More Growth - consumer insight, brand positioning, growth strategy

Are you only doing the things you are best at?

if not you are probably struggling to get enough growth or find yourself competing on price.  I was reminded of this by two features in Marketing Week yesterday. 

One was about Reckitt Benckiser who have just posted results with revenue up 20% and beating all their targets.  The other was about Tesco online who are enjoying good growth in their core grocery delivery and Tesco Direct businesses, but are pulling out of house sales, flowers and clothing as they are losing customers here.

   

The most striking thing about the Reckitt's brand list is how each product as the best at what it does, and in each case the product focusses on a narrow task. e.g.

Vanish - removes small difficult stains
Finish - dishwasher tablets
Calgon - removes hard water deposits
Dettol - anti bacterial cleaning
Airwick - air freshening
Lemsip - flu treatments
Nurofen - fast pain relief

      

Tesco's forays into markets that might seem attractive (flowers, house sales, clothing) have struggled as they end up being one provider competing on price or offering various new features.

Big brands also do this.  They must be the best at something.  Coke has a broad appeal and sells some generic soft drink values as well as its own brand personality, but it wins by being more available than any other brand. 

Mobile phone handsets that are winning at the moment seem to do one thing especially well.  Sony Erricsson have a walkman range focused on music, Samsung really attend to style and feel with a lot of designs so that friends can each have a different one.  Nokia and Motorola have struggled to stand out more recently.

This has got me thinking - what is it that Differentiate does best?  The best way to find out is to ask your customers.  I plan to ask our customers and ezine readers in the next ezine.

Identify what you do best and then narrow/specialise your business to deliver this and focus on selling to the people for whom what you do best is what they want.

In the language of the Growth Game - what you do best helps you define the characteristics of your Power Categories.  This is where you should specialise and focus. 

Reckitt Benckiser did not win by trying to take Unilever, P&G and GSK head on, they found specific niches where they could be the best and they focussed on these.  If big players like this find specialising is the route to profitable premium priced growth.  I guess we can all learn from that.

Fabulous brands will disappear overnight?

Lord Bell of Chime communications was quoted as saying this at the ISBA conference

"If we don't take action, fabulous brands that spent millions building their reputation will disappear overnight."

The issue referred to is action to dissuade the government from imposing further restrictions and controls on advertising in areas such as unhealthy foods, cars that are bad for the environment, alcohol etc.

This post is not about about the merits or demerits of advertising controls, but to challenge the astonishing presumption that a great brand could not survive without advertising.

Some of the greatest and most fabulous brands of the 21st century became great brands long before they invested in broadcast advertising.   How did they do this?  They created products and services that people wanted and executed them better than others.  Here are a few plucked from the Superbrands top 500

Google
Microsoft
Yahoo
Rough Guides
Facebook
Denon
Easyjet
Ebay
Rolls Royce Aerospace
Eddie Stobat
Blackberry

And some others
Innocent
Pret a manger

Brand reputation and durability is built upon people's day to day experience of the brand or what they hear about it from other people.  How did people discover these brands and services before they started advertising?  It will be different in each case but we know from our Power Channels analysis that whilst TV ads can be influential, word of mouth, previous experiences, being available in the right places are often the drivers of growth.

I would beg to suggest that the "fabulous brands that will disappear overnight" are not really so fabulous.  Great brands that deliver things that customers want and make themselves available in the right places will be sought after and customers will find them.  If advertising is restricted then brand owners will create new ways to make themselves famous.  I am not so sure their destiny is tied to the availability of mass market advertising.

Having said that, advertising is a powerful tool and persuading the government to back off is a good idea. But to do this we will need more powerful arguments than this one as advocated by Lord Bell at ISBA.

Footnote:   People's day to day experiences are shaped by the way the business delivers Power Attributes to the Power Categories.  This work underpins the brands success.  Customers and prospects then discover this through the Power Channels, which include advertising, but there is much more. (definitions click here or sign up here  to get our free paper "The Growth Game").

Is your growth constrained by a lack of resources or a lack of action?

Last post we discussed marketing influence across the whole business.  But according to some commentators, there might be a recession soon.  Does this mean marketers influence will decline even further.  You may have less money to spend and fewer resources.  It will put pressure on costs as growth gets more difficult.

So should you react in a different way as a result.  This week we show how "internal entrepreneurs" get growth.  This is the same whether the market is growing rapidly or stagnant.

The first thing is to focus on action; doing things rather than analysis, research and meetings.  I was reminded of this when reading Tom Peters blog and saw this quote.

Any project worth doing is worth doing because in some small or large way it challenges "the way we do things around here." Moreover, it is a given that bosses are primarily hired to be cops who make sure that we do things "the way we do things around here."

This dilemma is often resolved by a select band of individuals who drive for practical steps that will create growth.  These team members refuse to accept the processes, always find ways around the restrictions and "kick down doors" to make things happen.

This select band are the internal entrepreneurs.  They will work with limited resources.  Internal entrepreneurs push their ideas with conviction and energy.  They also recognize that they must win people over and cannot achieve their goals by just pushing their ideas.  However they are willing to push back and are not put off by objections and obstacles.  We have noticed they can exist at many levels of the organization.  This is not just a feature of senior management.  What are their behaviours?

We recently worked with someone in a 7m business who used this "internal entrepreneur" approach and it has worked, two years later this is now a 12m business.  They also operated with some of the constraints of a larger business since the business is owned by a multi billion global business.  But they did not have access to additional finance from this larger business.  The resources available to them were only those generated by the revenues of this 7m subsidiary. 

Here are our practical tips based on the behaviours we have observed in this case and others.

• Identify the five top drivers of growth on the business and ensuring the whole team understands them.   
• Translate the 5 drivers into practical actions and review them every month
• Refuse to accept that it is OK to miss objectives due to a need to adhere to process.  When obstacles arise, the question is how do you get around this?  What else could we do?
• Develop a great enthusiasm for celebrating successes.  Make the office area full of boards with updates on progress, pictures of successes, statements of intent and performance vs. targets.
• Evaluate all activities using three simple questions, what works, what does not work, what could we do better?  (Always start with the positive
• Always talk about the customer and understand the customer needs.  Underpin decisions by robust insight.  All ideas were tested with customers.  This can involve very low cost market research tools that the team created and managed themselves.
• Be clear about the working environment you want and the type of people this required.  Ensure all new recruits are interviewed and tested against this profile.

So if you are the boss, make sure you have some internal entrepreneurs in the team. If you are the team, try being an internal entrepreneur

If you want your team to understand how to do this look at  our programmes on  increasing marketing influence  (you can also read our papers on this.

Differentiate supports internal entrepreneurs with The Growth Game which is an approach that works to translate insights into practical steps for growth that have the support of the business team.   Our best clients are often "internal entrepreneurs; they know a lot of this stuff intuitively and use our approach to not only develop their ideas but to sell them to the business teams.

If any of you have experiences that relate to this, please let us know, either by private email or post comments under this article

Does your team ever struggle to win support for their plans?

The subject of marketing influence and effectiveness has hit the marketing press again.  Deloittes have done a global survey and Marketing published the findings last week.   It is a great survey based on authoritative opinions of 217 C level executives mainly CEOs, CMOs, and CFOs.

 

This reminded me that 10 years ago we published two papers in co-operation with The Marketing Forum.  These were based on survey findings from over 500 senior executives across all the business functions.  One paper was about marketing influence and the other about the future of marketing as a business function.

 

Get our papers click here

 

Some things have changed reading both 1998 and the 2008 papers I noticed that Marketing is now more central to strategy for the CEO.

Now 81% of CEO's see marketing as a key driver of growth  "the chief executive is much more open to talking about marketing these days"  CMO 2008

However what has not changed is that marketing teams remain detached from the rest of the business and often do not own the customer agenda within the business.

In 2008 - 77% of C-level respondents believe their employees do not fully appreciate the value of marketing  "I worry that I am seen as too specialised compared with my peers in other functions"  CMO 2008

In 1998 we found marketers do not communicate well with the rest of the business and are often seen as specialists who spend a lot of time talking to each other and their agencies but not enough time engaging with their own business.   Our report identified three characteristics of typical marketers that help to explain this

1. Marketers lack breadth and are conspicuously more loyal to their own professional development rather than broadening their career within the company
2. Marketers tend to be highly creative and analytical.  These strengths quite often go with weaker people and team player skills
3. Colleagues in other functions have much better people and influencing skills and this helps them exert more influence within the business.

Our conclusion in 1998 was 

The marketing profession was optimistic about its future.  The rest of the business wants it to succeed.  The role of marketing is to champion the cause of the customer throughout the business and ensure the business meets the needs of the customer in a profitable manner.  In many ways marketers are well equipped to do this.  The have the respect of the business for their creativity, intelligence, technical skills, energy and drive.

BUT

Marketing teams must develop new skills and operate in some different ways if they are to deliver this role in an effective manner.  It is essential that marketing earns the respect of the business so that the whole business becomes market led.  The key to this would seem to lie in new communication skills and having robust tools for identifying opportunities, analysis and measurement.  Without this the creative brilliance and smart analysis will lose its impact.

Since then, we have found that marketing teams who do spend more time working cross functionally and engage the whole business in their plans end up with much greater influence, are more highly regarded and create stronger top line growth.

This insight shaped the development of the Growth Game.  Our whole approach is  designed to overcome these issues 

 

Get the Marketing influence report click here

It is also instructive to examine Deloittes conclusions in 2008

• There is often a misalignment about the role of marketing amongst board members
• CEOs must help the CMO to align the organisation around growth
• The role of marketing is often misunderstood
• Marketers need to broaden their commercial skills to play an increasingly strategic role in organisations
• The focus on marketing measures is intensifying

Access to Deloittes report click here

If you recognise any of this, then take a look at our marketing influence programme.  This works with the marketing team and includes a 360 degree department feedback.  This programme encourages the team to think about why they should view the rest of the business as their customers, how this will help them achieve their goals, where they need to improve their communication skills and how to engage other colleagues to accomplish this.

 

Marketing influence programme - click here

 

 

Do you struggle with too much data or not enough insight?

Tabloid newspapers are powerful communicators and can exert influence on how people think.  One of the most effective tools they use (and abuse?) are concepts that simplify reality and allow people to see what is happening.  So a politician is "beleaguered", a celebrity is on the way "up" or "down",  a government is either "on a roll" or "stumbling".  Many people say that the papers influence opinion and they argue they just reflect it.  But whichever of these is true they cut through lots of data and create insight.

 

As marketers we need to create insight and become powerful communicators to win over the business to our ideas for growth.  There are often many ideas but this is accompanied by great uncertainty about which will produce the right results.  This uncertainty seems to derive from two sources.  Either there is too much data, so it is difficult to sift out what is important or there is a shortage of real customer driven insight because there is little market research available or affordable.

 

 

Have you found yourself sitting through analytical or descriptive presentations that provide some interesting content, but few actionable recommendations? 

 

Or sometimes have you found yourself struggling to come up with insights and unable to justify the investment in high price market research to create the customer understanding that will bring clarity to your decisions?

 

One of the breakthrough tools we have developed to cut through data and create insight is to develop "really useful concepts" that help you to see through the mist and bring clarity to decisions about what to do.  We have found it makes a huge difference and supports a cost effective approach.

• When there is too much data, the "really useful concept" slices through the data to bring out the compelling insights.
• When there is not enough money for new research, the "really useful concept" supports a structured approach to thinking through the issues and coming up with answers.  This approach may be done with customers or just your colleagues in the business.

You will probably have heard us talk about the concepts we use. What characterises all of them, is that they are built around an important business decision rather than just descriptive of an approach to analysis or discussion.

 

• Power Categories - where should we invest to get the most profitable growth?
• Power Attributes - what features and benefits most powerfully influence customers to choose our products?
• Power Propositions - products and services that deliver power attributes.
• Power Channels - where does the product or service need to be seen and be available so our customers will discover it and can buy it?

We also have two additional ideas that have provided valuable support.

• Rocketing - the tendency for customers to trade up and spend disproportionately on things that are really important to them
• Internal Entrepreneur - describes the skills and behaviours of the people who can make things happen and influence the organisation to change and actively create growth.

We were recently challenged about why our website and our conversation does not use the conventional language of the brand marketing world. So why we do not talk about market segmentation, brand positioning, marketing communications, brand pyramids, brand wheels and so forth? The question caused me to think about this and reflect on whether by being different, we are just confusing the issue.  In our experience this marketing speak can encourage debate, but often does not lead to decisions.  So we plan to stick to these "really useful concepts" because they are just that "really useful".
                                  
We know that internal entrepreneurs succeed when they become great communicators. Maybe we can learn from the Tabloid press and use simpler more powerful concepts.  When our clients adopt these "really useful concepts" they find it helps to create a common understanding about the decisions that the business must make.  This helps engage the business team and win support for the ideas. 
                                  

What is it that makes a concept "really useful". It must have the following characteristics

• It creates insight about an important business decision or action.
• It communicates.  It is easy to grasp and possible to have an idea of what it is about from the title.
• It is adaptable and can help you derive insight from robust data or management discussion.
• It has been proven to work through robust analysis or previous practical examples.

 

 

 

What "really useful concepts" do you use to make decisions?  If you want to share them, you can look at the blog version of this article and post a comment.

                                  

 

 

 

 

 

Our next due date for an ezine is 25th December, so we will skip that one and the next issue will be a New Year perspective on 2nd January.

                                  

In the meantime have a great holiday break.  The Differentiate team will be taking the chance to get some skiing in.  But we are back shortly after Christmas and will be fired up for the New Year.

Are marketers truly Growth Champions

Recently I read an article about marketers as "Growth Champions".    This article was based on a survey conducted by Booz Allen during 2005-2006 and covering 2000 senior marketing executives.  See http://www.strategy-business.com/press/article/06206?pg=all

The article identified 6 approaches to marketing leadership and marketing structure in the different companies (the % figures below refer to the number of businesses of that type found in the sample).

   

Marketing Masters (40%) have a solid grasp of traditional marketing fundamentals and are clearly competent at the kinds of activities that marketing has always conducted.  However, they are not so involved in establishing the strategic growth agenda, and they are not as likely to provide high-level strategy recommendations to the CEO and other business leaders. They are also less likely to rely on standardized processes and tools to provide efficient service. Marketing Masters deliver superior revenue growth and profitability.

 

Senior Counselors (17%) guide the CEO on marketing strategy. They rarely lead product innovation or new business development, and have severely limited decision rights over new markets, new products, or even promotion campaigns. They deliver average revenue growth and profitability.

 

Service Providers (15%) merely provide advertising, promotion, and public relations service at the request of the company's brand and product teams. Service Providers serve companies that are foundering behind their industry peers.

 

Brand Builders (12%) are efficient providers of such marketing services as communications strategy, creative output, and campaign execution in support of the company's key brands. But their role and decision rights on strategy and investment are all but negligible. This category seems to deliver average revenue growth and profitability.

 

Best Practices Advisors (9%) work with individual business units to maximize marketing effectiveness and efficiency by bringing best practices to advertising, promotion, public relations, and other activities. This profile has a low correlation with above-average growth, but they are profitable.

 

Growth Champions (9%) see themselves as "owners" of their company's key growth-support functions, whether or not these fit into conventional definitions of marketing practice. They lead general management activities as product innovation and new business development; they approve large investment decisions to enter new markets or launch new products.

 

Only Growth Champions correlated clearly with better performance; teams in this category are 20 percent more likely to exhibit superior revenue growth and profitability for their industry than marketing departments in the other five categories.

 

Growth Champions share several significant characteristics: 

• They can identify their contributions to revenue growth, and they gain added authority from their ability to define return on investment (ROI).
• Their members have a broader range of capabilities than their counterparts in other companies.
• They use standardized tools and processes for efficiency.
• They are proactive, not reactive, in providing both guidance and services that they believe add value to the senior leadership team.

We have observed that the clients who have been most successful at using the Growth Game principles have used it to assert their authority and to ensure they deliver each of these 5 points.

 

There are some strong similarities between this Booz Allen survey and some work we have done with 6 client companies about increasing the influence of marketing on the businesses growth agenda.  We will share our conclusions in the next ezine.

 

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