Latest Posts

Upsizing the impact

By Mark Di Somma

Interesting isn’t it how we perceive messages. 50,000 jobs on offer at McDonald’s sounds huge, but it actually averages out at around 3 – 4 positions at every restaurant in the U.S., which suddenly doesn’t seem anywhere near as impressive.

I have no doubt that McDonalds could have quietly filled those positions by advertising locally. But that would have significantly pixelised the effect.

Instead they chose to offer all those tens of thousands of positions on one day across the nation. All that hope, all at once. A dollop instead of a glimmer. A chance for the applicants themselves to be part of something that felt so much bigger, so much more powerful, so much more universal. A chance for McDonalds to make its presence felt and to reinforce its credibility as an employer brand. An event big enough to set social media abuzz.

The next time you’re planning to a “soft” release, maybe ask yourself this: What could we do to upsize this? And how big would we have to make it to get the world’s attention?

The difference between less and off

By Mark Di Somma

If I buy something on sale, what should I get? 40% less – or 40% off? They are very different things.

If I purchase something for 40% off, that means I get what I would have got if I’d paid full price but I get a 40% reduction on the asking price for the very same goods or services. The result, as we’ve discussed many times, is that the brand’s perceived value deteriorates and, if enough retailers participate, the actual market value of the brand also drops.

40% less on the other hand means I pay a lesser price but I get less for that price. How can that be? Surely a pair of shoes is a pair of shoes, right? Not necessarily. One of the first rules we were all taught in direct marketing is that it is much more economical to give than to take away. In other words, it is much more economically sensible to add services to a product in order to make it more valuable than it is to discount the asking price.

That’s because the price I can pay to add perceived value is generally much less than the cost of taking money away. Airlines are very good at this. You pay a lot more for a Premier seat than you do for an Economy seat – and in exchange the airline gives you a bigger seat, a different menu and perhaps more movies. They add to what you get, at a lower cost to them, than the revised price they ask you to pay.

But there’s no reason, on reflection, why that process shouldn’t work in reverse. In other words, what’s the reward for paying full price? Take our shoes example. What’s 100% worth? What does a customer get for paying full ticket that they wouldn’t get if they bought the same product in a sale? Because it’s only by establishing that, that a brand can establish what the new receivables are for 10% off, 20% off, 40% off … If I pay full price for the shoes, perhaps I should get a free fitting, my first replacement heel free, a 14 day money-back guarantee and a shoe care kit. If I pay 20% less, I don’t get the replacement heel and I have to pay for the shoe care kit. You get the idea …

The beauty of this arrangement is that it allows those people who just want to buy on price to do so, whilst simultaneously encouraging those who buy on value. Just taking 40% off and delivering the same as 100% doesn’t do that.

What would you Like?

By Mark Di Somma

In this discussion on whether Liking a brand on Facebook makes you more inclined to be positive about that brand, writer Gregory Ferenstein says that rationalisation theory suggests “our actions secretly influence our opinions”.

I’m sure that’s right. We do something and we justify that action to ourselves. When we “like” a brand, we tell ourselves it’s a better brand than we might have thought it was otherwise. We make a public endorsement and we stand behind it. When we pay for something that makes us feel good, we feel better about that brand. And when we buy something alongside many others, we feel more secure because we are not alone.

The dealmaker or breaker though is that we do get what we thought we were getting – and this is where brands need to be so careful in framing expectations. If I take an action, and the action turns out to be better than I expected, I will be pleasantly surprised and I will naturally carry that through to my view of the brand. Zappos 101. Happy actions make for happy opinions.

But brands can get it very wrong in two ways.

The first is that they induce people to take actions under an expectation that never is going to be met. You see this with budget airlines all the time – where people buy expecting that they will get some semblance of the full service they’re used to. When they don’t – and they’re charged for bags or barred because they’re late – their opinions go through the floor. The actions that were taken didn’t align with the actions they were expecting, and as a result, they are bitterly disappointed.

Here’s the question. Who’s at fault? The airline – for not being clearer about expectations? Or the customer for not understanding what they were buying? I blame the airline – and here’s why. They have more to lose. If you want to avoid having disappointed customers, you have to presume that people assume. For the sake of your brand, you need to start from the point of view that unless and until your customers are told they can’t have something, they’ll assume they can. You can’t just hide that in the T&Cs.

In other words, if you want people to “like” what’s happening, you have to tell them what they don’t get – and you have to link that to what they are getting. “We close our flights off 30 minutes beforehand because …” And the “because” needs to be something that is relevant to the customer not the airline. So don’t talk about resourcing or policy or anything like that. Link it to the buyer.

For example, here’s how you might get someone to “like” the luggage policy. “Bags are heavy, and weight uses up fuel. The less bags you travel with, the lighter our planes and the less fuel we have to burn, which means you continue to pay lower fares. You can bring more bags if you want to, but you’ll have to pay for them. We think that’s fair to everyone.”

The second way brands can get it so wrong is when they think customers are taking one action when in fact, they are taking quite another. For example, offering a brand at a discount may entice people to buy – and brands may think that because customers have bought once, they will buy again, only next time at full price perhaps. The good old lost leader theory.

Except that’s not the real action in many cases. The real action – the one customers who buy this way are really liking – is not paying full price. So the real opinion that such an action influences is that the brand is not worth paying full price for.

Be careful how you judge the likings of others. What and why they “like” may be different from what and why you’d like them to “like”.

Take a chance

By Mark Di Somma

Why do consumers go out and buy a Lotto ticket or take part in brand-run promotions when they know that their chances of winning are so very small? According to Kelly Goldsmith in this article in the Time blogs, it’s not because of what they stand to win, it’s actually because of where consumers focus.

Most people it seems focus on the outlay – it’s just a dollar or two. And when they connect that outlay to the potential reward, then they basically believe they have nothing to lose. Involvement appeals directly to the universal love of curiosity, surprise and of course winning. But, ask people to think about the problem the other way round, in terms of their chances of winning, and interest wanes substantially. In other words, where something is portrayed as hopeless, we find it much harder to justify even a small amount of money.

We’re hugely inclined to chase a dream if the price to do so seems small enough, but that interest declines rapidly when we’re reminded that we’re unlikely to get anything back.

That’s also why people travel to Hollywood, or try and break into the music business, or look to publish a best-selling book, or attempt to become a big-time motivational speaker. That’s what ensures that talent agencies, publishing houses and speaking bureaux stay in business. That’s what gets thousands and thousands of people to queue to audition for Idol or Next Top Model or Project Runway. The industries are adept at getting people to bet time, money and talent by publicising the potential rewards – prizes for which the outlay seems relatively small.

Maybe it’s the thought of gaining next to everything for what seems like next to nothing. But the irony is delicious isn’t it? The very thing that makes the game work and seem exciting – participation – is also the very thing that prevents almost all those who take part from winning.

Little jewels

By Mark Di Somma

Last night I attended the launch of my latest “book” – this one, the story of the Victoria Cross with particular emphasis on the 22 New Zealanders who have been awarded the country’s highest military commendation. It was a commission for New Zealand Post, one of a number I’ve done for them over the years on a range of subjects.

In fact, last year was a bit of a year for these larger writing projects because I was also involved in a beautifully-finished corporate history of the Pryde Group, a Hong Kong based company which owns the world’s largest windsurfing and kitesurfing brands.

People have asked me over the years why I get such a kick out of this kind of work. It seems such a long way from the strategic and communications work that Audacity does. And I think it’s because projects of this scale require you to be so curious, to look for the smallest humanity in even the broadest story. You need to find a structure that is robust enough to hold all the vital information, but at the same time, open doors off the main corridor – just to take the reader on fascinating side-trips that are completely self-contained.

There’s a lovely side-story in the Pryde book for example about a man who somewhat foolishly pokes his finger into a cage with a hot-and-bothered ferret in it. Guess what happens next? And what does that have to do with building the Neil Pryde brand? Nothing. It’s just a very human tale built around a surreal situation – what were all those cages of ferrets doing stacked up in the sun outside a fish restaurant in a little factory town in China? We’ll never know. (And perhaps that’s just as well.)

I find stories are most powerful when they mix the chronological with the anecdotal, when they have a powerful sense of progress but then dart off down an alley just so you can have a quick peek. Those side-tracks are not distractions. On the contrary, they add an invaluable sense of dimension. What made the Victoria Cross heroes human was the little things they did or said. That’s what revealed them as men and as New Zealanders. That’s what someone reading the book will really identify with.

The principle of chronology/anecdote is actually much more broadly applicable. In the case of stories about brands, for example, chronology provides credibility, logic, structure and of course direction but anecdotes build legends. They are the high-touch, human side; the behind-the-scenes reveal on what really goes on.

As you shape the story of your brand, you need to allow both to flourish. It’s vital that there is a grounded, prosaic framework that keeps everything in place and that reports to your biggest plans. But remember, it is the anecdotes that foster engagement and humanity. They are the proof that you are keeping your humanity. They are the little jewels that foster recall and community in the tea-rooms across your organisation, and at the pub after work.

Without them, you will quickly lose your sparkle.

Every price point needs a story

By Mark Di Somma

The temptation is to see story as a luxury item: something that brands implement to lift their margin. There’s nothing wrong with that of course – it’s powerful and it works. But I don’t think that story is just a top-end nice-to-have. My view is that most brands, no matter where they are priced in the marketplace, need a storyline.

To understand why, first let’s think about the alternative. Without a storyline, a product is just that. It has everything it needs (hopefully) to do what it’s being bought for but that also means it’s just another detergent, car oil, computer, whatever …That makes it highly vulnerable to house brands and to cheaper versions of what amounts to ‘the same thing’. It also means markets get packed very quickly with variants of the same idea that rapidly diminish the value equation: we talked about Groupon and its 425 competitors a couple of days ago.

This problem of course only becomes more acute as you move down the value chain – meaning that at the very points in the market that are most crowded and where competition is highest, the chances of finding differentiation are diminished, and much of the marketing amounts to little more than a rowdy discounting squabble based on ‘unbeatable pricing’. In point of fact, of course, those positioned in middle and lower markets should be upping their back story to compensate for this lack of differentiation. (There must be an equation in here somewhere, and I’m going to put my head around figuring out what it might be at some later date. Anyway …)

The real power of story is that it provides context, in two senses. First of all, it helps consumers differentiate an offering by attaching more than just functionality to a product. It can also help them understand why a product is priced the way it is – up or down. Ryanair are masters of this. Their price is a clear call to the market – don’t expect much, because you’re not paying much. And everything they do revolves on that premise. They do have a storyline, albeit an unusual one, based it seems on minimalism.

Secondly, and perhaps just as importantly, a storyline gives the brand owner a consistent and differentiated narrative upon which to base and evolve brand marketing. Again, Ryanair play on this with their discussions of stand-up passengers and paying for toilets. Their whole approach to their business and their marketing revolves around ‘how much less can we do?’ Provocative it may be, but it’s also consistent, distinctive and, in a highly effective way, it proves their price point. Even their at-times resentful customer service has that air of the cranky scrooge who insists on you meeting their demands on every aspect of your flight in order to qualify for their unreasonably low price.

Is it really that much cheaper to fly Ryanair than anyone else? Does it really matter? The airline brings that story to everything it does and talks about. Personally, I wouldn’t touch them with a barge-pole (I fly too much not to value some level of experience), but for some people they are utterly irresistible.

Finally, stories introduce humanity. They make you think through and act upon a narrative that is fundamentally rooted in human truths. Stories generate empathy. We see ourselves in the tale. Or we see a side of ourselves. Or we see the ‘me’ that we would like to be. Without that narrative, what are brands going to talk about and how are you going to focus your behaviours? Exactly. Everything is going to be dominated by features and discounts basically. These are much more restricted lines of engagement. And without a storyline hook to hang them on, they’re boring: witness the beauty pageant on any rush-hour ad break for evidence.

3 key points to think about:

Story is the new experience. Everything in marketing goes through phases. For some time, you couldn’t move without running into experience advocates. Experience is still important, but as that too commoditises, we’re now seeing experiences that are informed by stories. This is no surprise really. As marketing becomes more social, brands will need to become even better and more sophisticated story-tellers. It’s a pre-requisite for getting people to talk about you and think about you in positive ways.

Story helps growth. As companies move into new sectors and industries converge via technology, brands will need to spread their story consistently across diversified product lines in order to keep growing. The story will act in some ways as the constant point of connection for products that potentially range hugely in pricing and distribution.

Stories and price need to be directly aligned. Storylines themselves of course are many and varied. Some emphasise history and luxury. Others tie a product to a place or a hero, an idea, a challenge or an outrage. The key to success is to adjust the story you tell to the price you charge and vice versa. No point in telling a luxury story and charging a low end price. The whole thing will just look and feel out of whack. Beer brands have this down to an art – just look at the way lower priced drinks come with grittier and more parochial stories.Masterful.

The Feynman principle

By Mark Di Somma

A review of a review about scientist Richard Feynman in the Freakonomics blog caught my eye this morning because it also provides a simple but telling thought for every brand owner.

The author of the blog post, Sanjoy Mahajan, comments “It’s not quite true that Feynman could not accept an idea until he had torn it apart. Rather, the idea could not yet be part of his way of thinking and looking at the world. Before an idea could contribute to that worldview, Feynman wanted to turn over the idea, to see why it was true, from any angle that he could find.”

We don’t have to look far to see what Feynman was fighting against. Once something has been widely accepted as fact, the temptation is to absorb it unquestioned and to work with it on that assumption. What Feynman did though was to say “you may very well think that, but before I can think that, before I can actually absorb any thought into my worldview, I need to prove it to myself”.

For Feynman, concerns over “you don’t know what you don’t know” seem to have been replaced by a preoccupation with “you should always question what you do know”. I like this idea. After all, it is only by questioning what goes without saying that something new can be said. That it seems is what Feynman did. He re-litigated every assumption not so much to go over old ground but rather to uncover anything that had been missed in order to give himself something to build on. In other words, he used the re-litigation process to extract new value and new possibilities.

So how might you apply this Feynman principle to your brands? Perhaps by asking yourselves this the next time you sit down to strategise: What have we never questioned?

Going, going, Groupon …

By Mark Di Somma

You know what you think you’re worth. But what are you really worth? Some great points about company du jour Groupon in this article originally posted on Forbes. Most interesting perhaps because the article helps explain why and how value can so rapidly commoditise.

Here’s what I got out of it:

Success quickly generates a wolf pack – 425 competitors and counting have simply copied Groupon’s model. They did so because they could. There doesn’t seem to be any specific IP here that prevents duplication.

After the rain comes the flood. Lots and lots of competing sites in turn could well create “deal fatigue” – once customers have too much of a good thing, they quickly start to feel glutted, effectiveness drops and with it market share.

Why get married? Big businesses can probably replicate this process themselves rather than go via Groupon – or as close as makes no difference to the consumer.

Time for the big fish. Bigger opportunities attract bigger players. As you succeed, your competition also scales. In this case, Facebook and Google have now joined the hunt.

Sometimes regulation can amount to competition – not because legislators are necessarily taking dollars from you, but because they’re actively preventing you from getting to the dollars that are intrinsic to your business model. In the case of Groupon, those regulations include fights over the terms of the deals themselves and their very right to “market” alcohol.

Whose eating all the candy? If I was Groupon I’d be working really hard right now to persuade participants to stay with an arrangement that doesn’t continue to reward them. With just 20% of Groupon customers returning to shops for a second, non-discounted visit, the people who are really paying are the small businesses Groupon depends on. As the Coke model so clearly shows, the way to hold a supply chain together is to enable everyone to make money at every point.

What is Groupon really? I particularly liked Daniel O’Connor’s closing observation: Groupon is more of a business model than a company. If he’s right, then $6 billion is a lot of money to turn down for a business model, even a working business model.

Is Groupon really worth more than Google was looking to pay in December last year. Or will their decision to reject the search monster’s offer turn into this year’s version of Yahoo’s walk-away from Microsoft?

Which north?

By Mark Di Somma

Yesterday St John asked whether north meant true north or magnetic north. Good question.

As I said, most people have a sense of what the company they work for should be like. It’s natural for people to look for tangible ways to improve things. As we all know, it doesn’t take long for employees to offer a multi-point to-do list.

Listen very carefully to what you are being told. But, at the same time, be careful how you treat this information. Chances are what you are hearing is, at some level, a variation on today. It is magnetic north – the reality they are naturally drawn to. Taken literally, it’s probably an improvement on the reality people are part of – rather than an indication of where you truly need to be heading in order to be competitive. As Henry Ford so rightly pointed out, if he had asked people what form of transport they wanted before he delivered them the automobile, they’d have asked for a faster horse.

Don’t get me wrong, many of the ideas will be insightful and important and need to be acted upon. They can often represent powerful improvement opportunities: fast and effective quick wins that will help shift the momentum. What’s more, it’s very important that staff see their suggestions being taken up. Many of their ideas will certainly be steps in the right direction.

However, those ideas are unlikely to disrupt your existing model enough to recalibrate your competitiveness. To do that, you need to step-change how people feel about you, how they connect with you, how they understand where the future could be.

You want them to make an emotional shift in direction because you will be asking people to commit to feeling a different way about the company and to approaching their work with a different mindset.

Here’s how I address that. Instead of asking “what do you think this company should be like?”, I ask “what would you as part of this company like to feel that you don’t feel now?”.

I ask clients and ex-clients a similar question if I get the chance – “what would you as a client of this company like to feel that you don’t feel now?” or “what would you have liked to have felt that you didn’t feel and that prompted you to leave?”.

The answers help build an emotional gap analysis of the company you are versus the company your clients and your staff would like you to be. Once you know that, you’re ready to develop a strategy for the emotional connections the brand and the culture must look to generate from the inside-out.

I think true north lies at the end of this question: How will we need to feel and work as a company, and how will our customers need to feel about us, in order for our investors to be making the money they deserve?

Travelling north

By Mark Di Somma

Keith Yamashita has a phrase I love. He talks about companies and brands finding their northern star. The term isn’t astronomical, it’s aspirational. He’s referring to an ideal of your company or brand that burns bright in front of you and your staff, that leads you on, that fires you up and that you never let out of your sight …

It’s the brand and the culture you dream of being. It’s what your people long to be part of. And it’s who your customers always hoped you would be and that your competitors can’t be. It’s what a company’s vision should be all about.

At Audacity, we call it your ambition.

Without it, you drift.

So many people can see that north star in some form. When I ask people in workshops about the company or the brand they dream of working for, they can tell me, sometimes in amazing detail, what it looks like, how it feels to be part of that , what it’s renowned for.

They can see it. At times, it seems like they can almost reach out and touch it. What they often can’t see or touch is how they leave where they are and get to where they would most like to be.

That’s the role of brand strategy in my view. To help a company or a brand find its true north. And then to take you there.