Posted: March 31, 2015
I’ve said innumerable times that the relationships we have with brands are in many ways like those we have with each other. I call them brandships rather than friendships. However, despite the similarities in the emotions involved in these connections I see brands not as individual people, but as communities.
You choose your brands using the same criteria that you use to select your friends, but you occupy them as you do the district where you live. Some of us are city livers, others urbanites and village people. Some folks like to see trees outside their windows, others skyscrapers some places are just right for families, but there are places where only a singleton would feel at home. The other people inhabiting the place (your neighbours) are part of the story of course. The places we choose to live are defined by and also define them and it’s the whole package that represent your values and beliefs.
I know that a there are still business people out there who think this is all a bit to touchy-feely and feminine, but there is no denying that brands are very emotional. It’s not news. Kevin Roberts already told us about “Lovemarks”, Seth Godin introduced us to the concept of “tribes” and no end of people, including myself have presented brand theories based on all manner of emotional stuff. Brands aren’t about rational thought, but primal instincts, our inherited need to belong, to live in groups and there’s no way we are going to change or deny it. Nevertheless, if you are still not convinced, science has now pledged its support to those of us who are in touch with the feminine side of brands.
This week B&T published an article by Jennifer Faull about a piece of research by the London creative agency Hey Human that looked into the relationships we have with some of the world’s best known brands. The results aren’t surprising and, though I’m sure there are aspects of it that need to be taken with a pinch of salt, but the interesting thing for me (and the thing that underlines emotional nature of these relationships) is the language people use to describe their brandships. Terms like “a friend with benefits” which was used to describe Stelios Haji-Ioannou’s airline EasyJet or “enemies”, the term used to describe O2 HSBC, British Gas, Visa and Barclays (unsurprisingly the demon telco and a load of financial businesses dominate here) underline the way we relate to the brands we use and endorse the concept of “brandships” and the personal connection integral to my Brand Discovery philosophy. This not rational, it’s all emotional talk.
The agency employed neuroscience to understand the behaviour of customers at the point of sale. One point that I certainly agree with and which was highlighted by Hey Human’s Neil Davidson was that brandships are complex and brand managers need to get wise to this. They need to stop treating the subject as a simple, rational, process-driven affair and delve into a few subtleties if they want to achieve brandships with the strength to enable them to stick around in the future.
Posted: March 17, 2015
If you are unfamiliar with the data management company DunnHumby try reading the book Scoring Points by Clive Humby and Terry Hunt. For anyone in data management, retailing, loyalty or any other form, of marketing for that matter, this is a must read.
In essence this is the case study of how Clive and his wife transformed the fortunes of one of the world’s biggest and most successful retailers and in the process, built for themselves a unique consultancy that turned data management on its head.
To those in the know, the Tesco Clubcard programme is an icon of modern marketing and, in my opinion despite having already been the key to the Tesco turn-around, still has plenty of room to develop.
The DunnHumby approach to data and loyalty continues to set the bar for every practitioner. I’ve developed a number of loyalty programmes and talked to more data management companies and loyalty consultancies that I care to count and I can tell you that even today few get it like Clive and Edwina did back in 1994, when, just five years after setting up shop, they pitched Terry Leahy the then Tesco Marketing Director.
Tesco started protecting it’s secrets way back in 2001 in a series of acquisitions of DunnHumby shares until finally acquiring the whole business around 2006. Thus, the business that prompted the Tesco chairman of the time Lord MacLaurin to famously say to Clive Humby “What worries me most about this is that you know more about my customers after three months that I do after thirty years” was guaranteed international expansion on the back of that of Tesco. However, knowing Tesco’s customers meant that DunnHumby also knew the customers of just about every fmcg manufacturer and to this day it is generally accepted that the organistion knows more about all the manufacturers’ customers than they do themselves.
However, we are facing the dawn of a new era as Tesco, whose new CEO Dave Lewis is remodelling the business in the face of changing market dynamics and the challenges from budget supermarket chains. He’s set to tighten the focus of the business and is divesting non-core interests including DunnHumby now valued at something around £2billion. So where will they end up?
Favourite this week is WPP whose Chairman Martin Sorrell has admitted he’s keen. Frankly, I can’t think of a better host for the business and I sincerely hope WPP pull the deal off. DunnHumby aren’t the only switched in data management business around these days, there are very interesting operations like SkyIQ where ex-Experian man Tony Mooney is in the driving seat, but DunnHiumby were the first of a breed and there’s no doubt with the right ownership they have the capability to continue to innovate. WPP clients on the other hand would benefit greatly from the insights that a deal like this might provide and I’m sure every one of them is pushing Sorrell to nail the deal.
Acquisition of DunnHumby would certainly make sense for WPP from a number of perspectives, not the least of which is the reality that big agency groups simply have to strive for a full deck of marketing disciplines if they are to make any sense in the new marketing paradigm. The next few weeks will surely decide where this is going, but it’s certainly interesting for all concerned as well as all us onlookers and I for one would be saddened to see WPP let this one go.
Posted: March 17, 2015
I’ve been on a mission lately to raise awareness among marketers of the difference between good and bad content. Like any new toy, now that the dust is settling on the content marketing thing a few people are getting to grips with questions like “what makes content good or bad?” or simply whether it works at all and it’s no surprise to discover that its just like anything else. Good content works and bad or even just mediocre content is nothing more than a drain of your resources and can actually do you harm.
However, I discovered that even when I’ve sat with some people and feel they’ve “got it” they go off and make the same mistakes again. It seems some of us just can’t connect brand attributes with the kind of actions that represent supportive content. Maybe it’s just a personal thing. Let’s face it, some people are just socially inept and if they don’t have the sensitivity to manage their personal relationships we can’t really expect them to manage their “brandships”, which are after all, just the same thing
My thoughts go back to numerous conversations I had with a particular company CEO in recent years. He nodded a lot, but simply had a disconnect between brand theory and the understanding of how content represents the values and beliefs inherent in any brand. I shouldn’t have been surprised by this. His personal life was a shambles and I guess this could be as good an indicator as any. With this human weakness in mind I incorporated into my Brand Discovery programme a device that my clients can use once their brand is defined, to help them differentiate between initiatives that support or reinforce its values and promise and those that don’t. This is one of the keys in the broader operation of the business to achieving the efficiency that, more than ever, defines successful organisations these days
However, there are businesses that really get it, one of which, it seems, is Aussie TV franchise “Selling Houses”. With entrepreneurialism that revives your faith in programme makers, Selling Houses has differentiated itself from the plethora of increasingly bland home make-over shows around the world by partnering with relevant brands representing the products they use in their transformations. It leaves you wondering why so few shows like this have adopted such an obvious idea.
The reverse side of this arrangement is priceless content that can only enhance the value of the sponsors’ brands and provides them with endless opportunity for extensions into other areas of brand enhancing communication – brilliant! I love he way that Taubmanns the paint company in particular get their name on screen each time the interior designer explains the colours and finishes she uses, the Volvo car the presenter uses is everywhere, the blind company is featured in the very best light. This is content worth having for any consumer-facing business, but you could achieve the same kind of impact with a bit of imagination for BtoB too.
So, don’t tell me that content marketing doesn’t work. If you’ve tried it and you are still thinking that way then it’s a safe bet that you didn’t get it right. Then again, judging from the comments I get in my mailbox a lot of marketers are still struggling with the concept of brand character and how that translates into content.
Posted: March 16, 2015
If you ever had any doubts of the value of a strong brand new research from the AMA Journal of Marketing will surely put paid to them.
I’ve written at length about the areas where a strong brand comes into play in securing the success of a business. A strong brand contributes more to the efficiency of a business than anything else. It eliminates wasted time and effort by making sure that everyone in your organisation is clear on their role and halting non-aligned initiatives before they leech away valuable resources. Investors back businesses with strong brands more readily and will support new initiatives and suppliers will have the confidence to deal more openly with you all because of your strong brand. And that’s before you even get to the many ways in which your brand works to make customer retention and acquisition easier and less costly.
When your brand is strong customers know what to expect from you and will more readily accept new products and offers from you, reducing the need for launch advertising. It costs ten times as much to sell to a customer for the first time than it does to repeat sell to an existing customer, but if you can reduce the cost of acquisition too, you hold all the aces.
We have always known that loyal customers will recommend you to their friends, which, straight away further reduces the need for all that up front acquisition cost, but the AMA research shows that referred customers are even more valuable than those who introduced you to them in the first place.
According to the research referred customers are 25% more profitable per year for the first two-and-a-half years of your relationship with them. They are 18% less likely to churn and they have 25% more lifetime value, plus, of course, they are going to continue the snowball process of referrals that reeled them in, in the first place. It’s a win – win that no business can afford to ignore.
Now more than ever the single biggest factor separating your success from your chances of failure is efficiency and a strong brand contributes more to this than anything else you may do.
Posted: February 23, 2015
I have the feeling that I’ve missed something. All of a sudden I’m seeing hollywood stars appearing in the most dreadful, badly-produced, insanely silly TV commercials. It started with Antonio Banderas pretending to be a baker in a commercial for Italian biscuits. There’s no acknowledgement that it’s Banderas, no endorsement. He doesn’t even say anything (I mean, if you are going to have a movie star representing your product, why on earth would you have him acting out an anonymous part in a crap cameo?) so what’s the point?
Next Kevin Costner appeared in a commercial for Rio Mare tinned tuna! As with Banderras, I’m struggling to make a connection here. He only utters two words, which, so far, I have seen dubbed into three languages by anonymous v/o artists. I’m sure even Kev could have managed to come up with two words in any number of languages to have made these production even vaguely cohesive, but that’s hardly the point. What is going on here?
The most recent of these performances to have caught my eye is possibly the worst. The Dutch bank ING are changing their name to NN. I’m not even going to get into the choice of name here, but their decision to hire Ewan McGregor to do a “to camera” piece explaining in the most dreadful, boring, badly written script that he is celebrating the event by changing the spelling of his name to Ewann is just plain stupid? However, the whole thing becomes even more questionable when, having delivered the story in English, in the version I saw, he switches to Czech for the last section of the script!
I’ve written about the use of celebrity endorsement before. It’s difficult for the vast majority of brands to justify what is always a significant cost, but if you are going to invest these sums you need to at least make a stab at getting some value from the deal. The starting point would seem to be choosing a celebrity who has some connection to your brand or its values. Once you have the right person it would seem just basic common sense to make something of this golden opportunity by at least involving them in an engaging scenario with a decent script. It seems that whoever is responsible for these three fiascos was of the view that a celebrity removed the need for any kind of idea, but it begs the question, what on earth were the celebrities thinking about when they agreed to appear in these fiascos? Surely, they have script approval? After all, their reputation is on the line and it’s hardly appropriate for them to rely on some amateur, brainless and talentless writer to jeopardise that, yet they appear not to care. Beyond a very few of the many cosmetic and perfume commercials that feature celebrities I can’t think of a commercial that I’d consider to make good use of an opportunity like this, but examples like those I’ve mentioned can only be bad for everyone. Maybe its just a case of taking the money and running, but celebrities have business advisors and I wouldn’t have thought they’d recommend they associated with such dreadful projects.
Posted: February 17, 2015
In the first part of this editorial series I highlighted the way that our technical capability is driving, not only new businesses, but the way in which businesses operate. Now I’m going to explore what this means for marketers and marketing
A few years ago a major international financial services groups hired me to answer the question “If we were building our business from scratch today, what would it look like?”. I assembled a team of specialists in disciplines from across the business sphere and a few months later delivered a blue-print for a tech-based financial services business that looked nothing like the business they had. They couldn’t put it into play of course, that wasn’t the intention, but just as Formula One cars drive the innovations that go into production cars, this organisation launched a number of products based on ideas included in the business model that the task force produced.
This was clearly a very enlightened thing for any business to do and something that I can recommend to any business. However, I can’t help thinking that had I given the product ideas to start-ups, we would probably, by now be seeing new financial services powerhouses that had grown out of these ideas.
Unless you’ve been living under a stone for the past five years, you’ll recognise our new technical capability is driving the birth of radically different kinds of businesses. In fact, whole new sectors are being created simply because there are things that we can do today that we couldn’t imagine doing only a few years ago.
For decades businesses have been keeping up, as best they could, by adding patches and adaptations to existing business models to enable them to gain some benefit from a few of these innovations, but as a result they’ve become inefficient and ungainly. Start-ups, on the other hand, unhindered by the structures and processes of an established business, can be put together in a way perfectly suited to their purpose. With no operational compromises new model businesses are simply more efficient and as we all know, the single biggest differentiator of successful and unsuccessful businesses is efficiency. This has introduced a new phenomenon, a surge of small new tech businesses acquiring larger, established competitors at bargain-basement prices, simply because the small businesses hold the key to the survival of the larger competitor and has all the bargaining power.
From the start the current paradigm shift played out amid a big game of musical chairs where there was more sales capacity than customers. The only realistic source of new customers for most businesses these days is (and has been for some time) your competitors’ customer base. This has caused the focus in many businesses to switch from the challenge of finding customers to that of holding onto them. Repeat sales or customer loyalty are more critical than ever to the success of any business.
This is where brands and branding come into play. A strong brand may well increase your operational efficiency by among other things ensuring that you are offering the products and services that consumers most want at the price they are prepared to pay for it, but it offers another equally important, more emotional and less tangible benefit. It’s the feeling of belonging that a strong brand gives customers. It is this, as much as anything else that will guarantee customer retention.
The combination of all these factors influences the shape of many businesses in many ways, but one of the most fundamental differences between the old and new business models is the that marketing is now central to any business.
Because marketing is about identifying and leveraging an organisation’s resources in order to deliver answers to consumer needs it falls to marketers to guide the actions of everyone in every department. This in turn places a burden on marketers that most are not equipped to handle. To even get to first base today’s marketer has to be sufficiently familiar with all the disciplines that make up a modern business to be able to influence them. The more they know and the more sensitive they are to the functions and limitations of each department the better they will be at their job. However, marketers also need the authority within the organisation and a platform from which to operate. I’m still surprised when I encounter quite sizeable organisations that still don’t even have a marketing seat in their boardroom. Apart from anything else, this demonstrates failure to understand how businesses now work. A failure, which, by all accounts, will probably prove fatal. Nevertheless, I can understand that a real marketing director’s role is tough to fill and we need to start developing marketers with a wider range of skills and broader perspective. Have no doubt about it, marketing is very much in the driving seat of most of today’s successful organisations. The question is who will sit in it?
Posted: February 2, 2015
In the same week it emerged the pop singer Taylor Swift is attempting to copyright everyday phrases she just happened to have incorporated into the lyrics of some of her songs, the media shared the news that Nokia has issued a cease and desist notice against a London start-up over their use of the word “here”.
I don’t think any of us have a problem with the principle of copyright protection (Although, I was talking to an inventor this week who said that it was pointless taking patents out on products these days because they were all just combinations of technologies or concepts that are already known, so copyright enforcement was often impossible.) but does it make any sense for Miss Swift to literally claim ownership of the English language?
I’ll admit to some sympathy with the notion that she might inadvertently or otherwise, create a catch-phrase that may prove useful in promoting product, but should the product manufacturer pay her for so doing? It’s a question that I believe we are going to increasingly encounter.
Without a doubt pop songs throw up catch phrases that advertisers have adopted and profited from for as long as I can remember, but surely that’s just the way things go – Gangnam Style! We should also acknowledge that the advent of the Internet has thrown many entertainers onto hard times. Some of them don’t know where the next million is coming from, so you can understand that they are keen to monetise anything they can. There’s also just plain greed. Everyone is looking to make a fast buck and it usually makes no matter to them if it’s at someone else’s expense. The fact that we live in litigious times only makes this easier. If you can make a fast buck without actually doing anything that’s even better! The main reason for all of this though is that innovation is rarely unique. It’s just a race and it’s hotting up. Last month two people in separate conversations on two distant continents brought me start-ups that were working completely independently and unknown to each other on the same idea. Meanwhile the Brazilian team that developed the brain/machine interface and built it into the exoskeleton that enabled a paraplegic to kick-off the World Cup this year have been trumped by a European team who have taken the same technology to a new level by mind-merging two people on different continents.
Although our sensationalist press seemed to be trying to manufacture a David and Goliath story from the incident, I have more sympathy with Nokia’s objection to the decision by London start-up Lowdownapp to call their their location-based service “Here” than I do Taylor Swift’s claim. Nokia feels Lowdown were hitting below the belt by using the £8million Nokia had invested in promoting their mapping service with the same name as a springboard to fame. They may be right, but I can’t see that having the same name as another product in an adjacent technology is a good idea anyway. Isn’t it part of the growing-up process that all start-ups must go through, to learn to live with mistakes like the one Lowdownapp seem to have made here?
Posted: January 27, 2015
As I write this the world’s fastest computer, The Chinese Tianhe-2A super-computer, can make around thirty-four thousand trillion calculations per second (or for the initiated – operates at 33.8 PetaFlops) – Incredible, isn’t it? However the critical part of this statement is the term “as I write this…” because, what is more incredible still is that by the time you read it, this number will undoubtedly have risen. Such is the pace of technological progress.
I can remember being hired by the first company I had worked for that had a computer. It occupied a room, comprised towers of reel-to-reel tapes and all it did was the accounting for a modest independent advertising agency. Prior to that, accounting tasks like this were undertaken by rooms full, not of electronics, but men and women with thick books and sharp pencils. Today anybody can do the same thing on a smartphone.
DunnHumby, the company that manages the data for the international supermarket chain Tesco, record millions of transactions a day, comprising tens of millions of individual items that DunnHumby can cross-reference to define the profile of individual customers and accurately predict their grocery shopping needs. This in turn enables them, theoretically, to make a unique, tailored offer to each of their customers every week with a reasonable expectation that the customer will buy it. Thirty years ago, no retailer on earth had as many customers as the big players have today and there was certainly no expectation of ever knowing what they were buying with any degree of certainty, let alone predicting what they would buy next week.
Right now it’s possible to order the product of your dreams. From cars to clothing we can dictate colour, size and other features without even having a conversation with a human being. The tennis racket manufacturer Head already offer, not just a choice of colour and shape of our racket, but the stiffness at different points in its construction, so you are directly involved and influence the manufacturing process. Yes, we’ve come a long way in a short time, but hang on to your seats, it’s going to get a whole lot faster
We haven’t even begun to exploit the capability that technology currently affords us and already someone, somewhere is working on a way to increase that potential.
Just to get a better appreciation of how far we have come, here are five things that we now consider “everyday” that we couldn’t even do ten years ago:
- Order your weekly grocery shop for home delivery at a specified time
- Play just about any music track you wish on subscription without actually buying it.
- Pin-point any address in the world on a map and have the quickest route from your present location to that point plotted and dictated to you as you travel by foot, public transport or automobile.
- Back-up all your computer files, operate applications that you don’t have installed on your machine and share files via a cloud.
- Make a list of thousands of people just like your best customer and send them all a personalised e-mail about your product.
So, what does this mean for your business and how are you adapting to keep pace with this change?
In Part Two of this editorial, I’ll look at what this means for the shape of organisations and in particular marketing and marketing services businesses around the world.
Posted: January 5, 2015
As the role of marketing changes and expands at a rate never known before the profiles of the people doing it have to change too. There are new things to do, new disciplines to master and skills to perfect. Today’s markers have to understand areas like finance, HR and supply chain enough to influence the way they operate within the organisation, because we have come to realise that they are all contributing to marketing. There are also entirely new disciplines, like technological integration, data analysis and strategic development that haven’t featured in a marketer’s job spec before. Today, marketers have to be like Leonardo Da Vinci – creative and technical, equally left and right-brained and how many people like that do you know? Great marketers are very rare animals!
The truth is that organisations that wait for candidates with the breadth of skills marketers need these days, to apply for roles, will be waiting a long time. So long in fact that they’ll probably not survive. Being the complete marketing package is something that, as individuals, we either have within us or we don’t. No amount of training is going to produce Frankenstein’s marketer. There is, however, an alternative and that is what I call corporate aggregation.
If you can’t find a single person with the range of skills you need you must hire a number of people whose individual skills combine to create the whole. It looks expensive of course, but it’s not as costly as submitting to your competition and if you are working with the kind of truly integrated strategy that teams like this are capable of and that businesses worldwide are now turning to, you’ll find more than enough savings and efficiency to cover the investment.
Of course, I am simplifying a little here, because if you just put a random bunch of specialists together you’ll rarely generate any output. You need a process, a way of working and a set of tools to keep it all on track.
I’ve been aware of this growing need for a while now and in response some years ago I created Full Effect Marketing, which I’ve since shared with organisations around the world. You can create your own process, of course, but it’s complicated and plugging into a ready-made template suits most businesses best. It’s quicker and you are more likely to get it right first time.
The Full Effect Company is a group of people with diverse skills, but a common understanding of how businesses work these days. They’ve all signed up to my Full Effect Marketing philosophy and have adopted the tried and tested processes that we have created together that enable us to turn the strategies I create into reality. We come together in tailored implementation teams that can either supplement or replace entirely any organisation’s marketers.
Over the years we have learned to adapt to pretty well any situation. We’ve confined ourselves to creating the fully-integrated end-to-end business strategies that incorporate all that was previously part of an organisation’s separate business and marketing strategies. In other cases we’ve built, trained and managed their existing marketing team, mentoring at every level. In some instances we’ve even replaced in-house marketing departments altogether, at least for a while.
I’m convinced that this is the way forward for the vast majority of businesses. In fact, aggregation is the only alternative to waiting for Leonardo to turn up and other than doing it yourself, with all the delays and pitfalls associated with the unavoidable process of learning on the job, out-sourcing has to be the quickest and most efficient means of transforming a business and making it fit to compete in today’s marketplace.
Posted: December 15, 2014
Back in April Phil Morettini posted a really sensible piece on his PJM Consulting blog about managing the growth curve. I have spoken on this subject myself at conferences and seminars in the past, but, in recent times I’ve focussed on other subjects. Phil’s post made the rounds again this month and prompted me to revisit the subject.
While I like his approach, my take on the subject hinges on an additional observation. Critically, the shape of the growth curve has changed over time. As the introduction of new technology has accelerated, so too has the rate of change adding vastly to the potential agility of businesses. This all helps leaders get innovation to market quicker, which serves to steepen initial growth. However, it also enables followers to catch up even faster.
Think about what this means to you. With competitors breathing down your neck, the cost of all that research and new product development has to be recouped sooner than ever before. When competitive products arrive on the shelves things start to get tough, so the threat to your growth arrives sooner and you want to have your initial investment largely covered by then. When competition arrives sales will usually flatten and soon start to decline proportionate to the quality and number of the competitors.
What this highlights more than anything else is the need to maximise the efficiency of your organisation. An efficient organisation will have more great new ideas and get them to market quicker. It will also sell more in a shorter period of time and the key to efficiency is having a strong brand.
One of the most significant benefits of a strong brand is focus. A business with strong brands will have employees that fully understand the brand promise and the role they can play in its delivery. This means that innovations will be more appropriate with ideas that don’t accurately represent the brand being thrown out earlier. This in turn means time, human resource and investment are available to back the winners, quickening the pace of development of ideas and adding to the robustness of product concepts that go all the way. The last play in the product launch scenario though is getting it into the homes of consumers and anybody will recognise the role that a strong brand plays here.
One of the greatest assets of a strong brand is familiarity. People know its name and they understand the promise it makes. It won’t hold any bad surprises and consumers trust its consistency. It offers the reassurance that makes any new product that carries its logo more readily acceptable to existing customers, hence, fewer obstacles to the purchase.
The “knowing and trusting” aspect also manifests itself in the readiness of customers to recommend it. So all your existing customers banging your drum every aspect of your advertising at every stage of the path to purchase will be far more effective and bring a far greater return.
As a recent European survey revealed, the majority of shoppers around the world are not motivated primarily by price. This has come as a bit of a surprise to some people and a great many retailers in particular that I encounter fall into the trap of responding to competitive pressure by reducing prices. They get an immediate business up-lift of course, but it’s a fool’s paradise that ultimately introduces uncertainly into the relationship with customers and in the long term reduces both revenue and profit.
You should never forget that the keys to success are a) the consistency that fuels the feelings of knowing and trusting that drives both sales and recommendations. This also drives b) the efficiency that will enable you to get the right innovations to market quicker, at less cost, sell more in a shorter period of time whilst reducing reliance on expensive, traditional advertising. That’s how your brand influences the shape of your sales curve.