The Hutch Report

Faulty Marketing Strategies – Follow You, Follow Me!

By | Marketing, Technology

Follow You, Follow Me

This phrase used to have impact as the title of a classic Genesis song, but it has morphed into something much more banal since the advent of social media.

It has now become a marketing strategy that has no real influence and no real purpose, aside from stroking the human ego, yet many in Twitter and elsewhere have adopted it. These kinds of people are easy to find on Twitter. They have 15,000 followers and are usually following about 15,000 (just to name a number). Here is a clip from a blogger’s post on their strategy for gaining more followers on Twitter:

After about three days to give people a chance to follow me back, I go back and unfollow people who have not chosen to follow me – remember the goal of all this is to have a large, engaged following. So: If you have been followed by me you have something interesting in your profile or recent tweet. If you follow me I will continue to follow you. If you don’t follow me I will unfollow you after about three days. 

Unfortunately the title of this blog post was not “My strategy of contradictions,” or “Proof that I know nothing about marketing.”

Firstly, the author says his goal is to have a large “engaged” following. To have an engaged following means that people have followed you because they have found that you have something interesting to communicate. Something that fills a need. You are providing value to them in a way that others are not. Having people follow you just because you have followed them is far from the notion of being engaged.

Just for discussion sake, we could argue that there is an element of exchange, which is the foundation of marketing, whereby one side gets a new follow and the other side recieves a new follow. The big difference here is that in this type of situation there is no production surplus. If you are a plumber and I am an electrician, I will turn on your lights for you if you will install my toilet. We have exchanged our expertise returning value to both of us. Follow you, follow me can be equated to you put in my toilet and I will put in your toilet.

The author writes, “So, if you have been followed by me you have someting interesting in your profile or recent tweet,” and even though he says he has found something interesting, he promises to unfollow that person if they do not recipricate. Translation: In the end, I really don’t care who you are or what you have to say, if you don’t follow me back you are worthless to me. Another interesting thing about the post in question is that the author is talking about a Twitter marketing strategy yet he does not even think to post his Twitter handle in the article so that he may get a few more follows!

So, if I am only concerned that you follow me because I follow you then where is the value proposition? This is like a consumer going into a pen shop to sell the owner a pen. Is it not a contradiction to say that “I have followed you because I found a recent tweet interesting,” yet I am going to unfollow you because you didn’t do what I wanted?”

All organizations and people must create utility if they are to survive. The design and marketing of want-satisfying products, services, and ideas is the foundation for the creation of utility. So, what is utility? Utility is “the state or quality of being useful; usefulness,” something useful; a useful thing. The word has a long history and goes back to its latin roots from the word “Utilis.” Therefore, a properly oriented marketing system will provide utility that reflects consumer and societal needs.

Instead of “expecting” somebody to follow you back just because you followed them, you shoud be asking yourself the question “what value am I providing to this person?” Are they even your target market? This is where robots fail, because many people will do a search of key words and phrases to identify people on Twitter to follow, yet these descriptions don’t describe in any way what the real needs of this person are. To discover this requires more reserach and a greater level of effort on behalf of the curator.

Follow you, follow me is not a marketing strategy, it is a great classic song by Genesis!

The Hutch Report

5 Common Sense Ways To Enhance Your Business

By | Marketing

On a recent trip to New York I set out to discover some new cool locations.  I hadn’t been there in a few years and was interested to see the changes.  I also wanted the time to check out a few restaurants, bars and stores that I hadn’t seen the last time around.  I didn’t want to make the same mistake as my other visits, and that was to arrive back home only to discover something that I would have loved to see while I was there, and was located only a few blocks from where I was staying, only to have it slip through my fingers.

I took some time to read some reviews of different places and check out their websites for more information.  Having spent enough time in different aspects of Marketing, I am always interested to see how companies are presenting themselves. I find it fascinating how one company can do so well and another, which on the face of it has comparable service and products, struggles. How does one bar attract such a crowd, when the bar down the street that is just as inviting, sells the same drinks at the same prices, can’t scrape together a handful of customers? It is obviously not enough to just look in from the outside to come to a conclusion why this may be.  You have to look deeper into the different aspects of the company, employees, services, advertising etc. Then there are times where it has nothing to do with the company. Times change. Customers are very fickle and as the great funk group “Tower of Power” put it so clearly, “what’s hip today might become passé”. If you are a company and you don’t change with the times you are left behind.

So, while staying in Manhattan, I planned my days and started off around the city taking in the sights. I had a list of cool rooftop bars, with reported spectacular views of the city.  I had my list of specialty shops and restaurants where I planned to stop for coffee or have lunch. I always make a point of walking. It is the best way to see the city and quite often the best way to discover local hangouts.

One by one I would arrive, step into the bar or restaurant, turn around and make my way out. I would double-check these places on my smartphone to make sure that I indeed had the right addresses.  There began to be a recurring problem.  With every stop I became more disappointed and more and more frustrated. What was going on here, this view sucks?  “This is not at all what I was expecting”, I said to my wife, after having given her a description of how this place had the best view, or the coolest atmosphere or the best New York Cheesecake. Were my expectations just too high?  After having walked so long and not found what we were expecting, we would get tired and frustrated and just settle for a corner fast food sandwich shop, or dare I say a McDonalds (at least we knew from experience what to expect!). Of course this only added to our frustration.

As I was walking down Madison Avenue one afternoon, taking in all the activity around me and thinking about what I had experienced, it suddenly dawned on me what was happening.  Their marketing was fantastic, or should I say one part of it.  The alluring photos and beautiful descriptions of all these places I had read about in brochures and articles, and visited on websites, had seduced me. The big problem was the real life experience was far from what I was expecting.  For the most part, all these establishments were “Overpromising and Under Delivering”. I am not the first to talk about this and won’t be the last, which indicates that businesses are not getting the message. This only added to my frustration. This is the basic premise of the marketing mix.  If you are selling a Ferrari then you don’t hand out flyers.  Inversely, if you are selling a coffee and muffins served in a bag, you shouldn’t be producing a 3 page glossy brochure to advertise it as a “Patisserie Sublime”.

These companies must be under the assumption that if they can get the customer in the door then 99% of the sale has been made.  In reality, they wasted my time and lost all their credibility. There is no way I would recommend any of these establishments to a friend.  In a city like New York, and the number of visitors and businesses in such a small area, you can’t afford to take those kinds of risks with customers. If you are going to “Over Promise”, then you better be prepared to “Over Deliver”.

You can fool some of the customers some of the time but you can’t fool all of the customers all of the time.  If you rely on trickery to build your business then you won’t have much time left.

Here are 5 basic ways of enhancing your business:

1) Don’t Overpromise

Be honest. Every business wants to portray themselves as something special but presenting an image that you know you can’t deliver is just setting yourself up for failure. A company that sets the bar too high is just sabatoging their own chance for success. Lower the bar to an honest level that you can deliver on, then do your best to go beyond those expectations.

2) Be Sincere

Have you ever encountered the “Hi My Name is Barbara and I am your server,” “How Y’all Doing Today?” “Excellent?” “Great!” employee in a restaurant? It can get to the point of nausea. Either the company has told them to act happy and smile no matter how rude the customer is, or they are taking happy pills in order to get that 15% tip.

Just act naturally and be sincere. Everyone gets in a bad mood but you don’t have to carry that over to other people, especially if you are having a bad day, but don’t fake it either. People are not stupid. As an employee don’t forget that you are also a customer to someone else. Simply treat people the way you would want to be treated.

3) Surprise the customer

Over here in Europe I have been to a few restaurants that offer the customer a Limoncello (Italian Lemon Liqueur) after the meal. Not everybody accepts it but the customer walks a way with a sense of appreciation at the gesture. Offering the customer something they are not expecting can go along way. This could also be in the form of calling a repeat customer by their first name. It makes them feel special and will therefore increase the chances they will be back often.

4) Don’t try and please everybody

Not everybody who has money to spend is your target market. Concentrate on only that part of the market that can benefit most from what you are selling.  There are 7 billion humans on earth and we do not all have the same needs and wants. If you are spending $3 to convert a customer who will only bring in $1 to the bottom line, there is a problem.

5) The Customer is not always right!

You are offering a service and your customer is paying for that service. This does not mean that you should be offering 10 times more than what they are paying, or be subjected to someone’s personal abuse because they happen to be in a bad mood.  There are customers that are not worth having.  You are better off leaving those customers to your competitors and keep the ones that honour the two way transaction and will become a repeat faithful customer for years.

The Hutch Report

The Perception of True Value and Pricing

By | Marketing, Psychology

Does the price of something equal its true value? While speaking with a friend in the Swiss luxury watch business the other day I learned that the cost of building one of their brand models was $6,000. However, then I learned that the watch would be sold for $45,000.  This got me thinking about the true value of goods in comparison to their price on the market.

There are many theories about pricing. In the area of marketing, pricing is one of the most important elements of the marketing mix, as it is the only part of the mix which generates a turnover for the company. However, no matter how much you theorize about pricing, it always comes down to the consumer’s personal perception of value. What is the product worth to the consumer?  How much would he or she be willing to pay? The interesting part of this assessment, taking place in our minds, is that we can be deceived to come to certain conclusions about what something is worth. The luxury watch is a perfect example. If the company lowered the price of their luxury watches too low, the consumer perception would change. The watch would no longer be perceived as luxury. They would probably sell fewer units at $100 than they would at $45,000.  This aura of extreme luxury is supported with the proper promotion, distribution and packaging.

“There is no truth. There is only perception.” — Gustave Flaubert

If you think that this human psychology trait has somehow changed because of the so-called new economy you would be mistaken.  A perfect example of this comes from the music industry.  There was a time when consumers expected to pay $15 or $20 for an album or CD. There was a perception of value.  The new distribution platform that we know as the Internet suddenly changed all that.  The advent of file sharing provided millions of consumers to exchange and download music for next to nothing.  What happened was the perception of the value of music suddenly changed. “I just don’t agree with perpetuating the perception that music has no value and should be free,” said, Taylor Swift. Well, I hate to say it Taylor but that is the direction that we have gone.  I am not convinced that the consumer currently has a concrete perception of the value of a digital musical file.

While working with a service based startup I was in charge of pricing a service that had no precedent.  There was nothing really to base the assessment of the value on. I could use every pricing theory in the world yet most of it was based on assumptions. I knew what the cost structure was, so I could set a floor price multiplied by the minimum number of service contracts we expected to sell in order to cover those costs. There was one major problem.  We had no revenues. We had no customers at that point. I had no idea if our price would meet the perception of value determined by the market.

During the same time, we started to see the proliferation of the Freemium model. Something we also considered as a company. Companies all around us were giving everything away for free. The theory was, if you could entice the consumer to use your product or service they may see how valuable it really is. Then you could start charging. The problem would remain though.  What price is the right price? Many of these companies went under because they lost most of their users once they began charging for the products. In spite of what many say, free or really cheap does not necessarily translate into more customers.  The price of a product or service has a perceived value by the market.  The challenge is to find that price that represents the value perceived by the market.

The best way to determine price is to test the market, as the market ultimately decides and sets an equilibrium.  Use focus groups or the like to help determine what the perception of value is. This is a widespread problem among many startups. They don’t test the market for their products or services, so they take a stab in the dark by picking a random price point or just giving it away, hoping to charge for upgrades later. This is a dangerous practice because once the market is influenced into picking up a bargain at lower and lower prices, those price points will then become the perceived value of the product in the market and that is very difficult to reverse.

The Hutch Report

Branding – Did you over pay for your logo?

By | Marketing

At more than a few startups I was with, we had to come up with a logo for the company.  We did what most companies do, hire a design company, give them a description on how dynamic we are, and what we represent.  Then the designers come back with a few choices for the team to look at.

Mostly the designers are clever at giving modifications of a very narrow selection and in a sense often guide you into a direction before you have even seen the designs.

Then, in a small company, you go through the painful process of asking everyone’s opinion of the choices (as if it really makes a difference!).  Ask anybody’s opinion of something, even if they have absolutely no knowledge or experience to back up their opinion and they will give it to you.  This is about the time the arguments start.  People will argue until they are blue in the face in order to have the recognition of getting things their way or that self-satisfaction of being right.

I was in a small pharmaceutical company where this happened once.  What was meant to be a few minute get together between the marketing team and the rest of management to give feedback on the logo selection turned into an hour of bickering and arguing.  It got to the point where the CEO of the company lost his patience, and interest in any one else’s opinion, threw up his hands and said, “I am making the decision and I say we use the blue one”, “Meeting over!!”

The logo chosen by the CEO was used, placed on all the documentation and company communication and was never talked about again.  The company went on with its business, did a good job and grew in profits and revenues.

So it got me thinking of how much value do logos really have? I believe that the company’s success creates the logo.  The best logo in the world will not assure your company recognition that places you above all the rest.  There are millions of companies and logos of all sizes, colours and designs.

However, if you build some great products or provide great services that people use, provide great value for the price and you will grow as a company.  The more people who use your products and services will then become familiar with whatever logo you use (assuming of course that you haven’t done something self destructive such as making it illegible, or of bad taste).

Here are some examples:


In 1971, Phil Knight was teaching a class in accounting at the Portland State University. While there, he commissioned a graphic design student, Carolyn Davidson to create a logo.  When he bought the now famous “Swoosh” he told her, “I don’t love it, but maybe it will grow on me.”  The cost? $35.


Twitter purchased their logo from iStockphoto for about $15.  The designer of the logo, Simon Oxley, probably received about $6 for the job after fees. Twitter could have purchased any number of other designs and still have the same recognition and success that they have had with their service.


Sergei Brin, one of the founders of the company, created the Google logo.  He used a free graphics-editing program.  The logo has become so recognizable, not because of its brilliant design aspects but because a large percentage of the world’s population uses it everyday as a search tool. That’s how you become a brand!!


Stelios Haji-Ioannou launched the European based EasyJet as a low cost carrier back in 1995.  He was very conscious of keeping the marketing budget as low as could be. He, therefore, looked at all the other airline companies of the day and noticed not one of them was using the color orange.  He chose the lowercase Cooper Black font available in all word processors, colored it orange, painted it across the body of each plane and the rest is history.  Like it or hate it, the success of the company had little to do with the logo design alone, but everything to do with very astute marketing and publicity.  The cost was the time it took Stelios to conceive of the logo, which was not long.

Do you remember what the Logo for the 2012 London Olympics? Do you remember what color it was?  My guess is probably not.  The logo was designed by a London based brand consultancy company and cost the city $625,000. The rebranding of British Petroleum, Symantec, Accenture were all over $100 million dollars.  However that was the total cost of rebranding and not just the logo but we can imagine that the logo was not cheap. The big question would be, what was the return for the investment?

Graphic Designer and Art Director Paul Rand once said, “It is only by association with a product, a service, a business, or a corporation that a logo takes on any real meaning. It derives its meaning and usefulness from the quality of that which it symbolizes. Therefore, no matter how brilliant a logo in its inception and design, it will mean nothing if the company it represents is a producer of lousy products and services.

A good example of this is Ferrari.

Enzo Ferrari told the story of the prancing horse logo just once. “The horse was painted on the fuselage of the fighter plane of Francesco Baracca — a heroic airman of the First World War. In ’23, I met count Enrico Baracca, the hero’s father, and then his mother, countess Paulina, who said to me one day, ‘Ferrari, put my son’s prancing horse on your cars. It will bring you good luck.’ The horse was, and still is, black, and I added the canary yellow background which is the color of Modena.”

This logo would have represented nothing if it were not for the high standards that Ferrari set for his products. Instead, looking at the logo now and you see the reflection of high-end, quality, and performance.


Apple is another great example of reading too much into the importance of a logo. We can start with the simplicity of the name. Apparently it results from Steve Jobs having worked in apple orchards in Oregon, and stuck for another name, decided to name it Apple. Steve Wozniak describes the naming process as a simple one and that “anything that sounded interesting was valid”. So there really was nothing more to it.

The rainbow logo was designed by Rob Jannoff, of which today’s logo is still based on. Janoff said that the bite of the apple was added to ensure it resembled an apple and not a cherry. For anyone that has worked in marketing producing brochures etc. you will understand the costs involved in producing materials that are multicolored.

The rainbow logo remained for 22 years until Steve Jobs returned to the company in 1997. One of the main reasons for moving into a simpler form was apparently the production cost. Producing the colored logo was much more expensive, especially on the computers themselves. Michael M. Scott of Apple called the logo “the most expensive bloody logo ever designed”.

At the time The Beatles Apple Corp. logo was an apple.  They sued Apple Computer and settled for an undisclosed sum being paid to the Beatles Apple Corp. The apple logo choice at the time was actually not such a smart decision and ended up being quite costly. However, today the logo is iconic because of the products it represents, used by millions of consumers everyday. That is what made the logo and not vice versa.


Howard Shultz bought Starbucks in 1987 when they had six stores.  He reduced the product selection to just coffee and adjusted the logo accordingly.  The most recent adjustment to the logo was done in house at a minimal expense.  The changes over the years have been meant for simplification purposes and keep the look fresh, seeing that styles and fashion do change over time. In my opinion, Starbucks has done it right.  They could have spent millions on some high-end design branding agencies but that would have ruined it.  They have kept true to their origins at a reasonable.


There is the story of Virgin’s logo in the Richard Branson biography.  The way the story goes is Richard Branson and one of his associates went to meet a designer about the creation of the Virgin logo.  While Branson got up to go to the bathroom the designer asked the associate what the name of the company was.  The associate said it was Virgin, so the designer scribbled the name on a napkin.  When Branson came back to the table he saw the name Virgin written on the napkin and said, “Right, that’s it then.” That quickly written reminder on the napkin became the Virgin logo.

If you are a startup then you shouldn’t be thinking that spending a lot of money on a logo would attract business for you. Don’t over emphasis your logos importance.  This is not to say that the logo means nothing. It is your face and will be a communication tool to your market. Choose a logo design that you feel represents the quality of your products and services but you don’t need to bother paying for expensive design consultancy firms to do that.  Go and find a student designer (as in the case of Nike), I am sure they will do just as well and probably put more heart into the project, or you can just go online and choose an inexpensive one that way (as in the case of Twitter).  Then get on with the principle effort of building your customer base.

Trade Shows – The Real Winners and Losers

By | Marketing

Trade Shows and Events have been around for a long time.  They happen in every industry. They are fun to walk around, maybe have a chat or exchange a few business cards. In the evening there are always a few parties and dinners to attend.  If it is a big show then you are more than likely to go back home with a bunch of T-Shirts, mints and pens that light up.

Aside from a few exceptions, most of the companies attending these trade shows never even get close to covering their expenses from the additional business they have generated from the show.

So why do they attend in the first place?  More often than not it is the principle of keeping up with the Jones. In other words, if the big names in the industry are all there and your competitors are all there so the adage is you have to be there.

Startups are the worst perpetrators.  The ones with some solid financial backing and suddenly increased marketing budgets make a point of attending as many trade shows as they possibly can.  You can tell which ones they are because these guys often have the best T-shirts and gadgets to give away!  But what does it get them in return?

These events can get expensive very quickly and as a startup or any company you have to look at the opportunity costs involved.  If it is costing $50,000 to be present at an event, then you have to automatically ask yourself where else could that money be better strategically invested in order to provide the best return possible? In looking at this I will concentrate on Business-to-Business trade shows.

As an example, here are the costs that I was dealing with while managing a trade show in Europe for a startup I was with:


  • Booth                           $12,294.00
  • Hospitality Suite            $11,741.00
  • Stand Decoration           $9,185.00
  • Rental Furniture               $825.00
  • Rental Hardware             $1,100.00
  • Shipping                          $1,100.00   


  • Hotel                          $3,300.00
  • Flights                         $1,650.00
  • Transport                      $550.00
  • Perdiem                      $1,650.00


  • Giveaways                 $2,200.00
  • Print                           $2,200.00
  • Advertisement            $1,375.00
  • Shirts                           $1,100.00

Total                          $50,270.00

Note: These figures did not include PR that was scheduled to occur during the event or the travel and expenses of other employees coming from other departments as they are normally considered different cost centers.

You can see that the figures could add up quickly and this is probably a conservative amount in comparison to what some companies spend.  I could even factor in the weeks of effort and employee time required to organize such an event, which would increase the amount considerably.

Having attended and managed quite a few of these I started to understand what was working and what wasn’t. This is what I found.

1. Choose the right targets

If you are going to attend a trade show or event then it should be because everyone in the industry that you are targeting are all going to be congregating at the same spot.  This alone should save the company time and money from traveling all over the country to see these people for a first meeting (assuming you can meet with them).

2. Fill up that agenda

Everyone attending, from management to sales people, should all have their meetings blocked and confirmed weeks before the event even starts. If you are attending the event in hopes of making contacts at the event then you are set up for failure.  The guys you are hoping to meet will most likely be all booked up before you even get there. If you are not able to fill your agenda up, then you should think seriously about whether or not your company should be present at all.

3. Set your goals

Everything that happens at the event should be tied to a goal.  If you have set up a meeting then know what you want to achieve from that meeting.  Don’t waste too much time before getting to the point and don’t block somebody in for 1 hour when you only need 30 minutes (If they even give you that much in return).

We were trying to meet with the Director of a large French company at an event in Cannes one year.  We got through to him well before the event but he told us he could only give us 10 minutes in the lobby of one of the busy large hotels where he would be between meetings. We said fine. It only took as 10 minutes to capture his attention and an invite to Paris where we were able to build a relationship.

4. Marketing and Branding

I am always amazed at how much some companies spend on branding at these events.  I also made the mistake of throwing away good money on bad investments such as buying ad space on huge banners at the events, or large ads in the Event newspapers.  These investments never brought anything.  Business to business trade shows are not selling to the mass markets so as a company you should not be marketing your brand as if you were Coke or Pepsi. Your products, services and the way you manage your relationships will be the way you brand yourself.

5. Use your booth wisely

I have seen so many booths with 2 guys sitting behind a counter waiting for attendees to come and discover their brilliance.  Quite often those stopping by are often other company participants asking, “Are you having a good show?”

Your reach at these shows is limited to the total attendance.  You are then limited to the number of people who walk by the stand. Then you are limited to the amount of people who stop by to inquire about your product.  You only have so much time so the number of people you can talk with on a booth is limited.

The greatest weakness to this kind of booth strategy is that you are not able to target the decision makers.  Quite honestly, I have had people come by, ask a few questions, then ask for a t-shirt or a pen that lights up (yes, I was guilty of giving out my share!).  In all honesty, looking back at all the shows I have attended, this type of activity never brought anything but sunk marketing costs.

The best way to use your booth goes back to the preparation before the event. Have your meetings booked solid and have all the marketing tools necessary to best present your products or services to them.

6. Evening events

Everyone likes to get out and have fun and relax after spending the day in meetings in a noisy conference hall.  There are always shows and parties organized at these things where attendees like to get together and hang out over a drink.  However, I have found that there are always these high-powered guys that just can’t turn off the sales pitch, and everyone ends up trying to avoid them.

There may be a bit of business talk that happens but often a much better strategy at these evenings is to just hang out and have fun.  If you run into someone that you had a meeting with earlier don’t keep trying to close the deal.  The best method is to develop more of a human relationship.  You can gain a lot of confidence from people just being yourself.

7. Leverage your investment

A smart strategy is to leverage your investment in these trade shows.  The biggest bang for the buck that we got when attending a large industry trade show was to time an important news event or product launch for the company at these events. Once again, most of the preparation came before the event.  We were in contact with most of the media attendees (who are always looking for a story), informing them that we were intending to launch a new important product.  This got us many “free” write ups in important industry publications and exposure at the trade show that was much cheaper than what we paid for our large banner with our company name!

In the end however, if you are not able to quantify your presence at these trade shows and have not idea what your ROI is then you probably should not be attending.  The money would be better spent building up your business one client at a time.