Archives for the month of: May, 2012

All marketing is luxury marketing.

McKinsey Quarterly just published “Measuring marketing’s worth” (free subscription necessary). All of us marketers struggle with answering this—not because we cannot measure outcomes, but because we don’t have good traceability: inputs are difficult to connect to outcomes (often because of cross-channel marketing activities). Or as the saying goes: 50% of marketing dollars are wasted; we just don’t know which 50%.

In short, the article posits the following “five basic questions”:

1. What exactly influences our consumers today?
Marketers must be ready to use the findings to debunk accepted wisdom and legacy rules of thumb. In today’s fragmented media world, only by knowing how the way consumers interact with your company has evolved can you begin to make more cost-effective marketing investments that truly influence purchase decisions.

2. How well informed (really) is our marketing judgment?
Data remain only as useful as the expertise you bring to bear, and good judgment will remain a hallmark of the best marketers.

3. How are we managing financial risk in our marketing plans?
Managing risk is critical, and marketers shouldn’t be shy about putting this issue squarely on the table. With thoughtful scenario planning and cross-functional participation, such discussions can be extremely rich and rewarding.

4. How are we coping with added complexity in the marketing organization?
First, you’ll require a number of specialists. Second, you’ll need somebody who both integrates marketing efforts across channels and communications vehicles and focuses on the bottom line. Finally, you’ll need absolute clarity in processes, roles, and responsibilities not only within the marketing organization but also throughout your company (across functions and business units) and externally (with agencies and external vendors).

5. What metrics should we track given our (imperfect) options?
The volume of data available today should make it possible to find metrics and analytic opportunities that take advantage of your unique insights, are understood and trusted by your top team, provide proof of progress, and lay a foundation for more sophisticated approaches to tracking marketing ROI in the future.

Again, you really should read the whole article, rather than just the truncated excerpts above.

After that you have to read John Stauffer‘s “Social Brand Planning” article (Journal of Brand Strategy, April-June 2012, Volume 1, Number 1). John wrote the must-read (!) marketing article of the year so far: very strategic with excellent tactical guidance.

Specifically, John Stauffer explains in detail what and how brand planners need to execute:

  • Actively listen to slow and fast culture.
  • Identify their biases early on in order to break down some of their barriers to empathy that exist within brands and agencies.
  • Apply insights from social media upstream into the major arteries of brand planning.
  • Build consensus on a cross-practice measurement model designed to yield a realistic and timely assessment of marketing and communication efforts.
  • Lead an enterprise-wide planning model that acknowledges consumers do not think of a brand in discrete categories of marketing, communications, public relations, or advertising.

Run, do not walk, to your nearest library, and demand a copy of the journal. Or just buy it. Then you can answer the five questions McKinsey has thrown at you.

Lois Geller has a great blog on Forbes. Yesterday’s post, “Why A Brand Matters,” gives a simple, common-sense overview of how your business can benefit from having a brand.

Here are two other great reasons:

  • Strong consumer goods brands get to charge 25-30% more for the same thing than non-brands.
  • Brands with a vast number of net-promoters out-revenue their competitors 2:1.

That means even at the higher price you get chosen more often, and that drops directly to the bottom-line (if your costing and pricing is right)!

One way I generate interest in our product, and start conversations with business decision-makers, is to sponsor and exhibit at high-level but intimate industry events. There I hold a contest to generate awareness of our company and move conversations along.

It’s a true contest—not a drawing—and the top two best participants each wins a prize (it pays to come in second!). We often receive praise for how realistically the contest mimics a high-risk issue the industry is currently experiencing, and how much fun it is to participate. People like the prize, too.

The prize is, and has been for a long time, the current version of an Apple iPad. I’ve been doing this since the iPad first came out (even awarding one a few weeks before it became available commercially). People love them…and I love people.

In the past twelve months alone I’ve placed orders for 24 iPads—24 winners!

After the event, once back home, I place separate orders via Apple’s online store, and have the iPads shipped directly to the winners. Everyone’s happy: the winners get their prizes, we generate goodwill and possibly enter into sales cycles, and even Apple makes money off our success. What could possibly go wrong?

Today’s order got canceled by Apple. This one really hurts, as an existing customer won the iPad. You see, after you’ve become a customer of ours, we still like you.

The automated cancellation email stated the following:

Apple is unable to fulfill orders that exceed the quantity limit per customer, or that ship to an international, freight forwarder, or an APO/AFO address.

Since my recipient is located in Texas, and I was shipping to the street address of the business, I was rather curious to find out what the violation was. After calling Apple, I’ve learned that I am a channel violator. I’ve placed too many orders (at full price, mind you), and the current order will not be un-canceled and shipped.

I am too good a customer.

Dave Stuart, Apple Business Representative, tells me that Apple will not sell me iPads if I wish to give them away as prizes, but they will sell me gift cards at the same value (and would I like to purchase one?).

I’ve been cut off.

Just you wait until they find out that I’ve gamed the system (unknowingly). Last October I placed an order for an iPad as a gift for my wife. I used my personal credit card, which has a different billing address than the corporate credit card. But I’m still the same violator. I just told my wife I probably wasn’t permitted to give her that gift, and she’s none too pleased…

Just like US Airways (see post), Apple punishes its good customers.

Marketers listen up: There has got to be a better way!

Anyone who has studied brand strategy and Barbie’s entry into China via its flagship store in Shanghai is still in slack-jawed awe over its complete failure.

However, if you listen to—and believe—Richard Dickson, former GM and SVP of Barbie, Mattel, Inc., it appears to have been a planned failure that is paying dividends.

On “Building Brands for Asia” (Bloomberg TV’s Singapore Sessions), Betty Liu asks about the difficulty of successfully introducing the Barbie brand into the market. Mr. Dickson answered with the following:

I don’t think it’s necessarily that the consumer didn’t take to the store or the Barbie brand. In fact, all signals suggest that the market opportunity for the Mattel brands in China is significant. Barbie is probably one of the most iconic toy brands in the world, if not real literally lifestyle pop culture icons in the world.

Past success is not an indicator of future performance. And yes, the consumer did not take to the store or the brand.

Research suggests, and certainly all indications are that brand will be enormous in China. The brand recognition is through the roof and the aspirational qualities of that brand suggest it could be a very big business.

Is brand recognition itself the correct metric to predict future success? How are you collecting your consumer insights?

The execution of the branded strategies had a varied degree of success and trial and error. We built a flagship store in Shanghai that personified the brand, gave it a true experience, included every aspect of the brand, and it really served as an incubation, a test. We understood at that time what was working and wasn’t working, and were able to take all of those insights and redevelop the strategic approach of how to continue the brand’s growth in China.

No way that store was meant to be an incubator, an experiment, especially when considering the cost of opening up a flagship store in Shanghai, and the brand equity that was at stake.

There’s an incredible amount of learnings that went into that project. It was the first time the Barbie brand was brought to life in a four-wall experience. That included not only product but also experience itself. All of the amazing imaginative things that Mattel had applied to the Barbe brand and were personified in that research tool that basically redefined even the visual language of the brand.

Failure certainly turned it into a good research tool. And I bet the lessons were meaningful.

So while, as a store it may not have been as successful as the company wanted, in terms of narrating the brand’s future, it was absolutely essential.

Job well done!

My last remark: Richard Dickson never says “we,” referring only to “the brand” and “Mattel” (as in “them”). I guess he was just an innocent bystander.

It’s true that in business you want to fail fast. You also want to analyze your successes and failures. However, you don’t plan to fail, you plan for failure.

Strategy requires “…a diagnosis of the situation, the choice of an overall guiding policy, and the design of coherent action.” (Richard P. Rumelt, Good Strategy/Bad Strategy, New York: Crown Business, 2011). It needs to be situationally and culturally appropriate—else it’s not a strategy. Market research falls within that guideline. For example, the Chinese do not like anatomically correct dolls.

I don’t know Richard Dickson, and he is credited with reviving the Barbie brand. He seemed, however, incapable of acculturating Barbie. Today Mr. Dickson is President and CEO, Branded Business, at The Jones Group. I bet he learned a ton by analyzing Barbie’s failure in China; just about everything else he said on the show was spot-on! How his personal growth benefits Mattel I’m unsure of.

If you cannot find local resources to help you penetrate a market successfully, then at least find someone who can ask the right questions. Relaunching a brand in any part of the world is significantly more difficult than nearly destroying it.

Last weekend, watching the Spanish Grand Prix F1 race (on my couch), I saw a commercial for Kumho Tires, identifying itself as an official sponsor of U.S. Soccer. I found this odd. Why does does that sport need a tire sponsor, and why would F1 racing fans care that Kumho Tires sponsors that sport?

Then, flying to New Orleans on American Airlines to an event I was co-sponsoring (exhibiting at an ERP vendor’s annual SIG meeting in exchange for a speaking slot), I saw an ad in the in-flight magazine for Casillero del Diablo as the official wine partner of Manchester United.

Again, why does a soccer/football club need a wine sponsor, and who in the U.S. really cares about ManU (one of the globally most recognizable sports brands, but with little-to-no recognition value by the general public in the U.S.)?

Here are my guidelines to a successful sponsorship:

  1. Make sure that what you are sponsoring elevates you, rather than the other way around, and
  2. Make sure that the audience consuming your sponsorship welcomes your involvement and can react meaningfully.

This is different from goodwill marketing, where you truly want to give something back to the community without expecting a tangible return. I question whether soccer fans will buy Kumho Tires, Castrol motor oil, Yingli Solar equipment, or Century 21-marketed homes just because these companies “sponsor” U.S. Soccer.

On the other hand, I wish Envirocon Technologies would sponsor me, as I’ve been a phenomenal net promoter for Lemi Shine®.

This morning’s SmartBrief on ExecTech newsletter contained an alluring headline: “Why “superstacks” are becoming an IT strategy.” Clicking through to the CRN article revealed less than stellar journalism; luckily the full PDF is available from Accenture for download. (This infographic PDF tells you everything you need to know, so you don’t actually have to read a whole lot.)

A Superstack (pronounced like “Superstar” by Molly Shannon, SNL) is:

…a more extensive and cohesive integration of operating systems, semiconductor chips, devices, applications and end-user services than the industry has traditionally achieved.

Apple is prominently cited as providing just such:

Accenture-Superstack

Accenture Superstack (appropriated w/o permission from Superstack PDF; very sorry)

I remember another company that also offered a Superstack, but they weren’t very marketing savvy, and ultimately lacked strategy, which Apple had in spades (under Jobs). They were called Sun Microsystems.

Sun had:

  • Chipsets
  • an OS (if they’d have open-sourced Solaris sooner Linux would have fared poorly)
  • Server hardware
  • Middleware
  • Virtualization (xVM, Java!)
  • A kick-ass filesystem
  • Grid computing
  • Office applications

And they had the Sun Ray™ Ultra-Thin Client (PDF)—a most cool idea that didn’t go anywhere (and wasn’t portable like an iPhone). So many benefits, so few buyers.

I don’t really miss Sun, but I don’t think of Apple as pioneering (hypocritical comes to mind more readily).

Personally, I wouldn’t use one of the globally most recognized logos as a major design element for my car. Or, perhaps it’s incredibly inventive youth marketing?

Red Swoosh

The original Swoosh application.

Nissan Juke with Nike "Swoosh"

Nissan Juke with Nike “Swoosh”

Marketing is, and always has been, about influencing the influencer.

Living presently in Phoenix makes US Airways my default airline, as it has the most connections out of here. Because of that I signed up for a US Airways Dividend Miles credit card. However, I just don’t care about the dining rewards, and consider the regular email updates clutter in my inbox.

Imagine my surprise when the following message popped up during the email unsubscription process:

Choosing not to receive email updates will reduce your benefits to one mile per two dollars spent. Additionally, you will not be eligible for any current or future dining bonuses.

Only members who have signed up to receive emails and provided a valid, deliverable email address are eligible for our best rewards.

Please uncheck the opt-out box before proceeding to ensure you receive the maximum rewards for this program.

The opt-out mechanism is advising me not to opt-out unless I want to be punished!

In marketing you clearly want to reward your best customers, and you want to get rid of your worst. But is it really in your best interest to punish your good customers (I fly on US Airways 20-30 times a year)?

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