Case study: The pros and cons of PR in a B2B market.

Case study: The pros and cons of PR in a B2B market.

Feb 15, 2017 | Branding, Customers, Marketing, Strategy

PR can be a remarkably effective tool in the marketing arsenal, but most of it is just wasted, simply because it is not delivering any message of value to anyone who cares.

What can you expect when you have a combination of PR agencies who get paid by the word, various supposedly credentialed dills with a barrow to push who like to see their names in print, and politicians who will respond to the smallest of pressure groups who make a big noise?

The latest target of the word churners is sugar, specifically sugar in soft drinks,  but more broadly, sugar in everything.

Tax it and the problem will go away.

Nonsense.

While it is true that in economics 101 I learned that when you increase the price of anything, you sell less of it, this is a logical outcome based on an assumption of rational behaviour.

If I have learnt anything about consumer behaviour in the 45 years I have been in the marketing game, it is that it is rarely just rational, and unlikely to be altered by well meaning press releases, full of adjectives and promises of better days, written by those with a dog in the fight.

I was recently asked by a former client who supplies high value but very low usage ingredients that have the  potential to replace some of the functionality of sugar in food products for an opinion on a couple of different PR approaches they were considering in response to the discussion about a sugar tax.

Following is the reasoning I offered on PR as a marketing tool in this situation, sanitised for more general consumption.

  • There is a political problem, we are all too fat, therefore there is pressure on governments to regulate. Some of this regulation is warranted, such as the disclosure of the calorific value of products, in this case soft drinks, some is just nonsense.
  • We all (should by now) know that soft drinks are full of sugar, and drinking them to excess makes you fat, as well as having other health impacts. Therefore ensuring that label regulations are clear and understandable to laymen is a good thing, resisted by the beverage companies, as they do not want to scare the horses.
  • We cannot expect (in my view) governments to regulate for our behaviour, to be the gate keepers on our fridges. However, the tendency seems to be to seek to regulate to protect people from themselves. This is the guts of the move to have a tax on sugar, but underneath, there is a revenue measure for government that they will not talk about, but remains.

For a business to successfully leverage the public discussion for their commercial purposes requires some sort of strategy, and what I often see is a strategic vacuum, into which a PR release is sent. Some thoughts on the value of PR in these circumstances to a business that has some sort of vested interest in product formulation in the beverage market :

  • The target market for information is the marketing and technical people in beverage manufacturers, and they require different messages entirely. If it was me, I would have a plan with a few simple elements, and execute on the plan.
  • Create a list of the beverage manufacturers in each market, along with the relevant information about their ownership, location of factories, brands, strategies, etc, all you can reasonably glean from the combination of public documents and what your sales force knows. This is part of what marketing departments in businesses  with these sorts of interests should be doing.
  • As part of the above, ensure there was a list of the personnel in each business, their role in an organisation chart, and more importantly their role in the marketing, procurement, and product formulation decision making.
  • Develop ‘content’ with credibility to support all sides of the debate, and make all the data available, not just the bits that may support your commercial objectives. Research by the likes of Tate and Lyal, and CSR will be viewed with suspicion, irrespective of the science of it, because they have a vested interest, unless they discuss all the data and both sides of the debate.
  • Use the lists developed above to target selectively the people you need to speak to with the commercially agnostic data (content) you have developed. Do this digitally to create MQL’s (marketing qualified Leads) which are then passed to Sales and Technical services to follow up in person to make your formulation and commercial arguments.
  • Pick a small number of real target companies and devote resources specifically to the task of selling to them.  I would pick the challenger brands in each market, the ones you can sell to without the regional head office being involved, those who do not  have the big marketing budgets and brands, so they have less to risk. Once you convert a small number, and they have success in the market, the rest will follow.

This is pretty basic marketing 101.

Recognise that your target market is specific, and sales intensive, not marketing intensive. You are not selling toothpaste to a consumer with a low transaction value and regular small transactions, where marketing is vital. You are selling high value ingredient to customers where there is a high degree of specification, complication, and a long term relationship at stake. The challenge is different. Wasting time and effort, as well as money on consumer PR is useless in this context except as a strategy for keeping the wallies who do not understand the basics of the sales and marketing of their businesses quiet.

 

To cut through the digital clutter:  Tell stories.

To cut through the digital clutter:  Tell stories.

Feb 13, 2017 | Branding, Marketing

Stories are personal, they resonate, you see the real people behind the business, not some nameless corporation, the people who do the work, and are accountable for  the decisions and outcomes.

Facts never change anything, but stories can.

Martin Luther King did not recite a list of the facts surrounding the deprivations and discrimination of the American negro in his 1963 speech, he told us of his dreams, and changed the world.

Facts are boring, stores are listened to, part of our DNA, we listen to stories and relate to them into old age.

 As a kid Dad read to us from what became known as ‘The weekend book’. A book he had been given as a kid, of the Greek legends. I saw that book again for the first time in probably 40 years last weekend. My sister had it carefully stored, as it is now falling apart from almost 100 years of love and use. She has kept the family tradition alive by reading the stories to my niece, who is as familiar and engaged with them as I was at her age. As I turned the pages, every page, story and picture was as familiar as if 55 years had not passed and I was 10 again, listening to my dad reading them.

Stories allow you to differentiate in an emotive and highly engaging way. Your story is yours, not your competitions, yours. They can be used to give potential customers a reason to go nowhere else, they give you a personality that cannot be erased with a cheaper price, or a hyperbolic sales pitch.

Tell stories

I am currently working with a medium sized printer, a 60 year old business founded by the current MD’s father in the mid 50’s. In a recent move of premises, sitting in the corner was the original little printing press that he had used to start the business,  about to be sent to the tip. Aloud, I wondered at the stories it could tell if it could talk. That press now holds pride of place in the foyer of the new premises.

We trust those we know, and we get to know people by hearing, understanding and relating to their stories. Facts simply do not  build trust, they bring enlightenment, and understanding, but not trust.

Tell your stories, you may be surprised at who is interested.

The A – Z of personal branding

The A – Z of personal branding

Nov 2, 2016 | Branding, Marketing, Social Media

In 1997, Tom Peters wrote an article for Fast Company,  titled ‘The brand called You’ which was probably the first articulation of this idea. In it he wrote  ‘It’s time for me — and you — to take a lesson from the big brands, a lesson that’s true for anyone who’s interested in what it takes to stand out and prosper in the new world of work’

Most people think about personal branding as a result of necessity. Suddenly they find themselves between jobs or careers, and recognise for the first time the need for branding, of the personal type. Usually that is the second best time to start thinking about it, the best time was years ago.

The nature of work is also changing, lifetime employment is a thing of the past. No longer are there any ‘safe’ jobs, economically and socially we have recognised that we need to look after ourselves, and the digital revolution has provided the tools to do so. The book End of Jobs is a compelling read, and persuasively makes the point after having looked at all the research. In these circumstances, you have become a commodity with something for sale: your time, expertise, experience and connections. In order to get the best price for that commodity, the lessons learnt over 100 years of product branding can be applied to personal branding.

The standard 4 step brand planning process that works for soap, also works for you.

First: What is the current ‘brand’ position? What do you do well, what do you do poorly, how do others see you, and what do they say when you are out of the room. You may need to ask a few friends and acquaintances for the honest truth, and be prepared for some surprises.

Second: What you would like it to be?  You really need to think hard about how you want others to see you, leaving it to chance is not usually a good idea.

Third: How do you set about bridging the gap. Once you know the objective, you have a chance to plan and execute activities that contribute to the achievement of that objective.

Fourth: Implementation. This is the hard part, being proactive, consistently, over time, while reviewing and revising as necessary.

There are some pretty simple steps that can and should be taken by every professional to effectively implement a personal branding routine. None of it is particularly challenging, but does take a little bit of time.

  • Register your name or digital handle as a domain if possible, but you need an ABN in Australia to register a .com.au domain. Without an ABN, make sure you claim the ‘domain’ on the social platforms, particularly LinkedIn. Each platform does it a bit differently, but it is worth the small effort to figure it out. In my case, I have allenroberts.com.au and StrategyAudit.com.au as my domains, and Strategyaudit is the handle I use throughout the digital channels to give me leverage.
  • Apply disciplines to yourself. Having determined the sort of brand you want, ensure that everything you do on line adds a little to the project. No cat photos on Linkedin please, and have a separate Facebook page for your brand if you feel compelled to post those photos of yourself being compromised in some way. Best not to be in that situation at all now that everything is potentially public, no matter how hard you try to be private.
  • Build a library of content that reflects what you are good at, and what you like to do, the sort of things you would like people to think of as ‘yours’. This does not necessarily have to be extensive, but it has to be curated and representative of your personal brand. Spreading the content across platforms gives you leverage, and an opportunity to repurpose the things that work well for you. In my case, the primary vehicle is the bank of 1400 plus blog posts on the StrategyAudit website, as well as an active presence on Linkedin, Facebook (as StrategyAudit) Twitter, and other digital platforms.
  • Every digital platform is different, serving a different purpose for its users. It is reasonable therefore to vary the branding approach. Different narrative, photos and content are the start.
  • Recognise that ‘browsers’ of platforms see ‘headlines’ just like the old days of newspapers. They may move beyond the headline, dig a bit deeper, if their interest is piqued. In most cases, your photograph is a significant part of your headline, so having them taken professionally makes good business sense. Many skip this simple step, as it is so easy to take your own and just upload. However, it is nowhere near as good as having a session with a professional. It will also give you options of using different photos on different channels, reflecting the character of the channel and yourself.

I recently had a session with Sam Affridi from Hero Shot Photography, a photographer I met through a business network. He suggested I rethink my headshot and the message it’s giving to my different audiences. As a result of the conversation, he took a series of photos for me, all designed to better reflect the differing messages I try and send on different platforms. He did a great job, and I now have a ‘bank’ of different shots that can be used as an additional communication tool in my headlines in various  digital spaces. This replaces the one photo I had, that at the time I felt was pretty good but had over time proved to be sub optimal. It was enlightening to see how much thought went into the session and how my ‘brand’, what I want my clients and potential clients to feel about me, was a deliberate element of each headshot. As Sam puts it “creating a flattering portrait is the easy part. Creating one that’s specifically engineered to appeal to your ideal customer is worth spending time on” If you’re looking for an update, I’d give him a call and please do mention my name.

 

hero_shot_sydney_strategy_audit-9 hero_shot_sydney_strategy_audit-10 hero_shot_sydney_strategy_audit-8 hero_shot_sydney_strategy_audit-4

 

 

 

 

While it seems a bit narcissistic to have 4 of the many good photos posted, these all say something different about me, or at least I think so.

What do you think?

Commercial environments evolve, sometimes very fast, and staying still is death, which is why the successful brands are allowed to evolve in response to the job they are being asked to do. Similarly with personal brands, we have the opportunity to evolve what we do and say in line with the progress of our lives, but it should be a managed process, not one left to adhoc activity and chance. Developing your personal brand can be time consuming, and is necessarily an incremental activity, but putting aside 30 minutes a week as your investment in yourself seems pretty sensible.

 

5 crucial parameters of the Value Equation.

5 crucial parameters of the Value Equation.

Oct 31, 2016 | Branding, Marketing

Some time ago I wrote a post that listed the 4 questions every business owner should ask themselves:

How do we create value?

How do we deliver value?

How do we capture value?

Will it be the same tomorrow?

In a recent workshop I was asked to expand on the rather brief notes in the original post. Following is a summary of the comments I made.

How do you create Value?

This is the one question every successful business on earth has in common. Success depends on them creating value for someone in excess of the cost to create that value.

There are several parameters to consider.

First: What is value?  Value can be relative, as in the situation where you stick a premium brand on a pair of ordinary sunglasses, and some people who value the cachet and assurance of the brand will pay several times the cost of the identical pair unbranded. The value is in the brand rather than the physical pair of sunglasses.

Value can also be contextual. I have been considering the option of upgrading my computer recently, looking at the costs, brands, and technical performance of the available options that suit my needs. Two weeks ago, my existing computer took a powder,  at which time the context in which I was considering a purchase changed radically, and the value of time became the over-riding factor. As the context of the consideration changed, so did the value, and so defining value at any time needs to consider these two differing sets of relative and contextual factors.

Second: Value to whom? Everyone defines what value means to them differently. In the sunglasses example above, there are groups who will pay significantly for a brand, and differing amounts of premium for differing brands.  For some, a brand like Ray Ban might add 5 times the commodity value, for others, who would not buy Ray Ban to save themselves, Pierre Cardin might add 8 times the commodity value to their choice of sunglasses. The marketing challenge is to define the groups to whom your brand adds the value, and target your marketing and brand building activity towards them.

Third: What is your niche? The definition of a niche is always a critical but often overlooked component of your marketing planning. Without adequate definition, you are unable to find the degree of definition of customers necessary to discriminate sufficiently closely to refine your messages to a point where they resonate with the most likely primary customer without wasting resources on those less likely to buy.  Often the creation of value evolves when an unrecognised or under-serviced niche is identified. Back to the sunglasses. 10 years ago there were no brands (that I can recall) targeted at sports people, who valued a light tint, polarisation, and a ‘wrap-around’ style that ensured a frame did not impede peripheral vision, and a very close fit. Oakley jumped into this unrecognised niche and built a brand based on delivering value previously unrecognised to a closely defined niche in the sun glasses market.

How do you deliver value?

It is of little use having something someone else would value without the means by which to deliver it. Your ‘Business Model’ is the means by which you deliver, a factor that is again often not considered in any real depth by small and medium sized businesses.  There are a pile of questions that need answering, but are mostly left to chance, habit, and the way it is always done in that market, which is hardly the way to differentiate yourself. Are you a retailer, wholesaler, operate in a double sided market (such as EBay), fee for service, franchise operator or franchisee, and so on.  While we are all sick to death of Airbnb and Uber being held up as examples, they are simply great examples of delivering an existing service via an entirely different business model making their owners rich in the process.

A great tool to use is the business model canvas articulated a few years ago  in a book of the  same name, and described in this post.

How do you capture value?

A business model offers some of the story about the means by which you capture value. Every model approaches the task differently. However, there are some common elements irrespective of your model that face every business.

Firstly, and most obviously, your costs must be less than your revenue, numbers captured well in traditional accounting models of the Profit and Loss account. However, what the P&L usually fails to do is clearly articulate all the costs that are incurred, particularly the last two in this following list.

Direct or marginal costs are those incurred directly to produce another unit of sale. Usually this is referred to as the cost of goods sold.

Overhead costs are incurred in every  business to keep the doors open. Communication costs, rates and taxes, management wages and salaries, utilities, and so on. Many accountants use a ‘fully absorbed’ cost method that divides the total of all costs incurred except perhaps discretionary trading costs such as advertising and promotion, into the number of units sold and allocates a cost to each unit to ‘absorb’ the overhead. This is logically flawed as the less you sell the more you must sell it for to absorb the costs, so the march towards commercial oblivion proceeds.

Opportunity costs. I have never seen these captured in a P&L, indeed, am not sure of how you would go about doing it,  but nevertheless, it is a cost of choosing a less than optimised allocation of resources. Consideration of the opportunity costs of resource allocation decisions should be a topic in every serious strategic discussion.

Transaction costs are the costs of managing transactions inside a business. A business with one supplier for an ingredient has less transaction costs associated with the purchase of  that ingredient than  if they had 50 suppliers. Obviously they also have greater risk, but transaction costs are the great hidden cost in most businesses.

The answer to the dilemma of capturing value is twofold:

You just have to understand, really understand your numbers, what drives them, and how you can influence them. Secondly, the number that counts above all else is cash. How much cash is coming in, from where, and going out, to where, and what are the timing factors that will influence that flow of cash. Every business should be forecasting their cash flow at least weekly in a rolling periodic forecasts that suits their business, but usually 13 weeks is a good number, and be watching the ebbs and flows daily.

Will it be the same tomorrow?

While a literal tomorrow may see little change, but what about next month, next year, the answer is a clear and resounding No!

The answer to this dilemma of managing for short term profitability while ensuring commercial sustainability is complex. On the one hand you have to have stable processes to optimise the productivity of resources allocated to a task, at the same time as you experiment in order to see the next thing coming, which is usually messy and risky, but absolutely necessary to survive. The classic case is Kodak who invented the digital camera and did not do anything with it, enabling the seeds of its own destruction to be sown. Most good businesses manage what they can control, and accommodate the changes necessary to moderate risk or leverage the opportunities as they  emerge.

It is a cliché but time has to be spent ‘on the business’ rather than in it by at least some of those responsible for the commercial sustainability of the business.

People.

Most will tell you that people are their greatest asset, then go off an do something that demonstrates the hypocrisy in the statement. It remains the truth however, that in all but the markets for non-critical purchases, people do business with people, not corporations, and people still do business with people they know like and trust.

Since I was a boy, I have heard the expression ‘Beauty is in the eye of the beholder’. It holds absolutely true for value as well. Value is always in the eye of the beholder, and is the net outcome of the complex set of unconscious and unseen mental gymnastics we all go through as we make assessments of options open to us. In a supermarket that may be hundreds of times in a few seconds, in a significant B2B purchase decision the considerations may be entirely different, but the processes are identical.

How could Samsung stuff it up so badly?

How could Samsung stuff it up so badly?

Oct 21, 2016 | Branding, Governance

Once again, we are the observers in what will become another in the great ‘How to manage a marketing cluster****’ course.

I am talking about the public reaction of Samsung to the exploding Galaxy Note 7 phone.

Recent history is littered with lessons on both sides of the equation, how best to handle the meltdown as it happens,  and how to really stuff it up. You would think that an operation with the size and apparent sophistication of Samsung would have learnt, but it seems not.

The Galaxy 7 was launched in August, in a race to beat Apple to the market with their new ‘Apple iPhone 7’. There were almost immediately reports of the batteries blowing up, initially treated with some scepticism, as the fail safe levels built into the design and regulatory testing regimes should have identified any problems. Ooops… Samsung test their own batteries, whereas others all have third party tests done.

At the point of recall, Samsung had produced 2.5 million units, sold about 2 million, and there have been 35 reported explosions. Not quite a 1 in a million chance, but not far off it, so I guess they just thought it a minor glitch.

On October 10, Samsung announced ‘We are temporarily adjusting the Galaxy Note 7 production schedule in order to take further steps to ensure quality and safety matters.’  For the couple of weeks prior, Samsung had been recalling the phones, but calling it an ‘Exchange program’. When a couple of the exchanged phones also went ‘Boom’ they ended production, with the ‘temporary’ announcement above.

From October 11 until October 17,  when the US Federal Aviation Authority put on a blanket ban on carrying the device, describing it as ‘forbidden hazardous material’ airlines had started banning carrying the Note 7 on board off their own bat, recognising the public concern and real safety question.

There is a pretty large gap between ‘forbidden hazardous material’ and an ‘exchange program’.

Samsung’s statements are in competition for the ‘Biggest Blooper-statement in history’ Oscar with then BP Managing Director Tony Hayward who said ‘There is no-one who wants this thing over more than I do. You know I want my life back’  in the days after  Deepwater Horizon blew up in April 2010.

By contrast, when Arnott’s had a recall of Monte Carlo biscuits in 1997 prompted by an extortion bid, MD Chris Roberts was up front, recalling all Arnott’s products from the retail trade, explaining the reason and how Arnott’s was dealing with it. While it cost a lot of money, the Arnott’s brand was probably enhanced in the long term. Similarly, in 1982 Tylenol, the market leading US analgesic brand was found to have caused the death of a young woman after she consumed a poisoned pill. Johnson & Johnson immediately recalled all Tylenol from the shelves, and committed to completely redesigning the packaging to ensure tamper evidence. J&J garnered considerable public support, and Tylenol rapidly regained their market leading position after the relaunch.

These are just a few of the best known but very many examples Samsung should have considered. Had they done so, the short term cost would not have been as high, and the damage to the brand not as severe. Coming on top of the recent exploding washing machine episodes you would have thought they had sufficient practise to get it right.

The cost to Samsung will be huge, in both short term cash losses and longer term damage to the brand. Apple must be loving this!

As an aside, you would think that Samsung would have taken down their digital marketing material on the device, particularly with the tag-line ‘Rethink what a phone can do” but at the time of post publication, had not.

3 things advertising cannot do, despite the claims.

3 things advertising cannot do, despite the claims.

Oct 19, 2016 | Branding, Marketing

Many small and medium sized businesses I interact with seem to have the view that advertising and marketing are synonyms, and if they had a bit more money in their marketing budgets, it would best be spent on advertising.

Rarely is that the case.

Advertising is just a part of a marketing menu, often crucial and a voracious consumer of dollars, but nevertheless often a small part.

Advertising is a great tool, a device to achieve all sorts of commercial ends, but like any tool, there are limits.

The babble that usually  accompanies the sales pitch for advertising is often long on superlatives and short on specifics.

Here is what advertising cannot do:

Advertising weight is no substitute for creativity.

Messages only really get absorbed when they appeal to our hearts, and most advertising appeals to our brains. Like all rules, there are exceptions, such as the advertising of a once only limited time price deal. No heart in that, all head, and it may be seen, and it may also be destructive of the brand, as it is commoditising it.

Advertising cannot make people care about something that has no relevance to them.

Look at all the advertising done for starving kids in Africa, soliciting 10 bucks a month to save a life. If we really cared, rather than felt guilty, the coffers would be running over. It is not that we do not abhor the fact that kids die of malnutrition, it is just that it is removed from us, has no personal impact, and we are cynical about how much of our 10 bucks is actually getting to the people who need it.  Advertising  is best when it defines the WIFM to those seeing it. The best copywriters are usually the direct response writers, they know immediately when their adverting works, and they are always appealing to the prospects top of mind self interest.

Advertising rarely increases the size of a market in the short term.

The purpose of advertising is to attract your competitors existing users, lapsed users, or light users to your products or service. From time to time advertising latches onto a latent need and does create a market, such as the great Apple advertising for the first macs or even better, DeBeers programs to create the tradition of a diamond engagement ring, but those take bucket loads of money, beyond the capacity of any medium advertiser, as well as great timing and a level of creativity rarely seen. Most advertising is aimed at nicking your competitors customers, in one way or another. When I had to turn around Ski yogurt, the target was Yoplait. There was no mistaking what we set out to do by offering a product that was distinctly different, had a different value proposition, but it was still yoghurt. Over time the combined activity increased the size of the market considerably, but our advertising target was Yoplait users and we got them by taking a stance on yogurt that had discernible pieces of fruit in it, rather than being a homogeneous product, and the taste was distinctly different, so there was a choice to be made once we persuaded consumers to trial.

The question of which channel to use for your advertising is a whole set of different questions.

Digital or analogue, is usually the first step, and the logical answer is ‘both’ as there is no one right answer. Each channel and each platform within the channel plays a different role, and has different costs and outcome expectations. It can get very complicated, and the only sensible way to sort out the mess, and conflicting claims is to be very clear about the objectives you have, then assess each advertising option against the objectives, and the value they deliver.