Why Oh Why?

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I’m doing some work on leadership at the moment – as a marketer I work on the principle that you don’t need to be good at something to be able to express a view – and I came across a TED talk from Simon Sinek

It was posted in 2009 so I would imagine many of you (maybe even both of you) have already seen the video but I am quite taken with it. It offers an important message not just to leaders but to brands – people buy why you do what you do, not just what you do or how you do it. Or put another way, it is your beliefs and motivations that inspire a following.

Making a profit is a result but it cannot be your prime motivation if you are looking for loyalty and commitment. He has a very simple model based on what, how, why. People or companies know what they do and most know how they do it but only leaders are clear about why and unlike the rest of us that is where they start. “This is what I believe – what I do and how I do it are the proof”.

He explains that this is based not just on insight but science, how the big bit of the brain works – the Behavioral Economists will understand all this. But even without the science it just makes sense. I have also been doing a lot of work on the Craft Movement in drinks. People know what the big drinks brands do and often how they do it, but they don’t know why (other than making a profit). With Craft beers you know exactly why and that explains their growing following.

And on the subject of craft – you’re going to love this link – I spotted in the press the speculation about Kraft being bought up by Brazilian Private Equity firm 3G. It was Kraft who bought Cadbury and then span it off into a separate company, Mondelez, together with Toblerone and Oreo cookies. 3G together with Warren Buffet bought Heinz and are rumoured to be sniffing around Campbell’s.

I would imagine all these well known brands can articulate what they do and how they do it, whoever owns them. But it must be awfully hard to offer any reason why they do it other than to make money. In fact I would imagine that if you went to the board of any of these companies and suggested that in order to inspire more followers (sell more stuff) it would be a good idea to identify the motivation, the beliefs, the ideals behind the brands and to put these ahead of this year’s profit objective you might find yourself out of a job.

The main guy behind 3G is Jorge Paulo Lemann. He is the same guy behind the creation of ABI, the people who brew Stella Artois and Budweiser. He is clearly a very smart businessman and as a result is wealthier than many medium size nations. I can’t imagine he would care what I think but Jorge, if you get to hear about this, I’d pose you one question.

You are getting your butt kicked by Craft beers (15% of the USA market by volume, 25% by value and still growing). What are you going to do about it?

What ABI, and indeed SABMiller, are actually doing is buying up the more successful Craft Brewers. I wonder whether this strategy will work? You buy the ‘how and what’ but lose the ‘why’. Perhaps I’m wrong – Ben and Jerry’s and then Innocent both sold out and the brands still do well I’m told.

But can you be a leader of a big business that in large measure is publically owned and put your faith in idealism – ideals and beliefs that trump pure profit? Simon Sinek uses Apple as one of his examples in the video but back in 2009 Steve Jobs was still in charge. Now there was an inspiring leader who knew why he did it, not just how and what.

Can you be a politician and win power with your ideology in tact? Well some might say Thatcher did. You may not have agreed with her – I didn’t at the time – but she was clearly motivated by beliefs and succeeded in inspiring first the grey suits of the Tory party and then the electorate. So did Churchill for that matter.

But can you be a brand manager working in a big multinational and put the “why” at the heart of your marketing? Depends what kind of leader you are.

And that is what I have always believed – to be a great brand manager you have to be a great leader, so it’s worth paying attention to this leadership stuff.

Pure Delight

I was thumbing through a French car magazine last week and was interested by a regular feature they do on levels of customer satisfaction for various car models. The methodology was clearly explained – a decent sample of owners were asked to evaluate their cars based on 10 questions covering most aspects of quality, reliability and economy. The results are aggregated and an overall percentage given for some 40-50 cars.

Two things struck me. Firstly, all the cars scored more than 70%. Yes, modern cars are all pretty good these days, not like the 70’s when some cars – sadly the British and Italian ones for the most part – were so poor they would have got scores similar to the approval rating for an outgoing Italian or British Prime Minister. But the second thing that stood out from the tables was that no car got more than 78%. Not much of a spread. That is largely due to the methodology – aggregating lots of views over lots of criteria will give flat results. So would you change your choice of car based on this survey because it scored 3-5% less than an alternative model but both scored between  70% and 80%? I doubt it.

But what if they had asked a different question, just one question? How many of the owners are absolutely delighted, thrilled, over-the-moon about their car after a year or more of driving it?  If you saw that an alternative car was scoring over 5% and your preferred choice 1% or less I think it would give you cause to reconsider. You’d certainly want to find out more, maybe test drive it.

Customer delight is what we should all be chasing – for anything, not just cars. Forget “Pretty good, I’m overall fairly satisfied and would consider buying again”. We want “Bloody brilliant, I had no idea it would be this good, I’m definitely sticking with this and will tell all my friends”.

Now this is not a new thought. I recall reading an article in the HBR some years ago that gave the case study of a Car Hire company that had changed the way they looked at customer satisfaction. They focused single-mindedly on customer delight. They knew the figure would always be single digit but had proved that just small movements, literally decimal points, made a significant difference to their bottom line. (I have searched for this article but could not find it otherwise you’d have the link but no matter – you’ve got the gist).

Why is delight so important? Recall and repeat purchase are obviously two key benefits. I’m not sure you remember being satisfied or will make an effort to seek out the brand that satisfied you. You do remember being delighted. But the real value of delight is word of mouth. People talk about their delight and other people listen. It goes something like this.

“How was that new restaurant? Very nice you say? I must give it a try some time”.

As opposed to:-

“I’ve got to tell you about this new restaurant, we were blown away! Yes, I’ve got the number here. I’d book fast if I were you, before everyone catches on”.

Delight gives you ambassadors and they give you momentum, and momentum gives you more momentum. I’ve used the analogy before that avalanches start with the movement of one or two snowflakes. In marketing, those first few happy consumer snowflakes who get the momentum going should be highly prized. If they are delighted snowflakes they are positively kicking the avalanche down the mountain (apologies to the skiers, perhaps I need to come up with a better analogy).

So is this anything more than a nice reminder that customer delight – not a new concept – is important? Yes it is and here’s why. Social Media. The article in the HBR was written years ago (which is why I can’t find it) at a time when word of mouth meant just that  – the influence the delighted customer would have on the relatively few number of people they might talk to. We live in an age when word of keyboard can reach thousands. Analysis has shown only a very low % of Tweets relate to brands and most of those are internet or technology brands (e.g. Apple). Only 1 or 2% relate to Coke, Dove, BMW or those kinds of brands but of course we are talking 1 or 2% of millions and millions of Tweets every hour so the absolute numbers are very high.

What is likely to get you in to that 1 or 2% or to push the percentage higher? Customer Delight – if not with the actual product (there is only so much delight I can get from a mouthful of Coke) then at least with something the brand has done.

So go on then – go delight somebody, make them ecstatic. Better still, make this your key performance measure. The results might delight you.

How Brands Grow – A Higher Form Of Ignorance?

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I came across a quote by Theodore Dalrymple recently. It referred to the increasingly common – and understandable – use of the internet to obtain information on medical conditions.

“Information without perspective is just a higher form of ignorance”

Theodore Dalrymple is the nom de plume of Anthony Daniels, a retired doctor (and the most wonderful writer as any Spectator magazine loyal will know). I can see where he’s coming from. The doctors have years of experience and that gives them the perspective to make the best use of information, both old and new.

It made me think about the increasing amount of information available to marketers. This comes not just in the form of “big data” about the market and the target audience, their profile and their precise behavior in different contexts, but also in the form of new models and theories. The information coming from the latter that interests me most is the information derived from social sciences and an increasing, although admittedly still very limited, understanding of how the brain actually works. And like any rational person I become more interested if it is supported by empirical data.

The ones that interest me less are things like “How brands grow” by Byron Sharp that I have been hearing a lot about. I am not uninterested, just less interested. I understand that Mr. Sharp is quite defensive about his work and any doubters or critics, like my good friend David Taylor, are accused of being luddites, typical marketers who believe in logic with magic and not just ‘scientific evidence’. Well let me help Mr. Sharp brush off any comments I may have to make by declaring right up front that I have not yet read his book, only some of the critiques including those from David. I did however have the privilege of knowing Andrew Ehrenberg and hearing him explain first hand his findings on the relationship between category penetration and average weight of purchase for a large, statistically robust sample of FMCG brands. I am given to understand “How brands grow” is a continuation of Andrew Ehrenberg’s work.

I remember at the time thinking the findings were challenging and profound but, in Andrew’s own words, they really only explained why some brands are bigger. He explained to me that his findings were like Boyle’s Law (pressure of a given mass of gas moves in a constant relationship with volume). It is an immutable law of physics. So I asked Andrew what he thought might be the immutable laws in marketing that would, in effect, compress the volume and raise the pressure (if you follow the analogy). He laughed and said, “I am just a statistician, that is for you clever marketers to figure out!”

What was clear to me then, and is just as clear to me now, is that Ehrenberg’s work was not a theory of how brands grow but an observation about what happens when they do – useful but only up to a point. I suspect Mr. sharp’s book is more of the same – useful but only up to a point.

What concerns me is that in the hands of inexperienced marketers and business people it runs the risk of being a higher form of ignorance.

That said, let me defend the use of information about medical conditions by the general public – I have to for no other reason than the best practitioner of this (or worst offender) is my wife. She would argue, and I will not argue with her, that, at the very least, it enables you to have a better conversation with the doctors. But I support the idea that without perspective and experience it is well short of great insight, which is to say an insight that solves a problem or presents an opportunity – like how to grow your brand.

Let me illustrate what I mean with this old riddle. A man lives in a high-rise block of flats. Every morning he gets up to go to work and takes the lift to the ground floor. When he returns in the evening he takes the lift to the 7th floor and walks up the remaining flights of stairs to the 14th. Why does he do this?

Here are some of the most common explanations offered:-

  • He wants to keep fit
  • He knows someone who lives on the 7th floor and visits them before going back to his flat.
  • The lift is faulty

All are plausible theories (although each can be challenged – if he wants to get fit why doesn’t he walk all 14 floors every other day or indeed every day, if wants to get really fit?).

The answer is that he is a dwarf and he can’t reach the button for the 14th floor in the lift. That is something you would know immediately if you lived in the same building, would have figured out pretty quickly if you were a dwarf and perhaps eventually if you had any experience of dwarves. I would further argue – but have no statistical proof – that a curious, creative, lateral thinker is more likely to solve the riddle.

I will read Mr. Sharp’s book and I am sure I will find it interesting but I doubt it will give me a comprehensive, foolproof scientific model for how to grow brands. Hopefully, it will improve the conversation.

Would I Lie To You?

With one child still left in the nest with a chance to go to Oxford, an article in the Telegraph about Oxford interview questions caught my eye. David Leal at Brasenose uses this question for aspiring philosophy students – “Lie, deceive and mislead seem to mean a similar thing but not exactly. Help me sort them out from each other”. Great question. Even if you had a dictionary it wouldn’t help you. What Mr. Leal wants to see is how you tackle the question for which there is no real answer other than “You can’t, without a context”. As a failed Cambridge applicant (Economics) I am tempted to provide an answer that I might have given in the context of a university interview just to show the opportunity they missed. I applied to Selwyn, a college, I was told, was so poor no-one with half a brain could fail to get accepted. My humiliation upon receiving a firm rejection was thus all the worse, slightly eased by discovering that the friend I made in my first week at Bristol had also tried the same strategy and had also been refused by Selwyn. No names, no pack drill, but you know who you are Charlie K (still one of my best friends).

No, I shall attempt to answer the question in the context of marketing. I will seek to prove that only one of them is unacceptable in the promotion of a brand. In the Oxford question, had one said the answer lay in the context, one would have had to go on to show that who was doing the lying, deceiving, misleading, to whom and with what motivation might indicate nuances of meaning. In marketing we can answer that straight away. It is the brand, they might be lying, deceiving or misleading “consumers”  (people) for the purpose of making profits by gaining an unfair advantage over their competitors. I will argue that in which case, there is really only a difference in acceptability.

It’s OK to deceive your “consumer”, brands do it all the time. We spend millions of $ and engage the brightest and most creative minds to deceive people into believing that our brands are better and will improve their lives. It is not just part of what we do, it is what we do. We seek to persuade them that the smallest of performance difference will actually make any difference, that our brand will make you more of a man or woman, a more attractive and confident person, that it will earn you the respect of your peers and the attention of the opposite sex. Oh yes we do.

We mislead people into thinking that our brands are terribly popular among people who, according to our research, our target consumers will find credible and motivating. You don’t think so? So how many Irish people drink Baileys or Magners, how many Aussies drink Fosters? Did Michael Schumacher really help develop that premium petrol, does he deliberately drive out of his way to find the gas station that sells it to put it in his own car? Do all those starlets actually use that shampoo and derive their self-esteem from it? Do they ‘ecky thump. Are our shoes hand crafted in grottos by little elves, is our whisky lovingly scraped from the wings of angels by men in kilts? Or are they, respectively, knocked out in Chinese sweat shops and distilled as a chemical in something the size and appeal of a school science lab?

These days we twitter and post to create ‘a human face for the brand and to engage our consumers’. A slight deception as there rarely is one human guiding the brand, rather a large cumbersome team acting on behalf of shareholders. You are being misled if you believe we really want to engage with ‘you’ because we care about ‘you’. We only care if there are millions of “you” buying our brand. We engage because we have to not because we want to. The old didactic days of marketing were far easier.

Yes we both deceive and mislead people and revel in the focus group findings and Nielsen results that show we have succeeded.

We are magicians, we simply but cleverly misdirect. We use sleight of hand, theatricality, the set-up (is there any difference between planting someone in the audience or paying George Clooney to flog your coffee?).

But we don’t lie and if we do we get caught, which is probably why we don’t lie. You think this is harsh? I imagine if you had been born 100 years ago you would have been convinced Guinness was good for you and Marlboro cigarettes were part of a healthy outdoor lifestyle too. (I still believe both).

I did not get into the easiest college in Cambridge let alone the philosophy department of Oxford. I ended up a murketeer and in the context of murketing, “deceive” and “mislead” mean pretty much the same thing. They are not just acceptable, they are aspirational. A lie is not acceptable and it’s bad for business. That’s the difference.

Or put another way – great advertising is “truth, well told”  not a pack of lies. (Did I pass?)

That Special Ingredient

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Someone gave my wife a 1960 edition of Vogue Magazine (yes you can figure out why but please keep your inferences to yourself) and I could not resist having a quick thumb through purely to check out the Ads. The comparison with today’s Vogue is hilarious – they all feature demure Audrey Hepburn look –alikes. It was interesting if not unexpected to see that only a very few of the brands advertising are even close to famous now. Selfridges had a spread as did dear old Bentalls but most are long gone – any of you ladies wearing Polly Peck tights by any chance, I thought not. But one defunct brand caught my eye in particular. There were two full page ads for Bri-Nylon. I recall in my youth that nylon – bri or otherwise – was heavily promoted and for a while we all aspired to wear this new miracle material, sleep in it and, as Vogue 1960 was featuring, use it for our ball gowns. A few years later it was a by-word for cheap, nasty and smelly. Polyester took over and while seen as the poor mans cotton or wool still finds widespread use but I don’t remember seeing any ads for it anywhere.

Courtaulds were a well known purveyor of materials and there was an ad budget for them as well back in the day.

It got me thinking about the potential for marketing ingredients or components and whether this has any role these days. If people can only ever buy your product as just part of many other peoples’ brands is there any point doing any more than B2B marketing? Is it worth going over the heads of your business customers and talking to end consumers to create some pull, increase your leverage and therefore margins?

Until recently we used to know all about Intel and demand only those computers that had their chips. I don’t hear so much about them now and doubt many people care who makes their micro-chips (do you know who makes the ones in Apple products – thought not). Will we pay a premium for any brand of outdoor wear that uses Gore-tex or just the Northface brand irrespective of what material they use? Who makes the electrical components in your car? Most of you will answer BMW, Ford or whoever has their badge on the car, the rest will simply say they don’t care. Back in the ‘70’s when I used to do a little work on cars I knew all about Lucas, I even knew the relative merits of SU versus Webber carburetors and would pay a premium for Castrol Oil.

Back to the world of tech, are we witnessing the demise of the Microsoft brand? It is still famous but do we care far more for the hardware than the software? Shell and other petrol brands used to advertise heavily and those of us of a certain age can still remember going well on Shell or putting a tiger in our tank with Esso. The Oil brands now market themselves much more on the service station, even the coffee they serve, rather than the petrol you buy. You spent thousands of pounds on your car, one of the biggest capital investments you make, and yet will not drive 100 yards to buy a better petrol.

On the other hand, what is your emotional attachment and loyalty to your washing machine? You cared a bit when you were buying it and were possibly persuaded by the sales person – or on-line reviews – to fork out a bit more for a Miele or Bosch (or anything German rather than Italian or British frankly) but the brands you still care more for are the detergents you use in them.

The question here is what is the chicken and the egg? Did ingredient or component brands lose their points of difference, did we lose our naivety or did they stop investing in marketing (which ain’t just advertising, it is also innovation which delivers meaningful points of difference) just as all the end products upped their investment? The Persil/Ariel versus washing machine example would suggest it is the latter. The white goods industry has always been so f*** up and fragmented and in my experience – somewhat dated I must acknowledge – home of some of the worst managers, and their marketing reflected this. On the other hand P&G and Unilever have ploughed billions into their brands and this money has been invested by some of the very brightest and best managers and marketers.

I once gave a talk on this theme to a group of Shell senior managers. One them, the head of technical development, stood up at the end and said “I don’t think you understand, our petrol is only 3% better and that would never be noticed by anyone”. As a former detergents boy I replied that we would kill for a performance difference as big as that. The trick is to make the difference relevant and important and find ways to explain the benefits and consequences.

“But who on earth would really care?” he came back at me. It is 3 o’clock in the morning and you have to rush your sick child or pregnant wife to hospital in the family car. You have just taken delivery of your highly expensive sports car and are about to fill it up for the first time. An expert explains the savings in service costs and the increased residual value of your car if you protect the engine by using the right fuel.

Marketing starts with differentiation and ends with the investment to make sure the right people know, care and trust. On the way you make sure you create more value than you add cost.

Those are the ingredients for success. If you stop investing in your brand because in truth you have stopped believing in your ability to deliver something different that is worth paying for then you become a commodity.