Branding matters: Best ever evidence.

Branding matters: Best ever evidence.

Sep 29, 2017 | Branding, Marketing

The darling of the techies everywhere, Apple, is about to release new phones.

They are the iPhone X, iPhone 8, and iPhone 8Plus for outrageous prices, when compared to the offerings from almost any of the other 300 plus companies that produce phones.

The Australian price for the iPhone X will start at $1,579 and up depending on the storage you choose, and there are already concerns that demand will outstrip the capacity to supply. (Is it possible this ‘impending scarcity’ is a pitch to hype early interest? No… Apple would never stoop to that)

According to IDG, Samsung is the current world market leader of units delivered with around 23% followed by Apple with 15%, Huawei with 10%, and the other 295 odd makers fighting for the other 55%. The numbers vary a bit, depending on the researcher, the timing, and a whole lot of factors, but the pattern is consistent.

In absolute contrast, Apple leads the profitability stakes with 83% of industry profits, with Samsung taking just 13%.

Forget the rest.

Which would you rather be, Samsung market leader by units delivered, or Apple, market leader by a country mile in profits?

How can this be?

The technology is now pretty generic; all the phones work well, few of us use all the functionality they can deliver, dare I suggest that most would use less than 10% of their phones capability. Still, enough of us line up to buy the new Apples at double the price of a technically equivalent, or depending on who you listen to, superior, Samsung, or cheaper again Huawei, to make Apple hugely, even outrageously, profitable.

While Samsung and others blather on about their technology, cutting edge flexible screens (in Samsung’s case) Apple while making the observations that their tech is new and leading edge, concentrates on marketing and branding,

This is perhaps the ultimate example of great branding over a long period, resulting in a total, absolute domination of an industry profit pool.

Consider those numbers again, a 15% share of units shipped converting into an 83% market share of the industry profits. This astonishing brand performance comes in a crowded and  commoditised market, whose growth while stellar to date is showing signs of flattening.

I did doubt the ability of Tim cook to keep the apple money machine churning after the death of Steve Jobs, but is seems that by beatifying him, and building on Apples remarkable marketing DNA, the ride continues.

 

 

 

 

 

 

 

 

The single most common question I ask myself

The single most common question I ask myself

Sep 20, 2017 | Change, Governance, Marketing

How do I demonstrate value?

As a senior marketing bloke in a large business, being heard around the board table was always a problem, as it is hard to quantify the impact of what you do. Try as hard as possible, there are still holes in the case, as the reality is that you are setting out to tell the future.

‘Do this, and that will happen’

While marketers are no longer seen as the corporate equivalent of ‘Zelda the fortune teller’ it remains hard to compete for scarce resources with those who are able to table hard data, and are able to quantify the holes in your logic, should they choose to do so.

While pointing out that one is in the past and cannot be changed, while the other is in the future, and therefore is able to be shaped by sensible and informed investment, there remains the uncertainty of the future. Success depends on the confidence that a management has in the ability of the marketer to assemble facts and suppositions into a credible projection of outcomes, in line with the risk profile of the corporation

It is even harder in consulting to small businesses. Every dollar spent on marketing with the promise of better outcomes in the future is a dollar out of the owners pocket. They have all been stung by the purveyors of various forms of marketing snake oil before, so are a wary and appropriately cynical lot.

I have concluded that the answer is a bit like motherhood, the value off which is only visible over a long period, but is then indisputable.

Photo credit Ali Alhosen via Flikr

Is being ‘sticky’ the key to success.

Is being ‘sticky’ the key to success.

Sep 18, 2017 | Branding, Marketing, Strategy

Those flogging business coaching to the owners of medium sized businesses seem to focus on one of the oldest sales techniques in the book, the ‘Before &  After’ pitch.

Describe the current situation, and make it as down and dirty as possible, then describe the new world, the joy of the state achieved by the application of their great coaching/technology/process, whatever it is they are selling.

No mention of the challenge in the middle, abracadabra, all is well, just $109/month, less than the cost of coffee and a roll every day and you are on your way to the ‘laptop lifestyle’.

Tangled up in the bullshit, never articulated, at least  to my hearing is a very valid notion, that of ‘Critical Mass’.

The critical mass in a nuclear reaction is the point at which the process becomes self- sustaining. It may take only a nanosecond, but there is that critical point, below which the process is not self-sustaining, and past which, it is.

At what point does a cloud, which is just an accumulation of moisture, suddenly change from being a cloud to dropping rain?

For small business owners, the point of critical mass, from where the business is self-sustaining, is usually that point from where they can take time out of the business, and enjoy the financial rewards of success.  The road to that point will be different in every case, and most in my experience never actually consider what the elements of critical mass may be in their particular business, and how they might influence them.

I think it might be about how ‘sticky’ you can become.

‘Sticky’ is not a term often seen in any form of business writing, it is more usual in kids books, but how is this for a definition:

‘Stickiness’ in business is the function of: Share of Wallet  X Propensity of customers to advocate for you.

The stickier you are, the more likely you will be to have your customers buy from you everything you can reasonably provide, and then go one step further and tell their friends, peers, and wider networks.

If you are  not sticky enough, you will be sub self-sustaining, but pass that sticky test, and the business will sustain itself, with some ongoing tweaking, which is different from the 80 hour weeks most small  business owners put in, to make a living, but often  not have a life.

 

Cartoon credit: Hugh McLeod and Gapingvoid.com.

 

 

 

Sell or nurture?

Sell or nurture?

Sep 13, 2017 | Marketing, Sales

Every piece of research I have ever seen puts the conversion rate of an initial sales contact little higher than 2%.

It does not seem to matter if it is the old style letter box stuffing or sophisticated email outreach, 2%.

Does that mean 98% are not interested?

Not necessarily, it can mean that they are just not ready to buy right now.

Therefore there is a percentage of that remaining 98% that may buy at some point with some nurturing.

This opens the question not just of how you go about the nurturing process but how you split your time, creative, and financial resources between the two, which is where the challenging strategic choices need to be made.

 

 

The one rule to ensure you attract attention.

The one rule to ensure you attract attention.

Aug 15, 2017 | Communication, Marketing, Sales

The real fight out there, the one that is for most businesses ‘make or break,’  is not for  likes, or new friends, or how many social media feeds you showed up in, it is for attention.

The problem with attention, is that it is transient, hard to get, and there is  no saving it up for later.

Use it or lose it.

To win that fight for attention, or at least have a shot at the title, there is one rule to remember and implement.

Nobody cares about you and what you care about.

There it is, in 9 words, could be better at 7 if you cut out ‘you and’ .

Perhaps your Mum cares,  and your partner, maybe your few really close mates, nobody else.

They are all too  busy caring about what they care about to be worried about you, someone they do not know, or occasionally may know superficially.

Why is it then that we spend so much time telling others what we care about on our landing pages, brochures, advertising platforms, marketing collateral, and websites?

Usually in my experience that mistake comes from one of two places, often both:

  • You do not know who you really need to talk to well enough to communicate with absolute clarity why they should give you some of their valuable attention.
  • You are covering your arse in case someone higher up in the place asks ‘what about….’

Both are short sighted, and revenue destroying tactics.

All forms of marketing activity and material have one purpose only: to contribute to the generation of revenue.

Nothing else. Nada. Zilch. Generate revenue or go home.

What contributes most to generating revenue?

Easy: someone has a problem, and  in the first glance, on your website, or brochure, or whatever it may be, if the answer to their problem, in 10 words or less is there, they may stop. Even 10 may be too wordy, some with the problem will have skimmed over it and moved on to someone who expresses their solution to their problem with greater clarity.

Outside your family, and close circles, nobody cares. Until they need you: then they care, and occasionally when you get your marketing ducks in a row, offer you the opportunity to gain their attention.

 

Cartoon credit: Hugh McLeod at gaping void

The real measure of marketing effectiveness, and how to deliver it.

The real measure of marketing effectiveness, and how to deliver it.

Aug 7, 2017 | Governance, Leadership, Marketing

Marketing is a functional silo on an organisation chart, as is Sales, Operations, Finance, HR, but unlike the others, marketing deals with unknowns, the future, whereas all the other functions deal with the past, or what is immediately in front of them.

Marketing is about the future, long term commercial sustainability, and its effectiveness is really hard to measure, other than in hindsight. There are lots of measures for things that have happened, which are the result of often many combinations of actions taken some time ago, so the measures are unable to change anything, just give insights to what worked and what did not.

As the senior marketing person in a very large business 30 years ago, I found myself often talking about advertising, segmentation, positioning, graphic design, and all the rest, around the board table, which either put others to sleep, or elicited opinions, usually uninformed, about the detail. However, when I talked revenue I had their attention.

Marketing is all about revenue, particularly future revenue. The other stuff is the paddling under the surface that enables the generation of the revenue, but the real measure of marketing effectiveness is revenue and margins over time.

In every business I have ever had anything to do with, marketing expenditure is treated as an item in the P&L. By definition, items in the P&L are expenses or past sales revenue. This is inconsistent with the notion of marketing being about building the foundations of future revenue.

The closest analogy is a piece of capital equipment, they are always purchased to fill one of two roles, sometimes both:

  • To increase the volumes too be sold, or,
  • Increase the productivity of the processes.

Those purchases are recorded in the cash flow statements, and the balance sheet, not the P&L. The greater irony is that capital items are depreciating assets, whereas marketing  investments, when done well are appreciating assets, unrecorded anywhere until the business is sold, then the accountants start talking about ‘Goodwill’ being the difference between the realisable value of the physical assets, and the liabilities on the books.

There is a structural paradox here. We treat a potentially appreciating asset differently to one that can only depreciate, just because it is hard to measure.

This challenge of measurement is the biggest one marketing people have to hurdle. The turnover of marketers in senior roles is the fastest amongst the functional heads in large corporations because we generally do not recognise the essential long term business building nature of marketing investments. We treat it as an expense to be cut at the slightest cloud on the profitability horizon, and the marketing people with it.

One of the challenges here is that to achieve these long term outcomes, marketing requires the co-operation and  collaboration of all the other functions, without the organisational authority to direct. The CMO has to be a leader across functions. He/she has to build the respect and co-operation of other functional leaders, often at odds with their short term function specific performance measures.

25 years ago, I and my marketing team, failed to convince the board of the then Dairy Farmers Co-Operative to invest the required capital in new equipment to launch a new brand of flavoured milk. It was to be packaged in plastic bottles, with a screw cap, to be sold at a very considerable premium to the products then only available in the gable top cartons, and we proposed to sell it to different consumers. Nobody had done this before, we were banking on tapping into a market completely under-serviced by existing packaging and branding. The Operations Manager at the time believed in the project, and put his neck on the line by committing  his R&M budget to refurbish some older gear in the absence of capital approval, and I ‘stole’ the required advertising funds from another brand.  We launched Dare Flavoured milk, and it delivered the fastest return on investment I have ever seen, and 25 years later, it is still going strong, delivering revenue and margins to the now overseas owners of the business.

If marketers started talking about revenue generation, rather than the more common ‘marketing-speak’ like positioning, segmentation, and all the insider jargon generated by digital, they will be taken much more seriously around the board table. Building support amongst other functions to acknowledge the long term impacts of intelligent marketing, is necessary for long term prosperity, and the only real measure of marketing effectiveness.