. And they aren’t risking their capital. The tuxedos are going to be owned by a national distributor and shipped to the individual stores when rented. Sounds like a winner on a lot of levels and a competitive threat that Men’s Warehouse will have to deal with very soon.

The ideas behind most marketing alliances are pretty obvious. Sometimes the two partners are virtually inseparable.
•    So Louisville Slugger is the official bat of Major League Baseball.
•    And Sharp Aquos is MLB’s official HDTV.

Sometimes the two marketers’ audiences overlap.
•    Fans eat Papa John’s, the official pizza of the NFL, as they watch games on TV.
•    Money management is a universal need. So Bank of America is the official bank of the NFL.
•    The Big Mac is a mass market favorite hamburger.  And for the past month or so, Avatar is the mass market favorite movie.
Huh?
But some alliances are so strange they make you say “Huh? What were they thinking?” See if you can tell if the following alliances are real, or just figments of the overactive imaginations of R&Mers taking a break from real marketing work.  No cheating – answer before you click, please.
1. Scotts Grass Seed and Major League Baseball.
2. Bob Dylan and Citibank.
3. Thomas Crapper-branded bathroom accessories and gift items.
4. Star Wars and Weber grills.
5. Windows 7 and Burger King.
6. 24: The Series Energy Drink.
7. Harley Davidson and Barbie.
8. Popular Mechanics magazine and Old Navy stores.
9.The National Audubon Society, Olympic Paints and Lowes, the home center chain.
10. Volvo and New Moon, the vampire movie.

The answers: They’re all real except for #4 – the Death Star kettle grill was proposed but never executed. Some of them are good, but not obvious, ideas.
•    Major League Baseball fans knows how important their favorite team’s groundskeeper can be; Scotts takes advantage with Wrigley Field seed, Fenway Park seed, etc.

•    Old Popular Mechanics magazine cover art is a perfect fit with Old Navy’s retro appeal.

On the other hand:
•    Gift items branded with the name Thomas Crapper (the alleged inventor of the flush toilet) – not so sure about that one.
•    The Harley Davidson Barbie Doll – we’d like to see the Venn diagram that shows how the Hells Angels and little girls market segments overlap.

Someone is saying “….and your point is?”
Some marketing ideas don’t seem to make sense, at least on the surface. That doesn’t make them wrong, because as we said in a previous post, sometimes it makes sense to stop making sense. It doesn’t make them right either, because risk vs. reward is a constant juggling act in innovative marketing thinking. Were you looking for a secret formula for successful marketing alliances? Sorry, there isn’t one, except the one that says “Step beyond the expected. But watch your step.”

Inflation isn’t limited to monetary matters. Recently we’ve witnessed College Bowl game inflation: An increase in the number of bowl games, to 34 in 2009-10, leads to a loss of value among individual games. Somehow “Meinecke Car Care Bowl” and “San Diego County Credit Union Poinsettia Bowl” aren’t in the same league as “Rose Bowl” and “Orange Bowl”.

And now, in our business, there’s marketing formula inflation: “The 4 (INSERT ALPHABET LETTER HERE) Of Marketing.” It all started back in 1960 when E. Jerome McCarthy proposed the 4 Ps of marketing: Product, Price, Place, Promotion.

This was a good idea, but before long agencies, consultants and others got greedy. The race was on to monopolize a letter of the alphabet (“hurry, hurry, special offer limited to first 25 responders”) to create supposedly-proprietary marketing formulas.

Why settle for the “4 Ps,” when the gurus of modern marketing offer you so many ways to guide your thinking? Here are a just a few examples you can choose from:
•    The 4 As: Analysis, Attention, Acceptance and Action.
•    The 4 Cs: Consumer wants and needs, Cost to satisfy, Convenience to buy, Communication.
•    The 4 Es: Experience, Everyplace, Exchange, Evangelism.
•    The 4 Fs (not to be confused with the militarily-unqualified): Filters, Fanatics, Facilitators and Firecrackers.
•    The 4 Ms: Market, Message, Media and Measurement.
•    The 3 Qs: Quantity, Quality and Qualify. (The idea here is the Scrabble approach to marketing– Q is worth 10 points, as much as A, E, V and W combined.)
•    The 4 Rs: Recognition, Relevance, Reward and Relationship.
•    The 4 Vs: Validity, Value, Venue and Vogue.
•    The 4 Ws: Who Are You? What Do You Do? Why Does It Matter? and What Makes You Different?

This list is the result of a quick Google search. Which one’s right for you, or your agency or your company? You could review all the options carefully, comparing one against another, passing judgment on which one best fit the realities of marketing for today and for the future.

Or you could take the deflationary approach. There’s a different kind of choice that’s implied by what’s missing from this list: The Bs. At R&M, we kind of like “Marketing With No Bs.”

Like the evil monster in the 1958 B-grade drive-in movie, direct mail seems to be “The Thing That Couldn’t Die.” This horrifies the electronic media pundits, who keep insisting that marketing communications that use paper and ink already have one foot in the grave.

In May of 2009, a Borrell Associates research report predicted that direct mail spending will decline 39 percent during the next five years, from $49.7 billion in 2008 to $29.8 billion in 2013. According to Borrell, “Direct mail has begun spiraling into what we believe is a precipitous decline from which it will never fully recover.”

Not dead yet.
But a recent Wall Street Journal article contradicts that prediction: “Despite prevalence of digital media, entrepreneurs find old fashioned direct mailings still key to winning customers.”  Some pretty convincing anecdotal evidence shows that responses and sales start declining when firms abandon direct mail in favor of e-mail.”

And direct marketing guru Bob Bly cites a BtoB Lead Generation Guide article that shows:
•    Direct mail responders are 10 - 20% more likely to convert to a qualified lead than their online counterparts.
•    Direct mail responders are 10 -20% more likely to convert to qualified leads than online responders.
•    Sales reps are 7 – 15% more likely to work a DM lead, vs. an online lead.
(Full disclosure: We do both DM and EM at here R&M. We’re good at it. Our clients get results. We make money.)

It keeps coming back to haunt us.
Here’s why direct mail is still alive:
•    It’s tangible and real in your hands, while e-mail is virtual and can be eliminated with a click. Plus direct mail can deliver the “lump” – the merchandise item or dimensional construction that inspires curiosity.
•    Direct mail can use dramatic copy and graphics together, to get recipients to open the envelope. E-mail is limited to the one-dimensional subject line. Of course, this is a meaningless distinction if you’re a credit card marketer who sends out the typical “XX% APR” direct mail in a #10 envelope.

•    A lot of direct mail hangs around to be looked at later; most e-mail gets deleted immediately. Before sitting down to write this, I opened a Valpak mailer received two days ago, to extract a coupon for the local gyros stand.
•    There’s less competition – I personally receive far fewer direct mail ads than e-mail ads.
•    You can tell a longer, richer story in direct mail. I received the spring 2010 Burpee garden catalog in the mail, during a snowstorm, and sat down to page through it immediately. But I probably would have deleted a Burpee e-mail with a link to their online catalog.

Yes, we all know that e-mail costs less and is easier and faster to develop than direct mail.  But most efficient is not necessarily most effective. And anyway, if the Borrell research is right, this is the time to be a direct mail marketer, because you’ll have the whole mailbox to yourself.

“Think different” said the Apple campaign from a few years back - good advice for agencies who want to bring their clients fresh new ideas. The problem is, here in the USA even the most bizarre ideas quickly become business as usual.
•    Rock stars and athletes are so last week; today teens want be like the bloodsucking undead.
•    A billionaire offers to have his head shaved as part of a pro wrestling promotion.
•    A porn producer offers Octomom a million dollars to make a film….a rival offers her the same to keep her clothes on.

What’s an agency to do? Here at R&M we know one resource that’s as good or better than the standard “anything goes” brainstorming session. We look at what they’re doing across the ocean in Japan.

For a really big product introduction idea, tie-in with a high visibility fast food chain. To introduce Windows 7 to Japan Microsoft tied in with Burger King to create a Whopper stacked with 7 beef patties. (A previous Microsoft promotion for the ill-fated Vista operating system listed features and benefits in Japanese, on rolls of toilet paper. Not a big idea, but an honest one.)

Need a real life “spoke-hero” for your brand? Minimize controversy by borrowing a prominent figure from another culture, as the Japanese do with Barack Obama action figures.

Do distribution differently for your product or service. While everyone else moving to the Internet, consider a tried and true channel: The vending machine. In Japan you can drop in your money and press the right buttons to buy live lobsters, umbrellas, and underwear.

Get your employees involved in a long-term strategic initiative to assure that your company will have customers 20 or 30 years in the future. Japan’s population is aging –so Canon gives its employees time off to go home and make babies.

Weirdness is in the eye of the beholder. In Japan these ideas are no weirder than the vampire trend, Donald Trump and Octomom examples are in the USA.  Their value is as idea-starters, ways to start seeing things from a different point of view. But they’re not good candidates for direct imitation in American marketing – unless you’re one of our clients’ competitors, in which case we urge you to go ahead and print your features and benefits on toilet paper.

By now you’ve read all about Pepsi’s pullout from its 23 years of Super Bowl sponsorship. Instead, they’ll be running a social media program for the Pepsi Refresh Project, inviting consumers to create and vote support for thousands of worthwhile local community projects. Everyone seems to think this is a really important marketing move. But there’s little consensus on exactly why Pepsi is doing this, or what they hope to get out of it.

Reading all the press responses was like listening to the old story about the blind men and the elephant (one touched its side and said it was like a wall, a second touched its leg and said it’s like a tree, a third touched it tail and said it’s like a rope).
•    According to DM News, it’s a sign that “Direct marketing is now the centerpiece of all advertising.”
•    Advertising Age asks: “Is Pepsi’s Pass on Super Bowl an Offensive or Defensive Move?”
•    Business and technology group blog Techdirt is sure that online is the key factor: “Pepsi Drops Super Bowl Ads… Goes With Online Promotions Instead.”
•    Naturally, for Social Media Today, social media is what matters: “Pepsi Drops the Super Bowl for Social Media.”
•    For green business news site Environmental Leader, doing good is the core concept: “Pepsi Drops Super Bowl Ads in Favor of Cause Marketing.”

And so forth and so on. My R&M colleagues contributed some less biased, more insightful opinions:
•    Lowell pointed out the trade channel angle: “Since the dawn of Super Bowl advertising, in conference rooms all over the country there have been comments like: “We’ll get to take our best customers!” and “This is a great way for the sales guys to schmooze the customers.” But now Pepsi has signed merger agreements with Pepsi Bottling Group and PepsiAmericas - 80+% of their North American beverage volume. No need to schmooze your own people.”
•    Bob said Pepsi’s always been a copycat: “Pepsi looks at Coke on how to be a brand and then copies them. They act inferior, instead of having their own vision. But now that they’re doing something on their own, they’re doing a me-too again, copying the American Express Member Project program from a few years ago.”
•    And according to Alan: “What’s missing in a lot of what you read is what they really hope to accomplish in overall profitability, because between the cost of marketing and the cost of the Refresh program funding, they’re not saving any money. How does this work to build Pepsi business, and how will they know that it worked?”

We never thought we’d find ourselves classifying social media with Super Bowl advertising, but we’ve got to ask: Is this a big breakthrough for Pepsi (and other giant marketers)?  Or did the wheels just get too squeaky on the old Super Bowl bandwagon, so they jumped to the new social media bandwagon? When it you’re choosing something as simple as a cola, what’s the real driver: Clever and spectacular, or involving and relevant?

So what do you think? Is Pepsi’s pullout from Super Bowl advertising like a wall, or a tree, or a rope….or what? Comment, please.