Some excellent points raised by Carol Phillips in her post The Hostile Brand Strategy on Branding Strategy Insider. I’ve said for some time that the middle market is the muddle market – and that a more polemic approach by brands is, in my view, inevitable. Read More
The purpose of a face-to-face pitch is only partly to make the case for why you should be hired. The other part, the bigger part in my view, is that you’re looking to see behind the corporate face and to gauge the likelihood for mutual respect and profitability. Reciprocity. And in that sense, a pitch is always a two-way process – you’re judging whether you’re interested in doing business with them as much as they are judging their interest in you.
You should be watching – as much as you are being watched.
So many people forget that a pitch is a conversation not a monologue – and every good conversation is an interview by another name. By that I mean that you are looking to find out as much about what’s happening in their world as they’re prepared to tell you. And you’re looking to tell the person you’re talking to as much as they want to know, as honestly as you can.
Listen carefully to what is said – and pay close attention to what is not.
Above all, monitor the feeling in the room. People forget that while the conversation itself may revolve around any number of factors including requirement and supply, if the attitude of the requirer is that you are simply a supplier, then that is not respectful. If reciprocity of emotion is not there – bail. Do it nicely (there’s no point in burning bridges) but do it honestly and deliberately, and above all do it without hesitation.
I was working with a company some years back where we went in to pitch for what appeared to be a major branding programme. On the face of it, this was a very nice piece of business to have, and the team had done a lot of work to prepare for the meeting. We’d interviewed a number of the execs, we’d done a lot of background reading, we’d invested time and effort into a thoughtful appraisal of their situation as we saw it.
Twenty minutes into the meeting, it was clear to the whole pitch team that this was not business we wanted. They were nice enough people the ones we had met, but the new arrivals in the room that day – the people responsible for the real decisions – very much saw us as beholden to them and weren’t going to like our front-on approach to problem solving. So there was very little to indicate that there was any chemistry. We quietly and politely called a halt to the meeting, excused ourselves and left. As we collected our thoughts over coffee, I asked those around me this question: “If that was less than an hour into day one, what would day 100 be like?” I’m sure The “dear John” letter we sent that afternoon was met with relief on both sides.
Sometimes, no matter how nice the work looks, it’s just not going to work because of the people involved. Deal with it – or they’ll deal to you.
Acknowledgements
Photo of “10/52 – {outtake} guess who party by PhotKing, sourced from Flickr
What sort of information should decision makers share with employees as an organisation prepares to go through a significant cultural shift? These are my thoughts sized in digestible chunks. Order of course may vary.
1. The future that we now see for the organisation
2. How we discovered that we needed to change
3. How quickly we need to change
4. Why we need to make changes at that pace
5. How the new vision changes what the organisation intends to achieve
6. Where our new priorities lie
7. How this will change the ways we behave
8. How this will change the ways we compete
9. How this will change the ways we work
10. How this will change the ways you work
11. How we will now judge success
12. What we think the chances of success are
13. What we will be doing to stack the odds in our favour
14. Where we will be looking to make changes first
15. How far changes will extend
16. Why we have prioritised changes in the ways that we have
17. The benefits we expect to generate
18. What we don’t intend to change
19. What we think people may struggle with
20. When we expect the change to be competed
21. Who will be responsible for driving changes
22. Why those people were chosen and the mandate they were given
23. What will be asked of all people during this time
24. How we will keep you informed
25. How you will be supported through the change process
26. How and when we will measure progress
27. How and when we will report on and celebrate progress
28. How you can contribute
29. The incentives for change – personal, team and organisational
30. What we commit to doing to continue being a high achieving culture
The over-riding stipulation is clear, regular and open communications. Everyone agrees with the latter in principle but decision makers sometimes baulk at what they are being asked to share, fearful that it will ‘get out’. My own view is that if management don’t explain what they are doing, why, when, how and with what resources, staff will come to their own conclusions and share those ‘findings’ anyway.
Acknowledgements
Photo of “Little man on the Roof” by zanten.net, sourced from Flickr
Perhaps you’ve seen this video about the power of words, perhaps not. The storyline itself may have been attributed to David Ogilvy, nevertheless, it is a powerful story that offers critical insights into how we should think about words and their influence in this age of storytelling.
The clear intention is to demonstrate that changing the words in a context can change their impact significantly, even if the message and the intention of the message remains largely the same.
“I once read that a word is like a living organism, capable of growing, changing, spreading, and influencing the world in many ways, directly and indirectly through others,” wrote Professor Susan Smalley in a deeply thoughtful post titled The Power of Words. “…As I ponder the power of the word to incite and divide, to calm and connect, or to create and effect change, I am ever more cautious in what I say and how I listen to the words around me.”
Marketers should be equally aware of what they think they are saying and the stories they are really telling. It’s incredibly tempting to talk about a situation as we see it rather than as someone else will relate to it. It’s incredibly tempting to think that people act on factual descriptions. It’s increasingly tempting to think that brevity is paramount.
Three clear take-outs for me then for those fashioning stories:
Don’t just give people reasons to buy. Instead, tie what you’re doing, asking or looking for to a wider context; one that the reader or watcher will relate to, and treasure. That’s what turns someone else’s tale into a story that people choose to get involved with. And when you tell them that story, you give readers reasons to keep reading and watchers reasons to keep viewing. You make it personal for them.
The same words will never carry exactly the same meanings. And that is because they are never seen or felt in exactly the same context twice. As soon as the context changes (be it the situation or the mood of the recipients), the impacts of the words also change.
Words are never just words. They may be read, heard or viewed as words, but they are never absorbed that way. And how they are absorbed determines how they are acted on.
Acknowledgements
Video of “The Power of Words” by Andrea Gardner, sourced from YouTube
People buy brands, not managers. And yet think about the number of managers who make judgment calls, sometimes very big judgment calls, based on their own opinions and experiences? They feel comfortable because they are expressing views and making decisions that fit with their worldview. But that doesn’t mean they’re necessarily doing the brand justice, particularly if their viewpoints compromise the personality of the brand itself.
Hands up if you’ve ever been to this meeting:
“I like orange.”
Or “Don’t make it orange.”
“Use short words.”
Or “People don’t read.”
“We need to be on TV.”
And/or “We need to export.”
Brands thrive when they are based on meaning, trust, relevance and delight – but of course they must deliver that meaning, trust, relevance and delight to the buyer, not the seller. Otherwise they risk narcissism.
Every brand must pursue a life of its own – not affirm the life of a manager. And to me, that integral sense of being an asset in its own right hangs on ten things. A brand must have:
Its own name (obviously)
Its own purpose
Its own values
Its own viewpoints
Its own story
Its own language – verbal and visual
Its own structure
Its own pricing
Its own style of marketing
Its own experiences
Without distinctive brand attributes, companies are left to market the Emperor’s new clothes. And yet at the same time as a brand’s attributes must evolve to remain distinctive, they must remain recognisable to consumers.
Brand evolution is not about yes or no. It’s about on-brand or not. Personal opinion is a dangerous decision maker because it seems so reasonable to the person with the opinion. Unless managers can put distance between what they believe and what the brand believes, unless they can plan not just for difference but for distinctly and consistently branded difference at every point, a brand can quickly fall victim to compromise, distraction and sector and personal bias.
As Ron Johnson, the ex-CEO at JC Penney, has discovered to his cost, what feels so “yes” to a decision maker can be worlds apart from what the people making the buying decisions want. While his replacement, Myron Ullman, is quoted in this NY Times article as saying, “Nobody ever wins by going back in retail because the customers’ expectations change all the time”, it’s equally true that the way forward must align with what people expect for the brand as well.
As Bill Campbell pointed out in an interview in Wired recently, “Johnson was tone-deaf to the issues … Whatever you need to do, you have to keep the current business going while you are experimenting with your new one. He didn’t do that. What he did was put a bullet hole in his current business and went about trying to create a new one.”
It may even sound like I think brand managers’ opinions don’t count. Of course they do. No-one is closer to a brand and has more direct impact on its future direction than those who guide it and who are responsible for it every day. Just be very clear what sorts of opinions hold value. And which represent trouble.
Know the customers’ agenda. Pursue the customers’ agenda.
(Not what you think it is. And not what you’d like it to be.)
Acknowledgement
Photo of “Coat hangers” by Matt Callow, sourced from Flickr
According to mainstream marketing theory, price is decided by supply and demand and fluctuates accordingly. In today’s market however, pricing is increasingly about supply and desire. The rules of volatility have changed. The upgrade culture, shorter product lifetimes and highly efficient distribution chains have flattened the gaps between supply and demand in so many sectors, but interestingly increased the effects of seasonality. However, the actual nature of that seasonality has changed.
Pricing now has got nothing to do with how good a product or service is, what it does, what it doesn’t do or where it came from or how many of them there are. Pricing is decided by how much people want something, and the degree to which it is novel and available.
Commoditisation, it follows, is also driven not by “market” forces but by desirability forces. Brands that fail to attract a strong price have lost their desirability or that desirability is fading. People then want to pay less not because the product is necessarily worth less, but because consumers want it less, which of course is why they perceive it as less valuable.
Getting the balance right between desire and price therefore is critical. According to this BrandZ survey from a couple of years back, on average only 7% of consumers buy on price alone globally, down from 20 percent ten years ago. By contrast, 81% regard brand as an important purchase driver. In other words, brand has increased in importance relative to other purchase drivers such as price, location, convenience and habit.
Recognising that, competitive brands need to adjust their pricing based on changing levels of desire – meaning brands should monitor how much consumers want them and use this as an effective benchmark for pricing. Striking the right balance between these two factors is critical. Brands that are too expensive for the level of desire they deliver, as I have already observed, risk losing market share. Conversely, those that don’t charge enough for the desirability they deliver risk leaving money on the table.
The way I see it, there are three ways to strategise an effective desirability story that keeps pricing higher than the default market value:
High supply, high desire: The scale equation – things that everyone wants, readily available. This is a globally focused story driven by momentum (gathering interest) and recognition (peer pressure). This value proposition largely retains desire through authority and reputation in B2B and new model releases, upgrades and powerful brand awareness in B2C.
Limited supply, high desire: The cult/luxury equation – things that are deeply interested to a select group but that retain their pricing because they are deliberately fed into the market at below-demand levels. This is a scarcity story. This value proposition retains desire through exclusivity and the thrill that comes with being ‘in the know’.
Access: The social equation – the power of this approach lies less in the thing itself and much more in the access and introductions that come with being part of the network. For example, flying Concorde in years gone by only partly had to do with the speed. Of much more interest was who you might find yourself sitting next to, and the conversations that might follow. This is a door-opening story. The value proposition comes in where it leads.
Sadly too many brands are still telling availability stories: what it is; what it does; where you can get it; how much it costs. Business leaders forget this too as they obsess on capacity, productivity and innovation. Unless what is being planned, made and told is being planned, made and told as more and more desirable, it must, by deduction, be at risk of becoming less and less valuable.
Unless your go-to-market strategy is built on robust and deliberate grow-in-market criteria, you aren’t really building a brand, you are juggling a supply chain.
Acknowledgements
Photo of “more” by *_Abhi_*, sourced from Flickr
It is said that CSR is how companies build their reputation and contribute to helping the world. Cynics suggest that CSR has sprung from a need by corporates to justify what they were doing to the world. Either way, it’s failed to turn things around so far: CSR hasn’t made a material difference to global sustainability; and corporate motives remain the object of widespread suspicion.
According to this article by McKinsey, levels of trust in business are below 55 percent in many countries and less than 20 percent of executives in a recent McKinsey survey reported having frequent success influencing government policy and the outcome of regulatory decisions. No-one’s won – the reasons for which I’ve touched on several times, including here and here. A key reason the McKinsey authors suggest is because of the heightened expectations that consumers have of corporate behaviour, and the increasingly ability to scrutinise and critique those behaviours via social media.
John Browne and Robin Nuttall give four reasons why CSR has failed to impress:
1. Lack of traction for CSR across the business
2. CSR teams adopt too narrow a view particularly of external stakeholders
3. CSR focus too much of their attention of protecting their reputations by limiting the downside
4. CSR programs tend to be short-lived. They run out of endorsement and then money.
But does that mean CSR can’t work? Not necessarily.
There is a way forward, and it’s as exciting as it is disruptive, but things will certainly need to change if companies are to successfully pursue altruistic goals with deliberation and without suspicion. “Companies that succeed in building a profitable relationship with the external world … define themselves through what they contribute … [That] means being explicit about how fulfilling that purpose benefits society … it means recognizing that you generate long-term value for shareholders only by delivering value to society as well.”
Purpose and profit, in other words, need to be linked. And so do purpose and responsibility. In fact, all three aspects of corporate performance, which have tended to be treated separately and to have been controlled by different corporate masters, need to align. Companies must commit to a purpose that changes the world and, in so doing, delivers shareholder value.
Are we there yet? Clearly not – the business case is still being developed for a much closer alignment between how what a business aims for, how it chooses to behave and the money it makes through behaving in those ways and to that end.
But there are signs of a will to find a way. The McKinsey authors quote the Unilever Sustainable Living Plan (USLP), which sets out to double the company’s sales while reducing its environmental impact. To me, that’s still a relatively simplistic expression of the concept, but it does act as a starting point for a convergence of aims that I regard as inspiring, galvanising and defining. The rationale for thinking this way is well summarised by Daniel Vasella: “When people believe change will only cost them, you can be sure they will do everything to make change fail or not even start.” That’s been the problem with CSR up until now I suspect: its perceived “cost” to the business has been too high for anything meaningful to be maintained.
The lack of defined causality between financial returns and good corporate citizenship has been addressed by Kusum Ailawadi and Jackie Luan of Tuck School of Business, Dartmouth – and points to how companies might look to make the alignment of responsibility, purpose and performance work. Having collected field data from more than 3,000 grocery shoppers, Ailawadi and Luan found that the four attributes they measured – environmental friendliness, treating employees fairly, community support and sourcing from local growers and suppliers – all positively influenced consumers’ attitudes toward a retailer. However, consumers only modified their purchase behaviour when an aspect of CSR directly affected their actual experience with the company or brand.
Environmental friendliness and community support built goodwill but little else. Local sourcing and fair employee compensation generated both goodwill and a higher share of wallet. Local sourcing, for example, generated a sales lift of 10% to 15% for the average retailer in the study. Equally an improved CSR perception could translate into a price premium of about 12%. But it is this next observation that I find most interesting: “Consumers don’t just respond to the price charged; they also respond to how fair they think the price is,” the authors note. “High prices are considered fairer if they can be attributed to “good” motives like CSR efforts or costs rather than to “bad” motives like profit-taking. We find that as much as 15% of the share-of-wallet gain from the perception of employee fairness accrues through improved perceptions of price fairness … this indirect benefit is not equal across different CSR initiatives.”
Storytelling, then, is critical. The actions themselves gain not just meaning, but also value, when they are linked to ideas that customers want to hear about; when they provide a rationale for actions that people identify with and see merit in. It’s fair to say that, to date, most companies haven’t spelt out those connections for customers – they haven’t made their performance a relevant result of their purpose and responsibility – perhaps because they haven’t seen the connections themselves.
Time, then, to align the corporate ducks. Doing that appears to require responses to three core questions that need to be intrinsically linked:
1. “What are we most seeking to change across the world?”
At the highest level, where does the business most want to see social change? Purpose should focus on an issue of widespread concern/interest that society wants to see addressed.
2. “Why is that our business?”
In order for consumers to see a connection between what you’re doing and your purpose, there needs to be a reason for involvement. Otherwise, actions will, like environmental friendliness and community support in the Ailawadi and Luan study, generate goodwill but little more. CSR is not an automatic licence to charge more. But it can be a licence for better understanding and a deeper sense of value if you nail the connections around motive.
3. “Who profits and how?”
What’s the pay-off? How do all the stakeholders benefit? There needs to be a strong quid pro quo that matches what the company strives for with how all involved are rewarded. And those concepts need to be hardwired into how customers think about, experience and converse with the brand. As Ailawadi and Luan advise, “Integrate your CSR efforts into consumers’ direct experience with your brand, and monitor their response to make sure your initiatives and your message resonate with them.”
Acknowledgements
Photo of “Rubber ducks” by Alan Cleaver, sourced from Flickr
You should never start a business unless you are deliberately planning for others in the industry to be dismayed, surprised, outraged or alarmed by what you are doing.
“Start-up” has become a synonym for starting-out. It implies not just being at the beginning, but needing to catch up to someone more established in order to prove oneself.
Launching an upstart on the other hand is all about putting a business in play that really challenges what everyone else has accepted as the rules.
That’s because a start-up focuses on getting a product or an idea to market, whereas an upstart focuses on an “enemy” (be it an attitude or a standardised approach) and looks to a product or service to change that.
Without a business model trained on defying and disrupting the status quo, you are destined to be another player trying to get a footing in another overplayed market. A feature, no matter how beneficial, is not a disruption. If all that stands between you and your competitors is a product improvement, a customer service change, a change in your distribution plan or a new pricing model, you can bank on it being copied, commoditised or counter-attacked at the first sign of sustained success. Then what?
The equation is stark. Rock the boat, and keep rocking the boat – or risk ending up in the same boat as everyone else.
Acknowledgements
Photo of “Row boat” taken by PAVDW (Paul VanDerWerf), sourced from Flickr
Buyers have convinced themselves that they are entitled to deprive brands and shopkeepers of a degree of the asking price profit in the hunt for a bargain – yet in almost the same breath, they’ll tell you that businesses need to be responsible and to behave ethically and that they shouldn’t take shortcuts that compromise people or safety.
But there are prices to pay for things being cheap. In fact, one could go so far as to say that once prices get below a certain point, someone has to suffer. Some of the side-effects are obvious and horrendous: child labour; unsafe working places; the flourishing replica and fake markets; food scandals. Some are less obvious but still telling: the ongoing effects of over-production on environments and economics; the free-fall decline of high street retail in the face of online trade; and declining employment in the retail and service sectors.
You don’t have to look far for predictions that retail is about to close its doors. In this interview on Pandodaily, Marc Andreessen says, “Retail guys are going to go out of business and ecommerce will become the place everyone buys … Retail chains are a fundamentally implausible economic structure if there’s a viable alternative. You combine the fixed cost of real estate with inventory, and it puts every retailer in a highly leveraged position. Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves. There is fundamentally a better model.”
The responsibilities for an intelligent and viable response to the dilemma fall at least two ways it seems to me.
Retailers and brands have to invent new business models for their retail outlets. Clearly, the prevalent high-street model is dying – and a key reason is that shops have absolutely failed to find a value proposition to address the online threat head-on. Despite all the understanding and talk of brand, the shopping malls, the high streets and the side roads are littered with look-alike stores selling look-alike goods. The emphasis on price is proof that physical retail has lost a lot of its thrill.
If we look at what Andreessen is saying, I think the key words here are “if there’s a viable alternative”. Like publishers, airlines, the music industry, the telcos and so many others, retailers will need to find new ways of selling that justify the price point, perhaps by fragmenting offers (the way airlines have) or by making the experience of buying in store (not just pre-shopping) feel worth more than buying over the internet.
To achieve that, retailers must be prepared to be as revolutionary in how they reframe their businesses as producers have been in how they manufacture and as distributors have been in how they deliver. Compared with the extraordinary changes that they have taken part in those areas of the supply chain, shopping for the most part has barely changed at all. Frankly, it hasn’t kept pace. So retailers need to up the experiences.
Equally customers, if they want to continue to physically see and shop for retail goods need to take some responsibility for their survival. That requires a conversation about the ability of retailers to both pay a fair price (so that products can be made fairly) and make a fair living themselves. There’s a story in there, it seems to me, that needs to be teased out and it focuses on encouraging consumers to align their global beliefs with their local purchasing behaviours and making retail shopping an ethical consumer decision. It begs a question – and it’s an absolute ripper: If you believe in fair trade and in sustainability globally, why wouldn’t you believe in paying full retail price at home?
Acknowledgement:
Photo of Shop Window Dolls by Klearchos Kapoutsis, sourced from Flickr
In this post, Nigel Hollis explores a fundamental misalignment. Brand owners tend to view customer experiences in isolation, by channel, whereas customers of course view and grade their experiences cumulatively.
Tom Asacker captures why customers think this way. A brand, he says, is “one, interdependent system of behavior”. The problem is that in too many organisations the “system” has many masters and each wants independent control of their domain. CMOs, who might be expected to have responsibility for the overall experience as of right, do not. That’s because large chunks of the interface with customers, and the factors that influence that interface, remain for the most part outside of their control. They do not fit neatly into the “normal” org chart definition of what constitutes marketing.
And when multi-lateral ownership makes contact with a unilateral expectation, just as at Penn Station, the scene is set for disappointment. As a result, there is significant potential for the system to jeopardise itself at any time, at any weak point – through bad training, bad coding, bad quality, bad service, bad news, in fact bad a-lot-of-things.
In seeking to remedy this, marketers have confused the questions. They have asked “What must I own?” and judged it as synonymous with “What must I run?”, then involved themselves in a struggle for control of data in order to have access to better insights. From an internal point of view that seems to make sense – but again, viewed from an external perspective, the misalignment is obvious. Customers don’t judge a brand on what it knows. (In fact, as Brian Solis has rightly pointed out, they often don’t know what marketers know about them.) Instead customers simply judge a brand on how it succeeds for them.
Therefore, what marketers really need to have ownership of is their customers’ sense of success. And when organisations stop thinking of channels as communication points and/or functions and start assessing their effectiveness as brand proof points, regardless of where they are and who runs them currently, they will start co-ordinating their brands in the same way as customers judge them: systemically.
In looking for ways to improve things, here’s the real question that everyone, not just marketers, should be focused on: “What do each and every one of our experiences prove about the whole of us?”
Acknowledgements
Photo “System is normal” taken by Scott (skpy), sourced from Flickr
