Feb 15, 2024 | Branding, Marketing
There are many contenders from around the globe for the mantle of ‘GOAT”, or at least of the last 20 years.
The obvious choice might be Steve Jobs, whose single-minded pursuit of all the factors that coalesce into great, long lasting, and commercially effective marketing culture is unparalleled.
You might nominate Elon Musk. He reshaped the auto industry worldwide, made batteries sexy, and figured out how to create a reuseable rocket, before imploding by renaming Twitter ‘X’.
How about Jeff Bezos who figured we would buy books online and turned that idea into a retail behemoth that has reshaped markets.
Some might add the foul mothed Gary Vaynerchuck to the list, whose ability to promote himself while talking about himself is unmatched.
Then there is a small number of genuinely original marketing thinkers and academics: Seth Godin, Mark Ritson, Byron Sharp, Roger Martin, and Scott Galloway.
Add in a few hands-on practitioners like Angela Ahrendts, Richard Branson, Marc Pritchard, and a trio of Aussies who changed the world, Melanie Perkins, and the Atlassian duo of Farquhar and Cannon-Brookes (whose core values include ‘don’t F%@k the customer’) and you have a good list.
However, my nomination would be from outside the usual ‘who is the GOAT’ box. It is a 34-year-old musician, songwriter, entrepreneur, and publicity machine, who has added tens of billions to the GNP of the US.
Taylor Swift.
I could not identify one Taylor Swift song, and I do not know if she even has any musical talent, but she certainly is a truly great marketer!!
To have the world talking about you, (even a 72-year-old bloke in a blog post) to have massive fan clubs of ‘Swifties’ salivating over every new piece of iconography, hordes fighting to pay eyewatering amounts to get nosebleed seats in a 100,000 seat stadium, takes some talent.
What makes her so great? Indeed, what are the common characteristics of all those in the list?
- Understands who her customers are, and applies relentless focus. Swifts core market is young women and girls. She has demonstrated mastery in engaging with that audience with the music, visual extravaganza, and personal storytelling that resonates. She is also a powerful role model, encouraging independence, ambition, creativity and determination, emotions to which those in her market all aspire.
- Consistently creates value for customers, individually. It seems the ‘Swifties’ out there all see Taylor as someone they easily relate to personally, across a wide range of channels and media. She is consistently delivering experiences, based on the music and extravaganza shows, but supported by all sorts of adjacent activities, such as having Kobe Bryant, a superstar in his field, come on stage at a concert and wax lyrical about her kindness, generosity, and ‘grounded’ personal values. She tells Swifties what they want to hear, and even their parents have trouble arguing!
- Is ‘the only one’. Marketing success is an outcome of meticulous attention to detail, and the communication of all those details in a package. It requires two types of activity that is an extremely difficult mix to get right. On one hand, you need to ensure ‘activation’. The calls to action that today generate the motivation to spend money to be a part of the party. On the other, it requires that long term investment be made that build a brand, an identity that engages and creates a long-term platform from which the activation and short-term revenue generators are launched. When done well, as in this case, there will be ‘only one’. Where else can a teenage girl find the excitement, engagement, communal vibe she gets from being part of a ‘Swiftie’ fan community?
- Swift applies compounding leverage. Taylor has executed a masterful commercial strategy. Unlike almost all other entertainers, she has retained control of everything, and runs the whole shebang as the CEO of a large, volatile and very complex business entity. Her uncanny ability to generate ‘Buzz’ around everything she does, which is spread by wildfire word of mouth and unpaid media enables a continuous stream of ‘Swift-news’ which has fans hanging out for more. She provides the creativity, leadership, and alignment most CEO’s can only dream of across the diverse range of activity her business embraces.
Swift is touring Australia, starting later this month, with multiple sold out shows in Sydney and Melbourne. The hype is becoming all consuming: you even have to reserve a spot in the line to pick up your merch and get to the cash register at the exit of the ‘pop-up’ merchandise stores.
Header illustration is via DALL-E, everything else is ‘organic’
Feb 12, 2024 | Branding, Communication, Customers
Last week I provided a template for a Customer Value Proposition. The template works well, but ‘Customer Value Proposition’ is a piece of marketing jargon which just means making a promise to your customers.
This presupposes that you actually know who your ideal customers are, and what sort of promise would be attractive to them.
In the January February 2024 Harvard Business Review there is an article called ‘The right way to build your brand‘ written by Roger Martin and two Co-authors. The article sets out research that proves the hypothesis that making a specific promise to customers is more attractive than a generic claim of some level of excellence. The specific promise is about the benefit a customer will receive with use of the product. A generic claim to greatness is just about the product.
It does not surprise that the first is more powerful than the second.
‘Your promise is your strategy’ is a sub headline towards the end of the article. When you think about it, the observation must be right. Strategy is a process of influencing factors over which you have no control in such a way that the subsequent behaviour of the customers benefits your enterprise rather than an alternative. Making a promise of performance in delivering an outcome desired by a customer is about the strongest driver of short-term behaviour I can think of.
Delivering on the promise, will build trust.
Right at the end the authors ask four crucial but simple questions that can be used to determine if a proposed advertising campaign is worth investing in:
- Is the campaign based on a clear unambiguous customer promise?
- Were customer insights used to identify a promise the customers value?
- Is the promise framed in a way that is truly memorable?
- Were product marketing, sales, operations, and customer service involved to ensure the promise will be consistently fulfilled?
To me, this sounds like a comprehensive framework by which to decide if a proposed communication campaign is a worthwhile investment.
Feb 9, 2024 | Branding, Marketing
Almost everyone has trouble with this most basic of marketing jobs, articulating your ‘Value Proposition’. It is a simple statement of the benefit a customer gets from using your product, rather than an alternative.
Internally it also plays a role, in aligning staff and other stakeholders to a common purpose.
For …………….. (your ideal customer)
Who……………..(define the specific need, pain point)
Name……………(of the service or product)
Provides…..…. (The key benefit)
For example, the simplified Value Proposition for StrategyAudit might be:
For small to medium manufacturing business leaders,
Who do not have the resources to hire deeply experienced management,
Allen Roberts from StrategyAudit,
Provides that deep experience across all functional areas of your business on an ad hoc, part time, project, or on-call basis that is guaranteed to lift your profitability.
This simple template works well for just about any product or service.
It forces you to articulate why your ideal customer should deal with you rather than an alternative, and the value they will derive from that choice.
Generating the best possible value proposition is an iterative process. Rarely do I see the ‘perfect’ one emerge quickly. Often there are several that look OK, which can be tested and improved.
Dec 15, 2023 | Branding, Innovation
A year ago I stumbled across ChatGPT for the first time, had a poke around, and wrote this post. Over the following few months, I tried to keep up with what was happening, but at addendum 20, called it a day.
Generative AI became the fastest growing product group in history, with ChatGPT the leading runner by several furlongs, a lead that has been cemented over a year of frantic activity.
The release spawned several major competitors from the neighbours, and hundreds of unexpected applications built on top of the core (Large Language Model LLM) technology. This is a trend that will continue to accelerate.
Depending on who you listen to, we are either a year or two from ‘sentience’, the passing of Alan Turing’s test, or at least several decades away, and possibly will never get there.
The corporate rumble at OpenAI is a bit like Mad Uncle Henry turning up at your kids birthday party, drinking all the red cordial, and going bonkers. The structure as it was set up could not absorb the unprecedented growth. One lot wanted a slow orderly, and safe evolution of AI that did not repeat the mistakes of social media, the other basically said ‘stuff it’, let’s make a few billion!!
It seems like order was restored between the warring parties when the landlord stamped and said ‘Enough’. Capitalists won, and Mad Uncle Henry has been carted away to a comfortable retirement. Who would have guessed?
So far, the resurrection at OpenAI, the return of Sam Altmann (it was 3 days) seems to be working, but who knows what is going on in the minds of those in charge. This blended family model was bound to have difficulties, it just happened way faster than anyone anticipated.
Meanwhile, those not invited to the party continue to rave about the output, while complaining that it is wrong a lot of the time. They just do not understand the difference between an answer that is fact checked and therefore accurate, which is what we expect, and one based on probabilities, which is what your ‘artificially intelligent’ probability models are giving them.
There is no list of pre-programmed answers available from a database as is the case now for the various precursors like the Alexa’s of the previous generation. You are based on a huge volume of stuff on the web, which is why they are called LLM’s, and as we know not everything on the web is checked for accuracy. If it was, my bank account would now be in the billions after all those Nigerian princes I have helped.
Your answers are, as I said, based on the probabilities of an approximate answer built up as you trawl the training sets extracted from the web.
Alexa will give you an answer to your question, so long as the question has been anticipated, and the answer programmed in. You by contrast, will give an answer, but it will not necessarily be the ‘right’ answer. Many questions in life have a range of potential answers, sometimes that is all that is needed, they can be helpful, but AI machines cannot give ‘The’ definitive answer, the one and only, to many of the complex questions we are tempted to ask.
No silver bullet there!
This is very difficult territory for many, as the answers given are in natural language, the language we use every day, so they appear to be exactly as expected. This gives confidence in an answer that does not deserve that confidence. Without critical examination any so called Artificial Intelligence will deliver you rubbish as often as not. However, it can be extremely useful rubbish, able to provide a framework, provide ideas, and do much of the ‘grunt-work’ so often shuffled aside.
Smarter people than me are unable to offer much insight into what might happen next, and it is of no use whatsoever to ask Chat or any of his mates. They have no idea either. Two things I do know. It will be fun, and somewhat scary watching. Secondly, our world has changed, and becoming a dinosaur in your market can now happen almost in the blink of an eye.
Don’t blink first.
The header is courtesy of DALL-E, the sibling of Chat. I asked it to give me an impression of the OpenAI logo exploding, with a Gothic/surrealist feel. I chose this one from a pretty scary lot generated in about 15 seconds.
Nov 27, 2023 | Branding, Customers
Every time I go through a supermarket checkout, I find myself surprised at the total of the bill. Should be used to it by now, but no, I’m not!
The two supermarket gorillas, Coles and Woolworths have both released their annual results in the last month, and shareholders, which via superannuation is most of us, should be very happy.
Woolworths pocketed $1.6 billion on significantly increased margins, and Coles managed $1.1 billion on similarly better margins. The percentages are way above those generated by peers in developed countries, for the simple reason that they are an oligopoly and leverage that power to generate profit. Aldi has made an impact and continues to do a good job of ‘keeping the bastards honest’ but the fact remains, profit comes from market power. It is also fair to acknowledge that both have done a pretty good job of optimising their current operations, which also contributes to those juicy profit numbers.
Supermarket retailers, and other retailers in a position to exercise market power, are in two businesses that together make a powerful business model:
The first is renting retail real estate to their suppliers.
The second is selling products to consumers.
Both are transactional, with constant negotiation between the retailers and their suppliers. Sadly, there is an unequal distribution of power between the retailer and the supplier, so the use of price on both sides of the equation by retailers has become ubiquitous.
They extract maximum ‘rental’ for the shelf space, while being relatively unconstrained at the checkout by competitive pressure.
As a result, suppliers are screwed down so hard that even the very best of them have trouble returning the cost of capital, and price competition that benefits the consumer is a myth.
The price-based promotion programs deeply embedded in the psyche of both retailers and their ever-decreasing pool of suppliers destroys brands. Over the time I have been watching, the supplier margins from which springs the innovation that keeps categories fresh and interesting to consumers, has disappeared.
Retailers are lousy marketers. Ask one to explain the drivers of purchase and they have only one answer: price. Anyone who has ever bought anything knows that is rubbish.
For long term commercial sustainability of both retailers and their pool of suppliers, there must be a balance between tactical promotion and the innovation investment that generates category and brand growth, and there must be serious competition.
That no longer exists. Marketing and behavioural research over many years is unequivocal. Healthy markets need both.
Retailers have used price as their only tool because they can. In the process they have killed off almost all proprietary brands, replacing them with house brands, which are no more than carbon copies. There is no longer category or product innovation, and no suppliers willing to invest in brands, just a conga line of copycats.
The cost-of-living crisis facing many consumers today will become a strategic crisis for the retail gorillas as they fail to evolve their business model.
Nov 13, 2023 | Branding, Customers
The best place to start this discussion is some sort of definition of ‘Brand Salience’. To me it is the extent to which your brand comes to mind. This might be unprompted, as in ‘what brands of beer can you name? That first question may be followed with a prompt such as ‘which of these brands are you familiar with? A brand with strong salience will be identified quickly, those with none will remain anonymous.
A common phrase in marketing is ‘build a brand’. The actions taken by marketers to address this often-mouthed objective differ. There is no template to build a brand, but there are well established principals.
Most young marketers would struggle to think past Instagram and Tick Tock, believing the way to build a brand is to do stuff that gains attention and eyeballs. The reality is that doing so barely scratches the surface of what is required.
Building a brand is a long-term proposition, inconsistent with the very highly targeted digital capability we now have. Building a brand requires that you create and leverage distinctive visual, verbal, and aural assets. On encountering one of these assets, a current or potential customer has the brand immediately brought to mind.
The first task is to identify any distinctive assets your brand might have on which to build. In most cases this is after years of zigzagging and bouncing around. The potentially distinctive assets of most brands are a bit like the jumble in the bottom of a kids toy box. Lots there, bits and pieces, but nothing that has been picked out and made really distinctive.
As a marketer it is your task to pick those pieces and build them into a distinctive asset of the brand.
The Ehrenberg-Bass institute has developed by grid that captures the essence of all the above by reflecting two factors: Fame and Uniqueness.
- Fame quantifies the percentage of category buyers brains where the brand has an immediate and salient link to the brand asset being tracked.
- Uniqueness quantifies the brands level of ownership of that asset versus competitor brands.
The challenge for marketers is that to build such a matrix that has real relevance can cost a lot of money. It is one thing to do an audit of an existing brand, entirely another to audit a market category to identify holes in the competitive profiles which can be leveraged.
Understanding the factors that will drive distinctiveness that are relevant to the consumer is the first point of call. There is often the debate about the role of creativity in determining what is distinctive and relevant, and how that distinctiveness is captured by the combination of visual, aural, and verbal characteristics.
For example, what I regard as being a truly great example of Australian brand building is Meadow Lea margarine. While it is now relegated to the discount bins through stupidity and poor brand management, the tagline ‘You ought to be congratulated’ would bring ‘Meadow Lea’ straight into the mind of most Australian women over 50. Early in the process of building Meadow Lea, qualitative research identified that women were still doing most cooking and housework while increasingly holding down a job and managing the family. They were sensitive to criticism in all these areas, and were looking for acknowledgement. Meadow Lea acknowledged the emotional need and addressed it by telling them they deserved to be recognised and congratulated. The advertising captured the essence of that acknowledgement, visually, aurally, and verbally. Over the course of a couple of years Meadow Lea went from being one of many brands of margarine, to being absolutely dominant. I would suggest that the remnants of that brand salience remains. 30 years after the idiots who inherited Meadow Lea after the usual multinational financial engineering occurred and the advertising stopped, most still correctly associate ‘you ought to be congratulated’ with Meadow Lea.
Typically, the steps to build a brand cost a lot of money in advertising, and importantly in the initial stage of identifying those elements that can be built into distinctive brand assets. Most small businesses do not have the resources to even begin. However, two points are relevant:
- If you are a local plumber, accountant, architect, whatever you may be, you need only be distinctive in your local market, however you define that market.
- AI is throwing up tools that locals can use that promise to deliver at a relatively modest cost, and with some marginally compromised accuracy, the sort of understanding previously only possible after big investments. Mark Ritson, Marketing Prof at large recently wrote a very useful post in which he labels this data as: ‘synthetic data’.
Thinking strategically and acting creatively is the foundation of identifying, building and leveraging distinctive brand assets. You should try it!
My thanks for the catalyst of this post, and the outline for the header graphic goes to the Ehrenberg-Bass Institute for marketing science.
