Consumers increasingly can find out how good a product really is and whether the company acts with integrity. Some marketers get it. Some don't. See what happens when brands are subjected to the harsh light of the meritocracy.
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.
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.
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 byJames 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.
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.
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.
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.
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.
Posts
