[Over the coming weeks I'll be sharing excerpts as we work towards completing the manuscript for 'What's Your Purple Goldfish?'. Yesterday was Chapter 5 and today is Chapter 6]

The Engine behind Word of Mouth – The v4 principle

I first came across the concept of the v4 principle over 10 years ago. This is from a hilarious post from a guy named Rob from Boston (a.k.a Streetracer). I can remember almost peeing my pants when I originally read this:

Think about your entire history of relationships… Every person you dated long term, short term, prison term, and every random hook-up in between. The vast majority of those relationships were with someone you met through a common friend. Very rarely do you find a couple who met randomly at a bar. Most couples met through a friend, a friend of a friend, or a relative. The reason most relationships begin this way is what I call the “v4 Principle.”  “v4″ is short for “Vouch For” and it is this reason that the majority of people in America get laid.

EXAMPLE: Say you’re out on a Friday night and you see a cute brunette at the bar. You approach her, make small talk, and attempt to pick her up. To you she’s a hottie with dating potential. To her you’re just another one of the drunken masses out there trying to score some ass. Now take the same situation as before, but when you see her at the bar she is talking to your best friend’s girlfriend. Now when you approach you’re SOMEBODY as opposed to the NOBODY you were before. The girl at the bar has a reference point for you and your best friend’s girlfriend is there to vouch for you: “Oh, that’s Fred. He’s Mike’s best friend. They work together at the law firm. He’s a real sweetie, and he’s sooo cute when he’s drunk.”

See how it works? You’re the same drunken ass either way, but now you’re perceived as charming. So, if friends are largely responsible for our hook-ups, how does one improve his odds? Simple, just use this handy dandy friendship reference guide that follows to determine who you should hang out with more and which friends to discard:

1. Married Friends – Don’t have any. They only hang out with their miserably married couples and they constantly attempt to pull the rest of us into their pit of despair. There is no ass for you here.
2. Friends Who Work In The Service Industry – Hold on to these. People who work in restaurants, bars, retail, and the like tend to have a plethora of same aged single people to kick it with. They are laid back and don’t work until noon, so they’re always up for a night out. Also, all hostesses are easy.
3. Friends Who Do A Lot of Drugs – Keepers. Whether you do drugs or not is irrelevant. People who do a lot of drugs tend to hang out with other people who do a lot of drugs… and, chicks who do a lot of drugs tend to be easy.
4. Religious Friends – No! No! No! All of their friends are usually bible-thumpers as well, and meeting a group of hot Baptists is like going to your favorite bar without any money. You can look all you want, but you can’t have anything.
5. Strippers – If you have any friends who are strippers you can contact me. Please let me know where you’ll be this weekend…

On a more serious note, v4 or ‘vouch for’ is also how the majority of purchase decisions are made. A reference point or recommendation by a friend is the strongest factor impacting purchase intent. Add on the fact that 90% of word of mouth happens ‘face to face’.

According to research by Keller Fay:

Personal experience with a product or service is the #1 catalyst for recommendation, with 86% saying they recommend a brand or service based on first-hand experience. 60% of word of mouth conversations include advice to buy, try or consider a brand. Fewer than one in ten conversations advise avoiding a brand.

It only makes sense to maximize the experience with your customer.  Giving that little extra provides AMMO for your customers to relay their experiences.

The Power of WOM

One of the frustrations I have with measurement of marketing is that it is fundamentally flawed.  It assumes that all impressions are created equal.  There is no weight given to context and / or the delivery mechanism.

Let’s have a look at advertising, sponsorship, pr and word of mouth:

Advertising is a one way dialogue that is inherently biased.  It’s unlikely that a  company or brand is going to show you their warts. Ads are vested in trying to grab your attention via interruption. They sell ‘blue sky’ by putting the product in the best light. Let’s call the impressions via advertising V1.

Sponsorship plays on the interests of the consumer. The company or brand aligns themselves with a second party. They are still vying for your attention, but now they are engaging you at a point of passion. Sponsorship works on the idea of affinity or attribution. Let’s call the impressions via sponsorship V2.

PR is the proactive process of managing the flow of information between the brand or company and the public. It allows for exposure to the target audience via third party sources. Those sources are predominantly mainstream media. This third party authentication provides credibility to the message. The impressions gained at no cost through PR are much more valuable than those obtained by paid advertising. Let’s call those PR impressions V3.

WOM or Word of Mouth is the act of consumers providing information to other consumers. This is the V4 or ‘vouch for’ principle. V4 means that the consumer is standing up for the product and giving personal assurances to its value. It’s been around for thousands of years and remains one of the most powerful forms of promotion. It’s a friend recommending a new restaurant or the latest movie. New social media tools like Facebook, Twitter and Google+  have elevated WOM to a new level. Call it WOM 2.0 or WOM on steroids.

v4 reminds me of the old Breck shampoo commercial where they start to split the screen by saying, ‘She tells two people, then they tell two people and then they tell two people . . .’ and soon the screen has hundreds of people on it. That’s the magic of WOM.

You need to figure a way to get people to talk about and recommend your product. A small, unique and unexpected touch that provides fuel to the ‘word of mouth’ fire.

What are you working on?  What are you doing? What’s on your mind?

These are the respective questions asked by LinkedIn, Facebook and Twitter.

Brian Solis of PR 2.0 is a thought leader that is constantly evaluating PR’s role in shifting marketing landscape.  I absolutely have fallen in love with a term that Brian has coined.  It’s called the ‘STATUSPHERE’.

In Brian’s words with my thoughts in BOLD:

We’re shifting into a rapid-fire culture that moves at Twitter time. Attention is a precious commodity and requires a personalized engagement strategy in order to consistently vie for it [How are you engaging your best marketing resource - YOUR CUSTOMER?]. The laws of attraction and relationships management are driven by the ability to create compelling content and transparently connect it to the people whom you believe benefit. [What is your distinctive 'PURPLE GOLDFISH' and is it relevant to your customer?]

The Statusphere is the new ecosystem for sharing, discovering, and publishing updates and micro-sized content that reverberates throughout social networks and syndicated profiles, resulting in a formidable network effect of activity. It is the digital curation of relevant content that binds us contextually and through the statusphere we can connect directly to existing contacts, reach new people, and also forge new friendships through the friends of friends effect (FoFs) in the process. [Getting into the status updates of your consumer exposes you to their vast network]

Twitter, Facebook News Feeds and other micro communities that define the Statusphere, are driving action and determining the direction and course of individual attention.

So – what does this mean to me as a brand manager, CMO or a business owner???

The statusphere (people updating their status on social networks) has become the new digital watercooler.  It’s increasingly how people are sharing content via word of mouse. It’s how a vast majority of folks are getting their news. Your goal is to get your brand into that ’statusphere’. How do you WOW your customer to the point that they want to share their experience?

An Interview with Francois Gossieaux

I had the opportunity to catch up with Francois in San Mateo, CA. At the end of our discussion I asked about a post he wrote on the importance of customer experience. Here are the couple minutes where we discussed customer experience as a differentiator:
Here is a highlight from Francois’ blog post:

“The reason why exceptional service is the new competitive differentiator is not just because it’s easier for competitors to catch up product-wise, but because the news about exceptional service travels fast in the networks that matter – peer and friend networks where the buying decisions are increasingly being made. When people recommend products to friends, colleagues, and acquaintances, they do not focus on the features, functions and benefits the way many marketers have been trained to do – they focus on the overall experience of adopting the solution, and the exceptional qualities of that “whole” offering. So if you are like most companies and operate in a market where it is really hard to differentiate based on the product alone, you got to focus your attention on WOW service offerings.”

Marketing Takeaway: You need to find ways to differentiate your product or service. The easiest way is to focus on the customer experience. Exceed the expectations of your customers by offering those little extras that surprise and delight. You need to give your best marketing resource something to post, blog, tweet or Facebook about.

Are you creating PROsumers or CONsumers?

What are your customers talking about after leaving your business, logging off your website or hanging up the phone?

John Ernsberger (@johnestella) of Stella Service stated that roughly 6 out of every 7 tweets he sees involving customer service are negative. I’m not sure of the sample size on his assessment as they (whoever they are) say that 68% of statistics are made up on the spot. Whether its 70, 80 or 90% I think its a generally accepted fact that the overwhelming majority of tweets involving customer service are negative. This led me to the following question:

Based on their experience . . . Is Your Customer a CONsumer or a PROsumer?

Are you invoking Bonnie Raitt and her most famous tune, “Let’s Give’em Something to Talk About”?

Specifically:

• Who do we want talking?
• What do we want them saying?
• How can we add value?

Here is my take on how ‘marketing lagniappe’ addresses those issues:

• The best marketing is 1st person word of mouth, i.e. your customers
• Control the things you can control . . . how you treat your existing customers
• Deliver value with your product or service and exceed customer expectations
• Provide that ‘little signature something extra’ . . . a purple goldfish

Using a little artistic license (apologies Bonnie) on the song lyrics:

Let’s give them something to talk about
A little purple goldfish as they wonder out
Let’s give them something to tweet, blog and Facebook about . . .

[Next Up is the start of Section II, Chapter 7 - The five ingredients of a purple goldfish]

[Over the coming weeks I'll be sharing excerpts as we work towards completing the manuscript for 'What's Your Purple Goldfish?'. Yesterday was Chapter 4 and today is peek at Chapter 5]

Exploring the ideas of surplus (added value) and status

I’m fascinated by a concept called the gift economy and how it relates to marketing lagniappe.

So – what is a gift economy?

According to Wikipedia:

“In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards. Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community.”

A gift economy is opposite of a market economy.  In a market economy there is an exact exchange of values (quid pro quo).  It is my theory that there is a hybrid called the lagniappe economy that can sit between the two:

Can marketing lagniappe live in the middle?

Here is a great analysis from a post by Kevin von Duuglass-ittu of Tonner Doll on gift economies:

“This does not mean that the Gift Economy … and the Market Economy of business are incompatible, not in the least. In fact many if not most of our business exchanges are grounded in Gift-based relationships whose “gift” nature we simply are unconscious of and just assume. If you develop a keen eye for the gift-giving environment, and think about all the things that gift-giving in those environments signal, 1. a surplus others want to attach themselves to, 2. a magnanimous respect for the relationship beyond all else, 3. a debt structure that is “positive”

Let’s examine each of the three through the lens of a lagniappe economy:

1. Surplus – the idea of surplus is grounded in giving extra or creating an inequality. Lagniappe comes from the spanish ‘la napa’ or the Quechan ‘yapay’ both meaning ’something that is added’.  Lagniappe is the practice by the business of throwing in little extras at the time of purchase.
2. Respect – The gift or little extra is about the respect for the relationship.  It becomes a beacon, a sign that shows you care. It’s a physical sign of goodwill and customer appreciation.
3. Positive – A debt structure that is positive.  This speaks to exceeding expectations by giving extra.  The idea of an equal exchange (market exchange) is a myth in marketing.  You either exceed or fall short of customer expectations.  Providing that extra value provides an inequality that is positive.  The positive effect leads to a sort of indebtedness or reciprocity on behalf of the customer.

The Benefit of Surplus is Status

As a business why would you want to incorporate gift economy principles into your market exchanges? I believe there are 3 distinct reasons and corresponding benefits of the status gained through marketing lagniappe:

1. Positioning – stand out from your competition. If everyone is providing x, the fact that you provide x + y (gift)  differentiates your offering. Less than 30% of consumers buy on price. You want to tap into the 70+% who are looking for value and a strong customer experience. Benefit: Differentiation
2. Loyalty – giving the little extra (gift) enhances the customer experience. It creates a bond between the business and the customer. The benefit of that bond include increased loyalty and ultimately patronage as a form of repayment. Benefit: Retention
3. Reciprocity – Part of giving extra is to create goodwill (inequality).  That inequality is repaid by positive word of mouth or word of mouse. The best form of marketing is via positive word of mouth.  By giving a signature extra (gift) you provide something for your customers to talk, tweet, blog, Yelp or Facebook about. Benefit: Referrals

Case Study: Chocolate Chip Cookie

Flour, eggs, butter and chocolate chips and . . .

I recently visited a quick business lunch at the Port Chester Coach Diner in Port Chester, NY.  Upon paying at the counter I noticed a bowl of miniature chocolate chip cookies.

Here is the recap of the experience from Tim Heath:

“I recently enjoyed a business lunch on the fly with a colleague. We were pleased with the rapid and attentive service and quality of food. I walked away from the table content; but you guessed it, I was seeking a little something more from the dessert to satisfy my appetite. Much to our pleasure, there was a container of complimentary small chocolate chip cookies morsels next to the cash register. My colleague and I looked at each other simultaneously with a smile and then enjoyed. We both consumed two free cookies and we shared our pleasure with the owner/manager who was observing our enthusiastic response to his offering. A pleasant ending to a fine lunch. I look forward to my next meal at the Port Chester Coach Diner”

The chocolate chip cookie has been a thread throughout the Purple Goldfish Project.  The very first submission from Tom Haidinger was the DoubleTree Chocolate Chip Cookie.

DoubleTree and their signature chocolate cookie was named so many times they own the distinction of being the first brand inducted into the Purple Goldfish Hall of Fame.

The Hotel has built a reputation on a unique treat that keeps leisure and business travelers coming back for more: its legendary chocolate chip cookie presented to each guest at check-in. Their signature Doubletree chocolate cookies are baked fresh daily providing a warm welcome and refreshing hospitality for travelers around the world.

Here are a few fun facts about the cookie:

• Doubletree gives out approximately 30,000 chocolate chip cookies each day. That’s more than 10,500,000 each year!
• Doubletree began giving out chocolate chip cookies in the early 1980s, when many hotels across the country used them as treats for VIPs.
• In 1995, Doubletree enlisted the services of Nashville, Tenn.-based Christie Cookie Company to hold the brand’s secret recipe, which ensures that the same, delicious cookie is delivered consistently at every Doubletree hotel and resort.
• Every Doubletree chocolate chip cookie is baked fresh daily at each hotel.
• Each cookie weighs more than 2 ounces and has an average of 20 chocolate chips.
• The Christie Cookie Company uses more than 580,000 pounds of chocolate chips each year for Doubletree’s cookies.
• In June 2002, Doubletree presented its 100,000,000th cookie!
• To date, more than 200,000,000 cookies have been served to delighted guests and customers.
• More than 1,000,000 chocolate chip cookies have been donated by Doubletree hotels to celebrate and thank deserving members of the community from doctors and nurses to police and firefighters as well as non-profit groups such as orphanages, food banks and homeless shelters.
• From the United Kingdom to Canada and Italy to China, the signature chocolate chip cookie welcome is now being presented to travelers at Doubletree by Hilton hotel locations around the world.

DoubleTree was followed by Midwest Airlines (now Frontier) and Fort Wayne International Airport.  The trio has given away more than 250 million chocolate chip cookies collectively.

Recent entries have included Pot Belly Sandwiches and now the Port Chester Coach Diner.

It begs the question  . . .what’s so special about a chocolate cookie?

DoubleTree offers an explanation right on the brown paper bag the cookie comes in. “Why a cookie?” the headline asks. “Cookies are warm, personal and inviting, much like our hotels and the staff here that serves you.”

Quoted in an article by the NY Times, Erich Joachimsthaler, chief executive of Vivaldi Partners said,

“when consumers don’t know how to judge the benefits or the differentiation of a product — I don’t know the difference between Midwest and JetBlue and United — then a meaningless attribute like cookies can create meaningful differentiation . . .The giveaway creates buzz, it creates differentiation, it increases a purchase decision.”

I’m not sure if I agree with meaningless, especially if that little extra is a signature element.  I subscribe to the philosophy that Malcolm Gladwell offered in The Tipping Point,”The little things can make the biggest difference.”  The chocolate chip cookie is not just a chocolate chip cookie.  It’s much more than that.

[Next Up Chapter 6 - Giving Your Customers Something to Talk About]

[Over the coming weeks I'll be sharing excerpts as we work towards completing the manuscript for 'What's Your Purple Goldfish?'. Yesterday was Chapter 3 and today is a glimpse at Chapter 4]

Goldfish on the brain

OK – I’ll be the first to admit it.  I am oddly preoccupied with goldfish.  Mainly because the average common goldfish is 4 to 5 inches, yet the largest in the world is almost 5 times that size?

5 Times Larger!!! – Imagine walking down the street and bumping into someone 20 feet tall? How can there be such a disparity between your garden variety goldfish and their monster cousins?  It turns out that the growth of the goldfish is determined by 5 factors. Part of my obsession is my firm belief that the growth of a product or service is similar to that of a goldfish:

Let’s break down a ‘purple goldfish’ into two parts:

Why a goldfish?

Because the growth of a goldfish (your product or service) is affected by 5 factors:

1. Size of the Environment = The Market

GROWTH FACTOR: The size of the water the goldfish is in.

RULE OF THUMB: Direct correlation.  The larger the bowl or pond, the larger the goldfish can grow.  The smaller the market, the lesser the growth.

2.  Number of Goldfish = Competition

GROWTH FACTOR: The number of goldfish in the bowl or pond.

RULE OF THUMB: Inverse correlation. The more goldfish, the less growth. The less competition, the more growth opportunity.

3.  The Quality of the Water = The Economy

GROWTH FACTOR: The clarity and amount of nutrients in the water.

RULE OF THUMB: Direct correlation.  The better the quality, the larger they can grow.  The weaker the economy or capital markets, the more difficult it is too grow.

FACT: A malnourished goldfish in a crowded, cloudy environment may only grow to 2 inches / 5 centimeters.

4.  How they’re treated in the first 120 days of life = Start-up Phase / Launch

GROWTH FACTOR: The nourishment and treatment they receive as a fry (baby goldfish).

RULE OF THUMB: Direct correlation. The lower the quality of the food / water, the more the goldfish will be stunted for future growth. The stronger the leadership and capital, the better the growth.

FACT: The difference between the largest and smallest goldfish is by over a factor of 10.  The difference between an average and the largest is by a factor of 5.

5. Genetic Make-up = Differentiation

GROWTH FACTOR: The genetic make-up of the goldfish.

RULE OF THUMB: Direct correlation. The poorer the genes or the less differentiated, the less they can grow.  The more differentiated the product or service from the competition, the better the chance for growth.

FACT: The current Guinness Book of World Records holder for the largest goldfish hails from the Netherlands at a lengthy 18 inches / 50 cm.  To put it in perspective that’s about the size of the average domesticated cat.

Which of the 5 factors can you control?

Let’s assume you have an existing product or service and have been in business for more than six months. Do you have any control over the market, your competition or the economy? NO, NO and NO.  The only thing you have control over is your genetic make-up or how you differentiate your product or service.  In goldfish terms, how do you stand out in a ’sea of sameness’. How can you make yourself PURPLE?

Why Purple?

Two reasons: Mardi Gras and Seth Godin

Lagniappe is creole for ‘a little something extra’. Purple is an ode to the birthplace of the word [New Orleans] and the colors of its most famous event [Mardi Gras].

The accepted story behind the original selection of the Mardi Gras colors originates from 1872 when the Grand Duke Alexis Romanoff of Russia visited New Orleans. It is said that the Grand Duke came to the city in pursuit of an actress named Lydia Thompson. During his stay, he was given the honor of selecting the official Mardi Gras colors by the Krewe of Rex. His selection of purple, green and gold would also later become the colors of the House of Romanoff.

The 1892 Rex Parade theme first gave meaning to the representation of the official Mardi Gras colors. Inspired by New Orleans and the traditional colors (purple – symbolic of justice, green – symbolic of faith and gold – symbolic of power), I created three types of goldfish:

Purple represents the ‘little extra’ given to all customers, Green represents the ‘little extras’ given to all of your employees and Gold (inspired by Vilfredo Pareto) represents the benefits given to the top 20% of your customers and employees.

Ode to Seth

Purple also represents differentiation. Seth Godin established purple as the color of differentiation in his seminal book, Purple Cow back in 2003.  Seth outlines the why, what and how of becoming ‘remarkable’.  If you haven’t read this already, run don’t walk to your local bookstore or b-line it to Amazon.

Seth sets up the premise of the book with a story:

“When my family and I were driving through France a few years ago, we were enchanted by the hundreds of storybook cows grazing on picturesque pastures right next to the highway.  For dozens of kilometers, we all gazed out the window, marveling about how beautiful everything was.  Then, within twenty minutes, we started ignoring the cows. The new cows were just like the old cows, and what was once amazing was now common.   Worse than common.  It was boring.”

He further defined where marketing is heading:

The old rule: Create safe, ordinary products and combine them with great marketing.

The new rule: Create remarkable products that the right people seek out.

The Difference Between a Purple Bovine and a Purple Goldfish

Think of the Purple Cow as your product.  Your product needs to stand out and be remarkable.  Your Purple Goldfish is the distinctive way that you deliver that Cow and the extra value you provide.  It’s difficult to make your product ‘remark’able.

I had the opportunity to comment on Marketing Pilgrim to emphasize this exact point.  Joe Hall wrote a great post about the importance of being memorable.   He talked about how all cell phones are similar and his hesitation to upgrade or switch.

Joe made the following assertion:

“Why can’t I get one shaped like a banana with pink and purple stripes? I want one that can also open a bottle of beer, or something else equally ridiculous. Seth Godin will tell you that your brand has to be remarkable.  However, before your brand can be remarkable it has to be memorable. It has to stand out from the crowd. It has to make me want to know more.”

Here were the thoughts I shared:

January 9th, at 11:40 am

Great points Joe. You absolutely need to be memorable. Stand out or perish. The difficulty in Seth Godin’s PURPLE Cow principle is that you need to bake that remarkability into the product. That is extremely difficult. A phone is a phone. It would have to be really remarkable for you to overcome the friction (p.i.t.a. factor) associated with making a switch.

However – let me offer another take on how to color that phone PURPLE. That is by creating a few PURPLE Goldfish. A purple goldfish is something a whole lot smaller than a cow and much easier to create. It’s based on the concept of ‘marketing lagniappe’. Lan-what? Pronounced ‘Lan-yap’ is a creole word that represents the ‘little unexpected something extra’ thrown in by the merchant at the time of purchase. In Louisiana ‘lagniappe’ is part of the vernacular and represents anytime someone goes ‘above and beyond’.

Do small ‘PURPLE’ things make a big difference? Absolutely. Imagine if you asked that same friend for a recommendation and he started gushing about Product X because they did these little things that were unexpected and extra. It could be the customer service they received (think Zappos), a feature that they decided not to charge for (think Southwest and ‘Bags Fly Free’), or a ‘thank you’ with free minutes if you spend X per month (think Stew Leonard’s).

Is it possible for a PURPLE GOLDFISH to become PURPLE GOLDFISH STRATEGY?

Let’s compare it to the critically acclaimed model called BLUE OCEAN STRATEGY.  According to authors Kim and Mauborgne:

Blue Ocean Strategy is based on the simultaneous pursuit of differentiation and low cost.  It’s goal is not to out-perform competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.  The opposite of blue ocean is red ocean. Characterized by competition and a crowded space, red ocean is bloody water.

Is there a middle ground or better yet a middle ocean?

Purple Goldfish Strategy is differentiation by added value. Finding signature elements that help you stand out, improve customer experience, reduce attrition and drive positive word of mouth.

Customer Experience is now more important than ever

Here are three leading indicators:

1. The cost of customer acquisition continues to rise, making increasing retention the lowest hanging fruit in marketing.
2. Consumers now have a stronger voice given the emergence of social technologies like Blogs, Wiki’s, Facebook, YouTube, Twitter, Foursquare, TripAdvisor and Yelp.
3. Competing solely on price can commoditize your product or service.

In a recent Temkin Group survey The State Of Customer Experience Management, 2011, more than 200 large companies were asked about their customer experience efforts.  While 7% of respondents think that their company is a customer experience leader today, 61% want to be their industry leader within three years.

Everyone wants to go to heaven…but no one wants to pay the price.

Are customers complicated?

Perhaps we can learn a few lessons from the common goldfish.  Similar to customers, there are many myths about the common goldfish.

Takeaways: Find ways to maximize lifetime value, reduce attrition, and drive positive word of mouth.

[Next Up Chapter 5 - Leveraging surplus and the power of the Gift Economy]

[Over the coming weeks I'll be sharing excerpts as we work towards completing the manuscript for 'What's Your Purple Goldfish?'. Today is a glimpse at Chapter 3]

What if . . .

What if there was a simple marketing concept that moves the needle towards achieving differentiation, driving retention, and stimulating word of mouth? What if your execution was 100% targeted, with 0% waste and given with a personalized touch?

I believe the answer lies in focusing a greater percentage of your marketing budget on the customer, not the prospect.  Deal with the one that is “in hand” rather than the two “in the bush” through a concept called ‘lagniappe’.

What is Lagniappe?

Lagniappe is a creole word meaning ‘the gift’ or ‘to give more’. The practice originated in Louisiana in the 1840′s whereby a merchant would give a customer a little something extra at the time of purchase. It is a signature personal touch by the business that creates goodwill and promotes word of mouth.

LAGNIAPPE (lan‘yəp, lăn-yăp‘) Chiefly Southern Louisiana & Mississippi

1. A small gift presented by a storeowner to a customer with the customer’s purchase.
2. An extra or unexpected gift or benefit. Also called regionally boot.

Etymology: Creole < Fr la, the + Sp ñapa, lagniappe < Quechuan yapa. Interesting fact- Napa comes from yapa, which means “additional gift” in the South American Indian language, Quechua, from the verb yapay “to give more”

Enter Samuel Langhorne Clemens

According to Mark Twain in Life on the Mississippi:

“We picked up one excellent word–a word worth traveling to New Orleans to get; a nice limber, expressive, handy word–’lagniappe.’

They pronounce it lanny-yap. It is Spanish–so they said. We discovered it at the head of a column of odds and ends in the Picayune, the first day; heard twenty people use it the second; inquired what it meant the third; adopted it and got facility in swinging it the fourth. It has a restricted meaning, but I think the people spread it out a little when they choose. It is the equivalent of the thirteenth roll in a ‘baker’s dozen.’ It is something thrown in, gratis, for good measure.

The custom originated in the Spanish quarter of the city. When a child or a servant buys something in a shop–or even the mayor or the governor, for aught I know–he finishes the operation by saying– ’Give me something for lagniappe.’ The shopman always responds; gives the child a bit of licorice-root, gives the servant a cheap cigar or a spool of thread, gives the governor–I don’t know what he gives the governor; support, likely.”

A marketing lagniappe, i.e. purple goldfish,  is any time a business purposely goes above and beyond to provide a ‘little something extra’. It’s a marketing investment back into your customer base. It’s that unexpected surprise that’s thrown in for good measure to achieve product differentiation, drive retention and promote word of mouth.

So – is it just a Baker’s Dozen?

In order to understand a baker’s dozen, we need to travel back to its origin in England:

The concept dates back to the 13th century during the reign of Henry III.  During this time there was a perceived need for regulations controlling quality, pricing and checking weights to avoid fraudulent activity. The Assize (Statute) of Bread and Ale was instituted to regulate the price, weight and quality of the bread and beer manufactured and sold in towns, villages and hamlets.

Bakers who were found to have shortchanged customers could be liable for severe punishment such as losing a hand with an axe. To guard against the punishment, the baker would give 13 for the price of 12, to be certain of not being known as a cheat.

The irony is that the statute deals with weight and not the quantity.  The merchants created the ‘baker’s dozen’ to change perception. They understood that one of the 13 could be lost, eaten, burnt, or ruined in some way, leaving the baker with the original legal dozen.

A baker’s dozen has become expected and therefore it is not a ‘marketing lagniappe’.  Now – – if you provided a 14th bagel as part of the dozen . . . that would be lagniappe.

Acts of Kindness

Another way to think of lagniappe is as an ‘act of kindness’.

There are three types of ‘Acts of Kindness’:

1. Random Act of Kindness - we’ve all seen this before.  Good deeds or unexpected acts such as paying tolls, filling parking meters or buying gas for consumers. Usually a one off feel good PR activation.  This draws upon gift economy priniciples.  Giving with no expectation of immediate return, except maybe for potential PR value. But it doesn’t just need to be random anymore.  Executed correctly, as part of an integrated strategy, ‘branded’ acts of kindness’ can create brand awareness and more importantly drive brand loyalty.
2. Branded Act of Kindness – next level 2.0.  Here the item given is usually tied closely with the brand and its positioning.  It’s less random, more planned and potentially a series of activations. This has the feel of a traditional marketing campaign.  Many brands are moving in this direction.  According to EVP / CMO Joe Tripodi, Coke is leaning more towards ‘expressions’ than traditional ‘impressions’.  Less eyeballs and more emphasis on touches.  What is an expression or a touch?  It’s a ‘like’ on Facebook, a video on YouTube, sharing a photo, a tweet on Twitter etc.
3. Lagniappe Act of Kindness – 3.0 stuff.  Kindness imbedded into your brand. Giving little unexpected extras (g.l.u.e) as part of your product or service.  This is rooted in the idea of ‘added value’ to the transaction.  Not a one off or a campaign, but an everyday practice that’s focused on customers of your brand.  The beauty of creating a purple goldfish as a ‘branded act of kindness’ is that there is no waste.  You are giving that little extra to your current customers.  You are preaching to the choir . . . the folks who are already in church on Sunday.

Here is an infographic that shows all 3:

Think of it as the Curly Fry

My friend Rick Liebling recently shared some insight on lagniappe. Here is a snippet from his post at rickliebling.com:

. . . Lagniappe. It’s a fantastic concept that explains how brands can benefit by giving consumers just a little bit extra (read about it here). As I was reading “My life,” a blog by my friend and colleague Anastasia Wylie, she made reference, via a Jason Mraz song, to one of my all-time favorite lagniappes.

Ever go to a fast food joint, order regular french fries, and get one curly fry in the bag? Man, I love that! It’s such an incredibly small thing, it’s an accident of location really (the regular fries are right next to the curly fries in the kitchen). But it makes you feel like you received something you weren’t supposed to, that others didn’t get, and that you wouldn’t necessarily have asked for (”hey, could you throw one curly fry in there please?”), but once you get it, you are over-joyed.  That’s a lagniappe.

I love how Rick has summarized the feeling you get when you receive a ‘lagniappe’.  The curly fry is that ‘unexpected’ little extra.

Plus: Walt understood the power of exceeding expectations

I had the pleasure on meeting up with Rick Cerrone at a networking function. He shared a story about Walt Disney that became #537 in my Project. Rick mentioned the concept of ‘plussing’ from a book by Pat Williams called, How to Be Like Walt: Capturing the Disney Magic Every Day of Your Life.

Here is a superb summary by John Torre:

“Normally, the word “plus” is a conjunction, but not in Walt’s vocabulary. To Walt, “plus” was a verb—an action word—signifying the delivery of more than what his customers paid for or expected to receive.

There are literally hundreds, if not thousands, of examples of Walt “plussing” his products. He constantly challenged his artists and Imagineers to see what was possible, and then take it a step further…and then a step beyond that. Why did he go to the trouble of making everything better when “good enough” would have sufficed? Because for Walt, nothing less than the best was acceptable when it bore his name and reputation, and he did whatever it took to give his guests more value than they expected to receive for their dollar.

Perhaps one of the best examples of Walt’s obsession for “plussing” comes from Disney historian Les Perkins’ account of an incident that took place at Disneyland during the early years of the park. Walt had decided to hold a Christmas parade at the new park at a cost of $350,000. Walt’s accountants approached him and besieged him to not spend money on an extravagant Christmas parade because the people would already be there. Nobody would complain, they reasoned, if they dispensed with the parade because nobody would be expecting it.

Walt’s reply to his accountants is classic: “That’s just the point,” he said. “We should do the parade precisely because no one’s expecting it. Our goal at Disneyland is to always give the people more than they expect. As long as we keep surprising them, they’ll keep coming back. But if they ever stop coming, it’ll cost us ten times that much to get them to come back.”

Marketing Takeaway: It’s vital to continually be thinking about your own product or service. How can you “plus” it up to exceed expectations.

[Next Up Chapter 4 - Purple Goldfish Strategy]

How much is your customer worth if you could keep them for a lifetime?

In the book, “Reinventing the Wheel – the Science of Creating Lifetime Customers”, Chris Zane outlines the roadmap to reaching this lofty, yet elusive goal.

A 30+ year veteran of the retail bicycle industry, Chris has built Zane’s Cycles of Branford, CT into one of the largest bicycle stores in the nation.

Everyone wants customers for life . . . but how many are willing to pay the price?

Do you know how much each customer is worth over their lifetime?  Chris Zane does.  He know that each customer of Zane’s has a $12,500 LTV (lifetime value).  He sees the whole forest and not just the individual trees.  Zane’s doesn’t sell stuff, they provide ‘experiences’ that build relationships.  They never sell anything without sharing a story of why its valid for their customers.

Lagniappe – a little something extra

The etymology of Lagniappe stems from the Quechan ‘yapay’ which means ‘to give more’.  Zane’s lives by this mantra, leveraging customer service as differentiator.  They are committed to giving customers more than they expect. More importantly they then stand behind the sale by giving more service than others seem reasonable (especially competitors).

A Bowlful of Quarters

Zane’s is willing to spend $100 to service a customer.  To illustrate the point Chris uses the metaphor of a bowlful of 400 quarters.  During presentations he walks around with a bowl and encourages members of the audience to take quarters.   Most take a few quarters, but no one ever takes the whole bowl.  According to Chris:

“The point is that when you as a customer are presented with more than what seems reasonable, like a bowl of 400 quarters, you will self-regulate….By providing more service than what folks consider reasonable we can build trust and loyalty and remind them how hard we’re working on their behalf.”

Here are the 12 most compelling ways that Zane’s offers ‘little extras’ to maximize lifetime value:

1. Lifetime Service Guarantee - all parts and service are covered for life. Translation = buy your bike from Zane’s and tune-ups are free.
2. Flat Tire Insurance - pay a minimal one time fee at purchase and Zane’s will fix your flats (tubes and labor) for life.
3. Free Trade-In Program for Kids - buy a bike for your child at Zane’s.  When they outgrow it, simply bring it back to trade-up.  Zane’s gives you a credit for the price of the former bike towards a new one.
4. Gift Certificates in Water Bottles – Buy a gift certificate and Zane’s will throw in a complimentary branded water bottle that holds the certificate.
5. The One Dollar Rule – Zane’s doesn’t charge for any parts that cost them one dollar or less.  Need a master link for your chain, its on the house.  In fact they typically will throw in an extra master link for lagniappe.
6. 90 Day Price Guarantee – find your bike cheaper somewhere else, they will match the difference plus an additional 10%. No forms to fill out and no credit card processing, Zane’s hands over cash to keep it simple.
7. Giving Back – Zane’s gives back to the community whether its a helmut purchasing program for inner city kids, sponsoring local teams or creating a college scholarship program.
8. Coffee Bar – Zane’s has a nice espresso bar in the store encouraging customers to sit down, relax and enjoy a cup of gourmet coffee.
9. Set of Small Tools –  Zane’s provides a complimentary toolkit when shipping bikes to premium recipients.
10. Webcam – Zane’s has a camera in the repair shop which gives customers the ability to Skype the team.
11. Personal Notes – each person who buys a bike receives a handwritten ‘thank you’ note
12. Test Rides – Want to test a bike at Zane’s? You’re free to take it out for a ride.  No credit card or drivers license required.  Each year they lose a handful of bikes, but the small cost is insignificant compared to the trust gained and hassle avoided.

Any other examples of how you can maximize the LTV of your customers?

Today’s Lagniappe (a little something extra for good measure) – Here is Chris talking to Inc magazine:

Lagniappe defined: A marketing lagniappe,  i.e. purple goldfish, is any time a business goes above and beyond to provide a ‘little something extra’.  It’s that unexpected surprise that’s thrown in for good measure.

How do you stand out in the sea of sameness? How do you win repeat customers and influence word of mouth? What’s Your Purple Goldfish?

Download the FREE eBook here

Don’t Put the Cart Before the Horse

OK… maybe the title of this post is pejorative on Social Media Day. I’ll admit Social Media is part of the answer, but let’s look at some basic facts to consider:

1. 90% of word of mouth is offline
2. You have no control what people say about you, you only have control over how you make them feel
3. The ‘me’ in social media is about the me in customer, not the business

You need to be talkable as a business

I’m not a big fan of Bonnie Raitt (in fact I generally loathe only two types of music . . . ‘country and western’). That said, her song, “Let’s give’em something to talk about” speaks volumes about the importance of customer experience (cx).  CX is the igniter of social media.

Using a little artistic license (apologies Bonnie) on the song lyrics:

Let’s give them something to talk about
A little lagniappe as they wonder out
Let’s give them something to talk, blog, Facebook and tweet about

Do you agree?

2 constituents, 3 different types of Goldfish

Lagniappe is creole for ‘a little something extra’. Marketing Lagniappe leverages the concept via differentiation through added value.

For the last 18 months we’ve explored only one kind . . . the Purple Goldfish.  Inspired by New Orleans and the traditional colors of Mardi Gras (purple – symbolic of justice, green – symbolic of faith and gold – symbolic of power), today I’m declaring there are 3 types:

Marketing Lagniappe Takeaway: Purple represents the ‘little extra’ given to all customers, Green represents the ‘little extras’ given to all of your employees and Gold (inspired by Vilfredo Pareto) represents the benefits given to the top 20% of your customers and employees.

Today’s Lagniappe (a little something extra for good measure) – The accepted story behind the original selection of the Mardi Gras colors originates from 1872 when the Grand Duke Alexis Romanoff of Russia visited New Orleans. It is said that the Grand Duke came to the city in pursuit of an actress named Lydia Thompson. During his stay, he was given the honor of selecting the official Mardi Gras colors by the Krewe of Rex…thus, did these colors also became the colors of the House of Romanoff. The 1892 Rex Parade theme (”Symbolism of Colors”) first gave meaning to the representation of the official Mardi Gras colors.

A marketing lagniappe, i.e. purple goldfish,  is any time a business goes above and beyond to provide a ‘little something extra’. It’s that unexpected surprise that’s thrown in for good measure.

How do you stand out in the sea of sameness? How do you win repeat customers and influence word of mouth?

Are you Giving Little Unexpected Extras? What’s Your GLUE?

Download the FREE eBook here

Submit a Goldfish

There are 5 factors that influence your growth… which one can you control?

OK – I’ll be the first to admit it.  I am oddly preoccupied with goldfish.  How is that the average common goldfish is 4 to 5 inches, yet the largest in the world can be almost 5 times that size?

5 Times Larger!!! – Imagine walking down the street and bumping into someone 20 feet tall? How can there be such a disparity between your garden variety goldfish and their monster cousins?  It turns out that the growth of the goldfish is determined by 5 factors. Part of my obsession is my firm belief that the growth of your product or service is similar to that of a goldfish:

Which of the 5 factors can you control?

Let’s assume you have an existing product or service and have been in business for more than six months.  Do you have any control over the market, your competition or the economy? NO, NO and NO.  The only thing you have control over is your genetic make-up or how you differentiate your product or service.  In goldfish terms, how do you stand out in a ’sea of sameness’. How can you make yourself PURPLE?

So – is it possible for the PURPLE GOLDFISH to become PURPLE GOLDFISH STRATEGY?  Let’s compare it to the critically acclaimed model called BLUE OCEAN STRATEGY.  According to authors Kim and Mauborgne, Blue Ocean Strategy is based on the simultaneous pursuit of differentiation and low cost.  It’s goal is not to out-perform competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.  The opposite of blue ocean is red ocean. Characterized by competition and a crowded space, red ocean is bloody water. Is there a middle ground or better yet a middle ocean?

Purple Goldfish Strategy is differentiation by added value. Finding signature elements that help you stand out, improve customer experience, reduce attrition and drive positive word of mouth.

What’s Your Purple Goldfish?

Today’s Lagniappe (a little something extra for good measure) – Getting back to monstrous goldfish, have a look at Bruce from Hong Kong. According to Guinness Book in 2009, he was the World’s Largest Goldfish:

Lagniappe defined: A marketing lagniappe,  i.e. purple goldfish, is any time a business goes above and beyond to provide a ‘little something extra’.  It’s that unexpected surprise that’s thrown in for good measure.

How do you stand out in the sea of sameness? How do you win repeat customers and influence word of mouth?

Download the FREE eBook here

Exploring the idea of surplus (added value) and status

Over the last week I’ve started to peel back the onion on a concept called the gift economy and how it relates to marketing.  I have to thank fellow #usguys Kevin von Duuglass-ittu @mediasres, Lisa Thorell @lisat2 and Christopher Porter @67tallchris for spearheading the discussion.  Kevin gets extra nods for driving the bus and diving deep with a few strong posts to explore the concept.

So – what is a gift economy?

According to Wikipedia:

In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards. Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community.

A gift economy is opposite of a market economy.  In a market economy there is an exact exchange of values (quid pro quo).  It is my theory that there is a hybrid called the lagniappe economy that can sit between the two:

Can lagniappe live in the middle? Here is a great analysis from a post by Kevin on gift economies:

“This does not mean that the Gift Economy … and the Market Economy of business are incompatible, not in the least. In fact many if not most of our business exchanges are grounded in Gift-based relationships whose “gift” nature we simply are unconscious of and just assume. If you develop a keen eye for the gift-giving environment, and think about all the things that gift-giving in those environments signal, 1. a surplus others want to attach themselves to, 2. a magnanimous respect for the relationship beyond all else, 3. a debt structure that is “positive”

Let’s examine each of the three through the lens of a lagniappe economy:

1. Surplus – the idea of surplus is grounded in giving extra or creating an inequality.  Lagniappe comes from the spanish ‘la napa’ or the Quechan ‘yapay’ both meaning ’something that is added’.  Lagniappe is the practice by the business of throwing in little extras at the time of purchase.

2. Respect - The gift or little extra is about the respect for the relationship.  It becomes a beacon, a sign that shows you care.  It’s a physical sign of goodwill and customer appreciation.

3. Positive – A debt structure that is positive.  This speaks to exceeding expectations by giving extra.  The idea of an equal exchange (market exchange) is a myth in marketing.  You either exceed or fall short of customer expectations.  Providing that extra value provides an inequality that is positive.  The positive effect leads to a sort of indebtedness or reciprocity on behalf of the customer.

The Benefit of Surplus is Status

As a business why would you want to incorporate gift economy principles into your market exchanges?  I believe there are 3 distinct reasons and corresponding benefits of the status gained through marketing lagniappe:

1. Positioning – stand out from your competition.  If everyone is providing x, the fact that you provide x + y (gift)  differentiates your offering. Less than 30% of consumers buy on price.  You want to tap into the 70+% who are looking for value and a strong customer experience. Benefit: Differentiation

2. Loyalty – giving the little extra (gift) enhances the customer experience.  It creates a bond between the business and the customer.  The benefit of that bond include increased loyalty and ultimately patronage as a form of repayment. Benefit: Retention

3. Reciprocity – Part of giving extra is to create goodwill (inequality).  That inequality is repaid by positive word of mouth or word of mouse. The best form of marketing is via positive word of mouth.  By giving a signature extra (gift) you provide something for your customers to talk, tweet, blog, Yelp or Facebook about.  Benefit: Referrals

What do you think?  Is it possible leverage the power of gift economies in marketing transactions via marketing lagniappe?

Today’s Lagniappe (a little something extra for good measure) – Here is Chris Anderson, editor of Wired Magazine and author of the ‘Long Tail’ & ‘Free’ talking about the gift economy and the power of free:

Lagniappe defined: A marketing lagniappe, i.e. purple goldfish,  is any time a business goes above and beyond to provide a ‘little something extra’. It’s that unexpected surprise that’s thrown in for good measure.

How do you stand out in the sea of sameness? How do you win repeat customers and influence word of mouth?  Are you Giving Little Unexpected Extras?

What’s Your GLUE?

Download the FREE eBook here

An Interview with Francois Gossieaux of Beeline Labs

I had the opportunity to catch up with Francois last month at the NewComm Forum in San Mateo, CA.  I interviewed Francois for a video segment called MENG: 5 questions with an Expert.   At the end of our discussion I asked about a recent post he wrote on the importance of customer experience.  Here are the couple minutes where we discussed cx as differentiator:

Here is a highlight from Francois’ blog post:

“The reason why exceptional service is the new competitive differentiator is not just because it’s easier for competitors to catch up product-wise, but because the news about exceptional service travels fast in the networks that matter – peer and friend networks where the buying decisions are increasingly being made. When people recommend products to friends, colleagues, and acquaintances, they do not focus on the features, functions and benefits the way many marketers have been trained to do – they focus on the overall experience of adopting the solution, and the exceptional qualities of that “whole” offering.

So if you are like most companies and operate in a market where it is really hard to differentiate  based on the product alone, you got to focus your attention on WOW service offerings.”

Marketing Takeaway: You need to find ways to differentiate your product or service.  The easiest way is to focus on the customer experience.  Exceed the expectations of your customers by offering those little extras that surprise and delight.

Today’s Lagniappe (a little something extra) – Speaking of doing the little things, here is a site that was recommended by fellow MENG member Dan Gersten of Chadwick Martin Bailey.   You need to check out this 3 minute video on ‘Johnny the Bagger’:

Click Image to Play

In Search of Your PURPLE GOLDFISH.  ‘Give your customers something to talk, tweet, blog and post to Facebook about’

Click here to download the FREE Purple Goldfish eBook.