Wednesday, March 14, 2018
I recently received this question from a blog reader: What are the most effective marketing and growth strategies for risk-averse organizations?
First, one must assess the source of the risk aversion. Often it is insularity. The organization doesn't know any markets other than the ones it is currently serving or it doesn't know how to produce any products other than the ones it is currently producing. It could be that the organization has too many fixed costs associated with a very specific production process and would find it prohibitive to reconfigure or set up a new production configuration. Sometimes, when a company is privately owned by a prominent member of the community, that person is more concerned about his or her reputation and is worried that a risky growth move might cause an embarrassing setback. Sometimes, the organization is just run by a risk-averse person or group of people.
There are a few ways to identify risk aversion. One is the unwillingness to invest capital. Another is the percentage of revenues that come from new products or markets. A slow or declining growth rate may also be a symptom of risk aversion. And finally, some organizations perform an inordinate amount of marketing research to identify potential problems. A related tell-tale sign of risk aversion is how many decision-making steps are present in the new product development process of the organization (if they even have a new product development process).
So, what are some of the best ways to grow despite risk aversion? The easiest way is to expand distribution geographically or through new distribution channels. Another way is to hire additional salespeople or to create new sales channels. You can also make your brand more accessible by selling it online or by extending store hours.
Risk adverse marketing approaches include (low cost) publicity, targeted online marketing, providing additional sales support and tracking the cost of generating sales leads and tracking which of those leads results in new business. Co-marketing with other non-competing brands stretches marketing dollars. Offering co-op marketing budgets to retailers if your product is sold through retailers is another option.
While these are some of the approaches that may be easiest to to "sell" to risk-averse organizations, these are not necessarily the most risk-averse approaches. Often, the best way to assess the potential of new products, services, revenue streams and marketing approaches is to test them in some markets and, based on the results, modify and expand the approach/offering or pull the plug on it. But this is more the sign of an organization that is willing to take calculated risks.
I found this to be an interesting question. I hope it has helped you think about the topic.
I was recently asked two related questions: Why are new no-name brands able to topple big decades old brands in today's environment? How can a small start-up brand effectively challenge older established brands?
There are so many different ways to answer this, many related to technology, but some also related to legacy brands resting on their laurels. The advent of digital photography (invented by Kodak) killed Kodak's previously highly profitable business model that was driven by film purchase and developing. This disruption was amplified by the advent of smart phones with built-in cameras.
Uber's online platform not only revolutionized and democratized the way people can get rides but it also made it much simpler to find, hail and pay for a ride. Plus, it provided for a record of one's paid automotive excursions. This is an innovative model that is scalable and has network effects. Also working in Uber's favor is the general low level of quality of taxi service compared to the service offered by Uber drivers driven by a constant customer feedback loop.
Though backed by a lot of money from Pay Pal's founder Elon Musk, Tesla also has made significant inroads vis-a-vis legacy automobile brands. It has done this by sheer strong will and innovation. From its vigorously pursuing the concept of a luxury all electric vehicle to its sales and marketing innovations, Tesla has taken the risks to do things differently.
The Internet also makes it easy for smaller companies to seem bigger than they are and compete effectively with larger, more well-known companies. And the customer targeting offered by Facebook and other social media platforms makes it more cost effective to go after highly targeted customers.
CarMax, though supported with major funding, came into existence because legacy used car dealerships did not treat customers well. CarMax saw the opportunity to make automotive purchasing easier and more transparent. Again, it relied on an innovative business model and a transformative technology, a database that can be accessed from anywhere through the Internet.
Airbnb is another example of a brand that has used the Internet as its platform to achieve scalability. But it also is driven off of the concept of shared resources. This same sharing of resources has worked for Zipcar and Zagster.
So, in summary, these examples point to the following sources of legacy brand disruption and displacement:
- An innovative business model
- A superior model of customer service delivery
- New superior technologies
- The Internet
- Software-driven solutions
- Network effects
- Resource sharing
- Product differentiation
- Highly targeted marketing
Friday, March 9, 2018
This year, I am volunteering on six not-for-profit marketing committees. These committees are usually comprised of marketing professionals from the community. Some are retired and some are in between jobs, while most are just busy marketing professionals who are generous with their time and talents. One of the committees on which I volunteer is associated with a social membership organization and is comprised mostly of non-marketers.
A recent committee meeting was interesting. People had lots of ideas. "Let's stuff mailboxes in nearby neighborhoods." "Let's offer a discounted first year membership through a silent auction." "Let's advertise on Facebook." "Let's put up posters at nearby cafes and similar establishments." "Let's co-market through non-competing local organizations." "Let's have an open house." "Let's offer trial memberships." "Let's offer an incentive for current members to recruit new members." And the ideas kept flowing.
While the ideation was energizing, it was also frustrating because there was little focus. This is where I inserted myself, understanding that there is a marketing discipline that requires a specific order in decision making. Hopefully, this is completely obvious to most experienced marketers, but here is the order in which marketing decisions must be made. There are no short cuts. To execute marketing effectively, one must answer the questions raised by each step before one precedes on to the next step in the process.
These are the steps:
- What are the business and marketing objectives that this marketing plan or campaign is intended to address? That is, what are we trying to accomplish? What are the metrics and what are the goals?
- To make this happen, who are we targeting? What market segments will best help us achieve our goals? Think demographics, psychographics, attitudes, behaviors and geographics. Be as specific as possible.
- What does our brand stand for? Do we know what its unique value proposition is? What is its promise? (This step could be accomplished earlier in the process however often the target customer definition can lead to developing a more powerful unique value proposition and brand promise.)
- What are our brand's most important messages? What do we want to say that will cause our target customers to be interested in and choose our brand?
- What communication vehicles and tactics should we use to reach our target audiences with these key messages? What are the most effective and efficient ways to reach our audiences? (This may include a variety of strategies and supporting tactics, and along with the next step, full-blown marketing and media plans.)
- Given what we are trying to accomplish, what is the right timing for each marketing tactic?
A consistent brand architecture and identity system and execution should underpin all of this. And one should set up success measures if at all possible to determine which messages, strategies and tactics worked best. And, of course, the plan will have to work within a specified budget. On occasion, it might also inform or lead to a request for a specific budget.
So, while marketing tactic ideation is fun, there is an order of steps that will lead to a much more thoughtful plan and successful outcome. If you are a seasoned marketing professional, this just highlights and summarizes what you already know. If you are new to marketing, please follow these steps. They will help you develop much better marketing plans and achieve much better outcomes.
Tuesday, February 27, 2018
BrandForward is proud to introduce a new proprietary process that guides our clients to identify opportunities for accelerated growth. This process features opportunity identification maps, an online survey instrument and a strategy formulation workshop among other components. It helps you identify new markets, new revenue streams, new business models and new competitive strategies. It also helps you identify marketplace gaps, brand positioning opportunities and opportunities for add-on sales. It looks at everything from strategic partnerships, licensing opportunities and alternative pricing strategies to product bundling, line extensions, new product development and alternative distribution strategies.
It includes exploration of productization, scalability and network effects. It also identifies potential sources of industry disruption and paths to “category of one” branding.
If you want an intense “deep dive” in identifying high potential growth opportunities for your organization, this is a highly efficient way to do so. Applying all of the latest growth strategy tools and an objective outside perspective to your organization’s growth potential, it teaches you how to identify, explore and amplify that potential. And its modest investment promises a very high return.
Brad VanAuken, who concentrated in competitive strategy at Harvard Business School, leads all workshops. Brad was also the lead new business development strategist for Hallmark. For more information on how you can grow your business with this process, contact Brad VanAuken at email@example.com.
Thursday, February 22, 2018
Brands are the personification of organizations and their products and services. In this way, those organizations and their products and services can take on human qualities. They can stand for something. They can make promises. They can have personalities. They can share values with their customers. They can be funny. They can be friendly. They can be dependable. They can be trustworthy. And, in this way, people can relate to them, like them and even feel emotionally connected to them.
Think of the qualities that you most admire in a person. For me, it is compassion, intelligence, playfulness and quick wittedness. For you, it may be something else.
Now consider the personalities that have been given to specific brands, sometimes by brand spokespeople or characters, at other times just by sensory design and brand messaging. Consider GEICO's gecko. He is cute and likable and funny with a pleasant accent. And Dos Equis' The Most Interesting Man in the World is debonair and successful with a plethora of rich experiences and stories. It implies that life will be more interesting with Dos Equis. And Farmer's Insurance University of Farmers advertising campaign presents Farmer's Insurance as a calm knowledgable, seasoned brand that can handle anything because it has seen everything. And remember Tom Bodett's folksy voice that says, "I'm Tom Bodett for Motel 6, and we'll leave the light on for you."? This is folksy, friendly and reassuring. And remember Alistair Cooke, host of PBS Masterpiece Theatre? He epitomized civility, informed nonchalance and authority, just the right mix for Masterpiece Theatre.
I must admit, that on the other hand, I do not understand the appeal of Progressive Insurance's Flo, the fictional salesperson character appearing in more than 100 of their commercials. To me she is unattractive, awkward, plain and geeky without much going for her, not a spokesperson I would want for a brand. Having said that, I am clearly missing something as there are multiple Flo ProgressiveGirl fan pages with tens of millions of likes on Facebook.
I think you get my point though - brands are intended to add human qualities to organizations and their products and services so that they can better connect with people in an emotional and loyalty-building way. Have you thought through what type of person you want your brand to be?
Friday, February 16, 2018
According to BrandForward's research, one of the top attributes brands strive to be is trustworthy. Related to this, brands usually also strive to be customer service oriented, responsive, reliable and dependable. Other research has shown that people want their brands to have positive intentions toward them and to be capable of carrying out those positive intentions.
I will express this in several different ways. People want to be able to trust their brands. They want their brands to possess integrity. They want brands to deliver on their promises. They want their brands to tell them the truth. They want their brands to have their best interests in mind. They want their brands to care about them. They want their brands to do what is right on their behalf. In summary, they want their brands to be GOOD.
So brands that lie, intentionally deceive, cut corners, make promises on which they cannot deliver, are not focused on meeting the needs of their customers, are greedy, are unethical or otherwise are not good are brands that are in trouble.
Take the US Congress as an example. Based on the average of many different polls, Congress' job approval rating has remained around 16% for the past several years. Why is it so low? Because US citizens are not confident that their representatives are doing what is right on their behalf. Instead, they believe those representatives are serving the special interests that fund their campaigns. I would argue that the US Congress brand is is trouble. While this is an extreme example, it is not the only example. I have written a few times about brands that do not deliver on their promises. United Airlines has been a poster child for this. BP is also a brand that has not made good on its environmental promises. In fact, there are countless other examples of this.
While this might seem to be a cliche, I think it comes down to the Golden Rule. Is your brand treating its customers the way you would want to be treated? If your answer is "no," you have a lot of work to do to get your brand back on track. The problem could be the result of leadership, metrics and scorecards, systems, processes, employee recruiting criteria, employee training, recognition and reward systems, organization structure or just plain greed. Whatever its cause, as a brand manager, you need to get your brand back on track.
Thursday, February 15, 2018
I just returned from a local Boy Scout council marketing committee meeting. One of our agenda topics was the promotion of Earth Day merit badge workshops. The two merit badges in question are "Energy" and "Nuclear Science." Two professors from SUNY Geneseo are teaching the workshops. Professor Dennis Showers, an Eagle Scout and author of the Energy Merit Badge book and Professor James McLean (physics and astronomy) are leading the workshops. Activities and demonstrations include Geneseo's eGarden, solar powered car and a particle accelerator. Professor Showers will sign copies of the merit badge book that he wrote. Both of these merit badges support our country's emphasis on STEM.
While not always the most popular merit badges, we wanted to get a good turnout for these workshops.
The council publishes a newsletter that is sent directly to parents of scouts. Given the timing of the workshops, we felt as though this could be one of the primary communication vehicles to promote the workshops. There certainly was enough to promote that might spark interest in the workshops, from the solar powered car and the particle accelerator to the eGarden and signed copies of the merit badge book. Yet, were these powerful enough to get the scouts to sign up for the workshops? Then we thought about what parents of scouts want most for their children - success and happiness in life. So why not promote the fact that there are a wide variety of career options in energy, all of which pay quite well. Careers in energy would lead to a comfortable life. And isn't that what merit badges are all about - helping scouts to explore various hobbies and careers?
We decided that our primary communications target is parents. And we we decided that the lead message would be lucrative careers. We will still hype the other fun parts of the day, including visuals of the cool demonstrations the scouts will get to see. This will play well with the scouts themselves.
This simple promotion exercise led me to think about how everything a marketer tries to sell needs a powerful "hook." This emerges from a solid understanding of the primary target audiences and what is most likely to motivate them to take the actions you intend to have them take. Never neglect the "hook" in your marketing communications.