Has your brand insulted a potential customer today?

The other day June Whitfield dropped through my letterbox bearing glad tidings.
"Wouldn't you like to leave a guaranteed cash sum for your loved ones?" she asked me.
Well, not her really, AXASunlife in a piece of direct mail they'd sent out to thousands of homes.
And that's where the problem is — they'd had it delivered by The Post Office to homes, not people.
How do I know this? Because on the back of the envelope it had the immortal phrase: "Inside: (sic) An introduction to life cover for the over 50's (sic)". And it wasn't addressed to anyone on the front. Not even an address or "The Householder".
Two problems:
I'm not over 50. I'm 42. And this annoyed me that they couldn't be bothered buying enough data to target my elderly neighbours and exclude me. That's just bad database "blunderbuss marketing".
The first interaction their brand is having with me is one where they're mistaking me for someone much older than I am. To me, that's like asking a woman when her baby is due when, in fact, she simply needs to slim — it's a personal insult.
Some people won't forget that. Potential future business lost.
And VERY BAD marketing.

Are Web ads money better spent?

http://media.guardian.co.uk/advertising/story/0,,1933434,00.html
This article was interesting and unpredictable only in its revelation that the UK (and not the US, as I'd certainly expected) has a "significantly higher proportion of advertising online [14% this year ahead of radio, outdoor and national newspapers] than in many other countries" and, surprise surprise, it's cannibalising other media.
The sceptic in me wants to see the ROI data which have driven media planners and corporate marketers to rush towards the Web headlong in this way.
What exactly IS the ROI for Web ads, classified and display?
Is it truly better for response-per-pound than other media or is it just that it's so much more easily measurable than them?
And how much of this is just based on its perception as being better? Until I see direct comparison data, I remain to be convinced.
Which is maybe a good line for the Newspaper Marketing Agency to use. Maybe.

When will we get Advertising 2.0?

http://media.guardian.co.uk/mediaguardian/story/0,,1928964,00.html
Jeff Jarvis’s piece about the key point The Cluetrain Manifesto makes about conversations between humans being open, natural and uncontrived is, of course, one of the main pillars of what Web 2.0 should be.
But what about advertising? Why should it keep megaphoning messages to existing and potential customers in a one-way, top-down way rather than spending more time having a real conversation with them?
Yes, some campaigns have websites associated with them, but how much of that is interactive, providing human interaction between the brand and the customer?
Thankfully there are some brands already doing this, and well. Like (sorry, my favourite example for almost anything) Innocent Drinks, whose blog actively encourages it, as does their website.
While Ronseal isn’t, to my knowledge, interactive, the communication style is absolutely human natural and uncontrived, which is why it’s been so successful and copied by others. Ditto Tesco’s campaigns – simple message told simply, as a friend might.
So why don’t all brands talk to you like your friends? What’s wrong with Advertising 2.0? Nothing, as far as I can see.

Why Sony is repeating strategic mistakes with the PS3

http://www.wired.com/wired/archive/14.09/sony.html
This is a very interesting Wired article which raises real concerns that with the PS3 Sony is not only betting the whole company’s future on it, but also making the same strategic mistakes it made in the past.
The thing that triggered the notion of Sony repeating strategic mistakes in my mind was the section about the PS3’s revolutionary Core processor. Although its performance is a step change ahead of the one in Microsoft’s X-Box 360, until games developers can work out a way to make best use of it the PS3 gaming experience won’t be noticeably better than that of its rivals, despite the console being sold at a premium price. Which brings us back to the adage that pricing is transparent, but value is opaque.
Sony’s problem is they’ve been here before — with Betamax. It was sold at a premium price (compared to VHS machines) as it was technically better, but its value was opaque to domestic consumers (only professional users could perceive the higher quality and continued to use the format for broadcast-quality news cameras for many years).
Sony also failed to build the network effects the VHS alliance managed by ensuring there was content support for it through availability of Hollywood movies to rent in VHS. Sony later tried to make up for this by buying Columbia Studios (interestingly, recently criticised as a mistake by recently retired Sony boss Nobuyuki Idei).
Now with PS3 Sony’s trying not to make the same mistakes by ensuring content from Columbia and other studios for the Blu-ray high-definition discs the PS3 will launch, getting games made by major independent firms and building a wider network of firms supporting Blu-ray.
But the Wired article importantly points out that Sony is dangerously ignoring the “fun quotient” in the control mechanism, unlike Ninentdo’s Wii console — which uses a gyroscopic wand to let you control by waving your arms around.
So why is Sony making the same mistake again? The answer can easily be seen in its organisational culture, which is an engineer-ruled product-centred one because (as the article says) it was founded by engineers who wanted to make technically great things rather than marketing men who wanted to meet known human needs.
This culture (typically introvert and not very socially-oriented) has also, I believe, led to the tendency not to see networking for shared gaming over the Web as important (a senior figure admits they see it as an extra, rather than a core feature for the PS3 — unlike Microsoft with the X-Box).
Unless and until Sony can change its culture to get its engineers to ask people what they need and want before they go off to develop products, it will be condemned to make the same mistakes again and again.

Peter Day – more great work

Peter Day is one of the few journalists who, if I come across something by them by chance, I have to sit up and take notice (the others include the BBC’s John Simpson, Evan Davis, Mark Urban and Charles Wheeler).
Why? Because they are all experts in their fields and each can take a deep and insightful analysis of a subject and make it fascinating and entertaining or informative, or both.Aside from doing the excellent Radio 4 business programme In Business, Peter Day writes an occasional column on BBC News Online called Work In Progress about business issues. The following article is typical of his great work and a valuable lesson on the importance of managing consumers’ expectations.
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/4702995.stm

How good is your new e-pal's advice?

On the face of it Yahoo! Answers sounds like a great idea — use "the wisdom of crowds" (or rather the wisdom of knowledgeable individuals in the crowd) to give you advice.
It's being hailed as the latest example of "social search" — or "folksonomy" — which allows people to share information and collaborate through the Web. Which is great, especially as, famously, "information wants to be free".
But there's a hidden assumption in the good news view to this — that the info and advice given will be worth having, that it'll be correct and of equal value.
But how do you know whose advice is best? And what if the PC-buying advice someone on the other side of the world gave you is rubbish? Or the apple pie recipe is vile, or a bad taste prank? Look at Wikipedia’s experience with inaccurate entries.
That's why brands, and especially trusted media brands, still have a role to play as risk reducers — trusted sources of advice you have comeback with if they get it wrong.
Until the crowd is as smart as the expert, and you can tell which part of it is best informed, disintermediation by folksonomy will have to wait if you’re looking for good, reliable advice.

Why do we hate Wal-Mart and love Innocent?

It's a simple enough question - why do ethical-thinking folks (and that, IMHO, should be all of us) hate market-dominating firms like Wal-Mart and Tesco but love Innocent, even though its share of the UK smoothie market went from 37% to 61% between last year and this?
Well it clearly isn't about their "ownership" of their market spaces - Tesco and Wal-Mart are just as dominant and have just as much market power in their areas.
So why is Wal-Mart seen as "The Beast from Bentonville" and Tesco "The Creature from Cheshunt" (my own phrase!)?
The simple answer is their perceived behaviour — how they're seen to use the market power they've gained through success with customers.
Do any decent Internet news search and you'll find scores of stories coming up about how Wal-Mart and Tesco are said to be Janusian (two-faced) in being nice to customers and promoting themselves as helpful and friendly in their advertising to them (c.f. Tesco's long-standing "Every little helps" slogan and use of the voices of well-loved celebrities in their UK TV ads) while at the same time being horrid to their suppliers (see countless examples of Tesco being accused of forcing down prices paid to farmers and demanding payments from suppliers just to stock their products, supposedly to cover the costs of in-store promotions) and staff (see the long-standing stories surrounding Wal-Mart's use of low-paid, sometimes illegal, immigrant staff supplied by agencies).
So why are we bothered? My view is that, from our own personal experience, we hate bullies, particularly disingenuous ones who pretend to be nice while actually being nasty. Like the "Things It Took Me 50 Years To Learn" item - "If someone is nice to you and nasty to the waiter, they're not a nice person."
But, as I suggested, not everyone is bothered. Some folk don't care about how Tesco behaves to its suppliers - they just want it to give them the lowest prices and best service. Who cares how they come about?
But as the number of ethically-motivated consumers grow, perceived behaviour will become an increasingly important part of corporate strategy as a source of competitive advantage and differentiation for long-term market leaders.
P.S. Note from my little black Ideas notebook - "1/3/04 - Ethical is the new organic." I may not have published it then, but it's increasingly proving to be true.

Brand perception management - a key corporate competence

http://media.guardian.co.uk/marketingandpr/comment/0,,1545579,00.html
I read this article and immediately thought of companies like Innocent Drinks, Nokia and Starbucks — who are not only good at being good (ethical) but also good at managing the perception of their brand by customers and potential customers.
Innocent is very open about its ethically-driven mission statement and lives that through its donation of 10% of its profits to projects in the countries from which it sources its fruit and its annual free festival, Fruitstock. It's cheeky, fun, brand personality comes through in the silly jokes on its packaging, adverts, e-mail newsletter and website.
Nokia, being more corporate, manages things through its marketing and CSR (corporate social responsibility) activities, including its participation in a brilliantly honest and transparent (but also hilarious at points) BBC4 Storyville documentary about its CSR audit of the Chinese manufacturer of its phone chargers - http://www.bbc.co.uk/bbcfour/documentaries/storyville/made-in-china.shtml
Just by doing the film they showed how much they really mean all that stuff - it wasn't just tick-the-box for them.
Ditto Starbucks, whose approach to CSR has been deliberately low-key. While they do Fairtrade-like programmes to ethically source all their coffee and a lot more besides (http://www.starbucks.com/aboutus/csr.asp ), they don't make a big thing about it in their marketing activities, perhaps for fear of being accused of being a big Janusian American corporation by the anti-globalisation folks, even though Starbucks can prove everything they claim.
So much of their perception comes down to the other stuff they do in their marketing and the actual experience itself, which includes the whole thing about making it "The Third Place" in your life (with everything instore, including the muzac, carefully planned to match the brand - don't forget Mr Starbucks, Howard Schultz, is a marketing man!) and by selling cool music through its Hear Music label.
So where is this going to?
I believe some customers and potential customers assess their potential for a relationship with a brand based on their existing perception of it - functionally and ethically. How much price plays a part depends on how ethically-motivated they are.
But the more transparent they're seen to be, the more trustworthy they're perceived to be and the greater is their opportunity to start a new brand relationship with that ethical consumer.
And that's why managing the perception of your brand is a key corporate competence in the 21st Century.

Ambient = opportunity

Fragmenting audiences are a major strategic threat to the current broadcast TV advertising model — as audiences split between ever-increasing channels and other places and activities, like the Web and both online and offline games.
But the other side of the SWOT analysis here suggests a massive opportunity exists for outdoor and indoor ambient advertising channels which exploit the patterns in our lives which have remained broadly the same.
Like how we travel to work by car or bus or train or underground in our millions by, usually, the same routes past the same advertising billboards. Or how we still shop in the same aisles of the same supermarkets week after week.
These lifestyle patterns are changing far more slowly and so can be capitalised on for much longer.
So if you're looking to promote brand awareness amongst a broad audience, ambient advertising on billboards, in train stations, bus sides in on trains and buses is surely the place to be.
And why not look at the following other options:
* The walls of clubs — posters and/or wall screens (a bit like the Post Office ones) They can deliver younger audiences who, by their presence, show they have available cash to spend.
* Bus/Tube/train TV — LCD screens showing ads to commuters, just like "queue TV" at The Post Office. But the ads would have to be good, easily repeat-seen without irritation, or they'd backfire on the brand — seen as a pest.
* The intros of rental DVDs — just the same as the trailers for other movies and equally targetable for the demographic groups targeted by that film/show.
* "Workplace TV" — ads could be shown by screensavers on workplace PC screens in an agreement with employers', who could share the revenue and supply stats on the hours they'd been screened when someone was logged on.
* Works canteen TV — LCDs in works canteens.
* Hospital canteen TV
* Bus/train waiting room TV
* Mall TV — the same as Tesco's experiment in "aisle TV" for shoppers.
Audiences may be fragmenting in their leisure time, but everywhere they still regularly flock together and that’s when there’s an opportunity to get marketing messages to them.

Customers’ needs are core to long-term growth

http://www.economist.com/surveys/displaystory.cfm?story_id=E1_VPRDQSN
After reading this interesting survey, it came to me that a constant drive to meet customers’ needs is core to sustainable long-term organic, not R&D spend or innovation or “marketing” (for which they mean promotion).
Unless any or all of these are focussed on what customers want, they’re a waste of time and won’t deliver any growth, never mind the long-term sustainable kind!

Why self-confident brands earn respect

I’ve just finished reading Elen Lewis’s excellent brand biography Great IKEA! – A Brand For All The People and it’s made me think about the fact that there are successful exceptions to the “you-must-be-customer-centred” rule of marketing.
Look at IKEA and the way it has relentlessly tried to convert the world to its taste in furniture.
That was reflected in the UK by its infamous “Chuck out the chintz” advertising campaign — which told people they must abandon their traditional taste and go instead for the Scandinavian style they sell.
Similarly Sony has throughout its history been pretty relentlessly product-centred, arguing that consumers can’t tell it what to make as they don’t know what they’re capable of making. Instead they create products and try to education customers about why they need them.
So why have these product-centred bastions succeeded?
I’d argue it’s because brand buyers respect the principled stand these firms take — staying true to their belief that they have great products we’ll want in our lives rather than pandering to our ever-changing whims.
Similar-but-differently, Innocent Drinks sticks to its guns over its core principles like quality and healthiness of ingredients, ethical sourcing, recycled packaging etc while also being a prime example of a customer-led organisation – asking customers which of many possible recipes they should introduce next.
Ditto Starbucks and McDonalds — although they’re good examples of “glocal” brands, which modify their product range for local tastes, they both stay true to their core principles for their core products.
All of the above are strong, self-confident, “authentic” brands. And that’s something brand buyers respect, partly because it strongly differentiates them from the many brands which will run after the latest craze just to get extra sales. What do they stand for? Who knows?
Unlike them, these brands are leaders, not followers and that gives them sustainable competitive advantage while they keep staying true to their brand values.

Ethical is the new organic.

Almost exactly two years ago, sitting on the bus to work, I wrote the phrase “Ethical is the new organic” in my little black “ideas” notebook (everyone should have one – think how many great ideas you’ve forgotten because you didn’t write them down at the time!).
I was reminded of that semi-prophetic phrase when I read a Guardian article today about Marks & Spencer announcing that in future it would source all its own-brand tea and coffee from Fairtrade sources.
Similarly, Top Shop are sourcing clothes on a Fairtrade basis, Sainsbury’s T-shirts and Asda baby clothes.
Why are they suddenly doing this? To try and cash in on the “ethical premium”, gain some competitive advantage over their competitors and get some ethical “halo effect” on their brand.
For each of these converts to the cause of ethical consumerism the advantage is only going to be temporary and partial the for the following reasons:

• Exactly as with the introduction of organic fruit and vegetables and free-range eggs in British supermarkets, the early adopters will only harvest competitive advantage with ethical consumers until their rivals catch up by doing the same, if only so they’re not left behind – as with the introduction of engine-cleaning additives in petrol by Esso. Once they’ve all caught up, it’ll be the norm and new sources of competitive advantage will have to be sought to stay ahead.
• Many ethical consumers, while applauding the fact that these firms have acted well, won’t buy from them just because of these actions. They will recognise that these firms are just indulging in “bolt-on” ethical sourcing purely for reasons of commercial gain. If they’d been genuine believers in Fairtrade, like the Co-op, Innocent Drinks and Starbucks, they’d have made the switch years ago. But they didn’t. Not until it gave them something back which they needed.

So, while many customers will be convinced to buy these products as a result of this move, the hardcore ethical consumers will stick with the brands which are, and always have been, true believers in the ethical consumer cause. And which continue to lead the way.

That’s sustainable competitive advantage and it can’t be faked with a Damascene conversion.

Let customers lead your organisation to success

http://www.economist.com/surveys/displaystory.cfm?story_id=E1_PSRVTGG
The rise of customer power means that to be successful in an increasingly competitive globalised world you have to listen to what customers want.
Look at the Innocent Drinks newsletter ( http://www.innocentdrinks.typepad.com/ ) in which they regularly ask those customers who've liked their product enough to join the mailing list to vote (in their thousands) for what they want next!
A link takes you to a voting site, where you answer questions on your preferences and which of several possible new products you'd like most. And then they do what the customers want. Simple, but brilliant, as they're guaranteed to be doing what customers want most — because that's what they asked for! That's as close to a guarantee of success for a new product launch as you're going to get.
They are, in my view, the leading runner in a new type of organisation - the "customer-led organisation", or CLO.
Tesco, arguably, could be part of this group too, as they're the biggest database marketer in the world and use their Clubcard loyalty card data to find out what we're wanting and offering us discount vouchers for items we actually buy.
The antithesis of the CLO are firms like the mobile phone makers who are relentlessly product-centred — adding new features customers haven't asked for.
Why? Partly because they believe new technology and features will give them competitive advantage (maybe to early adopters, but not to most of the rest of us) but also because network operators want to recoup their licence fees by charging us for using whizzy new features like videocalling on 3G or mobile TV.
The problem is, most of us didn't ask for it, so we won't use it! A survey showed most people don't use extra features for their own sake — only things which fit in with their existing lives.
But why would you ignore/fail to consult customers?
I reckon it can often be linked to the kind of “father knows best” paternalistic culture seen in top management of organisations, as those at the top feel their years of experience getting there best qualify them to judge what’s wanted. The trouble is their mindsets are all too often worlds apart from those of customers who are not like them – perhaps young and/or female. How can they really know what they want or need?
It would be interesting to see if there’s a correlation between the age of top managers and their organisation’s user/customer centricity.
But this kind of product-centredness can also be an industry paradigm into which they become engendered – look at how product-centred most newspapers are, especially compared to magazines – which have been created and altered based on market research findings for many years.
A curiously long-term successful company which has been famously largely product-centred is Sony.
The philosophy of product development created by its founders was that customers can’t tell you what to make because they don’t know what you’re capable of making. The result was decades of being product-centred with the belief that if only the customer could be educated, he or she would be what the engineers had created.
Despite this Sony has thrived, but had to offset the cost of the expensive innovations (like MiniDisc and DAT) which failed to big mass market hits from the ones which have met genuine existing mass needs (CD, Walkman, Trinitron colour tubes).
In more recent years, though, I suspect Sony has shifted more towards listening to what customers want rather than trying to educate them to want what they’ve made.
The former is the way of the CLO — and the only way to do efficient, and ultimately successful, product development. It’s the definition of marketing — ask people what they want and give it to them! Simple, but all too often ignored.

Stick out or stick on the shelf

The Economist has a piece about Kraft Foods in its new issue (sorry, the online version is subscribers-only) in which the immortal phrase “Pricing is transparent, value is opaque” came up.
Very true and never truer than today, when prices are usually easily compared by the Web.
Which is why all people selling goods and services need to make sure their marketing emphasises how their offering is differentiated from the rest.It’s one of Porter’s three basic strategies – niche, cost-focus and differentiation – but it’s still valid today, however much we seek to make marketing more complex and multimedia.
Stand out and you have a better chance of being selected.

We have FIVE senses, why not use them all?

http://media.guardian.co.uk/marketingandpr/story/0,,1698317,00.html
As a basic proposition, this seems to be absolutely make sense, although Mr Phillips does overdo the criticism of the dominance of visual media - it is most of our sensory input, so it seems to make sense to use that.
And Starbucks, and many stores before them, have been using control of muzak to influence or moods in-store for a long time.
But there's a hidden bear trap for anyone seeking to use smells and sounds to tap into our emotions — customers may perceive these media as a covert means of manipulation analogous to the (banned in the UK) use of subliminal images (one frame out of 24 per second with a call to action) in films and adverts.And that would have the opposite effect to that intended — making you mistrust the brand!

New year, new blog!

Well it's a new year and by the end of it I hope to have successfully “transitioned” into the wonderful world of marketing.
And this blog is part of my campaign to make that change.
How? Well, by letting any and all marketing folk who read it see what I know and what I can do — as far as you can within the confines of a blog in a little corner of cyberspace.
Will I succeed? Who knows. But watch this space to find out.
And PLEASE, if you fancy debating anything I say here, make a comment and we can talk about it.
Alan : )