The following remarks were first delivered at PRO’s 50th Anniversary Convention in Ft. Lauderdale, Fla. on July 19, 2008:
In my invitation to attend this session, I referenced the top news in a recent issue of The Washington Post…“An economy thrown into turmoil.” Turmoil. That’s a strong word and I’m sure the editors knew it would grab the reader’s attention. It certainly caught mine – but for a different reason than I’m sure the paper intended. See, while I’m concerned about the state of the national economy, I am not fearful about the future of our industry. Instead, I remain as confident and optimistic as ever.
Why?
Because we are in the business of emotions. Emotions are not a commodity like gas, milk or housing. Emotions are at the core of the human experience. And lucky for us in this industry, the photo industry is built around emotions. For this reason, our industry has been virtually recession proof throughout its history. And for this reason, we will not only ride what some economists and editors see as a storm, we will sail right through it.
Step out of your industry shoes for a minute and put on your consumer hat. In a slow economy you, the consumer, might decide to pass on that extra vacation. But would you skip a birthday or holiday celebration? Of course not. The party might be at home this year instead of at the amusement park, but you can guarantee mom and dad aren’t going to pass on a single photo opp even if it is in the backyard with dime store streamers
and balloons.
And once the cake has been eaten, the presents have been unwrapped, the guests have gone home, mom will be the first to download those photos. Increasingly, she will also be looking for innovative ways to share her photos. She’s no longer satisfied simply printing them for her own family archive.
Now put your industry hat back on. It’s your job to make that mom’s search easy.
Some in the industry are having a tough time of that. They are wary of how involved consumers are becoming in the process. They simply aren’t accustomed yet to having that mom do much more than drop off a roll of film and come back a few hours later to pick up the prints.
I’m here to tell you that the days of the 2-minute customer interaction are over – and thank goodness for that! That’s the best thing that could be happening to our industry.
Is this shift challenging? Yes.
Is it disruptive? Yes.
Is it the key to our success? Absolutely.
As an industry, we have lost sight of the fact that change can either be seen as a recipe for failure or an opportunity for improvement. I choose to see the latter. I see these changes not only as opportunity, but the key to our industry’s future.
See – emotions are not only at the core of the human experience, they fuel the desire for human expression. Why isn’t that mom satisfied simply printing out 4x6s and stuffing them away in a box? Because she wants to share her pride, joy, love – her experience – with anyone who will feel it with her.
At Lucidiom, we see this consumer desire – this very basic human desire – as a mandate for an industry-wide shift towards social expression. If you think about it, consumers haven’t really changed. Technology has merely evolved. And that has changed how quickly, broadly and freely consumers can express themselves through pictures.
Lucidiom is at the heart of this transition.
Just over a year ago, we introduced a new brand to represent our technology and industry vision. Lucidiom EQ – the complete imaging solution. I often am asked what the ‘EQ’ stands for. Well, the “EQ” stands for “emotional quotient.” Ask yourself, “What’s my EQ?”
Now raise it – and your profit potential – by embracing the exciting changes in our industry. Start by viewing the photofinishing world, your business and your customers from new angles.
Blockbuster vs. Long Tail Marketing
Chris Anderson gave one of the best Keynote speeches at PMA 2006. His theory of The Long Tail and its impact on our business was fascinating. In fact, it seemed to resonate so well that we all took it as truth. Since PMA 2006, Lucidiom has been both a pioneer and an evangelist for The Long Tail. However, there are some pretty big misconceptions about how to apply the Long Tail and where it is effective.
Anita Elberse is an associate professor at Harvard Business School; she did an excellent job in laying out the counterpoint to Long Tail. I will attempt to translate both of their theories to our market.
Prior to the Long Tail, we were all focused on what is called blockbuster marketing. With limited flexibility in our production process and in an attempt to maximize our returns, the photo industry put all its resources in a small number of likely best sellers…hello, 4×6 prints and double-prints.
Essentially, the retailer had complete power in the photo relationship. The customer demanded the commodity that we produced, but we produced it our way and the customer had no choice but to accept it. They never knew what they were purchasing.
Were the pictures good, did the baby smile, who was blinking? Even with those issues, they continued to come to us in droves, simply because they needed and demanded their memories.
When digital cameras first hit the scene, we (the industry) worried about the loss of the film business and really worried over whether consumers would ever print again.
Now, our industry is not the first to go through this. The television industry went through this in the late 80’s and 90’s. At that time there was a theory of the digital living room that would kill the TV. Who wants passive entertainment, when we can have interactive?
Our fears were just as unfounded as the television industry. The assumption that the two ideas were zero-sum was just wrong. The customer has an appetite for both.
These fears led the industry to misdiagnose the downturn in the 4×6 business. We asked questions like, “How do we get them to print all those images on their card? Why are they printing so few? My film business is down, how do get it back?”
The real shift was that customers finally had choice. The power was in their hands. They knew what photos they liked and what they wanted to do with them. Out of this shift, we started Lucidiom. Lucidiom’s focus since the beginning has been to empower the creativity of the consumer while at the same time maximizing the return for the retailer.
Our first campaign, “Beyond 4×6” was the embodiment of that vision and we believe the earliest example of the Long Tail theory in our industry. From the start, Lucidiom intended to promote everything, not just one thing.
Blockbuster marketing isn’t dead and it certainly shouldn’t be ignored. It should be applied in concert with the Long Tail theory for maximum impact. The Long Tail theory suggests that retailers can realize significant profit by selling small volumes of a
wide variety of items (like banners, mini books, notepads and the like) instead of only selling mainstay items like 4×6 prints.
When taken individually, Long Tail products aren’t necessarily your top sellers. But when you look at them collectively, they make up more of your profits than your current bestseller or killer product does.
Now, the average customer is not a Long Tail customer. But, the top 20 percent of your customer base are, so you have to offer Long Tail products in order to attract and retain these most loyal customers. Most important, you have to then promote your Long Tail products. For example, in a tough economy, a consumer may decide to spend $20 on grandpa’s Christmas gift rather than $40. Promote your Long Tail offerings and encourage that consumer to invest time in that $20 gift — a personalized calendar, notepads or photo book – to make it a priceless gift rather than simply throwing money away on something meaningless.
Create the EQ Environment
I mentioned earlier that the days of the 2-minute customer interaction are over. If they aren’t over in your store, you need that to change real fast. How can your customers purchase Long Tail products if they aren’t even in your store long enough to hear about them or see that they are offered?
Challenge the customer’s “emotional quotient” the moment she walks through the door or logs onto your website.
Your goal is to attract, engage and retain customers and you might have heard Lucidiom talk about the three ‘E’s to keep in mind – environment, education, entertainment.
I won’t go into too much detail, because we are after all at the PRO Show, but it’s always useful to review these key consumer selling points.
By environment, I mean of course your store. Clean it up and dress it up. If you’re looking for examples to get started, industry trade pubs have many good articles about stores that have revitalized their business by reorganizing and redressing their stores.
And be sure to include plenty of eye candy and speed bumps along the way. Put samples of photo books or some other featured product right where your customers are guaranteed to see it.
Next, educate. Yes, even though we’ve now entered the replacement stage of digital cameras, there are still a lot of consumers out there who don’t know what to do with their camera beyond point and click. And there are countless more who don’t know what to do with their photos other than print a 4×6. Show them.
Make it entertaining (aha!, our next ‘e’) by hosting special events for customer segments. The creative possibilities are endless here and there are many marketing experts at Lucidiom – and well, okay, elsewhere – who can guide you through this if you want specific ideas.
Gather the Right Tools
The three e’s are sure to boost business, but environment isn’t enough. You’re obviously going to need the right tools in order to take advantage of the Long Tail effect and social expression profit potential. Lucidiom has been working on a lot of new technology that centers on the Long Tail of photo imaging. Our EQ platform allows you to offer more products in more places and to produce them with high quality and fast turn-around times.
The Lucidiom EQ features the APM photo kiosk; scrapbooking content; Photo Folio products (including photo books, folded cards and bound calendars); the EQ 9850 printer; APM ProfitWatcher statistics tracker; Photo Finale online software; and Lab 50 management system – all connected by the APM
Network.
What makes the EQ line unique is Lucidiom’s emphasis on your customer connections in the store and on the web. EQ management software gives you control over business-building essentials in a social picturing world. Things like a strong customer database, membership plans, prepaid product plans, discounts, promotions, coupons, transaction activity and picture sharing power for your customers.
Future of Imaging
The future of imaging is bright. For Lucidiom, it clearly is based on the social picturing phenomenon. And no single facet of this concept is the key to success. That’s why the EQ platform is a complete imaging solution.
Customers will want to interact with their images and friends from the in-store kiosk, from home on the web and with desktop applications. The whole social picturing package is the industry trend and the key to the imaging consumer in 2010.
Notice I said 2010, not 2008. Today, consumers are still learning about the possibilities with social picturing. Lucidiom is looking ahead to 2010 when it is not only familiar, but expected. We’re busy building products today like Photo Finale 6.0 and the robust EQ product line that are rich in social expression features, so that when a customer walks into your store or visits your website in 2010 you’ll be ready for her.
But we have to work together. Embrace the changes sweeping across our industry and don’t be bashful about asking for help. You’ll undoubtedly need to acquire some new tools and know-how. Once you do, you’re guaranteed to increase customer loyalty, top line revenue and your margins.
I’ll close by asking the same question of myself that I posed to you earlier. So, what’s my EQ? You are.
Posted by Rachel 
