Posts Tagged ‘marketing’

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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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Your Customer is a Cynic

Thursday, October 16th, 2014

As a marketer, you are positioning something to someone. As we speak, that someone is changing his attitude. Changing her outlook. Some of that change is just a result of his or her last conversation with a friend and some is more deeply felt and therefore permanent. One permanent change is that consumers have increasingly adopted the attitude and behavior of professional cynics.

Blame it on the Internet. Blame it on the press or the school system. Blame it on Wall Street. Blame it on marketers who chronically over-promise and under-deliver. You can blame it on the government, too. The undeniable fact is that the modern consumer is a cynic. And this is definitely not a temporary state of affairs, a fleeting reaction to our times. Access to information and a broad range of perspectives is the real breeding ground for this cynicism- as it damn well should be.

People ‘Occupy Wall Street’ because they are losing faith in our institutions. The more they know about big business, the less they seem to like. In the words of GE CEO Jeff Immelt: “Businesses today aren’t admired. Size is not respected. There’s a bigger gulf today between haves and have-nots than ever before. It’s up to us to use our platform to be a good citizen. Because not only is it a nice thing to do, it’s a business imperative.”

Two points:

-The first is that in today’s market, product quality is less in doubt. The range of available quality is tighter. Big is no longer better. Meanwhile, small can mean handcrafted and suggest pride.

-Second, social consciousness is becoming a growing element of any purchase decision. With information availability comes transparency- the ability to see beyond the product and customer service walls of an organization to the values behind them. Share a company’s values and you are more likely to buy its products. Don’t share them and you are less likely to buy. Really dislike those values and you may actively work to convince others not to buy the product.

These days you have to respect and work with the cynicism of the marketplace. Respect the knowledge of your audience, and respect the healthy skepticism with which it views marketing.

To corrupt a much-used quote from David Ogilvy: “The customer is not a moron. The customer is you.”

Austin McGhie is head of Sterling Strategy

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The Consumer is Dead

Monday, October 6th, 2014

For what it’s worth, the term ‘consumer’ really irritates me. I still use it to make myself understood, but it bugs me. With time, I’ve concluded that the word bugs me for strategic reasons- not just because I don’t like the word itself.

‘Consumer’ conjures up a mass of people ready to blindly ‘consume’ my product. By comparison, the word ‘customer’ seems more singular and implies a relationship of some kind. Consumers consume. Customers purchase- if they are treated right. Consumers are the way of the past. Customers are the wave of the future.

This makes a difference on a couple of fronts. Right now, retailers have customers and most of their suppliers have consumers. For structural reasons, but also because of this schizoid mindset, the retailer often has a much stronger relationship with that person than does the manufacturer. Over time, this almost always leads the retailer to become a more trusted ‘guarantor’ of product quality than the manufacturer. Ultimately, this means that the retailer can source products and build brands that the customer trusts more than those from the manufacturer- and they’ll be cheaper for many of the same structural reasons.

I believe everyone needs to build a real, working customer relationship management (CRM) strategy. Forget the software for now; just embrace the theory. In the old world, terms like 1:1 marketing, segmentation and mass marketing were too often viewed as distinct alternatives. The fact is, for many marketers, inside their customer database reside customers who deserve to be handled 1:1 and can be profitably marketed to this way, customers who can be approached on a segment basis, and customers who can only be profitable if they’re treated en masse.

Depending on your business, you may even be able to determine the unprofitable customer- and although all consumers may seem like they are worth having, some are definitely best sent over to your competition.

So, let’s stop thinking about the people buying our products and services as consumers and promote them to the exalted status of customer… and then we can all go back to fighting over them.

If you’re a manufacturer and this creates confusion with intermediates such as retailers, who you currently call customers, I have another suggestion. Call them partners and treat them accordingly.

Austin McGhie is head of Sterling Strategy. Stay tuned for a continued, in-depth take on the customer all month long.

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Make Yourself Famous

Wednesday, October 1st, 2014

“I’m gonna live forever. Baby, remember my name.” - Irene Cara, Fame

It’s okay; admit it. You’d like to be famous. You want to succeed. You want to make a difference. You want to win.

Well, act like it! I think that anyone with ambition wants to make a difference. That said, for some reason, most of us simply don’t act that way. We’re just not ruthless enough. We let politics, niceties, organizational structure and time itself get in the way of doing what it takes to win. We’ve all seen managers make the easier choice, one that leads to losing, instead of the tough decision that might lead to winning.

Over the course of a year, a senior marketer will face a host of little decisions and only a couple of make-or-break decisions. The trick is to make the small ones quickly and intuitively to only get the majority right- and then fix the minority that prove to be wrong. Bat above .500 on the small stuff and you’ll be just fine.

By comparison, you simply cannot get the big stuff wrong. Here, you have to be completely ruthless. Think about these decisions, but then make them boldly. Make them count for something. Make the big decisions in the right ways, and you could become famous. Always adopt that attitude, even if it’s unlikely that you’ll really become famous.

One illustration close to my heart is found in advertising.

I’m all for ongoing agency of record relationships – but it needs to be based on performance. Once every few years a business needs a brand new campaign, a campaign that could possibly transform the business. You’ve seen it happen in the past:

-McDonald’s turns a few syllables into a more contemporary position

-A real live Jack helps save Jack in the Box

-A gecko transforms the culture of an insurance company

-An introduction to The Most Interesting Man in the World pushes Dos Equis into the spotlight

-A new Old Spice Guy ressurrects a brand on life support

These campaigns can transform a business, but we also know that they are a distinct minority.

So when you arrive at an inflection point and need the campaign to make you famous, you need to be ruthless. For example, offer a couple million dollars to the top three creative agencies in the country. Better still, locate the top three creative teams in the country and make the offer to them directly. Winner take all. Once it successfully runs, thank the creators for their work, pay the winner, and tell your agency of record to get back to work.

On the other hand, if the winning campaign idea is merely good, and not the earthshaking concept you need, do not say yes. Start over, and over- until you are truly ready to make history.

Keep in mind this is an inflection point for the entire business. A chance to elevate. How can you not do everything possible to create this kind of marketplace leverage- including putting your maintenance agency on hold and rewarding one of its competitors for a great idea? Your job is to succeed, not to protect the feelings of your partners. Your partners are smart. They’ll get it, even if they don’t like it.

Austin McGhie is head of Sterling Strategy

Stay tuned as we turn to thoughts on the customer in the coming weeks…

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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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Building Critical Marketing Mass

Wednesday, August 20th, 2014

building

“If it’s worth doing, it’s worth doing well. If it can’t be done well, it’s not worth doing at all.” -Proverb

Imagine placing fifty cents into millions of vending machines, all of which require a dollar before you can get anything out of them. In the end, you’ve spent a fortune and absolutely nothing to show for it. You wouldn’t do anything this foolish with your money- right?

But in business, we’re all guilty of doing just that. We spend countless hours writing marketing plans and brainstorming tactics, sometimes even coming up with something both original and brilliant. That original and brilliant idea then goes into the plan with all of the other brilliant initiatives the budget is spread out across all of these smart things we think we need to do.

The problem is that none of these initiatives has any chance of reaching critical mass.

Why? Imagine a line that moves through time. Above this imaginary line you capture your audience’s attention, below this line you don’t. It really can be this absolute, since there is no such thing as almost getting noticed. I always preferred to run well below the line for most of the year, which allowed me to focus my resources and take at least one really strong leap above the line annually.

Limited opportunity for attention means that you need to take each of your tactics or marketing initiatives and prioritize them based on such criteria as strategic importance, marketplace impact and expected cost efficiency. Next, calculate the ‘cost of success’  for each of these initiatives. The ‘cost of success’ should be a real, honest assessment of what it will take for this initiative to work in the marketplace. It’s easy to underestimate how much it takes to get attention from real people out in the real world.

Now, determine how many of your priorities you can afford before you budget runs out. These should be the only projects that get the green light. Do it to effect or don’t do it at all needs to be your guiding philosophy. Once again, be absolutely ruthless with your priority setting. You’ll end up doing less, but you’ll do better.

All of this is just common sense. So why is it so hard to do?

Answer: politics and organizational structure. Different groups want their slice of the budget and it’s hard to say no. A leading retailer with whom I worked with many years ago had a marketing budget in excess of $500 million. Lots of potential for critical mass there. But by the time it was divided amongst every department, critical mass was nowhere to be found.

This is exactly the wrong approach, because for all that money spent, no single initiative ever rose above that invisible attention-getting line. Had the company focused the budget on a smaller number of high priority marketing programs, it could have had a huge marketplace impact throughout the year.

The task, then, is to create critical mass, somehow, somewhere, sometime. This may seem like a dream to some marketers, but that’s an error of perspective. It’s far better to get noticed by one person than to get almost noticed by thousands. Should we be content to forever fall short? It’s the CFO’s fault- right?

So how do you actively create critical mass?

-Believe in what you’ve just read here and apply it ruthlessly

-Limit your core audience

-Limit your geography

-Limit the time frame

-Limit the media mix

-Limit the vehicles used within the selected medium, even if it means advertising in a single television program. (But own that show!)

In other words, always own a slice of a communications channel- and therefore of your prospect’s attention- no matter how thin that slice might be. Then use success on that narrow front to gain a bigger budget and thicker slice.

Meanwhile, it’s good practice to test a few of the proposed initiatives that didn’t make the cut. Test them in a limited geography, time frame or against a limited audience. Once you have a sense of their positive potential, flag those initiatives for next year’s critical mass priority.

Tune in next week when Austin lures us back into the proverbial ‘box’ and gets your brand back on strategy.

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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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Sterling Buzz…

Thursday, July 24th, 2014

americancraftWe’re excited to share the recent success of the Hillshire Farm’s American Craft brand!

Smart marketing tech coupled with smart packaging is a great recipe for success.

Click here to read the full story on Hillshire’s foray into Beacons mobile technology, and to check out our design work.

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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