ABC, Nielsen Team To Measure iPad Video Consumption

More big media companies want to determine consumer usage and reach of new digital media platforms.

Now Disney/ABC Television Group has announced an effort with Nielsen to measure video consumption on iPads.

With 55 million different versions of iPads now sold -- and another 3 million new iPads sold in the last few weeks -- the companies say it's important to understand how consumers are using the iPad when watching video.

Nielsen will create a panel by asking 200 people to download a special "meter," which will measure reach, duration, frequency and page views of their iPad apps and Web usage. The opt-in Nielsen iPad panel will aggregate and measure video consumption, app usage and other activity over the course of a year.

The companies believe the study will offer the first view of actual iPad behavior -- as opposed to self-reported data -- along with demographics and other insights.

Disney has been studying consumer tablet behavior for some time, but now wants some deeper data. “Nielsen’s proprietary technology has the potential to deliver unprecedented additional details about consumer viewing patterns,” stated Peter Seymour, executive vice president of strategy and research for Disney Media Networks.

Cheryl Idell, executive vice president at Nielsen, added: “The insight gleaned from this study, using these metering capabilities, is an example of how we meet our commitment to deliver cross-platform understanding to the industry.”

Disney isn't the only media company looking to find deeper analysis. Recently, media agency Group M announced a deal with Nielsen to measure cross-platform -- traditional TV and other digital media -- reach and frequency of Group M clients media campaigns.

Sales Tip: Fundamentals of Sales Success

Five fundamentals for sales success.

It is not an accident that the top producers in the world of selling are at the top. It is also true that there are no born sales champions. Yes, some people have more talent then others. But, success in selling comes down to some basic fundamentals. Fundamentals, if taken action on consistently will lead to success.

1) PROSPECTING: So, what are the fundamentals that all sales champions master? Well, one is Prospecting. Most people don't like to prospect. Me included. But, you have to have someone to sell to. LinkedIn has made the prospecting and networking process more simple and more powerful then it has ever been in the history of selling. Build your network with people who can and want to say yes to your offer.

2) BUILDING RAPPORT: Another fundamental is Building Rapport. It has been said that in a perfect world, people want to do business with their friends. Well, in the imperfect world in which we live, people would still rather do business with their friends. Have we made friends with our prospects and customers? Do you have a plan to do this? A book I have found extremely helpful over the years is Dale Carnegie's classic How to Win Friends and Influence People. I use what I have learned from Mr. Carnegie every day.

3) PRESENTATION SKILLS: The third fundamental is Presentation Skills. Let's be honest. Most sales professionals are lousy presenters. They ramble, They jump from subject to subject. Quite frankly, they confuse and bore the prospect. When is the last time you bought something when you were confused and bored?

4) CLOSING SKILLS: Then, of course, there is the fourth fundamental of Closing Skills. Research shows it takes around 5 closes to begin a partnership with a customer. Many sales professionals know only one or two closes. That is a problem. Closing is a natural part of the presentation process. But it is the scariest for the sales professional as well as the prospect. You must practice and master the closing process so that it becomes natural and not canned. When this is done, is eases the buying tension of the prospect and builds the confidence of the sales professional.

5) CUSTOMER LOYALTY: The fifth fundamental of successful selling is Customer Loyalty. My mentor, Zig Ziglar, says that we as sales professionals have to become assistant buyers to the prospect. Selling is not something you do to someone. It is something you do for someone because you know your product or service is the answer to their challenge. It is not an adversarial process. You are on the same side of the table as the prospect. It is a fundamental belief system that creates loyalty from the prospect but also from you.

Sales Tip: Handling Price Objections

You would think every salesperson would be proficient at handling price objections, considering how often customers push back on price.

In my experience, though, most salespeople can strengthen their skills in this regard. Sorry to be blunt, but too many salespeople are quick to leave profit on the table when they really don't need to.

Here are 3 ways skilled salespeople handle price objections:

1. They don't respond. "What?!" you may be thinking. It's true, though! When a customer first asks for a reduction in price or makes a comment that the price is too high, skilled salespeople simply ignore this. The goal is to determine if the customer is serious.

It is not unusual for customers to ask for a lower price simply because they think that's what they are supposed to do as a customer. They haven't genuinely given any thought to whether the price is accurate or not. Knowing this, skilled salespeople will not even entertain a conversation that focuses on price reduction the first time the customer brings it up.

I have found that this one tactic alone is often enough to move the customer off the price issue.

2. They ask "need-based" questions. Your goal as a salesperson is to always bring the customer back on track to focusing on what they want and need. Through effective questioning, not only will you uncover surface needs, you will discover needs and desires the customer possibly hadn't even considered.

The more you can do this, the more likely it is the customer will see value in what you offer -- and be willing to pay for it. I know it sounds obvious, but it is ridiculous how many selling situations end with a salesperson offering a discount because he or she didn't take the time to understand the customer's needs.

The key to effective questioning, of course, is body language that clearly conveys your confidence in your product and price. If your words are saying one thing, but your body language is conveying hesitancy, the customer will gravitate toward the message from your body language.

3. They don't waste time on customers who aren't willing to buy. This sounds harsh, but let me explain. Skilled salespeople develop an almost uncanny ability to differentiate the customers who are serious about buying from those who perpetually prolong making a decision.

If a customer is persistent in pressing for a price reduction or seems stuck in an unwillingness to buy, your "go to" method should not be to sabotage your profits. You should stop investing time and resources in this customer and instead turn your focus toward prospects and customers who are willing to buy.

The only way this point works is if you have a pipeline full of prospects. I always tell salespeople that if they start banking all their sales numbers on one or two big customers, they are headed into dangerous territory.

The most profitable salespeople are wise about who they spend time with -- and they make sure they have plenty of solid prospects and customers with whom to invest that time.

Domestic Automotive Brands Score Well in Total Value

Volkswagen, Hyundai and Ford are leaders in Strategic Vision's newest Total Value Index study. But for the first time in over a decade, American manufacturers paced the number of Total Value winners in vehicle categories, with 11 segment leaders.

Another big change: four alternative fueled vehicles -- Chevrolet Volt, Honda Civic Hybrid, Nissan Leaf and Lincoln MKZ Hybrid -- led their respective segments. The firm says that in the past, alternative-powertrain vehicles didn't lead because simply offering better fuel economy did not provide enough overall value to make a difference. The Tustin, Calif.-based market research firm says the change implies a watershed moment for acceptance and desirability of hybrids.

"Even though the median price of a Chevy Volt was $43,000, owners believe that for every dollar spent, they got more than did buyers of other vehicles," said Alexander Edwards, president of the company. "Customers had tremendous value appreciation for (the vehicle's) technical innovation, warranty, standard equipment and certainly fuel economy."

In Strategic Vision's study, Volt not only had the highest Total Value score in the Mid-Size Car Segment, but also the highest score of any vehicle in the entire study. Owners may have a predilection to love cutting-edge technology, as they had a median annual income of $133,000, with 37% having post-doctorate degrees, putting them solidly in the early-adopter category. Another alternative-engine vehicle, the all-electric Nissan Leaf, won in its segment for technical innovation and standard equipment.

But Edwards -- giving a nod to the fact that such vehicles still make up only a couple percent of the U.S. auto market -- said cost benefits, not emotions, will be what drives broad acceptance and larger volumes. "A word of caution to manufacturers is to realize potential buyers are smarter and more empowered with information than ever before. A hybrid needs to make sense for larger sales volumes to occur. Hybrid ownership is still primarily 'statement'-driven, but things are changing."

General Motors also had segment winners with Cadillac CTS Sedan and CTS Coupe, Chevrolet Corvette Coupe and the GMC Yukon. Honda had several winners as well, with the Honda Civic Hybrid, Accord Coupe, Odyssey, Ridgeline and Acura TSX Wagon. Hyundai continued its winning streak because of design, features and mileage from models like Tucson. Ford's segment leaders included the Lincoln MKZ Hybrid, Mustang Convertible, Flex, and the F-Series trucks.

Dodge Durango was another winner, and Volvo won because of strong product and comprehensive warranty with several of its vehicles. MINI Cooper won for the seventh year in the Specialty Coupe segment, per the study.

Strategic Vision says the Total Value ranking is a combination of subjective owner statements on 442 attributes combined with what the firm characterizes as immediate and long-term economic factors like warranty, technical innovation, standard equipment, and vehicle mileage ratings. The survey side of the study gets into political party affiliation, personal media habits and hobbies, and any ethnicity they claim.

"The way you become a value leader in this economy is to create an exceptional product that is affordable. Price alone will not determine value," said Darrel Edwards, founder and executive director of Strategic Vision.

(Source: Marketing Daily, 03/16/12)

2011 Was a Record Year for Dealership Profits

Average dealership profits in 2011 were the highest since the National Automobile Dealers Association began tracking the data in 1970.

The average dealership made a record $785,855 in net pretax profit in 2011. Net pretax profit as a percentage of total sales was 2.3 percent, a level not seen since at least 1978, said Paul Taylor, NADA's chief economist.

It's such a good time to be a dealer that dealerships even made money on new cars last year. The average retail net profit for a new vehicle was $23 in 2011 vs. a loss of $180 in 2010.

"It's normally a loss," Taylor said. He credited the turnaround to an improving economy, fewer dealerships in competition with one another and historically low interest rates.

With those trends continuing this year and probably through 2013, dealers could see a golden era of profitability if they stay disciplined, experts said.

"'Make hay while the sun shines' is the operative phrase here," Taylor said.

In 2011, interest rates alone made for the difference between a profit and loss on each new-vehicle sale. Because of the low rates and manufacturer incentives, the average dealership had a floorplan credit of $48 last year instead of the $200 expense typical in a growth year, Taylor said.

Used-car net profit is up slightly, he said. It went from $252 per vehicle in 2010 to $269 in 2011.

Sales in the new-vehicle department rose by 15.6 percent; in the used-vehicle department, by 9.8 percent; and in the service and parts department, by 5.7 percent. On a per-vehicle basis, advertising and rent expenses fell last year.

Service and parts absorption -- the department's gross profit as a percentage of total fixed overhead expense -- dropped from 59.6 percent in 2010 to 57.8 percent in 2011. That's to be expected, Taylor said: Fixed costs go up when vehicle sales rise, and service and parts sales weren't increasing as fast.

The overall rosy profit picture makes for a lot of happy dealers and those who advise them.

"It's a lot more fun to work with our dealers than it was three years ago," said Dan Thompson, a Pennsylvania dealer accountant. "I think they're going to have a good run."

Dealers continue to prosper from the lessons learned during the industry downturn, Thompson said. In particular, they sharpened their focus on used vehicles and the parts and service business.

In 2010, dealers generated as much gross as three years earlier on sharply lower vehicle sales volume, Thompson said. In 2011, dealers continued to perform at those higher levels while enjoying the benefit on incremental vehicle sales.

Going forward, dealers are challenged by how much payroll to add to the dealership.

"Our experience has been dealers have asked less people to do more, primarily because they are not all that confident that sales increases are here to stay," Thompson said. "At some point, personnel will need to be added -- knowing when, how many and what cost is the key."

Dick Heider, a Colorado dealer accountant, also is keeping an eye on expense control.

"Everyone learned a lesson in expense control over the last few years, and I think this will not be forgotten soon," Heider said. "Dealers are smarter and more focused on efficiency within their stores now than in the past."

Dealers should analyze employee productivity and look for process efficiencies. "In what is now more of growth market, this may mean using the same number of people to accomplish a greater volume of work," he said.

Money also can be saved in other areas, such as computer vendor and utility expense, Heider said.

Much better software is now available from computer vendors outside the Big 2 providers, he said.

"While not fully equal to the Big 2, the strides second-tier vendors have made is providing very capable software and is worth a second look," Heider said.

While the payoff is longer term, he said, dealers also can cut utility bills by installing more efficient lighting, including lot lighting.

(Source: Automotive News, 03/23/12)

Automotive Recovery hits red-hot Stage 2

Strong March sales show surge has gone beyond 'need to replace' crowd.

This year's faster-than-expected sales recovery has entered a key new phase: "Want" buyers are joining the "need to replace" buyers who have been carrying the market.

With the strong February selling rate continuing into March, optimistic carmakers and analysts are boosting full-year industry sales forecasts. Last week, Volkswagen Group of America CEO Jonathan Browning said the company has increased its industrywide outlook to 14.0 million from 13.7 million.

Executives, dealers and analysts say pent-up demand has been unleashed, and lenders are making it easier for shoppers to do deals.

"Customers are having no trouble getting financed," said Nissan Division sales boss Al Castignetti.

But in a new development, they say consumers who simply want a slick new ride are turning up in showrooms, not just buyers who are trading in high-mileage vehicles.

"We're getting some 'want to buys' now," TrueCar.com analyst Jesse Toprak said. "The 'need to buys' are 13 million [a year] at best, so the industry needs those 'want' buyers."

Toprak is among those who have revised 2012 sales forecasts upward this year, in his case to 14.0 million from 13.8 million. He's considering a second 200,000-unit bump upward but will wait until March sales are reported April 3.

Dealers across the country sound confident, especially at high-flying brands such as Hyundai.

"Sales are tracking better than our best month ever," said Andrew DiFeo, CEO of Hyundai of St. Augustine in Florida. "The automotive market is really coming back."

March volume may not match February's 15.1 million selling pace. This month has no extra leap day, and the freakishly warm weather and stock market rally lack the surprise pop they had last month.

But most analysts expect a seasonally adjusted annual sales rate in the mid-to-high 14 millions, matching or exceeding January's 14.2 million SAAR.

Between August and February, the light-vehicle SAAR jumped 3 million units, "increasing our level of conviction for a continued recovery in demand," said Sterne Agee analyst Michael Ward.

Still, at least one potential cloud is on the horizon: rising fuel prices that Ward believes will hit household disposable income and consumer confidence enough to limit the March-to-May SAAR to 14.5 million.

But IHS Automotive analyst Rebecca Lindland says high fuel prices may drive auto sales because buyers want more fuel-efficient rides.

"Whatever they are trading in, it doesn't get nearly as good mileage as what they can replace it with," she said.

Hot brands are trying to ride the sales momentum. If Chrysler dealers either matched their total January sales by March 23 or sold half of their March target by March 15, Chrysler will increase their monthly volume bonus by 25 percent, said one dealer who asked not to be named.

The dealer said he's on pace for his best sales month in five years.

"The early March trend is through the roof," he said.

What's driving the surge? The improving economy, increased credit availability, a flurry of new products, and the aging vehicle population are all factors, analysts say.

Vehicle owners can't delay replacement purchases any longer. Noting the average U.S. vehicle is a record 10.8 years old, Morgan Stanley analyst Adam Jonas described the current U.S. fleet as "not just old, but creaky" with many vehicles having more than 100,000 miles.

Dealer principal Steve Landers of RLJ-McLarty-Landers Automotive of Little Rock, Ark., agrees.
"Lots of our trade-ins can't make it to the dealership driveway," he said. "We send the tow truck to their houses."

Kjell Bergh, chairman of Borton Volvo in Minneapolis, said he noticed a shift in buyer attitudes at the Twin Cities auto show this month.

"This year, people were going to the show because they intend to buy a new vehicle," he said. "We're moving out of the 'buy to replace' crowd to people with the confidence to vote with their dollars.

"Before, car owners were spooked. But now they are saying 'I don't have to replace my car but I want something new.'"

Jeff Schuster, top forecaster for the Americas at LMC Automotive, said: "Buyers are starting to loosen up a bit, finally. It's normally a fine line between 'want' and a 'need to replace but don't have to.' But we're seeing consumers much more willing to make a big purchase."

Overall, consumers are becoming less sensitive to bad news, many say.

"The mind-set is: 'It's OK to buy a car,'" Toprak said.

Consumer confidence has been rising, though it dipped slightly this month, which chief economist Scott Brown of Raymond James & Associates attributed to the pocketbook pinch of fuel prices.

Credit availability is much wider, and subprime lenders are expanding. Because Exeter Finance Corp. could securitize $200 million in auto loans, the subprime specialist is expanding to all 50 states this year from 13 states a year ago, CEO Mark Floyd said. "It's a pretty competitive market," he added.

Also, attractive new models are reaching the market, said Kelley Blue Book analyst Alec Gutierrez.
"Subcompact car sales will be especially strong," he said. "Not only are they cost effective, but [they] are of significantly higher quality than just a few years ago."

Two analysts have increased their North American production outlook. Sterne Agee's Ward raised his production forecast by 400,000 to 15.2 million units, including heavy trucks. Citing a 23 percent output increase in the first two months this year, LMC's Schuster hiked his light-vehicle forecast by 200,000 to 14.2 million.

Toprak said vehicle buyers are not spending beyond their means in 2012.

"This sales level seems to be sustainable and not a blip," he said. "The industry is healing its wounds on its own."

Jesse Snyder  Automotive News -- March 26, 2012

When Conversations Lead to Mobile Searches

There are 7 billion people in the world, with about 2 billion connected to the Internet. Some 1 billion have smartphones.

Suzanne Mumford, Google product manager, cited those numbers from a recent presentation by Eric Schmidt. She said Android activates 850,000 phones daily running the operating system, and one-third of mobile searches have local intent, meaning people searching for nearby businesses.

Google has launched an initiative to help businesses build a mobile Web site and strategy, GoMo. Google is offering companies help in Web development and hosting space.

Some 79% of large online advertisers still don't have what Google considers a mobile-friendly site. A recent Google webinar supported the GoMo campaign. When asked during the webinar how many businesses on the call have built a mobile-friendly site, about 42% said yes and the remainder said no.

It turns out that 53% of Americans own a smartphone. About 95% use smartphones to search, 77% in a store, 43% while commuting to work. I am one of those 13% who pull out their smartphone to search on something during a conversation to look for a business, confirm facts, or further thoughts in a conversation.

Consumers engage and purchase more from mobile sites, according to Google. Consider these stats. Fifty-one percent of consumers are more likely to purchase from retailers that have mobile-specific Web sites. Research has shown that Web retailers could increase consumer engagement, such as time on site, by 85% with a mobile-specific Web site. And 40% said they would visit a competitor's mobile site instead. Those Compuware numbers from "Why the mobile Web is disappointing end-users" are from a year-old study.

Since then, Google and Microsoft have opened the doors to more features for mobile ad campaigns, such as targeting day and time.

For Google, it's part of its GoMo strategy. Drive consumers to a mobile-friendly landing page, separate mobile from desktop campaigns, use mobile-specific keywords, and rely on made-for-mobile ad formats.

To make a point, Mumford shared data from Roy's Restaurants mobile site. She said the company achieves 800% return on investment with hyperlocal advertising and mobile-only campaigns. After realizing that mobile traffic outperformed desktop traffic in click-through rates and cost per clicks, Roy's created a separate mobile-only campaign to maximize the number of calls and clicks, using hyperlocal location extensions to better target mobile customers.

The results stated in the report include achieving "800% ROI on mobile-only campaigns, drove 40% more calls, hyperlocal mobile ads had a 539% higher CTR and 67% cheaper CPC compared to previous desktop campaigns."

How many times have you had a conversation with someone in person and reached for your smartphone to consult?

(Source: Laurie Sullivan, SearchBlog, 03/15/12)

TV Sourcing and Viewing Continues to Change

According to the latest Nielsen Cross-Platform Report, Americans spend more than 33 hours per week watching video across the screens, but how they're consuming content, traditional TV and otherwise, is changing.

Consumers are increasingly making Internet connectivity a priority; 75.3% pay for broadband Internet (up from 70.9% last year):

• 90.4% pay for cable, telephone company-provided TV or satellite
• Homes with both paid TV and broadband increased 5.5% since last year

Consumers are seeking out the subscription service that makes the most sense for them, says the report. The number of homes subscribing to wired cable has decreased 4.1% in the past year at the same time that telephone company-provided (telco) and satellite TV have seen increases of 21.1% and 2.1%, respectively.

Nearly a million more homes are subscribing to broadband while skipping a traditional paid TV subscription. There are 5.1 million broadcast-only/broadband homes, and though broadcast only/broadband homes comprise a smaller subscriber group; the number of these homes has increased by 22.8% since Q3 2010.

Whether they're cord-cutters or former broadcast-only homes that upgraded to Internet service, these homes represent a growing group of U.S. consumers. Interestingly, roughly the same percentage of consumers in broadcast-only/broadband homes watch traditional TV, stream or use the Internet as in all cross-platform homes; the difference between these groups falls to time spent on these activities. Even broadcast-only/broadband homes spend the majority of their video time watching traditional TV: 122.6 minutes, compared to 11.2 for streaming on average each day.

(Source: The Center for Media Research, 03/02/12)

IPG: Mobile Key To Agency Growth

New research from Ernst & Young indicates that 88% of TV viewers say they multitask with a computer while watching TV. And nearly half of viewers say they are on their mobile phone while watching TV.

In a panel discussion in New York Tuesday put on by Ernst & Young to discuss its research, Interpublic Group CEO Michael Roth mused: “Our lives are blurring from a device standpoint.”

For clients, that’s both a blessing and a curse, he said, noting that commercials “give you a break” from watching content, and that allows viewers to check emails or go online to view content that may or may not be related to the TV programming.

The challenge for advertisers and agencies, he added, is to make commercials that engage viewers so they don’t completely disengage with the TV set.

Mobile technology, said Roth, is key to the company’s future growth -- given that in many markets, mobile has bypassed other technologies to become the primary communications means for consumers. “We’re getting double-digit growth in emerging markets” like China and Brazil, said Roth, adding that those growth rates will continue.

Smartphones will be the core device that integrates other forms of communications, he said, adding that consumers are using smartphones more frequently to access the Internet than computers.

But there’s a “disconnect,” said Roth, between the amount of mobile usage -- which is soaring -- and ad spending in the space, which is lagging. He likened it to the same gap that occurred when Internet usage first took off a decade ago. It took a while for advertisers to shift significant amounts of money from traditional media, which was being used less, to digital. Just as that gap has narrowed, so will the gap that now exists on the mobile front between consumer usage and ad spending.

The Ernst research also found that the average home in the U.S. now has four devices connected to the Internet, an average that will likely climb half again in just two to three years.

Michael Fries, president and CEO of cable company Liberty Global, responded that the more devices households have connected to the Internet the better -- at least for his business. "I want 10 devices in the home because [consumers will] need a bigger pipe," to connect to the Web. He predicted that in three years' time, providing subscribers with Internet connections will constitute 40% of Liberty's revenues.

~Steve McClellan - OMD

Social Media Chatter Ups Live TV Stats

Rather than cannibalize “old media,” some online activities can actually boost viewership. In particular, new research shows that social media can significantly increase consumers’ TV time.
    
A majority (58%) of heavy engagers -- i.e., consumers who share related thoughts via social networks at least 10 times a week -- report watching more live TV, according to a iModerate Research Technologies study.

Adam Rossow, vice president of marketing at iModerate, says there are several reasons for the synergy. “The respondents in this study consistently remarked that it makes TV more fun,” he said.

There is also “the desire to keep up with the conversation” -- especially if and when someone becomes recognized as an online authority on a particular show or genre. 

An increasingly number of viewers also "love the social interaction and frequently add shows to their viewing lineup due to social chatter,” Rossow notes. “That adds up to more time spent on social networks and more hours watching television.”

Among some 150 males and females who engage in what Rossow calls “social TV” at least once a week -- the emerging behavior has also made these viewers into more active consumers and influencers.

To that end, one-third of respondents said their primary reason for engaging in social TV was either to give feedback to the television network or show support for their television program.

What sort of consumers are participating in social TV? iModerate found three specific types, which it groups as “The Spots Nut,” “The Extrovert” and “The Girlfriend.”

Sports nuts are 25-54 males that partake in social TV primarily for “big games.” They post more than five times a week on social media and enjoy debating sports, talking trash, celebrating and venting about their teams and showing off their sports knowledge.

Extroverts are 18-34 year-old males who have a vast network of virtual and personal friends. They make new friends online in chat rooms. By posting about social TV, they consider social friends to be “real” friends.

Finally, “the girlfriend” is a 25-44 female who mainly engages in social TV while watching dramas and reality shows. According to iModerate, she relates deeply to her favorite shows and looks forward to the “girls’ night out” aspect of interacting with them through social TV.

The study also found that, beyond giving feedback and supporting their shows, individuals engage in social TV to be relevant and recognized, be part of a community, maintain relationships, and have virtual “hang out time” with friends.

~Gavin O'Malley - OMD (3/21/12)

Box Office is Booming Despite a Largely Lackluster Slate of Films

Hollywood loves a comeback story. Now it's trying to live one out.

After an abysmal year at theaters, moviegoing is back. Through the first two months of 2012, ticket sales surged 18% over the same period last year. More importantly, attendance was up 20%, even though this year's films appear to be no stronger than last year's.

If anything, 2012 is flourishing despite the movies. Last year's early-season No. 1's included The Green Hornet, Just Go With It and Gnomeo & Juliet -- films that earned middling reviews, at best.

But compared with this year's hits, those films were Oscar bait.

Take The Devil Inside (please, said some tweeters). The $1 million horror flick opened to a staggeringly high $34 million on Jan. 6, giving the year a kick-start that hasn't slowed. Every weekend has seen increased sales over the previous, according to Hollywood.com. This, despite tough reviews for surprise No. 1 films Contraband, The Vow and Act of Valor.

"I can't recall a year that started like this, when almost every movie has overperformed," says Jeff Bock, box-office analyst for Exhibitor Relations. "The movies may not be great, but in terms of making money, the studios are firing on all cylinders."

Bock credits cannier marketing behind this year's movies, which have been aimed at niche audiences. The Devil Inside, for instance, launched a viral campaign that played on its "found footage" theme. Valor, which scored an upset win with a $25 million debut weekend, features real Navy SEALs, and publicity events were staged at military sites nationwide.

"You're seeing the studios learn social networking," Bock says. "They've caught up with the trend, and give them credit: They've got their fingers on the pulse of what core groups want to see, and are reaching them" through specific ad campaigns.

Hollywood.com's Paul Dergarabedian says the box-office defibrillation began the last week of 2011, which can be anemic at theaters because of the holidays. Despite being in its third iteration and second week of release, Mission: Impossible -- Ghost Protocol powered through the end of the year on its way to $208 million, the seventh-highest-grossing movie of 2011.

"That's when we knew something was up," Dergarabedian says. "That gave us momentum that we haven't lost."

Nor does it seem likely to slow, as studios begin a march of big-budget releases including Dr. Seuss' The Lorax (which brought in more than $70 million in its debut last weeked), Disney action epic John Carter this Friday and the best-seller adaptation The Hunger Games on March 23.

Dergarabedian says that while it's too early to anoint the year a success, the rebound marks "a shift like I've never seen before. Remember, last year was the lowest-attended in 15 years," with 1.28 billion tickets sold in North America.

"If studios can keep up the way they're marketing their products," Bock says, "Hollywood is going to be just fine."

(Source: USA Today, 03/01/12)

Bank Customers Defect Due to Fees, Poor Service

Fees are the main reason customers shop for a new primary bank, according to the J.D. Power and Associates 2012 U.S. Bank Customer Switching and Acquisition study.

One-third of customers of big and large regional banks cite fees as the main shopping trigger. However, poor service and unmet customer expectations also have fueled increases in defection rates among customers of large, regional and midsize banks.

The beneficiaries of the exodus from larger banks are primarily smaller banks and credit unions. Acquisition of new customers by smaller banks and credit unions has increased by 2.2 percentage points to an average of 10.3% in 2012 from 8.1% in 2011.

Among big banks, regional banks and midsize banks, switching rates average between 10% and 11.3%, while the defection rate for small banks and credit unions averages only 0.9%, a significant drop from 8.8% in 2011.

The study, which examines the bank shopping and selection process, finds that 9.6% of customers in 2012 indicate they switched their primary banking institution during the past year to a new provider. This is up from 8.7% in 2011 and 7.7% in 2010.

"When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet," said Michael Beird, director of the banking services practice at J.D. Power and Associates, in a release.

However, customers weigh the price they pay against the value of their experience.

"It is apparent that new or increased fees are the proverbial straws that break the camel's back," Beird said. "Service experiences that fall below customer expectations are a powerful influencer that primes customers for switching once a subsequent event gives them a final reason to defect. Regardless of bank size, more than one-half of all customers who said fees were the main reason to shop for another bank also indicated that their prior bank provided poor service."

Promotions and cash incentives helped attract customers shopping for a new bank.

At one of the highest-performing big banks, 19% of customers indicate these promotions were the reason they selected their new bank. However, according to Beird, doing a good job for customers is not just about dollars, but also about loyalty and retention.

Only 32% of customers who selected a new bank because of promotional offerings said they definitely would not switch banks again in the next 12 months. In comparison, 46% to 51% of customers who chose the new bank because of either good service experience or positive recommendations say they definitely will not leave within the next year.

The 2012 U.S. Bank Customer Switching and Acquisition Study is based on multiple evaluations from 5,062 customers who shopped for a new banking account or new primary financial institution during the past 12 months.

The study was fielded in November and December 2011, and includes Bank of America, Bank of the West, BBVA Compass, BB&T, Capital One, Chase, Citibank, Comerica Bank. Fifth Third Bank, Harris National Bank, HSBC, Huntington National Bank, KeyBank, M&I Bank, M&T Bank, PNC Bank, RBS Citizens, Regions Bank, Sovereign Bank, SunTrust Bank, TD Bank, U.S. Bank, Union Bank and Wells Fargo.

(Source: Marketing Daily, 02/27/12)

What's Behind the Dollar Store Craze?

Bargain Hunters Expected to Stick Around as Economy Improves

There are few places where a buck buys more than at 99 Cents Only, Dollar Tree and other "all one price" stores, a retail sector that thrives when customers pinch pennies.

The $52 billion dollar-store industry has been expanding as middle-class shoppers trade department stores and supermarkets for extreme discounting.

Dollar-store sales have grown 4.3 percent, on average, in each of the past five years, said Justin Waterman, retail analyst for IBISWorld.

"That's extremely high in light of the recession in 2008 and the negative consumer sentiment in 2009," Waterman said. "Any time there's a slump in the economy, this industry picks up, because consumers are more price conscious."

Meeting that demand are publicly traded companies like 99 Cents Only Stores, Dollar Tree, Dollar General and Family Dollar, which have acquired smaller chains, as well as many mom-and-pop stores. They compete with Target and Walmart as well as supermarkets with smaller, convenient locations, often in urban areas.

Years ago, dollar stores had a bad rep. Shoppers perceived them as junk stores stocking leftover Halloween merchandise and dented cans. Today's stores are clean and well-arranged, with an emphasis on brand names, and some "core" items such as bread that are always in stock. You'll find obscure brands side by side with household names like Kellogg's and Oscar Mayer, sometimes in downsized packaging to meet the $1 price point.

Dollar Tree sells everything from toilet-bowl cleaner to Mardi Gras masks and cans of Progresso soup. Another market leader is 99 Cents Only Stores, which does a brisk business in fresh romaine hearts, batteries and Malt-O-Meal cereal.

"It's a mix of everyday items but it's also an exciting treasure-hunt shopping experience, with closeouts and deliveries several times a week," said Jeff Gold, president and chief operating officer of 99 Cents Only Stores.

Gold believes that his stores have much to offer middle-class customers. "We feel that if and when they come in our stores, they'll appreciate the values we offer and enjoy the shopping experience," he said.

As dollar stores have upgraded, consumers don't feel embarrassed to be seen at one.

"Some people might have thought that there was a stigma attached to shopping at dollar stores," Waterman said, "but when they saw their friends shopping at them and realized the potential savings, they were more likely to frequent these stores."

San Diego resident Maria Lopez, 27, said she shops regularly at a new 99 Cents Only location. "I like dollar stores because even without coupons you can still get a good deal on brands," she said. "Of course, you have to make sure it's not expired and some of the products are smaller sizes. But you can fill up your pantry by shopping there."

Lopez, who blogs about saving money at drugstoredivas.net, said she found Earthbound Farm organic salad, Philadelphia Cooking Creme and Farmer John ham, all for 99 cents each, on recent trips.

"People know me -- I'll go anywhere for a deal," she said.

The big question is whether middle-class customers will keep shopping there once the economy improves.

"I've got a feeling that dollar stores are going to have some staying power," said consumer-behavior expert Bernhard Schroeder, director of the Entrepreneurial Management Center at San Diego State University. He said consumers who feel "burned by the recession" will still seek bargains and may find they enjoy the dollar-store shopping experience. "I don't think we necessarily come out of a recession and immediately run back to caviar and chocolates."

IBISWorld projects that the dollar-store industry will continue growing at an average of 2.6 percent a year for the next five years.

99 Cents Only
An industry standout is 99 Cents Only Stores, which says its per-store sales of $4.9 million are the highest in the dollar-store industry.

The company has 294 stores, mainly in California, Arizona, Nevada and Texas, and plans to open a dozen more this year. Unlike many dollar stores, the 99 Cents Only stores emphasize fresh food with perishable products such as packaged sliced turkey or a package of Dole romaine hearts, and some organic produce.

The company's employees are trained to "act with a sense of urgency" and handle constant change, such as processing one-time closeout buys, Gold said. Unlike a Walmart or a Costco, which has rigid operating constraints, 99 Cents Only is designed around handling varying stock.

The company does $1.4 billion in sales a year, but "in a lot of ways we act like a very small company without a lot of bureaucracy," Gold said. "Being resourceful is an important core value for our company."

Dollar Tree
The Chesapeake, Va.-based Dollar Tree Stores chain has around 3,800 locations and sells in bulk from its online arm, dollartree.com.

The company had an estimated $6.6 billion in sales last year, which it attributed in part to adding refrigerated and frozen food at more stores. It gets about half of its revenue from cleaning products, food, and health and beauty items, known as "trip starters" because customers visit the store with those in mind. Many people then make impulse buys when they spot bargains like Easter baskets, china plates or two-for-a-buck greeting cards, company officials have said.

A spokesman for Dollar Tree declined to provide an interview because the company's policy is to avoid media coverage ahead of making certain investor disclosures.

More than a dollar
The nation's two largest discount variety stores, Dollar General and Family Dollar, aren't strictly dollar stores but sell a significant number of items at the $1 price point. Both carry name-brand items, emphasize value prices and convenience, and serve shoppers making "fill-in" trips between visits to supermarkets or big-box stores like Walmart.

Dollar General has 9,800 U.S. stores and plans to open 625 stores this year, said spokeswoman Tawn Earnest.

Family Dollar has roughly 7,100 stores. The company plans to continue expanding in 2012, and recently opened its first California stores.

(Source: The San Diego Union-Tribune, 02/27/12)

Sales Tip: Be Interested

As a rule, people aren't coming to you for your product or service because they find you interesting. There is nothing wrong with being interesting, or having a wonderful personality or fascinating life experiences. But customers aren't primarily concerned with doing business with interesting people. They want to do business with people who are interested in them. They want someone concerned with their needs, desires, fears and expectations.

If you want to remind yourself and others on your team of this important concept, just remember the lesson of young Johnny. Johnny was 10 years old when he came home from school and shared with his mom that he had a new girlfriend. "Wow, a girlfriend," his mom exclaimed, "What does she like about you?"

"She thinks I'm cute, that I'm funny and I'm a great dancer," Johnny answered.

"And what do you like about her?" mom continued.

Johnny's insightful response was, "That she thinks I'm cute, that I'm funny and that I'm a great dancer."

That's the essence of being interested. We respond positively to people who are interested in us and want to help. They make us feel good, and that's what draws us to them.

Start CARING about customers. Superior service begins with a genuine interest in and commitment to customers. It is about caring about them as individuals, and being obsessively concerned with the experience they have when they do business with you. And if you don't fundamentally care about the people you serve, I assure you that they won't care about doing business with you.

The best product at the best price isn't the best deal if you don't care about customers.

The Millennials Check In

The hotel industry, struggling to recover from the depths of the recession, has begun to contemplate a group of travelers it sees as crucial to its economic growth -- those in their 20s to mid-30s who are obsessed with technology, social media and design.

Many hotel owners and operators are remodeling existing hotels or introducing new ones that offer free hotelwide Wi-Fi connections; large, welcoming lobbies with plush, comfortable furnishings; state-of-the-art fitness areas; in-room power consoles to plug in iPads, laptops and other devices; and stylish bars that spill into the lobby.

Some are also scheduling nightly social events, like happy hours and free wine tastings, aimed at luring the iPhone-toting generation to their hotels.

"All of the major brands -- Hilton, Starwood, Marriott, InterContinental -- have developed hip products that are targeted at the younger traveler," said Chris Klauda, a vice president at D. K. Shifflet & Associates, a travel and hospitality market research company.

Travel spending by these younger travelers rose 20 percent in 2010, making them the fastest-growing age segment, according to American Express Business Insights, though they still lag the baby boom generation in overall spending.

Hotels that ignore these younger travelers, said Mark Woodworth, president of Colliers PKF Hospitality Research, will be at "a very severe competitive disadvantage."

About a decade ago, the hotel industry was concentrating much of its effort on luring people who are now mostly in their 50s and 60s. The changes involved higher-quality beds, brighter lighting and bigger work spaces. And those travelers were loyal to brands that offered reliable, comfortable services.

Today, the Millennials, or Generation Y, seem to be seeking the opposite: the innovative and the off-the-wall attract their attention and their wallets.

"Interesting is more important than comfort," said Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. "It's the reverse for baby boomers."

Mr. Hanson said wall-to-wall -- and free -- Wi-Fi service was not only demanded but expected. "High-speed Internet is almost like air to Millennials," he added, with most considering it as essential as beds and towels.

Hotel owners are also installing power consoles in rooms and public areas so that charging all those cellphones and laptops is easy and accessible.

"Gen Y'ers don't want to have to unplug lamps or crawl under the bed to get their laptops and P.D.A.'s plugged in," Ms. Klauda said.

The Plaza Hotel in New York has gone one step further, placing iPads in every hotel room. Guests can use the device to control the lighting, adjust the air-conditioning, order room service and read the morning paper.

Marketing and communicating through social networks are also important among hoteliers. When young travelers have a problem at a hotel, they are less inclined to complain to the hotel manager, as their predecessors generally do; they go online and post on Twitter about it. In early 2010, Starwood Hotels and Resorts Worldwide responded by setting up a team of about 20 people whose sole job is to monitor and respond to online complaints and comments.

Probably the biggest physical change has been to the hotels' lobbies. Executives are retrofitting lobbies with comfortable sofas and Art Deco furnishings.

"If Millennials are wearing shorts, a T-shirt, a baseball cap and athletic shoes, a lobby that has mahogany paneling, English hunting scenes and Oriental rugs doesn't connect as well," Mr. Hanson said.

Young travelers also tend to spend far more time socializing and working in the lobby than they spend in their hotel rooms. "We coined the phrase 'isolated togetherness,' because if you watch them in the lobby, a lot of them are texting -- but they're texting each other in the lobby," Ms. Klauda said.

Older travelers, on the other hand, often prefer solitude at the end of the day. They "like the face-to-face interaction during the day, but at the end of the day, we're done -- bring us our room service and leave us alone," said David Loeb, a senior research analyst at Robert W. Baird & Company, a wealth management firm.

Younger travelers also tend to visit three or four different restaurants and bars a night, so some hotels are opening up multiple bars and lounges with different themes at different times of the day to keep them in the hotel. Many also offer free daily events, including tea tastings, yoga sessions and wine tastings, said Raj Chandnani, vice president for strategy at WATG, an architectural design firm for the lodging industry.

The hotelier Ian Schrager, a founder of the Studio 54 nightclub, was a pioneer in creating designer hotels with hip nightclubs, like the Paramount, Royalton and Hudson hotels in Manhattan in the 1980s and '90s.

Starwood followed with its W hotels in the late 1990s and the debut of its Aloft brand in 2005. Other major brands have since jumped in, among them the InterContinental Hotels Group's Indigo brand, Hyatt Hotels Corporation's Andaz and Hyatt Place brands, and Marriott International's concept to turn its lobbies into so-called great rooms.

Gerard Greene, a former hotel analyst, said he felt so strongly about the need for designer hotels at affordable prices that he quit his job, sold his home in London and used cash from the sale to finance his dream.

Now, 10 years later, his brand, Yotel, has four hotels, including one in Midtown Manhattan that some guests have described as futuristic. That hotel has an airportlike check-in kiosk (there is no registration desk); social public spaces; Wi-Fi access, power consoles and entertainment systems that devices can plug into; giant Monsoon shower heads; and compact 200-square-foot rooms, which were inspired by airline cabins, that have floor-to-ceiling windows.

Yotel's other hotels are at the Gatwick and Heathrow airports in London and at Schiphol Airport in Amsterdam, and it is planning on new ones in Miami, San Francisco, Paris, Hong Kong and New York, at Kennedy Airport.

But could all of this be a passing fad that will fade as the travelers get older?

Mr. Greene said he was not concerned, comparing it with the Apple phenomenon.

"Younger people were the first to adopt the iPods, iPads and so forth, and now my mom has an iPhone, as do many older people," he said. "But the people who got it first were the younger people."

Similarly, he said he believed that older travelers would follow the young in hotel trends.

"My sense is most people think there's been a change," said John Fox, a senior vice president at PKF Consulting, "and it's a permanent change."

(Source: The New York Times, 03/12/12)

Customization, Healthful Foods Top 2012 Restaurant Trends

Healthful menu items, local foods and customization will be key sales drivers for restaurant operators in 2012, according to a forecast released last week by Chicago-based market research firm Mintel.

Mintel made predictions on menu and operations trends:

• Since consumers are more interested in where food comes from, restaurants will focus on American regionalism. Among geographic claims on restaurant menus, however, "New York-style" showed up the most last year, followed by "Texas." For the first time, "Philly-style" surpassed "New England" in menu mentions.
• Menu labeling will lead more operators to offer "double-sided menus," offering something for everyone in terms of both nutrition and price. Customization will continue to drive consumer satisfaction, as guests are offered more opportunity to control their selections. The barbell approach to pricing will morph into a more consumer-focused tiered pricing approach, Mintel said.
• With an emphasis on fresh, unprocessed food, restaurants will offer and promote more "handmade-just-for-you" items.
• As restaurant chains grow globally, they will also develop more expertise in international flavors and methods, allowing for the import of ideas. McDonald's Chicken McBites came from Australia, for example, and both McDonald's and KFC are using self-serve kiosks in Europe. KFC is also offering espresso and Lavazza brand coffee in the United Kingdom.
• Steak and Caesar salad remain the top menu offerings, and they are still growing in popularity. Among burgers, cheeseburgers are climbing; sushi is losing ground to salmon; and quick-service operators are enhancing their breakfast sandwich lineups.
• What do customers want? About half of respondents said they'd like to see lower prices, and 29 percent want smaller portions, followed closely by the 28 percent who want more healthful menu options. The descriptors "fresh" and "made from scratch" were also of interest to the majority of restaurant goers, but the term "artisan" does not resonate. Only 28 percent said they were interested in the latter.

QSRs to lead industry sales growth

Sales growth in the foodservice industry will increase 2.8 percent this year to $416.4 billion, with limited-service restaurants leading the charge, Mintel said.

Adjusting for inflation, the increase will be nearer to 1.5 percent.

This year, limited-service restaurants are expected to see sales rise 4.1 percent to $219.1 billion, or a 2.8 percent inflation-adjusted increase.

Full-service restaurant sales are expected to increase 1.5 percent -- or an inflation-adjusted 0.2 percent -- bringing that segment to $197.2 billion, Mintel said.

In 2011, the overall foodservice industry grew 1.4 percent to $404.9 billion, or a decline of 0.2 percent when adjusting for inflation.

Limited-service segment sales rose 3.4 percent last year, or 1.8 percent with inflation. Full-service restaurants saw sales decline last year 0.7 percent, or a decline of 2.2 percent with inflation.

Although the economy remains challenging, the report noted improving unemployment trends, as well as increased disposable personal income levels and a more optimistic consumer sentiment.

And although menu-labeling laws are expected to come into play for restaurants in 2012, many chains have already developed more healthful options that aim to appeal to increasingly health conscious consumers, the report found.

Mintel surveys indicate that 41 percent of restaurant goers said menu labeling would not impact how they dine out, while 33 percent said they will order menu items that are more healthful overall and have fewer calories.

Looking at January, a survey by Mintel found that 65 percent of respondents who visited a restaurant that month said they plan to spend the same amount at restaurants in 2012 as they did last year.

About 12 percent said they plan to spend more, while 23 percent said they plan to spend less.

Still, 63 percent of respondents said it's too expensive for them to dine out regularly.

Of the 12 percent who said they will spend more, 59 percent said they would spend more at casual dining restaurants, followed closely, at 57 percent, by family dining.

(Source: Nation's Restaurant News, 03/13/12)

Shifting the Focus of Your Stories

Some sales professionals prepare for a sales meeting by getting all their facts in order -- their i's dotted and their t's crossed. In the process, they forget to talk to prospects in the most basic way that humans talk. They forget to tell stories.

It's a good idea to tie your stories into the benefits your product delivers. Part of the power of using personal stories in your presentations is that they reduce the information overload caused by a recitation of benefits and features. A good story captures the minds of prospects and takes them on a journey.

Some salespeople tell stories that focus on their companies, their products and how they will save their prospects time and money. The central character in those stories is their company and the product or service being sold.

These salespeople believe that if their prospects know as much about their company and its solutions as they do, they will buy. The problem with this type of story is that it's the same one being told by competitors.

Instead of telling your own corporate story, you need to tell prospects their story -- the one in which they achieve success.

It's a better idea to make the central character in your story your prospect. Your job is to take the story you tell and make it a story about your prospect that makes him or her feel that moving forward with your solution is the surest and safest way to go.

St. Patrick's On Saturday: A Mixed Blessing

With St. Patrick's Day looming, retailers, restaurants and bartenders all over the country are thinking green, and hoping that the holiday landing on a Saturday this year will boost bucks.

A survey by the National Retail Federation predicts that 54.4% of Americans plan to celebrate the traditionally Irish holiday this year, the highest in the nine years the NRF has been conducting the research. On average, the NRF forecasts that each of these leprechauns will spend $35, for a total of $4.6 billion.

Eight out of ten say they will wear green, 28.2% plan to go to a party at a bar or restaurant, 19.1% plan to go to a private party, 23.8% will decorate their home or office, and 32.3% will make a special dinner to celebrate.

But for restaurants, having the holiday fall on a weekend may be a bit of a bummer. "Weekends are typically busier than weekdays for restaurants, so it's actually better for the restaurant operator when holidays fall on a slower day of the week, like Monday or Tuesday, for a traffic boost," says a spokesperson for the National Restaurant Association.

Others are betting that the weekend timing will extend festivities, and mean bigger spending all around. In Philadelphia, for example, where the Irish are the second-largest ethnic group, "every bar, restaurant, and practically every street corner is packed, even if St. Patrick's Day falls on a Tuesday," says Denise Foley, editor of Irishphiladelpia.com. "Having it fall on a Saturday is going to be like Black Friday after Thanksgiving for local merchants and bar/restaurant owners. It's a day when anyone selling anything Irish is going to make their profit for the year. It's all good."

Some cities are worried that crowd control will be a greater issue than usual. Organizers in Hoboken, N.J. actually cancelled its parade after they were told it would have to take place on a weekday to manage the mayhem. (The city is still delaying bar openings, bringing in extra cops, and adding 50% more portable toilets than in years past.)

(Source: Marketing Daily, 03/08/12)

Mobile and Video Grab a Greater Share of Digital Ad Budgets

Marketers must diversify their ad investments across a wider variety of digital channels to keep up with today's media consumption habits.

Not surprisingly, digital ad agency ValueClick media found U.S. marketers' digital advertising budget allocation for 2012 was expected to mirror popular consumer usage trends, resulting in more spending on mobile and video efforts.

Almost half (49%) of U.S. marketers surveyed by ValueClick planned to boost video ad spending, and 65% noted increases to their mobile budgets for 2012. These two channels also saw the smallest number of marketers who said they planned to decrease spending: 3% for mobile and 2% for video.

In December 2011, 66% of U.S. marketers said they planned to spend between 1% and 24% of their 2012 digital budget on mobile, compared to 50% last year. In addition, 52% of U.S. marketers planned to allocate a similar portion to video, up nearly 27% from 2011.

Additional data showed the vast majority of respondents (94%) planned to purchase standard mobile banner ads. Roughly half also planned to buy mobile rich media ads (53%) and mobile video ads (49%).

Such high levels of interest in standard mobile display ads will help U.S. mobile ad spending skew further toward rich media and banner advertising this year. Ad spending on these two formats will comprise one-third of total US mobile ad spending in 2012, or $861.7 million, according to eMarketer estimates. Video will account for 5.8%, or $151.5 million, of the year's $2.61 billion in total US mobile ad spending.

The greatest share of U.S. mobile ad spending will continue to go to search, expected to account for 49% of all ad dollars this year. This is unsurprising, given that mobile is still working to achieve mass reach and scale—two common prerequisites for display advertisers. In the meantime, mobile search advertising will continue to dominate mobile ad spending.

In terms of mobile campaign measurement practices, additional data from ValueClick showed that, in December 2011, marketers were just slightly more likely to measure their mobile efforts with brand-health metrics as opposed to direct-response measures. And ValueClick found the highest percentage (63%) of U.S. marketers measured mobile performance using clickthrough rate.

For now, mobile appears to be a channel equally employed for branding and direct-response objectives, and measurement metrics reflect that near-equal division.

(Source: eMarketer, 03/12/12)

Becoming an 'Unpaid Consultant'

The highest compliment that a customer can ever pay you is to confer upon you the title of "Unpaid Consultant." To want your opinion when they are not buying. To value your knowledge enough to want to take advantage of your expertise.

Examples: If you sell automobiles, to get your opinion on which of a competitor's two models is a better choice for a child going to college. If you sell printing, your thoughts on whether a new ink is appropriate for a packaging project that doesn't actually involve you.

The point is this: People don't ask for input from those whose opinions they do not value. When a customer asks for your advice under these circumstances, the message is loud and clear: They view you as an expert. Give the request your very best effort, every time. I assure you, you will be rewarded many times over.

Leasing Boom? Not So Fast

Dealers looking for a big increase in leasing this year may be disappointed.

Some forecasters see a leasing boom this year and beyond. And one even suggested leases will account for 40 percent of new-vehicle deals by the end of the decade, up from 30 percent in 2007.

But new data from Experian Automotive show lease penetration for new-vehicle volume was flat in the fourth quarter last year -- down slightly, in fact, at 23.1 percent from 23.7 percent the year before -- after two years of growth. And that, the company says, is where it could stay.

"It's starting to look like this is what the market bears for leases," said Melinda Zabritski, director of automotive credit for Experian Automotive.

She isn't alone.

"There are real reasons why those who are optimistic about leasing should be optimistic, but the realities don't seem to be following those reasons," said Paul Cuevas, director of automotive finance for J.D. Power and Associates.

Cuevas cited three interrelated reasons why lease penetration seems to have topped out for now at around 20 percent of new-vehicle retail: Lenders are leery of again being burned by inflated residual values, consumers are keeping their cars longer, and low interest rates favor purchases over leases.

In addition, the downsized Detroit Big 3 have lowered their breakeven points since the recession. They're not as highly motivated to get units out the door by subventing leases as they were before restructuring.

A single quarter of lower lease penetration in the fourth quarter of 2011 doesn't make a trend. But the rate of increase in leasing has been diminishing ever since the third quarter of 2010, Power Information Network data show.

Lease penetration was 19.5 percent in the fourth quarter, down from 20.2 percent a year earlier, PIN said. Lease share of new-vehicle retail sales bottomed out at 10.3 percent in the third quarter of 2009.

Experian Automotive, using a different methodology, said lease penetration was 23.1 percent in the fourth quarter, down from 23.7 percent a year ago. For all of 2011, Experian Automotive said, the average lease penetration was 23.7 percent, up only a fraction from 23.5 percent in 2010.

Zabritski said that leasing is back to around the same level it was before the credit freeze and the recession. Maybe it's too much to expect leasing to keep growing beyond that level, she said.

"This tends to be about where it had been, going back as far as 2006, before we had all these troubles," she said.

Still, there are some reasons for optimism.

The growth in leasing has enjoyed a tailwind in the form of higher used-car prices. Used-car prices have stopped increasing like they did in the past couple of years, but they are still at a high level in historical terms.

Data from ADESA Auctions Inc. show that the average wholesale used-vehicle price at auction was $9,878 in December 2011. That was a 9.5 percent increase from December 2008 but only 0.5 percent increase from December 2010.

Higher used-car prices mean auto lenders are less likely to lose money on lease returns. The used-car shortage that's supporting used-car prices is expected to persist at least through this year.

Leasing also remains high for luxury import captives such as Mercedes-Benz Financial, at 64 percent leasing in the fourth quarter; or BMW Financial Services, at 62 percent leasing, according to Experian.

Finally, several automakers have expressed an interest in higher lease penetration. GM bought the former AmeriCredit in October 2010 in part to get closer to the industry average in leasing. The company said it is unlikely to reach industry average because it sells a high percentage of trucks, an area in which leasing is less popular.

GM reported its U.S. lease penetration was 11.1 percent in the fourth quarter, down from 12.9 percent a year ago. For all of 2011, GM's lease penetration was 13.2 percent, up from 9 percent in 2010, spokesman Jim Cain says.

According to Experian Automotive, captives for the three biggest Japanese brands had above-average lease share in the fourth quarter, with Toyota Financial Services at 30.6 percent, American Honda Finance at 40.8 percent and Nissan-Infiniti Financial Services at 45.8 percent. Those figures include their respective luxury brands.

Taking advantage of improved residual values, Hyundai Capital America, which serves both Hyundai and Kia brands, had a 53 percent lease share in the fourth quarter, according to Experian. VW Credit had a 53.7 percent lease share.

However, leasing has become pretty much the domain of the captive finance companies as banks stay away, J.D. Power's Cuevas said.

The manufacturers want "to shorten trade cycles and length of ownership," he said, adding: "Leasing definitely does that for the manufacturer. There's also a higher propensity for that customer to purchase a similar-make vehicle if they come from a lease."

Leasing is likely to grow more rapidly if and when the manufacturers pour enough incentives into it to make that happen. For the most part, that doesn't seem to be the case, Cuevas said.

He added: "A huge factor in lease vs. purchase is the lease offer itself."

------------------------------

Why Leasing Growth May Stall

Auto lenders are risk-averse: Lenders got badly burned on inflated residual values in the credit freeze and the recession. In 2008, the domestic captives lost billions when the bottom fell out of resale values for big pickups and SUVs coming off leases. Ford Motor Credit Co. and Ally Financial Inc. have come back in leasing to an extent, but big banks' auto finance units, such as Chase Auto Finance, have largely stayed away.

Customer demand is changing: Customers are keeping their cars longer. The average trade-in is now 6.5 years old, according to the Power Information Network. The average car on the road is close to 11 years old, according to R.L. Polk Co. Customers are less interested in 3- or 4-year leases, J.D. Power's Paul Cuevas said. Not only that, there has been a shift to smaller, more fuel-efficient cars, an area in which lease penetration historically is low, he said.

Interest rates are low: Because interest rates are low -- the prime rate is only 3.25 percent -- it's relatively cheap, and certainly less risky for lenders, to buy down the interest rate on a loan instead of taking a chance on residual values, Cuevas said.

------------------------------

(Source: Automotive News, 03/07/12)

Buying Station Websites...Why it makes cents!

Why Buy Local Television Station Websites? Local broadcast TV station websites reach local consumers, where they live and make purchases.  And more adults turn to local TV station websites for local news and event information than any other local sites.

Adults Who Have Visited Websites Affiliated
with Local Broadcast Television Stations

 

 

More Adults Visit Local Television Station Websites for
Local News and Event Information

	18+	18-34	18-49	25-54
Local television station website(s)	52.3	52.4	54.7	53.2
Local newspaper website(s)	43.2	41.5	39.8	42.0
Local radio station website(s)	9.3	14.4	11.6	10.9
Other Local Site(s)	6.6	5.0	7.2	8.2
None/Don't know	2.5	2.1	2.3	2.0

TVB Media Comparisons Study 2010.  Knowledge Networks, Inc. Custom Study

Hyper-Local Websites

Local TV station microsites offer highly-targeted neighborhood and lifestyle content to reach specific consumer groups and advertiser retail zones. They feature community news and user-generated content about area happenings and events. Local businesses benefit from the opportunity to connect with potential customers and drive traffic and to their door.  And integrating an on-air campaign with an online component, maximizes effectiveness across platforms.
Hyper-local website opportunities include:

• Search
• Coupons
• Business Directories
• Ad Targeting

SMBs Up Ad Budgets for Digital Media

Showing power in numbers, small and medium-sized businesses (SMBs) continue to increase their share of digital advertising.

Over the next 12 months, SMBs plan to allocate 26% of their budgets to digital and online media, according to Local Commerce Monitor, BIA/Kelsey's 15-year tracking study of SMB advertising spending, media usage, web presence and sales channels.

As a whole, SMBs are particularly interested in self-serve advertising and promotional tools, including video, social media and search engine marketing.

"SMBs love the easy-to-use tools, like YouTube, Facebook, Twitter and self-serve advertising," according to Matt Booth, SVP and program director of Interactive Local Media at BIA/Kelsey. "We are on the verge of a real revolution in marketing platforms that serve SMBs, in particular around digital presence."

According to LCM Wave 15, nearly half of respondents -- 49% -- reported that they purchase online advertising, including SEM products, directly from a Web site -- either with or without live operator assistance.

More than half -- 52% -- of LCM respondents reported that they use social media to promote their businesses, while 22% said they plan to have a video on YouTube in the next 12 months.

According to a new U.S. SMB Spending Forecast by BIA/Kelsey, small and medium-sized businesses will continue the recent trend of shifting their marketing budgets to digital advertising, performance-based platforms and customer-retention business solutions over the next five years.

Late last year, BIA/Kelsey predicted that SMBs would allocate 30% of their marketing budgets to traditional advertising by 2015 -- down from 52% in 2010.

That would leave 70% for digital and online media, including mobile, social, online directories, online display and digital outdoor; performance-based commerce, including pay-per-click, deals, and couponing; and customer retention business solutions, including email, reputation and presence management.

In sheer dollar terms, U.S. SMB spending on media, marketing and business solutions will grow to reach $40.2 billion by 2015 -– up from $22.4 billion in 2010 -– according to BIA/Kelsey. If accurate, that would represent a compound annual growth rate of 12%.

(Source: Online Media Daily, 02/28/12)

Consumers Plan a Steady Budget Equal to 2011, According to Survey

More than 51 percent of consumers plan to spend the same amount of money in 2012 as in the previous year, according to a 2012 Shopping Outlook survey conducted by PriceGrabber, a part of Experian.

While more than half of the survey respondents plan to spend the same amount of money as they did last year, 21 percent indicated they plan to spend more, and 28 percent plan to spend less. Conducted from Jan. 26 to Feb. 13, 2012, the survey includes responses from 933 U.S. online shopping consumers.

Reasons to spend this year
When those who plan to spend more were asked to select all of the reasons why, 36 percent cited confidence in the economy, and another 36 percent said that they expect retailers to offer better discounts this year.

Thirty percent indicated that they are earning more money in 2012, 6 percent said that they are tired of being frugal, 5 percent cited a credit limit increase, and another 5 percent have found employment in the past year.

When the respondents who plan to spend less this year were asked to select all of the reasons why, 40 percent cited increases in prices such as gas, food and necessities; 34 percent said lack of confidence in the economy. Twenty-nine percent indicated they were making less money this year, and 16 percent said they overspent during the 2011 holiday season.

"Our data shows that shoppers plan to remain optimistically cautious with their spending again this year and expect retailers to continue to offer deals and incentives on products," said Graham Jones, general manager of PriceGrabber. "We expect retailers will continue to roll out a number of tactics, such as free shipping, larger discounts and online-only promotions to help win the consumer dollar this year, while implementing strategies that will span brick-and-mortar, online and mobile shopping platforms to entice consumers to shop."

Electronics, clothing top shopping lists
When consumers were asked to select all of the items and activities on which they plan to spend more in 2012, more than half said consumer electronics and clothing, followed closely by travel and vacations, household supplies and dining out.

Twenty-nine percent said they will spend more on furniture, books or DVDs, followed by jewelry, toys, events, sporting goods and fitness memberships.

Daily deal sites still popular
The daily deal industry looks like it will remain strong in 2012. Forty-six percent of the PriceGrabber survey respondents indicated that they plan to use daily deal sites, such as Groupon, Living Social or PriceGrabber's local deals category, more often in 2012 than in 2011.

When consumers who plan to use these sites more frequently were asked to select all of the categories they will search the most, 53 percent said food and dining, 46 percent said shopping, 42 percent said entertainment and events, and 34 percent said family and kids.

Online, brick-and-mortar and mobile shopping
When asked how they plan to shop in 2012, 45 percent of PriceGrabber survey respondents said they will combine online, brick-and-mortar and mobile shopping. Forty-two percent said they will shop mostly online, 12 percent will shop mostly in brick-and-mortar stores, and 1 percent will shop primarily from a mobile device.

According to the survey, the average shopper will make 53 percent of his or her overall purchases online, 42 percent from brick-and-mortar stores and 5 percent from a mobile phone.

(Source: PriceGrabber, 02/28/12)