To attract customers – be available in all channels

Robert CrowderLast night I was having a discussion with Robert Crowder who is the chairman of SkiClub GB and owner of Crowders Nurseries and www.crowders.co.uk.  We were talking about retail and the role of e-commerce for garden centres in particular.  Robert reminded me of such a simple truth that to maximise growth opportunity it is essential for the product and service to be available in as many channels as possible. Especially channels that are growing like e-commerce.

Being in the right channels

This morning Robert sent me these quotes as follow up to our discussions.  This is from today’s trading update from the Chairman of the John Lewis Partnership:

Charlie Mayfield John Lewis“Although we expect to report profits up on last year, trading profit is under pressure. This reflects the greater changes taking place across the retail sector. We expect those to quicken, especially in the next 12 months as the effects of weaker Sterling feed through. We will now accelerate aspects of our strategy. This will involve a period of significant change, investment and innovation to ensure the Partnership’s success.”

Continue reading

Pensions firms will they attract and educate or just extract?

Rob Gardner RedingtonRob Gardner of Redington has just thrown down a challenge to the Pensions industry. click here. His quote (below) is in response to the success of Auto Enrolment.  Auto-enrolment is handing a whole new batch of customers to pensions firms.  Will the firms lean forward and seek to help these customers with great products and advice that help them secure their retirement.  Or will they just take this new crowd of customers and work out how much money they can extract from them.

 

 

Rob puts it differently in his article in Pensions Expert

For the first time in decades, we have a captive audience of pension savers. We could do what we have always done and hope some of it sticks. Or we can take up the challenge and recognise that the workforce of today will want to engage in a different way.

We could simply direct employers to the Pensions Regulator website, or we can start to develop communications fit for a world where Siri and Alexa capture the imagination of a new breed of savers. On the whole, the population lacks both the confidence and knowledge necessary for financial security. 2017 must be the year we really start to address this.

Redstart Financial EducationAs well as being a pensions investment consultant and co-founder of Redington, Rob is campaigner for better financial education (Redstart) so we can all create a more secure financial future for ourselves.

Disrupt, produce, fulfil – boosting productivity

From time to time I go looking for events where I might learn something new and get a different perspective.  I also try to combine going to these events with meeting a friend, so we can discuss the subject.  The LSE provides some great events and attracts interesting speakers.  I try to avoid famous politicians as they tend to only say what we have already heard.  I look out for people with expertise and something to say.  Especially if it is about something I know little about.

Timothy Massad Chairman of CFC

Timothy Massad with President Obama

Last night I went to hear Timothy Massad who has been on the front line of the U.S. effort to combat the financial crisis and reform the international financial regulatory system. He was appointed by President Obama as Chairman of the U.S. Commodity Futures Trading Commission and was formerly as Assistant Secretary for Financial Stability at the U.S. Treasury. However, President-elect Trump will replace him as is customary with a new president.

Continue reading

Top 10 books that changed the way I do business

A client (David Edwards from UL) asked me yesterday for some advice on what books he should read to develop his product marketing knowledge.  This prompted me to reflect on which books have had the greatest influence on me.  All these books have had a material effect on my approach to creating growth strategies that everyone is convinced will work.

Product marketing is about more than marketing, it is about attracting more customers.  Over the years I have found very few marketing text books that were really helpful and stimulating.  But many books that have influenced the way I think about marketing and attracting customers.

None of these books give a simple answer straight out of the box.  They are all thought-provoking and will help you to move your thinking forward.  If you want easy answers then look elsewhere, if you like a challenging thought-provoking read, then take a look.

My top 10

The science and laws of marketing

How brands grow

Start with Byron Sharp.  He has taken the pioneering work of the late Andrew Ehrenberg and made it accessible to everyone.  This is about why it is more important of get more customers, not just focus on customer loyalty.  It is about why light buyers matter so much.  It is why the 80:20 rule is wrong.  It is based on years of research into how people actually behave and not anecdotes and armchair thinking about marketing theory and customer loyalty.

 

 

Byron shows us why evidence matters and how to bring science into marketing.  Byron shows you that there are 10 laws of marketing and why you cannot ignore them.
Watch his TEDX Talk here

The Text-Book

marketing byron

This is the only marketing textbook I would recommend.  It takes the laws of marketing as explained in How Brands Grow and tells you how to apply them to the business decisions you need to make to develop a marketing plan that will actually work.

It is written by whole team at the Ehrenberg Bass Institute of Marketing Science and has some good case studies.  It is aimed at university students studying marketing and strategy.

This academic work is known and been adapopted by global brand leaders like P&G, Mars, Unilever, Colgate and Google for some time.  It has only become accessible to everyone else in the past 5 years.

Leadership and innovation

Find your light bulb

Mike Harris shares his experience of creating totally new and game changing brands by taking a radical approach to providing service to customers in conservative industries.

Find Your Lightbulb draws from Mike’s experience of creating game changers in banking (First Direct and Egg) in telecoms with Mercury and in internet security with Garlik.

This book is about leadership and driving extraordinary ideas through your organisation and creating somethign that will attract more customers.

 

Behaviour and psychology

Daniel Kahneman Thinking Fast Thinking Slow

Daniel Kahneman reveals why and how people’s decisions and behaviours are not entirely conscious or rational.  He discovered that we have two systems in our brain,  System 2 is the one we all know about, it is conscious, rational, slow and cautious.  System 1 is actually the driver of many decisions, it is unconscious, instinctive, fast and very importantly, we could not function without it.

This book helps you understand why people buy, why emotion matters, what triggers a purchase and you will think differently about how to attract customers when you have read it.

Advertising and marketing communications strategy

IPA Peter Field Les Binet, The long and short of it

This report analyses the results of 998 marketing campaigns.  These campaigns were all submitted to the IPA Annual Effectiveness Awards.  They were all assessed on the basis of the results and the effectiveness rather than subjective critieria like creativity or design

This report updates an important study called Marketing in the Era of Accountability. It tells you what worked and what did not work so well.

 

 

This highlights and confirms the importance of increasing market penetration (i.e. strategy speak for “getting more customers” ) and the role of share of voice in building market share.  They also discuss and demonstrate why generating emotional response to campaigns is important to get value for money from your marketing

Looking to the future

Black Swan Nassim Nicholas Taleb, Improbable events

Nassim Nicholas Taleb shows us that looking to the future is a bit of a mugs game.  The most likely thing to happen in the future is an improbable vent that you cannot predict.  So stop worrying about it.

His writing is dense and a bit inaccessible, he is a mathematician and ex stock trader with a big brain.  But what he writes about is important and has implications for strategy and practical decisions.  I wrote about what we should do about this in 2008 in this post.

 

 

My conclusion is we should spend less time worrying about the future.  We should spend more time strengthening our ability to withstand unexpected shocks.  Read here

Social Media

Penny Power, Know me, like me, follow me

There is increasing evidence that digital marketing and social media are attracting a disproportionate share of advertising revenue as these new media have become more fashionable “must haves” in your marketing plan.

Penny Power takes a different approach and shows us what social media is really for and how to use it to build a following and create a network that will help you and your business and even how the network will help each other.

Penny’s approach echoes the whole Attractive Thinking ethos.  It is about attracting people not broacasting to them and capturing them.

 

This book is a classic, it may be 7 years old, but it is not out of date.  It reveals some fundamental truths about who we are, how we interact and what that means for your business, brand and marketing plan.

Strategy

Good strategy, Bad strategy, Richard Rumelt,

Richard Rumelt has studied many strategies and the book has loads of examples.  This makes this very practical and well grounded.  Richard invites us to look inside the business for what we can do and what we are good at.

Rumelt dispels popular misconceptions about strategy – such as confusing it with ambitions, visions or financial goals – by very practically showing that a good strategy focuses on the challenges a business faces, and providing an insightful new approach for overcoming them.

 

Remember a strategy is merely a set of actions designed to achieve a particular goal. This book will bring you back to what really matters, so you create a plan that will work

Getting recognition and being recommended

Key Person of Influence, Daniel Priestley

This book together with the KPI programme showed me a whole buch of stuff that is known by entrepreneurs and not so well understood or taught in large corporate environments.

Daniel Priestley highlights five steps that are essential if you and/or your business are to gain recognition and be recommended.  Daniel has talked with thousands of entrepreneurs and gained insight into the problems they have to overcome.  The KPI method is an effective way to overcome them.

If you want to develop your career and be secure in your ability to attract customers or employers, then read this.

He has followed this up with another book called Oversubscribed how to get people queuing up to do business with you.

Avoid being misled by common sense

Common sense, Duncan Watts,  Everything is common sense until you know the answer

In the 2001 election, William Hague created the Common Sense campaign for the Tories.  It did not work.

“Why is the Mona Lisa the most famous painting in the world? Why did Facebook succeed when other social networking sites failed? Did the surge in Iraq really lead to less violence? And does higher pay incentivize people to work harder? If you think the answers to these questions are a matter of common sense, think again.

 

Common sense is one of the most dangerous ideas that pervades general thinking and our decision-making.  Yet science nearly always demonstrates that many ideas that were common sense were plain wrong.  (e.g. sun goes round the earth).  Duncan Watts will help you fine tune your antennae to detect common sense ideas that are misleading or just plain wrong.

And another 5 books

Inevitably I found it difficult to nail this list down to 10.  But the list above is my top 10. Here are my next 5.

  1. Viral marketing, The science of sharing.  Shows what goes viral and why
  2. Switch, How to change things when change is hard:  Argues that we need only understand how our minds function to unlock shortcuts to switches in behaviour.
  3. Contagious: How to Build Word of Mouth in the Digital Age:  Does what it says on the tin
  4. Marketing Manifesto:  The booklet from the Marketing Society on what marketing leaders must focus on to increase their effectiveness and impact  download here.  I helped the team to create this book.
  5. The One Thing You Need to Know: This helps you discover the question you need to answer, get the right answer and then get everyone else to agree with you.  You will be better at pitching within a corporate environment.

Finding purpose – what’s the point?

Iconic Shift Mike HarrisLast week I was fortunate to be at one of Mike Harris’ ICONIC SHIFT mentoring events. It was motivating to be with an inspiring bunch of entrepreneurs covering industries from healthcare, pensions, financial services, fashion, food and business services; especially when each entrepreneur is aiming to challenge the way things are done in their industry and turn their business into a game changer that that delights customers and disrupts an industry.

Mike shared with us his model of high performance leadership drawing on his experience of creating game changing businesses in current account banking with First Direct, fixed line phones at Mercury Telecoms, credit cards at Egg and internet security at Garlik.
Like all the best ideas, you get a lot from them the first time but then you get more on the second, third and fourth time of hearing them.

But the real reason for this blog is that during the event it finally dawned what really bugs me, and I want to do something about.

Setting goals and purpose

Business owners and business leaders want to maximise shareholder value. It is an explicit goal of all public and of many private businesses.  But the irony is if the leader makes this the primary goal they will be less successful at achieving it than if they start with a bigger purpose that helps customers in some way.  Why is this true?

Value Adders vs Value Extractors

Starting with a focus on creating shareholder value will lead you to what I call value extractor strategies. These strategies are effective at maximising the short term revenue extracted from customers.  They are tempting, it appears a much faster way to hit this yera’s profit targets.  But in the process you engage in a stressful relationship with customers.

Value Extractor Cowboy, Differentiate

The value extractor tends to view their customers in the same way this cowboy regards his cattle.  They are there to deliver a source of income and to be reined in with the lasoo.

So for example, customer acquisition is done with value incentives and offers which lead to contracts that trap customers into buying more than they need. Mobile phone companies and utilities are expert at this. Energy firms leave us stranded on inefficient tariffs, mobile phone operators use tariff complexity to confuse customers into buying services they don’t need.

In consumer product and food companies it is a lot easier to shave a bit of quality and bank a £m on the bottom line than to perusade the finance director that the product quality improvements will deliver more revenue by attracting customers.  So business leaders are tempted to shave product quality to save money in the short term.

There is another way that delivers better results than this.

Value adders continually improve the product and service and find ways to go beyond what customers want because they know this will attract more customers in the long term.  By going beyond what customers want and they stay ahead of their customers and competitors.

JigsawI always think value adders are more like this cartoon character fitting the last piece of the jigsaw to make things just right.  they are supplying something that solves a problem for their customers and design it to fit.

Leaders who deploy these strategies know that if they offer something attractive to customers that really helps them, then they will come back for more and even more importantly tell their friends about it.

Value adders also create businesses that are more fun to work in as well as delivering better value to customers. Value adders believe businesses must engage all the participants not just the shareholders. They must engage the customers, the employees, the management and the local community as well.  And we have seen many examples of this.

  • Hotel du Chocolat transformed chocolate retailing with superior product quality and design whilst Thornton’s value engineered themselves into an empty market space between their high street stores and value products in supermarkets.
  • Galaxy reshaped chocolate products in the Middle East by bringing superior quality and design to everyday supermarket products
  • The most over-used example is Apple who reinvented mobile communications whilst Nokia made lower cost mobile phones using the technology they already had.
  • Miracle Gro has entered new market categories through it’s determination to make products that make gardening easier for everyone.
  • P&G have taken the excess margins out of skin care whilst delivering superior products with Olay.

What distinguishes these firms was a purpose beyond shareholder value

These firms created a purpose beyond money and this created better shareholder value than the ones that start with maximising shareholder value as the goal.  This is still business not a community or some higher purpose or campaign.  It is simply about helping improve people’s lives in a small but practical way.

These businesses also end up as the most rewarding to work in, deliver great shareholder returns and always experience the most growth. They deploy VALUE ADDER strategies that help customers, improve the products, enhance the customer experience and as a result grow by attracting more customers.

I know this idea has been discussed in many places such as by Jim Collins in Good to Great.  Collins talks about this from the perspective of the CEO and the mission.  But my take on this is that the principle can be adopted for every brand development, every growth strategy and every business.  What frustrates me is how many people still don’t seem to “get it”.

So every time I experience a value extractor business whether as a consultant, manager, advisor or as a customer, a voice inside me pipes up and questions why do they do this?  Don’t they realise there is a better way?   I don’t like it when people are not doing the best thing for their business. It is bad for customers, bad for staff and bad for shareholders, bad for growth.

SO WHAT NEXT – I will be less frustrated and take action!

I realised this week, I need to stop moaning about this and stop getting frustrated. I should do something about it.

My whole consulting service is devoted to helping value adders. So I need to work with more of them to create more examples of how this strategy works.  I have seen that value adders want to turn their products and services into things people love to buy.  That is what we do at Differentiate, so we can help.

So I set my own 10 year goal to help 10-20 business leaders transform 20 products and services into something that helps to make customers lives a little better.  It is much more satisfying to make customers smile than to extract money from them.  And I need these examples to get the message out there that value extraction is not best strategy for anyone, certainly not for customers, but not for staff and shareholders as well.

Clarifying purpose

It is an immense relief to have clarified my purpose and know the reason to build Differentiate in the next 10 years. I plan to share the bumpy road of experiences through this blog, my Google+ and my email list.

If you like this journey and want to explore it with me, please subscribe for blog updates (top right) or stay on my email list or sign up for email updates on the Differentiate website.  You can also follow me on Google+ and Twitter.

If you are even more interested in this, I am creating a group who will meet every two months to shape and develop this path and ensure we succeed.  Call it a non exec role, an advisory board.   If you are interested, please do get in touch?  More on that later.

Where do I get great advice about branding?

There is much talk about branding. To me, some commentators seem to make it more complex than it needs to be or the discussion seems divorced from the realities of why customers actually buy things.

This post is to share my thoughts on creating great brands

Great brands offer products and services that customers want to buy, because great brands solve real problems that customers have. My approach to brand strategy is based on helping marketers first create things that customers want to buy and then market them to customers in a way that makes it easy for them to buy from you.

The more relevant and attractive your brand is to customers, the easier it will be to market it and attract more customers.

Background

There are a number of seminal works that guide this approach and prove it is the most effective way to build a business and a brand.

Mike Harris – Iconic Brands (my business mentor) shows us how high performing businesses always have value propositions that are strong and sufficiently differentiated, communicated with sufficient power, completely and consistently delivered AND basic economics that work. The brand management task is to create that value proposition and build a plan the business is convinced will work.

Byron Sharp – How Brands Grow shows us that the biggest and most successful brands only get growth when they increase market penetration. Growth cannot arise by selling more stuff to the same number of customers (empirical fact). To grow you have to get more customers. This is because customers have repertoires of choices. The brand manager’s job is to put the brand in repertoire. Brand loyalty can be a misleading concept.

Peter Field and Les Benet in Marketing in the Era of Accountability and The Long and Short of It prove that building your reputation in the long term is more profitable than getting sales through short term promotion.

The Marketing Society UK – I worked with the society to create The Marketing Manifesto. This work demonstrates that delivering this is not just about creating the customer proposition and the marketing plan. It is about engaging the internal business in your mission and winning support for the plan from within the business. Without this the plan will fail. Successful marketing teams always focus on three different areas.

  1. Create and pursue a purpose – successful businesses have a purpose that goes beyond making more money. This purpose must include creating profitable sustainable growth. The brand is there to helps the organisation deliver this purpose.
  2. Championing customers – this means get your insight, shape the customer experience based on insight and find creative ways to engage customers and go beyond what they expect
  3. Mobilise the organisation – this means collaborate and communicate with colleagues, bring the voice of the customer into the boardroom and most importantly quantify and measure.

The 5 step EGL framework

A brand manager’s task is to build products and services customers want to buy and create a plan that the organisation is convinced will work (i.e. deliver profitable growth). There is a lot of theory talked about this but we bring it back to 5 questions.

PINPOINT – Who are your customers and what problem do they have that you can solve?
POSITION – How does your brand solve it better than others?
PERFECT – What is your story? How do you design a product to deliver this?
PROMOTE – How will customers find out about your brand and how do you make sure it is the right place so they can buy it when they need it?
PITCH – How do you convince customers, the board and the business this works for them?

EGL workshops introduce these ideas through case studies and then go on to provide a practical framework to apply them to your business. The workshop is a combination of lecture content, a 5 step framework and workshop session where teams create a plan for their team and their brands. This is grounded in evidence and what works as well ideas and imagination.

Marketing leaders face similar leadership challenges to other leaders

New CTO

This article has advice for new CTO’s that could easily be translated and applied to new marketing directors and CMO’s

  • Respect the current team
  • Don’t go and buy fancy new agencies
  • Keep the baby dump the bathwater
  • Don’t be with your agencies be with your business
  • Hire for attitude and intelligence, then skill
  • Be a technical marketing and insight mecca
  • Be the marketer who talks to others in the business

Interesting that the challenges facing new leaders are similar between functions

Read the article here

 

http://pandodaily.com/2013/03/08/attention-ctos-culture-matters/

Why social media can be a distraction

Effective Growth StrategyCranfield School of Management are repeating a study that they conducted 1 year ago amongst marketing directors.  This study explores the operational and strategic priorities for marketing directors.

You can contribute to the study if you are responsible for strategic decisions click here

The previous Cranfield study from 2012 revealed that marketers priorities were around media and especially around the new fashion for social media.  The writers think this is worrying and I agree.  Will it be different in 2013?  I suspect not.

Read the results click here

The reason for my post is to reflect on why marketers seem over preoccupied with media strategy in studies like this rather than the real growth drivers of product strategy, distribution strategy and innovation.

Strategy-for-Growth

For as long as I have been in marketing, marketers have complained about their lack of influence at the top table.  It is clear that finance, sales and operations have the power when it comes to major strategic decisions.  The observations made by Cranfield in this study describe this problem.  Yet then when asked about their priorities, marketers still focus is on a narrow part of growth strategy.

I have consistently noticed that the most effective growth leaders prioritise product strategy, distribution strategy and innovation ahead of media.  They see media as a part of the marketing mix and often a secondary part.

As an example of this, I have recently been involved with a group at the Marketing Society who are working on a marketing manifesto that exhorts marketers to focus on business fundamentals.  We also have been looking at the ways marketers build their credibility within the business so they can be more effective. The experienced marketers on this working party know that media is important but not the fundamental driver of success.

Most of the people I meet in business seem to understand this and understand what are the real growth drivers.  But then this study arises and I wonder why we get these results?  It remains a bit of mystery to me as to why we still see results such as are seen in this Cranfield study.

Tip of the week

I am a big user of social media.  It has a role to play and you ignore it at your peril.  It is true that for some new and smaller businesses they built their customers with social media, so it is a priority for them.  But many businesses built their business in other channels and social media cannot deliver the reach and penetration that they need to get growth.

We all know that we don’t buy stuff because we find it in social media we buy stuff because it helps us solve a problem we have got and it is available to us and we can find it when we need it.  This is why product strategy and distribution strategy are the growth drivers

Be clear on your business fundamentals.  Make your priorities on the real growth drivers.  they usually lie in product strategy, distribution strategy and innovation. Experiment with social media, but do not be distracted.

Why are your colleagues not convinced about your plan for growth?

Whilst your brands and products have been growing steadily you know this is not good enough to accomplish the business long term goals. So you are looking for new ideas to step up and accelerate your growth. As a result, you have spotted an opportunity for your brand or business to get more growth.

It becomes obvious to you that the business should pursue this opportunity. If you don’t, you know the business could get left behind. So you come up with a plan to capitalise on it.
You do your research and planning and may even hire some great agencies or others to help you. Together you come up with growth initiatives that will work. You have done your homework; you have great numbers to support the plan. But when you pitch it to the business, some colleagues are not convinced. They seem a little sceptical. Some seem enthusiastic but don’t really get behind it.

Then even after you have convinced the board, you find you struggle to get the product development or the operations or the sales teams fired up to deliver it.  Why does this happen, Continue reading

How well connected are we with the real world?

When I listen to the great and good in the news, there does seem to be mounting evidence of a surreal detachment from the real world. We are facing a harsh reality that the nation and businesses have some big debts to pay back. However
 
Royalty:  Prince Andrew hiring private planes at tax payers expense to go to Davos to the world economic forum  .
 
Civil servants:  Mark Thompson's private flights courtesy of the Licence payer, because it was terribly important he dashed home from his holiday to sort out a staff problem.
 
Stephen Hester's  £9.6m package for managing a business wholly underwritten by the tax payer and is guaranteed it cannot fail.
 
Politicians:  Duck houses moat cleaning, phantom mortgages etc. But now I have heard MP's arguing that their bullet proof pensions are perfectly reasonable and the problem is not that their pensions are too generous but that the private sector is at fault and is too mean for withdrawing final salary pensions.
 
Ministers and opposition politicians talking as if they can continue to spend money and not realising that the electorate knows an adjustment is needed.  Gordon Brown's slip up that we face zero percent growth in spending is an illustration of the psychological dilemma.
 
Business Leaders:  I heard three eminent business leaders on Evan Davis Radio 4 slot profess, without blinking or stuttering, that when they meet staff (sorry colleagues!) they have perfectly normal discussion with them. They argued that they always find out exactly what the staff thinks because staff (sorry colleagues) do not tailor the response to impress the boss. (You would never think of doing such a thing!)
How can we stay in touch with reality? .
   
You know this is important for you to make the right decisions for your business. If you do not, you will lose touch with customers and they will drift away and the business will flounder. This is about more than being customer driven, it is about being realistic regarding what you try to accomplish and about the kind of role and relationship you have with your customers.
 
The most successful leaders manage to keep in touch with this, they do it through good instincts (Margaret Thatcher), good research (Tony Blair), talking with people (David Cameron).
 
Less successful leaders miss the beat, (Gordon Brown) start paying too much attention to what their immediate direct reports are telling them (Neil Kinnock, John Major, Ian Duncan Smith) and do not reach out to the wider market or audience.
 
This is not just about market research and talking to customers it is about having wider antennae by using multiple sources.
 
We need to find the same thing for our businesses and to understand customers. What is available to us to ensure we stay realistic? Here are 3 thoughts to get started.
 
1. Seek to understand what customers have done and why Do not take too much notice of they say they will do. Future behaviour is hard to predict. Funnily enough customers cannot predict their own behaviour. But it is possible to ask them and understand their current needs and frustrations.
 
2. Find ways to track what people are saying about your business. Get away from the bubble in your head office. Find out what they say behind your back (being British we are too polite to tell you to your face). If you are high profile enough then social media networks provide feedback on this. It is time consuming and expensive to track but it is real and â€oewith the beat”. This seems a more practical use of social media than trying to insert ads into conversations between friends.
 
A good example of how customers do not want to say things to your face comes to me from conversations with John Yates Smith a Val d'Isere chalet operator (YSE). He is amazed at how often when something goes wrong in the chalet (lights, fridge hot water etc), that customers keep quiet about it all week, then go home, moan to their friends, then even write a letter of complaint. But they do not tell him whilst they are there when he could fix it.
 
Any more thoughts on how to stay in touch with customers and keep our antennae switched on would be very welcome.  Please post comments on this blog.