Posts Tagged ‘brand strategy’

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Customers Not Marketing Advisors

Monday, October 20th, 2014

There is a critically important and logical order implied when it comes to strategy development, a priority that is often ignored by marketers, strategy consultants and (especially) communication agencies. It is a simple syllogism that goes like this:

-Know where your differentiated advantages lie

-Know what you need to do to win the game

-Then go to your customer and find out how to win

Rely on business strategy, competitive advantage and marketplace dynamics to tell you what to do, not the customer. Instead, the customer should tell you how to do it.

To find your strategy, there a number of things you must do, and an order in which customer feedback comes into play:

1.) Look Inside. Based on the vision and core capabilities of your organization, your competitive advantage and what you see as prevailing marketplace trends, determine  the strategic alternative or alternatives that are best for you from a long-term, bottom-line perspective. I’m making this sound easy, but finding the strategy that brings all of this together in one idea is a real art.

2.) Determine which strategy is best. It’s OK to talk to your customer to determine how to refine that strategy. Will they give you permission? Where does that permission start and where does it end? What sort of stimulus do you need to get the response that they’ve indicated they’re capable of?

3.) Find the easiest path to implement your strategy. Customer research is all about finding the easiest path, in that it allows you to find natural marketplace momentum and use it to your advantage.

To put it simply, don’t ask the customer – “Do you like this ad?” Ask them “Does this motivate you to do/buy X?” Customers are not marketing advisors, but they will tell you what they will or wont do.

Norwegian Cruise Lines once embarked on a beautiful, award-winning advertising campaign designed to entice young people to take cruises. The company essentially ignored the competitive realities of its own business. Surveys found that young people loved the ads- and so the campaign went full steam ahead.

But “Do you like the ads?” was the wrong question. “Will you go on a cruise?” was the right question. An even more critical question should have been posed to the older people who really do go on cruises, and that was: “Will this ad campaign scare you away?” Unfortunately, the answer was: yes. Older folks stayed away from Norwegian in droves while only a trickle of young people took the plunge. Bad for Norwegian. Good for its competitors, who had stuck to marketing to those older cruise takers.

Remember to develop yours strategy first, then go to marketing. And, if you are going to talk to your customer, ask the right questions.

Austin McGhie is Sterling’s head of Strategy

Next week we take a deeper look at research and its rightful role in support of brand strategy.

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Build an Experience

Wednesday, September 24th, 2014

A brand is a promise of a customer experience.

This definition should be fairly obvious when you look at immersive or experiential brands such as retailers (and many services). But it is also at play in a more subtle way in even the simplest product categories.

In these more subtle cases, you may have to shift your mindset from that of a consumer buying your product to that of a consumer experiencing your brand. In order to do this, try walking through a real shopping experience, from start to finish, with an assortment of your customers. Map the ‘experience trail’ for each. Where are the highs? The magic moments? How can you take advantage of them? Showcase them? Where are the lows? The dissatisfiers? How can you fix them?

A great example is when I once walked through a bunch of department stores with a group of women shopping for apparel. Stores like these still separate their apparel into departments with anachronistic titles from the 1950s, such as ‘misses,’ ‘petites,’ ‘juniors,’ and ‘women’s.’ The conversations you hear in these walk throughs are a complete downer, as women describe one section as meant for ‘older, bigger women,’ and wistfully recall the days they fit into anything from the colorful, ‘junior’s’ department. The worst thing about this scenario is that just down the mall corridor are specialty stores such as the Gap, where all women are treated exactly the same, regardless of their size.

Walk throughs like these almost always yield surprises, and often, it’s not those seemingly more critical parts of the process that please or piss off your customer, but the trivial stuff that you might have over-looked— and you can fix.

Okay, so you’ve mapped out the shopping experience step by step and you know where the issues and opportunities lie. Some questions you should now ask yourself:

-How does each step in the experience hook into the next?

-How do you maximize the efficiency of the transition from one step to the next and thereby minimize the odds of competitive intervention?

-How can you deliver each step in a way that ensures that the trail consistently delivers the desired brand experience?

The next step is to map out your competitor’s brand experience. Where are their customers most vulnerable? What are their competitive strengths? What are the weaknesses you can exploit?

Look at your brand as an experience rather than a product or service. See it through the eyes of your customer. Pull that experience apart, get it right- both step by step and as a whole- and then put it back together again.

Austin McGhie is head of Sterling Brands’ Strategy team

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Change

Tuesday, September 2nd, 2014

Change is good. Change is essential.

The marketplace is a downward-moving escalator. If you stand still you go down. You only go up by running- hard.

Last year, on behalf of your brand, you executed a marketing plan. It worked well and the brand grew. But now that is old news. What will you do this year? Theoretically, if you do more of the same, you might hope at least to hold steady- but that hope assumes the marketplace itself hasn’t changed and begun to work against you. The escalator is moving down.

So what’s new in your plan?

If you’ve written a marketing plan, put it through the change filter. That is, ask yourself what is the one significant change you’ve created that will grab the attention of the target audience? That one difference that will cut through all the other ‘change clutter’ in the marketplace? Change can be good.

However, change has a dangerous flip side, particularly within organizations with short-tenured brand managers (such as packaged goods companies). There’s a need, sometimes perceived, sometimes very real, to do something different- anything different- rather than stick for one extra second with the status quo, even when it is successful.

To do change right, get to know your brand inside and out, and pick one thing to focus upon. Find the one thing that will really make a difference- the one thing that will make you and your brand famous. Build critical marketing mass behind it, execute it flawlessly and then move on to the Next Big Marketing Idea.

Beware the small changes to strategy. Before you know it, they can add up and throw the brand off track. Change with a specific purpose and a planned impact is the type of change you want.

Case in point:

A great example of change-gone-wrong can be drawn from my days as a very young brand assistant working on a ‘luxury’ cat food. We had just replaced one ingredient with another, cheaper ingredient. Like good little brand managers, we’d done due diligence and knew that the taste trade-off was minimal. Yet as soon as we made the switch, we started getting complaints from cat owners. As is always the case, it’s your most loyal customers who notice first, your best customers who write to you first. But how could they possibly have noticed something so small?

Checking back into the brand history files, we discovered our little change, wasn’t the first. In fact, we were just the latest in a long line of similar, ‘insignificant’ trade-offs. We just happened to be the ones who pushed the ‘tipping point’ and fell flat on our face.

As customers, we’ve all experienced this phenomenon. That is, we can’t quite put our finger on what’s happened, but somehow the product or service just isn’t what it used to be- an we quietly move on. No call. No letter. No purchase.

When all is said is done, change is just change. Good change builds. Bad change destroys. The trick is to recognize the difference before it’s too late.

Austin McGhie, Sterling Strategy


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Stop Thinking Outside the Box

Tuesday, August 26th, 2014

box

If niche marketing is the most misdirected object of contempt in my profession, then “thinking outside the box” is the most misdirected object of admiration.

In fact, the box is the strategy.

The truth is, any idiot can think outside the box. You can make noise there, but it’s’ irrelevant. To be fair, the most unimaginative manager can easily stay in the middle of the box. It may be relevant, but it’s awfully quiet in there. The real challenge is to punch the hell out of the edges of that box- from the inside, because that’s the only way to change the size or shape of that box.

You spent a lot of time building that box, so why abandon it now? Spend too much time outside the box and everyone gets confused. Moreover, the position gradually loses relevance as too many creatively driven tactics assault the customer. In the end, while going outside the box is almost always presented as brilliant rebellion, it is, in fact, the easier road to take and a recipe for failure.

Of course, staying dead center is obvious, predictable and boring.

Moving from strategy to execution, it’s always interesting to review work from inside an ad agency. Too often you see brilliant, creative ideas that are disconnected from the strategy- outside the box- and when these go to air, we are left scratching our heads. You also see ideas that are dead-on strategy- so much so you could have written them yourself. When these ideas air, no one notices.

Ideas that delivery the strategy in a highly creative, intriguing way are few and far between- and al the more valuable because of their rarity.

Again, your task is to create innovative and fresh ways to punch the edges of that box from the inside out. Hit those edges hard. This is the only way to make that box bigger and to change its shape. After all, who says the box needs to be a box in the first place?

Take Nike and ESPN, two powerful and highly differentiated brands in related markets. As defined by results, their architects were geniuses. Over time, they have moved from strength to strength, and many layers of business and meaning have been added to the original brand and business definitions. They never left their boxes, they have continued to push their own boundaries, dramatically changing the size and shape of those boxes.

In addition, these two are particularly well maintained and remain flexible. Both are also served by an agency that “gets them,” and it’s the same agency for both companies. Coincidence?

This leads me to another point: There are noisy boxes and quiet boxes. In other words, there are noisy strategies and quiet ones. Noisy strategies grow out of positioning that is inherently provocative. Positioning that contains a strong point of view, an attitude, and an edge. In contrast, quiet strategies don’t make you think. They don’t provoke. They don’t inspire.

You measure the effectiveness of your strategy by marketplace response. The noise isn’t in the stimulus, it’s in the audience recognition. When everyone is yelling, you measure your strategic volume by who’s listening.

So take a look at your strategy and ask yourself:

Is the basic idea around which the strategy is built compelling?

Does it have creative energy?

Does it lead to great tactics? If you test them was it easy and fun?

Were lots of options created by the team?

If you answered yes to all of the above, you’re ready to make some noise.

Austin McGhie, Sterling Strategy

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The Joys of Disruption

Monday, August 11th, 2014

Brands and brand strategies can be viewed as conceptual frameworks that demand consistency of execution. It follows then that brands promote continuity. Competition disrupts continuity. So if you are not acting disruptively, odds are that a disruption will be visited upon you by someone you might not have even realized was a competitor.

The point is that you must do everything possible to be disruptive. Strategically disruptive. Disruptive at the product or service level. Disruptive at the marketing communication level. If you want my attention, you need to disrupt whatever else is holding my attention. If you want my business, you need to disrupt whatever is causing me to do business with someone else.

Remember, attention has become the most precious commodity in the marketplace. Also recall how difficult it is to create real change.

There’s a problem with staying in the center of the strategic “box.” This kind of behavior gets an A+ for consistency but a D- for attention-getting. Tactically, your job as a marketer is to bang the hell out of the walls of that box, all while still staying inside. In other words, get creative. Make noise. Promote change. Always keep moving. Always keep building. Always stay “in-strategy.” But first and foremost, always make noise.

Generally, the only way to ensure a discontinuity is to create it yourself. Whatever that discontinuity is, it must work to your advantage, and therefore must play into your brand strategy.

Napster disrupted the music market, but in a way that could never make money. Apple disrupted the music market in a way that did make money- generally a better approach.

Yahoo! disrupted the way we find information, but then acted as if it had no idea what it had done. Google knew.

In fact, when you look at the big four- Apple, Amazon, Google and Facebook- they are in the process of disrupting about a hundred different markets. You may not think  you compete with these guys, but the odds are that sooner or later you will. Don’t wast energy figuring out if this is true or not, just figure out the how of the disruption- then beat them to it and make it work to your advantage.

Amazon sold books, but created a disruption through the Kindle. In some ways the company even attacked its own business in order to build that business. If Amazon hadn’t developed Kindle, the book business would’ve been disrupted by- you guessed it- Apple. This disruption would have been terrific- as long as you work in Cupertino and not Seattle.

Today, Google owns the idea of search. Now it’s up to some aggressive new player to create a new discontinuity, one that works to the advantage of its brand strategy. Search is now ubiquitous- it is indeed the Internet’s killer app- but therein lies both Google’s opportunity and its vulnerability. Search has begun to splinter into several specialized segments. Who will own music search? Who will own television search? Who will own local search?

If strong specialists don’t disrupt the flow, Google will own all of the segments because it now has continuity working for it. Bing proved to be insufficiently disruptive, attacking Google head-on instead of doing something different- something truly disruptive.

Unless someone creates a true disruption, Google will continue to control the agenda. But the reality is that the brand most likely to disrupt the search market in some way is Google itself. Why? Because Google is really good at it. Disruption is hardwired into its DNA.

Check back next week when Austin challenges tackles the ‘M’ word–Marketing,  and learn more now by reading Brand Is a Four Letter Word

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Niche is Not a Four-letter Word

Monday, August 4th, 2014

Whereas the word brand often seems like a spiritual invocation, in many marketing circles the word niche is often spoken with derision and used as a put down.

As far as niche goes, perhaps the most egregious errors of judgement were made in the technology marketplace of the late 90s, when niche became a curse you placed on any idea you wanted to kill or competitor you wanted to insult. Niche companies just weren’t going to make it. Niche start-ups just weren’t going to get the needed venture capital. Niches were for small-time players, the fearful, people with limited vision.

Well, I have always loved niche brands, never forgetting that bigger can indeed be better, particularly in the old economy. Needless to say, however, the Web has changed the way we think.

In 2006, Wired Editor Chris Anderson published The Long Tail, which highlighted how universal Web access meant that even the most thinly sliced niches could still add up to significant business when physical restrictions were taken out of the equation. For example, part of the dominance of big media content has always been physically derived: Limited space on a television channel or with a cable operator. Limited space on your local cinema screen, in a video rental store, in a music store or on a bookshelf. By comparison, digital distribution, universal access and search tools have created unlimited usable space, which has begun to make for an absolutely fascinating media marketplace that will become even more compelling in the years to come.

Niche brands understand the “position narrow, catch wide” axiom of brand strategy. They have built a limited, but fervent following first. They own their segment and enjoy the higher margins that general accrue to smart niche marketers. It’s not a bad place to stay.

Yes, it’s true, businesses are, as the cliche goes, like sharks: If they stop moving forward, they’ll die. But moving forward and getting big are two very different things. Who says you need to be big? A VC will if you’re a start-up, which is why many of those VCs are fully responsible for killing businesses that would have survived their first downturn if they had been rigged to run in niche-mode rather than artificially scaled to run big. Once you’re publicly traded, the street will demand top-line growth- until you teach your shareholders to invest in your consistent profitability rather than your explosive growth.

Owning a highly profitable niche is a thing to be celebrated. Don’t make the mistake of assuming that it is a natural and evolutionary step to move out of that niche and compete on a larger and more competitive stage. For now, at least, you may be much better off staying just where you are. Also, keep in mind that several focused and successful niche plays might well offer the better path to higher revenue, higher margins and less risk exposure than one big, broad play.

Large packaged goods companies offer wonderful lessons about niches. Each year entrepreneurial start-ups create niche products that, either slowly or very quickly, build a loyal and passionate following. Once they get “big enough,” they are acquired by a larger packaged goods company in that category. Interestingly, if that same very successful idea had originally been created within the larger, acquiring company, it would have been deemed too small (or niche) to warrant the investment necessary to take it to market. Often, there isn’t the passion and patience in larger companies to build a niche brand, but there does seem to be the money to pay for that brand once it’s an independent success.

Case in Point:

kelloggs

In my early days of marketing at Kellogg’s, I once sat in a meeting and watched chairman Bill LaMothe get a hard sell on the idea of getting Kellogg’s into the manufacturing of private-label cereal.

He replied, categorically, that they would never do that on his watch. He believed that companies and manufacturing facilities could only accommodate one level of quality. If Kellogg’s were to attempt to make both high and low-quality cereal within the same factory, ultimately both would work their way to the middle. What would Kellogg’s stand for then?

LaMothe was happy to pass up a short-term opportunity to preserve the long-term health of his company. He also passed up a number of opportunities to diversify Kellogg’s through acquisition, taking a lot of criticism from analysts until all those other CPG acquisitions flopped. Bill LaMothe was a visionary. He knew Kellogg’s and its niche better than anyone alive, and the company is so much better today because of the revenue-limiting decisions he made along the way.

Remember, there’s nothing wrong, and a lot of things right, with truly excelling at one thing. Thinking small can actually be the best path to a big result.

Stop back in, next week, as Austin delves into the Joys of Disruption

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Position Narrow, Catch Wide

Monday, July 21st, 2014

I think I first heard the above expression from Alpa Pandya, a colleague of mine at Sterling, and I’m happy to give her full credit for it.

Although obvious to the best marketers, “position narrow, catch wide” seems counterintuitive to nearly everyone else. I means that if you want to appeal to a wide audience you must position yourself in a narrow, specific way. Its corollary is that if you try to be a lot of things to a lot of people, you will be nothing to nobody. A friend read the phrase and told me about an old radio commercial that began: “Men! And that includes you girls.”

Another, similar saying: “Positioning is the art of sacrifice.” In other words, done right, great positioning is subtractive in nature, not additive. The road is filled with tough sacrifices you must make if you are to achieve a narrow focus.

Think of real life. The people we admire most are those who stand for something specific. They have a point of view and it’s simply not negotiable. The people who get the attention of the media (for better and sometimes for worse) are also those with a strong, specific and narrow point of view.

In marketing as well as life, it takes nerve to position narrow, which is perhaps why entrepreneurs are so much more successful at it than professional brand managers. Positioning narrow entails finding your core audience, understanding it and building a sustainable relationship. Once you’ve done that, you can enlist that core to help the rest of the world “discover” you.

nike

Ideally, then, you want a core audience that is inspirational to others. Nike is a great example of this. It’s clear to everyone on the Nike campus and across the marketplace that Nike is a brand for the high-performance, highly competitive athlete. That said, Nike also knows that about 80 percent of its shoes are worn by people like me, often simply to go grocery shopping. Why do we buy high performance shoes if we live low-performance lives? Because we all think we have a bit of that high-performance athlete in us. And because we all feel we need to be ready and equipped to perform, even if we never do.

Nike’s message? Don’t confuse your core customer with your target market.

That said, within the organization, we first want everyone to know we are building our brand for our core customer. This is important because we want every employee to know the people for whom they are designing products, experiences and marketing. Ideally, we want everyone to have a single customer in mind. Why? Because life is so much simpler when you are designing for a solitary person instead of a faceless demographic. Ideally, we want every single employee working on the same product experience to have that same individual in mind. The long term goal, of course, is to have everyone outside the organization also understand the individual we are building for- and we want them to aspire to be more like that person.

Once all of this is in place, we then want to reach out to those who can best help us achieve our objectives. This might be limited to our core audience (remember the need for critical mass), but it might just as easily be directed toward those legions of undecided buyers.

In practice, this means our core audience is unequalled in importance. They are the people we are working for, the people for whom our brand is built. With luck, others aspire to be more like them. But that is a completely separate issue from identifying our target market when it comes to communication. In other words, target narrow, reach wide.

Cadillac New Logo

When Cadillac moved to restage its brand, which was (accurately) stigmatized as being only for old folks, the first thing the company did was design a product that would appeal to younger drivers. Cadillac hit pay dirt when rap stars began snapping up the Escalade, and the marketing team quickly saw the opportunity to position the model as the prestige SUV of the hip-hop set. This opened the door to the brand embarking on a massive shift toward high-performance luxury cars that continues to this day.

googleIn what may be the whopper of all narrow product positions, Google has specialized in and come to own a simple idea: Search. In the early days of Google, lots of “expert” commentators criticized this model as limited and overly specialized. But we’ve all now come to see that Search, by sucking away advertising dollars from every industry (all while appearing completely benign) was the killer application to end all killer applications. as we continue to expand our use of the Internet, search will be the one unifying “tool” that almost all activities pass through.

If Google teaches us anything, it is to not confuse how narrowly you position your offering with the ultimate size of your business. Indeed, it’s often an inverse relationship: the narrower the position, the broader the ultimate audience. Just look to Google- the narrowest and simplest of positions, and the widest of all catches.

Position narrow/ catch wide also applies to corporate communications. Way too much PR, advertising and point-of-sale copy is written with the belief that it is possible to convey complex information to its target audience. It almost never works. Not because the audience isn’t smart enough, but because it isn’t interested enough. Instead, you have to focus the message, whatever that message might be. As I used to tell clients when I worked in advertising- you can say whatever you want, but it’s only what they hear that counts.

Strategy, positioning and communication: in their best forms they are all acts of sacrifice.

Stay tuned- next time Austin shares how to Own your new position

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Love Me or Hate Me- Just Don’t Like Me

Monday, July 14th, 2014

Positions polarize.

What you don’t do and what you’re willing to give up is often more important that what you do and keep. Don’t be afraid. The better you are at creating a strong, clear brand position, the more likely you are to find a group of people who really don’t like you. As Bill Cosby once said, “I don’t know the key to success, but the key to failure is trying to please everybody.”

and1

The And1 website used to feature an extreme example of this point. Addressing the meaning behind its name, the basketball apparel company announced: “If you don’t know what it means, we don’t want you wearing our shoes.”

It’s like life: the only way to have everyone like you is to avoid taking a controversial stance on anything. If you are willing to be anything to anybody- to surrender your identity and your individuality- no one will have strong feelings about you either way. You won’t stand out to anyone and you won’t offend anyone. You simply won’t matter. Is that the fate you want?

In business, a dull existence means a weak brand. If you want some people to love you, you’ve got to accept that others may hate you. With your company clamoring for new customers and more business, it takes a certain amount of nerve to deliberately ignore people that many within your organization might consider prospects.

After an American took second place in the Olympics, Nike CEO Phil Knight was quoted as saying,”He didn’t win the silver, he lost the gold.” Polarizing? You bet. Clear positioning? Hell yes! Nike is unabashedly a culture built around winning, and if you can’t take the heat you have no business in that kitchen. Maybe it wasn’t the most sensitive thing to say. Perhaps Mr. Knight would like a do-over on that quote. But more likely not.

Can you find fault with this kind of corporate culture? Definitely. Is this a culture for everyone? Definitely not. Do you know exactly where this company and brand stand? Most emphatically yes.

ems

Eastern Mountain Sports (EMS) is an example of a retailer that completely lost its way. EMS started out as a genuinely hardcore outdoor retailer for genuinely hardcore outdoor types. But in an attempt to drive revenue, the thirty-seven-year-old company repositioned itself as a mainstream outdoors retailer, stocking its shelves with lots of soft, fleecy and approachable stuff. Well, no surprise: the new me-too retailing didn’t drive revenue. Enter, in 2003, new CEO Jim Manzer, who described EMS at the time as a “Gap with climbing ropes.”

Manzer understood positioning and he definitely understood the need to be different. In the years since taking over, Manzer has taken the company back to its original position, beginning with restoring the hard-core outdoor culture within the company and creating a much more authentic retail experience. Polarizing? You’d better believe it.

EMS makes me think of a new business pitch we once made to Eddie Bauer when I ran Cole & Weber. The meeting spun out of control when I began arguing with the then-head of marketing. The rest of my pitch team was appalled. We had just made a very strong case for the unique and therefore truly differentiating characteristics of the Eddie Bauer brand. I was informed politely that I didn’t really get retail, and that success could only be found in becoming more like Gap (and other similar retailers). I responded that America already had a Gap and didn’t need another one. In my mind I definitely won the argument, but we most definitely lost the pitch. (Did you know arguing with a potential client is not an approved new-business approach?)

And though I lost the battle, Eddie Bauer ultimately lost the war. Arguing may not work in new-business pitches, but “me-too” doesn’t work in marketing.

Polarization is good. Traveling the middle road, tempting as it may be, is always and unequivocally bad. Like people, brands a defined by the company they keep. But they’re also defined by the company they don’t keep.

Stay tuned for more tips to help hold or pivot your position from Austin McGhie, Sterling Strategy

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Invent, Don’t Construct

Tuesday, July 8th, 2014

Analysis is great, but creating true differentiation is essentially a leap of faith.

Differentiation is seldom achieved purely through analytical rigor. Analysis and incrementalism still have their place in business, just not in the actual creation of differentiation.

The answer is to know everything. Strive to be more analytically rigorous than your competitors but also assume they’re looking at the same data and probably arriving at very similar conclusions. As heard in the movie The Incredibles: “When everyone is super, no one is.”

So go ahead and build that mountain of information. After that, climb to the summit and look around. Then leap off. Use science to get  you to the top, art to guide your leap.

That which is static and repetitive is boring. That which is dynamic and random is confusing. In between lies art.

John Locke

Two well-known books by Malcolm Gladwell (Blink) and Michael LeGault (Think! Why Crucial Decisions Can’t Be Made in the Blink of an Eye) illustrate this point: you need to think before you blink. You are suicidal if you don’t use every ounce of analytical rigor you have to solve your strategic problem, but you’re delusional if you think that analytical exploration is sufficient for business success. Conversely, anyone who tries to build a business on a “golden gut,” without taking the time to explore actual market data, is a fool.

Information is critical but it’s also ubiquitous. Analysis is a given. True brand differentiation and sustainable advantage can only be found and created in one place: your imagination.

Another weakness of using analysis alone is that it tends to lead you toward so-called red oceans (red because of all the competitive blood being spilled). In other words, when you are led by things you can measure, you tend toward spaces that can be measured- and those spaces are inevitably already overbuilt. Such spaces are almost always red oceans. Blue oceans, on the other hand, are not well measured, and no amount of pure analysis will lead you to them. (Read Blue Ocean Strategy by W.Chan Kim and Renee Mauborgne)

This all sounds good, maybe even a bit inspiring. But most marketers operate within large organizations and those organizations aren’t known for following the intuitive leaps of their marketers. Once you’ve made that leap you need to put your analytical hat back on and construct a bridge from the top of that information mountain to wherever you landed. Sorry, but that’s the way it works: to justify your recommended strategy, you will be asked to compare your intended path to paths taken by others- even though the only really successful path with be the one that takes a completely different route (and thus can’t be measured).

To reiterate: analyze the hell out of the situation, make your intuitive leap, and then find the analytical path that connects your landing spot back to wherever you jumped from.

Finally, if you can’t handle paradoxes you may want to stay out of marketing.

Check back in next week for more straight talk on positioning from Austin McGhie, Sterling Strategy

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Don’t Be a Prisoner

Tuesday, June 24th, 2014

prison

It’s easy to become a prisoner of your point of view.

Two very smart people from two very different worlds made this crucial point in different ways. Not surprisingly, one was Steve Jobs. In a 2005 interview with Fortune magazine about companies that were (or weren’t) on top of the move to digital music, he noted: “Some companies are prisoners of their point of view.” (Typically Jobs: small statement, big point of view. That’s just one reason he’s already missed so much.) Ted Levitt made more or less the same point in “Marketing Myopia” a renowned Harvard Business Review article published in 1960. In it, Levitt argued that corporations (and sometimes entire industries) are held prisoner by how they define their market.

Early train and bus companies, for example, defined their business in terms of trains and buses rather than transportation and thus missed out on flight. Similarly, old film studios defined their business as movies instead of entertainment and missed out on television. More recently, Barnes & Noble and Borders defined their business as mere bookstores for far too long and were “Amazoned.”

No doubt Jobs had an ulterior motive for his statement (didn’t he always?), in that he needed consumer electronics manufacturers and others to jump on the let’s-make-great-entertainment-products-that-run-off-the-iPod-brain bandwagon. But that doesn’t mean he wasn’t right.

Kids today find the idea of buying and carrying around plastic containers filled with CDs remarkably quaint. They also increasingly find the physically buying and renting of movies to be curious behavior. Music and movies will stay digital, and a very large industry is growing up around their storage, discovery, delivery and consumption. Companies that embrace this transformation will prosper, while those in denial will fail.

Blockbuster defined its business as “physically rented movies.” Despite the sheer size of the franchise at its peak, that definition still put Blockbuster on a very short runway to oblivion. On the flip side, if MGM (the casino and entertainment MGM, not the film studio) had limited itself to gambling instead of branching out into other areas of adult entertainment, it would be a much smaller and more vulnerable business than it currently is.

So be careful. The seemingly simple act of defining the business you’re in can have a profound impact on your strategy- from the business model all the way through to brand and marketing strategy. Defining your business serves to define your competitive set. Most people have a tendency to define their business, and therefore their competitive set, too tightly. They then pay the price when their business is “disrupted” by someone they didn’t even consider competition.

Spend time on this most basic question and spend that time early. Don’t wait for a crisis and never leave it to others to determine when you get around to addressing it. Bring in outsiders for the express purpose of torturing the logic of your market definition.

Finally, if you created an apparently successful strategy and you’re still around because it’s been working, task a couple of young Turks to show you why it’s all wrong. I speak from experience- it’s a case of losing objectivity through strategic ownership. Like it or not: if you’re the author of a strategy, you can also become a prisoner of it.

Define your business, and define it carefully. But consider that definition malleable and invite others to challenge it. Listen. Then create an organizational environment where people are rewarded for challenging the status quo. If someone successfully challenges your status quo before an unseen competitor does, he or she may well save the company.

Tune in for the next installment on shaping your brand strategy from Austin McGhie, head of Sterling Strategy