Customer First

Water packaged as perfume?

 
 

I came across this selection of bottled water in Paris. At five Euros a bottle this was packaging stretching value tooooo far . Just how good can water get?  Me thinks there is a point when a product just becomes over packaged. When presentation goes beyond the believable it becomes undesirable.

Identity is not a matter of fact – it is a fiction.

The way we appear says things and we make judgements on what we see all the time. In marketing it is our job to dance on reality and give the audience make believe. It is our profession to embrace the illusion and bend perception in the mirror of our targets’ eyes.

Recently I had an elevator conversation in a hotel in Houston ”Hi, where are you’ all from” said the guy in the base ball cap, polo shirt buttoned to the neck, short sleeves emblazoned with car dealership logos tucked into blue pleat fronted chinos, held aloft by a brown leather belt like a coopers hoop around the barrel of his belly. Reading the signs you would not hesitate to stake $100 on him being Texan through and through.

“You from the UK…?” he continued, reading my Brit ‘tells’ – the middle distance gaze, aloof (maybe pompous…) demeanour which hid the inner terror of being talked to by a complete stranger in a confined space – it’s just not the done thing where I come from. “Yes” I replied, “where from?” he continued “Bristol” As we plummeted passed the 8^th floor. “Hey, I am from Portsmouth … My mum moved to the states when I was four.” 30 years in the US had completely eroded any British reference points - his identity was completely assimilated and his genetic provenance superficially erased.

Ping. We reached the lobby -

“Have a nice day”

“You too,” I replied.

Who we are, business or individual is not a given. We have the power to choose. Our identity definitely does not have to be a factor of our origin. In identity terms we can be anything we choose. In the case of the man in the lift – his identity was far from his origin. The facts of his provenance where completely subsumed by a new fiction.

It maybe obvious but it is worth saying that what we are and what we appear to be are only loosely connected. We have choices – do we want to be the thing we are? Do we want to appear different; do we want to be the same?

It is not the facts that define us but it is the presentation – and truth is just a sideshow.

On many ideological, business and cultural fault lines nations and businesses compete whilst sharing the same origins – it is not the physical difference that fuels the competition it is the differences of presentation that define it. Something so intangible becomes so solid when projected into the desire to take market, territory and resources from neighbours who are in fact of the same family – we need to present the difference to win and justify our drive.

The US is the ultimate identity blender of our time but in the context of human history it is just another in a long line of successful nations who have projected their identity way beyond their borders and defined the identity of others – as the man in the lift unknowingly testified, it's what successful brands do.

Problem solving

 
  

Have you ever considered that the solution to a problem does not involve a study of the obvious?

I was at the Science Museum in London recently and they told me that solving the mystery of flight was delayed by five hundred years because engineers believed that flapping was the essential component of lift when it was infact the study of gliding that unlocked the secret.

When faced with an unsolvable problem - the answer is infront of you but go beyond the obvious to reveal it.

Directors should cure the headache and have sex

Whilst visiting the Institute of Directors for a meeting last week I was struck by the power of customer insight, product placement and the role of marketing to meet your customers’  needs. Visiting the gents the choice of products in the vending machine gave me cause for a smile. The usual assortment of condoms and prophylactics in various colours, flavours and textures are replaced by a selection of headache tablets from Ibuprofen to Paracetamol -- not a condom in sight. One can only assume from this that consumer research reveals that company directors have headaches and do not have sex? Surely the IOD are missing a trick. Wouldn’t it make sense to stock the machine with both headache tablets and condoms as a combo? Cure the headache and have sex! Mmmmm, maybe this is a dual marketing opportunity? Does anyone know a contact at Durex?

In defence of ‘Z’

Last week we received criticism from a 3^rd party who had been reading a ‘brand book’ for creating a brand beginning with Z – “obviously a branding consultant that knew anything about anything would not do this…” well! I was so incensed by the utter and complete b*****ks regarding this that I spent 2hrs on the plane returning from Kuwait meditating on them (brand’s beginning with Z I mean!)Here is a beautifully formed list of tiny brands who are REALLY NOT struggling with z as a beginning letter to their brand name.

1.    Ziess – the worlds leading manufacturer of optical instruments and binoculars  (like their Strapline by the way “we make it visible”)

2.    Zurich Insurance – shit z is a real problem here, and inhibiting their $70 billion revenues

3.    Zanussi – kitchen appliances from Italy

4.    Zinfandel – a premium Californian grape variety originally of Hungarian origin

5.    Zephyr and Zodiac were leading brands made by Ford from 1950 to 1971, “They were the first to use in mass production the MacPherson Strut independent front suspension which is still widely used today” so there!

6.    Zyxel – Taiwanese network products company T/O £280 million

7.    Zoopla – UK property benchmarking site launched in 2008 with T/O of £7million. From nothing to number 2 property website in the UK in 2 years. Phew z really held them back…

8.    Zara – Spanish clothing brand T/O E7 billion in 2008

9.    Zimmer – not the frames! Worldwide leaders in orthopaedics   T/O $ 4.8 billion

10.   Zeneca – demerged ICI pharmaceuticals business in 1994 (merged with Astra in 1999)

11.   Oh, and Xerox (sounds like a z anyway…)

 

Not sure what the ‘brand book’ is that they have been reading but it sounds a little bit ill informed… I can only think they were concerned about listings and directories… didn’t they go out with the ark? Since when do we ever search for anything by alphabetical order thee days! Der… Also of all the letters in the alphabet z is a cool brand in its own right – it worked for ZORO, Zapper, Ziggy Stardust, Zanzibar, Zero fighter, Zion,  et al

I can take the point that many of the Z brands have a German root – but the two leaders of the ‘z’ brand in question are of German descent.

One last point – a little knowledge is a dangerous thing and there is no substitute for experience. Beware of branding without positioning, brand experts really can leave a lot of value on the table if they just design a wizzy logo even if it begins with the letter ‘a’ - … wizzy? Now that’s when z’s could be really dangerous.

A revelation in Rome… and some cultural thoughts.

Visiting the St Peter’s church in Rome ten years ago it suddenly occurred to me how and why religious culture is so binding. The ultimate anxiety for human beings is our own mortality (a by product of consciousness and self awareness) and our desire to live forever. The Catholic Church gives us the opt out (or rather the opt in with conditions attached). The promise of an afterlife in heaven (consistent with many other religious cultures – beer and the Valkari in Valhalla for the Vikings, Paradise for Muslims, Nirvana for Buddhists, etc.) These promises are very persuasive especially when linked with a hint of sex for eternity – for the blokes anyway, sorry ladies... They are promoted by leaders the people believe in – Lama, Guru, Ayatollah, Pope etc. They are made binding through a contract that swaps eternal life for good behaviour and the whole construct is made memorable through the signs and symbols of the culture – most often guys wrapped in various colourful blankets wearing silly hats wielding unworldly amounts of power… It’s all wrapped up in this model of PROMISE / RULES OF BEHAVIOUR / AND SIGNS. The model is present in every group where people are required to behave in a particular way together in order to achieve a higher goal. From the local, kids play gym where the promise of fun is only achieved when the group behaves in a certain way as a collective group – no eating on the play equipment, no fighting, no wearing of shoes etc, to the highest religions via the Hell’s Angels – wherever there is a group, there is a culture and culture is glue. Strong culture = strong group, weak culture = weak group.

Moses and the Israelites – a master class in the creation of culture.
• They were in the crap and their anxieties were high…
• Moses, the identifiable leader gave them a vision – the Promised Land, the land of milk and honey – which the Israelites could desire and in the process God gave Moses and the team a vision to believe in to reduce their fears.
• Moses understood that the journey to reach their vision / goal would be a long one with many known and unknown obstacles… not least the small issue of the Red Sea.
• In order to keep the gang together Moses listened to a burning bush(…?) went up a mountain and came down with a bunch of rules for how they were to behave in order to achieve the vision… the ten commandments
• And off the all went … and founded the first religion to exploit the power of publicity when they realised that a temple was anywhere where their words were present (the Torah) – this saved on the architects, builders, bricks and expensive columns and stuff

Culture is linked to the environment we find ourselves in.
We find it difficult to change culture when the environment changes and this can then threaten our survival The US also has a good example of what I call cultural lag. Culture evolves as a response to the environment within which people find themselves and this culture gives them strength and aids their survival – this is fine so long as the environment remains the same. If the environment shifts, the culture that sustains them then starts to work against them and instead of aiding survival it begins to hinder it – there are many examples of nations, teams and companies that have failed to adjust their culture in time with changing environmental conditions. In the American case the right to carry arms would be a good idea in the context of the Wild West and the need to kill rattle snakes and baddies… in a modern, urban, 21st century society it is a cultural trait that is positively working against the common good… the recent headcount? 12 killed at Fort Hood and British back packer killed because he liked the song ‘Amarillo’… It is strange that in Canada where there is no gun culture there are no killings – same country/land mass different cultures. Strange that.

The product is often not what we sell

 

 

The National Trust gives us a great reminder that the products you sell are not necessarily what the customer is buying. Here the National Trust is not promoting the stately homes (the product) they promote a great family day out (the value). The product is the enabler that delivers the desirable customer experience. It is worth remembering that often customers do not value the product, they value what the product can do.

SO in communication we must make sure we work hard to promote the value before we promote the product. “It is not what we do; it is what we do for you”.

The National Trust reminds us that the customer creates the value and our products are only there to deliver it. The product is behind them. This is what we mean by ‘customer first’

Accenture gives us a communication master class

Whilst running for the plane to Houston 10 days ago – this ad stopped me in my tracks. It is a perfect piece of communication. In less than a few seconds it communicates to the target business audience on multiple levels, simultaneously. On digging a little deeper back at the office it is clear that accenture is disciplined about integrating and reinforcing the message. Every piece of communications reinforces the central idea of ‘High Performance’. They have taken a position and they are branding it religiously and relentlessly. They have not adopted multiple messages, a mistake made by many B2B companies, they focus on one message and make it relevant in many contexts reinforcing it in everything they do. The theme of ‘high performance’ is their brand DNA  and the message is a powerful business asset in its own right. By taking this position more powerfully than competitors they deny them and achieve greater ‘mindshare’ as a result.

 

Communication construction:

Customer context: Represented by the cloudy skies and emotive copy. This makes the advertisement immediately relevant and attractive.  

The promise: “High Performance. Delivered” This is what is desired emotionally by the client. It provides purpose. It is what the customer will measure

Endorsement: Tiger Woods. Provides credibility. If accenture is good enough for tiger it’s good enough for the customer. Endorsement reinforces belief

The brand: Accenture. Provides the reference point it is what is remembered

Products: Consulting, Technology, Outsourcing. Importantly this is what we can buy

Call to action: accenture.com. It’s where to go for more information

 

This ad is the tip of the iceberg and provides a perfect template for consistent, brand communication. The content of this advertisement connects and is reinforced by the total package of integrated marketing. My only criticism? Tiger really shouldn’t be teeing off in a thunder storm with a carbon fibre driver, it’s the perfect lightening conductor!

 

Recession proofing the marketing strategy

Fact: Customers are jumping ship!

Question: What do we do?

Answer: Make a new ship!

Top tips for surviving stormy business conditions

1. Identify, protect (and develop) products that have high value
2. Do not discount your high value products but expect and prepare for fewer sales with discerning customers. It may be counter intuitive but it is possible to encourage customers to trade up to a better product that lasts longer or delivers more.
3. Nurture and deliver great service quality and brand experience
4. Expect to negotiate and provide discounts on mainstream, products and services as a short term defence to protect market share
5. Fish where the fish are. Develop your longer term attack strategy. Create new  options within new business models that provide customers with the opportunity to trade down to a cost effective choice whilst at the same time give you the ability to protect margin.

From the bridge - look out and what do we see? Stormy weather. We see a period of uncertainty, radical change, and increased conflict. It is time for business creativity to express itself as markets retreat. For our nations, businesses and families it is a time of contraction as forces turn inward not outward, a period of negative yin rather than the positive yang energy we have experienced for over ten years. Globalisation and expansion replaced by protectionism and introspection.

But do not equate negative as always bad – it is just different - as corporal Jones would say “don’t panic Mr Mannering…” It’s a time of real opportunity too.

In a market like this there is something for everyone as long as we know where to look. The trick? Wherever you look for the answer make sure it is not in the same place as before. It is true that for all businesses there is less market to share and with the double wammy of fewer customers with smaller budgets we must navigate carefully through the turbulent water because when we get beyond the storm we need to be sure that our customers are still with us. We need to keep our customers close and value them the same even though they may be spending less money with us.

Keeping the customer rather than growing the customer becomes the focus of our efforts.

If customers are tempted away during this time, when things recover they may not come back – the ones that have traded down may be so happy with the value they receive from their new products and services that they never return. At times like these customers are more tempted than ever to jump ship and we need to have appropriate marketing strategies that prevent them rather than giving in to the short term emotional over reactions of discounting. In marketing we must work harder.

If customers are going to jump ship give them the option to jump into a ship that you built rather than a competitor’s.

During these times customer buying behaviours are more fickle, the sanctity of self image or the perception of potential risk is challenged as the fault line of purchase decisions is more scrutinised than ever. Do I stay with the brand I know or do I go? Is a question asked by customers both individual and corporate more often than before? In a time of plenty buying often becomes habitual or instinctual. Now buying decisions are more conscious and this ‘consciousness’ for the time being becomes the new habit.

In the good times habit masquerades as loyalty and we need to be careful not to confuse the two. When every penny counts it becomes not only essential but cool to be seen to economise – shock headlines like “Waitrose customer seen shopping in Lidl’s”. Or for myself yesterday normally a habitual (rather than loyal…?) Costa coffee fan (£8 per visit) visited a Subway for the first time ever and was pleasantly surprised by both the quality of service and the product (£3 for the visit). Will Subway hold my custom? Probably not. Does Subway fit with my identity? Mmmm. Did Costa lose my custom, even temporarily? Yes. Can Subway make a good margin on £3? Yes. Can Costa make anything on nothing? No

We are more willing to try new (and cheaper) things we do not only look for discounts from the brands we have adopted, which they undoubtedly do, we look for opportunities to trade down either in the sector or parallel sectors. We jump ship not to a direct competitor – in my personal example I didn’t find another coffee shop brand I took my cash to a fast food brand - but to a new competitor in a different sector with a completely different cost base and business model.

Discounting alone is not enough to retain customers with certainty in a recession. Coping with the potential for customer defection through down trading is the necessity. Combined with the current financial constraints these are the mother of your marketing invention. When the money that has kept a market fat drunk and happy for a considerable period has been withdrawn we need to get creative or succumb.

Recession is a time of die back which means a new entrepreneurial generation is born paradoxically without the constraints and burden of excessive overhead recessions give light to encourage the new growth on new business formats.

http://www.insidecrm.com/features/businesses-started-slump-111108/ Burger King, Apple, Hewlett Packard, CNN, Microsoft, GE and Fedex all started and benefitted from the space they were given in the favourable recessionary trading conditions. And its not only good for start ups its a great time to change the business direction. So a recession is the ideal time to start something new – in 1992 after suffering the largest loss in US corporate history IBM repositioned to services first, products second and began the process of moving out of computers and into consulting. The recession of the late ‘80’s also gave the newspaper barons the opportunity to break the power of the printer unions with the switch from hot metal to litho printing epitomised by Fortress Wapping in the London Docklands.

To build our attack and defence it is worth understanding customers buying behaviours in a recession. With a smaller market where every penny counts all of us need to secure a better share:

1. Not buying  In a recession customer behaviour is defined by the fact that customers either no longer exist – some business to business markets have contracted by more than 50% - or are no longer buying - period. This means that the remaining market is even more competitive. A case of more fish in a smaller pond, no matter how big it was before the pond is now more crowded for the time being. No amount of marketing will change the fact that in some cases markets have vaporised like the Vulcan planet in Star Trek. With less customers buying less we need to be clearer than ever with our marketing strategy, and importantly not over react, over sell and over discount
2. Buying Value If your product has significant perceived value the price will be stable, but the market and your sales volume by customer will shrink as customers buy less. I really believe that truly valuable things hold their price. Discounting value is defeatist – don’t do it. It is actually a time to take the value product to more customers and grow market share. When the perceived value is high, like for like choices not available and replacement with another category is not an option customers will stay with the valued supplier. In a recession customers will continue to buy on value but these purchases are likely to be fewer, customers are unlikely to move to direct competitors or down trade and discounting is unnecessary. In a recession we can expect fewer orders. In response do not be tempted to compromise your service or discount high value products it is not a solution to lower sales. Discount value sends the wrong message and can seriously devalue the product in the long term. Sectors where value is likely to be preserved within a reduced market size include health, defence, and premium lifestyle brands (perfume, haute couture, yachting, riding, motorsport etc).
3. Buying service Make customers look good; give them ideas that make them shine. They will be resource constrained and over worked you must pick up the slack for no extra money. It’s a time to go the extra mile and do the work of ten men; tell them jokes; be a shoulder to cry on; make yourself indispensible in the words of my mentor Adrian Rasdall ‘die for your customers’ Nurture and deliver great service quality and brand experience provides some small but essential defence against customer defection.

6. Buying Discounts As my colleague Zoe Morton said to me recently when budgets are tight expect customers to negotiate. When there are obvious alternatives to the product customers are more likely to demand/expect discounts and to negotiate harder. Today, supply outstrips demand and it is a buyers market. It is negotiation on demand! many of us have received polite and not so polite requests for immediate discounts of between 10 and 15%. If you don’t comply and switching between competitors within the category is easy then there is a significant risk that customers will churn. Discounting may temporarily protect the market share but it doesn’t answer the deeper questions being asked by the market. Discount squeezes your margins and has a limited ability to protect market share. Service quality combined with an openness to negotiate and provide discounts provides some defence against customer defection but can only ever be a short term solution.
7. Down trading Customers will be more open than ever to down trading. This is the nub of it. There is a choice either loose customers to the creative alternative or be the creative alternative. Down trading is different to discounting when down trading the customer must receive the same or better value to the existing product for a fraction of the cost. Whilst at the same time the company providing the new product receives a healthy margin based on a different business model. Down trading is not to be confused with buying discounted products. When we down trade we buy a replacement product often in a different segment of the market place. For example this year in the UK families are not going abroad for their summer holidays, they are down trading to holidays in the UK. The airlines and many holiday companies such as Mark Warner have all discounted their holidays and fares and yet our local campsite has benefitted and has not needed to discount at all as the customers down traded and jumped ship. Beer sales on draught in pubs collapse as canned beer sales in supermarkets dramatically rise. Traditional advertising spend slumps digital media continues to rise. As many companies suffer from discounting others are benefitting from the phenomenon of down trading. We all need to consider our response to down trading as customers search for what they need from different sources at much cheaper prices.

In conclusion recessions are not bad they are great! It’s a question of choice. In stormy weather we can either go faster… or sink. As captain of the ship we must make the right decisions and whatever our business looks like when we enter the recession, one thing is for sure, if we survive we will look very different when we come out.

 

Prophecy from the twighlight zone

 

 

This blog is written from the twilight zone – literally. We left Heathrow at 4pm and will arrive in Calgary at 6pm and the sun has been setting for 6 hours – tests the concept of a red sky at night…

Is there a time for all of us when the sci-fi projected future of our youth becomes a reality? The wheel goes round. We respect the creative vision of these cultural prophets. Orson Well’s tanks, George Orwell’s ‘big brother watching’ spookily manifest with a surveillance camera on every corner, all normalised years ago. An old future is again being made new reality and we are watching its manifestation.

Today’s auspicious reference points come straight from the 26 year old digital world of Ridley Scott’s Blade Runner - minus the replicants and flying cars (that bit seems more difficult to make  a reality…)  In our communal environments we are increasingly surrounded by the moving image – digital advertising on the underground, flat screen news at the airport, downloads to our hand-helds. My children no longer ‘watch the television’ they download content… or they make their own. They share their brand allegiances on msm, u-tube and Bebo and advertisers embrace the individual’s choice. The young folk actually choose the ads from the brands they wish to watch and download them onto pc’s and ipods. The ad was historically an annoying insert within the content or context – now it is the content or context itself…The brands we choose are integral to our identity and the ad is now an emblem or flag of allegiance. Brands and the identities they serve know no boundaries in a digital world and will erode and homogenise culture. The dark, digital genie predicted by the likes of Ridley Scott is out of the bottle and his prophesy is unraveling.

Where are today’s cultural prophets? Who are they and what are are their visions? Answers on Facebook please.