The Marketing Blender

Wii Offers Lesson in Strategic Marketing

You’ve got to love the Nintendo Wii.

For years, Microsoft and Sony competed on established dimensions in the video game market – graphics, the number of games available, and so on.

Nintendo was losing on these dimensions.

When it created the Wii, it changed the competitive landscape. It literally changed the way people play video games, by getting people up off the couch and having them get involved in the game with a unique new control scheme.

And all of a sudden, graphics didn’t matter nearly as much.

Nintendo decided not to compete on the established dimensions in the game market, recognizing that being third in any market is a tough place to be.

Thanks to some clever innovation, It’s not third anymore.

The best part – you just know that there were many people at Nintendo working their butts off to figure out how to make a new Nintendo system with better graphics so they could compete using the established rules of the video game business.

I’ll bet they are glad now that there were a few who decided not to compete on someone else’s rules.

Cashing in on Change

There’s no better time than an economic downturn for lesser known brands to take big steps forward against established brands. This happens mainly because the things that made top brands valuable in the “old” market are somewhat less valuable in the “new” market.

My favourite example is the real estate business.

As the real estate market cools, everything will change for local agents.

Nobody will care how many sales awards you won two years ago, because two years ago might as well have been 20 years ago given the speed at which the market has changed in some cities.

Nobody will be impressed that you got over asking price for your listings last year. Because you won’t get it this year.

Essentially, the storylines from recent years – about volume and high prices and managing multiple offers – are less effective when talking to clients because they don’t reflect today’s reality.

As the market changes, clients are open to new storylines, like clever research to find out the right market value for a client’s property, or credible information to help clients make informed choices about when to sell, or even if they should sell at all. An agent weaving their marketing message through these relevant storylines has an immediate opportunity to become a “big” brand in their local market.

It will be interesting to see which of your local agents recognize this, and which still cling to last year’s sales awards as proof of their expertise.

Green Marketing - Slowly but Surely

Interesting study in the most recent edition of Canadian Business magazine -- an article entitled "Green Counting" mentions some research done by packaged goods giant Proctor & Gamble that illustrates the challenges of green marketing initiatives.

The key highlight - only 10% of Canadians would accept a trade-off of some sort when using a product that is more environmentally friendly than their existing brand. In addition, 75% of Canadians would accept no trade off at all.

So, bio-degradeable garbage bags are a great idea, but not if they tear a little more often than plastic ones.

While there's a tremendous interest in green marketing initiatives, it's clear that consumers are not yet willing to embrace truly environmentally friendly products and services if they involve a trade-off in quality or the user experience.

And therein lies the challenge for companies trying to highlight their green marketing initiatives for the market. A vast majority of the people you ask will tell you that they want to see more earth-friendly products on the market, but on an honest day, many will tell you that they aren't that interested in buying them.

Ironically, a company that does nothing to communicate their commitment to the environment is often viewed in a negative light, yet the company that pours themselves into developing products that are 100% eco-friendly may find themselves with no takers.

So how do you approach product development in these market conditions? Carefully. P&G has focused their efforts on reducing packaging and marketing concentrated versions of their existing products such as Tide - and even that took a lengthy advertising effort to convince customers that they were getting the same value for their money in the smaller bottle.

The lesson in P&Gs research is that consumers will embrace meaningful green marketing programs, but they'll do it as true consumers - they want value for their money. Green alternatives need to be as effective as the original.

I believe green marketing will continue to grow - but it will only grow in step with consumers' willingness to consider alternatives to their trusted brands for the sake of the environment. And P&Gs research suggests we aren't there just yet.

Green Marketing Fatigue

Green Marketing is still in its infancy, and yet we’re already seeing headlines citing “green marketing fatigue” among consumers.

The allure of green marketing has proven so powerful that too many companies are making dubious claims about their environmental commitment – and the entire green marketing movement is now met with considerable skepticism as a result.

So what’s a company to do?

In my view there are two green marketing avenues available to marketers:

• The "corporate initiative approach", which usually sees a company promoting the fact that they use 5% less paper at head office or have reduced air conditioning usage

• The "customer experience approach", which enables clients to participate in some way in reducing materials, recycling packaging, and so on

The customer approach is by far the more effective of the two, and much less likely to be viewed suspiciously by your customers. Green marketing initiatives that your customers actually participate in combine a positive customer experience with your green marketing efforts, making both feel more genuine at the end of the day.

For example, would you rather hear that the grocery store you shop at has reduced their lighting by 10% to conserve energy, or that you can now choose recycled paper bags instead of plastic?

Would you rather hear that Toyota has cut emissions from their factories by 10% on average, or that they are offering special lease rates on their most fuel efficient cars to make them even more affordable?

In both cases, the latter option allows customers to make a deliberate decision to do something that’s better for the environment, be it choosing a reusable shopping bag or a more fuel efficient car. The result is a more genuine "green" experience.

Enabling clients to do something green through your company is far more effective than doing something at head office and then telling the world you did it.

The Grass isn’t always greener on the low-price side

Last week I blogged about the price objections encountered by sales people.

One of the points I was making was that sales people encounter price objections so often that it’s only natural for them to want the company they work for to lower the price, sweeten the deal, etc, to help them sell more of whatever they sell.

This is especially true because the number one thorn in the side of many salespeople is that someone else is always willing to do it for less, and clients aren’t afraid to remind you of this fact.

It pays to remember that the grass isn’t always greener on the other side. Have you ever considered what it’s like to be in sales for a low-price provider?

A real estate agent once remarked to me that “those flat fee agents are killing us”. She was referring to the influx of agents entering the market charging lower commissions than the leading brands such as Remax, Century 21, etc.

I wonder if she’d contemplated life as a flat fee agent.

-         little or no brand recognition

-         constant pressure on margins and expenses

-         constant pressure to sell more to compensate for a lower margins

-         no advertising budget

-         no budget for anything resembling advertising

It’s easy to think of the many ways that your low-price competition is killing you. While you’re at, think of the many ways you’re killing them, and then start focusing on those on your sales calls.

Paying too much, by choice (Hey Sales People – Cheer Up!)

The cry of the sales force is often to lower the price, offer a better rate, throw in a bonus etc etc. This is somewhat understandable, as every other client probably throws an objection about price on the table during any negotiation. (“Your competitor can do it for 5% less than you can…). This is especially true during tough economic times when companies are trying to squeeze every dollar they can.

The marketing and product folks protest these requests, because continuously lowering the price erodes margins, undercuts the company’s value proposition, and generally de-values the sales force (if the product is the cheapest on the market, why do I need a sales person to sell it?)

So if you’re a sales person frustrated with the price objections you continuously encounter, just think for a moment about all of the things you readily pay more for every day.

A personal example – I have all kinds of insurance through a full service broker. I could probably find a lower rate on my insurance if I cut out the middleman and purchased my insurance individually online from low cost, no service insurers.

But I don’t want to.

When I call my agent, they know who I am, answer my questions, and generally treat me pretty well. I think that if I ever made a claim, they’d actually be there for me – and that’s the point of insurance, right? That adds value for me. I’m paying too much for insurance, but I’m fine with it. In fact, I do it knowingly and willingly.

Think of all of the things you pay too much for:

• Gilette Fusion Razor Blades – 4 Blades? Do you really need 4 blades? My Dad shaves with a 1 blade Bic. 

• Oil Changes at the Car Dealer – More expensive than independent garages, but who really knows what goes on at Joe’s Garage?

• Tylenol - You can get generic pain killers for half the price, but when you really need your headache to go away, you reach for a Tylenol

• And the list goes on...

Price is the number 1 objection you face when you are trying to make a sale. If it helps, remember that the person making the objection readily overpays for a whole bunch of things in their personal and professional life, because they have a reason to. (Trust, Effectiveness, overall value...)

They’ll overpay you as well, if you’d just give them a reason to do it.

How to Ruin your Public Image in 37 minutes

This past weekend, one of the major unions that staffs the Toronto Transit Commission (TTC) walked off the job late at night with almost no notice, shutting down the city’s transit system and leaving thousands of commuters stranded.

The strike was ended by government legislation in just 2 days. The damage to the union's image will last much, much longer.

The sudden strike was a PR blunder of epic proportions by a union that had so carefully managed its image in the weeks leading up to the strike, and serves as a lesson for businesses in all industries – goodwill built through positive PR is fragile, especially in its early days.

A little background – the union in question is made up of members who drive and maintain the TTC’s buses and subways. In the weeks leading up the contract negotiations with the city of Toronto, the union had taken great pains to buff up its public image by selecting two very clever key messages:

First, it focused its positive PR efforts on the people of the union, highlighting the stories of the drivers who get up at 4 am to help get people to work, and the maintenance staff who work overnight to keep riders safe. This was a safe choice – instead of a pro-union stance that might alienate some people, they focused on telling the stories of real people to humanize their side of the contract negotiation. It’s easy to dislike a union, if that’s your view. It’s harder to dislike a person you haven’t met.

Simultaneously, they floated stories about the abuse that some of these union employees face from irate passengers, which drew attention to a central issue in the contract debate – benefits for workers injured on the job. Again, this was good messaging – it’s tough to disagree with the notion of fairness.

They even launched their own website – worthamillion.ca – where they were progressive enough to allow comments from visitors (negative and positive). They even had union members reply to some of the more negatve comments to clarify the union’s position on certain matters.

And they made a much publicized promise to the citizens of Toronto – the union would give 48 hours notice of any job action so that the public (the very people the union needs on their side) would be well prepared to make alternate arrangements.

The Union's communications were on message, relatively clear, and helped to further their position in advance of the contract talks, which (as all talks of this nature do) were coming down to the wire.

And then, in an inexplicable public relations blunder, they threw all of that goodwill (and money) away in the space of 37 minutes on a warm April evening.

After their own members voted against the most recent contract tabled by the city despite an endorsement of the deal from union leadership, the union was notified at 11:23pm on Friday that a strike would begin at midnight. By 11:30pm, some passengers were notified over the loudspeaker system in the subway stations. But for the thousands of Friday night partiers enjoying themselves and counting on the union employees to get them home, and the shift workers who rely on the system to get to their jobs, there would be no 48 hours notice as promised - only 37 minutes.

And then the worst of it – Union leadership turtled. The head of the union was nowhere to be seen on TV or Radio in the midst of this chaotic scene. The union was silent.

The website that so effectively told the stories of union employees was taken down – presumably by the union itself.

On Saturday morning, no picket lines could be found anywhere across the city.

Outside of a terse statement that talked about ensuring the safety of employees, the Union said nothing.

The result – an entire weekend of news coverage dedicated to showing how the citizens of Toronto were angry and offended at the union for breaking their much publicized promise. The Union’s side of the story was never told, because they had stopped talking.

All of that careful messaging and goodwill, tossed aside in a span of 37 minutes. The long term damage to the union’s reputation remains to be seen.

The moral - your brand can survive the odd bump in the road when it has established roots in the market and a long favourable history on its side. But emerging brands buoyed by recent PR wins and good messaging are fragile, and must be handled with care. One slip and alot of work can go out the window.

It’s the Little Things…

The genuinely good attitude of the call centre rep when you call with a
routine question, that makes you feel that they actually care about their
job and their brand.   

Or the consistently good advice and treatment you get in a particular store,
that makes you feel that you really are a “valued customer”.

These are examples of the silent, unseen events that drive brand loyalty and
have the potential to turn clients into advocates for your brand.   

So why are many companies managing these activities out of their organizations?

Modern day brand management, especially on a mass scale, doesn’t do very well with these creative little variances. We like to put policies and procedures in place to keep the customer experience as consistent as possible. We want the phone answered with a specific phrase, or a standardized greeting used in our stores.   

But in driving this kind of “regulation” into the brand, we’re also stamping out some of those creative, silent, often unseen behaviours that make a huge difference in brand loyalty.

We time call centre employees to the point that they rush through calls to land on the top of some scoresheet somewhere that ranks employee performance by call times. Only, clients aren’t even aware of call times – they just want the phone answered, to be treated well, and not to be hurried.

We standardize service down to a scoresheet that asks whether the employee greeted you in a specific way or offered you a receipt. I’m sure some of the brands I deal with greet me in a standard way – but I haven’t noticed it and it sure hasn’t made a difference in my loyalty to the brand.

The next time you survey your customers, how about asking them one simple question -- The last time you called or visited us, did we meet your expectations and treat you like a real person?

Managing brands and brand image is not always about instituting rules and regulations. Its about establishing parameters for behaviour, and then giving your people some room to go the extra mile.

You’d be surprised how many of your employees will.

It’s an Incremental World

For all of the big thinking that goes on in some businesses, and for all of the books and experts that tell you to seize a great market opportunity when it comes along by betting big, you see surprisingly little of this kind of aggressive marketing in your day to day life.

In fact, much of the business world measures success in relatively small, incremental gains.

Some corporations delight when revenue moves up 5% vs 2% in the same quarter last year. Or, they throw a party when they drive market share up by 10 basis points.

When a company offers an employee a 6% increase, it’s considered a “big raise” because inflation is only running at 2%.

Measuring Everything

Since we measure absolutely everything we need to know (and many things we don’t) we get fixated on comparing numbers, making relatively small gains seems like real improvements.

Which begs the questions, just what is success anyway? Is it a relative measure, comparing today’s performance against the past?

Or is it a measure of what you could have done had you not set incremental targets – a measure of you vs the world, instead of you vs yourself 12 months ago.

Incremental Thinking Goes Out the Window when things get Bad…

It’s interesting that incremental thinking disappears when things get desperate. Apple was in lousy shape a few years ago, so any incremental measures they had were useless to them. As a brand and a company they were in a downward spiral.

Once the quarter over quarter incremental gains no longer mattered, they had nothing to lose -- so they made some big bets, and they changed the course of music with the iPod as well as reinventing themselves in the computer space.

Do you think when the iPod was launching, Apple was worrying about a 2% increase in revenues? Nope. they had their eyes on a much bigger prize.

The Moral of the Story…

I recognize that companies need to show incremental gains to demonstrate to shareholders that the company is heading in the right direction. But marketing departments (and companies in general) need to take their eyes off the percentages every now and again and think about what they could accomplish if they bet big on the right opportunity.

10 Questions to Ask (...to grow your business)

It's not about having the answers, it's about asking the right questions.

Too often, we don't learn as much as we can about an aspect of our business, because we assume we already know it inside out. Or, we subconciously decide that we don't want any new information on something we already presume to understand.

Good leaders and good marketers are constantly asking questions, not giving answers. In that spirit, here are some questions you should ask to help grow your local business:

• Ask one client what first led them to do business with you

• Ask one ex client what led them to do business elsewhere

• Ask your web team what your conversion rate is, and then ask them how it could be improved by .25% in the next 10 days

• Ask your marketing/advertising agency how much revenue their last campaign for you generated (just to see if they know)

• Ask a fellow business owner/marketer in a related industry what the single most successful tactic they used they in the last few months

• Ask a local journalist if there is anything you can do to help them write a story about a problem that your clients face (and preferably, one that your product or service solves)

• Ask an employee for an idea

• Ask a client for an idea

• Ask about local speaking opportunities

• Ask for a referral