More Growth - consumer insight, brand positioning, growth strategy

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.

Do you promote what you do well or what matters to customers?

If you want to discover the Power Attributes that drive your customers to choose your brand rather than the competition, you have to have start by generating a list of possible attributes.  When we help clients do this, we get the initial attribute list from talking to the customers.  You can only really rely on customers to think like customers.    However, the business team can think of attributes that customers cannot even begin to imagine, so we also get some valuable attribute ideas from the client management team.

We do this through our facilitated workshop approach.  These workshop events often attract a senior audience.   When we work with these knowledgeable and experienced managers we often find that the list of attributes is a list of features or things that the company does well.   But that is not always what we need.  We know that what will be powerful for the customer is a specific benefit or a special way the business helps the customer solve a problem. 

So for example the director of a financial services firm tells us that what really matters to the customers is "we give independent advice",  which we translate  into a more customer focused benefit "has independent advice I can trust", but when we talk to the customers, this is still not good enough, the most powerful attribute turns out to be "makes my business more successful" .

Time after time, we discover that the hot power attributes are all about the customer and the cold attributes are all about the business and the brand.

Experience this week brought this home to me and showed that directors may not always be the best choice when we are generating potential insights about what matters to customers.

In one of our current projects we are trying to discover some Power Attributes in a whole new category for the business.  We ran a workshop this week where we wanted to generate a list of candidate attributes that we plan to investigate with customers.  The investigation and consumer research will establish which attributes are most powerful in influencing customers to choose a product. 

The project is being led by the sales director who helped us bring a fresh approach. Rather than directors, he invited a number of the PA's and front line team to the session and this proved to be an inspired choice.  They seemed to think more like customers and in a more natural way.  As a result, we have come up with a list I am confident is much closer to what customers will suggest.  This means when we do workshops with the customers we are already part of the way there and we will be able to spend time discovering why the attributes are powerful rather than just generating the list.

Our ezine always aims to deliver practical advice, so I would suggest you can take two things out of this When you are thinking about what is important to your customers,

1.    always challenge yourself to think "is this about the brand or about the customer"  I can pretty much guarantee that if it is about the brand it will not be that important to the customer.
2.    go and ask some customers or at least a few "real" people around the office, they might just shed some insight on your thinking.

Our Power Attributes paper discusses how you can come up with this insight in more detail click here

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

 

 

Give your customers a New Year Present

Happy New Year! There may not be a tradition of New Year presents but you can get your 2008 growth plans off to a great start by giving your trade customers a present.

I'm not suggesting you "re-gift" those socks from Auntie Dot at Christmas but rather you share some knowledge, free, with no strings attached, and no proposal at the end that you want them to agree to.  After all, these are the people who stand between you and your product getting into the hands of the people who use or consume it.  Why wouldn't you give them a present!

In days gone by their critical role in the success of your business might have been recognised by a lavish gift.  All your competitors did the same.  That sort of behaviour is no longer tolerated but there is no ban on giving knowledge "gifts" that benefit the organisation rather than the individual.  And your competitors probably aren't doing this which means it increases the relative value of your relationship with the customer.

Most of you will have gathered all sorts of new knowledge during 2007 whether from research, attending conferences or visiting other countries (and as an aside if you haven't then you are behind the game because everyone else in your market has!).  You will have diligently figured out how to use this to best advantage to persuade your customers that your new initiatives will transform their business.  In the process you will have carefully screened out anything that will distract from the laser beam of logic that leads towards the inescapable conclusion of your desired outcome.  Whether your customers believe you rigged the research or not will depend on their preconceptions of the initiative in question.

This is of course a huge missed opportunity. The customer thinks you are only interested in your own business.  While in reality you have lots else you could share that they might find really valuable in the development of their own business.  And of course it is no bad thing to help them grow their business because if it grows then yours probably grows too. 

The knowledge or insight is best packaged as a single digestible thought rather than a long detailed analysis or report.  The real gift is making the insight useful and easy to assimilate.  This doesn't take a lot of time; it is more of a mindset shift.  It doesn't need formal presentations with all the expectations that this creates, often a simple email can be more powerful.  Something that reads: Hi, we were doing x, found out y that we thought might interest you, here's some detail, hope business is good, see you soon.  It's short, simple and shows you care about their business

Imagine the impact of doing this over time. Instead of always struggling to get meetings you might actually get an invite when they want to know more.  It might enhance the credibility of the research and insight evidence you use when you next have an initiative you want to implement.  And they might start to ask your view on more than just your narrow product expertise.  In other words they would value the relationship more and while a valued relationship doesn't guarantee revenue growth, one that isn't valued certainly hinders it.

This is a goal worth pursuing so, as sales and marketing teams, why not start the New Year with a new attitude towards customers.  Think not just about what you want them to do for you, but also what you know that might help them - and start handing out those presents.

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.

What is an insight? Does it matter?

Insight is a word that is often used, and abused, in business but what does it mean?  You might think that it doesn't really matter exactly what is "an insight".  But since nowadays the claim of insight is everywhere we need to make sure we recognise the real thing, so we confront it when we see it.

 

Insight is when you uncover the true nature of something.  The way things really are or the way the trends are moving.  Sometimes this can conflict with the way the business is today and so it is inconvenient or at least uncomfortable, especially if the business is doing well.  But we know we must confront it, since it it is always an uphill struggle to work against reality.  We can all name once successful businesses that failed to react to changing trends until it was too late.

 

Insight is a breakthrough.   While often "obvious" with the benefit of hindsight, at the time it causes you to stop and reassess how you do things.  There should be a bit of an "aha" moment.   Some of the most powerful insights can come from our own observations and ideas rather than formal research.  For example, the fact that people want "better for you" products is not new news.  We have been involved in developing these types of products in many food and drink markets for nearly 25 years now.  The one thing that we continually see (other!) businesses ignore is the fact that not many people will buy "better for you" if it doesn't also have "great taste".  Once you know you need both you get breakthrough ideas like smoothies.

 

Insight solves problems.  At first an inconvenient insight might seem to create problems based on the way we do business today, but true insight also highlights the way forward and how we might succeed.  Figuring out what is the minimum acceptable level of service for an airline has enabled Easyjet to strip it's business down to the essentials and recently post record profits despite a reduction in average fares and increases in fuel costs.

 

Insight is easily understood and communicated.  People "get it" straight away and easily know if what they are doing is working with or against the insight.  In fact clearly articulated insight helps everyone know whether an idea is a good one or not and so makes decision making much quicker and easier.

   

Insight creates change.  It is relevant to the business today and it's success in the future.  People know they ignore it at their peril. 

 

We have talked previously about the role of the internal entrepreneur in large organisations.  These are people who push their ideas with conviction and energy and don't let obstacles and objections get in their way.  Listen to their insights, give them the tools to create insights and you are half way to creating the growth you need.

Online research offers exciting new possibilities

Stacey and I went to the Insight Show at Earls court yesterday to have a look around and see what new methodologies and developments are on offer today.   We were focused on online research since we have been moving our own tools into the online area as it seems to save cost, allow us to reach new audiences and creates speedier delivery.

But we found consistent with our own recent experiences, the online tools are now moving from being cheaper and quicker to being better and more effective.

One of the presenters, powerfully made the point that the research business has itself to blame for the slow development of online work.  He showed an image of the Amazon website in 1996 and contrasted this with the tools and capabilities of the 2006 version.  Whereas a look at a survey in 1996 showed not much difference from one in 2006.  We are all still putting face to face techniques and paper questionnaires onto a screen.

But things seem to be changing.  We noticed three powerful trends (of which we have used one and are developing the second)

1. Introduction of flash tools to create much more intuitive survey formats that allow respondents to interact with the packs, the brands the images and the films in a way to creates a better and more useful response than can be obtained in traditional ways.
2. Significant developments in the scope and penetration of online panels allowing recruitment of previously difficult to reach markets such as wealthier consumers and business decision makers. 
3. The creation of virtual panels to allow you to have continuous and direct feedback from customers.  This is less structured and might have the purist screaming "unreliable" and "not validated" but the directness can be very powerful.  See Virtual Surveys
4. New possibilities to do qualitative in ways that are quicker easier to view and analyse.