Thursday, November 20, 2008

Creating Brand Relevance

Several months ago I wrote a column, "The Reality of Branding." When that was published it was suggested that I follow-up that column and discuss how marketers can make what they sell more relevant to those who purchase that product or service. Said differently, how can marketers better connect with prospects and their real needs?

Branding has less to do with product features/benefits and more to do with customer needs, wants and aspirations. Without insights into the prospect’s attitudes and behavior as they relate to the product, branding assignments can be pretty speculative and highly risky. Brand relevance comes only from a genuine understanding of the stated (and unstated) needs and wants of the target market. How do we get at these needs and wants?

If “location, location, location” is the success formula in the real estate business, “research, research, research” is a key ingredient of successful branding campaigns. Unfortunately, many businesses are unwilling to invest in (or don’t understand) the strategic research that might reveal unknown customer and prospect needs/wants.

If you are interested in getting to know your customers/prospects a lot better, a good place to begin is with a Segmentation Study of your industry. This type of quantitative research will tell you how the industry is segmented in terms of different buying preferences/motives. After all, not everyone purchases your product or service for the same reason.

How large is each segment of the market? Do your customers segment the market as you do? Which brands do customers associate with each market segment? What product performance issues are most critical to each segment? What brands are most relevant to each segment of the market?

Once you know something about how the industry is segmented, it might be helpful to know how your customers actually use your product or service and how they feel about using it. This type of research (also quantitative) is called an Attitude & Usage (A&U) study. Larger marketers conduct an A&U study every few years.

Importantly, A&U studies attempt to get at exactly how customers relate to brands. What are they happy about? What product improvements do they want? What needs are not being met by the current brands in the marketplace? Do they use the product exactly as the marketer designed it to be used? Marketers are going to understand a lot more about how relevant their products and services are to their customers when they invest in an A&U study.

If “location, location, location” is the success formula in the real estate business, “research, research, research” is a key ingredient of successful branding campaigns.

At this point someone must be saying, “But what about focus groups, aren’t they valuable?” Focus groups are certainly valuable at exploring the range of feelings customers have about the market and the product/services being evaluated. However, focus groups are probably the most misused research technique on the face of the earth. There are a number of reasons for their misuse.

First of all, they are relatively cheap to do and if your budget is small, you can do them and feel like you have done some marketing research. Second, what one hears in a focus group tends to be what one wants to hear (selective retention). I can recall more than one discussion following a focus group where we argued about what the respondent was really saying in the group. Third, if you don’t know squat about research, you think you sound smart saying, “lets do some groups to see what we learn.”

What is so bad about focus groups? Nothing -- if you are going to follow them up with some of the studies mentioned above. But many marketers don’t ever follow them up with quantitative research. Thus, important marketing decisions may be based on what 15-20 people said in a room to/with folks they had never met before.

One-on-ones, a variation on focus groups, puts one interviewer with one interviewee, allowing for greater confidentiality and perhaps greater learning about needs, wants and product usage. However, they are also a qualitative research method and suffer from the problems associated with qualitative research.

Legitimate marketing research is not cheap. However, the more you know about your prospect and their needs, the better you can design your product or service around meeting those needs. Then, when you set your ad agency team loose on a branding project, they won’t be asked to perform miracles, just to communicate a relevant benefit clearly to your prospects.

[This article first appeared in GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

The Reality of Branding: Smoke and mirrors just makes it harder to see the brand.

Who’s fed up with reading about the death of Branding? Entrepreneur magazine recently carried the cover story, “Branding Backlash.” Darwin magazine’s July cover also assured us that, “Branding still has a future.”

What really gets me is that most of the obituaries for branding are being pronounced by those associated with technology/internet-oriented businesses. As their advertising demonstrated, many knew little if anything about branding in the first place. A lot of money was wasted entertaining their prospects rather than creating relevant selling propositions for potential customers. Now, they want to pronounce branding a bad idea -- as if branding is something you have a choice to do or not do.

What they don’t seem to understand is that branding is something your prospects do to your product or service, much more than what marketers do. Prospects do it every time they decide to purchase from you or not, based on how relevant your offering is to what they feel their needs are.

This isn’t to say that marketing communications can’t influence the sale. However, marketing communications is only one influence to the prospect’s purchase experience. To exaggerate the influence of marketing communications misleads everyone and worse, it suggests that any marketing communications is effective. The dot.bombs will certainly tell you that’s not true.

The reality is that every time one of your unhappy customers talks about their unpleasant experience with your product, you are being branded. Your worst salesperson is branding you as you read this. One very bad experience in your restaurant will probably brand it forever with that patron. Your most discontented employee is having a field day branding your product or service. And, consider how your toughest competitor is branding you with your customers when they call on them.

Branding is something your prospects do to your product or service, much more than what marketers do.

Unfortunately, branding has recently come to represent some type of “con” – an exaggeration of what a product or service can do. Over thirty years ago advertising legend David Ogilvy warned marketers, “The consumer is not an idiot, she is your wife.” This served as a wake-up call at the time, but a lot of marketing communications practitioners have lost their way since then. What we have now is more than a failure to communicate; we have a very jaded buying public, be they consumers or businesses.

What is to be done with this cynical buying public who brands our products and services so harshly? Most importantly, we need to start making “relevance” the priority in communications. Relevance means, “fitting the purpose, appropriate, pertinent.” We can influence how our customers brand our products/services by rethinking the relevance of what we sell to those who buy it. To do this, we need a better connect with our prospects and their real needs.

When we do create relevance, we may be able to plant the seed of branding, thus actually influencing how prospects brand our products and services. Then, every time one of your satisfied customers mentions your product, they may use a brand descriptor you provided, if that descriptor is relevant to their actual brand experience.

Branding is far from dead. In its purest form, it has been around for centuries and will be around for as long as products are considered for purchase. The question marketers must answer is how relevant is what they sell to the real needs of their prospects?

[This article first appeared in the September 24, 2001, issue of GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

Marketing Research for Small Businesses

One of the reasons small businesses have a reluctance to do marketing research is that without proper planning and execution, the client can end of with a bunch of facts that don’t necessarily lead to actionable strategies and tactics. If marketing research isn’t going to give you something you can use, why do it?

For the small business person with the commitment to better understand their customers and prospects, here are some marketing research techniques to help them.

Secondary Data Analysis. This should always be the first step. Take a look at all the information already gathered by someone else. It could prove very useful and just might alleviate the need to fund more expensive primary research.

Experience Surveys.
In this exploratory technique, a person who has considerably more experience in the specific area of interest is interviewed about their area of expertise or previous market experience. A good interviewer can make this search for "best practices” very productive.

Case Studies. Another business may already be doing it better (or worse) and it might make sense to do an in-depth study of their progress. Here you may also be looking for “best practices,” but from a situation rather than a person.

Pilot Studies. This is a broad term that includes focus groups, one-on-one/in-depth interviews, and a variety of projective techniques.

Focus groups.
Probably the best known and most utilized of all techniques. They are most appropriately used to generate new ideas, get initial reactions to concepts or probe attitudes regarding a problem situation. It takes a skilled moderator to make them truly productive.

In-depth interviews with only one respondent at a time. Some issues can be discussed more candidly in a more private atmosphere than in a group setting.
Projective techniques.
These can be helpful in getting a handle on attitudes and motivations when the respondent may not want to be completely honest about their motivations. Asking a prospect why someone else might want to try a particular store, could help in understanding why people choose (or choose not) to shop that store. Or you can provide a brand name or other word to a customer/prospect and ask what words/brands come to mind. Try asking your customer to complete a sentence about the store. Projective techniques, which have become popular in the Account Planning discipline, may seem a bit like psychotherapy but can reveal wonderful nuggets of wisdom for the small business owner willing to listen.

This quantitative technique doesn’t have to cost a fortune and you can do them in Questionnaire or Personal Interview formats. Make sure your questions/directions are clear and unbiased and that you allow adequate response opportunities. This form of research used to be very expensive but nowadays, with Survey Monkey, it is very inexpensive to do.

The most popular marketing experiments are test markets and many small businesses just can’t afford this research technique. The Simulated Test Market variety is also too expensive for most small businesses.

Go get a clipboard and watch how your customers shop. I think you will learn more if you just observe without them knowing what you are doing. You can then do an in-depth interview after you have observed them to question whatever you found interesting in their behavior.And there are other techniques, too.

Before you begin any research project, however, make sure you have a clear idea of exactly what you want to know and what you will do with that information once you get it -- whether you get the answer(s) you were expecting or not. That way, the money you invest in research will help your marketing expenditures yield the return on investment you want.

[This article first appeared in GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

Strategy Lessons from a Kid with a Slingshot

The story of David and Goliath can tell small businesses a lot about corporate strategy.

As we read in The Bible (NRSV), 1st Samuel, Chapter 17, the Philistines entered Judah, intending to conquer the Israelites. At Socoh, they drew up battle lines to meet the Israelites who came to defend their territory. Each morning, the Philistines would send a giant warrior named Goliath, intimidating in size and menacing in personality, to challenge the Israelites. Goliath's objective was to goad one Israelite to come down into the valley to fight him. If the Philistine won, the Israelites would become their slaves. If the Israelite won, the Philistines would become their slaves. And unless this one-on-one match occurred quickly, a full battle would ensue with a tremendous loss of life.

Enter our hero, David, a teenager with brothers in Israel's army under King Saul. David hears Goliath's insults and wonders why no one will face the giant.

Word filters back to King Saul that someone actually wants to face Goliath. At first, Saul discourages David, reminding him of his youth, size and lack of military experience. David is not dissuaded. Since Saul is desperate for someone to fight Goliath, he permits David to fight. While Saul is reasonably certain the boy will be killed, he offers him battle attire to give him the best chance at surviving the Philistine'sattack. David declines Saul's armor and goes down into the valley to fight Goliath. On his way, he chooses five stones for his slingshot, which he puts inside his shepherd's bag. His only other weapon is his shepherd’s staff.

When our hero appears before Goliath, the giant is insulted that the Israelites have sent someone so young and inadequately armed. He threatens David, trying to intimidate him. David returns the verbal abuse, which perhaps rattles the giant somewhat, leading him to believe that this youth is either crazy or maybe even dangerous. Goliath walks toward David, hoping to grapple with him. At just the right moment, however, David places a stone in his sling, hurls it at the giant and strikes him in the forehead. The giant falls heavily and before he can recover, David is upon him. He takes Goliath's sword, decapitates him and holds the head high for all to see.

What wisdom can entrepreneurs, owners of small businesses and other “underdogs” learn from the shepherd with the slingshot? There are seven key lessons about strategy that can be gleaned from this story.

Be clear in your objective and why it's important. David felt Goliath had insulted God and the nation of Israel. Defending the honor of God and country became the supreme objective. Being on the side of “right” quieted the fear inside him.

View your strengths as broadly as possible.
This helps determine the best application of your core competence. Although David had no military training, he had killed bears and lions when they attacked his flock. He knew how to handle weapons and was not afraid of conflict.

Utilize resources that you trust.
When Saul tried to persuade David to fight Goliath in traditional military equipment, David insisted on using weapons he was familiar with. Judging from Goliath’s reaction, this may have been the Old Testament equivalent of a "psych."

Have a back-up plan.
David knew he might not hit the giant with his first rock, so he brought four more stones, just in case he might need them.

Don't let the competition define the rules of engagement.
Goliath kept approaching David, thinking he could get close enough to use his sword (and superior strength) against the boy and his shepherd's staff. David never let Goliath come close enough for the giant to use his superior strength against him.

Don't let the competition know exactly how you are going to attack them.
It may have been only when Goliath was within slingshot striking range that he even realized that David had a slingshot. Until David loaded the rock in the sling, Goliath may have thought David carried only a staff. (Bad intelligence gathering, Goliath.)

Once you achieve the first indication of success, follow through boldly to ensure complete victory.
As soon as the giant fell, David ran to him, took his sword and cut off his head. Proof of their hero’s death caused the Philistines to panic and flee, with the Israelites chasing them far from Socoh, the site of the giant’s defeat.

Too many “underdog” organizations let their larger rivals define the terms of engagement. David didn't let Goliath control the fight. Don't let your larger competitors define how you compete.

[This article first appeared in GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

What Reputation Does Your Organization Have?

Branding has been abducted by the insincere.

In recent times, branding has come to represent a façade that marketers wrap around a product or service to increase customer sales and loyalty. Branding has become only what they can convince others to think about their business. This is the great lie.

The Marketing Rule is “Find a need and fill it.” But many in business don’t really consider what their customers may need, but rather, what they want their customers to buy. From this point forward, the branding process is usually doomed to either fail or to fall dramatically short of what it could have been.

What should happen is that the client takes his first year’s communications budget and spends it trying to figure out:
  1. what unfulfilled needs the market has,
  2. how they articulate those needs,
  3. how they feel about the currently available options at meeting those needs, and
  4. what would qualify as a perfect solution to their needs.
In other words: find out what the customer really wants, what the competition has, and what they can bring to the party.

In his book Building Strong Brands, David Aaker offers a Brand Identity System that moves planning for a brand from its current brand image (as a product, as an organization, as a person, and as a symbol) through development of a value proposition with functional, emotional, and self-expressive benefits. This planning paradigm helps define the future of the brand-customer relationship.

According to Aaker, it is from this definition of the brand-customer relationship that the brand’s positioning can be developed. The positioning statement -- which includes core brand identity elements, the target audience, the competitive advantage, and elements of the value proposition -- directs the communications effort.

Sounds like a lot of work, doesn’t it? I’ll say! Not only is it a lot of work, it is a significant investment of sincerity. The above process can’t be faked. There is no way an organization would go through the complicated process described by Aaker unless they were very, very serious about developing long-lasting relationships with customers.

When I speak to clients about what a brand is, I talk in terms of a “reputation.” I do this because most everyone knows that a reputation is hard to fake. Whatever reputation someone has, it is generally deserved and that is what I want my clients to think about. Act honestly and the world will generally know you have integrity. Do a good job and they will say you are competent. Return their calls quickly and they will say you are committed to their future. Reduce your service to them and they will cut their revenue stream to you.

Branding has become only what they can convince others to think about their business. This is the great lie.

The great marketing guru Ted Levitt of Harvard has said that a business’s purpose was not to increase the wealth of its shareholders, as is generally taught in business schools. Instead, the purpose of any business is to create and keep a customer. Increasing shareholder wealth, says Levitt, is merely a requisite of creating and keeping a customer.

You don’t create and keep customers with a façade. You do that with a reputation that has been developed by listening to your customers and building products, services, and delivery systems that truly meet those needs. If business acted on this mantra, instead of trying to build veneers around products and services that offer little in the way of differentiation from their competition, we practitioners of the branding art would either find our jobs easier or find our services unnecessary.

[Photo used under the Creative Commons License courtesy of Flickr.]

Marketing Lessons from the Battlefield

Recently, I was thinking about some of the lessons I have learned thus far in my career. I tend to think of “lessons learned” as the wisdom gleaned from firsthand experiences.

Wisdom can seem trivial when discussed in abstract terms so I am providing specific examples of how some of my former clients’ marketing experiences led to the formulation of those “lessons” that I now encourage my current clients to embrace.

Never forget that emotion plays a significant role in most purchase decisions. I helped launch a new Gillette hair care brand, Mink Difference, in the fall of 1981. The brand’s point of difference was that it provided a softness to hair because it contained mink oil -- the same chemical that makes mink fur so soft. Our TV commercial contained numerous scenes of women adorned in beautiful, soft, luxurious mink coats. We tested the commercial prior to launch and found that the strongest marketing elements in the commercials were the camera shots of women in furs in the commercial. The brand had a very successful launch, in part, because of its ability to tap into the aspirations and associations that women (at that time) held for mink coats.

Assess your competitor from their strongest suit, not their weakest. In 1983, my Carnation Company client launched a new dog food brand named New Breed, claiming “best tasting” compared to the leading brands. Within weeks of the launch, General Foods Corporation called the TV networks and disputed our claim against their Gravy Train brand. When challenged, our client admitted (to both the agency and the networks) that their product tests were performed on a dry version of Gravy Train rather than on the “water added” recipe recommended on the package.

Build a better mousetrap and the world will beat a path to your door – as long as it is well promoted. In 1984, my team at SSC&B:Lintas helped launch the very first camcorder in the U.S. JVC’s VideoMovie was a significant departure from the “strap-hangers” that every home movie buff was using to shoot their home movies. With VideoMovie, the consumer had a one-piece, approximately 20-inch camera that was much more convenient than traditional video cameras.

Interestingly, JVC was not sure VideoMovie would be the success it turned out to be, so they pre-sold half of their production to Zenith Corporation so Zenith would bear part of the task of marketing the concept of a one-piece camera to the American public. Zenith merely had to put their logo on the new product and market it. I used to joke about this using Zenith’s advertising campaign theme saying, “Yeah, but the quality went in before the name went on!” JVC’s VideoMovie was so successful that the product was back-ordered for months.

Don’t define your competition too narrowly. In 1985, I was developing and managing the advertising program for Lipton Cup-a-Soup, the instant dry soup brand. During the ‘85-86 soup season, Campbell’s introduced a dry “cook up” soup targeted at adults. During that same season, Lipton also introduced two new dry “cook up” soups (International Soup Classics and Hearty Soups). During the media war and shelf space battles that ensued that season, Cup-a-Soup was hurt significantly in terms of dollar share and volume -- even though they were an instant soup and not directly competitive with those “cook up” soups.

Small businesses can learn a lot from the “war stories” of Big Business. And while budgets may differ dramatically, the strategy lessons generally apply no matter what size the company.

[This article first appeared in GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

The (Terribly Misused) Mission Statement

Have you ever read a truly motivating mission statement?

OK, maybe that is not fair. Have you ever read mission statement that did not put you to sleep? (Be objective -- everyone thinks their mission statement is motivating and looks really good bronzed in their lobby on that nice little plaque to the left of the receptionist.)

Unfortunately, what started out as a great idea (“Hey, let’s clarify our organizational purpose, specify who we really serve and how we do it in a paragraph or two.”) has turned out to be a terribly homogenized marketing tactic instead of the strategic process originally intended. Try to find a mission statement that does not contain the words “highest quality,” “superior service” or “best value” in it. If it has all three, it probably says “blah, blah, blah,” too.

In the mid-1980s, many corporations were taking a closer look at their businesses to determine whether they were allocating their resources in the best ways possible. As part of this, organizations explored the development of mission statements to help them stay focused on their core business and the markets they served. As originally conceptualized, the mission statement was a succinct version of the company’s business plan. Of critical importance was that once management developed this internal tool, it would be presented and discussed with every employee to help keep everyone in the organization on the same page.

Unfortunately, many organizations have gotten it in their heads that a mission statement is an external (read Marketing) tool. They want to show it to all their customers and get them nodding in agreement. And this is a terrible misuse of this valuable tool. Why? If organizations think their mission statement will be shown to their customers, there is a tendency to take all the “meaty” stuff out that might be perceived as controversial to important customers.

There is nothing wrong with showing your mission statement to your customers, just don’t let the tail wag the dog.

Now if the mission statement is a “succinct business plan,” does it not stand to reason that mission statements should begin to reflect what an organization is really trying to do?

A good business plan ensures that the company does not try to be all things to all customers. Jack Trout and Al Ries in their book, The 22 Immutable Laws of Marketing, discuss the importance of the Law of Sacrifice. This “law” says that to focus their resources, companies need to consider reducing either their product line or their target market. Now there is some “meaty” thinking for you.

Michael Treacy and Fred Wiersema gave similar advice in their best seller, The Discipline of Market Leaders. Treacy and Wiersema advocate companies strictly adhere to a single “value discipline” – Best Product/Service, Lowest Cost or Total Solution provider – and then concentrate on delivering one of these values to their customers.

So what’s to be done about all these terribly boring mission statements? First of all, take them out of your lobby. As written, most of them won’t impress anyone anyway. Then, get your senior management together and, using your business plan as a foundation, hammer out a paragraph or two that tells everyone in your organization what you are trying to do, who you serve and how you really are different from the other guys. Quit worrying about who this statement might turn off and start thinking about whom it might motivate (your employees) when they read it.

Only when you have developed a motivating statement that clarifies your purpose as an organization for your employees, can you consider bronzing it on a plaque for your lobby. There is nothing wrong with showing your mission statement to your customers, just don’t let the tail wag the dog.

And, if that bronzed plaque inspires your receptionist as she greets potential customers, it would have served its original purpose quite well.

[This article first appeared in GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

A Definition of Marketing

I have never been quite satisfied with definitions of "marketing" that I have run across. The marketing rule -- find a need and fill it -- is perfect. Short and sweet. However, many definitions marketing fall short. So, let me offer mine and see what comes back.

marketing (noun): all of the business activities responsible for sales -- from product/service conception -- encouraging the customer to make repeat purchases.

[Photo used under the Creative Commons License courtesy of Flickr.]