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.

Boris v Ken - what can we learn about how customers make choices?

Using your existing data?

  How can you discover the Power Attributes that determine why consumers choose your brand without doing new and expensive surveys?  Our answer is that you can and should take a stab at it.  Whilst doing new research will be more robust, you can understand valuable insights about your Power Attributes by analysing whatever data or insight you already have or can easily gather.  This ezine shows you an example of how to do this.  We have analysed the result of the London Mayoral election to illustrate how this can work.

Analysis of Boris victory?

Voters' and customers' choices can seem a bit odd. So how come the electorate plumped for Boris, who had been seen as a bit a bit of a joke and prone to gaffs and offered an uncertain prospect of being competent?  We have analysed the Power Attributes to understand how voters made this choice.   

It is possible to take a good stab at understanding the Power Attributes using available published data.  In this case we have located two very different pre election polls to help us work out the Power Attributes.

Conquest's Metaphorix Poll for ITV London
IPSOS Mori poll for Unison

Power Attributes must possess both importance and uniqueness. So Power Attributes for the candidates are ones that are both important to voters and in some degree are unique to the candidate.  Attributes will have both functional and emotional elements and both will influence the customers decision to purchase.  In this case of this election functional really means policy issues and emotional attributes relate to the candidate's personality.  We started by looking at policy attributes.  MORI revealed the ranking of importance of the policy issues.

Importance ranking to voters

1. Crime/Policing
2. Transport
3. Healthcare/NHS
4. Cost of living
5. Education
6. Pollution/environment

It was difficult for the candidates to get uniqueness on these issues - even though the candidates were able to offer some differences in their policies.  Ken had a good track record on transport.  Brian Paddick had been a policeman.  Boris talked a lot about crime reduction. When you look beyond crime and transport, the next three issues lay completely outside the control of the Mayor (NHS, Cost of living, Education).

The personalities of the candidates offered much more scope for uniqueness

So personality attributes may offer more scope for real power. When we look for clues about these more emotional attributes, the metaphorix survey done by Conquest for ITV London was able to highlight the emotional beliefs about the personalities of the candidates.  If we start by looking at the importance of the different personality attributes, we discover that the most important attribute is

Trustworthy

However none of the candidates possessed this to any adequate or differential degree.  So despite trustworthy being important as an attribute, it lacked power as a means to choose between the candidates.  So we need to look further to find attributes that are powerful for each candidate.  Conquest discovered there were some attributes where the candidates differed.

 

Ken	Boris	Brian
arrogant	refreshing	boring
confident	confident	focused
capable	approachable	honest

We can eliminate confident as this did not distinguish Ken or Boris and also knock out boring as this is not a positive.  The remaining attributes provide the clues as to why Boris won. 

Boris won the day by being approachable and refreshing. Ken's lead on capable was outdone by Londoners' desire for a change. For Brian Paddick, being focused and honest was just not important enough to Londoners.

Power Attributes for London Mayor

The Power Attributes for this London Mayoral election were to offer a change from a tired and slightly arrogant incumbent and promise to address violent crime alongside transport issues.

No doubt the national issues of healthcare, cost of living and education played a part.  Ken would have suffered by his association with a struggling Labour government.   But since these issues remain outside the direct control of the Mayor and were difficult for the any candidates to discuss.

For an attribute to be powerful you must be able to create some uniqueness. The most powerful attributes were those where the candidates could establish some uniqueness.  It is the combination of an attribute being both important and unique, that creates the power to influence voters or consumers choices.

 

Which is more important?

Helping your customers or selling to customers? 

The business answer is we need to do both.  But what would the vote be in your business if you were told you could only do one of these and you had to choose?

My experience of trying to buy a flat screen TV last week would suggest the answer varies in different organisations.  I tried three different places:

Google: lots of helpful information, no selling, independent advice (no product experience).
John Lewis: helpful, little selling, clarity about the solution, real product experience.
Currys:  no help, stressful experience, plenty of selling, lots of offers, a good credit deal.

Interestingly Google and John Lewis are doing quite well whereas DSG (Currys) are suffering in these more turbulent times.  DSG management seem to be blaming the economic difficulties, but I am left wondering if their problems are to do with too much selling and not enough helping.

Google and John Lewis know that they must help their customers whereas in many businesses the emphasis on marketing and sales has been about getting the message across, making the offer, closing the deal.  But is this really want customers want?  Is this what is most important to customers?  Is this the most effective way to get more growth?

Businesses sometimes struggle to see what is most important to their customers.  Last ezine we discussed ways around this.  This article takes this one step further and suggests that by starting with selling as the source of growth many businesses are distracted from what is important to their customers.   This distraction and neglect of what is really important to customers is likely to lead to less growth and less success.

How well do you understand your customers problems?

How do you ensure your products and services help your customers?  Do you or your colleagues struggle to see that what customers want is help to solve a problem?  Do you focus on selling at the exclusion of helping?

Increasingly businesses that help are more successful than those that just sell.  Google is the ultimate "help not sell" company and seems to enjoy the highest brand valuation in the world (BrandZ published today)

How did this work in the case of my TV purchase.  My problem or opportunity is that I want to be able to relax with the TV only when really I feel the need.  I do not want the machine in my face every time I sit down in the living room, so we will put it in a smaller separate room.  When I go to the internet or the store I am looking for some help to solve these problems.  So my search extends to appearance, size, discreteness, on demand TV services, as well as picture quality and sound quality (the only thing anyone talked about was picture quality).

Customers do not want is to be sold a product.  Customers want to solve problems issues and realise opportunities that they face in their lives.  Features of products and services that businesses can offer them are only important when they help with this.  Businesses that help their customers will win.  Those that just sell to their customers are likely to lose out to smarter competitors.

So when you go and ask your customers what is important to them, ask them about their lives and their problems not just the features of your products and services.

Now if you were forced to choose between only helping your customers or only selling to your customers, which would you choose

If you are interested to arrange a free introductory consultation to help you understand what your Power Attributes might be, then click here to find out more about this. free consultation

If you think you know what your Power Attributes are but are struggling to get your colleagues to see it that way, then click here take a look at our marketing influence ideas click here.

Thought for the day (maybe even thought for the month)

Saw this on www.gapingvoid.com today

 

 

Made me think a bit.  Maybe some of the ideas in the more growth blog could be more useful if we apply this principle to our writing.

Will try it for the next post

How do you know what is important to customers?

Why is it that once we walk through the door of the business each day we are programmed to want customers to believe that what we are doing is the answer to their problems and that the features and benefits of our products will be important and useful to them.  Suddenly the world seems to be centred around the products and brands that we sell.

Somehow the corporate mission or our own ambition can blind us to insights we acquire every day.   As we spend our home and shopping lives being customers and making choices between products we can develop a good understanding of what it means to be a customer.  We can understand what is important and how trivial or important different decisions are to us.

I have been reading Nassim Nicholas Taleb's book, The Black Swan,

The Black Swan: The Impact of the Highly Improbable

See our discussion  click here   

He has been reminding me how easily we can get persuaded by the "narrative" explanations that exist within the business.  How easily we tend to seek confirmation of what we would like to believe in the anecdotes and events around us.  How difficult and more challenging it is to rigorously assess the evidence. 

How do you deal with this?

As a successful business person you know you must cut through this and you should understand what is important to your customers.   

But how much time and money do you devote specifically to find out what is really important to customers so you can act on it?   And if you do spend time on it, what is the best way to discover what is important to our customers?

But you may be thinking that you already know what is important to customers.  Why should you invest more money and time in finding out what is important to customers.  Just stay with us for 2 more minutes reading this ezine and we will give you the chance to assess whether you have done enough.

What we have found

We have frequently observed in project after project and study after study is that successful business people do know a lot about what is important to their customers.  Especially sales people who are talking regularly with customers and marketers who choose to spend time listening to consumers.

We have noticed that the managers in the business tend to get it 80% to 90% right.  Which sounds great.  And would that we could get everything 80-90% right!  But the problem is the thing you miss out or get wrong is often the important attribute feature or benefit that could make all the difference.

Here are some examples from our own studies

Examples where managers think something is important but consumers think is less important than other things

Healthy snacks - less than 3% fat, not embarrassing to eat in public
Gardening - used by professionals, use less peat
Reinsurance - can offer independent advice, harnesses innovation.

Examples where consumers think something is important but managers did not spot it

Healthy Snacks - is a satisfying eat
Gardening - Is attractive to wild life, forgives me if I forget to water it.
Reinsurance - Flexible to my needs, fixes problems rapidly

How can you know what is important to customers?

Inevitably the most straightforward answer is to ask them and we would be the first to say that asking them in any form is better than not asking them.  But there are a few pointers that we have learned.

• We have found the concept of an attribute is valuable to help distinguish what is more important or less important
• Don't get too tangled up in whether the attribute is a feature a benefit an emotion or an image, it does not matter.  What matters is which attributes are important
• Ask the customers/consumers to help you prepare your list of attributes.  They will often come up with some attributes that you did not think of.
• A third party conversation is more likely to reveal the truth, if you have a relationship with your customers, this can get in the way of a truly transparent conversation.  On line or paper survey tools can also do this very well
• Plan the approach so you do not lead them to give you the answer you want to hear.
• Ranking attributes from 1-10 or 1-20 is more revealing than asking for a score on a scale where 1 is not important and 5 is very important.

Attribute importance is a fundamentally important part of helping our clients understand how customers make choices between brands.  The really useful concept of Power Attributes is based around what is important to customers and how you can differentiate yourself to them.

You can download our paper on this click here

You can see our website discussion on this click here

You can see our case study examples click here

You can see our blog posts on Power Attributes click here

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").

Why you should worry less about the future?

I was listening to this fascinating discussion on Start the Week on BBC Radio 4 on Monday

We are hard-wired not to truly estimate risk, too vulnerable to the impulse to simplify, narrate and categorize – and we don’t even realise it. What we should understand, argues the academic and city trader NASSIM NICHOLAS TALEB, is that our world is dominated by 'black swans', highly improbable events that have a massive impact and are nearly impossible to predict. Black swans, he says, mean we should ignore ‘experts’, stop reading newspapers and learn to take advantage of uncertainty. Nassim Nicholas Taleb will be delivering lectures on The Black Swan at the University of Oxford on Wednesday 5 March and at the London School of Economics on Thursday 6 March. The Black Swan: The Impact of the Highly Improbable is published by Penguin.

Here is the podcast link  Nassim is in the last 15 minutes

I got 5 points from the discussion

• What actually happens is often not possible to predict
• Measuring (empirical?) what is happening is more useful
• Projecting current trends is more reliable than expert predictions
• Our assessment of the risks we take will be wrong.
• Newspapers, colleagues and experts often try to convince us we can predict and manage risk.

It got me thinking, so what does this mean for businesses in pursuit of more growth? 

You should spend less time worrying less about the future.  So reduce the time you spend

• Worrying about things you cannot control
• Forecasting future events (since we will be wrong)
  
• Predicting competitor reaction
• Reacting to the latest hot topic in the marketing press

You should spend more time strengthening your ability to withstand unexpected shocks. To do this, measure what is actually happening to the business and assume it will continue until you create change by doing these things

• Discover your customers frustrations and unmet needs
• Know and measure what is important to customers
• Discover how to make this more available to customers
• Take action based on these insights and measure the results

You can do a simple audit to see where the balance of your time is spent.  Is it more on worrying about the future or could you do more to strengthen your competitive ability.

Corporate teams can easily get sucked into worrying about the future, whereas entrepreneurs tend to focus on things they can do now.

In the meantime.  I am off to the LSE on Thursday to gain some more insight into how we can strengthen our approach to helping you translate insights about customers into practical steps that will create more growth.

If you would like a free telephone audit to discover if you are worrying about the future too much or are doing enough to get on with the present, then email us or phone us on 020 8334 7202 to arrange it.

P. S.  This is exactly what Power Categories and Power Attributes and Power Channels will help you achieve this action orientation and address the business fundamentals.  The approach is about translating insights about customers into practical steps that will strengthen your competitive position in the market.

King Canute, ITV, BA, Easyjet, Google and Zopa

I have lost count of the number of times I have sat in meetings where King Canute reigned and new ideas were put in the trash can because of the risk that they would substitute the existing sales in the business

Meanwhile, some-one else bowls a long, creates the idea and the sales substitution is done by new competition.  The traditional business is left struggling to catch up.

Remember when ITV dominated ad spending and took more ad money than anybody else?  But see what happened last year

An analysis for The Times shows that Google generated £327 million in advertising between July and September, compared with an estimated £317 million for all of ITV1 across the UK during the same three-month period.

10 years ago just think how inconceivable it would be to suggest that on airline selling low cost seats on the internet would be the dominant short haul airline out of Gatwick.  Now Easyjet dominate short haul rather than BA.

Who could have predicted that strangers would trade and trust each other through their computers.  Many retail markets declare their growth or declines and this often excludes substantial trading volumes on Ebay and Amazon and elsewhere that are not tracked by conventional stats.

Growth orientated marketers need to be looking for new ideas to stay ahead and not be afraid to compete with themselves and create new approaches to conduct their business. 

So what are the next markets that will be transformed or at least attacked ny New Internet models.  I cannot be sure these will succeed but they are all doing something very new that could transform the way markets work.

Savings and investments     http://uk.zoba.com

 

Book buying and borrowing   www.bookmooch.com

Travel guides and hotel bookings  www.world66.com

Book and media publishing     www.lulu.com

These are all ideas that have long legs and real depth.  They are not a retail concept slapped onto the internet.  They do things that only the internet can do by using information and communications.   The have identified a real customer problem and they are solving it.

Lulu - self publishing is so expensive

World66 - how to find out what normal people think (not massaged by journalists or promoters)

Bookmooch - what to do with my old books?

Zoba - banks tend to rip me off and cannot be trusted

Whether they succeed will depend on many things, not least how well they are executed and whether people are ready for these radical new ways of doing things yet.  But the traditional industries they are attacking have to decide if they want to end up struggling like BA and ITV and EMI or if they are going to embrace a whole new world.

For us we need to keep an eye out for new models that attack our business.  or even better stay one step ahead and spot the opportunity.  In the language of the Growth game, if you know the Power attributes of your customers, then you will know what they want that traditional businesses do not supply.  So go find out about your customers' Power Attributes

How much do you help your customers through the tyranny of choice?

Two experiences in the last 24 hours have  prompted me to think about why less is often more.   What a relief it is when a supplier, manufacturer or retailer helps you to find your way through the amazing choice of products and services that confront us these days.

The first was when I was in B&Q today.  They offer a massive selection in the core home and building products, but have more limited choice in the Garden Centre area.  As some one with a limited appreciation of gardening and in search of quick convenient solutions, this proved to be a huge relief.  Their range was not just limited but very well selected to cover all the task and needs and presented in a way that made it easier to choose.  Three powerful attributes seemed to make the range work.

1.  Limited to a size I could survey and understand
2.  Covered all the tasks and needs so there was something to address each issue
3.  Merchandised by task and clearly explained how to choose.

I have to say my foray into the bathroom and kitchens section was more dazzling and confusing as the choice expanded.

These thoughts on choice were forcefully echoed by some consumers in research groups last night who when examining the array fo products available in the category we were exploring, made a straightforward and simple appeal.

Please simplify our choice, tell us what the product does for me, what type it is and put a window on the front so I can see what is inside.  All this other technical detail can go on the back.

I am sure that offering people manageable choices and helping them choose can be turned into a Power Attribute and can be used to differentiate your offer wherever you do business.

So could you do more to help your customers through the tyranny of choice?

£4.99 or £5.17 or £4.83 - which is better?

I came across this paper today. 

Title:
Do Consumers Perceive Precise Prices to Be Lower Than Round Prices? Evidence from Laboratory and Market Data

Authors:
Manoj Thomas, Daniel H. Simon , and Vrinda Kadiyali

Here is the summary of the findings

In considering price tags, do consumers perceive round numbers to be larger or smaller than precise numbers of similar value? The authors examined the prices of 27,000 homes in South Florida and Long Island, N.Y., and their results showed that homes priced with a rounded number (for example, US$550,000) sold for about 0.73 percent less on average than homes with a more precise price (say, $553,505). Furthermore, the authors found that buyers perceived precise prices to be lower, and were therefore willing to pay an amount closer to the asking price than they were when the price was a round number.

My analysis
People tend to perceive precise prices as less than round prices of similar value. This discovery could have significant implications for buyers, sellers, and pricing strategists in any number of industries.

Marketers have long since believed that £4.99 is better than £5.00.  If you take the conclusions of this report, it may be that £5.17 or £5.42 is much better. 

Further to that, maybe consumers have been well trained to think that £4.99 is really just £5.00.  But what if precise prices like £4.87 or £5.13 are seen as better value? 

This research suggests that precise prices are seen as lower than rounded prices.  they also seem like they might reflect the real cost of the goods rather than being a rounded up to make more money.