Thursday, July 30, 2009

Alfa Insurance touches a nerve

AdRants today pointed me to a fun new commercial for an insurance company that exploits the frustration we often feel when attempting to extract payment from an insurer.

The insurance industry certainly has created the conditions where this type of appeal has resonance. It's actually surprising more brands aren't exploiting the status quo.

Do you think Alfa Insurance touches a nerve? Do you believe they'd be any different when you need to file a claim?

Thursday, July 23, 2009

New way to differentiate: Don't screw the customer

David Pogue's column today in The New York Times nails what's wrong with the wireless phone industry. People (probably marketing people) at the big wireless companies find new ways to grow revenue by tricking, gouging or otherwise abusing customers.

Pogue notes many examples in his article including this, “Why has the price of a text message gone to 20 cents, from 10, in two years? There was no big technology shift. There was no spike in the cost of electrons.” Pouge goes on to guesstimate that Verizon pockets $850 million a year by forcing you to listen to those annoying voicemail instructions every time you try to leave a message. He wryly suggests congress investigate. Read the article and your blood pressure will go up.

When will wireless companies realize that not treating customers with contempt is a powerful way to differentiate, build genuine brand loyalty and profits? I don't think government will ever be able to enforce social responsibility in business. I do think social media's ability to make bad corporate behavior transparent will eventually force companies to change. Social media will also steer new customers to brands with real integrity. Now is the time for a company with foresight to preempt their competition by not playing the same old game with their customers - by making the inevitable changes today.

Monday, July 20, 2009

Ikea - Operations understands the brand

A recent article in The New York Times noted the increasing popularity of Ikea's Smaland play centers. "Ikea estimates that Smaland attendance has jumped roughly 20 percent so far this year in its stores in major American cities."

Many of the parents using the free baby sitting service openly admit that they are not in the store to shop. As the article states, parents can be seen "depositing their children at Smaland and plopping into a display couch for an hour of peace and quiet, and then leaving without ever buying a thing."

In many companies, the operations group would note the increase in Smaland usage and quickly calculate the cost for the incremental staff required to maintain the 12-1 employee/child ratio in the centers. New rules or restrictions would be put in place to contain costs. Eventually, someone would dream up the requirement that parents submit a purchase receipt (dated that day) to liberate their child from Smaland. That's what happens when operations and marketing (or whoever is in charge of the brand) don't communicate. When push comes to shove, a tangible cost argument generally wins out over a fuzzy concept like brand affinity.

Not at Ikea. The company understands that the value accrued to the Ikea brand from the hour and a half playing in the ball pit, reading the paper or munching meat balls vastly outweighs the potential impact of any TV commercial, banner ad or online game for kids. The quantity and quality of the interaction is priceless. It's not a cost, it's an investment. Maybe that's why Ikea's sales were reported to be up 5% earlier this year.

What other companies get it like Ikea?

Thursday, July 16, 2009

Wal-Mart changes the game

Wal-Mart’s announcement today that they are planning to make the "social and environmental impact" of the products in their stores easily visible to customers is certainly interesting and the most visible evidence so far that I may be on to something with my Transparency Principle™.

Not only does Wal-Mart create a new way to differentiate their shopping experience on a basis other than price, they will likely save money and lower costs for customers over the long run. Their tag line, “Save money, live better.” certainly takes on a new dimension.

I think a bigger ramification is the legitimization of a new paradigm for consumer brand differentiation. Clever brands will find a way to lessen their footprint and get paid for it when consumers vote with their purchase decisions. Sure beats trying convince someone your laundry detergent is better because it contains "fluorescent whitening agents." This initiative could eventually do more for the environment than any governmental regulation.

Do you think Wal-Mart will succeed in forcing/enlisting other retailers to play ball with the same rating system?