Well considered and communicated performance predictors should assist in effectively positioning your product or service.
Occupying the ‘best quality’ position requires the business to produce best quality service, advertise in the best quality publications, associate with best quality strategic alliances and employ best quality staff.
The risk of not aligning performance predictors with your market position is that consumers are less likely to receive your message, because the mismatch will lead to confusion.
Sunday, March 30, 2008
Thursday, March 27, 2008
Consumer decision making and performance predictors
As a marketer you may be considering spending a part of your budget on ‘testing’ the theory of performance predictors on a sample of your customer base at a focus group. Unfortunately, this is unlikely to provide any meaningful validation of the concept.
Quite frankly, the ego of the focus group participants will get in the way of the truth. They will make comments like, “I select lawyers based on non-subjective factors such as service provision and price, not the number of diplomas on their walls!” But don’t be fooled, this is pride talking.
In reality, it is very rare that a prospective customer acts in a totally rationale manner when making a purchase decision. Emotions cloud our judgement when we are attempting to make a rationale purchase decision.
You are, however, able to test the effectiveness of individual performance predictors in your marketing communications. For example, you may promote one form of guarantee for a specified time, and when the time lapses, change the guarantee. You can then assess the impact of the two guarantees and select the most effective to move forward with on a permanent basis.
Quite frankly, the ego of the focus group participants will get in the way of the truth. They will make comments like, “I select lawyers based on non-subjective factors such as service provision and price, not the number of diplomas on their walls!” But don’t be fooled, this is pride talking.
In reality, it is very rare that a prospective customer acts in a totally rationale manner when making a purchase decision. Emotions cloud our judgement when we are attempting to make a rationale purchase decision.
You are, however, able to test the effectiveness of individual performance predictors in your marketing communications. For example, you may promote one form of guarantee for a specified time, and when the time lapses, change the guarantee. You can then assess the impact of the two guarantees and select the most effective to move forward with on a permanent basis.
Wednesday, March 26, 2008
Your own performance predictors business
Whilst organisations can improve their marketing results by using performance predictors, there is also an opportunity to start your own performance predictors business.
You may have noticed the following performance predictors:
As consumers become increasingly sceptical, the opportunity to start-up performance predictor businesses increases too. Consumers want evidence of performance.
You may have noticed the following performance predictors:
As consumers become increasingly sceptical, the opportunity to start-up performance predictor businesses increases too. Consumers want evidence of performance.
Tuesday, March 25, 2008
Consumers are sceptical
Jarrod and Katherine are a married couple in their mid-30s, and planning to build their ‘dream home’ before the arrival of their first child in 8 months. Given the importance of their decision, they have conducted extensive research into the 3 building companies they have short-listed as possible candidates for the project.
The problem for Jarrod and Katherine is that none of the builders provide much more than a glossy brochure and a fast-talking sales representative’s pitch upon which they can base their final decision. In Katherine word’s, “We’re pretty sceptical and don’t like taking risks. I wish we had a crystal ball to see into the future so we could know, without any doubt, which builder to trust.”
Jarrod and Katherine are typical consumers (in fact, their feedback is representative of the collective voice of global consumers) – they are risk adverse and don’t trust any form of so-called marketing. Performance predictors would convince Jarrod and Katherine.
Do you have 'Jarrods and Katherines' approaching your business? What can you do to convince them of your performance?
The problem for Jarrod and Katherine is that none of the builders provide much more than a glossy brochure and a fast-talking sales representative’s pitch upon which they can base their final decision. In Katherine word’s, “We’re pretty sceptical and don’t like taking risks. I wish we had a crystal ball to see into the future so we could know, without any doubt, which builder to trust.”
Jarrod and Katherine are typical consumers (in fact, their feedback is representative of the collective voice of global consumers) – they are risk adverse and don’t trust any form of so-called marketing. Performance predictors would convince Jarrod and Katherine.
Do you have 'Jarrods and Katherines' approaching your business? What can you do to convince them of your performance?
Monday, March 24, 2008
Servicescapes and Performance Predictors
Servicescapes, as defined by Booms and Bitner, are the environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service*.
The servicescape is concerned with a customer's perceived surrounds and includes tangible and intangible aspects. Tangible aspects include decor, layout and architecture. Intangible aspects include smells, time, sound, temperature, lighting and colours. All these aspects will have an impact on the customer's mood and feelings, which ultimately alters their behaviours (hopefully, for the marketer, in a positive manner).
The servicescape influences customer’s thoughts and behaviours. As everyone is different, based on their unique experiences in life, the interpretation of the servicescape will be slightly different for every customer.
This interpretation is largely influenced by the tangible aspects of the physcial environment which forms part of the servicescape. For example, a clean and tidy retail store is typically interpreted as being inhabited by an efficient business. In this example, the store environment acts as an important performance predictor.
*Source: Wikipedia [Accessed 25/03/08].
The servicescape is concerned with a customer's perceived surrounds and includes tangible and intangible aspects. Tangible aspects include decor, layout and architecture. Intangible aspects include smells, time, sound, temperature, lighting and colours. All these aspects will have an impact on the customer's mood and feelings, which ultimately alters their behaviours (hopefully, for the marketer, in a positive manner).
The servicescape influences customer’s thoughts and behaviours. As everyone is different, based on their unique experiences in life, the interpretation of the servicescape will be slightly different for every customer.
This interpretation is largely influenced by the tangible aspects of the physcial environment which forms part of the servicescape. For example, a clean and tidy retail store is typically interpreted as being inhabited by an efficient business. In this example, the store environment acts as an important performance predictor.
*Source: Wikipedia [Accessed 25/03/08].
Tuesday, March 18, 2008
How will you be judged?
When deciding on what performance predictors to develop and promote, ask yourself "How will customers judge the product?" The answer will lead you to the development of performance predictors which are relevant, and therefore, powerful.
For example, will customers judge the product on performance and/or durability and/or speed and/or reliability and/or results and/or cost and/or image and/or responsiveness and/or credibility and/or accessibility and/or security. If you don't know, ask them.
For example, will customers judge the product on performance and/or durability and/or speed and/or reliability and/or results and/or cost and/or image and/or responsiveness and/or credibility and/or accessibility and/or security. If you don't know, ask them.
Monday, March 17, 2008
One versus many
A single performance predictor provides prospective customers with a glimpse into the future by reinforcing product benefits. For example, backing a product claim with a guarantee of performance.
Exposing prospective customers to a host of performance predictors essentially allows them to recreate the likely future in the present. A skilled marketer who uses performance predictors effectively will shift the prospective customer into the future with a range of performance predictors creatively communicated and engaging the five senses.
Exposing prospective customers to a host of performance predictors essentially allows them to recreate the likely future in the present. A skilled marketer who uses performance predictors effectively will shift the prospective customer into the future with a range of performance predictors creatively communicated and engaging the five senses.
Sunday, March 16, 2008
Price as a Performance Predictor
Price is an under-rated element of the marketing mix. Pricing strategies can be employed to achieve a host of outcomes, relative to the objectives set.
As far as performance predictors are concerned, price indicates quality. Let's look at cars as an example.
If BMW and Hyundai were to reverse their car prices, how would your perception of the quality of their vehicles change? BMW has been positioned as a luxury car provider and its prices MUST reflect this position or sales will NOT be maximised.
When there is a mismatch between quality and price, prospective customers will hesitate as a result of the confusion created (at the subconscious level). This hesitation is likely to either stop the sale in its tracks or cause the prospective customer to begin the decision making process again (with the aim of looking for more or less value).
As far as performance predictors are concerned, price indicates quality. Let's look at cars as an example.
If BMW and Hyundai were to reverse their car prices, how would your perception of the quality of their vehicles change? BMW has been positioned as a luxury car provider and its prices MUST reflect this position or sales will NOT be maximised.
When there is a mismatch between quality and price, prospective customers will hesitate as a result of the confusion created (at the subconscious level). This hesitation is likely to either stop the sale in its tracks or cause the prospective customer to begin the decision making process again (with the aim of looking for more or less value).
Thursday, March 13, 2008
Vicarious Learning and Performance Predictors
Vicarious learning is a term used to describe learning by observing another. Vicarious is defined as received in place of another and learning as the act or process of acquiring knowledge or skill. Mentoring is an example of vicarious learning. Most people will tend to mirror the behaviour of another when they see it resulting in positive consequences.
What does vicarious learning have to do with performance predictors?
Testimonials, case studies, success statistics, before & after demonstrations, celebrity endorsements and prominent client lists are powerful performance predictors and they all have an element of vicarious learning. For example, testimonials outlining the positive results achieved by the customer are typically viewed by prospective customers with aspirations for similar success. What's more, they learn what the customer did to achieve the results (for example, engage the service provider that helped to achieve the described outcome) and follow suit.
The skill required by a marketer is to move this vicarious learning into action. Without action, the prospective customer will 'live through the other person' forever and not take any action for themself.
As humans we often think, "If they did it, may be I can to". That's why little boys have been wearing capes and jumping off fences for decades!
What does vicarious learning have to do with performance predictors?
Testimonials, case studies, success statistics, before & after demonstrations, celebrity endorsements and prominent client lists are powerful performance predictors and they all have an element of vicarious learning. For example, testimonials outlining the positive results achieved by the customer are typically viewed by prospective customers with aspirations for similar success. What's more, they learn what the customer did to achieve the results (for example, engage the service provider that helped to achieve the described outcome) and follow suit.
The skill required by a marketer is to move this vicarious learning into action. Without action, the prospective customer will 'live through the other person' forever and not take any action for themself.
As humans we often think, "If they did it, may be I can to". That's why little boys have been wearing capes and jumping off fences for decades!
Wednesday, March 12, 2008
Salient Beliefs and Performance Predictors
Salient beliefs, in a marketing context, are those beliefs consumer's hold that are highly visible or prominent. Through the experience of life, consumers take on-board various beliefs about organisations, people, objects, brands and products in their environment. Each of these beliefs are retained in memory, and comprise a complex interconnected system of linked meanings.
Skilled marketers can influence which salient beliefs will be activated by consumers in particular situations. This is achieved by locating stimuli in the servicescape (including performance predictors), positively influencing the mood of consumers with humour (for example), projecting back consumers' values and initiating a discussion on consumers' goal aspirations.
A common example of using salient beliefs in marketing is the bright lighting and upbeat music playing in most retail stores. This environment contains stimuli to 'bring out' salient beliefs in shoppers, with the aim of them making a positive link back to a past experience.
Skilled marketers can influence which salient beliefs will be activated by consumers in particular situations. This is achieved by locating stimuli in the servicescape (including performance predictors), positively influencing the mood of consumers with humour (for example), projecting back consumers' values and initiating a discussion on consumers' goal aspirations.
A common example of using salient beliefs in marketing is the bright lighting and upbeat music playing in most retail stores. This environment contains stimuli to 'bring out' salient beliefs in shoppers, with the aim of them making a positive link back to a past experience.
Tuesday, March 11, 2008
Consumer attitudes and performance predictors
Consumers typically have attitudes toward most tangible objects and intangible aspects including products, brands, opinions, experiences, events, locations, ideas and people. Every individual is likely to have a differing attitude toward each of these objects and aspects.
Furthermore, consumers have attitudes toward their own actions and thoughts in the past and present.
What this means to marketers using performance predictors is that placing your efforts on one performance predictor (aka the silver bullet approach) will be unsuccessful, because everybody has differing attitudes toward everything.
There is no such thing as a performance predictor with universal appeal. As a marketer, you must research your target market and promote performance predictors which are likely to appeal to the largest possible percentage of your chosen sub-market.
Furthermore, consumers have attitudes toward their own actions and thoughts in the past and present.
What this means to marketers using performance predictors is that placing your efforts on one performance predictor (aka the silver bullet approach) will be unsuccessful, because everybody has differing attitudes toward everything.
There is no such thing as a performance predictor with universal appeal. As a marketer, you must research your target market and promote performance predictors which are likely to appeal to the largest possible percentage of your chosen sub-market.
Monday, March 10, 2008
Brands and Risk
Small and medium sized enterprises (SMEs) are unlikely to possess a brand which is a household name. A brand helps to establish trust and reduce risk through familiarity.
As such, if trust isn’t delivered and risk reduced through a well known brand, then you need to develop other ways to minimise the risk of doing business with you.
Performance predictors help to reduce this perceived pre-purchase risk by providing evidence of the likely performance of the product or service.
When (or if) you have a well known brand, you can use performance predictors to reinforce the brand's attributes and your market position.
The objective when implementing performance predictors may be different between those organisations with well known brands and those without, but the result will be the same: more sales.
As such, if trust isn’t delivered and risk reduced through a well known brand, then you need to develop other ways to minimise the risk of doing business with you.
Performance predictors help to reduce this perceived pre-purchase risk by providing evidence of the likely performance of the product or service.
When (or if) you have a well known brand, you can use performance predictors to reinforce the brand's attributes and your market position.
The objective when implementing performance predictors may be different between those organisations with well known brands and those without, but the result will be the same: more sales.
Sunday, March 9, 2008
Personal branding by association
If you were to meet a person for the first time at a friend's BBQ and they arrived in a new BMW, wore Jag jeans and a Gucci watch, what would your impression be?
The brands we display as a person, provide signals to others as to who we are. They act as performance predictors, providing an insight into who we truly are on the inside.
The brands we display as a person, provide signals to others as to who we are. They act as performance predictors, providing an insight into who we truly are on the inside.
Saturday, March 8, 2008
Do performance predictors eliminate the need for emotion-generating marketing messages?
Does the introduction of performance predictors to marketing content imply the elimination of an emotion-generating message to consumers by marketers?
The short answer is, no it does not. Performance predictors provide consumers with the evidence they crave, but it does not suggest that marketers should present the evidence in a purely rational context.
As neurologist Donald Calne states:
"The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions"*. For this reason alone, it is important to place your performance predictors into an emotional message to elicit action (i.e. a purchase) rather than draw a conclusion, for example, "Oh, so BMW really is the best made car in the world. That's nice to know".
Just because consumers are becoming increasingly sceptical and fact-seeking, doesn't mean that bland marketing messages containing only proof of performance will get results. Creative messages aimed at generating an emotional response including performance predictors is likely to achieve maximum impact today.
* Cited in Lovemarks: The Future Beyond Brands (K. Roberts), Millers Point: Murdoch Books, pp42.
The short answer is, no it does not. Performance predictors provide consumers with the evidence they crave, but it does not suggest that marketers should present the evidence in a purely rational context.
As neurologist Donald Calne states:
"The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions"*. For this reason alone, it is important to place your performance predictors into an emotional message to elicit action (i.e. a purchase) rather than draw a conclusion, for example, "Oh, so BMW really is the best made car in the world. That's nice to know".
Just because consumers are becoming increasingly sceptical and fact-seeking, doesn't mean that bland marketing messages containing only proof of performance will get results. Creative messages aimed at generating an emotional response including performance predictors is likely to achieve maximum impact today.
* Cited in Lovemarks: The Future Beyond Brands (K. Roberts), Millers Point: Murdoch Books, pp42.
Thursday, March 6, 2008
Everybody is different
Prospective customers will place varying degrees of importance upon individual performance predictors. Whilst we may think one particular performance predictor holds the greatest importance for every prospective customer, we are likely wrong. Because everybody is different.
Yesterday a prospective customer phoned to ask about the qualifications of two franchisees within the same city. She was making her choice based on the performance predictor of qualifications; placing more importance on this aspect than experience, size of office, location, etc.
Never assume anything when it comes to the appeal of individual performance predictors to prospective customers, because everybody is different and people change.
Yesterday a prospective customer phoned to ask about the qualifications of two franchisees within the same city. She was making her choice based on the performance predictor of qualifications; placing more importance on this aspect than experience, size of office, location, etc.
Never assume anything when it comes to the appeal of individual performance predictors to prospective customers, because everybody is different and people change.
Wednesday, March 5, 2008
Performance Predictors in B2B Marketing
Yesterday, I was discussing a major project we are undertaking at Destiny Financial Solutions and it requires the design of a graphical interface. A colleague is travelling interstate to discuss the design elements of this project with a graphic designer and he asked me what he should be considering when assessing the capability of this designer.
My answer was simple: "Ask to look at his portfolio of previous work and find out his hourly rate?" His portfolio and price are both performance predictors.
Performance predictors are equally relevant to B2B marketing as they are to consumer marketing.
My answer was simple: "Ask to look at his portfolio of previous work and find out his hourly rate?" His portfolio and price are both performance predictors.
Performance predictors are equally relevant to B2B marketing as they are to consumer marketing.
Monday, March 3, 2008
Cornetto has "no boring bits"
A great example of aligning performance predictors to a point of difference is the current Streets Cornetto campaign. The point of difference being communicated is the fact that Cornettos have chocolate and nuts all the way to the bottom of the cone. But rather than just assert this point of difference, Streets prove it with a very clever performance predictor. See http://www.cornetto.com.au/. Can you spot the performance predictor?
Sunday, March 2, 2008
Aligning perceptions to performance predictors
The majority of marketers are concerned with changing consumers perceptions of a product to ultimately resuult in a purchase. This outcome is achieved through advertising, packaging, point of sale material, positioning, branding, etc.
In many cases, performance predictors work in the opposite direction. Consumers who have an existing perception of a product, brand, organisation, person, community or idea may change their perception to align it to a performance predictor(s).
Let's look at a common example (I'm sure you will associate with this one). You meet someone new, let's call her Sue. It is an informal meeting at a breakfast seminar, over a cup of coffee. Your first impressions of Sue isn't great. You find her to be untidy, poorly spoken and vague.
A week later, you are talking to a colleague who also attended the breakfast seminar (and as it turns out they know Sue, but you are unaware of the connection). You are chatting about the seminar and mention that you met a lady by the name of Sue, and express your negative impression of her. Your colleague replied, "Oh really! Sue must have been having a bad day, because Sue can speak 5 languages, raised 7 children whilst completing a PhD, she used to be a violinist with the Australian Symphony Orchestra and authored 2 best-selling books".
What happen's next?
Typically, you would add some excuses for your negative perception of Sue, for example, "Oh, Sue must have been having a bad day, you're right. Some of us are just not morning people are we?" Your brain would then realign your previous perception of Sue with the performance predictors about Sue that your colleague has just told you to create a new perception.
Performance predictors have a very profound impact on perceptions. Use this fact to your advantage.
In many cases, performance predictors work in the opposite direction. Consumers who have an existing perception of a product, brand, organisation, person, community or idea may change their perception to align it to a performance predictor(s).
Let's look at a common example (I'm sure you will associate with this one). You meet someone new, let's call her Sue. It is an informal meeting at a breakfast seminar, over a cup of coffee. Your first impressions of Sue isn't great. You find her to be untidy, poorly spoken and vague.
A week later, you are talking to a colleague who also attended the breakfast seminar (and as it turns out they know Sue, but you are unaware of the connection). You are chatting about the seminar and mention that you met a lady by the name of Sue, and express your negative impression of her. Your colleague replied, "Oh really! Sue must have been having a bad day, because Sue can speak 5 languages, raised 7 children whilst completing a PhD, she used to be a violinist with the Australian Symphony Orchestra and authored 2 best-selling books".
What happen's next?
Typically, you would add some excuses for your negative perception of Sue, for example, "Oh, Sue must have been having a bad day, you're right. Some of us are just not morning people are we?" Your brain would then realign your previous perception of Sue with the performance predictors about Sue that your colleague has just told you to create a new perception.
Performance predictors have a very profound impact on perceptions. Use this fact to your advantage.
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