The greatest failure of marketing management.

The greatest failure of marketing management.

Jun 2, 2016 | Change, Leadership, Lean, Marketing

 

The headline is a big call, competing as it does with some real doozies.

Remember “New Coke” or the Ford ‘Edsel‘ or perhaps Thomas Watsons declaration that there was a world market of no more than 5 for computers?

This one is a general observation on the nature of marketing people generally and their project management skills, at least in my experience.

They tend to spend too little time really defining a problem, but then jump effortlessly to a conclusion, leaving a pile of crap in their wake for others to clean up, and sub optimal outcomes from projects.

The explosion of marketing technology is not just making the shortcomings more obvious, it is delivering the means to measure it.

Holy cow Batman: Accountability!

The smoke and mirrors are being removed, leaving many self declared marketing gurus naked.

Leaving aside the question of individual capability, the root cause of this can usually be pinned down to a failure of project planning.

Specifically the failure to recognise the nature of critical activities that are sequential, building on the one before. For example, only a fool would lock into a creative approach and copy before the persona of the target market was absolutely crystal clear.

This notion is entirely different to the usual ‘critical path’ which can be a moveable feast as timetables move around.

Critical activities are just that, and they do not move around, at all. Project planning should always acknowledge the time necessary to complete each critical activity, and the specific sequence that is necessary.

Marketing project planning is no different to planning any other context, although the questions to be answered are usually less black and white, which simply means that the planning process needs to be rigorous and scientific if it is to be any good.

Marketers have a lot to learn from the manufacturing end of the lean movement.

To Social media or not, that is the question.

To Social media or not, that is the question.

May 25, 2016 | Communication, Customers, Social Media

Many of the small and medium sized businesses I interact with still struggle with the notion that they should be investing in social media as a marketing strategy. Creating and sharing content of value to their customers, potential customers, and competitors runs against their grain .

In addition, the operational challenges are technically confronting to many, and the notion of having to write and produce the content necessary is normally a hill too far.

B2B, B2C,  it makes little difference.

The immediate reaction of my B2B clients is that this social media stuff is for consumers, not serious businesses. However, it is the reality that those in businesses who make the purchase decisions  are usually engaging, anonymously at first with potential suppliers during the early phases of the purchase cycle, and coming to the supplier only for the transaction. Not being in on the ‘conversation’ early is clearly a mistake.

vanity metricsIt is becoming pretty clear that social media well used is a remarkably potent marketing tool, but challenging for those with modest resources, as this stuff is time consuming, technically challenging to measure properly as distinct from just measuring what is becoming known as ‘vanity measures’ just thinking they are measuring something useful.

 

 

There are a small number of very sensible strategies you can use.

Use it as a tool.

Social media is a marketing tool,  and like any tool, the effectiveness is best measured by the outcomes rather than the use, so set out to measure the effectiveness by identifying the cause and effect links between the SM and your corporate objectives.

Understand the tool.

When you have a nail to be driven, a screwdriver is of little use. Same with social media, they are tools that can be used very effectively in the right circumstances, but are useless in the wrong place. Understanding how the tool works, and where it’s characteristics are best deployed is a fundamental part of the game.

Identify your key customers, and what they want out of it.

You simply have to  be able to put yourself in the customers shoes, understand the value you can deliver from their perspective, and be prepared to be patient. My favourite  metaphor for social media is to humanise it in a way everyone understands. You walk into a bar, and spot someone who just overwhelms you. If you just walk up and ask them to marry you, your chances are pretty slim. By contrast, introduce yourself, find shared interests, spend some time together, and you never know where it can lead. Social media is no different. To have a chance of the desired outcome, you need to do the spadework up front.

Measure, test & improve.

Be creative but deeply interrogative about the measures. (is interrogative even a word?) continuously test options, so you can continuously improve. Social media and digital generally have absolutely changed the practise of marketing. It has made it measurable and accountable, but there are limits.  ‘Vanity measures’ such as number of friends, and likes  are very poor measures. They are superficial and misleading offering no clue as to which activity is likely to generate a commercial outcome, they just look good on a piece of paper to a boss who does not understand. Understanding the difference between cause and effect and correlation is critical, observing correlation is terrific, but do not make the mistake of thinking it is always cause and effect and therefore measurable. A metaphor used by Gary Vaynerchuk is particularly potent here. He observes that everyone understand the value of good parenting, over time it has great outcomes for both, but trying to measure it in a month  by month basis is stupid, it is a cumulative effect of many small things over a long period. There are some aspects of measuring digitally the return on SM that can really stuff us up.

 

Success with digital marketing, including the leveraging of the potential of social media is not easy, despite all the nonsense and get rich quick promises to the contrary.

Hopefully now you are at least a part way to answering the question.

Anatomy  of a successful email

Anatomy  of a successful email

May 23, 2016 | Communication, Marketing

Email is still the most widely used marketing tool out there, and that is for a good reason.

It works.

Like most, I receive many emails, and having subscribed to all sorts of sites over the years, to see what works and what doesn’t, as well as to get my hands on their stuff.

Every email whose purpose is marketing has, or should have a pretty common structure.

Subject line.

The subject line makes or breaks the opening rate of your email. It does not matter how great the content of the email, if it does not get opened, it will not be seen. Spending time on the subject line will be a great investment.

Good subject lines have at least one of c couple of common characteristics. They grab attention by appealing to our deep instincts for survival, they create an interruption of some sort, appeals to our curiosity, or promises to deliver a relevant benefit.

Opening sentence.

Having conjured an open, the first sentence of the email must reinforce whatever grabbed the attention of the reader and motivated them to open it. It is like a sub headline of a sensational headline you click on a news site, it delivers a bit more information, and draws you into the body of the email

Email body

As implied, this is where the message is delivered, where you are drawn into the description of the problem that got you this far, and then given the solution.

The Pitch.

Every email should have a pitch, it is the reason the email was written, it is the delivery vehicle for the pitch. In effect, ‘I have outlined the problem, here is the solution”.

Call to Action.

The CTA answers the question “what do I do now”, it may be buy here, or sign up to this webinar, or just go to this  site, whatever it is, the email must be clear on what they how the reader to do now, as a result of reading.

The power of the CTA is considerably enhanced by the use of some sort of ultimatum. ‘There are only 7 left in stock’ or ‘this price lasts only until Saturday’. Just directing someone to ‘click here for more information’ these days is pretty lame, there is insufficient motivation of FOMO (fear of missing out) as it implies they can come back at any time, and they rarely do.

Are supermarket customers a means to an end, or the end?

Are supermarket customers a means to an end, or the end?

May 18, 2016 | Customers, Marketing, retail

Woolworths has delivered in spades to shareholders in the last 20 years, but the rot had set in a decade ago.  The seeds of the rot were assisted in my view by a lack of credible competition, and management losing touch with the subtle changes happening in consumer attitudes and behaviour that added together began making a noticeable performance difference 5 or 6 of years ago.

Can it be reversed, we will know in another 3-5 years.

New CEO Brad Banducci appears to be making sweeping changes at Woolies, ditching his fancy CEO office for a workstation sends a string messages, stronger yet is the message to his troops that it is not just desired that they get into the stores, it is mandatory.

Getting the executive decision makers close to the retail action……..what a novel idea!

Former Executive chairman Paul Simons who pulled Woolies out of the gutter in the late 80’s after returning from a gig as MD of trail-blazer discounter Franklins, was famous for turning  up unannounced in stores, checking the minor details of the way the store was operating and presented to consumers, talking to floor staff, and espousing frugality as a great virtue. He must have been dismayed at the way Woolies followed Coles into an extravagant head office, seeing it as a sign of executives isolating themselves from the interaction with  customers in stores, where retail success is won or lost.

In the 80’s the Morrisons chain, then  concentrated in the North of England before they expanded south, was a leader in produce merchandise. Their stores were the best I had seen to that point anywhere in the world. In a store one  day near Leeds during a visit to the UK, complementing the manager on the display during a conversation where I was sucking his brains, he pointed to an elderly gent in a brown cargdigan carefully stacking apples on a shelf, ‘that is the reason’ he said, “Mr Morrison turns up in a different store every day, so everyone is on their best game‘. I introduced myself, complementing him on his stores, I recall he said ‘did  not matter what happened elsewhere, it was the little things in the stores that made the difference’.

I never forgot that conversation, it reminded me at the time of the words of Paul Simons, and of Reg Clairs the real architect of “Fresh Food people” who I came to know very well after he retired from Woolworths.

It seems Brad Banducci heard it also.

You would think Woolies would have learnt from their experiences, plenty of opportunity to so.

They took over Dick Smith, and stuffed it up by ‘corporatising’ and in the process removing the things that made it successful. They watched the challenges and mistakes of BBC hardware in the early days of big box hardware, as Bunnings set the pace, then a decade later deciding to take on Bunnings with an inferior customer offer from a position of significant financial, branding and logistical weakness. Meanwhile, they had made a great start with Thomas Dux modelling Harris Farm, but again throwing out the things that delivered the early success in favour of more of the same from Woolies head office, arriving at the current place where Dux is being closed down.

Mass market retailing is a schizophrenic occupation.

On one hand, it is the advantages of scale that that deliver profitability, but at the retail selling face it remains a highly personal business. Get the balance wrong in either direction, and the financial results will follow. Allowing the financials to drive decision making  inevitably results on the focus being taken off the customers, and they will react accordingly.

7 thoughts on FMCG brand building by small suppliers

7 thoughts on FMCG brand building by small suppliers

May 13, 2016 | Branding, Marketing, retail

Competing in FMCG against the duopoly, rapidly becoming the ‘Triopoly’ as Aldi makes share inroads is not easy, never was. However, the optimist in me sees opportunities that few are leveraging, so set in ‘process concrete’ is the status quo.

The driver of the great change can be summed up in one word:

Digital.

It is the enabler of all the changes that are occurring before our eyes if we choose to see them, and the change has just started. Following is a list of the things I see evolving

Two way conversations with consumers.

Brands can now have a direct and two way dialogue with consumers. Digital technology is the enabler of a personalised dialogue across a variety of platforms and subjects. This new found ability has the promise of breaking the iron grip the retailers have over packaged goods sales. The flip side is that there are so many people and brands competing for the limited attention of consumers that it is increasingly hard to break through, and we marketers are kidding ourselves if we believe that consumers are as engaged, indeed, passionate about our brands as we are. The reality is FMCG brands are more a comfortable habit that removes another decision from our lives than something that consumers are waiting to hear from. Pewdiepie has well over 43.3 million Youtube subscribers, the largest number, and few over 35 have heard of them, a couple of blokes who make cheap satirical videos of gaming. Coca Cola, one of the leviathan of branded packaged goods, spends hundreds of $millions around the world on  digital content creation and distribution, has been one of the biggest brand advertisers for the last 50 years, and currently has (as of today April 15 2016) has 759,411 subscribers. If Coke cannot do it, why should you think you can? Are you the new Pewdiepie?

Engagement and awareness is earned.

In the ‘old days’ awareness was paid for by media advertising, the bloke with the fattest wallet won. Those days are well and truly over. As noted, Coke spends a fortune, but the level of engagement is not in the ballpark of someone who earns it by being relevant and interesting to a niche market, albeit now  being a niche that is more like a crevasse.

Availability of behavioural data.

Scan data that all grocery retailers now collect offers a huge depth and variety of data related to purchasing behaviour. Time of day, makeup of the basket, price sensitivity and elasticity,  competitive impacts, and much more. When combined with the loyalty card data giving demographic and individual behavioural data, this is a deep and rich marketing resource. Increasingly this data will be combined with so called ‘big data’ scraped’ from social platforms, and real time geo location data, we will be deluged with offers exquisitely tailored to us.

Consumer feedback feeds NPD & C.

Market research has always been a vital component of product development and commercialisation, irrespective if the development is an evolution of a pack design or a category creating innovation. The research was flimsy at best, and the investments needed to bring new products to market where the failure rate has always been closer to 99% than 90%, significant. That also has changed. We are now able to test new products in newly available digital channels and collect data almost in real time, using it to inform ongoing development.

Point of sale.

Point of sale has always been important. I am old enough to remember excitement around a sales meeting induced by a fancy new shelf wobbler! The opportunities at POS for things as diverse as MVS code driven interaction, interactive video, as well as the more usual promotional stunts are considerable.

Be a publisher.

The supermarket business  model is under considerable stress,  and the number of suppliers has become way smaller, and they seem to be starting to realise you cannot buy a brand, you have to earn it. In the old days, if you  had enough money, you could almost buy a brand, as there were just a few TV & radio stations, and a few newspapers and magazines, all owned by a few people. Nobody else had the means to communicate beyond one to one.

Then along came the big bad internet and blew it all away. Now anyone can publish, and if they are good enough, reach and interact with their consumers.

Focus on your strategy, not theirs.

If your strategy centres on building a brand, do not waste your time and resources working with a retailer that does not have proprietary branding as part of their strategy. A former client took on a contract to pack for Aldi. The margin was very slim, but the volumes significant , so the contract appeared to be a good way of covering overheads to enable brand building activity elsewhere. As it evolved, the management and operational demands of meeting the Aldi orders overwhelmed the operational capacity of my client, consuming all their resources, and preventing any of the proprietary development it was supposed to enable. This comment applies equally to the two gorillas as it does to Aldi. Allowing your strategic implementation to be driven by the volume power of a single or even small number of customers will have a sticky end.

The supermarkets have huge amounts of capital invested in their existing business model, physical assets, efficient supply chains, and high volumes delivering dollar margins. It has made them  really successful, so the tendency is naturally to do more of the same, just try and do it a bit better. Even Coles in its worst days before the Westfarmers purchase was doing OK by world retailing standards, and Woollies was killing it.

 

The world had changed, the retailer model has not changed as much.

Now supermarkets are open 7 days, often 24 hours, and with a bit of organisation  shopping is slowly evolving back into a partially social event, replacing the mass convenience. Just look at the number of farmers markets now open! Mass market is no longer the panacea of the masses, they want more. Value is  no longer measured purely by price and availability, the brand is about to make a comeback.

Never has the opportunity been greater for agile and committed medium sized businesses to engage with the group of potential customers who care about what they do, and build a brand that delivers longevity.

The key to successful communication

The key to successful communication

May 9, 2016 | Communication, Innovation, Strategy

Actually it is three keys, which taken together make for a potent mix.

It should be easy, but it seems to be hard, judging by all the rubbish I see around.

There is just so much messaging out there that fails to deliver any useful message, despite the money, time and supposed talent thrown at it. Somehow we have lost sight of the simple rules to apply. If you want a message to be seen and acted on, you had better make it clear, and articulate what you now want the receiver to do with the information.

So, three simple rules:

  1. Make it relevant
  2. Make it simple
  3. Make it repeatable.

As I watch the beginnings of what I expect to be a truly appalling tsunami of complicated, irrelevant and forgettable  babblings from politicians on both sides over the next weeks, I cannot help wondering what would happen if one side or the other told the truth. What if they, acknowledged the shortcomings and uncertainties of their economic and social models, and of the resulting ‘policy settings’, acknowledged  that you cannot please all of the people all of the time, and recognised the value of at least some part of the other sides positions.

Little hope of any of that.

Martin Luther King’s great ‘I have a dream’ speech delivered on August 28 1963 on the steps of the Lincoln memorial in Washington would probably not be as well remembered if it was the “I have a 10 point plan” speech.

A 10 point plan to end the racial discrimination prevalent at the time would not have resonated, the way “I have a dream” does. That message has not been heard by the opposition leader who I heard this morning spruiking his ‘Plan to make Australia great” followed later in the day by a long menu of things he will be “fighting for in this election”.

Yawn. Unfortunately the Prime Minister is little better, being unprepared to answer simple questions, even with a caveat that forecasting 10 years is challenging when nobody really knows what will happen tomorrow.

What if one of the protagonists in our political system actually articulated the dreams, the things we can all relate to, then backed it up with the truth. The truth, with all its  power to engage, build a following, and be held accountable.  In the 1990 film  “Crazy People”  Dudley Moore as an over-stressed advertising man proposed that greatest of evils, truth in advertising, and became wildly popular while kicking the accepted wisdom of obscuration, selective delivery of any facts, wild and unrealistic claims, and outright bullshit, squarely in the teeth.

Perhaps a bit of that medicine should be dolled out this morning as this 44th Parliament is wound up.