And then came the web, it changed everything.  Integrated marketing was once the Holy Grail.  But in today’s rough and tumble economy, integrated marketing across traditional channels, even with a great web site, just isn’t enough anymore.  “Getting there first” happens in masse.  The internet is alive, it has a pulse. In one of the most turbulent economic periods our nation has experienced since the great depression, how is it some companies are not only surviving – but thriving?

A small sub-set of US businesses who consistently outperform competitors have ingeniously brought their brands to life online. Companies like Apple, Verizon, Nike, Netflix and Amazon are at the head of the class.  The common thread across each and every one? Interactive product positioning leads their brands’ competitive edge.

For the marketing pros out there who have seen fads come and go, weighing out the trends to design an equal balance of innovation with traditional marketing is what separates market leaders from market leader wannabes. As companies large and small judiciously weigh out where to invest their precious marketing dollars, analysis of which channels will produce the greatest return on investment has been elevated to a science.

In order to yield a full return on investment in these tough times, products must effectively deliver on their brand promise in a meaningful and interactive way. Companies like Apple, Verizon, Nike, Netflix and Amazon (in addition to other US and global market leaders) just figured out how to do this first. It’s not rocket science, but it does require that a deeper strategic interactive overlay leads brand positioning – not reacts – to larger market forces. The current consumer driven marketplace doesn’t tolerate a mass marketing, non-targeted, disconnected relationship with the brands they choose to do business with.

Cultural Fabric
Distribution of information via an ever expanding network of web channels has begun to define the cultural fabric. Trends point to the growing significance of wireless, mobile and social networks not just in terms of adoption, but more importantly, in terms of revenue.

In the coming weeks, a series of blog posts will continue to explore trends, interactive phenomena, strategies and ways of thinking about the cyber landscape. Like it or lump it, “it is what it is,” is no longer what it once was.  Adapting, adopting and advancing your brand’s life force in the larger interactive ecosystem is a huge opportunity. Lead with Interactive™ is how we talk about it. Business impact is how we measure it.

Proponents of the Net Promoter scores claim that it is a better metric than customer satisfaction. The thesis is that satisfied customers aren’t good enough. In an increasingly networked world, you need customers who are brand evangelists – customers who refer their friends and colleagues to your brand.

Interestingly, the Wikipedia article on Net Promoter Score also states that the above thesis is controversial.

Great loyalty programs improve brand equity. Two of my favorite loyalty programs are Starwood’s Preferred Guest (SPG) loyalty program and American Express’s Membership Rewards (MR) program. Sure, these programs increase my purchases from these suppliers because they effectively provide me with a small rebate – a rational benefit – and other rational perks (e.g., room upgrades at the W hotel). But more importantly, these programs create a positive emotional connection with their brands!

Amex’s MR program sends me beautiful catalogs showing me the rewards I can get. While I would never order anything from the catalog (everyone knows, the best use of MR points is FF miles), the catalog triggers my imagination and provides me a vehicle of escapism.

Likewise, the SPG web site also provides me with a vehicle of interactive escapism – I can imagine using my points for trips to exotic places like the Seychelles and Maldives.

The SPG and MR programs have very few restrictions on how you use your points – i.e., you can redeem instantly with no annoying blackout dates that would turn me into a brand detractor.

Both programs cause me to visit their brand web sites way more frequently than I otherwise would. Both programs help turn me into a brand evangelist, and indubitably, increase their brand’s Net Promoter score.

Some Funny and Infamous Examples of Abuse

There are at least two very famous and funny cases of abuses to loyalty programs, where customers were able to game the system. The first is the story David Phillips (The Pudding Guy). The second is more recent story of an Australian commonly known as “Beer Guy”.

While marketers should be careful not to open their program to abuses, both Healthy Choice foods and American Express received tons of almost free publicity from the above noted abuses. It also reminds me of a Capri Sun loyalty promotion that I tried to game to get a gift certificate to K.B. Toys – I figured out how to beat the promotion, bought loads of Capri Sun, but then forgot to redeem my points in time and wound up with a sticky collection of Capri sun containers.

Thus, a loyalty program that has the potential to be lucrative to the consumer (e.g., MyCokeRewards) may actually build enough brand equity and produce enough incremental sales to make up for a few abuses.

And clearly, having a compelling transactional web site for your loyalty program is critical to making it interactive for your brand.

While the events industry has suffered from cyclical economic changes and reduced event marketing and communications budgets, interactive has been evolving and thriving. I remember managing my first webcast in the late 1990’s, for SGI, at a company all-hands meeting broadcast on the corporate LAN. Even before broadband internet, the writing was on the wall; interactive was coming.

Not long ago, this author wrote in an event-centric blog that, “there is really no adequate substitute yet for meeting people face to face.” While I still believe that this is true (why would there be such a thing as the Web 2.0 Conference?), I am beginning to understand the subtle difference between interactivity and interactive, and the importance of making this distinction. Simply defined, interactivity is face to face communication between two or more people, while interactive is the active response of a computer system to a user.

Seen in this light, interactive doesn’t replace interactivity, but powerfully complements it in ways that are being explored every single day. We are only beginning to scratch the surface of what interactive is capable of contributing to humanity in terms of social interaction, politics, and culture. Interactive technology is rapidly evolving and creating richer experiences and more control over information for people around the world. As an abstract and egalitarian venue for human expression, interactive makes it possible for us to present ourselves and communicate our ideas on a grand scale. It enables community formation unbound by geography, economy, culture, and language.

It challenges us by fostering a social environment in which the rules of engagement are being redefined as rapidly as the technology that drives the user experience. Every existing social institution has been forced to reconcile commonly held assumptions in relation to interactive. Our notions of security, privacy, human rights, and ownership (to name a few) have been and will continue to be tested by the possibilities that interactive will enable.

If we employ interactive from the perspective of conventional business practices, we are missing the point. We must look not only at how interactive impacts us, but how we can make an innovative impact with it. The rapid social and technological change that interactive brings will accelerate and its influence will expand. Many of our established notions about ownership and control over brand equity and about the value of traditional marketing and sales channels are no longer valid. We must approach interactive with an open mind and look for new ways to leverage all of the new opportunities it offers.

Companies finding success in interactive are creating communities around their brand; leveraging numerous interactive methods, entertaining and educating their consumer, establishing transparency, soliciting feedback, and listening and responding to the needs of the market via a rich and growing box of tools at their disposal. They are doing this with a highly accurate measure of ROI at a fraction of the cost and turnaround time of traditional advertising. They are gaining competitive advantage and growing market share.

I believe that Pop Art’s trademark, “Lead with Interactive™,” reveals the coming of age of interactive as the new foundation of successful corporate marketing strategy. Economic and social pressures will continue to beat up the traditional modes of communication, and those that survive will do so as an extension of the interactive space.

We should continue this conversation. Hook up with me on Facebook. And if you get to Portland, we can sit down over a cup of coffee.

The Lombardy firms’ R&D operation, for the most part, can be found neither inside the companies nor in interactions among them. Rather, it comprises a free-floating community of architects, suppliers, photographers, critics, curators, publishers, and craftsmen, among many other categories of professionals, as well as the expected artists and designers. The members of the community are prized as much for their immersion in a discourse as for their originality.

A takeaway from the HBR article is that strong industry clusters and business communities emerge, not only as byproduct of large universities, but by a willingness of firms and individuals in a region to engage in discourse and collaboration.

Trade Associations as Connectors

From Pop Art’s experiences, we have found that trade associations play a huge role in facilitating discourse and collaboration. It is a myth that trade associations are primarily about promoting an industry through activities such as public relations. On the contrary, most trade associations devote most their resources to topics such as “industry standards,” “education” and “workforce development.”

They connect CEOs with CEOs, engineers with engineers, designers with designers. They build social networks (both online and offline) and hold formal educational seminars.

When I have a business problem, I can share it in confidence with other trade association executives who I have grown to know over the years. When I need to find a new supplier or key employee, I can tap into my trade association contacts. Often, I attend a trade association event where I hear about a new concept, technology or story. The concept may not directly apply to my firm, but I am able to synthesize the ideas and gain valuable takeaways.

The ROI of Building a Strong Community

It may be easy for a company like Intel to justify belonging to a trade association of semiconductor manufactures. But why should Intel support the local software association or advertising federation? Certainly Intel executives already have plenty of peer groups and collaboration partners. And why should a company like Pop Art support a trade association of start-ups, if our company is no longer a start-up and very rarely has a client that is one?

The reason is that companies like Intel and Pop Art benefit enormously from the strong companies that trade associations help foster. It’s a low-cost way to build a strong community that benefits the broader industry. For example, a great start-up might attract a stellar engineer to our region, and that engineer might lead a speaking panel that larger companies learn from. Or even better, that engineer (or a friend of the engineer) might later go work for Pop Art or Intel.

When Intel sponsors a trade association event, it builds tremendous goodwill and mindshare. Because Intel is so supportive of trade associations to which I belong, not only am I more likely to buy Intel’s products, but I am much more likely to recommend Intel when my friends in New York, Los Angeles or Portland are seeking a job.

And on a political note, when large companies support the community, they are much more likely to receive essential political support from small companies when the large companies really need it. The Small companies will not blindly follow the lead of the large companies; but at the very least the small companies will listen and discuss the needs of the large companies who form the anchor support of trade associations. Simply put, when you get to know somebody, you are more likely to empathize with them.

Trade Associations and Politics

Trade associations are often poorly portrayed by Hollywood, the media and politicians. The “Trade Federation” in the Star Wars films and the “Spacing Guild” in the Dune novels are antagonistic forces that seek to maintain monopolies on trade. Politicians and the media portray trade association lobbying as representing “special interests,” often working against the common good.

Some trade associations devote a small portion of their dues to “lobbying and advocacy” activities. Trade associations may also maintain political action committees (PACs) to engage in lobbying. Other trade associations do not engage in any political activities.

I have spoken with CEOs who get nervous about participating in a trade association’s political activities. Reasons are cited such as:

• “I am not sure that I support their political agenda.”
• “I don’t want my business engaged in politics.”
• “I don’t want to offend our customers or employees.”
• “I don’t want to be a political pawn of big industry.”

As far as politics are concerned, I believe that trade associations do far more good than harm. Trade associations play a huge role in educating elected officials regarding topics like: the need for skilled workers, long-term macroeconomic trends and how various legislation will affect businesses. I think it’s safe to say that not every legislator understands business and economics. And certainly, not every business executive understands legislative political.

The majority of lobbying that I see from Pop Art’s trade associations is lobbying for increased education funding in the arts and sciences. Most CEOs don’t earn huge salaries. Most CEOs want livable communities, clean and safe environments and opportunity for all. The political needs of metropolitan CEOs and their owners is most often in-synch with the needs of labor and the community at-large. And when it isn’t, there are plenty of voices representing the other side so that politicians can listen to effective discourse.

In general, trade associations won’t advocate a policy position unless the vast majority of its membership is in agreement. I believe in change from within the system, and I would rather have my voice heard than sit on the sidelines. Our involvement in trade associations offers us a window into issues and perspectives that we might not have know about otherwise. Our firm benefits from our ability to influence political discourse within trade organizations, and from the power we have to rally other companies to our causes as well as our potential to block the trade association from taking policy positions to which we wholeheartedly object.

Challenges faced by Trade Associations

Trade associations face numerous challenges, including: maintaining membership in light of M&A activity, finding sponsors and putting on events. The bottom line is that there are more and more trade associations, probably too many of them. New trade associations pop-up frequently, but trade associations fade away slowly, and rarely burn-out. Keeping their mission and their content relevant is perhaps the biggest challenge.

Working in a trade association is a tough job. Many trade association employees work 12-hour days, with little job security or financial up-side. They must balance lots of politics and the egos of CEOs who make up their constantly changing executive boards.

The best trade associations have low staff turn-over; this helps their employees to best serve as connectors and helps advance the interest of their members.

The best trade associations also have very dedicated volunteer boards who are passionate and generous in making the association relevant and viable. The best board members are inclusive. They do not promote the “Old Boy’s Network” with cliquish and controlling behavior; rather, they are very open and inclusive in welcoming new members and ideas.

Conclusion

The ROI of trade association membership is largely intangible; however, it is outstanding nonetheless. It is in your self-interest to liberally join, sponsor and participate in numerous trade associations. If you are a good member, the trade association staff and board members will go out of their way to help you.

If you are open-minded to talking with other firms, both your competitors and firms not directly in your field, you might stumble upon some new innovations. Successful industry clusters, business communities and ideas will emerge; this is essential to your firm’s long-term success and the growth of a prosperous society.