Mar 4, 2014 | Customers, Innovation, Marketing, Strategy
Innovation is a process, mostly it is managed for better or worse with some sort of stage-gate process.
Sensitive project management of innovation is vital, the context of the project, the culture, management engagement, business model, the source of resources used, funding, and all the rest are critically important, and blend into a system.
However, one vital consideration often under-considered, or missed, in development projects is the evolution of the Customer Value Proposition.
Concentrating on the product, its specifications, the technology, operational considerations, design and engineering, and all the rest are vital, but ultimately, it is the customer who puts their hand in their pocket, and allocates, or otherwise, their scarce resources to your products. They will only make that choice in your favour when it is in their interests to do so.
Why is it then that the foundations of the value proposition, the identification, characteristics, interaction, and measurement of the drivers that will deliver customer value and therefore sales are often ignored, or glossed over? In my experience, it is usually because the developers fall in love with their products and designs, not really considering them from the customer perspective.
The value proposition usually evolves during the design and pilot process, but only if it is allowed to.
Sensibly, there is a second stage gate process, one that is parallel to the product development, the value development process which critically translates the product features into customer value as they evolve.
A test of the success of the value development process is the depth of the debate about price. A successful VDP will preclude almost any debate, and certainly the most often used determinants of prices, being cost and competitor activity, will be relegated to the bottom of the pile of considerations.
Feb 25, 2014 | Branding, Change, Collaboration, Demand chains, Marketing, retail
A pilot program I have been recently involved with, setting out to assist the evolution of a” Sydney Harvest” brand of local produce has not delivered the results hoped for.
After years of agitation by produce growers in the Sydney basin, beset as they are by aggressive competition from the chain stores, lack of scale and high operating costs as a result of being in semi urban areas, governed by urban concerns, the pilot was created. It was a collaboration between a small number of Sydney basin growers, and specialist retailers aimed at delivering the freshest and best possible produce to those discerning and demanding customers who choose to shop at the specialist produce outlets.
The value proposition was simple : “You know it is fresh, because it come from down the road, you know the retailer, and here is the grower, guaranteeing product provenance and farming practice sustainability”.
In considering the reporting of the exercise, part of the shortcoming of the pilot was that there was little commitment beyond the verbal from the participants, even though the verbal commitment was strong. This is very common in the early stages of collaborative exercises, everyone says “yes” and waits for others to do the lifting. The emergence or otherwise of a “champion” someone who takes on the challenges at a visceral level, can be the main bellwether of success.
Watching a presentation by Seth Godin last night, he articulated just the situation we had.
There was no “connection” between the participants beyond the superficial, the human connection was not there.
Godin calls Connection “The asset of the future” and in a connected world, it would be hard to argue against this proposition. He further identified 4 pre-conditions of connection occurring.
- Co-Ordination. There was co-ordination in this pilot, but it was managed from the outside, by me, there was little skin in the co-ordination part of the game by participants.
- Trust. Trust evolves over time as a result of behaviour, it is never given, it has to be earned. In this case, we underestimated hugely the role to be played by trust, and the preconditions necessary for its evolution.
- Permission. Seth is talking about permission being given by the subject of a marketing effort, so this pilot is a different set of circumstances, nevertheless, whilst” permission” was given in the sense that all signed up to the pilot knowing exactly what was going to happen, and the role they were expected to play, when it went away, nobody missed it. The “permission” whilst given was nothing more than a superficial “OK”
- Exchange of ideas. In this case, whilst there was superficial buy in, the subsequent behaviour did not include interaction amongst the participants. They were too busy and pre-occupied with the normal business to put the time aside to exchange ideas, and get to know on a human level the other participants ,exchange ideas and experiences, and learn from each other.
This stuff is really, really, hard, and the only way we learn is by jumping in and having a go.
Feb 24, 2014 | Branding, Governance, Marketing, Strategy
There is a lot to learn from the SPC imbroglio, the feds must be delighted to have got away with their IR/”no more handouts” agenda intact as the Victorian government bailed out not only SPC, but their federal colleagues, albeit not a good look for the state version and federal version of the same party to take a different position on a matter that both are saying is fundamental to their philosophy.
But what can we marketers take away?
- Every conversation has many sides. Jan Carlzons great “Moments of Truth” idea from the 80’s hold true in the C21, but the moments have been multiplied by the proliferation of connected devices. Not only do we need to have to have those we used to call “front line” troops on the hymn-sheet, but we have to have everyone on the sheet, as the conversation is now much wider, and almost totally uncontrollable, unlike the past. Best you can do now is have a credible seat at the table. I wonder would Sharman Stone have had the same impact 25 years ago as she has had over the last few weeks? I suspect not. Her message would have been the same, but her ability to access consumers, interest and advocate groups, and the public would not. She may have got a sound bite on the evening news, perhaps a radio interview, and the local paper would have run it indefinitely, but would the rest of us have been aware of the Gaffs the PM made about the workers entitlement, the connections made with the car industry, the Cadburys decision and Tassal decisions? No.
- We do care about local industry. SPC sales soared after the publicity, Australians do care that local industry is being decimated, but not enough to buy more cars. Is the cause of agriculture is closer to our national psyche than cars? Perhaps the cost of a car Vs the cost of a can of peaches had something to do with it. It will be interesting to observe how a renowned marketer like Coke extends the effect. I doubt they will be able to, as they will just revert to the tried and true, the plan, and what has gone before, when the context has changed completely. Having the cultural agility to completely change the message is usually beyond hierarchical organisations. I would radically alter and expand SPC consumer communications to keep the mood alive, and the retailers on side.
- Marketing needs to be agile, and connected. Following the above point, the production of annual marketing plans that feed into strategic plans, with budgets, accountabilities, media plans, and all the rest remains a vital task, with the huge caveat that things move so fast these days, that marketers need to be prepared to respond instantly to stuff that emerges. That single twitter post highlighting a product failure cannot be left alone, you may choose to do nothing, but ignoring it is not an option, you risk the classic “United breaks guitars” response.
- Marketing is the driver of everything. Marketing used to be just another functional responsibility, usually seen as a poor cousin to operations and finance. No more. Those enterprises that continue to see Marketing as the producer of the ads and promotional material, diviner of new products, and artistes of the long lunch rather than an idea that is the responsibility of everyone to be a part of, the driver of perceptions, and the voice of the market inside the enterprise will not be long in the business.
How does your place rate?
Feb 21, 2014 | Branding, Communication, Marketing
B2B and B2C is the way marketing has been described for the last 20 years.
Nonsense.
Marketing when successful has always been P2P, person to person.
Successful marketing is about engaging with people and people engage around stories, not data and specifications, and jargon, stories.
Stories about your history, products, and how they relate to the world, happy stories, informative stories, stories that are metaphors, that enlighten, that pique curiosity, that deliver lessons of things that should not be done again, and sometimes sad stories.
Successful marketing is always about the stories, and stories are told by people, even when there is a vehicle for delivering the story in the middle.
If you remember this basic building block of our humanity, marketing becomes easier.
Feb 18, 2014 | Branding, Communication, Customers, Marketing, Sales
Jan Carlzons great 1987 book Moments of Truth reflected on the point at which a “front line” employee interacted with a customer, and how important that interaction was. The digitisation of our lives has profoundly changed the context in which interactions occur, the moment is no longer the point at which some personal interaction occurs, it is now far more likely that it will be a digital one, and in addition, “front line” now includes everybody.
The idea of Moments of truth needs to be expanded, and categorised so they can be managed independently if it is to be of much more than a cliche.
- Opening moments of truth. That may occur anywhere!! Anyhow on a range of platforms.
- Referral moment of truth, When someone refers someone else to a web site, blog post, social media platform etc.
- Conversion moments of truth. When a “lead” evolves into a “prospect”. Then there are more as the prospect moves through the system to the transaction
- Depart moments of truth. The point at which prospects drop out of the funnel, what do you do with them then? Do not lose them!!!! Figure out how to re-engage.
- Recidivism moments of truth. The point at which a departed prospect returns to the funnel. Sales funnels as a metaphor work, but the neat, orderly and logical progression seen on all the whiteboards and consultant presentations are far from the truth. The process of moving a contact through a set of steps towards a transaction, then hopefully, many subsequent transactions is messy, random, often illogical and emotional. Therefore, a key marketing task is to raise your recidivism rate
- Apostle moments of truth. When a user becomes an advocate, an apostle, for you.
- Complaint moments of truth. When customers complain, that is potentially full of information, and opportunity to serve them better, discover where and how you can improve, and convert them to advocates. Alternatively, give them to your competition to harass, as the customer is not always right, but the right customer is always right.
- Loyalist moments of truth. When loyal customers return, they do so because they have been satisfied in the past, convenience, the offer is compelling, and sometimes just because it is easy. A returning customer costs way less than it costs to find a new one, the loyalists are the financial backbone of every enterprise, thank them, and treat them like you are grateful for their custom, and pleased to see them again.
I tried some word games to make the list more memorable, hopefully you can do better than me, I’m just happy that the idea that the context of MOT’s reflects the way you should treat it.
Feb 17, 2014 | Communication, Customers, Marketing, Small business
Digital and email marketing is just the C21st version of direct snail-mail. Why is it then that we despair when our email open rates are only 2%, when that is all most direct mail campaigns ever got?
I think we are looking at things from the wrong end of the telescope.
Direct mail, and email campaigns can be hugely successful, we have all seen and heard of those successes, and when you look at them, the reason for the success is nothing tricky, but plain common sense.
The offer was personalised and compelling
The audience was engaged and willing
The communication channel delivered the offer with a minimum of fuss
The offer was easy to access
The creative in the communication was, well, creative and appropriate to the intended audience.
Those unsuccessful campaigns we see seem to concentrate on the above list in reverse order, worrying about the layouts smart photos, intriguing puns, and all the rest of the creative artifices, relegating the value of the offer to a specific audience, and the way that offer is communicated to the bottom of the pile.
Want success with direct mail/e-mail, get the customer to the front of the queue, worry about the rest later.
