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« June 2007 | Main | August 2007 »

The world is actually not flat, it's sort of lumpy

Waterbuff On Friday at 2 pm, I was standing in a small room, about 100 km outside of Delhi, talking with a young man who shared his home with a water buffalo. Less than 20 hours later (thanks to the miracles of 15-hour non-stop flights and many time zone changes) I was at the local Toyota dealer, watching the sales manager working hard to avoid talking to me (or even acknowledging my presence) about how they hadn't finished servicing my car after a week.

Given the ubiquity of cell phones and the internet, outsourcing this gentleman and his three service consultants to India would be very easy. Instead of having people manning terminals in high-cost Rockland, NY, you'd have 10 people answering the phones (and inputting the same data) in India. More access for less money.

I have no doubt it would create savings. I'm also pretty sure it wouldn't add much value.

It wouldn't add value because reducing the cost of an interaction with a consumer isn't usually the point. The real win is when a service person does the difficult work of solving problems and the essential work of connecting with people as individuals. You can't outsource this easily.

You've heard it before: every single interaction is an opportunity to do marketing, not a chance to cut costs.

PS in addition to owning the water buffalo, the young man in India ran a micro-business in coordination with Drishtee, while others I worked with on my trip were part of Scojo and some other very cool organizations. If you bought the Big Moo, you've funded some of their work via Acumen.

Sloppy naming

If you've got more than one product or service, you have a problem. You need to decide if there's going to be an architecture to the way you name things. General Motors has a division, Chevrolet. Chevrolet makes cars, and each car has a name (Corvette, Impala). They have an architecture in place that makes some things clear very quickly.

It's easy for the brand managers at GM to figure out the steps to go through before naming a car. It's easy for consumers to subconsciously figure out the hierarchy of how it all fits together.

This architecture isn't a cure-all. Sometimes it leads to internal navel gazing that prevents great stuff from happening. (I remember sitting in long meetings at Spinnaker, where I was a brand manager in the 80s, arguing about what color the little logo banner should be on a particular product--teal meant educational, but siena meant family...)

The alternative, which is to make stuff up as you go along, can lead to chaos. Check out the chart of Apple products through the ages. Apple's sloppiness has cost them millions of dollars in legal fees and settlements, not to mention making it hard for the team to keep up with the engineers.

First, Apple was a brand that modified a noun. Apple Computer, Apple II, Apple III. Then Macintosh was a brand that was modified by a brand that modified a noun. Apple Macintosh computer. Then Apple Mac IIfx computer, etc.

Then Apple was a brand that modified a brand that modified no noun at all. Apple Newton.

Then Apple modified its own subbrand by adding the letter "i" in front of it. Apple iMac.

Then they went back to the Newton strategy, with a twist: Apple iPod. The thing is, the "i" in Mac modified something we knew what it was (a Mac). But what's a "pod"?

Wait, it gets a lot worse.

Now that Apple had two successful "i" products in a row, they got giddy and tried to own one of the 26 letters of the alphabet. Which you can't do. So iHome isn't made by Apple, but iLife is. The more equity Apple puts into the i, the more they waste, because others can just leverage it for free and people get confused.

Apple made the same mistake with the Powerbook (a third sub brand, the Apple, Macintosh, Powerbook laptop). They had to give up the word "Power" when they switched to the Intel chip from the PowerPC chip. A multi-billion dollar brand name, shredded.

Apple had to pay a million dollars for iphone.com, because the brand managers didn't see it coming years ago. Same thing with Cisco's phone.  They even paid a million dollars for permission to use the word 'classic' for one of the Macs years ago. Did I mention the hassles with podcasting?

When a newer, more integrated version of the iPhone comes out, what do they call it?

My guess is that everyone waits to see what Steve likes.

It's absolutely true to argue that a naming architecture is no replacement for amazing products that people choose to talk about. But if you're going to pay all those lawyers and marketing suits to work on the names, they might as well be encouraged to lead, not to follow.

Brand names aren't brands, not by a long shot. But they are valuable clues to consumers, as well as assets you own.

Expectations

Word of mouth comes directly from expectations.

Low expectations are a terrific shortcut, because when you exceed them, people are so amazed that they can't help but talk about it.

But low expectations are dangerous, because if you fly too low, you're invisible. Worse, when people expect little of you, they often don't bother listening at all.

So most of the time, you're challenged with this: high expectations that must be beat.

Broadway shows. Apple products. Expensive consulting services. Promise big and deliver bigger seems to be the only reliable strategy.

7/7/07

Why all the hoopla about a date? (Marriages are up by 30% year on year for today over a similar Saturday last year, for example).

Simple. People are meaning machines. We look for hints about what the future will hold and add meaning, often where there is none.

Putting a lucky number on your marriage certificate is just as silly as all the other cues (from the typeface in the ad to the tie on the applicant's neck) that we use to make decisions.

Maternity ward lesson

Lifespring The staff and doctors at the LifeSpring hospital told me that they have to do exactly three things:
1. Realize that their customers* have expectations
2. Exceed those expectations
3. Do better at it every day

That's as good a marketing plan as I've heard in a while.

*(notice that they didn't say 'patients')

Times a million

Natlamp73 Politicians, social-cause marketers, health product marketers and others have a particular problem that makes marketing difficult: The closer an issue is to the purchaser, the easier it is to use it with impact. People care about a fire in their movie theatre, a lot less about one across the country. People care about an illness that they have right now, a lot less about preventing something twenty years from now. When you create gaps in time or space, people lose interest.

There's another factor to consider as well: the consumer will be more motivated by something that she can have a direct influence on. Sure, every little bit helps, but every little bit is really difficult to market.

I was driving on the Taconic Parkway last week and noticed a Porsche Cayenne and a Ford Edge were keeping pace with me. I was driving my Prius and getting about 51 miles per gallon. The other two cars were averaging about 20 each. Here's an analysis I just grabbed from a random website:

Even though I drive over 35,000 miles per year, a CX-7 would only save me about $300 per year over an Explorer Limited V8 (with regular at $2.40 and premium at $2,60). Even though the Edge will run on regular, and probably achieve a bit better mileage than the CX-7, it would probably only save me about $900 per year on fuel vs the Explorer Limited V8. For someone who drives more typical distances, the annual savings would be less than half those amounts.

Notice the lack of "times a million" math.

If we figure that the average driver in the US does 20,000 miles a year, I'm going to use about 400 gallons of gas. A car getting 20 mpg is going to use closer to a thousand gallons. Figure that there are about 100 million actively driven cars in the US, which means that the net difference if "everybody did it" has the potential to save 60 billion gallons (600 times 100 million) of gas. A year.

No, this isn't a pitch to switch. It's a pitch to describe how amazingly difficult it is to market that story.

The guy above who's not going to switch from his Explorer to an Edge because it will only save him $300 a year is clearly not going to be interested (never mind moved) in the thought experiment above. It's too distant. Too far away.

The same as the person who buys one of the million bottles of Fiji water sold every year. The same as the person who doesn't want to know about a kid about to die... if the kid is thousands of miles away and it's not clear how one person can make a difference right now. Here's the thing: all marketers who whine about the distant do is annoy people. At least the people who don't care about the distant. They don't get "times a million" math, and repeating it with frequency isn't going to help much.

The reason PETA has had good success railing against fur coats is that they make it personal. The same way faith healers bring an impact to a room.

The lesson of the National Lampoon cover above, the best magazine cover in history, should be obvious by now. The way to sell the distant is to make it immediate. The way to sell the drop in a bucket is to make the bucket a lot smaller, not to extrapolate to even bigger numbers. "Buy this car and we'll kill 10 penguins" is a lot more powerful than "Buy this car and forty years from now, if everyone else buys a car like this one, your grandchildren are going to spit on your grave."

Who knew I could be wrong in so many ways

I got a lot of feedback from my post about reorganizing for profit. It broke down into several groups:

  1. non-retailers explaining why it would be impossible logistically to do this
  2. retailers explaining that making it hard to find related items actually helps them, because as you search around the store, it increases the chances you'll find something you didn't remember you were looking for
  3. high-end believers who insist that the salesperson will find what I want for me
  4. fashion hounds who insist that they buy the wrong size just to get a great label

and
     5. retailers who have actually done this and regularly report increases in sales of 30%.
(I heard from people who sell high end clothes, hardware and bikes).

Of course this won't work for everyone. (Of course label-centric sport shopping is here to stay). And of course it's doable (hey, you separate the men from the women from the kids already).

The most fascinating takeaway for me is this: many retailers believe that they still have the power to inconvenience shoppers as a way of increasing revenue. "Too many stores in that mall," in my opinion, for me to stay with you if it's easier and more fun to go over there instead.

Test it first. If it doesn't work, let me know.

You can ask, "First time here?"

Alysoup Airports, restaurants, online stores and police stations often have the same challenge: they don't deal with regulars. A lot of the time, people are walking in the for the first time.

If it's an experience that's fairly common, human beings are very good at looking for clues about where to go for more information or to get started. That tall desk in the back of the drugstore probably has a pharmacist behind it...

Often, though, especially in international travel or new experiences or emotional events, we just don't know. So why not make it easy?

Be obvious about it. A sign that says First Time Here in three or four languages is a fine place to start. You can explain that while you serve minestrone, the locals come for the gumbo. Or that you should keep that little tag from the customs form cause you'll need it when you pick up your luggage.

Sure, not everyone is going to read that page on your menu or press that button on your voicemail, but your smartest and often loudest prospects will. And that's who you most want to persuade. (PS Richard has a plugin that does this for Wordpress users.)

Reorganizing for profit

Here's what most retailers do:
They organize by brand/designer or label
Within that, they organize by type of item
and within that, by style
and finally, by size

So, all the Armani blue suits are next to each other, then by size.

So, all the boxer shorts at the Gap are on a wall, organized by style first (checks over here, stripes over there,) then by size.

So, all the power tools at Home Depot are together, sometimes by brand, sometimes by function (saw) and then by type of material to be cut (wood).

This is dumb, and the web makes it obvious why it's dumb. It's dumb because it makes it easier for the clerk, not for the customer. And dumb because it plays to the label's ego, not to ours.

Does anyone say, "okay, even though my son wears size large boxers, these striped ones are really nice, I'll buy the small instead." Of course not.

So why not put all the large boxers right next to each other, regardless of designer and style?

When you go to Home Depot to get what you need to build something out of wood, why don't you find the glue and the wood saws and the screwdrivers and the screws all together in a section called, "working with wood"?

It's pretty simple: if you want to sell belts and socks and even shoes, you need to sell a suit first. Make it easy to add on, and people will do it, quite happily.

Pushing and running

One of the most difficult transitions that marketing organizations go through is shifting from pushing against resistance to running with acceptance.

The culture at insurgent companies is all about pushing. You get turned down on sales calls, you have tiny market share, people walk away from your trade show booths. You have trouble finding suppliers and a bank loan and even employees.

So you learn to push. In fact, you may discover you start to lean against that resistance, that it becomes part of who you and your team are.

If your work is successful, you break through. You become Apple or the politician who leads in the polls. And then what?

If you're very good, you start running like crazy. You have the wind at your back and the chance to dramatically increase your impact and market share. But most organizations keep pushing. Because that's what they know how to do. Instead of running up the scoreboard, they look for something else to push against. I think the fascinating transformation at Apple is worth noting. The iPod gave them the opportunity to start running.

It's not easy.

« June 2007 | Main | August 2007 »