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Medtronic selects BD'M

Medtronic has selected BD'M to help tell is corporate story, and what a story it is.  From two guys in a garage in 1955, the first pacemaker, to a $16 billion leader in medical technology.  And what's rare about them is their culture – they haven't changed a single word in their mission statement since it was written in 1960, and every employee can recite it by heart.  You don't usually that in companies of this size.

Gaming as a form of strategic marketing.

We've all seen the brief: raise awareness, shape new customer behaviors, launch a new product and generate revenue.

Historically, this brief has been answered through an advertising campaign.  But in a world in which collaboration and experiences often trump one way communications, gaming is fast becoming a bankable marketing strategy.

A while back I attended a thought-provoking presentation by Dr. Jane McGonigal, a leading game designer and researcher, about the social benefits of gaming.  Dr. McGonigal believes that gamers exhibit four personality traits that are essential for problem solving:

• urgent optimism
• social collaboration
• blissful productivity
• epic meaning

Perhaps inspired by Albert Einstein's quote – "Games are the most elevated form of investigation." – her work focuses on ways to harness gamers' collective intelligence and creativity to solve societal challenges, such as imagining a world without oil, or new ways to bring water to sub-Saharan Africa.

Now companies are embracing gaming as a business strategy.  Within the past few months I've witnessed B2B gaming initiatives from IBM, Cisco, GE, SAP and Microsoft.  Each is using gamification to engage customers in a deeper brand narrative, or to train sales people.

BD'M used gamification to help United Airlines sell its new suite of Travel Options.  We designed a game around each Travel Option – e.g., Line Jump Hero, Legroom Legend, Mileage Ace – that could be played online or on smart phones.  After being played over nine million times and generating millions of dollars in incremental revenue for United, The Mobile Marketing Association named the Optathlon games the best mobile promotion in 2011.

This new presentation by PSFK provides a thorough and clear case for gaming as a business strategy.  Gaming has the potential to communicate; to teach; to solve; to alter behavior; to raise money.  It does so through its unique ability to tap into peer competition and one-upsmanship; stakes and rewards; exclusivity and access.

PSFK Future of Gaming Report [Preview]  

Marketing to the 66%.

A big issue confronting marketers is the shrinking middle class consumer.  Let's call them the 66%, after accounting for the famed 1% and the 33% of Americans living near or below poverty levels (an even bigger issue).

The middle class, a core target for most marketers, is hurting because technology and process-driven productivity increases is eliminating middle management jobs in manufacturing and service industries.

In 2011 marketers witnessed what the WSJ calls the "Barbell Effect."  Marketers catering to wealthy consumers fared relatively well.  Sales at Saks and Nordstrom were strong, as were sales for Mercedes, Land Rover, Porsche and BMW.  At the other end of the "barbell," sales at dollar stores and discount chains spiked as the middle class traded down, causing marketers such at Heinz and P&G to focus on discounting and bargain brands.

What should marketers do?  I'd suggest CMOs look at what Hyundai has done over the last few years to drive a remarkable surge in sales.  Several years back, Hyundai began addressing the fundamental issue depressing sales -- FEAR. The vast majority of consumers are not facing layoffs or home foreclosures, yet they curtail spending because they're understandably anxious about the future.

Hyundai launched its Assurance program, allowing consumers to return their new car within a year of purchase if they lost their job. (Sales jumped 14% that month while the industry was down 37%.)  The company followed that by sweetening the program by offering to pay the vehicle loan or lease for 90 days while the owner looked for work.  Moreover, Hyundai has also made buyers feel smart – another way to alleviate fear – through its warranty program, styling and quality.

Looking back on my recession-themed posts (a topic I look forward to not writing about in the future!), the strategies suggested at the outset of this recession remain applicable today:

• Reduce anxiety by making consumers feel smart; 
• Appeal to consumer's need for emotional security and "cocooning";
• Get closer to your best customers through true loyalty incentives and CRM; 
• Consider tiered pricing and value options; 
• Invest in innovation – "new" is still a powerful lure; 
• Finally, don't let a good crisis go to waste – refocus and reprioritize all elements of your product portfolio, marketing and media mix.