Gray Matters: differing points of view, surging prices, Sky and conscious consumers

  • Voices
  • May 10, 2019
  • Graham Medcalf
Gray Matters: differing points of view, surging prices, Sky and conscious consumers

Please complain

I love the Advertising Standards Authority website and its invitation for anyone to make a complaint. It even tells you how to complain: “Any person can complain about any advertisement in any media.” That’s probably why seven people complained about the Family First New Zealand funded anti-cannabis billboard.

Quite correctly, the Complaints Board ruled the advertisement "did not contain anything indecent, exploitative or degrading, did not cause fear or distress, was socially responsible and was unlikely to mislead consumers."

The problem today is if someone doesn't like a different point of view, including those in ads they just complain or tweet a hashtag, hoping the company pulls the ad and apologises.

For advertisers and their brands, responding to complaints, however idiotic, is important. As business strategist Jay Baer writes in Adweek: “When confronted with criticism, our instincts take over. We either pick a fight or ignore the hater altogether as a defence mechanism. This same tendency pushes numerous business owners to ignore customer complaints.”

Baer believes about 40 percent of complaints happen on social media, review sites and forums. “Onlookers wait to see how you react, and your response tells them whether they can trust your brand,” he says. “Staying silent makes a bad situation worse.”

According to Baer the Net Promoter Score of customers who don’t receive a reply to social media comments drops by 43 percent.

Perhaps then the ASA is right in making it easy for people to complain about ads. It’s a great way of understanding where our brands stand in the consumer milieu.

Splurge or surge

Anyone who has taken an Uber or bought a flight in school holidays will be aware of the maddening practice of changing prices according to demand and supply. “When Uber announced its surge pricing for certain rides, that created a lot of stir and animosity. People saw it as price gouging,’ writes Judy Colbert, Next Avenue Contributor to Forbes. But is it really any different to retailers discounting prices on items that aren’t selling?

In 2017, Briscoes had to defend its sales practices after the Commerce Commission warned retailers not to mislead customers, and Briscoes group managing director Rod Duke told Mike Hosking at the time, “there's nothing illegal about the retailer's promotions”.

Surge pricing is different in that the prices go up with demand rather than prices coming down because of lack of demand. Anyone who has been to a property auction will understand that,

Dynamic pricing is the practice of varying the price for a product or service to reflect changing market conditions, in particular, the charging of a higher price at a time of greater demand and perhaps marketers should make more use of it. After all it affords a business the opportunity to maximise profits with each customer and gives them the ability to adjust prices for service projects or products based on the time, costs involved, and fluctuating demand.

IBM offers a great tool called IBM Dynamic Pricing to help online retailers respond in real-time to changes in competitive prices. “It combines web data, such as page views and cart abandonment—along with sales, inventory and the latest competitive pricing information—and uses pricing intelligence to recommend the optimal pricing action to achieve your business goals.”

“A well-designed dynamic pricing strategy is consumer-friendly,” says Harry Tomasides, chief revenue officer with Digonex — a dynamic pricing solutions firm — when quoted in Forbes. “It will often give savvy consumers access to lower prices than would be possible under a traditional pricing model and allow enhanced access to ‘scarce’ products or services to the consumers that value them the most.”

As Warren Buffet’s observed, “Price is what you pay, value is what you get.” Something that is fundamental to good marketing.

Pie in the Sky

In the Business section of the NZ Herald this week, Chris Keall made the case against Sky TV NZ moving into broadband. The very next day though, Keall wrote about newcomer Justin Tomlinson joining Sky NZ as a strategic advisor. Lo and behold, “Justin has significant experience in delivering broadcast and OTT platforms at Sky for Sky UK and has 20 years' experience delivering transformative digital solutions.”

Sky UK just happens to offer totally unlimited broadband for an amazing price of £20 a month. That’s just under NZ$40 for a deal we’d pay around NZ$70 here in New Zealand.

Adding two and two together to make five: 1. Sky NZ has fallen behind streaming services. 2. Sky NZ has been losing subscribers. 3. Justin Tomlinson joined Sky to make a big difference in digital 4. New Sky NZ boss Martin Stewart identified streaming content as a priority. 5. The desire to hit Spark where it hurts after losing the Rugby World Cup rights must be immense.

So, by my calculations I’ll soon be able to bundle my Sky subscription with a fabulous broadband plan from SKY.

Conscience Be Thy Guide

“It’s brilliant business for brands to consider the vociferous power of the conscious consumers,” says an article inMore About Advertising.

We were warned four years ago “research shows millennials don't respond to ads.” It’s not just that “millennials will go to their friends and social networks to see what people think, “ as Daniel Newman CEO of Broadsuite Media Group wrote in Forbes. It is that consumerism has been supplemented with a social conscience.

“Socially conscious marketing is a powerful way for businesses to shape their brand and connect with consumers on a deeper level,” writes Steve Olenski, also in Forbes.

A 2015 Nielsen report found that 66 percent of consumers said they would pay more for products from companies committed to having a positive social impact, and that is even more true today. “Understanding the connection between sentiment and purchasing actions has never been more important.”

Expect to see more locally produced ads taking this trend into account.

Afterthought

“Free speech is the very best of what our democracy represents and what it has the potential to develop into. No democratic society can sustain itself if people cannot speak freely.” Zachary R. Wood, author of Uncensored.

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NZTA campaign to raise awareness of drug driving

  • Advertising
  • July 23, 2019
  • StopPress Team
NZTA campaign to raise awareness of drug driving

New Zealand Transport Agency’s latest campaign hopes to get Kiwis talking about drug driving in Aotearoa.

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