Upheavals

“What are we going to do?”

It’s been said on too many occasions that actions speak louder than words. Said so often in fact, that many brands today seem to have a disregard that borders on disdain for taking the time to really think through what could make them outstandingly competitive.

In today’s manic, results-driven world, fewer and fewer people, it seems, feel they have time to strategise where their company and their brand needs be heading, and how to retain their edge. It’s better instead, they believe, to just get on with the business at hand.

Everything happens now. And as a result, considered is an idea that seems to have passed its use-by date.

Execution is the mot du jour. The best way to solve any problem is to do something. In fact, not just something, lots of things. Kevin Roberts calls this, “ready, fire, aim”. I call it stupid. Looking to reaction and sheer activity to get you out of trouble relies on the fallacy that doing something has got to be better than doing nothing. In fact, they strike me as equally dumb, because chances are that if indeed you are in trouble, you are where you are because of what you have been busy doing up until now. Indulging in more of the same action parallels having another drink to try and cure alcoholism. It’s just as likely to deepen the problem as fix it.

Remember that lovely moment in the TV series Blackadder when the General says they’re going to throw more men over the top at the enemy and take them completely by surprise. Captain Blackadder queries the surprise element of repeating an action that the British undertook “last time … and the time before that … and the time before that .. and so on” Precisely, says the General, and that’s why it’s so clever. Because doing what we’ve always done is the last thing that the enemy will expect us to do again.

As Albert Einstein once said “The definition of insanity is doing the same thing over and over again and expecting different results.”

The philosophy of act and adapt as necessary only works if you do actually adapt. (Even the British High Command came to realise that.) And the key reason why adaption is so hard is because action is easier. People can concentrate on doing what they know, what they have within their frame of reference, what they’ve been doing for some time. Action. And reaction. Getting through workloads. Getting things done. Following the other guy. Or not following the other guy.

Some decision makers seem to believe that if they act, they will get better at what they have been doing (which, incidentally, is often not that dissimilar to what everyone else is doing). That will also satisfy their KPIs – which often are built around actions not competitive effectiveness. Do more. Be more effective.

Polaroid did that. They made a great product. And that’s what they focused on. They were on a roll until digital came along and took the wind out of their sails. Suddenly they were becalmed. They’d got very good at being Polaroid – the problem was that the world had moved on, and now the thing they were so good at wasn’t noteworthy anymore. Polaroid, it seems to me, never had a winning strategy for the digital age. But, like I said, they were very good at what they did. I call this redundant excellence.

Their competitor Kodak had the same issue. Brilliance in the analogue world of photography actively prohibited them from making the changes needed to stay competitive. I have no doubt that over the 15 years that Kodak slowly deteriorated, everybody there worked hard. I have no doubt either that many actions were taken. It’s just that they were the wrong actions in the end because they were based on old thinking about consumers’ wants around their photos.

The irony is that Kodak were a first mover in the very market that would later kill them. In 1975, a Kodak engineer created the first digital camera, but for whatever reason they never took advantage of being first-out-of-the-blocks.

There’s a good chance both companies confidently met many of their KPIs along the way. But key performance indicators are not necessarily success indicators. They recognise actions the company thinks is important. But if those markers are out of alignment with what is required to actually be competitive, then a company may well meet its own goals at the expense of securing its future.

The ironies of this can be intriguing. One set of numbers – the financials – can be showing that things are not as they should be. Another set of measurements can be showing that people are doing all that is expected of them. When a management team is so close to what’s happening, it can be very challenging for them to agree that the expectations they set were wrong.

POSTED: Friday, 3 February 2012

 

Market leadership: you can’t lead as a brand if you follow another brand.

Looks to me from this article like Samsung are going down the same competitive route as others before them in their battle with Apple. They’re looking to out-do them and to build a reputation and loyalty for themselves that replicates the following that Apple has.

Here’s the thing. As soon as any brand does this, there’s a very real risk that what it is actually doing is fighting with its perceived nemesis on their terms and therefore, subconciously or not, by their strengths. Because of the underlying references, Apple also becomes a focus and therefore, by implication, an authority. And all this within time and space that Samsung is paying for and looking to own. Unless they are very careful, there’s a real risk here that Apple could be allowed to Occupy Samsung’s marketing real estate – by Samsung itself.

After all, Apple is very good at being Apple. And their consumers love them for the brand they are.

What does Samsung realistically believe it can change here by spoofing Apple customers? And how does it think it will do this?

It’s not smart brand strategy to address a strong brand competitor at their strongest points. If I were working for Samsung, in fact, I would be actively encouraging them to avoid any reference to their competitors. Rather, they need, in the words of Fleetwood Mac, to go their own way. The most powerful brand you can own and manage is one where you know and write the code – not one that takes its cues from where others are, or where you perceive them to be.

That’s not to say that any brand should ignore its competition. But rather, in my view, a brand like Samsung should use its competitive analysis to sort out things like the emotions that Apple and others don’t evoke and whether these represent opportunities for emotional equity.

The question is not, “what does Apple do well that we can do also?”. The question is “What can’t our competitors do that we can excel at?”

The real lesson that Samsung have taken and that they do need to pay attention to is that products are upgraded by repeat customers motivated as much by loyalty as technical introductions. Apple’s very good at that. But the way to beat them is not to look to emulate more of the same emotion.

In the tech world particularly, if Samsung is to have any hope of achieving its goal it will need to match technical innovation with emotional innovation.

Emotional innovation stems from finding what I term the “unexpected value”. It’s driven by this line of enquiry: “What is the most extraordinary feeling that people in this sector haven’t felt yet? And how will we deliver it to them?”

When you strategise and deliver a brand underpinned by unexpected value, you change the emotional landscape that you compete in and you sidestep the cluttered, increasingly emotive middle ground that your commoditising competitors are squabbling over. You also actively avoid reploughing the deeply owned and highly branded field of another. That’s how you build market leadership. That’s how you continue to lift brand equity. By owning and fuelling emotions that are increasingly and delightfully associated with you.

Thanks Todd for the heads-up.

POSTED: Wednesday, 1 February 2012

 

For your information: why so many brands are not listened to

The insurance company wrote to me again. That can only mean it’s a bill or a change in policy. Either way it’s more expensive – literally, because I’m paying more, or metaphorically because I’m getting less for the money I do pay.

I’ve lost count of the number of meetings I’ve been to where marketing managers in the financial sector and in utilities have told me that they are keen to build closer relationships with their customers. They want more loyalty, they want customers to engage with them. Everyone nods.

But then their customer service teams keep sending out the same bills and policy changes, and they wonder why they don’t have more likeable brands. It’s not rocket science. In fact it requires something much more daunting. A change of heart.

In order to relate to customers as people, insurance companies need to start thinking of those customers as more than named policies, phone companies need to see them as more than accounts, electricity companies need to see the people who pay their bills as more than bill payers.

If brands in these sectors want people to associate them with more than just money, then they need to have conversations with them that extend beyond money. And for many organisations in these sectors that’s very, very difficult – they have nothing else to talk about, because their culture is honed to think about nothing less. It’s not that they are usually particularly greedy or even obsessive. It’s just how they have always talked to customers – as customers, rather than as people.

But the relationships between customers, services and experiences have shifted massively with the maturation of social media, and will continue to do so. Not long ago, people were sold services, and experiences were a value-add. Increasingly, people buy into the philosophies of likeable brands and then expect validation of that worldview when they purchase products. That validation comes through the experiences they receive when they buy and the ways that the brand itself looks to engage with its customers.The things it talks about socially. The causes it supports. The subjects it is interested in. The areas it engages with in the media.

In a pre-Google world, where it was so much harder to access data, brands provided information and people saw that as a cornerstone of the experience. We judged brands by their ads or their correspondence for example – because it was so much harder to judge them any other way. In an online-centric world, brands need to prove they are likeable and offer experiences that people are interested in across a wide range of fronts before anyone pays much attention to the information that brands want to send them.

And without that buy-in, the information itself is considered worthless. It’s something people ‘have no time for’. They’re too busy – read, they’re too busy to give whatever it is their time.

But engaging like this, in ways that encompass but also extend beyond the business relationship, are a massive disruption for conservative institutions. Imagine a general insurance company having to think about and talk about motorbikes for example instead of just focusing on motorbike policies. A specialist insurer might do that, but for a general deliverer, that seems too hard. Which is why these companies revert to what they do feel comfortable talking about and why customers revert to believing that’s all they want to talk about.

An explanation in writing, however nicely phrased, of why customers need to pay more for their policies is not a conversation. It’s not even interesting to the consumer. It’s just more correspondence. It's paperwork. It's another brand talking about itself on its terms. And that, consumers find, increasingly socially unacceptable, in the broadest interpretation of that idea.

What likeable brands recognise that other brands do not is that they need to earn the right to talk with people. They don’t automatically have that right. Or rather they may have it technically, but they and must keep earning it emotionally.

POSTED: Thursday, 26 January 2012

 

Likeable brands: Debating the value of Likes.

If brand owners are buying Likes on Facebook, what are they actually worth?, asks Alexis Dormandy in this recent article in The Telegraph. “Can we really value a ‘Like’ or a ‘Follow’ when so many of them are bought rather than earned?”

Dormandy’s question goes to the heart of the marketing community’s ongoing fixation with volume and to the business world’s fascination with social metrics. With marketing managers under huge pressure to build and participate in scaled brand communities, perhaps it’s inevitable that fast-track approaches to ramp up fan bases have become more popular.

There’s good, bad and ironical news in this.

Let’s start with the good. Slowly a real value case for using social media seems to be emerging. In a recent post on the RICG blog, comScore's Linda Abraham and Buddy Media's Mike Lazerow reference research showing that a "share" on Facebook can lead to $2.10 in incremental sales, and drive up the average conversion rate to 10.2 percent per share.

A key reason Abraham and Lazerow give to factor social media into digital marketing programmes is that "social media is the No. 1 online activity today," accounting for almost 20 percent of the time consumers spend online.

They go on to say that there are three steps in social media marketing: 1. Cut-through, or the brand messages that fans receive in their news feed; 2. Engagement, or what fans say about a brand or product's news feed content; and 3. Amplification, where fans share the content they like with others in their network.

However, they also point out that “most brands skip over those "intermediary steps," and instead think the process only involves getting fans and then seeing a marketing ROI”.

And when getting fans involves buying their loyalty through incentives, that’s when Dormandy seems to believe the illusions of success start. Yes incentives and giveaways work, but as his article points out, generating Likes and Follows through mechanisms like contests rather than through unprompted affinity must beg the question: how much do consumers truly see these marques as likeable brands and to what extent are they more interested in the likeable giveaways?

That in itself raises a wider concern. The bad news.

With the introduction of marketing moves like Sponsored Stories and the use of incentives to gain community memberships, reviews and WOM, there’s a very real danger that authentic endorsement - the sort members of the online community truly value and want to share - is under threat. As Dormandy puts it so well: “for products, services and brands, the Facebook Like provides little indication of what your friends want or would recommend. In the quest to be endorsed on Facebook, brands have devalued those very endorsements. Buying a Like doesn’t mean you’re liked.”

So Like no longer means ‘like’ in its defined sense. And Follow could easily mean Follow for Now, or until the competition ends. There’s a transience to that commitment that is disquieting because by extension endorsement no longer means endorsement either. It simply means participation.

If that’s the case, what are marketers buying beyond a momentary measure? What can they bank on?

And is the very fact that they continue to seek out Likes and Follows making Liked brands less reliable and Followed brands less charismatic?

Leading perhaps to this irony: the more consumers Like your brand online in the minute (because of the incentives you offer), the greater the risk that they might not actually value it over the longer term.

Not dissimilar in many ways to how consumers behave in sales – it isn’t the brand they are buying, it’s the discount. Only in this case, it’s not about the discount but rather the incentive.

POSTED: Monday, 23 January 2012

 

The future of brands: 7 takes from Jim Stengel

Recently, Jim Stengel, the former global marketing officer at P&G, opened up on his blog on what he perceives as the future of marketing. I very much liked what he had to say. My takes and comments.

1. Brands are becoming more important not just as identifiers in crowded markets but also as valuation mechanisms. As Stengel points out, 30 years ago, “almost none of the market capitalization of the S&P 500 could be attributed to brand equity; today it is above 30%.” Stengel sees that as a sign that marketing has become more important. I agree – certainly in the sense that brand can now be visibly seen to add value on the bottom line. I wonder though whether marketing itself has gotten more important or whether it has become increasingly important for marketers (with their heritage involvement in communications) to evolve their understanding of the value, performance and application of brands.

2. Marketing will be more and more about the behavior of the people behind the brand, not what the brand says. Absolutely. Last week’s post about “human marketing” centred entirely on this point. Increasingly brands are judged not just by what they deliver, but how they deliver it – and people are the key component in delivery. If your human marketing doesn’t cut it, nothing else will compensate.

3. Marketing will integrate and synthesize with other disciplines. And vice versa in my view. The globalisation of markets is being clearly mirrored by the globalization, convergence and integration of functions. Delivering “on brand” now involves not just everyone – human marketing again – but almost every aspect of the organisation’s intellectual and operational arsenal.

4. Competitiveness will increasingly be right-brained in its orientation. Stengel’s own words: “Empathy and artistry will get more important. Empathy is at the heart of marketing because it is the ability to see and feel through someone else’s perspective. Artistry is the intuition and creativity to invent something that offers something new and important for a customer” Yes. Yes. A thousand times yes.

5. We’ll all know more, so we better make sure that, as brands, we understand more. Hadn’t really seen the full implications of this one I have to say, but Mr Stengel’s absolutely right. “Big data and advanced analytics will profoundly impact how well we understand our business.” We tend to hear so much about the privacy concerns of big data, but this marketer’s point that it will also yield big insights is very true. The key seems to lie in what brands do with all the information that will flood their way. Those who percept and act will swim and win. Those who try to filter and wait will drown or be swept away.

6. Great brands will continue to “[upend] the business model”, questioning and reframing the frameworks, zones and channels within which they do their business. And they will do so, not for innovation’s sake, but because the changes they make to the ways they are organised will bring them closer to consumers. Great point, well made.

7. Finally, marketers will need to become more nimble and adaptive in how they present their brands and associated messages to communities of consumers who are no longer at their desktop. Instead those people will, in time, be moving rapidly, impatiently and individually, through areas of a city or town that they are highly familiar with. Getting their attention, remaining part of their conversation and attracting them to engage will require new approaches and new ways of thinking about media. Stengel quotes Eric Schmidt in saying that the future for brands will be “social, local and mobile”.

Plenty to think about here as we power into 2012.

POSTED: Monday, 16 January 2012