Marketing, Not Apartheid
Almost 15 years ago, I started asking the best and brightest in marketing questions about the future of this business, first on Reveries.com and now in The Hub Magazine. That probably translates into thousands of questions asked. But, in fact, I've really only posed variations of one, pivotal probe: Where's it all headed? Some of the answers have been more memorable than others, obviously. If there's one I recall best, it was the response from Geoffrey Frost, a former chief marketing officer of Motorola, during late summer, 2005.
It's memorable partly because, tragically, Geoffrey passed away within weeks of our conversation. But it's more because he was so damn clear about what he saw coming. He was remarkably prescient when he referred to his product as "the device formerly known as the cell phone." He also suggested we should think about our business as "the industry formerly known as advertising."
But my favorite part of the interview was when Geoffrey talked about the famous William Gibson quote: "The future has already arrived; it's just not evenly distributed." As Geoffrey explained, "What he's saying is that there are people of the future, already here, walking among us. If you can figure out who they are and co-create with them, you're actually doing a rather amazing job of not only anticipating, but also shaping where the world can go." It's a new year, and a new decade. What's new, for you, in the industry formerly known as advertising? Where's it all headed?
Let's just get this straight once and for all: There is no such thing as brand loyalty. Each of us likes certain brands and may even love them. We may buy them most of the time, or perhaps even every time. But the idea that we have a true bond with any brand, like the kind of commitment we have in real life with our friends and family, is a farce. This doesn't mean we shouldn't try to create that kind of loyalty; most of us tell ourselves that's the end game and it's always important to aim high.
What it does mean is that we should take a harder look at how we go about creating what we call loyalty. We need to admit that coupons, discounts, points and prizes are just beanbags. We ought to spend more time thinking about the stuff that really matters to people, and serve that up each and every day.
That means products and services that really and truly solve problems and help people live happier lives. Providing a helping hand when someone really needs it, and smiling because we truly mean it. It's not because the customer is always right (nobody's perfect). It's because it's up to us to make it right. We may not get the same kind of loyalty we enjoy with our family and friends, but we'll have more fun, and so will everyone else. Loyalty is what we make it.
I've never been to Bergdorf Goodman, the fancy Manhattan department store, much less its Room 4. You've probably never been to Room 4, either. It's the dressing room in Bergdorf's personal shopping department, where the rich or famous are pampered with champagne or food as they check out really nice clothes and stuff, selected exclusively for their consideration.
I only know about Room 4 because Alan Feuer of the New York Times wrote about it, and I assume he wrote about it because Bergdorf invited him in. Alan describes Room 4 as "peach-walled" and tricked out with wi-fi, zebra-patterned ottomans, three-way lighted mirrors and generally flattering atmospherics. He also quotes Todd Okerstrom, whom he describes as "Bergdorf's immaculately clad director of personal shopping."
Todd says, "Everything is possible here," but suggests the experience is more about convenience than luxury. "The time factor is enormously important," he explains. Alan wonders if it's "a blind spot of the boutique trade to create false divisions among the comfortable, the rich and the extremely rich" like this. I wonder if it's a blind spot in retail to create those divisions between those folks and everybody else. Is there Room 4 the rest of us? What do you think?
Next week, I'm slated to interview Tony Hsieh, CEO of Zappos.com for the next issue of the Hub. In the spirit of "social media," I'd like to invite you all to send me possible questions (except questions about the Amazon deal, because Tony can't talk about that). Please click on the "comments" link below and submit your question. Thanks! ~ Tim
It seems retailers have decided that cash-register receipts are pretty darn hot as media, report Ilan Brat and Ann Zimmerman in the Wall Street Journal (9/2/09). As a result, even the smallest purchase can result in a receipt a foot long, full of coupons and other stuff. You'll notice this at Duane Read stores, where purchasing a pack of gum comes with twelve-inches of proof, and RadioShack, where "single-item buys" yield "19 inches of paper." If you buy just one thing at Kmart, you will likely get a receipt that's about two-and-a-half feet long. Granted, some shoppers appreciate the coupons, but others are just annoyed.
"You feel like you have a very special document in your pocket, when in fact you bought a Sprite at Best Buy," says Jack Britton, who now refuses receipts. But retailers see it differently. Home Depot uses receipts to advertise shopper surveys, and it's very effective. "Prior to 2003, we used customer-comment cards in store, and they got nowhere near the level of response," a spokesman says. NCR, the cash-register maker, also says that redemption rates for receipt coupons "can run as high as three percent, about triple the rate" for direct-mail or circular coupons.
Kroger uses the tapes to inform shoppers how much money they've saved, item, by item, with totals both for each trip and the year to date. Another two inches is devoted to notifying "shoppers if an item they'd previously purchased had been recalled." However, some retailers, like Walmart, are taking steps toward receipt reduction by testing "doubled-sided receipts." Lowes is reducing receipt length for a "one-item purchase to 5.5 inches from 7.2 inches." Apple, meanwhile, has offered emailed receipts since 2005. Good way to build a database, too. What do you think?
Some people say that there's no such thing as new media or old media, that it's all just media. We now know that this just isn't so. Old media were just channels through which messages were communicated in hopes of influencing attitudes or, even better, changing behavior. Those kinds of media can still pack a punch sometimes. But they are starting to look rather primitive compared to new media, which are more than just vehicles for our advertisements and promotions.
These new media -- which are usually (but not necessarily) digital media -- are different because they're all about call and response. Sometimes it's the brand calling and the shopper responding, while other times it's just the opposite. These new media are also different because, while they're still about the delivery of messages, they are not the neat and tidy messages of marketing's ever-present past. These new media messages can be upbeat, positive and cheerful, but they can also be angry, negative and mean.
In other words, these new-media messages are about real people living their lives in the real world, and that's the real beauty of new media. Marketing has a problem, and it is precisely this disconnect between what happens in marketing and what happens in real life. It is a gap that new media bridge with astonishing efficiency and effectiveness. Can we measure that? Maybe, maybe not -- certainly not in the traditional sense. But we can count on it to connect with our shoppers in ways we have only begun to imagine. May the old media rest in peace. What do you think?
Last November, two managers walked into a meeting and turned the tide at Procter & Gamble, reports Ellen Byron in the Wall Street Journal (8/6/09). "Just listen and keep an open mind," Suzanne Watson, one of the managers, told a roomful of executives. Her message was that P&G should introduce a bargain version of its iconic Tide detergent, whose strategy has always been to persuade shoppers to pay a higher price for a better product. P&G actually had already gone the downscale route with its Charmin and Bounty brands, but Tide is the company's best-selling brand in America.
That P&G decided to test the idea in about 100 Kroger and Walmart stores in Southern states says a lot about the American economy, but it also represents a shift from P&G's "new and improved" mantra to something decidedly less aspirational. "Now, some of the biggest innovations in our company are geared toward making products more affordable," says P&G's Bruce Brown. That's at least partly because P&G was creating products for developing countries, but now they're applying that kind of cheap and cheerful know-how at home.
The new Tide product, called Tide Basic, is powdered, boxed, and contains less of "the anti-pilling and color-preservation technologies embedded in regular Tide." It was created using "the company's existing fragrances, whitening agents, stain-fighting enzymes and other technologies," and costs about 20 percent less. The packaging is yellow -- not Tide's trademark orange -- picked precisely because P&G hopes it will "discourage current Tide users" from trading down and cannibalizing sales. The question, of course, is whether Tide Basic will boost sales, damage Tide's brand equity, or both. What do you think?
A brand divided against itself cannot stand. Or can it? The strongest brands are those that remain true to that which made them strong to begin with. The weak are those that forget what made them relevant and lose their way. Seems to me there was a book about that recently. And yet, we have Google, which makes all of its money selling advertising, but doesn’t invest much in advertising for itself. There’s Nike, whose use of recycled materials is often at cross-purposes with its reputation for “performance.”
We now live in a world where Toys ‘R’ Us owns FAO Schwarz and the Penske Automotive Group, a retailer, owns Saturn, a car company. Then again, we live in a country where an African-American man with a Muslim name is President of the United States. These curious bundles of contradictions aren’t purely an American phenomenon, though. In Germany, BMW is encouraging its factory workers to buy the cars they make. Factory workers buying luxury cars! Imagine that. They couldn’t be serious.
Or could they? Oh, probably not. But just think about that for a moment. Google’s strength is its weakness. Nike’s weakness is its strength. BMW may just be smoking something. It is indeed a delicate balance between strengths and weakness where brand identity is concerned witness the rise of store brands as innovative rivals to national brands. Like much of the rest of marketing, things are not always as they seem, but a world of possibility resides within brand-identity contradictions. What do you think?