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Reaching the social consumer

By Mark Di Somma

New media guru Brian Solis has filed this excellent article on what some are predicting to be branding’s next key customer: the social consumer. Based on research from attendees at The Pivot Conference, there are a number of key out-takes:

Social media has a strong in-house bias and is the biggest responsibility for marketing/advertising teams. But while marketing dominates social media responsibility right now, Solis’ view is that “social media will extend the capacity of any business unit or division affected by outside behavio[u]r.” So expect to see social media making its presence felt in PR, sales, customer service, even investor relations …

If Solis is right – and there’s no reason to doubt him – that means companies will need to hard-wire social media into their lead and sales generation processes and into their customer and stakeholder response systems. My view is that some functions will find this easier than others. The significant benefits of course are timeliness and efficiency. But based on research I’ve seen in the investor relations’ space for example, this could take a while. I do agree though that it’s inevitable.

The Pivot Conference research also found that while marketers plan to significantly increase their use of social media, with the majority of participants identifying it as a component of an effective customer relations programme, only 35% of those polled actually saw social media as fundamentally different from other media. I was also interested in the fact that while 73 percent said their social media programmes were successful, only 16% identified them as very successful. A whopping 57% identified them as somewhat successful.

Three key out-takes for me here.

Firstly, it looks like the majority of marketers probably aren’t using social media that differently from the way they use other forms of marketing yet. In other words, they recognise it as a channel, but either can’t, or don’t, regard it as a discipline in its own right. This may change of course as social media becomes more integrated into outward-facing corporate functions and more and more parts of the enterprise start to recognise ways to use it to improve their work.

Secondly, the size and vagueness of the response around returns suggests people are still relatively hazy on what they get out of their social media investment, and that a sizeable number are still trying to reconcile buzz and bucks. For now, most it seems will continue to throw money at it. At first glance, the problem is not dissimilar to the ways corporates first used the internet. As organisations have discovered wider and wider uses for online, and the technology has expanded to accommodate those, the understanding of the value of the internet has also broadened, and what was once the preserve of the IT department has become a way of working that permeates more and more of the business model. In other words, I think the monetisation model for social media – the return factor – is more strictly defined right now than it will be in the years ahead.

Finally, while the majority of those polled seem to have defined the social consumer as someone who is reached and engaged by social media, my own view is that such a definition is too restrictive. To me, the “social” aspect has the potential to be much broader, incorporating a number of other key trends including corporate social responsibility. An opportunity for example, at least in the medium term, lies in how companies and brands link consumers with what they are doing via their CSR in  order to generate product preference, and how they might use social media to do that. Let’s talk more about that another time.


Stars and scandals

By Mark Di Somma

I’m not a huge one for the ins and outs, behaviours and otherwise of the fashion world (preferring to leave such pursuits in the experienced hands of friends like Jack), but I did take some note of the recent John Galliano scandal because it highlights the risk that brands take when they associate themselves so closely with an individual who is a brand in their own right.

It’s not always bad of course. Steve Jobs turned up for the iPad2 launch, and everyone took heart. The stock price even went up. And in fashion, most would agree I think that designers like Marc Jacobs and Karl Lagerfield have done wonders for the brands they are associated with. Galliano too up until this point. But how quickly, and dramatically, things can change.

Almost every brand today it seems is just one YouTube clip away from a crisis.

And when things go wrong in this kind of situation, there is fallout on three levels: the individual’s brand suffers; the employer’s brand suffers; and the halo effect that I would call the relationship brand also suffers. It’s still early days, but that’s what has certainly happened here. Galliano is in disgrace. Dior is on the defensive. And inevitably a whole range of things are being called into question.

The wider message here for brands, of all types and sectors, is that if you have public-facing “stars”, they can be significant assets, but their potential to compromise your brand, particularly in these days of the three second clip, extends into areas well outside your own sphere of influence.

In this case, we’re talking about someone whose employed. But the same situation, from a branding point of view, exists for sponsorships, endorsements, third party agents, contractors … anywhere there’s a link back to your brand that you are promoting in order to cement perception. It could be a person, it could be a show, it could be a team, it could be your rainmaker or your top performing salesperson.

The scary thing about investing in a “name” is that you are investing not just in what they do at work for you but what they do, or don’t do, outside of work hours. Reputation never sleeps – which can make the face of any brand, yours or not, appointed or otherwise, a 24 hour goldmine or a round-the-clock nightmare.

Cult branding: Developing a scarcity strategy

By Mark Di Somma

In a world dominated it seems by the push for scale and mass coverage, it’s easy to forget that sometimes the smartest thing you can do is the polar opposite: develop a deliberately limited edition brand that shuns the mainstream. I’ve written about this a number of times – here’s an example – and coined the phrase cultrepreneurs to describe those enterprising individuals who have chosen to create and market brands with cult status.

As this story about Julian Van Winkle and his Old Rip Van Winkle Distillery shows, there is nothing accidental about why his aged bourbon attracts a fervent following. I really liked the owner’s description of ‘a strategy of scarcity’.

Here are just some of the ways Van Winkle builds cult status:

  • The company deliberately stymies supply in order to raise cachet and lift returns. It’s one of the great ironies of cults that, beyond what you need to be viable, sometimes the less you produce, the more you make. As Van Winkle says he could unload two or three times what he makes. But keeping his inventory low minimises the chances of being stuck with spare stock and also means he can continue to raise prices.
  • The brand is not visible. You have to be in the know, and prepared to wait, in order to procure the product. So – scarcity of presence only adds to the mystique, and lack of readiness lifts the anticipation levels. Entirely the opposite dynamics of mainstream, scaled brands.
  • The brand gets covered by others. The article is a prime example of that. But Van Winkle also makes great use of word of mouth, through dinners and trade shows, to get connoisseurs talking and so raise authenticity, desirability and credibility.
  • The brand has deeply embedded values – in Van Winkle’s case, an unstinting focus on quality. And there’s a figurehead who embodies those values – Julian’s grandfather, Pappy Van Winkle – and who is known by consumers of the brand.
  • There’s a secret recipe – this one substitutes wheat for rye. Another component of making the brand exceptional.
  • Awards prove the value of the brand and its claims to quality – and once again, they do this objectively, rather than the brand itself having to make public claims.
  • Distribution is limited, and upmarket. A very big part of the joy of a cult brand lies in its discovery. Finding out about what most people don’t know about is a reward in itself. It also, ironically, invites the very kind of ‘sharing’ that galvinises the brand.

Perhaps the most powerful thing about the decision to build the Old Rip Van Winkle Distillery into a cult brand is that scarcity absolutely fits with the specialness of the product. Everything about the brand is genuine. There is no ostentation. Van Winkle aged bourbons are rare because of what they are, not because they have chosen to self-consciously position themselves that way. There are any number of ‘upmarket’ brands that look to borrow from cult brand ideas – but many come with an inherent sense of self importance, which they call prestige, that compromises their desirability. As the CNN article points out, so much of the bourbon base product evaporates before it is mature. So scarcity is a precept built into the very nature of making aged bourbon. What Van Winkle has done is to accentuate that quality and celebrate it, rather than trying to compensate for it. That would have been difficult, perhaps impossible, if the product or its manufacturing was inherently more mainstream.

The temptation to be overt is all around us. Social media in particular has raised visibility to god-like status. But in the world of cult brands, even difficulty in finding the product is not necessarily an obstacle – in fact it can be very engaging, very sticky. By making what was already a rare product into something even harder to procure, Van Winkle has astutely and discreetly lifted desirability.


Lessons from Wikileaks

By Mark Di Somma

What’s Wikileaks really selling us? Access to information we deserve to see or the chance to participate in something that piques our curiosity? How many people have actually read the Wikileaks files – and at the end of the day, does it actually matter? Is Wikileaks important for what it says, what we’re told it says or what it claims to represent?

Julian Assange has done a masterful job of linking his ‘product’ to some powerful and highly emotive causes: freedom of speech; censorship; government secrets, and of course persecution of the individual by the state. Big causes; global causes; causes that attract a committed audience; causes that broaden and deepen the Wikileaks’ brand story.

In the process, of course, the brand has deftly snookered the authorities. If governments don’t express outrage at what Wikileaks has done, then they may encourage other persons with access to such files to release more leaks. If they do condemn the brand’s actions, that merely strengthens Wikileaks’ brand story as the modern day Robin Hood of free speech.

In a world of open information, “right to know” brands are the harbingers of today’s dirty little secrets … And Wikileaks is a master of the modern-day peep show. Snippets of what goes on behind the scenes at an international level … and all the press coverage a brand could ever want. A little bit here … and a little bit there. Buy a T-shirt or a mug, and in between court battles, Wikileaks will tell and show you a little more.

What does all this mean for you? It’s further proof that privacy the way we’ve always had it is a has-been. Your brand is probably findable, searchable, leakable. That makes the brands that find, search and leak potentially very powerful indeed. Same for the brands that stop the finding, searching and leaking.

Secrecy is the new pornography.

Rediscovering trust

By Mark Di Somma

While the officials, scientists and insurers in Christchurch start the interminable discussions over what, when, where, why, how much and who, perhaps the toughest task of all for the authorities doesn’t lie in rebuilding the structures, but rather in bringing back the very human aspect of trust.

With time, patience and enough goodwill and funding, government, insurers, investors and the private sector can restore order, power, water, services, homes, the CBD, everything that has been physically lost and damaged. But what the hell is it going to take for faith to return?

Out-thinking the recession

By Mark Di Somma

When everyone’s in sale, no-one is. It simply means the market has reset the prices that consumers expect to pay. So I was interested in this interview with retail specialist Jim Lucas of Draft FCB about how businesses should approach recessive times. Here are my key out-takes from his interview:

The lack of decline in small luxuries such as skincare and animal treats is a clear sign that shoppers will hold on to a handful of indulgences in their everyday lives just to feel normal. The secret is to scan for those opportunities in their changing behaviours.

Rather than focus on the big ticket buys, look for little pleasures. Lucas says marketing is about trying to change behaviour, and a recession is a strong backdrop for that. “’You need to think of creating behaviours or new forms of regimen or rituals or routines that are going to fit into this new era.” That means, for example, calling for smaller actions: paint a wall, rather than repaint the house.

Continued discounting will simply make some categories unprofitable, and not just that, it will cement in those price expectations. Goes to my point earlier.

Finally, Lucas says, the rise of private labels is a sure sign of brands failing to communicate their points of difference. If that’s happening in your sector, it’s a sign that consumers either don’t value quality or regard it as ubiquitous. Changing that requires shifting what they value rather than just the value itself.

Incidentally – one of my rules from when I worked in direct marketing was that it was always better to give than to lose. I always used to try and keep prices up by giving consumers more product(s) for the same amount rather than the same product for less cost. Oh, and make that “extra something” a little treat if you can – for the reasons Lucas outlined above.

Four hard yards

By Mark Di Somma

Sitting in the lounge waiting to board yet another plane, it’s fascinating how many people are busy. Laptops open everywhere, conversations on smartphones everywhere (at various levels of discretion). No-one wants to miss a minute. And yet today Borders tanked, and local book chain Whitcoulls announced it’s in schtum …

I wonder how many of their senior people are at work right now still believing that hard work alone will get them through …

Albert Einstein once defined insanity as doing the same thing over and over again and expecting things to change. Somehow, we’ve allowed ourselves to be lulled into the false security of doing. Things will just be fine if we work hard, advertise hard, sell hard. But while all this is happening – while everyone is working hard out – it’s easy to forget the real things that actually put distance between you and circumstances.

1. Look hard – at what’s really happening and ask the hard questions about what that might mean

2. Brand hard – so that you continue to mean something exciting rather than just selling things

3. Finance hard – so that you have debt structures that are at least viable

4. React hard – read what’s happening and make the difficult decisions

I call them the four hard yards, because if they were easy everyone would be doing them.

What’s your reply?

By Mark Di Somma

“I can’t believe they got that job. We are so much better than them”. We’ve all heard that. Some of us have said it. Here’s the question. Then, why did they get it?

If it was price, what did they do to their cost structures to make their price possible?

If it was networks, what are they doing or who do they know that you don’t?

If it was credibility, what makes them a more comfortable choice than you?

So many companies respond to a competitor’s wins with excuses. The companies I like are the ones that use every loss as an opportunity to re-evaluate if and how they themselves need to change.

Sometimes, decisions are a bit like email. It’s not the message you get that counts. It’s the way you choose to reply.

The real recipe for Coke's success

By Mark Di Somma

So someone’s supposedly discovered the recipe for Coca Cola. What does that mean for the world’s most popular drink? Very little I would have thought. Because the world’s most closely guarded beverage trade secret has already done its job – it has helped build perhaps the most consistently powerful brand in the world. Beyond that, its value as a formula today is questionable.

Even if someone did replicate the taste, so what? They still wouldn’t be Coke. Great brands grow beyond the products they marque. They actually come to embody ideas – such as happiness in the case of Coca Cola – that the product reports to, and not the other way round.

The New Coke debacle might suggest otherwise to some, but to me that was much more about changing a product that consumers held dear rather than a taste issue. Consumers expressed their apprehension by citing taste, but taste, in my reading of this particular case, was the identifier to the wider fear. What they were really saying is – don’t touch.

So often brands think that their product recipe is the greatest thing they have to offer. They trademark their products or their designs and think the business and the brand is future-proofed. Not so. IP protection is important, don’t get me wrong, but it must form part of the wider, on-going telling of a compelling and relevant brand story.

In today’s environment, where no secret is safe (even the secrets of diplomats) and all products get to a point of being pretty much on par technically, I think you have to assume that a trade secret alone will not be enough. Coke recognised that a very long time ago and used its “secret” recipe to build its brand. Same with the KFC Colonel’s 11 herbs and spices. A food scientist could probably break those down in an instant. Fine, it’s done its job.

However, there is another side to this. Talking with Alex today, she made the very good point that releasing the recipe does demystify the Coke brand just a little, and, more to the point, if there was anything in the recipe that consumers hadn’t known about then that could indeed have jeopardised Coke’s brand equity.

That doesn’t seem to have been an issue in this case – beyond the widely known inclusion of coca – but, as Alex so wickedly asked, what if it had? Wow.

Ten minutes of Gaga

By Mark Di Somma

If I was a Lady Gaga fan, how would I feel about her claim to have written her latest single in 10 minutes? Would I see that as a sign of her huge creativity? Or would I, on reflection, consider that the return for minutes invested, assuming this is another big hit, is going to make most Wall Street bonuses look relatively modest?

A cynic might say if it just took 10 minutes then she didn’t do a lot to make a lot.

It didn’t take 10 minutes of course. It took all the experience that Gaga brought up to that moment, and all the subsequent time it took, both hers and for everyone else involved – to get the ideas in the song expressed, captured, edited, packaged, marketed and distributed; time probably better expressed in at least months. So the key value metric here is misleading; it’s not actually time to create (the idea), it’s time to market (the final result). By drawing attention to the 10 minutes, Gaga has framed the product in the shortest terms, for reasons that she perhaps believes celebrate her artistry.

But audiences aren’t buying what she created in 10 minutes. They’re buying the end results of endless days by named and unnamed people to bring that idea alive. Critical distinction.

And in drawing attention to the 10 minutes she took, Gaga has, unwittingly or otherwise, devalued all of their time and contributions. I think they’ve been short-changed.

Gaga’s not alone of course in framing the value of what she does in this way. So many organisations want to explain what they offer in terms of the time it took, or didn’t take them – speed, somehow, being associated in the creative industries with genius or inspiration. But actually, for almost all of us, there is a massive difference between the creating minutes and the time we bring to a project through our past experience, and another chasm again, on the other side, between the formation of the concept and its cumulative delivery to market.

If you’re going to, or feel you have to, talk about time at all in conjunction with what you do, it’s that amount of time – the time it took to go from idea to shelf, and the time you had already invested before you had the idea in the first place – that you should be framing in your stories, because that amount of time feels careful and prudent and determined and produced.

10 minutes feels like what it is. A cup of tea.