Friday, January 29, 2010

Walkin' the talk

Fast Company today details 11 Ways That Walmart Is Changing Retail -- for Good with respect to sustainable business practices. These are the same 11 ways Walmart is differentiating itself from most other big box retailers by demonstrating extraordinary social integrity. Not surprisingly, these are also the 11 ways they will probably save significant money over the long run.

Perhaps a better title for this article might be "11 ways Walmart won't have to compete on price." It's a fun slide show worth a few minutes of your time. Last post on Walmart for a while. I promise.

Thursday, January 21, 2010

Attention shoppers: Zero landfill corn chips are now available in aisle nine.

Great article by Kate Rockwood in the new Fast Company on Walmart's Sustainability Index.

What caught my eye was a quote from the Walmart SVP of Sustainability, Matt Kistler. He said of this initiative, "it is creating a new level of competition in ways that, historically manufacturers have not competed." Kistler went on to confirm that high-scoring products will earn preferential treatment -- and likely more shelf space -- in Walmart stores.

There. It's official. In addition to how well your product does what its supposed to do and how much it costs, there will soon be a third horse in the marketing race - the impact of the product (and company that makes it) on our planet and society. Shoppers won't be at the mercy of "greened-up" packaging or vague sustainability claims thanks to this quantified and verified index.

Will a killer carbon footprint rating trump a super Sunday supplement coupon offer? We'll have to wait a little longer to find out but thanks to Walmart's clout, it looks like this is really going to happen.

Read the article here.

Thursday, January 14, 2010

Is Blue Shield of California about to step on a land mine?

Advertising Age today covered Blue Shield of California's announcement that they would provide a forum on its website for customers to share ratings and reviews of its various plans. The program is just emerging from a pilot phase so there are not yet a ton of reviews.

So why are they doing this? As heath care and heath insurance in particular tend to be frustrating (occasionally maddening) for many of us, isn't Blue Shield of California just setting itself up to get hammered with negative comments from unhappy customers? Won't those comments turn-off prospective consumers? These risks are real. I'll attempt to illustrate why this might actually be a good idea in the context of marketing:
  1. People will be able to find this information elsewhere anyway (Consumer Reports for one offers in-depth reviews of individual insurance plans with extensive reader reviews). Why not get points for making it easy to find and acknowledging that's how the world works now? It also makes it easier to stay on top of the conversation.
  2. Positive customer feedback in the context of an open forum (alongside negative comments) is the most credible endorsement you can get. Take away the negative comments and you have a very expensive brochure.
  3. Customer feedback might help prospects do a better job of choosing the right plan for their needs. Lower selling costs. Higher customer satisfaction. Win-win.
  4. Blue Shield of California might actually learn about what satisfies and dissatisfies customers. Isolate the hot buttons that drive purchases. Identify the things that cause you to lose customers. Beats mall intercepts.
  5. If Blue Shield of California substantially addresses the issues they learn about in this forum they have the potential to create brand evangelists. The most persuasive endorsers are often those who've been wronged who go on to have their problem resolved. It happens so rarely in the context of large corporate service providers that the occurrence is generally noteworthy. These turnaround experiences are genuinely tweet-worthy (as is ignoring a negative situation).
Clearly this bold step is not without risk. If Blue Shield of California is to do more than ride the popular trend of being transparent they need to act on what they learn in this forum or it does have the potential to backfire.

Monday, January 4, 2010

Marketing with a capital M

So imagine you run marketing in a company that sells 400 million units of anything a year. You're one of the largest players in what most people consider a promotion-driven, commodity category. You must be doing something right. Right? So naturally you go to your boss with the idea to radically reformulate almost every aspect of the product. That's apparently what happened at Domino's where they just introduced their "Pizza Turnaround." New crust. New sauce. New cheese. On virtually all their pizzas. The only thing they did not change appears to be the round shape. See the details (as have 170,000 or so other people) in the video below.

Why gamble with a product that's so ubiquitous and successful? For one, I'm sure there's a lot of pressure on that poor little original recipe over time. Decades of procurement and operational "refinement" as well as vapid focus group input can really have only one effect - to identify the lowest cost item acceptable to the most people.

Instant gratification through speedy delivery originally distinguished Domino's. Aggressive promotional marketing drove things further. Product quality was never a big issue for most of the brand's history.

Competitors like Papa John's hammering for years about how their "real" and "fresh" ingredients are superior helped illuminate the issue. Old fashioned conversation amplified by newfangled social media makes product quality transparent. We've reached a point where Domino's is the least objectionable, instantly available but virtually unloved option in our personal pizza pantheons.

Hat's-off to the Domino's team for having the stones to tackle the real issue. That's marketing with a capital M. Taking a step like this is rare in a world where brand and product managers often want to make their mark with a quick but modest win then move on in 12-to-18 months.

Here's what I think Domino's is doing right with the introduction:
  1. They are honest and genuine. They admit to what we all know (they actually say "cardboard crust" out loud multiple times in the video) and get credibility points for doing so. Communications are straight forward and feature the head of the company and what appear to be real employees emoting honestly about their problem and their enthusiasm for doing something about it.
  2. They are giving "the people" credit for identifying the issue. A little pandering here for sure but Domino's seems a little less like a faceless corporation by actually appearing to listen.
  3. They went "all-in." Domino's did not decide to offer this as a new menu item or "premium" offering. It's appears to be on every regular Domino's pizza from now on. By going all-in, people sense sincerity and conviction. You don't bet the farm on spin and people know it.
In a time where the quality of your product (and that of your competition) is transparent, marketing needs to think beyond promotion or even what we used to call "brand building." A move like this could yield exponential growth in category wallowing in incrementalism.

We don't know if history will lump this effort in with Apple's overhaul of Macintosh with the eMac or the misadventure of New Coke. Maybe people actually like the lowest common denominator. That reminds me - the new season of American Idol starts January 12th.