The hyperbole trap

The hyperbole trap

Aug 21, 2019 | Communication, Customers

 

We marketers as a stereotype tend to adjective driven descriptions that make little logical sense, and in some cases, are in fact misleading.

Yesterday in a major supermarket deli section I saw two examples that should be taken out the back and flogged.

The first was ‘organic salami’. I am aware of organic chicken, beef, tomatoes, and others, but I am unaware of an organic salami running around anywhere. I am not sure I would recognise a live salami if I saw one.  Presumably the motivated copywriter hidden in the bowels of the retailer, or more probably, a well-meaning deli manager in the store, wanted to differentiate this salami from the others on display. They were probably made in the same factory, from the same ingredients as some of the others,  and certainly were not certified organic. Hyperbolic over-reach, and either completely incorrect, or the rules governing the use of the word ‘organic’, have been radically and terminally loosened since the last time I looked.

The second, equally misleading, was ‘Fresh Sea Barramundi’. Unfortunately for the copywriter, barramundi is a fish species that does not live in the sea, it is native to the coastal rivers of northern Australia, with close genetic relatives found throughout S.E. Asia.  The only exception to this rule of nature is when the barra is ‘farmed’, presumably not an attractive description. Again, a misleading and factually wrong product description used in the quest for hyperbolic impact.

I am nit-picking, these examples are relatively minor in the scheme of things that are manipulated to attract consumers, but nevertheless, struck a chord when I saw them. I will admit to a chuckle at the evident lack of recognition that most consumers are not fools, and would see through the hyperbole for what it was: flowery and meaningless language.

However, retailers are held to account. Regulators do not like false product descriptions, and more importantly, consumers, who have come to accept that the food they buy in supermarkets is as described, may start to have the trust eroded, just a tiny bit by such nonsense, and in the long term, this will damage the supermarkets brand.   

Do you allow your marketing people to wax illogically lyrical, or insist on well crafted copy that delivers a value proposition devoid of superfluous hyperbole?

 

Header cartoon courtesy Tom Gault.

 

 

 

 

The cost of failing to build brands

The cost of failing to build brands

Aug 12, 2019 | Branding, Customers, Governance, Marketing

 

Direct marketing is highly tactical, it is a one on one communication from the marketer to the consumer. Within the boundaries of some limitations, the outcome of direct marketing can be quantified with a considerable level of confidence.

You either got a response, or you did not. It is tactical, short term, and transactional.

Because it is so responsive to short term quantification, and our digital lives are all about quantification, these tactical elements are now predominant. However, there is no evidence that tactical activity alone will build a brand, and plenty that an overuse of tactical stuff will actually destroy a brand.

By contrast, building a brand takes time, investment, a great strategy, and the nerve to continue in the face of debatable real time data, and short term expediency.

Just look at what has happened to proprietary brands in supermarkets. They have been destroyed by the power of the retailers demanding tactical promotional dollars, which is code for retailer margin protection. This has been given by suppliers, usually reluctantly, at the expense of brand building, simply because it is easier and expedient in the short term to comply.

Consider Meadow Lea. At its height, Meadow Lea had a 23% market share at premium prices in a crowded and growing margarine market. The great advertising supported by a range of customer focussed promotional activity that had built the brand, was stopped in favour of tactical retailer price promotions. Now, 20 years later, Meadow Lea is just a label on a few Sku’s in the chiller cabinet.

Imagine you are the marketing manager of a branded product, you have a finite marketing budget. You need to convince the CEO, who is an engineer or an accountant, that it is better to keep advertising for  the long term health of the brand, than give in to powerful retailer demands for various forms of retailer margin supplementation, which will retain distribution in the short term. This has been a very hard argument to win for all but a very few FMCG marketers. With the benefit of hindsight, it has been a vital one that was lost.  

Had the argument been won, and a balance between the two been found, what would have been the difference to the revenue and margins of both retailers and Meadow Lea Foods?? Most probably in the hundreds of millions of dollars, and consumers would have benefitted by  continued value innovation in the spreads  category, which has been stagnant for years.

 

 

What is the value of habit?

What is the value of habit?

Jun 11, 2019 | Customers, Strategy

Yesterday I filled my car with petrol. There are a number of petrol stations near me, but I tend to use the same one, by habit, without any real form of comparative pricing with other stations in the area.

It is convenient, is in a backstreet, the bloke who swipes my card is pleasant, it is an independent, so I just assume the price is OK without checking. None of that stupid discount applied if you have a supermarket loyalty card, where you know the price is inflated to accommodate the discount, a practice I find is as irritating as it is immoral, so avoid them like the plague.

I wonder how many of his customers just use the place habitually, without checking prices as I do?

Consider the implications of pricing on the profitability of the station.

I will not try and do the maths, as I do not know the costs or the volumes involved, but two questions are relevant:

  • How many of the customers are regulars, like me, who do not check prices?
  • At what point do regulars, like me, check prices, weigh up the other factors that influence our behaviour, and move elsewhere?

Would it be worth knowing the answer to these questions, and managing price accordingly?.

At some point, you will lose the price checkers, those who  chase the cheapest price on the day, and seem to be prepared to drive around looking for the cheapest petrol.

How many added cents/litre will motivate a habitual user, like me, to actually check the comparative prices, and move to a less convenient station?

If I was running this petrol station, I might consider putting in a system that in some way recorded the regulars, those who seemed always to use the station, and those who just used it occasionally, and then experiment with the price elasticity of the regulars, assuming that the price checkers will never come in unless you are the cheapest  on the day

An added cent to the price would probably not be noticed by the regulars, not drive any of them away (poor pun there) but would drop straight to the bottom line. If the regulars were 60% of your sales, it might well be a great strategy. It gets rid of the lines at the pump, increases the chances for interaction at the cash register, and that extra sale from the grocery and confectionery lines, which is after all, where a lot of the profit hides. 

Every business, no matter what it is, should consider deeply the drivers of profitability in their business, and pricing strategies should be number one on the list of considerations.

 

 

To win, reverse the sales funnel!

To win, reverse the sales funnel!

May 31, 2019 | Customers, Sales

 

There is no gravity in a sales funnel!.

 Prospects do not fall down a sales funnel in an orderly manner, defined by some marketers picture of their customer journey.

Prospects climb up a chimney that gets narrower and more difficult the higher you go. There are points of friction, decision points, diversions, and often life just gets in the way. When a prospect falls out, sometimes they return, at another time, to another place in the ‘chimney’, and sometimes are never to be seen again.

At each point in the climb, the marketer has to get a ‘mini-yes’ from the prospect. Are they going to continue the climb to a conversion? Or is the friction greater than their motivation to climb further?

There are 3 points of extreme friction you need to address as prospects climb

  • Why should the prospect engage with you? This may be a PPC ad, a download, simply looking at a second page on your website, or not throwing away that brochure you mailed them. This is the first major point of friction, and conversion rates at this point are usually in single figures.
  • Why should the prospect buy this product in preference to any alternative solution to whatever problem they are facing? Most problems have many potential solutions, and many suppliers, so you need to be able to demonstrate why the solution you offer is superior to alternative solutions.
  • Why should they buy the product/solution from you, rather than one of your competitors? If the only answer to this question is price, you have just lost.

We kid ourselves if we think of this process as ‘gravitational,’ exerting gravity downwards towards the transaction. The process is the reverse of gravity, there is pressure from many angles to squeeze prospects out of the chimney, and it takes sustained effort to support them in their climb.  

 

 

Where is the gap to be filled in retail?

Where is the gap to be filled in retail?

Mar 8, 2019 | Customers, Marketing, retail

The range of retail format options is huge and multifaceted.

At one end of the continuum you have pure on-line retailers,  to full service bricks and mortar retail at the other, and everything in between.

It is the ‘everything in between’ where the development is happening, and the opportunity lies.

Apple ‘Zigged’ when everyone else was ‘Zagging’ and spent a decade and billions of dollars opening retail stores. While they are now the most successful retailer in the world on a turnover/square foot basis, the reason was more about brand building over the long term than just retail revenue. Brilliant.

Amazon has been the catalyst to the on-line gold-rush, but you have to ask yourself are they are retailer, or a data business first? They started as a retailer, simply using a different channel, but to enhance their position they have evolved into a data company that uses on line channels to sell and deliver product.  With Amazon Go, they have combined bricks and mortar retail with their data capabilities, which can only become more important as they evolve their purchase of Whole Foods.

Meanwhile, B&M retail is either hunkering down, cutting costs, and generally moaning about how on-line sales are cutting their margins, or investing in their businesses, some by increasing service levels, others by setting about ‘digitising’ to compete.

Any way you look at it, the gap is in the middle.

That gap will be rapidly filled by deploying digital tools already available, or in development, based it seems on two rapidly converging technologies:

  • Facial recognition, powered by our on line profiles and pattern recognition software, and
  • Location definition powered by our devices and GPS.

Amazon Go is able to recognise and record stock movements from the shelf to your shopping basket, and back, as it happens, and debit your card with the purchase. It is a small step to use facial recognition as you approach a store, or product category while inside the store, and match that with your previous purchase patterns to make exclusive, and immediate offers to you tailored to your history.   You do not need to be Amazon go to deploy the second part of that scenario, you just need the facial recognition and location data connected to your purchase history, and perhaps purchase intent identified by browsing history.

This combination of location, facial recognition, purchase history and browsing patterns will be the game changer in the current gap.

The question to be answered is how we as members of the public and consumers feel about this complete exposure of what has been to date private. On the one hand we seem to want the convenience and immediacy it can deliver, but on the other, remain very wary of offering up our privacy to the unknown forces that can tap the data in ways never expected or sanctioned.

However, I suspect the horse has bolted, and the gap will rapidly  be filled!

Photo credit: Kristian Dye via Flikr

Get stronger, then get bigger

Get stronger, then get bigger

Mar 6, 2019 | Change, Customers, Management, Strategy

Most businesses find themselves on the ‘get bigger or get out’ merry go round. Unfortunately, one of the characteristics of merry go rounds is that unless you hold on, centrifugal force  will throw you off.

Also, the faster you go, the more likely you are to be thrown off, and as you slip towards the edge, the momentum grows making it that much harder to reverse the trend.

The alternative choice is to get stronger, rather than just bigger.

This usually means you say ‘No’ to a lot of tempting, but short term ‘opportunities’ that will arise, as most will dilute the focussed and differentiated value you can deliver to your ideal customers.

The dual question therefore is: How do you get ‘stronger,’ and what does stronger actually mean?

To me, strong means a number of things.

  • You are commercially resilient,
  • Customers, employees, and suppliers are all aligned to your values and strategy,
  • You have a strong brand amongst your customer base who want what you have because you are the only one who has it, and
  • Your competitors employees wish they worked for you

In short, you have a ‘moat’ around your business that repels all boarders and pretenders, and resists the siren song that suggests the grass is always greener somewhere else .

When you have all that, you can get bigger, it will happen almost without you driving size, as the strength will attract suppliers, customers, and those great employees with energy and ideas.