Tim Matthews's Blog, page 10

The Virgin America Brand

Here’s another excerpt from my forthcoming book The Professional Marketer — TM

Virgin America is a California-based airline that has a declared mission to make flying good again. Launched in 2007, the airline’s goal was to disrupt the airline industry. Though hyper-competitive, the airline industry had become sclerotic. According to the American Customer Satisfaction Index, in 2011, the American airline industry had lower customer satisfaction than the IRS and U.S. Postal Service.[i] This presented an opportunity for an airline that would emphasize customer service and the flying experience.

Flying Virgin America is like flying no other airline. From the moment you check in, you notice the difference – rock music plays at the self-service check in kiosks. The planes have pink mood lighting (a seemingly small but important part of the Virgin America brand identity that was important enough to take the time for regulatory approval).  The safety video is clever and funny. The safety video has over 500,000 views on YouTube.  Think about that – no one pays attention to safety videos on the plane, but someone put Virgin America’s on You Tube and it has been viewed by half a million people!  (Creating buzz-worthy content is discussed in Chapter 7.)

According to Virgin America VP of Marketing & Communications Luanne Calvert, the goal was to disrupt the industry and differentiate the airline from all others. Brand was key to this. Virgin America extending its branding to every bit of the customer experience, including elements like music, mood lighting and humor. To achieve its mission of making flying fun again, Virgin America sought to let people take their on the ground experience up in the air with them. Why couldn’t air travel be relaxing, comfortable and fun? Music, lighting, leather seats and humor were important elements.

Virgin America had another, unique challenge. The airline inherited some brand elements from its parent company, Sir Richard Branson’s Virgin Group (technically, due to U.S. government restrictions prohibiting foreign control of U.S. airlines, Virgin Group is a minority owner). Branson himself has cultivated a sexy, adventurous brand with a bit of cheek that works well for many of its businesses. But Virgin America had some unique requirements.

According to Calvert, the airline ran the risk of seeming exclusionary or aloof if it did not add friendliness to the brand’s personality.  Stressed out or fearful flyers also respond well to friendly staff. Obviously, based on ACSI’s findings, friendliness was wane in the airline industry.[1]

The company also cultivated two additional brand personality elements – clever and provocative. The safety video and mood lighting serve as examples of Virgin America’s cleverness. Its ads seek to provoke change in the industry, asking questions like Why can’t airline food be as good as food you can get in the airport or at a local restaurant. This provocateur stance suits the upstart airline.

The brand torch is carried throughout the entire organization.  Every employee understands the importance of the brand, from the airport staff to the flight crew to the executive team. Calvert’s Brand Management team oversees the brand and helps maintain its key elements of friendly, clever and provocative.

The team and Virgin America’s agency also creates unique digital and live elements to let potential customers experience Virgin America. Because so much of the Virgin America brand is the airport experience, Calvert’s team has been working on ways to bring that experience to prospective customers outside the airport. These efforts include an interactive online video called VX Experience that is half party, half airplane, and the Virgin America Club Level at AT&T Park, home of the San Francisco Giants. I experienced this personally when I sat in the Virgin America club seats at AT&T Park with my son. Virgin America didn’t just put their logo on the walls, they turned the escalator into a mood-lit jetway and installed a bar with a fun party atmosphere.

The results have been impressive. Since launching in August 2007, Virgin America has captured a host of travel industry best-in-class awards, including: “Best Domestic Airline” in Condé Nast Traveler’s Reader’s Choice Awards for four consecutive years, “Best Business/First Class” in Condé Nast Traveler’s Business Travel Poll for four consecutive years, “Best Domestic Airline” in Travel + Leisure’s World’s Best Awards for five consecutive years, and #1 in Class in Zagat’s Global Airlines Survey in 2008, 2009 and 2010.

Calvert says the company also measures Net Promoter Score (also covered in Chapter 7) among its Elevate frequent flier program members. Virgin America is #1 by a long shot over their closest competitors JetBlue and Southwest

[1] United, the largest airline in the U.S., perhaps had a part to play in opening up an opportunity for Virgin America. It dropped its “Friendly Skies” campaign in 1997, after thirty years. And perhaps because of Virgin America’s success, brought it back in 2013.

Kickstarter for “The Professional Marketer” Launched

Just launched my Kickstarter yesterday. Even though it’s relatively small money, it’s strangely thrilling. Found myself furtively checking my Kickstarter iPhone app at dinner last night.

In addition to raising the money to bring the book to market, I’ll be noting along the way what tactics work when it comes to promoting the campaign. When it’s done, I’ll post them here.

Meanwhile, take a look. There’s a link to the draft manuscript for anyone who wants a peek https://www.kickstarter.com/projects/...

SaaS Tactics: Do You Mean “Freemium” or “Free Trial”?

I work in the software industry, and online customer acquisition is a hot topic these days. Getting prospective customers to use your software before talking to a sales person benefits both sides. Customers get to try out a product on their own terms and schedule. Salespeople can work more efficiently by talking only to those customers who are ready to buy.

There are two models for acquiring customers this way: freemium and free trial. Freemium is a model where customers are provided with a useful piece of software for free, with the option to purchase advanced features if they so desire. Free trials allow users to try out a piece of software for some period of time (usually a few weeks to a month) and then decide if they want to buy it.

I think the distinction is pretty straightforward, but I’ve had a few conversations recently where people were asking me about freemium when they really meant free trial. In trying to figure out why, I’ve come up with a few possible answers. One is that people aren’t really sure which one they mean and use freemium as a catchall for any kind of free use of software. The other is that there are now blends of free trial and freemium out there in the wild, which I will explain below, and people are getting confused. The cynic in me says that there is a third possibility: people just like to spout cool buzzwords.

Whatever the reason for the confusion, when it comes to selling SaaS applications, I feel there are clearcut reasons for using freemium, free trials, and the blended version. Here’s my take.

Freemium

Freemium works best when there is an advantage in the numbers. Lots of users is good if your revenue model is based on selling advertising or achieving a critical mass for social networking reasons. LinkedIn, which I started using for free, is a great example. Having lots of users fuels the value of LinkedIn. It allowed them to have something valuable to sell to recruiters, and gave them lots of eyeballs to view ads. I upgraded my account after a period of time to get the ability to directly message other members,which I still use for business development. Another take, now in vogue, is the capacity cap employed  by cloud storage vendors like Dropbox and Box. They offer a free version with a cap on capacity, hoping that users will get hooked and eventually need to upgrade to get more storage capacity.

Free Trial

Free trial is a better bet when you have a SaaS application and a straightforward monthly subscription revenue model. The goal is to get customers up and running quickly, expose them to your great features, and let the product sell itself. In the enterprise software world, you are essentially shortcutting old meeting/demo/pilot sales process. This wasn’t really possible before SaaS. You used to have to find a machine, schedule a time to install software, configure the software, train the users, etc. This was especially hard in regulated environments like banks, where touching anything in the data center required approvals from the right people. But now, just sign up and go. Salesforce and Zendesk are great examples of how to do free trials right. They both offer multiple editions of their products and use one of the more advanced editions for the free trial. Better to entice new customers. At the end of the trial, SaaS vendors are thinking you will stick with the version you tried – which is not the cheapest offering.

Free Trial to Freemium

Free trial to freemium is the blend I mentioned. Just like any free trial, the vendor offers you one of their premium versions for a limited time. After the trial, if you decide you don’t want to pay, you are reverted to the free version, which has fewer features and perhaps other limitations. But you still get to use the product, so there’s nothing to lose by trying the advanced version New Relic is a good example of a company that sells this way. What I can’t say is whether this psychological ploy helps free trial conversion rates. I would love to know.

In my experience, picking freemium or free trial falls right out of the business model. From a marketing execution standpoint, succeeding with the model you choose takes lots of work and iteration. Small tweaks to offers and lots of testing get you incremental improvements that continue to up your conversion rate, and ultimately your customer acquisition rate.

SaaS and the Buyer Persona Imperative

I came across something recently that really struck me. In reading Peter Levine’s “SaaS Manifesto,”  I was surprised to learn that half of all SaaS purchasing decisions are now made or influenced by operating departments, like Sales, HR and Marketing.

Now, I know Sales VPs have always had a say in which CRM to buy, and I read IBM’s study from a few years back on CMOs on track to spend more than CIOs on technology. I am also well aware of (and complicit in) the “consumerization of IT” trend. But the ESG research Levine cites really put a fine point on it: The buying patterns for B2B software are changing, but I don’t think B2B software marketing is making the changes to keep up. And that’s a problem.

By and large, with the notable exceptions of CRM and HR applications, B2B software marketers have always sold to some kind of IT person. Been that way for many, many years. Sure, Web teams and operations teams and storage teams and development teams are all different, but we were selling to technical people in IT.  And we had some idea what their boss, the CIO, was like. But now, with many department heads buying Cloud applications without even consulting with IT, the target has obviously shifted.  Dramatically.

Those who have read my stuff know I am a big fan of buyer personas. I think this is the time for B2B marketing teams to start understanding their buyers and building out personas. It’s not enough to shift and say, “We sell to heads of Sales.” Why? Because you need to understand what drives heads of Sales, how they think, and what words they use. We need to stop using technical terms (99.99% uptime) and use more approachable, valuable language (“We are always up at quarter end.”).

I like buyer personas because they require a process change in marketing. They are a great mandate for a head of marketing, something to rally a team around. You need to interview buyers to understand what you need to know to effectively market to them. Years of technology marketing shortcuts — so-called “feeds and speeds” — won’t work anymore.

Starting the change takes work, but it’s intellectually easy. I wrote about the process in detail here, but here’s an simple four-step process to get going:

1) Talk to your head of sales and CEO and identify your top three buyers, by title.

2) Identify five people with each of the titles (15 total) and, working with Sales, set up a 30 minute interview call with each. If you don’t have enough customers yet, use prospects.

3) I have a detailed list of questions you can ask, but start with these: What’s your role? What are your key initiatives? How to you define success? What is your purchasing process?

4) Summarize the responses and then go back and look at all of your marketing and sales training materials. I am certain you will see gaps, cringe, and identify lots of opportunities for quick wins.

I then suggest you keep at it, building out more detailed profiles and getting to know your buyers and their problems better. I highly recommend checking out the resources at The Buyer Persona Institute. That’s where I learned.

I’ll be curious to see how SaaS changes the B2B marketing mindset. On the one hand, I can see buyer focus being a lot more work for marketing teams. Selling a CRM app is one thing, but selling a reporting app or an analytics package — one that could be bought by any number of departments — will be potentially a lot more work for a marketing team. On the other hand, continuing on marketing “IT style” to non-technical people just seems like a losing strategy.

Keeping the Audience Engaged with Presentation “Spikes”

Humans are prone to distraction. In today’s world, smartphones are addictive little distractions that sit temptingly right in our pockets or purses. So, even if you are a good presenter and your topic is interesting, you should always check in with the audience, to keep them with you.

In their book Conversations That Win the Complex Sale, messaging gurus Erik Peterson and Tim Riesterer call the pattern of people’s attention “the hammock.”  Why? Because, as shown below, it peaks at the beginning, when you have 70% of a listener’s attention, sags in the middle when you have only 20%, and, depressingly for the presenter, is highest at the end when you have 100%.

This assertion is not based solely on the authors’ experiences and observations. Research in neuroscience confirms that people pay attention to the beginning and the end, because they are using a part of their brain called the “reptile brain” that controls the fight-or-flight instinct. They pay attention at the beginning because they are deciding if the information can contribute to their survival. They pay attention at the end because they know they are about to be freed. Even if you lose them in the middle, the words “in conclusion” wake up the reptile brain. All the more reason to recap your key points at the end – you have the listener’s full attention.

To fight the hammock effect, you need to bring people back every 10 minutes. That is the time increment during which people pay attention, according to brain researcher John Medina in Brain Rules. (Some observers would argue that people’s attention spans are shrinking, so even 10 minutes is too long these days.)  How do you bring your audience back? The standard method is to insert a “spike” at least every 10 minutes. The diagram above shows what the hammock looks like when you add in spikes, or “grabbers” as Peterson and Riesterer call them.

What counts as a spike? Here are a few  you can use:

Facts and Figures – Adults love facts and figures. They will often pause to take a note if a compelling fact is displayed on screen.
Questions – Asking the audience a question can keep them with you. Whether you are looking for an exact answer or examples you can use in your talk, asking questions encourages your audience to participate and thus helps to keep them engaged.
Show and tell – People like to see new things. Presenting or displaying a new product to see and experience can excite the audience. Steve Jobs was a master at this approach.
Video – Video can be tricky. Though it will likely perk up your audience, a well-produced video can make the switch back to your presentation look bland by comparison. Ideally, the presentation should critique or comment on the content of the videos. Simply using the videos to display company advertisements or as a water break for the presenter will accomplish very little.

Next time you give a presentation, watch your audience carefully as you present a spike, and see if they don’t just look up from their phones.

Marketingspeak: Why Are They Called ‘White Papers’ Anyway?

White papers are a staple of B2B marketing. We write them to explain complicated topics or products to our customers. We read them to try and glean what our competitors are really doing.

Did you even wonder why they are called white papers at all? Since most documents are printed on white paper, the modifier “white” would seem redundant, and too generic to differentiate from other documents.

The term was coined by the British Government to distinguish shorter informational documents with white covers from the formal legislative documents sent to Parliament with blue covers – called “blue papers.” The term was adopted by industry in the 1990’s to mean any short informational paper.

So for all of you tired of reading eight to ten-page white papers, just be glad B2B marketing didn’t adopt “blue papers.”