Today I present this case in the course that I have been doing every Wednesday, HCM Academy with the lectures Matteo Rinaldi and Luca Bertocci. The topic was “Marketing Communication Mistakes” and despite the nervousness, I could give my contribution to the class doing a presentation of this case, with the very kind support of Francesco Antonio de Caprariis.
AMERICAN AIRLINES – FREE FIRST-CLASS TRAVEL
Would you will like to travel in the first class forever?
So, in 1981, American Airlines introduced the AAirpass, offering unlimited first-class flights for a flat rate of $250,000 USD. At the time, they were strapped for cash, and they hoped to raise millions during a time of record-high interest rates.
But they didn’t expect the people who’ve purchased would use it without limits. They used these passes have more than since made up for the investment. Some of them, AAirpass holders, were taking 1,000’s of free flights every year, that means costing the company millions in lost sales.
Several factors had been contributed to the disaster of the campaign, as such lack of market research in its public and the external environment, they didn’t analyze and tried to identify the external factors that are favourable and unfavourable to follow up with that campaign, they didn’t limit the number of flights, thus allowing the person to fly numerous times. Maybe the marketing campaign may have been well developed, but without analysis and integration with the other sectors, it failed.
A long-term goal was lacking, this action would be essential to not lose the money they earned quickly
Remember, If you’re offering an incentive to your customers, set reasonable boundaries so both sides can benefit, but make sure you’re prepared to deliver on your promises.
The objective of benchmarking is to understand and evaluate the current position of a business or organisation concerning best practice and to identify areas and means of performance improvement.
The Benchmarking Process
Benchmarking involves looking outward (outside a particular business, organisation, industry, region or country) to examine how others achieve their performance levels, and to understand the processes they use.
In this way, benchmarking helps explain the processes behind the excellent performance. When lessons learned from a benchmarking exercise are applied appropriately, they facilitate improved performance in critical functions within an organisation or in areas of the business.
The application of benchmarking involves four steps:
Understand in detail existing business processes
Analyse the business processes of others
Compare own business performance with that of others analysed.
Implement the steps necessary to close the performance gap
Benchmarking should not be considered a one-off exercise. To be effective, it must become an integral part of an ongoing improvement process, the goal being to abreast of ever-improving best practice.
Types of Benchmarking:
The performance or Competitive Benchmarking
Case study for my college
The case study of Procter & Gamble illustrates well how the brand, always attentive to competition, outlined its marketing, communication and quality management strategies – becoming a reference in the sector of personal hygiene, cleaning products and baby care.
One of the most revolutionary products that appeared on the market was the company’s disposable Pampers diaper, the first to be marketed in 1961 before that, disposable diapers weren’t popular. Babies always wore cloth diapers, which leaked and required much work to wash. Pampers provided a convenient alternative, albeit at the environmental cost of more waste requiring landfill. Amid recent parents’ concerns about diaper ingredients, Pampers launches the Pampers Pure collection in 2018, which is a “natural” alternative to diapers. The company operating in more than 70 countries, “reported a profit attributable to the controllers of $ 3.2 billion in the second fiscal quarter of 2019 and is used by approximately 5 billion people worldwide”.
According to the company’s file, in the section “Doing what is right”, the company’s principles and values encompass aspects such as:
Impact on the community
Diversity and inclusion
Alternative to animal testing (with animal welfare policy)
The brand worked, above all, with TV in a campaign in Brazil, the company raffles R$ 200 thousand in prizes for consumers who bought their products and registered on a promotional website. Detail: the prizes were placed in the airplane, nominate “Avião do Faustão” – after all, had to surpass a competitor who, previously, had a track called “Caminhão do Faustão”. According to P&G, more than 140 million Brazilians were impacted in the first and second edition of the campaign.
The campaign with Faustão was Procter & Gamble’s first significant move to take on the maternity of its products. Founded 173 years ago, the owner of market leaders such as Pampers, Gillette, Pantene and Eukanuba had never insisted on giving visibility to the corporate name. The global marketing guideline determined promotion of products and not of the company – exception made to the operations of Japan and the Philippines, which had already prioritised the communication of the corporate brand for some time. If it was possible to do it there, why wouldn’t it work in Brazil? Procter & Gamble products had great potential in the Brazilian market but weren’t well known. Showing that they are all from the same family was a way to make people aware, try and buy again”, says Nizan Guanaes, from Africa, the advertising agency of Procter & Gamble.
In the second half of 2011, the company closed a millionaire contract with Flamengo, to be the master sponsor of its football team. The value of the deal was 5.6 million for a 4-month contract.
Procter & Gamble was one of the main sponsors of the London 2012 Olympic Games sponsoring 150 athletes, as well as one of the main sponsors of the 2014 Winter Olympics in Sochi. He also sponsors the 2016 Olympic Games in Rio de Janeiro and the 2018 Winter Olympics in Pyeongchang, South Korea.
P&G believes that the safety of its products is a prerequisite for responsible business and this philosophy is reflected in the company’s Statement of Purpose “We provide branded products and services of superior quality and value that improve the lives of consumers worldwide, now and for generations to come. Safety is an intrinsic part of the quality and value of our products. “
Procter & Gamble invests massively in customer relations – it’s most significant differential – in brand management, product innovation, in addition to creating long-term strategies and perspectives, quality strategies, brand extension and seeking aggressive sales force.
It is the main objective to gain strength to subsidise the coming of global brands that are not yet in the Brazilian market and uses mapping strategies and study of the organisational environment to serve different social classes in Brazil.
Measuring is a crucial part of the process of promotional initiatives in digital marketing. It is through data analysis that we can optimize a marketing strategy to obtain the best possible result. Also, a measurement of results allows evaluation of your investments. Knowing if they are generating a positive return – or if you need to change the strategy – is a fundamental fact. In this sense, it is essential to be sure about the measures that must always be met.
Here are examples of measuring the results of your marketing strategy more efficiently.
CAC (Cost of customer acquisition)
CAC is a measure to know how much companies are spending to attract each customer. The cost of customer acquisition is a fundamental indicator since it takes into account everything you invested in marketing until closing sales. You need to consider how much was spent on marketing actions or the cost to maintain your sales team. To calculate CAC, simply divide the number of investments to acquire a customer by the number of customers won in a given period.
If the CAC result is high, it means that the company needs reimbursement as an acquisition tactic. In addition to being a health indicator of your business, it also helps to base decision-making strategies, analyses and projections.
A company spends a total of $300k in sales and marketing and generated 300 new customers during a one year period. We can compute CAC thusly:
The company’s Customer Acquisition Cost is $1k.
The hope is that the CAC is less than the expected revenue per customer so that you will make money with the chosen acquisition strategy.
Watch out for the bounce rate.
Bounce rate is an SEO metric that shows the number of single-page sessions, in other words – how many people left your site without taking any action (visiting another page, signing into a newsletter, etc.).
Is a high bounce rate a bad thing?
It depends solely on the main purpose of the page. A high bounce rate of a checkout page is a much bigger problem than a high bounce rate of the page with the company contact info.
For example, a 75-80% bounce rate of a blog post is nothing terrible as it simply indicates that people came to the article, read it and left, which is a natural behaviour. As the bounce rate doesn’t consider the time the visitor spent on a page, it doesn’t necessarily mean that he didn’t find what he needed.
You can compare the bounce rates of your landing pages, analyze why some perform better than the others and use the same pattern to lower the bounce rate on the pages that do not perform well.
As you may already know, ROI (Return on Investment) is one of the main measures used in digital marketing. Its calculation shows how much the company is spending on campaigns and what results are being used. Its formula is quite simple: a reduced profit margin (not the total number of sales) minus the investment cost, divided by the cost, again.
This metric requires careful monitoring, as it generates a specific percentage of the total results that a company can achieve. With ROI data in hand, you can identify which are the sources of profit for the company, which communication channels are most effective and which sources are showing better sales results.
ROI = (Return on Investment – Investment) / Investment
This calculation can be used to compare the efficiency of two or more marketing strategies, knowing what to prioritize.
Organic traffic refers to all the visitors that come to your website or blog from the search engines. It does not include the paid PPC ads.
We may say that higher organic traffic is the ultimate goal of the search engine optimization, so it is good to regularly track the progress to know whether your SEO efforts are successful or not.
To find the overall organic traffic that comes to your web, you need to go to your Google Analytics account and navigate to Acquisition > All traffic > Channels > Organic Search.
If you want to check the performance and popularity of your landing pages, the best way is to analyze the organic traffic coming to the individual landing pages. Just go to Behaviour > Site Content > Landing Pages and select the Organic traffic segment.
Do you know what engagement is and how important it is?
Engagement is your audience’s interaction with you when the customers comment, like or share in social media. This involvement, interaction, and influence with the public is the best way for you to know if your customers and prospects are satisfied with the experience they had with you. That’s why engagement is so important; it will attract more users and, consequently, more people will see your ads and posts. Your brand needs to be recognized, accepted and sought after.
It needs a good reputation, credibility and authority in the digital environment. Your audience must know who you are and what you stand for.
Tips on how to increase engagement on social media
BUILD A STRATEGY RELATED TO YOUR BRAND
The implementation of a digital strategy is fundamental and effective in attracting customers for your brand. That’s because success in the market is very much related to disclosure to the right people.
MEET YOUR AUDIENCE
To reach your target audience, you need to know them first. Each type of product and service has a specific audience. It is essential to be aware of what your clients expect of you, establishing a relationship of proximity and interaction with them.
POST ON VARIOUS SOCIAL NETWORKS, BUT INTEGRATE THE CONTENT
If you are looking for how to increase engagement on social networks, you should already know that having just one website is not enough. Social media can (and should) be used to your advantage: Facebook, Twitter, Instagram, as your target audience can be spread everywhere. Combining all these tools and posting integrated content between them ensures the reach of a wider audience.
MONITOR AND MEASURE YOUR RESULTS
But digital marketing is not just about strategies: it is necessary to keep constant monitoring to determine the results of your interaction on the internet. Monitoring the times your audience is online can help you offer first-hand content.
Example of engagement in social network
Aimed exclusively at people who want to find a job, as well as companies that want to hire new professionals or establish professional contacts, LinkedIn is a social network that offers companies the opportunity to have more engagement. On the platform, it is possible to participate in groups and create connections with other users, which is essential for the business to become known to other professionals in the area and, thus, to have greater involvement with those interested in the services they provide.
With LinkedIn connections, another advantage is that the company can make posts to engage its audience and generate interaction between users of the social network. Besides, the platform also offers filters for the business to direct its content to the right people. Finally, with the LinkedIn Analytics tool, the company can monitor the types of content that generate the most engagement and, thus, make posts more interesting for users who follow the posts. In general, it is a social network that cannot be left out when it comes to generating greater involvement with Internet users.
Content marketing is a digital marketing strategy in which companies create relevant and valuable content attracting, involving and generating value for people in order to create a positive perception of your brand and thus generate more business. Normally it is to use the publication and promotion of content to drive organic website traffic, increase qualified lead generation, motivate the sales team to quickly close deals.
It is part of a marketing strategy focused on creating and distributing relevant content (such as articles, ebooks, webinars and posts on social networks), without explicitly promoting the brand. Thus, the company helps its target audience to solve their problems and become an authority on the subject.
Also used as a way of engaging with your target audience and growth in your network of customers and potential customers through the creation of valuable content for people to create a positive perception of your brand and thus making more sales.
Content Marketing is one of the most powerful weapons that a company, of any size, can have at its disposal to attract and retain customers.
Hubspot is a great example of excellent Content Marketing.
Hubspot is one of the largest digital marketing companies in the world, with marketing, sales and CRM solutions to integrate all of this. Much of Hubspot’s success is due to the Inbound Marketing techniques that the company both uses and teaches others. Blogs, which are a reference in the market, are far from being the company’s only content channels: tools, templates, surveys and online courses are also included.
Inbound marketing is about delivering the right solutions and opportunities that have a positive impact on business and or people.
It is a strategy based on a series of online actions that aim to attract traffic to a website and work this traffic in order to become leads or active consumers of your products or services.
Why Inbound Marketing?
Conventional direct marketing is giving way to relationship marketing, where instead of directly offering products and services, the goal is to create relationship points and then disseminate a value proposition.
It is what is being known as New Marketing, a way to attract the attention of potential customers, presenting content that adds value to people’s daily lives, in a technique that is much less invasive than others used in traditional Internet marketing.
One of the advantages of Inbound Marketing is its segmentation. As it comprises a series of actions that seek to arouse public interest in the brand, its products or services, the public resulting from these actions is extremely segmented.
This greatly facilitates the work of inserting this audience into a sales funnel that allows brands to achieve a drastic reduction in the cost of acquiring customers while also positioning them as a reference in their market.
Plus, around 85% of consumers conduct online research before deciding to buy.