Marketing Meritocracy

Extraordinary product strategy

2011-08-02T09:22:00.000-07:00

The New York Times' David Carr did a great profile Monday on a rare bright spot in print media.

While much of the the magazine industry continues to cost cut its way into irrelevance, a new publication, Lucky Peach, has sold-out the first two printings of its $10, 174-page "streetwise" celebration of food and its preparation. Read the article to see how they did it (Hint: They essentially disregarded all accepted wisdom pertaining to magazine publishing).

A circulation of 42,000 is no People Magazine but this was the first issue. Profitably exploiting a niche is easier as connecting with your audience has never been easier - especially when the audience does a lot of the connecting for you through social media.

Lucky Peach is another example of the exceptional overtaking the ordinary. Breaking conventions to make something "insanely great" (Thank you Steve Jobs) seems to prevail more often over models where marginally pleasing the largest number at the lowest cost is the rule.

As marketers we should look at our own brands in this context. What's the next tired category to be transformed by the Lucky Peach approach? Can legacy brands or products be re-engineered to be insanely great or are they destined to be replaced?

Who ya gonna trust?

2011-05-17T12:55:00.000-07:00

The announcement that Bing will incorporate Facebook likes into search rankings is a big deal. All of a sudden, the mechanistic algorithms that determine what we see when we do a search will get a helping hand from real live human beings. Search results will be influenced by Facebook likes in general and more specifically by your friends (if you happen to be logged-in to Facebook at the time).

This is a game changer in four ways:

The Bing brand of search just became a lot more differentiated. My curiosity to see what the crowd and my friends like in search results will cause me to use Bing more.
We all have more incentive to make Facebook an "always on" utility in our online lives. Welcome even more Facebook ubiquity.
Knowing my vote really will be counted when I like a brand will cause me to like brands on more occasions while making me a little more selective in awarding my endorsement.
Facebook likes just became a much more important tool for businesses seeking to improve their page rank in search. Gaming the algorithm with clever page titles and link building campaigns could take a backseat to cultivating Facebook likers if this initiative succeeds.

The trend of aggregating active human endorsement in search is bigger than this Bing announcement. Google is making strides toward social search with it's plus-one initiative. Social search is where things are headed because it's human nature to trust in your friends' opinions.

The implications for marketers are profound. Delight a customer and step to the front of the line to be found by others. Offer an average customer experience and be consigned to invisibility among the herd of the mediocre. Disappoint or anger the customer and end-up on page 29 of search results.

Smart brands will not only improve their customer experience but will solicit likes by showcasing less tangible aspects of their brand that appeal to people on a values level. A brand's enlightened environmental, sustainability and labor practices are all now potential marketing tools. The issue cuts both ways. Polluting a local stream or off-shoring jobs could have a substantial marketing cost if the Facebook community takes note and decides to get active.

This is going to be interesting.

Greed can be good. Ask Mother Earth.

2011-04-22T09:43:00.000-07:00

I've been saving this post for Earth Day because Bloomberg's decision to carry environmental information on its financial news terminals is indeed a gift to Mother Earth.

Paul Tullis at Fast Company expertly reported this decision and the rational behind it earlier this month. Bloomberg is catalyzing an emerging truth on Wall Street: A positive environmental track record is a good indicator that a company is well run and is more likely to offer superior financial performance over time. Now Bloomberg is supplying the numbers financial wizards need to track and price this theorem into valuations.

This blog has focused on the consumer side of the sustainability is good business debate - suggesting that consumers more and more choose brands that act with integrity toward customers, employees and the environment. Bloomberg's action has the effect of enlisting the almighty hammer of the capital markets in the cause.

This will get the attention of the corner office crowd. Companies will look for ways to improve their ESG (environmental, social and governance) scores because there's money to be made doing it. Altruism is nice but in the end, it's behavior that counts.

This is an opportunity for the smart marketing executive to bring ESG issues into the boardroom. A significant improvement in ESG will improve not only the stock price but can provide a real and meaningful point of differentiation for consumers making purchase decisions (read; good ESG = free marketing).

I've become more and more skeptical that government will ever have the fortitude to come to the aid of the environment in meaningful way. The challenges are too big, too immediate and big money is too entwined in the workings of Washington.

I'm heartend this Earth Day by the vision of Wall Street and engaged consumers doing what government can't by making sustainability not only a priority but profitable. Mr. Gekko, meet Mr. Gore. I think you two have something to talk about.

It's the story stupid. Now more than ever.

2011-02-02T20:02:00.000-08:00

The Dining section of The New York Times is not usually where I go for marketing inspiration. A story there today by Jeff Gordinier on how exotic sake is sold in Las Vegas has caused me to reconsider that assumption.

As the article points out, sake is a marketing conundrum. You can't read the labels. You can't pronounce anything. The story points out an even bigger challenge; "It can be difficult for an untrained American drinker to figure out the difference between the name of the sake, the name of the brewery, the type of sake and the region of Japan that it comes from." So have fun marketing a new wave of artisan sakes that can cost hundreds or even thousands of dollars a bottle.

The savior in this situation is the story. Anglicized brand names and unusual bottle colors may help but it's the story that makes these products special, memorable and successful in the marketplace. The quote that seared it's way into my long-term memory was from Henry Sidel, president of the Joto Sake distribution company in Manhattan. Print out this next line and tape it to the top of your computer screen:

“There are no brands if there aren’t stories.”

Read the article. It's packed with amusing anecdotes about igloo filtering, nomadic quests for sake brewing knowledge as well as fascinating insights into the psychology of wealthy Asian "whales" and their exploits in Las Vegas.

The high end liquor industry is steeped in story telling. I'm still fascinated with the yarns I heard visiting the Rémy Martin operation in France while pitching their advertising account back in the day. The marketing secret the French have understood for centuries is more relevant today than ever.

An unremarkable product from an unremarkable company used to be able to grow and profit by hammering the market with ads, paying for shelf space or through aggressive price promotion. An entertaining TV commercial could compensate for lackluster product. Today unremarkable brands are losing traction as a result of the creeping impotence of mass-media weaponry and consumers better equipped to sniff out a crummy product.

Being remarkable and delighting customers is the new marketing currency. There's no such thing as a remarkable brand without a story. A customer has rarely been delighted and not shared their story as a result. Social media exponentially amplifies these truths.

Brands really can't make-up their stories anymore. Authenticity is more and more a key differentiator. The price for getting busted for fabrication is high, immediate and measured in tweets. A powerhouse brand of the 1980's, Bartles & Jaymes would probably garner a shrug among today's twenty somethings.

The importance of the story applies to every marketer. Packaged goods, services and retail brands all need coherent, meaningful stories. This applies to the local landscaper as much as it does professional grade kitchen appliances.

I think the Japanese auto brands could learn a thing from their sake marketing countrymen as I'm challenged to recall a coherent, meaningful brand story for Toyota, Honda, Mazda or Subaru.

Does your brand have a story?

Real marketing innovation

2010-10-12T11:01:00.000-07:00

I almost turned the page this morning, mistaking Hyatt's newspaper ad for a pharmaceutical long copy dirge. Fortunately I skimmed the headline and was pleasantly surprised to discover something genuinely rare in travel marketing . . . a new product.

Hyatt now offers hypo-allergenic rooms in 125 properties. Branded Respire by Hyatt, every room undergoes a rigorous six-step process that dramatically improves air quality and removes irritants. Improved HVAC systems and filters, special cleaning of hard and soft surfaces and encased mattresses and pillows are some of the things that make these rooms different.

Hyatt is targeting the 25% of Americans who are affected by asthma and allergies. That's a sizable market. My question is who of us wouldn't want one of these rooms given a choice? Every road warrior can reel-off cringe-worthy tales of odors, mold, pests and grunge discovered in their hotel rooms. Clean and healthy could be the new premium designation in travel.

Just a year ago I was panning Hyatt for not anticipating the backlash from draconian measures to take cost out of their housekeeping operation in Boston (they instructed housekeeping staff to train "vacation help" that turned out to be their outsourced replacements). Ironically, by looking at housekeeping and room cleanliness as a feature as opposed to a cost Hyatt can use it to differentiate in a commodity category.

Hyatt has hit on real, meaningful product innovation. Travel marketing is overdue for a new idea. Not since boutique hotels and later some of the larger chains decided to make hotel beds aspirational as opposed to punitive have we seen anything like this. Traditional hotel marketing tools are getting tired. Loyalty programs have devolved into parity and we're all numb to glossy images of models posing in infinity pools. I think Hyatt has a winner on its hands. Now if they could only figure out how to make an ad that is as good as the product.

The real cost of saving money.

2010-06-30T07:07:00.000-07:00

Internal Dell documents indicate the company shipped 11.8 million computers between 2003-2005 with potentially faulty motherboards using capacitors that could leak and cause the machines to fail. According to an article in The New York Times, it appears Dell attempted to feign ignorance and sweep the issue under the rug.

It just crawled out. Documents from a three-year-old law suit have recently been unsealed shedding light on this brand equity train wreck.

Unlike competitors who stopped shipping equipment with the faulty capacitors, Dell apparently kept pushing them out the door - mainly to large corporate customers.

It looks like Dell didn't exactly take the high road when the magnitude of the problem became known. It's never good when employees send emails saying things like, “We need to avoid all language indicating the boards were bad or had ‘issues’ per our discussion this morning.” In other documents about how to handle questions around the faulty OptiPlex systems, Dell salespeople were told, “Don’t bring this to customer’s attention proactively” and “Emphasize uncertainty.”

Dell has already spent millions extending warranties and defending this suit. Should Dell lose, they could be on the hook for a large penalty. That figure will certainly be dwarfed by the long-term damage done to the Dell brand by this news. The corporate customers who originally built the Dell brand will now have to think twice before specing the company's hardware.

I'm guessing the Dell manager who made the decision to try to keep a lid on this in the name of short-term cost containment had no idea he or she was making one of the biggest marketing decisions in the history of the company.

No ignoring the pain in social media

2010-06-21T09:53:00.000-07:00

Great story today on AdAge Daily regarding AT&Ts growing social media customer care initiative.

What caught my attention was AT&T's realization that they had to first deal with significant customer dissatisfaction issues before social media could be effective as a public relations and marketing tool. The story includes this poignant quote from an AT&T marketer - "We started using social media as a PR tool," said Susan Bean, who leads an eight-person social-media strategy and execution team within AT&T corporate communications. "With marketing, we discovered that for social media to be successful we really needed there to be customer care. Otherwise all anyone would want to talk about is: 'solve my problem.'"

One of the wonderful things about social media is the ability to force a brand to acknowledge obvious negative issues prior to engaging us with marketing. If only TV worked like this.

AT&T has a lot of work to do to improve their network performance. An honest and responsive customer care program using social media may help the brand keep customers in the meantime. Just responding and acknowledging an issue can earn a brand points. It will be interesting to see if AT&T can add bandwidth (while soothing customers) fast enough to blunt the eventual defection once Verizon lands the iPhone and iPad.

As marketers we should avoid the temptation to sweep a product performance issue under the rug while promoting our brands as usual (especially in social media). Negative issues generally always emerge from the other side of the rug larger and nastier than ever.

A diamond in the tar ball?

2010-06-03T06:38:00.000-07:00

Suspended plume-like, deep in the first official BPGlobalPR press release is a kernel of truth all marketers should consider:

You know the best way to get the public to respect your brand? Have a respectable brand. Offer a great, innovative product and make responsible, ethical business decisions. Lead the pack!

This advice rings true for all brands, not just the ocean fouling kind. While obviously irreverent and occasionally sophomoric, the spoof BPGlobalPR Twitter stream is touching a nerve. Over 110,000 Twitter followers are tuning-in to this unlikely authority. Humor and a shared sense of outrage are certainly key drivers. I believe the followers are also responding to the dissonance created when traditional corporate messaging with it's "put a good face on it at all costs" philosophy runs headlong into 24/7 coverage of a truly awful situation.

Social media has created a platform for viral public response that is forcing PR people to consider a new approach to "crisis management." Clearly, the old model just backfired. In a transparent marketplace, a company's words have to match the pictures. There are no more short-term fixes delivered by a deft spokesperson. It's not a PR problem. It's a marketing problem and a brand's character and past behavior are the only valid tools in a situation like this. A lack of sincerity at the press room podium will only add fuel to the fire.

See the entire press release here.

Will Facebook help you choose your groceries?

2010-05-12T17:34:00.000-07:00

I've been preaching the Transparency Gospel for over three years - suggesting that as technology allows more people to find out how good a product really is (from objective experts or digitally aggregated peers) it will become more and more important to actually have great products.

The theory is a no-brainer in considered purchase categories. But even I wondered if this behavior would ever trickle-down to the grocery store shelf. Will people actually take the time to compare the ingredients or the carbon footprint* of two different brands of baked beans?

Apparently people will take the time and are interested in these rational issues when it comes to food purchases. As reported by Marketing Charts, Deloitte's new "2010 Consumer Food Safety Survey"spells it all out. As you might expect, most of the study relates to food safety but a few of the findings have broader marketing implications. First, people are going online to do their homework prior to shopping shopping for food items: Twenty three percent of consumers visited a food company's website to get product information while 23% of consumers made a food purchase as a result of something they read online.

More interesting was the impact of smartphone technology. As the chart below illustrates, 7% of people have used their phone in-store to learn about potential purchases (click chart to enlarge).

These data demonstrate people have an appetite for detailed and objective information regarding their food purchases. Technology is filling a need that apparently is not being met on the package.

Where is this going? According to comScore, approximately 17% of the U.S. (age 13+) had a smartphone in December of 2009. That means over 40% of those with the ability to use a smartphone while shopping for food did so. Multiple sources predict smartphone penetration to increase to 40 or 50% in the next 24 months. Assuming the rate of usage for food shopping stays flat, that would translate into 16-20% of food shoppers using their smartphones to learn about food products in the store. To be sure, we don't know frequency of use or the actual impact on what was purchased. Price comparisons and coupon hunting are a big part of this dynamic. But this behavior is more than incidental and it's bound to increase.

The quality of information available in-store will only get better. The folks at GoodGuide provide detailed information regarding the health, environmental, and social impacts of over 70,000 products in your home. Their clever iPhone app is no doubt driving some of the in-store usage unearthed by Deloitte. Walmart's sustainability index initiative will surely catalyze this transformation.

And yes, I imagine someone at Facebook has mocked-up a "Liked" product rating index calibrated to the tastes and preferences of your very own social network. Your old high school girlfriend may finally add some value by helping you pick the right can of baked beans. Seriously, every aspect of a product - good and bad - will soon be transparent. How will marketers respond when their product is naked on the shelf?

In this environment, Job One for marketing will be to make the product and usage experience extraordinary. Domino's recent moves to improve their product show that this strategy can drive significant increases in sales (see It worked! below).

Smart shopping at the shelf will also impact other elements of the marketing mix. Traditional product demonstration and affinity advertising strategies will likely have a hard time competing with hard data in the store. How many FSI drops or TV target rating points will it take to top the impact of significantly superior quality or sustainability score - not to mention a timely digital coupon? If trends continue it may well become less expensive to differentiate and gain market share by improving product quality or how that product is made, shipped or recycled. A bigger question is how many TV TRPs will it take to counter a negative product performance issue? It's going to get interesting. Fast.

* measured prior to consumption

It worked!

2010-05-05T15:31:00.000-07:00

Congratulations to the Domino's team for delivering a jaw-dropping 14.3% same store sales gain in Q1. Advertising Age today reported the big news.

Back in early January, I wrote about Domino's gutsy decision to reformulate the product in my post, Marketing with a capital "M." The Pizza turnaround worked. Make the product better and apparently more people will buy it.

Ad spending was up 9% for the period but that alone would not account for the increase (Papa John's sales were flat for the same period). Social media played a role here. When I wrote in January, 170,000 people had seen the four-and-a-half minute Domino's YouTube video. As of today, the number is up to 640,000. That kind of momentum can only be sustained with sincere consumer interest and active social sharing. Domino's made real news by being honest about their situation. This campaign was not spin and people responded.

This is a potent reminder that real marketing is more than ads and promotion. Product (and the product usage experience) comes first in a transparent, socially connected marketplace. Way to go Domino's!

Busted for being opaque

2010-04-14T15:02:00.000-07:00

Corporate Responsibility Magazine shines a light on the Russell 1,000's least transparent companies.

The Black List details 30 companies for whom zero points of relevant data can be found to compare their transparency to that of colleagues on the Russell 1000 list of large-cap firms.

These companies are saying nada about things like climate change performance or broader environmental performance. The issue is bigger than the 30 companies on the list. 161 companies did not even have basic disclosure about their employee benefit programs.

The magazine approaches this situation from a corporate governance/investor relations perspective. Their audience is the corporate executive charged with maintaining good "corporate responsibility."

In the past, avoiding disclosure may have been a smart way to dodge controversy, oversight or unwelcome attention. Now choosing to not be transparent has its own cost. Remember that the next time you venture into an Abercrombie & Fitch store.

Yelp steps into the sunshine

2010-04-06T11:37:00.000-07:00

Yelp just announced two substantial moves to eliminate the controversy brewing around alleged linkage between retailer advertising support and review quality.

The company is making it possible to see how their review filter works and will even show you the reviews that have been filtered. They are also eliminating the "Favorite Review" feature. Why you see what you see on Yelp just got a lot more transparent.

In retrospect, these changes are actually product improvements. Better information and less fog obscuring motives. For a company built on the idea of using consumer feedback as a weapon to reward and punish marketers, it's ironic they took this long to act on the input they were receiving themselves.

Our natural reaction as passionate, competitive marketers is often to try and argue with the public when we feel they misunderstand our company or actions. That knee-jerk reaction immediately puts us in an adversarial role with consumers. It's hard to pull out of the ping-pong match once things escalate.

At some point perhaps Yelp realized the angry hoards might have a point - maybe they could actually improve their product by making it more transparent. On the other hand, Yelp may view these recent steps as necessary concessions - conceding they could never argue the social media beast into submission. Either way, they made the right decision. Chalk one up for the meritocracy.

Time traveling

2010-03-24T13:36:00.000-07:00

I want to share an amusing peek at the future of traditional advertising agencies.

The Last Advertising Agency On Earth from FITC on Vimeo.

The joke has been told before but this rendition nails a real truth - fewer and fewer consumers are influenced by blunt force attempts at persuasion. If not avoided or ignored altogether, traditional advertising rarely delivers the influence conveyed when one's peers weigh-in on the merits of a product or company via social media or in person.

Many agencies ironically miss the point and assume they simply need to migrate to newer, digital communication channels. The transformation underway is not analogous to adding a department as agencies did during the mid-century transition from radio to TV. To be sure, "ads" will still be around to do things like rally enthusiasts and announce new products. But agencies will be distinguished by the ideas they bring that materially improve the customer experience or enable brand evangelists to share their convictions.

We're coming full-circle back to an era where people rely on word-of-mouth and reputation to make purchase decisions. Technology will make it easier and better than ever but I think marketing in 2020 may work a lot more like marketing in 1820 than the way it does today. That's good for (good) brands and good for consumers. I predict a buyer's market for slightly used Foosball tables.

Who will be the Southwest Airlines of car rental?

2010-03-16T11:05:00.000-07:00

I saw yet another article today on ways brands extract revenue from customers with occasionally clever but more often blunt force add-on fees and charges.

Elizabeth Olson of The New York Times illustrates the recent escalation occurring in one particularly brutal category in her story, The rental car squeeze. Being charged $13 a gallon to refill the tank after dropping off your car (yes, this happened in Maryland) may generate a ton of cash in the short term but it can't help your brand. Not surprisingly, the percentage of dissatisfied travelers has nearly doubled from 12% to 21% in the last six years according to J. D. Power and Associates' annual Car Rental Experiences survey.

This is not big news to anyone who has rented a car in the last six years. What is newsworthy is the inability of any brand to leverage the brewing customer revulsion. Twenty one percent of the market represents a ripe opportunity. A tactic like Guaranteed, out the door pricing at the time of booking would be a game changer. It could also help reverse an increasingly adversarial relationship with at least one car rental brand. Does this sound risky? Fortunately, a very similar approach has succeeded wildly just one floor up from the rental counters.

Southwest Airlines is arguably the sole differentiated brand in the airline category. They have customer loyalty scores that are off the chart. So is their valuation when compared to the competition. Part of the Southwest appeal is their determination to not stick it to customers with add-on fees or similar "gotcha tactics."

It's time for a rental car executive to take the escalator up to ticketing to see how a successful travel category marketer delivers superior value for shareholders by making customer satisfaction (not short-term revenue enhancement) job #1.

Toyota: doomed by its own culture?

2010-02-25T09:32:00.000-08:00

I've resisted posting on the Toyota mess up to this point feeling that mainstream media may be piling-on a bit. The debacle is not going away. It seems a new embarrassment for the company surfaces roughly once a week.

A recent article in Automotive News by James Treece sheds new light on the culture inside Toyota and how that may be the root cause of the company's troubles. Treece spent 22 years living and reporting on the auto industry in Japan and brings firsthand knowledge of the situation.

Treece's article, while a bit inside baseball, paints a clear picture. Toyota's insular, secretive culture drove their attempts to stifle early safety concerns rather than openly vet and address them. Initiatives to suppress the damage by playing it down with the media, strong-arming regulators and what appear to be partial technical fixes have caused the biggest brand image backfire in modern marketing history.

Toyota rode one attribute, "quality" to the top of the automotive category. That's gone now. We won't know for years if they will be able to reclaim it. I'm not sure their snazzy styling or impressive handling will carry the day in the absence of the quality gene. The irony of Toyota defaulting on it's core equity is not lost on owners of Toyota vehicles.

What's missing at Toyota is the ability to be open and transparent internally and with the public. A transparent corporate culture is not a "nice to have" or a fashionable marketing trend. It's an essential means for earning the public trust. The modern marketplace rewards brands that behave with integrity. It punishes those that demonstrate they are not trustworthy. As a Toyota owner, I feel the sting every time I turn the key.

Walkin' the talk

2010-01-29T13:15:00.000-08:00

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.

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

2010-01-21T14:05:00.000-08:00

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.

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

2010-01-14T08:26:00.000-08:00

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:

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.
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.
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.
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.
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.

Marketing with a capital M

2010-01-04T13:49:00.000-08:00

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:

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.
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.
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.

"Post-price" retail marketing

2009-12-29T04:46:00.000-08:00

While their competitors advertise holiday clearance bargains, Best Buy is running full-page newspaper ads to inform customers that they ". . . promise to be there for you and whatever you bought for as long as you need us." Wow, Best Buy's got your back (if you're a customer).

These are not simply platitudes. The campaign goes into tangible detail about an extended no-hassle return and exchange program, help with set-up and even recycling when it's time for new stuff.

Why all this altruism? It's easy. The low price purchase factor big box retail relied on as a reason for being and eventual domination is going away. Retail pricing is quickly becoming transparent. Online shoppers regularly use sites like PriceGrabber.com and CNET.com to scour the web for the best deal. More dramatically, it's not unusual to see shoppers in a Best Buy scanning UPC codes using smart phones equipped with apps like RedLaser or ShopSavvy for instant price transparency at the shelf.

When you use these digital shopping tools, you'll note that Best Buy rarely wins the low price race against no-frills online outlets like Abe's of Maine or NewEgg.com. It used to be just the geeks or hyper analyticals who used these tools. I've noticed that bar code scanning is a popular smart phone bragging point this holiday cocktail party season.

So if you can't win on price, you had better change the game. Best Buy is doing just that with its Buyer Be Happy campaign. The tone speaks to a bigger end game than simply changing the rational context of a purchase decision. Best Buy's language signals a fundamentally different social contract with the consumer. They are not just there to deliver a low price or even a better usage experience. They are promising to act with what I term, "social integrity" - essentially "pledging" to treat their customers, employees, communities and even their supply chain with an eye toward a long-term, mutually beneficial relationship. Is all that worth an extra $150 on a flat screen? Time will tell.

When what you buy is pretty much the same from store to store and the pricing is instantly transparent then how you behave as an organization becomes a more important point of differentiation. Maybe the "best buy" is not necessarily the "best price." Let's see if Best Buy can turn the super tanker that is our current shopping paradigm.

Braveheart Marketing

2009-12-21T07:56:00.000-08:00

Advertising Age posted an interesting video today illustrating how a buyer's market and a more transparent marketplace allow consumers to dramatically compress their vacation purchase decision window. Vail Resorts responds by doing the same thing with their marketing plan.

Social media and other short-close vehicles allow the company to fluidly read the market and execute more relevant and impactful programs week-to-week.

CEO Rob Katz awaits his Braveheart moment when having kept his powder dry, he can dominate the competition.

CPG brands tip-toe into a new approach to differentiation

2009-12-10T15:47:00.000-08:00

Two leading consumer packaged goods marketers made announcements this week about what they were taking out of their products.

Minnesota based General Mills announced yesterday that they are reducing the grams of sugar contained in cereals advertised to kids to single digits per serving. To be sure, the qualifications would make any corporate attorney proud (some of the "hard stuff" like Franken Berry and Boo Berry will continue to exceed this standard but they are not advertised brands). Even so, this step is consistent with others "The Mills" has taken in recent years to improve the healthiness of their products. In 2005 they guaranteed at least 8 grams of whole grain per serving in all of their Big G cereals. In 2008 the company fortified all its children's cereals with calcium and vitamin D.

General Mills is not the only player innovating this way in the cereal isle. Arch rival, Kellogg Co. reduced the level of sugar in three of its kid's cereals by 1-3 grams last year. Together these actions represent a pretty big shift for a category built by overtly tempting the juvenile sweet tooth via wacky cartoon characters.

The other significant announcement this week was from Nestle. Fast Company reported Nestle's plan to use only fair trade chocolate in KitKat bars manufactured in the U.K. (in essence removing from their product chocolate sourced from exploited growers). Okay, it's one candy bar brand made in one country but Nestle is not alone. Cadbury earlier announced plans to source fair trade chocolate from Ghana while Mars announced plans to go with 100% fair trade chocolate by 2020.

A cynic might argue that these companies are taking these baby steps to diffuse pressure for heightened governmental regulation. Cereal marketers are still certainly cringing from the experience of having to discontinue their "smart choices" program after it became widely known that sugar-laden products like Fruit Loops qualified. Fending-off regulators may be a partial motivation but I don't think that's the primary driver.

More and more consumers see messages pertaining to healthy, green, and even sustainability on the front of packages. The only way a message gets on the front of a package is because some very smart people believe it will sell more product. I expect the pace and degree of innovation on this front to increase because these differences are real (as opposed to manufactured hype like "blue flavor crystals") and they are becoming more and more meaningful to consumers. This trend can only go in one direction as more brands use it to compete. The more pronounced and tangible the innovation, the more powerful the differentiation. Imagine a day where the claims are so clear, universal and compelling that the lawyers won't need to be involved.

CMO turf wars?

2009-11-05T18:38:00.000-08:00

This is my response to an article in today's Ad Age Daily by Scott Davis regarding the challenges of the modern CMO.

The CMO won't have clout until the entire organization realizes that the entire organization is on the hook for marketing outcomes today.

The quality of the product and the usage experience is exposed for the world to see thanks to peer-to-peer opinions shared online.

Same for the "social integrity" of a company. How an organization treats its customers, employees, community and environment are all on the radar.

People more and more rely on this type of information to make purchase decisions. What has traditionally been defined as "marketing" can't really blunt the effect of a black mark on TripAdvisor.com (in the case of a resort destination) or indifference when a musician's guitar is smashed by luggage handlers (in the case of United).

Likewise, regularly delighting customers (and doing right by them when you screw-up) often has an exponentially positive impact on a brand power, sales and profits.

Even the most politically adept CMO can't succeed if his or her organization does not see the bigger picture. Bringing that reality in focus, not waging turf wars or power grabs is the role of the modern CMO.

It's not about fighting or controlling

2009-10-20T09:29:00.001-07:00

Tools like Google Sidewiki are helping transform the marketplace into a meritocracy. You can't fight or control a meritocracy. As a marketer, your job now is to help it do its thing. Job one is to make sure your product is great and the user experience nothing short of fantastic. Once you nail that, find your enthusiasts - reward them and give them the tools to share. Find those who do not love you and convert them. The meritocracy can help you if you respect it.

in reference to:

"fight reputational triangulation"
- Don't Blame Google Sidewiki if Your Brand Takes Another Hit - Advertising Age - Digital (view on Google Sidewiki)

Hell's fury - avoidable

2009-10-09T05:29:00.000-07:00

Joseph Jaffe launches into a fairly amusing rant today (Hell hath no fury like someone who's credit card hath been declined). Once you get through the apoplectic part, Joe makes a razor sharp observation about the damage caused when the ads run by American Express conflict with the way the company treats its customers in real life.

Interestingly, Mr. Jaffe is not bent out of shape so much over having his credit limit halved but how the brand did and did not communicate in this time of transition. Amex could have done a few inexpensive things (like reach out with preemptive text or phone call warning that he was reaching his limit) that might possibly have made Joe a more loyal customer. But now he's mad as hell and going for the jugular on this. Let's keep an eye on how many people visit his site, see this video and read his tweet.

In today's transparent marketplace (where everyone has access to YouTube), the way a brand treats its customers is a more powerful driver of brand awareness, affinity and most importantly trust than any ad. Do you think the Amex marketing people should invite themselves to the next operations meeting?
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GoodGuide gets it.

2009-09-28T14:54:00.000-07:00

The good people at GoodGuide are providing a fantastic service to consumers. They are also changing CPG marketing.

GoodGuide has created "the world's largest and most reliable source of information on the health, environmental, and social impacts of the products in your home." What's in it? Who makes it? Where and how? What is the environmental impact of this product across its entire life cycle? These are some of the questions GoodGuide seeks to answer. They rate products to make it easy to quickly make better purchase decisions.

Over a million people have visited website (still in beta) and already there are over 70,000 products rated.

Over 100,000 people have downloaded the free GoodGuide iPhone app making it easy to take this knowledge to the store shelf. A bar code reading capability is due out shortly.

GoodGuide is candid about building a platform for "normal people" (not just bleeding edge, environmentally conscious, health freaks) to make healthier, socially and environmentally conscious decisions everyday.

It's somewhat ironic that people must seek out resources like GoodGuide to get the information they want on the products they buy. The extraordinary lengths GoodGuide has had to go to sleuth-out this information is equally ironic.

One of the founders, Dara O'Rourke in an interview today on Minnesota Public Radio shared anecdotes about how some companies were maneuvering to keep information pertaining to ingredients and environmental impact out of public view. Other more enlightened brands are actively working with GoodGuide to improve their scores.

Eventually brands will realize that transparency is a powerful differentiator and path to growth. First movers will likely reap disproportionate benefits. GoodGuide is dramatically accelerating this process. What's your product's GoodGuide score?

Hyatt exposed

2009-09-25T09:33:00.000-07:00

Hyatt Hotels has been getting a lot of press the last few days for firing housekeeping staff after instructing them to train "vacation replacements" that turned out to be lower cost contract workers who would soon take their jobs. Thanks to Sara Peterson @ Megaphone for pointing me to this HBR Editor's Blog post by Paul Michelmanon assessing the damage.

What are the odds that Hyatt's marketing leadership was aware of the plan to sweep out the housekeeping staff in this fashion? In our transparent marketplace, the marketing department needs to do more than make the ads and brochures. They must be engaged in operational decisions that directly impact the brand. The ramifications from these "simple economic decisions" are often more impactful than any ad or brochure. Today "marketing" is more about brand behavior than glossy images. Wake up Hyatt.

Beyond the sound bite

2009-09-24T09:15:00.000-07:00

An ambitious if somewhat wonky experiment is taking place. Is it possible for two opposing parties to calmly and rationally debate an issue using in-depth, fact based arguments? Can anyone actually be persuaded to change their opinion on an issue after witnessing such a debate? Interesting questions given the pundit-charged, polarized nature of our "national conversation."

Intelligence Squared US is bringing the formal, "Oxford style" debate format to key issues facing the U.S. They've been at it for three years now and are starting to get some visibility. IQ2US tackles issues ranging from the demise of mainstream media to the efficacy of "Buy American" policies. The radio broadcast is available on over 190 NPR stations nationwide and is televised on Bloomberg, reaching over 200 million homes. I encourage you to listen to one of these debates. They are informative, surprisingly fun and charged with same kind of drama that kept millions tuned into Perry Mason.

A citizen making a voting decision is analogous to a consumer making purchase decision. Based on available information, both make a choice. Poor decisions generally happen when the information is incomplete or inaccurate. It's an understatement to say the quality of information available to the average citizen or consumer today is less than ideal.

Is there an appetite for more rigorous and in-depth public debate? Viewership of the 2008 presidential debates indicates there is. Are consumers open to more and better fact based information in making purchasing decisions? It appears so when one looks at the popularity of sites like TripAdvisor.com and Yelp.com (where consumers have essentially filled this need on their own).

Bottom line: Politicians and marketers have an opportuity to improve their standing (and outcomes) by taping into this appetite for deeper dialog and better information. Could the pendulum be swinging from the era of superficiality to one of substance?

Former ad guys concur

2009-09-15T18:07:00.000-07:00

It seems fellow recovering advertising executive, James P. Othmer has a similar perspective regarding the ability of social media to help President Obama persuade the masses. Check out his recent New York Times op-ed piece here.

Social media failing health care debate. Turn on the TV.

2009-08-21T06:54:00.000-07:00

It's painful to watch. President Obama makes speech after speech detailing the rational argument for a health care overhaul. His opponents serially attack elements of the proposal creating fear, uncertainty and doubt among much of the population. Those opponents offer few meaningful alternatives for fixing the situation. Liberals are livid that "red meat radio" mis-characterizes the issues and distorts the facts. Conservatives worry that they will be left on the sidelines of a liberal stampede. The cycle repeats.

Social media and the larger blogosphere, key drivers of Obama electoral success, are disappointing in their ability to influence this debate. This should not be surprising. Most of social media vehicles are self-reinforcing in nature - people who share common interests or perspectives talking to one another. The "lunch bucket" voter who might genuinely benefit from a health care overhaul is not hearing how he or she could benefit. The progressive, hell bent on a public option, is not hearing from those who sincerely believe it will ultimately subsume private options. We're effectively at a rhetorical standoff in the digital universe on this issue.

Social media was a potent tool for rallying supporters to elect the president. Surveying my in box, it's clear the Obama Administration is attempting to leverage social media again on this issue. One problem: the health care debate is a very different animal. The Democrats hold the White House and majorities in both branches of congress. The base is rallied. If Obama genuinely wants consensus, he needs those who are not his supporters to actually hear his argument.

This is where good old-fashioned traditional media could be more effective than the cool digital stuff. Imagine a nationally televised debate (or series of debates) where the President spends an hour sparing with a notable Republican (or health care industry leader) on the health care issue. Just the spectacle of a real human-to-human debate might cause us to look up from Huffington or Hannity to see what's going on. Remember that well over 50 million viewers tuned into each of the most recent Presidential debates.

A televised debate could provide the one element sorely missing in the health care conversation: drama. Sominex would be envious of the sedative powers of the President’s most recent New York Times op-ed piece making the case for health care reform – the boilerplate for his recent speeches. What’s needed is the drama of a heated exchange or a “gotcha” moment on national TV.

Most importantly, a debate could raise the level of dialogue from rumors, innuendo and finger pointing to a serious, thoughtful exchange of ideas. A well-viewed debate could provide a common context and language for more productive "water cooler" debates in our offices the next day. That’s the only route I see to any form of consensus. In the end, consensus may not be a realistic goal. Regardless of which way the health care issue is ultimately resolved, it would be nice for most citizens to at least be accurately informed.

Setting politics aside, social media excels at building enthusiasm among the like minded. It sucks at enabling dialogue between disparate perspectives.

Whole Foods' values train wreck

2009-08-20T08:12:00.000-07:00

There's a lot of clamor today regarding Whole Foods CEO John Mackey's recent op-ed in the Wall Street Journal where he came out against many of the ideas contained in the Obama administration health care overhaul initiative.

Right or wrong, Mackey's POV conflicts with the leanings of many Whole Foods patrons who reportedly tend to support the Obama approach. Quite the social media furor is underway. Over 20,000 Facebook members have pledged to boycott the chain. The debate has prompted a new forum on the Whole Food website with over 14,000 posts.

The image of the original hippy store used to illustrate the "values" page on the Whole Foods site paints an image that does not line-up with the viewpoint of the CEO. Shopping at Whole Foods (and paying the significant premiums involved) is an overt values statement for most customers.

In this transparent era it would seem that either Whole Foods needs to migrate to a less progressive values position or the CEO needs to recant or even possibly resign. The current "values dissonance" will only erode the Whole Foods brand and franchise.

What would you do if you were on the Whole Foods board of directors?

Alfa Insurance touches a nerve

2009-07-30T14:31:00.000-07:00

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?

New way to differentiate: Don't screw the customer

2009-07-23T18:31:00.000-07:00

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.

Ikea - Operations understands the brand

2009-07-20T14:08:00.000-07:00

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?

Wal-Mart changes the game

2009-07-16T19:23:00.000-07:00

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?