All posts filed under: Consumers

Portion control

By Mark Di Somma

Often we don’t leave a favourite brand because of anything dramatic. In fact, quite the opposite: the experiences we have quietly fade to the point where there’s less reasons to stay than to go. One day the food isn’t quite as good as it was, the movies on the flight haven’t been changed in a while, the person we spoke with just now was that little bit less warm, the changes in the insurance policy are more inflexible and the biscuits in the pack are smaller and taste different. Brands make these changes with the best of intentions for the business. They do it to save money, to introduce a shortcut, to be more efficient. It’s just a little change right, a little reduction – think of it as portion control. No-one will notice. And most people don’t. Unfortunately, the people who do notice are the people who have been loyal to the brand. They know where this is heading. Not today perhaps. Not tomorrow. But at some point, this is going to be yet …

How to win

By Mark Di Somma

I’m always interested to see how successful people think and to learn how they go about building competitive marques. In 2009 – 2010, in the course of working alongside Alex and the crew at Milk on Will to Win, a history of the Pryde Group and its brands, I spoke with Neil Pryde many times. On a number of occasions, he talked about how he approaches running a global business. I thought I’d take a moment this morning and share with you the philosophies Neil shares in the book: 1. Strike the right balance between measured risks and natural optimism. 2. If you look back at your career and you’ve made more good choices than bad, you’re ahead. 3. Love what you do – but not too much. Too many businesses are wrecked by emotional decisions. 4. Be paranoid. Recognise that nothing is static. React quickly. 5. Never forget that sport is the business, and the business is a sport – always, play to win. 6. Always be prepared to walk away. If you’re going …

Telling

By Mark Di Somma

What gives you the right to sell a product/service at margin today? It’s easy to assume you have a mandate. Or that you deserve one. But what is your brand doing to earn/retain the mandate it wants/has? Don’t tell me it’s because you opened. Because presence isn’t enough. Don’t tell me you worked hard to get here (past tense). Because then you’re relying on your history. Don’t tell me you’re doing a good job. Because most everyone’s doing a good job. Ditto service, people, methodologies, products, channels, technologies, systems, processes, efficiencies … for most companies anyway. Talk perhaps about the scarcity of what you offer, or the richness of the ideas that you encourage, or the loyalty you forge, or the need you are meeting that your competitors don’t, or the insights you’ve developed and applied that are truly valuable, or the excitement you generate, or the journey you’re taking people on, or how you are looking to generate the most wonderful change … Better yet talk about how you’re combining ideas and where that’s …

Mind games

By Mark Di Somma

Here’s another of those inconvenient questions: is it really worth our while for New Zealand to be involved in hosting global sporting events? Or more to the point is it worth our while, the way we go about it? Yes, I know … participation, competition, world stage, all that … but given that it’s actually costing us significantly more than we can expect to make to host the Rugby World Cup, for example, how do we intend to get a payback? And the $36 million for the America’s Cup – what are we projecting that will bring home? My sense is, it could be worth it – but it probably won’t be. I don’t get the sense that each of these initiatives is a calibrated and layered contributor to a defined and well-laid out New Zealand strategy designed to get the nation from point A to point B by lifting our competitiveness and our margins. In fact, I don’t get the sense that the Government has an economy-wide story right now that will gain us …

How real is the value of reality brands?

By Mark Di Somma

Last night I sat down and watched Inception. Today I spied this article on the Kardashians – and I couldn’t help but wonder whether the dream states of the film mirror the “reality” of the brand value of reality brands. The Kardashians appear to be a retail success story, for now, and we’re told they have raked in millions. What’s the business model? Their “real” lives? And those millions of followers – what are they following? The real Kardashians or three levels down? Does the Kardashians’ show and product portfolio add up to a brand, souvenir merchandise or fashion? Does that become stronger, or more real, when it diversifies? Why all the questions? Well, because if I was Sears, and I was looking at setting up a Kardashian shop within my shop, it might hugely influence my decision to know what exactly I was partnering with. Of all the celebrities in the world, why them? What’s the connection between what they are and what Sears represents? And, as I say, is what Sears are seeing …

Everyone expects to be rewarded

By Mark Di Somma

According to this post in the NY Times, Americans racked up about $48 billion of rewards via fly miles, hotel rewards, credit card points and other programmes in 2010. The average household it seems has 18 loyalty programmes and earns $622 a year in miles and points. So, roughly $35 value per programme per year. And yet nearly one-third of that amount will go unclaimed. You can read this as proof of the ubiquity of rewards systems, but what fascinates me is the clear expectation of consumers that they will now receive rewards in some form for so much of what they do, whether they cash them in or not. Once loyalty was. It existed out of convenience or preference, habit, range or relationships. Now, for many brands, loyalty costs. Sure, you get to keep the customer, but you keep them on retainer. You keep them by pumping incentives at them whenever they buy. And the irony of those incentives, looking at the stats above, is that such generosity doesn’t count for anything up to …

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. …

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 …

Finding the long tail of distribution

By Mark Di Somma

This story about how United Villages is using motorcycles, mobile phones and face to face selling to bring big brands to the smallest villages in Jaipur in Rajasthan, India is a stark reminder that tapping tomorrow’s multi-billion dollar markets isn’t about the latest fave apps at the tech conferences. On the contrary, it’s about simple things like allowing retailers to keep trading by delivering the goods to them. It’s about local reps that the retailers get to know. It’s about something as straightforward as a product guarantee. This is the real long tail of distribution – a genuinely untapped maze of villages stretching across India, China, South Asia, Indonesia, the Pacific, in fact a good chunk of the earth. As the buzz from SXSW swirls online, it’s easy to forget isn’t it that massive numbers of the world’s future brand consumers are only now moving out of the analogue age.

Loyalty and lust

By Mark Di Somma

Over tea with Alex in the sun a couple of afternoons ago, we got talking about what you can count on in a market, and what you can observe but not necessarily depend on. I’ll leave it to Alex to share the specifics of what she talked about in her own inimitable way, but our conversation did get me thinking about the different kinds of customers that brands have today because in the face for scale, it’s easy to confuse the different levels of interest and loyalty. Let’s start with what happens when you get waves of visitors. It’s tempting to have your head turned by the massive numbers that can swarm a post, a thought, an idea, a product. Suddenly your metrics are through the roof and your mentions are running like ticker-tape. You are the talk of the world, and the temptation of course is to think you’ve made it. You have their front of mind. But that space is mercurial, and attention – one the Holy Grail of marketers – is now …