The Loyalty Continuum

Loyalty is the ultimate goal of marketers and it should be on the minds of anyone managing brand or new venture. It is often said that 80% of your company’s profits will likely come from the top 20% of your customer base. Another name for the top of that 20% is loyalists. Loyalists talk up their brand, actively engage in promotions or brand activities and rarely switch or  move even if discounts or incentives are offered. They give back in the form of spending more of their share of wallet and through referrals. In higher education, loyalists are the alums that go to homecoming and give back year after year. They go to the reunions and keep up with their former classmates even when it is years after they graduate.

Moving prospects from unaware to awareness is an advertising and social media challenge. In marketing Monmouth College, direct mail to prospects is the traditional route for generating awareness among graduating high school seniors, but today most research on college is done online by the prospects themselves and most importantly, their parents.

Once a college prospect is aware of your brand, you should consider the best strategies and tactics for getting into their consideration frame. The consideration frame is the “short list” of colleges the prospect wants to consider. Another way to describe consideration frame are the the finalists in their wish list.

The next step is generating trial. Trial is most often a virtual tour, visit with an admissions rep or  faculty member on the phone. The campus visit is the preeminent step in trying your school out to see if it “feels right” or “fits”. At this point you will begin to see real benefits from your marketing intiatives. Before you achieve true loyalty you need prospects to establish certain behaviors or pattern of brand perference. Many loyalty programs are built on the premise that the repeat/frequency phase is the most important link to loyalty because its establishes paterns of behavior (plus the financial payback begins from all of your marketing investments).

Repeat/frequency behaviors might mean coming up with an anti-melt strategy if you are an institution of higher learning. The ultimate objective is loyalty and word-of -mouth advertising and social media “pin-action” . Using the example of marketing Monmouth College, loyalty usually results in a current student or alum recommending Monmouth College to a friend or associate.

Brands should plan promotions and incentives for each step in the continuum so that a fresh supply of new prospects is maturing into loyalists one step at a time. It takes effort to manage these activities and measurement devices to monitor the development of prospects along the continuum. My job at Monmouth was to take what we had spent in the past and maximize  the impact. How a CMO handles these challenges varies dramatically by college. Each university must distinguish its unique benefits, programs or faculty to get attention. In higher education it a common practice to copy oneself after an aspirational peer.  In Clay Christenson’s new book on innovation in Higher Education, he is highly critical of any college that copies the Harvard model since Harvard developed into an institution with few market constraints. Harvard, with its multi-million dollar endowments in virtually every major school has few financial limitations. For the rest of us, we face the reality that our institution could be marginalized or completely destroyed (or squeezed) by pressure to follow the Harvards from above and the online/for-profit colleges or community colleges below.

In higher education, a proven marketing principle is that a high perceived value translates into brand preference and goodwill. The brand value equation provides a meaningful model that helps us understand how to build that goodwill. Ultimately the marketing plan, resources available, execution and learning from results determine the success of your marketing program. Marketing criteria and milestones established in the college’s business plan will become your recipe for brand momentum and success.

Prior to beginning any marketing plan I recommended that the institution conduct professional quality research on the key stakeholders and prospects (and their parents!) that look at your college but decide to go eleswhere.

The problem most institutions face is that marketing themselves is inherently repugnant to academics. For academics, marketing and advertising smacks as manipulation and “spin”.

Even the task of market planning requires colleges to do something that is not natural; to look at the mirror and admit your flaws or accentuate your strengths. Traditional universities were not designed to brand distinctively or address metrics of quality as benefits. Most want to be like Harvard, Stanford or Carlton. Christensen would say these institutions are trying to follow the Harvard model. He believes that trying to be all things to all people in higher education is often a way to unwisely invest in “me-too” strategies which are often misguided.

But starting a distinctive marketing program is not easy. Simply promoting a quality program in business or prominant faculty is like telling prospects you offer a “quality educational experience”—everyone says the same thing. Large universities offer wonderful facilities and sports programs, but do not successfully educate students around their individual and distinct needs.

If your goal is to attract prospects to your college you need to explain the value proposition. The value proposition is the value of the college program degree less the cost to get that diploma. If graduates consistently land their desired jobs and get into prestigious graduate schools you will not need to convince prospects to take a closer look at your school. The evidence and word of mouth will help the programs sell themselves. Today, parents and prospects look around a colleges web site, its program offerings , and decide if it is worth of consideration even before they speak to an admissions rep or faculty member. It is our job to convince them to visit campus (trial). If the prospects live far from the college, your job will be tougher. No matter what their incoming academic achievements, you will need to convince them that they will be a better off, gain more internship/ job prospects, get smarter, and be more capable of handling leadership opportunities when they graduate–otherwise or you will fail in your efforts to generate more word of mouth, social media, and most importantly, campus visits.

In our case,  we are a small college so we had an advantage of taking time to learn as much as we could about each individual prospect and their parents. We customized our approach and campus tour to their specific interests and our strengths. Asking larger, more selective universities to customize their admissions process, let alone marketing something distinctive and memorable is challenging. We do it everyday because we have to.

Becoming a “great college” for Monmouth was a long-term objective that involved getting everyone to believe our central message. Our focus on business and science in the context of liberal arts was unique so we created a campaign to reinforce our strong position in both disciplines . We backed up that commitment by raising money and building a $40 Million Dollar Center that combines the study of science and business. We interviewed close to 100 alumni working in both those areas and focused our promotion efforts on those that were successful in combing both.

Focusing on both alumni and student success represented a seismic shift in how Monmouth and higher education, broadly speaking, will measure high quality programs. Its a move away from the traditional focus on US News rankings or following the great research and knowledge creation universities such as Harvard. Our focus on teaching, active learning and smaller classes moves the Monmouth brand benefits towards an expertise in active learning and knowledge proliferation.

So at the end of the day, the success of your college is still depended on making new prospects aware of your brand, and getting them to seriously consider a visit. The loyalty contiuum works for all companies and non-profits too-everyone needs new customers.

But to be truly successful you will need to move prospects down that continuum to the place where all of that marketing investment pays off– loyalty.

Secrets for a successful job search

It makes sense to share the failures and successes, right? Well, I have been consulting with many of my graduating seniors about how to best search for a job. Finding that first job is usually the most difficult search you will ever undertake. I recently accepted a new position in academia as the Dean of Business for Jacksonville University’s Davis School of Business (pictured below) so the experience is fresh in my mind personally.I have been told by my students that I helped them find internship and permanent positions so I thought I would share the general principles I use when discussing how to conduct a successful job search.

1. Invite contacts and friends to help you. Your network of references, friends, recruiters, and confidants are your most valuable asset.

2. Gain credibility with your current classmates or colleagues so that you will be seen as someone that your employer and faculty mentors would “hate to see go”.

3. In interviews, be prepared to tell stories of the challenges and lessons you learned that prepared you for the position you want. Show them you have had an increasing amount of responsibility and have been promoted.

4. Don’t plan to leave a job until you determine there is no way to move up or you have spent at least three years trying to make a difference.

5. Get the most/best education you can possibly afford and document the experiences on the job with an electronic portfolio. Lead with your education if you are new to the industry or lead with your experience when you have many successful years under your belt.

6. Return phone calls and emails promptly, but don’t be afraid to say no thank you.

7. Tell the recruiter what is important to you and ask for feedback on your initial letter of interest.

8. Ask anyone connected with the target organization for help and feedback in effectively competing for the position.

9. Study the target company and its key players, especially those that will decide the winning candidate. Be friendly and outgoing without appearing “fake”. Remember names of those you meet.

10. Listen more than you talk.

11. Don’t expect web sites like The Ladders, Green Ivy, Monster, or Career Builder to be much help. The industry specific verticals and word of mouth are likely to be the best leads.

12. Edit and refine your LinkedIn profile and be circumspect in your Facebook postings about the ups and downs in the job search. Ask for advice from the people who have the job you want.

13. Be patient. Don’t leave the day job until you have something solid lined up. Don’t burn bridges while giving notice.

14. Learn from Tim Tibow–be humble when accepting compliments and praise. Thank your teammates, mentor, and colleagues for helping you be successful

From Paris with Love

I am sure you will enjoy listening to entrepreneur Audrey Kabla tomorrow discuss her new start-up Epykomène in Paris, France. It isn’t just her french accent and knowledge of French culture that will keep you intrigued. It is her courage to launch a marketing agency in the middle of a economic downturn in France. She was given what equates to 1/2 her expected annual salary as start-up funding from what we might call the small business coalition in Paris. She has successfully worked with a number of high profile clients during her first year of operation.
Epykomène is a new agency that specializes in marketing services for luxury goods.

Audrey left Monmouth College in 2004 and worked for Hilton and other famous brands after graduating with an MBA in luxury marketing from the Paris School of Business in 2009. She will talk in depth about the thrill and peril of launching her own service business which is 1.5 years new.

Being at MC opened doors to the international, Showed Audrey another way to consider business & marketing (more quantatatively oriented than the Paris Business School, used intense business plan & rigor at MC). She credits her international orientation from her experience at Monmouth as critical in finding internships and and her first jobs afterward.

What she learned at Monmouth that was the most useful for her was the Entreprenerism Capstone Business 406, incorporating a Business Plan course & Marketing Communication (BUSI 367) which was one very practical course that Audrey already had in France  but her Monmouth professor (I’m blushing now) taught in another way ; treated the subject differently so that she felt she grew a lot.

“It was truly the first time I experienced to live with people from another new culture. I had to adapt myself still keeping my French background. In Rome you live like the Romans. That’s what I did and that’s what works worldwide.

“I did several internships and then had several positions in International companies.

Her main experience was in marketing and sales: at Dior Couture – a marketing research and survey company in Paris.

She had an internship and job at the Hilton Paris & Chicago – in the capacity of a sales & marketing assistant And then, she decided to leave her past brand management positions… to start with a new challenge  and create her own company.

“First, I knew I always had the entrepreneur fiber within me and knew I would have my small boutique hotel concept in a few years…. however I had no idea of the project externalization concept…

“Things just came to me thanks to this opportunity in hotel & real estate I chose to take – I worked on this project 6 months before leaving my company and slowly but surely —-Epykomène appeared as the natural next step. I am one of those persons that get involved to 150% into projects … when it’s not my own company – 2 years is long time on one project… and so it came to me that I could probably be a marketing manager for several companies at the same time if I could do it for one. I wanted/needed to take a new challenge now that I couldn’t put off until later. I choose this because I want to work/move wherever I needed to. I needed autonomy and I was not totally in a good place in my previous jobs.” We are proud to welcome Audrey back to Monmouth College

Seminary Street Success

Jay Matson did not dream of becoming an entrepreneur. But being “his own boss” always appealed to him since graduating from graduate school in the late 60’s. Despite stints on the east coast and San Francisco during the era of love-ins and drug use, Jay returned to Galesburg and married a entrepreneur, single-parent from the area. He and his wife started their first retail store with $2500 that was a “pay-off” from the Chicago Transit Authority for being hit by a bus.

Today he guided our 24 MC students on his journey in developing Seminary Street into Galesburg’s best known destination.

Over the last 30 years Jay has learned a lot about how to create a destination for tourists and locals alike. Seminary Street was shaped by Jay’s vision to be a celebration of historic city centers. He pushed the city to recreate the original brick pavers in the street and special lighting. He bought most of the property over the three block area and installed awnings and restored the original brick exteriors and windows. While acquiring many properties he become a restaurant developer and gained national publicity as someone willing to transform a meat packing plant (sitting idle for years as an “eye-sore”) into a thriving eatery. He became well-known as someone that could transform empty storefronts into a destination shopping and eating experience. When he could not convince existing bakeries to open a new location on Seminary Street, he bought all of the machinery for the bakery, outfitted the kitchen and hired a baker because he was convinced the neighborhood needed a bakery.

Jay built loft-apartments for people who wanted a city-feel in Galesburg and he maintains that these units command the highest rents in the city.

He saw opportunity where others saw risk. He had his share of failures too. He invested $750,000 in a restaurant in Macomb as WIU was growing in the 80’s. When the 12% loan on the $750,000 ballooned to 21% he almost lost everything he had built. “it was a humbling experience after our success in Galesburg”.

Jay is now in the process of selling all of his businesses and even the real estate. “I am ready to retire, and we do not want to have so many employees”. The opportunity to own an outdoor shopping mall in the middle of a small city should appeal to someone who has imagination and drive. “There are so many things that can be done here”, Jay said. The opportunity to expand Seminary Street and tie merchants closer together will bring big benefits to Galesburg and revitalize downtown.

Mike Bond’s Entrepreneurial Success

The founder of Innkeeper’s Coffee spoke to the Midwest Entrepreneurs class last Thursday afternoon. The discussion was open to anyone. In case you missed it….you can read about a classic story of how one of the best secrets in Galesburg became a $1 million business selling specialty coffee, desserts, and lunch. Mike Bond spent 20 years working in management for Bergners ( and had a dream. Don’t be afraid to “dream big” Bond told the 20 students in attendence. “But be careful what you wish for”. His partner Johan worked in New York City and even opened the Belmont Kitchen in Washington, D.C. before starting Innkeepers Coffee in 1997. We thought we might open a nice B & B in Galesburg since we saw a classic victorian during our 20th year renuion, but that business model was not viable. “We listened carefully to our coffee customers, and we did a lot of what they suggested. They wanted food, so we added pastries, breakfast items, then a full lunch menu. They asked for desserts and we did that along with chocolate. It wasn’t what our business plan said we were going to do but it made sense to follow the business. Some of our best customers do business with us 21 times a week.”

It is amazing to see how Innkeepers Coffee succeeded in a small market where Starbucks failed by taking a greater share of wallet from each customer, thus avioding the need to sell thousands of cups of coffee monthly. The volume you would need to sell the 500-1000 avid coffee drinkers in Galesburg that have the means to buy daily coffee didn’t work for Starbucks but by going deeper and getting that greater share of wallet, InnKeepers has been very successful. There current challenges: Innkeepers best customers are 50+ and they want to appeal more to the 20-30′s crowd. Another big challenge–Finding great people who are articulate and willing to work hard.

Smith Speaks on Science Start-ups

Sherm Smith ’72 has long believed that science holds the key to solving the world’s largest problems. But the president and CEO of the Chambers Group, Inc., an environmental consulting firm, also realizes that business can’t be overlooked in the equation. He believed in science so thoroughly that he leveraged everything he owned to acquire and grow the Chambers Group.

“The most important problems, such as issues related to rebuilding Japan’s nuclear energy program or obtaining energy independence in the U.S., will be solved by scientists,” he said. “However, there is one big caveat: unless the scientists obtain grounding in project management and a sense of the balance between risk and reward, they cannot be successful.”

We can refine petroleum from slate or rock, but at what cost? Scientists who make an meaningful impact at his firm learn both the skills of good science and project management, scarcity and risk/reward”. So, combining science skills with business was Sherm’s ideal company marriage. “The fact that Monmouth College is investing in the best facilities and forums for the interaction is the best educational investment I can imagine.”

When choosing a college to attend, Smith said he was drawn to Monmouth, in part, by the national acclaim it had received in the sciences.

“Monmouth had a great reputation for turning out scientists,” he said. “I had heard that not too long before I attended, Monmouth produced more science graduates that eventually became Ph.D.’s than any other small college in the Midwest. I was convinced that future problems would be solved by scientists and engineers.”

He recalls being “traditionally trained” during that heyday for the sciences.

“Scientists at Monmouth were trained to be logical and speak the language of the discipline,” he said. “I learned statistics and the value of analysis there. The scientific process came to life for me at Monmouth. I learned about what was controllable and predictable and how to work with variables to maximize the impact of my experiments. Those skills are timeless.”

After graduating, Smith furthered his studies at the University of Iowa. Prior to his current consulting work, he was at Fluor Corporation, an internationally recognized company and environmental science pioneer.

“My career there was successful because of my science preparation and Fluor’s excellent training program,” he said. “My timing could not have been better. I started just after the first environmental legislation was passed and the Environmental Protection Agency was established.”

Smith became the company expert at Fluor, helping clients do such things as obtaining government approval for new power plants, establishing acceptable emission levels and regulating the sulfur release from the burning of coal and liquefied coal.

“All of this stuff was regulated for the first time,” he said. “It was a great time to join the industry, and I loved what I did at Fluor. My competitive spirit leads me to want to do whatever it took to be the dominant player in the markets we served. I took advantage of every opportunity I had to learn more science, engineering and business.”

As an example of how the scientific discipline comes together with business, Smith recalled working as the lead environmental engineer on the design of a new coal-fired power generation plant that Louisville Gas & Electric built in an environmentally sensitive area.

“We came to an impasse with the EPA and they refused to give us a permit,” he said. “The issue was the analysis and projections we provided for the air pollution dispersion and heat from the plant running at 100 percent of capacity. I was asked by our client, ‘How do we get around this regulatory impasse?’”

Smith provided three alternatives, but the more he studied his own work, looking at the project holistically, the more he was drawn to his third option, which consisted of design changes, but which could still potentially cost several million dollars to implement.

Ultimately, as Smith’s company worked with designers, they were able to increase the height of the release stacks by 15 feet, eliminating the need to reheat the stack itself.

“We found a solution that could be implemented for less than $100,000,” he said. “The solution combined good science with business acumen. The result was that we saved the client millions of dollars.”

Smith, who hired hundreds of scientists in his career and employs 250 with the Chambers Group, has advice for students who hope to go into that field. Part of their success, he said, will come from lessons learned outside the laboratory.

“At Monmouth, I was more than a science major. I was a leader in student government and in my fraternity (Tau Kappa Epsilon). I recruited volunteers and tried to make things happen. If you can learn how to lead volunteers in a fraternity or student government, you can hone skills for scheduling events, sequencing and motivational change. Those life skills were invaluable.”

Understanding the business behind science is also a key part of achieving success.

“Young scientists must understand the business model they are operating in,” he said. “The No. 1 reason we are in business is to make money, not do good science. We need to make a profit to be able to do good science. Good science alone doesn’t pay all the bills. Many scientists just want to conduct experiments as they did in graduate school. They do not want to deal with any of the project management demands or client mandatories, so they are worth less money.”

His other advice is for scientists to be well-rounded, and be realistic in their expectations.

“No client will pay a field biologist a $100,000 annualized rate for generic fieldwork,” Smith said. “The reality is that the U.S. market values those skills at a $35,000 annualized rate. Both the client and I are willing to pay more for someone who can do the science and manage the project. Putting to use what they have learned in the field is essential, but applying that knowledge for the benefit of the client gets my attention.“

Obtaining that high level of skills doesn’t happen overnight.

“It is worth more money to my company when scientists take a natural career path — a path that normally includes project management within the first five to six years after joining the firm. From there they can lead programs or write proposals. The scientists who are paid the most learn how to combine what they need to know with what it takes to get things done in a variety of situations.”

Oberhelman believes the CEO’s desk is a dangerous place to see the world

Douglas Oberhelman, CEO of Caterpillar spoke on campus today about four central topics:

  1. The last 20 years at Caterpillar and the next 20
  2. His personal legacy and dreaming big
  3. Accountability-the essential ingredient for successful employees and organizations
  4. Government policy

The first topic demonstrated Doug’s great optimism for the future. At CAT, the revenues in 1992 were $10 billion. Twenty years later it is over $60 billion. He expects that number to jump to 70 billion next year. Specifically he discussed the global expansion he has seen (or helped drive) from the perspective of leaving something better off than it was when you started. He expressed thanks for Lee Morgan, former CAT CEO (Monmouth College trustee chair) for leaving a legacy of positive momentum and “setting things in order” to work better for the “next guy; they set us up” [When I joined CAT], I was focused like any other recent graduate on paying off my students loans. I didn’t think, “I will be the next CEO of this company”. But as he had more international experiences, Doug saw the great potential at CAT and a vision of leadership grew in my mind.

Oberhelman has seen so many challenges met and positive changes at CAT over the last 20 years. The last time a CAT CEO spoke at Monmouth College (Lee Morgan), Doug reminisced about that earlier era. “There were 1991 predictions that the Japanese were going to take over everything, manufacturing, finance and even real estate; buying Rockefeller Center in NYC and everything in Hawaii. Now everyone predicts the Chinese will be dominant in a few years and own everything”. Doug does not agree with those pundits, but expressed knowledge that we face some major choices as a nation, including political leadership. This is the least productive political environment in my lifetime–it must be improved to realize greater prosperity and growth as a nation and overseas.

“Growth is good and dreaming big is essential for anyone who wants to be successful”. Oberhelman was optimistic about CAT and the global economy. Even though 20 years ago the world had 1.5 billion less people living on the earth, the last twenty years saw almost 3 billion people lifted out of poverty.

“As a company, we are focused on productivity. Productivity comes from quality built equipment and products that work 24/7. As a company we have proven we can build those quality products. [But they are not the cheapest available] Nowhere is that more obvious than in the Chinese where there are 100 + competitors and more construction than you can imagine. CAT plans to operate 26 manufacturing facilities in China (they now have 17 factories in operation) where they ran only one sales office in 1992. We built a second company under another brand name to sell less expensive equipment to supply demand in Chinese domestic market. It is our core business to focus on value, not price  so as other less expensive products enter the market we were persuaded to produce product at a lower price point in China. I do not see that as a future direction, but it works in the current state of the market there.

He dreams under his watch he will “set them up” (future CEO’s of CAT) for even greater growth, maybe “seven times” its current revenue projection of $70 billion to $490 billion in 2032. Oberhelman would be happy to see the number of employees increase three-fold from 150,000 to 450,000 worldwide under that kind of revenue growth. CAT hopes to provide job opportunities and prosperity everywhere they operate. As an example of the commitment to stay ahead in quality and durability, CAT spent $450,000 on R & D in 1992 and recently spent over $2.5 billion in 2011. They successfully exported $3 billion of products in 1992 and project well over $20 billion in 2012. “95% of my customer base is now overseas”.

His vision of accountability and leadership is unique. “I like the metaphor of running a hardware store”. When someone calls or comes in with a problem you know you better answer the call [because Walmart is down the street, and cheaper than you are]. You find a way for CAT products to be the solution.”

Management is the area where “the desk is a dangerous place to view the world. I trust my team and let them go”. Doug makes it a practice to see at least one customer a week. Oberhelman is definitely keeping it real at CAT.