Listen to the podcast of last week’s Biz Takeouts Marketing & Media radio show, to find out more about neuromarketing and Martin Lindstrom’s The Progress Conference on branding and the digital marketing revolution.
Reminder that the conference is on the 16 May, 2013 and tickets are selling fast.
In anticipation of Martin Lindstrom’s visit to SA, we asked him to respond to our most current brand ethics saga – the meat scandal.
What you will find is that no brand or retailer is immune to a brand ethics disaster and there are some great lessons to be learned from the meat scandal.
This is what Martin had to say:
Those days where brands were able to hide whenever unpleasant news was released are long gone. In a matter of days a thriving brands can come under a level of attach even threatening their future – case in point would be the Domino’s Pizza case where a video on YouTube featured a young person spitting in the pizzas before being served to the customers. The video attracted millions of visitors – and resulted in a share price drop of 9.2% in just one day.
Be warned and prepare for sophisticated media
This is by far a single standing story – almost on a weekly basis similar stories hit the media – unfortunately in return the media scene has become equally sophisticated – distributing the news instantly to the entire world. And it doesn’t stop with brands – recently a bogus error tweet sparked a major share blip in the U.S. after an Associated Press Twitter account was hacked – and bogus news was released making the entire share market react within minutes.
Be warned – this is only the beginning – needless to say that brands truly have to build in mechanisms which can ensure instant reactions before the news spread.
They did too little and too late – the trust is simply gone
The recent meat crises in South Africa is no exception – those supermarkets involved should have reacted months earlier than what they did. Remember this crises has been running in the UK for almost 5 months – subsequently spread to Central Europe and now South Africa. Needless to say this comes as no surprise – the clever supermarkets would have reacted beforehand, double checked the situation and prepared themselves for the media storm. Instead 60% were caught cheating.
The good news for the retailers is (if there is any) that they all seemed to be in on this and thus no “hero” was pointed out – the bad news is that consumers are left with a sceptical view on every store in the future – the trust is simply gone. And reacting now is simply too late.
Did the leaders do the right thing?
The response from the CEO’s is fine – but far too late – they would have known this well in advance just by watching BBC World news where this crises has been running in the UK for 5 months. The clever CEO would have reacted then, implemented a program to fix the problem and the moment the announcement took place hit the media with a well-oiled campaign. Instead nothing happened before the problems hit the fan.
Can the trust and customer loyalty be regained?
Over react – employ qualified butchers in all supermarkets – endorsing the meat, employ independent experts to endorse all products, offer free samples of the quality meat with these endorsements…launch a “only quality” brand line – and re-launch all meat products under such label. In short, reach in a dramatic way, so that the consumer can see (and feel) that they take this seriously.
In anticipation of Martin Lindstrom’s visit to SA, we asked him to respond to our most current brand ethics saga – the meat scandal.
What you will find is that no brand or retailer is immune to a brand ethics disaster and there are some great lessons to be learned from the meat scandal.
This is what Martin had to say:
Those days where brands were able to hide whenever unpleasant news was released are long gone. In a matter of days a thriving brands can come under a level of attach even threatening their future – case in point would be the Domino’s Pizza case where a video on YouTube featured a young person spitting in the pizzas before being served to the customers. The video attracted millions of visitors – and resulted in a share price drop of 9.2% in just one day.
Be warned and prepare for sophisticated media
This is by far a single standing story – almost on a weekly basis similar stories hit the media – unfortunately in return the media scene has become equally sophisticated – distributing the news instantly to the entire world. And it doesn’t stop with brands – recently a bogus error tweet sparked a major share blip in the U.S. after an Associated Press Twitter account was hacked – and bogus news was released making the entire share market react within minutes.
Be warned – this is only the beginning – needless to say that brands truly have to build in mechanisms which can ensure instant reactions before the news spread.
They did too little and too late – the trust is simply gone
The recent meat crises in South Africa is no exception – those supermarkets involved should have reacted months earlier than what they did. Remember this crises has been running in the UK for almost 5 months – subsequently spread to Central Europe and now South Africa. Needless to say this comes as no surprise – the clever supermarkets would have reacted beforehand, double checked the situation and prepared themselves for the media storm. Instead 60% were caught cheating.
The good news for the retailers is (if there is any) that they all seemed to be in on this and thus no “hero” was pointed out – the bad news is that consumers are left with a sceptical view on every store in the future – the trust is simply gone. And reacting now is simply too late.
Did the leaders do the right thing?
The response from the CEO’s is fine – but far too late – they would have known this well in advance just by watching BBC World news where this crises has been running in the UK for 5 months. The clever CEO would have reacted then, implemented a program to fix the problem and the moment the announcement took place hit the media with a well-oiled campaign. Instead nothing happened before the problems hit the fan.
Can the trust and customer loyalty be regained?
Over react – employ qualified butchers in all supermarkets – endorsing the meat, employ independent experts to endorse all products, offer free samples of the quality meat with these endorsements…launch a “only quality” brand line – and re-launch all meat products under such label. In short, reach in a dramatic way, so that the consumer can see (and feel) that they take this seriously.
Martin Lindstrom has proven scientifically that giving away free stuff helps to surprize and delight customers – and win over new customers.
SAB gets this. Last week I was standing in the queue at a local liquor store waiting to get some drinks. The guy in front was busy paying for his six pack of some other beer. A SAB rep, who was in the store at the time, surprized the client by giving him a six pack of Castle Draught – “Here, why don’t you try this? It’s on the house”…
The customer’s surprize and delight was clear – and it was contagious – smiles all round from the other people in the queue as well!
Evidently such a simple gesture can go a long way.
Martin Lindstrom’s neuro-scientific marketing research has proven why. When consumers get free stuff an unconscious response in the lateral prefrontal cortex of the brain is triggered – the area that generates emotion.
And this trigger response is worth mega bucks.
Just take Apple for example. Apple took the legendary Gillette strategy to a whole new level – the razor and the blades are free – i.e. free app, free game … You only pay when you want to be recognised as a gamer that has liberated the cute creatures. It is estimated that 65% of the revenue generated in the iTunes store comes from free games.
Not convinced?
That’s an estimated mind-boggling $ 2 billion per year!
Some more food for thought – how 2 cents impacts sales by 222%
And free stuff is not all – Martin has studied the psychology behind the sweet spots of pricing. A Chicago grocery store dropped the price of margarine from 89 cents to 71 cents – sales improved by 65%. When they dropped the price by just 2 more cents to 69 cents, sales jumped by 222%!
Take away the $ sign and your customers will spend more
So couple this with his other research which shows that stores who mark their goods with a $ or R or £ sign are creating a very unpleasant emotional response – one linked to our consumers purses/ wallets leading us to believe that the item in question is more expensive than it actually is.
“$2 billion dollar revenue generated for Apple from free stuff” – “This is neuro-marketing at its best,” says Martin Lindstrom.
SAB get this. Just last week they created a new love affair with an obsessive fan of their competitor. They applied Martin Lindstrom’s evidence that scientifically proves what happens when free stuff triggers an unconscious response in the lateral prefrontal cortex – the area that generates emotion.
Just last week, I got to see how SAB use free stuff. Picture this,“ a-can’t- wait- for- Friday- beer-o-clock”, guy in the queue buying his regular “Friday-beer- o-clock”-non-SAB brand six pack. A SAB rep happened upon him by giving him a Castle Draught six pack, “Here, why don’t you try this? It’s on the house”, he said. And it was contagious – lateral prefrontal cortex smiles all round, including the other people in the queue.
Apple took the legendary free Gillette strategy to a whole new level – the razor and the blades are free – Free app, free game … you only pay when you want to be recognised as a gamer that has liberated the cute creatures. Not convinced – It is estimated that 65% of the revenue generated in the iTunes store comes from free games = $ 2 billion per year.
Some more food for thought – how 2 cents impacts sales by 222%
And free stuff is not all – Martin has studied the psychology behind the sweet spots of pricing. A Chicago grocery store dropped the price of margarine from 89 cents to 71 cents – sales improved by 65%. When they dropped the price by just 2 more cents to 69 cents, sales jumped by 222%.
Take away the $ sign and your customers will spend more
So couple this with his other research which shows that stores who mark their goods with a $ or R or £ sign are creating a very unpleasant emotional response – one linked to our consumers purses/ wallets leading us to believe that the item in question is more expensive than it actually is.
“$2 billion dollar revenue generated for Apple from free stuff” – “This is neuro-marketing at its best,” says Martin Lindstrom.
SAB get this. Just last week they created a new love affair with an obsessive fan of their competitor. They applied Martin Lindstrom’s evidence that scientifically proves what happens when free stuff triggers an unconscious response in the lateral prefrontal cortex – the area that generates emotion.
Just last week, I got to see how SAB use free stuff. Picture this,“ a-can’t- wait- for- Friday- beer-o-clock”, guy in the queue buying his regular “Friday-beer- o-clock”-non-SAB brand six pack. A SAB rep happened upon him by giving him a Castle Draught six pack, “Here, why don’t you try this? It’s on the house”, he said. And it was contagious – lateral prefrontal cortex smiles all round, including the other people in the queue.
Apple took the legendary free Gillette strategy to a whole new level – the razor and the blades are free – Free app, free game … you only pay when you want to be recognised as a gamer that has liberated the cute creatures. Not convinced – It is estimated that 65% of the revenue generated in the iTunes store comes from free games = $ 2 billion per year.
Some more food for thought – how 2 cents impacts sales by 222%
And free stuff is not all – Martin has studied the psychology behind the sweet spots of pricing. A Chicago grocery store dropped the price of margarine from 89 cents to 71 cents – sales improved by 65%. When they dropped the price by just 2 more cents to 69 cents, sales jumped by 222%.
Take away the $ sign and your customers will spend more
So couple this with his other research which shows that stores who mark their goods with a $ or R or £ sign are creating a very unpleasant emotional response – one linked to our consumers purses/ wallets leading us to believe that the item in question is more expensive than it actually is.
