The Brand Experience Myth

flosspickMany brands continue to lose relevance, value and profitability. Much is written about how “marketing” needs to fix this. Talk abounds about consumer experience, purpose driven brands, etc. It’s all misdirected.

I will accept that consumer experience and connection with your company’s purpose can create stronger brand loyalty. It’s the “icing on the cake;” not the cake itself.

Harley Davidson has fierce brand loyalty others would “kill for.” How many consumers tattoo your company’s logo on their body and wear brand logos on their clothes like Harley owners? And yet a few decades ago when Harleys were crap bikes that leaked oil, etc. their loyal consumers began to flee. If the product isn’t what one expects all that other “icing” won’t make the cake worthwhile.

Several years ago we were invited to help Chrysler figure out ways to sell more cars. At the beginning of the process we were told they did not want to discuss the PT Cruiser as they could sell more of that car than they could make. I suggested maybe they needed to develop more cars people really wanted to buy. We haven’t been invited back to work for Chrysler since. But then they haven’t done so well either.

So-called Chief Marketing Officers are tasked with improving brand loyalty, consumer connection, etc. Unfortunately, in most companies, these folks are really just Chief Marketing Communications Officers with no real, or any, input on the products/services themselves. They are just expected to put “lipstick on a pig” so the consumer will really love the pig.

We hear more than ever about consumer brand experience, why, purpose, etc. What’s the root cause of brand value degradation today in my opinion? Crap or at least not “better” products. If your high-priced brand (at least when compared to house or private brand prices) is no better and perhaps worse than the house or private brand, how can you expect the consumer not to switch?

I do a number of workshops for “marketers” for many recognized brands and for some retailers. I have noticed an interesting fact: the brands almost never have any product people in the workshop, just “marketing” (né marketing communications) people. The retailers have mostly product marketers/product managers in the workshop and some marketing communications professionals.

If you get the product or service right, marketing communications is easy. Just look at Apple (other than the Apple Watch, which doesn’t seem like they got it right). As a percentage of revenue, look how little Apple spends on “marketing communications” compared to others. No wonder they can generate over 80% of cell phone profits with less than 50% market share.

BTW, if you’re wondering what started me down this path: it was dental floss. I resisted flossing my teeth for decades. Hate that little fishing line stuff. Then my periodontist (note I did not say dentist as there is a punishment for not flossing) introduced me to floss on handles (per the picture above). Love those things and so does my dentist now that I floss.

First time out I bought the private brand product. Worked really well. When I was running out I asked my wife to pick up some new ones at the store next time she went, if she went before we did together. She came home with Oral B brand. More expensive, fewer in the package, but it was Oral B and my wife knows that brand. Crap product. None of the private brand I had used ever broke during use. 20% of the Oral B brand does and 70% of the rest weaken to the point of less value in use. Why on earth would I pay more for this product? What kind of brand experience do you think the marketers at Oral B could come up with that would make up for an inferior product?

Want your brands and products/services to thrive? First make a great product/service. Deliver it consistently, then look for the icing. Putting icing on a cardboard cake will not make it a great cake.

Mitch

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Is There Really Anything Wrong With Amazon’s Culture?

newyorktimeslogoFollowing a widely read article in the New York Times purporting to show the true culture at Amazon.com, much has been written about how they need to change from their hard-driving, data driven culture. Poppy cock.

Amazon, like many successful companies has a strong culture. It’s not for everyone. Does it work? Of course it does. How do I know even though I don’t work there and have never talked to anyone who does? Simple: The company is successful and people are lined up to work there. Does everyone want to work there? Of course not. Does the writer of the article in the New York Times? I doubt it. He found people who had worked there and didn’t like it, so they talked about how it is, or at least how they want people to perceive that it is.

I had professional friends suggest that Amazon needed consulting help to “fix their culture.” Poppy cock. Their culture works for the reasons noted above. And everyone is not going to like it. Are there possibly some managers at Amazon that are toxic. Duh. That’s pretty much true everywhere. Should they be expelled. Sure. Maybe they will be.

W.L. Gore has a very different culture than does almost any other company. Is it bad or is it good? Depends on what you like; but it’s good by my definition because the company is successful, and people want to work there.

Amazon’s culture, as described, reminds me of a cross between Andy Grove’s Intel and T.J Rodger’s Cypress Semiconductor, two very successful companies. And hard to work for if you don’t like their approach. Many years ago Robert Swanson founded Linear Technology and was purported to rule with an iron fist and a foul mouth. And very smart and capable people worked in that culture. Did it work for everyone? Of course not. Did it work? By my definition, yes. They attracted the talent they needed and were very successful.

It’s sad and funny that anyone believes there is one “true” way to run a company, or one “best” culture. In my observational experience, if you have a stable, strong culture that produces a profitable enterprise and can attract and keep the talent you need, you have a good culture.

Mitch

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What Are They Thinking? Or Maybe They’re Actually Not

efaucetslogoToday’s post ties to several recent posts. I have slammed brick and mortar stores for expediting their own demise; I have talked about confusing activity with results in marketing automation systems; and mentioned the raising of the bar by some companies today when it comes to serving their customers. Today we are going to talk about a web-based company that seems to have figured out how to combine the worst of these together in one place.

A few months ago we ordered a Kohler toilet online from efaucets.com. We were diverted there from amazon.com. Since I knew we would have to order the specific toilet we wanted, I did not bother to go to the local stores, I just went to amazon, as I often do. They had the toilet I wanted, (or so I thought); but in actuality, they were just a referral source to efaucets. (I am unclear on what the business arrangement is, but from the diversion point forward, I was dealing directly with efaucets, not amazon.)

The site was easy to use, I found the toilet we wanted and ordered it. Delivery was in 7-10 days, which was great. The toilet did not arrive as scheduled. However, apparently their marketing automation/CRM system triggers an email based on promise date, not actual date. My response to this idiotic email was to ask them why they sent it, given the toilet had not arrived yet, and where the heck was the toilet anyway?

A day or so later I got a reply that the toilet had not been in stock and was on back-order. It would arrive in 4-6 weeks. I asked why on earth they sent the email they sent and why they had not sent a “sorry for the delay email.” Crickets.

After six weeks, still no toilet. I email again. This time the response a day or so later is “call us on Wednesday and we can update status.” Really, I have to call you to get an update on your poor performance?

I called, after 10 minutes on hold, the CSR told me the warehouse had a ship-commit from Kohler for 10 days hence and once it got to the warehouse it would be about a week to me. I checked again two weeks later, and the CSR told me the toilet had arrived and it was being shipped to me, and I would get a shipping notice. I did. It told me to contact the freight company to arrange delivery since it was coming to a private residence. I did. They said, “why are you calling?” I said, “because I was told to call you to arrange home delivery.” They said, “we’ll call you (idiot) when the item gets to our depot and arrange for a delivery date and time.” They did. When the toilet arrived, they attempted to deliver a set of furniture to our house and told my wife there was clearly not enough room in the garage for it all without her moving her car. A conversation ensued, and the toilet was placed in the garage easily without her needing to move her car. Hopefully the people who were expecting the furniture got it too.

I have never heard from efaucets again; would never do business with them again; and btw, they charged my credit card for the toilet on the day I ordered it.

As Tom Peters famously said 30 years ago: “If you raise your level of customer service to mediocre, you can stand out in the crowd.”

Mitch

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And The Change Begins

Back in June I questioned the viability of the Uber business model in terms of “what’s in it for the driver,” and my belief that drivers would become scarce. Maybe I was on to something. At the end of July Uber announced a lease program for Uber drivers. This program allows drivers to lease, maintenance included, a two-year old, mid-sized car for about $150/week plus a $250 deposit. If the driver wants out of the contract before the three years are up, all they lose is their $250 deposit.

This seems to me an excellent fix as the operating costs are now fixed and known. The driver gets a good car to use for his/her job as well as personal use, and income will be tied to hours worked and customer availability. My assumption is that the hard-working drivers will make about $30K/year maybe a bit more, but the vehicle risk has been removed.

Now, if Uber can just work out their issues with the local governments.

Mitch

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The Stupidest Rebranding Ever?

flextronicslogoWell, at least as far as I can tell, this will rank as the top mistaken rebranding effort ever. The new CMO of Flextronics, Michael Mendenhall, has decided the company should rebrand itself as Flex. I do not care that he was CMO for HP (a company that has seen an amazing decline in its stature over the last few decades, and for sure during his tenure), or that he spent 17 years at Walt Disney. This is just dumb in my opinion. (And Flex.com is already taken.)

Why are they doing this? Well, I could be cynical and say that is what most CMOs do when the come on board, and Mr. Mendenhall has been there since last October, so it’s time. But when asked this question he answered: “… we found that the “tronics” part of Flextronics was dated relative to the corporate strategy of the company, and it left people thinking we were still an electronics manufacturing company.”

And you think that changing the company’s name to Flex fixes that? Seriously? I will accept that Flextronics, a $26B supply chain solutions company, is no longer just a contract manufacturer.  I don’t think they have been “just a contract manufacturer” in most anyone’s mind since the late 90s, or for sure the early part of this century.

How on earth can one really believe that Flex is a better name than Flextronics for what they do? And if one wants to argue that the position of Flextronics is not valid and it truly needs to be repositioned, which I seriously doubt, why pick a name so close to the old one, and so non-useful? Are they now an exercise company?

They have become a $26B company with the name Flextronics. Is Flex going to take them to the next level? Who could seriously think that?

While I am not ready to state that this effort will damage the company, I do believe it is another example of LARGE sums of money being spent (not invested) by a CMO concerned with action over results. When all is said and done, I believe the only thing they will have to show for this effort is a smaller bottom-line and some very happy agencies.

And we wonder why the C-Suite does not taking Marketing seriously.

Mitch

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Double-jointed Peanuts

peanutDish Network is running a radio ad for their service that suggests that just like peanuts, satellite TV is “all the same” so why pay more from another supplier when you can get it for less from Dish.

While I espouse that nothing needs be a commodity if you look at what the customer is buying rather than what you are selling, the use of the peanut analogy really got my attention. It reminded me of a story my friend Ted Steinberg told me about his first sales experience.

While Ted’s first sales experience was “selling” a peanut to a squirrel (you have to read the story to get it, and I recommend it), this Dish ad focuses on peanuts in a ballpark and that is where Ted learned to sell.

Ted’s experience at selling peanuts is insightful in many ways, including creating a difference, promoting that difference and thinking like a customer instead of like a producer.

Dish can keep promoting price if they want to, and maybe that’s really all they have to offer, but selling on price doesn’t usually lead to better profits. A quick recent example notes that while Apple has less than 50% market share in smart phones they generate over 90% of the profits. Why? Samsung and others sell their phones for materially less than Apple sells the iPhone.

Mitch

Posted in sales, What | Tagged , , , , | 2 Comments

Confusing Activity With Results

comcastThe advent of “marketing automation” seems to have really revved up the marketing communications/sales enablement teams in many companies. Unfortunately, as often happens with shiny new tools, people get carried away. This can be further compounded by the marketer’s (or at least marketing communications) dilemma of trying to appear relevant.

In the “what have you done for me lately,” marketing accountability, marketing ROI driven world today, marketers are often desperate to “prove their worth.” Sales enablement activities are often the shortest link to that prize. And with new automation tools, it is even easier to think less and do more. And as long as you have a lead scoring system, what could possibly go wrong?

We see many examples, but our office manager noted this one. Our office is located near the San Francisco 49ers stadium. As such, the landlord appears not 100% sure what may happen to the space. Will it be re-zoned and then we have to move, or…? This leads to lack of upgraded infrastructure, notably communications. The only provider to our office park is AT&T and I am pretty sure the line in was an original limited speed data line as the service is mediocre in terms of data speed. And AT&T appears to have no plans to upgrade, but more on that a bit later in this post.

Meanwhile Comcast Business Services mumbled they were coming to our office park. However, further discussions with them determined they were coming, if they were, at some unknown time in the far future, once rezoning is accomplished … if it is.

Meanwhile at least 2-3 times per week we get an offer from Comcast Business for 25Mbps and voice for an amazing price. Heck at this point 25Mbps at a fair price would be good. Unfortunately, when we contact Comcast to buy, they tell us it’s not available at our complex. Ok, so why are we getting 2-3 mailings a week? Perhaps the metrics are mailings and calls, because no sale is going to happen. And I may be generous suggesting there are any metrics.

Then of course, not to be totally outdone, but either without a full-blown sales enablement function or a budget, AT&T periodically mails us offers to upgrade our service to higher speed data. Silly us, we call them. Well we call the actual sales person who sends us the letter. He usually doesn’t call back. Perhaps because that is standard AT&T service, or because he knows enough to know the answer is “no” about if they can help us. They just like to tease us apparently.

Anyway, as has been said about automated systems for decades: garbage in just gets you lots more garbage out. And in this case it just reminds your customers and potential customers how non-customer focused your company really is.

Lesson for today: First be effective, then work to be efficient.

Mitch

Posted in customer satisfaction, customer service, sales | Tagged , , , , | 1 Comment