Jun 30, 2014 | Branding, Customers, Marketing, Small business
www.strategyaudit.com.au
One of the most common questions I get is how you get away from competing on price.
A couple of things are common in the situation that leads to the question:
- Someone else has control of the value chain. This is often the case with an FMCG product. In Australia two chains have 75% market share, the supplier, even to the MNC behemoths can only watch as they set the retail price, shelf position and category definition.
- The questioner has not spent the time and brainpower to consider what really matters to the customer. They have therefore failed, or chosen not to to make the hard choices that are central to building a brand.
Back to the Australian FMCG situation, as it relates to produce. Coles and Woolworths do not stock any proprietary brands at all in produce, just store branded product. The producer therefore has no control at all about what happens in store, but they do have a choice: to build a brand in alternative channels.
In some produce categories, hard vegetables, for example, the chains have close to the FMCG share of 75%. Carrots and onions seem to be pretty commoditised, but other categories like sensitive summer fruit, mangoes, stone fruit, and berries like strawberries and blueberries, have a far larger share in the alternative channels simply because the state of the product really matters to consumers. The 17 year old casual in Coles after school does not care much about the sensitive nature of the strawberries, but the greengrocer often does, the product matters, so they make decisions based on what matters.
Not every consumer will care enough about their strawberries, but perhaps enough will to make the development of a brand worth the effort, time, risk and cost.
When you accept that it is only price that matters to consumers, you have made a key strategic choice. That choice is that you will not care enough to find out what else may really matter to consumers sufficiently that they will make their purchase choice on a basis other than price.
Things that matter are usually beyond the physical dimensions and capabilities of a product, they are the stories that make the difference.
Why is one toaster worth more than another, they both toast bread, but perhaps one is just a tool, the other a piece of kitchen art based on the stories of the designer.
In simple terms, Focus on what really matters
Jun 24, 2014 | Change, Communication, Management, Marketing, Small business, Social Media
I asked that question a week or so ago of a group of SME’s, most of whom did not have any digital presence.
None said their businesses would survive without a phone. Why is it then that they think they can survive without a website and social media presence? These tools are as integral to success as the phone, but like the phone, need to be used well, as they are just a tool.
Last week (July 19, 2014) the ABS released a report “Summary of IT use and innovation in Australian Business”
web presence by size
Web presence by industry
Businesses with 4 or less employees 35% penetration, 19 or less employees, 60% penetration, overall about 50% of enterprises have no web presence.
Lowest web penetration is, obviously in industries with many SME’s, agriculture, transport, and distribution.
It is a report that highlights the paucity of digital capability amongst SME’s, which are the backbone of the Australian economy, and back up previous reports by Sensis and others pointing out the shortfall.
The building of digital capability by SME’s is not just necessary to compete, it is vital for survival.
Social media use
The pattern is repeated in social media, but is more pronounced, most SME’s do not even use the simplest forms to market their business.
I remain “gobbsmacked” that so many still seem not to have got the message,
That is where your customers are!!!
But what opportunities there are for improvement and leverage, it just takes a bit of energy and time.
Jun 20, 2014 | Communication, Social Media
not an algorithm
There are platforms that will automate social for you, do everything, except the one thing that really counts, make a person to person connection.
“Social Media” badly used is a terrible misnomer, it is often anti-social media, an effort to remove people from the process.
Maybe we will develop an app to do that, but I suspect not, we are social animals, it is in our DNA, and you cannot substitute that for some digital metaphor.
Our bullshit detectors are enormously sensitive.
Last week, I got another email, personally addressed , so it passed the first test, but the font of my name was slightly different, Boom! Bullshit detector cuts in.
I guess it was better than the Dear Mr. Allen Roberts, or even Dear Mr Roberts Allen, but really it was only just more obviously a machine that had been poorly set up, a SPAM, or the result of my email address being scraped from somewhere I would rather have had it remain private.
Authenticity matters, and it is hard to scale. The tools will get us part of the way, like all tools, but it is how we use them that really counts. Using tools to get you to the point of eyeballing is sensible, a logical leveraging of technology, but few people are happy to eyeball a device and call it “Sally”, and really mean it.
Technology can get you so far, but usually is still requires people to close the social loop
Jun 16, 2014 | Branding, Marketing, Sales
A journey evolves
One of the most memorable, and biggest mistakes I made as a young product manager was to redesign a pack.
The product was an old fashioned, relatively low value product on supermarket shelves, it had a small niche to itself, and the sales ticked over, pretty much unaffected by promotional activity of any sort.
The pack was truly horrible.
Over the years , as suppliers of the display box had come and gone, the original photo had morphed into a messy amalgam of unrecognisable shape and conflicting colour to the point that it was not easy to recognise what the product inside might be, and if you did, it seemed unlikely to me that any reasonable consumer would consider buying it.
So, I did the obvious thing, at least it seemed obvious.
I contracted a designer, who did a great job of redesigning the pack, new photos, layout, recipe ideas, the whole five yards, so it looked clean, fresh, appetising, and with a bit of a flourish in womens magazines (this was the early 80’s) we relaunched the product.
The unexpected, unthinkable, happened.
Sales stopped, literally, dead in the water, nothing, nada, zilch.
Panic stations were manned, as while the volumes and profile of the product were low, the gross margins were outrageously high, and I had just shot the goose.
Not having any budget for research, I did the next best thing, which turned out to be the best thing, another lesson I have kept and reused, and reused.
I lurked around in supermarket isles for a while trying to talk to consumers of the product, and begged the field staff to do the same, to try to understand the reason for the abject failure of the new design.
It was rapidly clear that while consumers had no love for the old pack, they also thought it was rubbish, but they recognised it, bought it by habit, and when the design was so radically changed, they simply did not recognise the new pack as the same product, assumed their regular purchase, that had done the job for them well despite the packaging, was out of stock and moved on.
We changed the pack back, with a couple of subtle improvements and sales recovered immediately.
The point here is that I am sometimes faced with a client wanting to completely redesign their websites, they get sick of the old one, it is dated, unresponsive, not mobile friendly, and so on, and it seems like a good idea, and it almost always is.
However, I relate my pack story, and seek to persuade that many incremental steps that create an evolution of design that takes people with you is better than a big jump that risks losing some of the rusted on followers, those to whom you probably owe the bulk of your profits.
Now, you do not have to lurk in supermarket isles to assess the impact, you can conduct a series of A/B tests, to maximise the impact of the changes as the evolution journey winds along, a journey that should not end, just seek to deliver a superior experience.
BTW, the old product is still on the shelf, and having just googled it, the design seems fairly close to my memory of the brand, spanking new design of 30 years ago that so nearly truncated my marketing career.
Jun 13, 2014 | Marketing
the only cat photo on this bllog
Walk under any ladders yet?
It seemed appropriate to have a think about some of the silly superstitions that infest the world of marketing, and proffer a view about the reality.
- “The internet will never be a good marketing tool”. Hello, the jury came back a decade ago.
- “Twitter is a waste of time.” Wrong. Twitter is now a powerful tool for search, connection, and marketing. The # is changing the face of marketing in new ways every day. Some time ago presenting the Andrew Olle lecture, the editor of the Guardian offered a whole bundle of uses for Twitter, which I massaged into this post, 15 uses of Twitter.
- “Google is just another search engine“. Google is way, way more than just a search engine, it is a door into a host of tools, platforms and services.
- “TV, radio and magazine advertising is dead, supplanted by the web.” Rubbish. Crap advertising never worked anyway, now we just have a viable alternative. Good old fashioned advertising still can work, but is a far more demanding mistress than ever before.
- “Social media is free“. Well, it is if you do not count the time and effort it consumes to develop, organise and post content, then follow up to make the effort worthwhile. It is a two way medium, not one way as media used to be.
- “Banner ads on the web work“. No, it seems not, despite the touting that goes on. Economic logic prevails, when supply is infinite, as virtually it is with space on the web the price should be very low, as will the value. Detailed and focussed targeting can deliver some value, and in the right circumstances can be a useful part of a media mix, but just using banner ads……..why?
- “You need help to be on line if you are an SME“. Not any more, there are free tools to build very serviceable websites, so you are just up for the domain and hosting, and anyone with a bit of curiosity , time and inclination can do it. Weebly, Squarespace are two of the best, my preference is Weebly because of the plug ins, and there are people around who can help you for remarkably low cost. Getting the summer intern to do it for you is a mistake however, do it for yourself, and learn as you go, or use Imagehaven or someone who can teach you as you go.
- “As an SME owner you need to do everything yourself” . Only if you choose to. As with the point above, there are great services around, world class expertise available to you often at modest cost offering outstanding value so long a you are very clear about what you need and actively project manage the services. Mostly the outsourced experts are not mind readers, and assuming they are is a mistake. From design to IT selection and implementation, copywriting, marketing and financial management, engineering, and operational management, the expertise is a mouse-click away.
- “Collaboration is too hard for an SME“. Rubbish again. The collaborative economy is booming, as Jerry Owyang keeps on documenting, and is even easier for SME;s to leverage. One of my mates runs a personal training business, and has developed relationships with a nutritionist, yoga instructor and womens apparel retailer, all of which support and reinforce each other to their mutual benefit, and they agree on the joint marketing programs over coffee.
What further examples do you have?
Jun 9, 2014 | Branding, Marketing, Sales
Strategyaudit.com.au
We all know the world of sales has changed.
Consumers now have virtually all the information they need to make a purchase choice without any assistance from a “sales assistant”.
Before a significant purchase, consumers now review all sorts of web based resources that can deliver exactly the information important to them in making the choice.
It is exactly the same in B2B, sales people really only come in most of the time when the purchaser is almost ready to place an order and has all the information they need, except one bit:
The performance of the vendor and their product, by reputation, by past actions, and by undertakings about future performance
In the old days, choices were made on relative value, The purchaser had limited information, and really only chose between a few options.
Now they have enormous choice, and access to all the information that could possibly be relevant should they choose to look for it, so they are in a position to make a choice on the absolute value of the alternatives to them.
Changes the dynamics of brand building just a bit, and the old dilemma of functional priority is well and truly determined in favor of marketing, who now runs the sales show.
No longer is it about weight of distribution, advertising, number of sales people on the road, and relative value, it is about the absolute value delivered.
Now to be successful you need to be thinking about the balance between your sales and marketing investments, and making the most of marketing automation. Software and the cloud have changed the game, weather you are just using excel, the free Mailchimp and others, or going the whole mile with Marketo, Hubspot, or other enterprise solution marketing automation packages.
PS. September 2014. One of the really well known marketing writers David Meerman Scott, has written a new book called “The new rules of selling” and released a Slideshare of the same name on this topic. The book is worth reading, the slideshare is long, and summarises the ideas with great generosity.
