Mar 27, 2011 | Customers, Lean, Marketing
Last week I had a problem with my mobile internet connection when changing plans. Usually a simple process, something went array in the supplier, and I could not connect and as the “new improved” plan rolled into service, I had nothing, at a most inconvenient time.
I got onto the carrier, and their technical help desk fixed it quickly by stepping me through a process on my computer. All that is OK, but it seemed that the problem should never have been occurred, so fixing it quickly was good, but it was just bolting the stable door.
The following day I got a call from a researcher setting out to get my feedback on my experience with their techos. A very polite young lady, whose first language was not English took me though a series of 1-10 options ranging from outstanding to poor along a number of parameters, each sought measures of my experience with the technician. He scored very well. However, she did not have any questions about the cause of the problem, or how I felt about the fact that it happened, and when I tried to explain that my high marks for the tech assistance should not be confused with the dismay at having had the problem, it all got too much for her.
Customer service is all about preventing problems in the first place, when you cause them your customers are grateful that they were fixed, but will not necessarily forgive you for causing them. To be effective at improving service, they should have investigated the cause of the problem, so they could take steps to prevent it happening again, not check that an empty stable had been well cleaned.
Mar 23, 2011 | Branding, Communication, Marketing, Social Media, Strategy
How does a branded product withstand the power of a retailer duopoly that controls 65% of Australia’s supermarkets?
That question has exercised the minds of proprietary FMCG brand owners for over 30 years, since the first house-branded “No Frills” products appeared on the now almost defunct Franklins shelves. It has become a really serious question over the last couple of years as the big two retailers more actively set about building a brand of themselves as more than a place to shop, but also a range of products to buy, following the patterns set in the UK by Tesco and Sainsbury, and it hotted up a month ago with the beginning of the “milk war”.
The Nielsen Global Private Label report puts Australia’s private label penetration at 14%, not really accurate if you happen to own a milk brand. Milk had a sales channel split between supermarket and route sales about 60/40, with Housebrands holding a share around 50% in supermarkets, but nothing in route, until a month ago. Overnight, the “milk war” has dragged sales from route into supermarkets, (I do not have the numbers) and the house-brand sales must be now 85-90% plus, again, I do not have the numbers, just a set of eyes. “Dairy Farmers”, “Farmers Union” “Paul’s” all venerable brands in the milk market have had their value decimated almost overnight.
Now it seems we have Fosters pulling their beer brands from the shelves of Coles and Woolworths owned liquor outlets as a defense against the risk of having their brand equity, built over long periods, with huge investments, being trashed by under cost sales by retailers. It may lose them lots of sales in these outlets, but the 50% of the market still controlled by independent retailers will be cheering, it offers them a competitive advantage over the chains to have brands like “VB” on shelf when Woolies and Coles owned Dan Murphy and First Choice do not.
Suppliers of produce to supermarkets have faced the dilemma for many years. The retailers simply will not allow proprietary branded products on their shelves, if you want distribution of your oranges, potatoes, or lychees, it is as unbranded produce, or increasingly branded with the supermarket brand. In these categories, housebrand share is 100%, so I wonder where the innovation will come from in this drive to the bottom of the price equation, and will consumers in the long run be better off?.
Back to the core question, to which I wish I had a simple, glib answer, but I don’t. However, I think the answer is tangled up in the way we manage the changes emerging from the digital revolution we are undergoing.
- Mass media is dead, the cost cannot in the long term be recovered if hard won brand equity can be destroyed overnight by a retailer who wakes up with a good idea. In the future, mass media will not be used to build brands, with the exception of a few huge multinational brands. Apart from the cost/risk equation, the “mass audience” has fragmented anyway, and is increasingly hard to find. Time to sell your shares in TV networks.
- Social media now has a framework for communication, like it or not, that framework has two major dimensions, called “Facebook” and “Twitter”. As we figure out how to use them, these two related frameworks, and the others offering similar but more specifically targetted access to individuals, will drive the way brands engage with their adherents, attract new ones, reward their loyalty, and build equity that is remote from the ravages of duopoly bricks and mortar retailers.
- Marketers have to get to grips with this stuff, mostly it is beyond the young brand manager who does not understand, and should not have the power anyway to make brand related decisions. The case for the CEO to be the “Chief Brand Officer” in any business is getting stronger daily.
Building a brand just got a whole lot harder. Dollars to spend now bears no relationship to success, nor does longevity, (facebook had its 5th birthday day before yesterday), so just hanging around is not an option. Instead, markets have to do the hard yards to really deliver value, huge value, to customers, and keep “value-innovating” as if their lives depend on it, as it surely does.
Mar 21, 2011 | Innovation, Lean, Marketing
This is an expression I have used for many years, it is just a metaphor for never throwing out an idea, leave it available for scrutiny later when you know more, or for parts to build something different, or just for inspiration when building the portfolio of projects
The brainiacs in Silicon Valley have now come up with a better expression, “Strategic Pivot” which is essentially the same thing, but geared specifically to innovation in the digital world. Perhaps unfortunately for silicon valley, not every innovation is a new app, most are far more mundane.
A new way of moving a product WIP from one production station to the next can be an innovation, as can an improvement in the process of collecting data on that movement, and further improving it by removing excess time and effort.
In either case, the metaphor, whichever one you choose, works. Never throw out an idea, just because you cannot see the value now.
Mar 16, 2011 | Marketing, Social Media
Sorting the approaches and options emerging for on line marketing using social tools is sufficiently complicated to make your head break.
Logically, you use the net to try and sort out what is best for you under the circumstances you face, as the net is now the first stop when seeking information.
However, when you get there, it is like an overstocked supermarket, so many alternatives, each shouting their own greatness to you, offering you everything should you make the wise decision to “use me!!!!” Amongst all the e-shouting on the net, here is one that makes a lot of sense.
However, there is no substitute for the old fashioned marketing disciplines of understanding your customers needs, refining your offer of value to these customers, and communicating with them about how you can make their lives better, and most importantly, delivering on the promise.
In this context, the multiplicity of tools on the web become just more means to the end of adding value, they are not the end.
When confused, take the marketing Aspirin of keeping it simple, and ensuring above all else that you deliver on your promise, even better, over-deliver, to those few who trust you with their patronage.
Mar 9, 2011 | Communication, Leadership, Management
There is a big difference between these two states, and they can have a powerful impact on the way organisations react to the decision maker.
Someone who is seen as decisive, but as yet undecided will be have the respect of others, who will usually assist in the process of coming to a decision in a positive manner.
By contrast, someone who is seen as indecisive, will be ignored, and work-arounds will be used to get things done, and at some time, if it is a personal trait, it needs to be removed from behavior patterns, or the individual will be removed.
Feb 6, 2011 | Branding, Marketing, Social Media
Advertising has a new coat, “adverfanning” as in advertising to attract “fans” for your social site, who are then the target of directed or “Permission Marketing“, a term coined by Seth Godin over a decade ago.
Adverfanning has been growing exponentially with the growth of social media, it is the foundation of the business model, but the cost/impact has been increasing as click through rates decrease. According to a report by analytics firm Webtrends, it now costs $1.07/fan, as reported in this WSJ article, which is getting close to TV cost/impact in some time slots.
The business of advertising has not changed, but the tools have. The old ones, TV, radio and magazines have fragmented enormously with choice, and new ones have emerged from the social media, but the objectives are unchanged.
Gain attention
Generate engagement
Motivate trial
Build repeat sales
Encourage brand evangelism.
