Marketing

Do your customers really understand you?

We all believe we know what we do and what benefits we offer potential clients. We put a lot of effort into our brand proposition and ‘elevator pitch.’ But it can be easy to be too close to our business and miss the very fundamentals that we take for granted.

I often lecture at universities on digital marketing to non-marketing students. I usually begin with a question, saying something like, “What is digital marketing… no, wait, first of all, what is MARKETING?”

As you can guess I get a lot of answers that are way off the mark, and hardly any that are near correct. That’s understandable because it’s not part of their day-to-day.

The question opens the door for me to present some definitions and introduce such ideas as the Marketing Concept and Philip Kotler’s thinking.

A good deal of the public misunderstanding and confusion may be blamed upon media misunderstanding and sloppy journalism. But it got me thinking: was I assuming that my business audience actually understand what we do?

Testing understanding

I do quite a bit of networking and often describe my business in broad terms as a marketing consultancy, brand marketing or marketing communications specialist. But always using the term ‘marketing‘ and assuming it means the same thing to my audience as it does to me.

So, I decided to put it to the test – I asked various groups of businesspeople: “What is marketing? What do you understand by the term?” The results were worrying. There were lots of muddled ideas but very few understood the basic concept – unless, that is, the people were from associated fields (and surprisingly, even some of them had fuzzy definitions).

This presented me with a dilemma. I was using a term in our brand descriptor which most of my prospects did not fully understand. Of course, in presenting my proposition I go to some lengths to describe what we can do and what benefits we can deliver. However as a basic brand communications issue, I had a lot of thinking to do.

Many other businesses may fall into the same trap. You may be so familiar with what you do that it’s easy to assume a similar understanding from audiences. They will have a broad idea (we hope) but some important nuances may be lost.

Take the step

My advice would be to try that basic test on your prospective audience – ask them what they understand about what you really do. It could give you valuable insight into how you define your brand and fine-tune your proposition.

Does sales need marketing – does marketing need sales?

The Institute of Sales and Marketing Management has recently updated its identity and is now just the ‘ISM’ and it’s not clear which ‘M’ has been dropped. Hovering over the logo on their website shows the alt tag: ‘Institute of Sales and Marketing‘, while the copyright line on the foot of the same page states ‘Institute of Sales Management‘ – curious.

Throughout the rest of the site, the ISM acronym is used consistently. Though worryingly, this is also used by the ‘Institute of Supply Management’ and the ‘Incorporated Society of Musicians’ amongst others.

However, it’s not the nomenclature that is concerning. From the tone of the language and discourse it’s clear that we are now talking about pure sales skills and expertise. There is no mention of marketing. We must assume that this is a conscious policy decision and there has been a schism between sales and marketing in the eyes of the organisation.

This is intriguing – because a little while ago, I was at a CIM (Chartered Institute of Marketing) event where speakers were bemoaning the historic drifting apart of the two disciplines and suggesting both would benefit from bringing them back together.

As a marketer, I would like to see this re-engagement. I’m sure many of my fellow practitioners would benefit from the cross-fertilisation of ideas – and a straw poll of my sales friends suggests similar viewpoints.

What’s the value of a brand? Not a lot say Amazon.

Amazon-logo-700x433I’ve written a lot about brand valuation and how many businesses under-value their brands. Now one of the most powerful brands, Amazon, claim their brand isn’t worth that much.

One issue with brand value is its contentious status so far as balance sheets are concerned. Although a good deal of work has been done to standardise brand valuation in accounting practices, it usually only becomes manifest on sale, acquisition or transfer. This is just where Amazon came unstuck and found itself in the US Tax Court.

There has been a good deal of discussion concerning international corporate giants using subsidiaries overseas to make the most effective use of favourable tax environments. Like Starbucks and Google, Amazon followed a well-worn path to Europe – Luxembourg to be precise. So far so good.

Obviously the Amazon brand was important as the parent company transferred some of the associated intellectual property to the subsidiary for a fee.  However, in the view of the IRS, the fee was not enough. Amazon undervalued their own brand!

Why would they do this? Simply to reduce their tax bill in the US choosing a move favourable regime in Europe.

The details are now the meat of argument for the tax lawyers. For brand specialists and marketers it presents some important issues. The trial should aid the clarification and status of brand valuation. Moreover, it should help identify the position of a brand and its associated intellectual properties as corporate assets.

If Amazon succeeds in defending its own low valuation, it would be interesting to see how it would argue reversing that position should it wish to sell.

This case will be watched with interest, not by just accountants and tax lawyers but also by brand owners and marketers.

Tesco and five kinds of brand damage.

Financial, sales-revenue and profit reversals usually correlate with brand damage, though not necessarily to a serious extent. The public is often sympathetic to market conditions and we have seen many retailers struggling through, without permanent brand damage.

Tesco_signHowever some forms of damage can be more serious and enduring, and recently we have seen poor Tesco stumble from one hole to another. Sales revenue damage was compounded by mishandling possibly questionable management activities.

It’s probably a good time to consider the five major categories of brand damage in the light of the benighted retailer’s problems.

1. Market environment damage

Sometimes no blame can be attached to the organisation for issues beyond its control. Particularly political and legislative changes can impact business and the brand and the company may be trapped in negative activity,

Cultural and technological issues can also have damaging impacts. However, it can be argued that a well-managed brand should be constantly monitoring the market environment to remain in touch and relevant.

2. Accidents, incidents and events

Traffic police often say ‘There are no accidents, only incidents’ – the inference being that all accidents are avoidable. Events can be seriously and often terminally damaging.

We can look at the brand damage following in the wake of BP’s catastrophe in the Gulf of Mexico, or Toyota’s string of recalls. These ‘events’ are rarely blameless and damage is inevitable – the distinguishing feature is how a brand faces up to such a catastrophe. Openness, acceptance and swift responses can do much to restore a brand’s reputation where denial, obfuscation and attempts to cover up will only compound the problem.

3. Neglect, complacency and hubris

This kind of brand damage often follows a period of undoubted success. It is where a brand sits back, assumes that it has arrived at its place in the sun and believes it has a right to its position. This often leads to the previous form of brand damage as complacency dulls the belief that ‘something might go wrong’.

In the Tesco example, for decades the business was hardworking and innovative – a pioneer of online shopping, exploiting multi-channel trading and pushing the boundaries of a food market retailer. Did it grow fat, lazy and complacent? It has been suggested that part of the malaise was not being sufficiently sensitive to economic and market changes, and lack of clarity in its brand positioning – leading to shrinking market share.

In such a case, there is often an emotional disconnection – a complacent brand, like a complacent person, stops reaching out and the important emotional bond with the audience is damaged.

4. Incompetence and mishandling

It goes without saying that incompetence in brand management will be penalised. Well-meaning fumbling may not be taken too seriously if the brand has sound core values, however.

Mishandling is often the product of misunderstanding what is important. We have already looked at damage due to events and incidents. These are typical areas where a strong hand on the tiller is required to handle the aftermath.

We have recently seen the tragic events surrounding the Virgin spacecraft test-flight – we also witnessed the exemplary way Richard Branson responded. A stark comparison with Tesco’s response to falling figures.

5. Malpractice, malfeasance and dishonesty

This type of serious brand damage is the result of the actions of individuals or groups within a business. It may be rogue elements or it may be with the approval and complicity of management. We have seen examples of corrupt individuals in the financial sector – here swift action from the board can go some way to mitigate the potential damage. In other cases is may be institutional malpractice – here brand damage can spread beyond individual organisations to whole sectors.

Sometimes this can strike at the very core values of a brand and the damage may be terminal. The example which springs to mind is that of Anderson Consulting and the Enron scandal. The implied brand value of probity was brought into question and the result was the demise of a brand.

We wait to see if this type of damage was involved in the Tesco episode. If so, we can expect a costly and crippling degree of brand pain. Perhaps for a grocery retailer corporate rectitude is not a core value, but we can be sure other brands will be queueing up to fill the moral void.

How to make them love your brand – the emotional dimension of branding.

heartIt’s generally accepted that we engage with brands and make choices on two levels: the pragmatic or declarative level and the emotional level. But the importance of the emotional level is often underestimated.

Our primary processing of any experience (including a brand experience) is at a visceral level, often described as pre-wired and subconscious; next we process at a behavioural level – how it functions and our own interaction. Thirdly, we consider it at a reflective level – how it makes us feel and in terms of our broader life experiences. (After Don Norman)

These early stages of experience fall into the category of passive involvement processing (PIP). We don’t consciously process, we feel.

Later stages of brand choice use active involvement processing (AIP), where we consider and weigh alternatives and make what we believe are rational, objective decisions. The truth is that we have probably made our emotional choices already using PIP and are now only justifying those decisions.

Much of the work done with brands is done at the rational level because this is most amenable to communications and persuasion. Facts and information can be communicated with the object of influencing rational choice using the subject’s pragmatic AIP. However, by this stage decisions, prejudices and choices are likely to be already deeply embedded.

So, how do we appeal at that passive emotional level?

It is not easy, but understanding those primitive emotions may help point the way. Early man liked people like himself. There is a functional advantage to this, your own family group and tribe represent safety in a potentially violent world. Approaching strangers could be a risky activity – so he would seek out those he knew, those who looked like him, sounded like him and smelled like him. He wanted to feel comfortable with those who shared his values.

Our brand choice is similarly driven – we choose brands with which we feel comfortable, which match our values and our lifestyle. The key word for the brand steward is ‘empathy’. It is important to be in touch with the emotional forces at work in the audience. No at a shallow level that can be talked to, but at deep level that can be felt.

It needs a real understanding of the person the brand wants to share with – understanding their values, desires and fears. The brand steward must seek to build an holistic picture of the subject and also of the brand. The objective is to analyse the touch points, where must the brand values be perfectly in tune with those of the audience – empathy.

Fundamentals.

1. Get to really understand your audiences emotional needs. Marketers are good at understanding and satisfying physical needs, but for your brand to touch people you need to  recognise their deeper emotions, desires, aspirations, needs and fears. Use archetypes, create lifestyle boards – anything to help your insight.

2. Analyse your brand values. Be honest. It’s easy to pay lip-service to all the values we believe we should have – but what are the core values that we hold true? Better still, ask others – clients, suppliers, friends – a quick survey will be priceless.

3. Match up the touch points – this is where you can build.

4. Don’t force it. Sometimes there are circles you just cannot square. For example, perhaps customers are small independent retailers who are uncomfortable with and scared of big suppliers. If you are a large organization, don’t try to fake it. Either look for other emotional convergence that you can build on or admit that perhaps you are trying to connect with the wrong audience. Or maybe you need to restructure. The point about emotion is it’s deep and visceral – and above all, must be honest.

The seven pillars of export branding

sevenpillarsAt its core, all branding is the same – however, when a brand moves into the international arena, there are some critical dimensions that must be considered.

1. Language

This may seem obvious, but does your brand name translate into your target languages? Even proper names may have an unintended meaning. Don’t just think of the spelling – when pronounced, even seemingly harmless words may have unintended meanings.

Do you use descriptive words in your brand such as, ‘Norfolk Car Parts’ or ‘Budget Printing’? Will these words be meaningful in your selected markets.

You may not need to change a brand name, but it may help to emphasise just part of your title.

Also consider any statements or strap-lines that form part of your corporate signature; these may need adapting in translation.

2. Culture

While language may be easy to check, culture is rather more subtle, and potentially a bigger trap. There is no quick fix. You need to do your research and immerse yourself as far as possible in the culture of your market.  Look at the media, both online and offline; look at your competitors.

Best of all, expose your brand to nationals of your target markets. Discuss your ambitions. Use your partners in-market; agents, distributors etc. Talk to embassy staff.

You’ll soon appreciate how culture impacts upon many of the other dimensions of your branding activity.

3. Brand Story

Is your brand narrative relevant to your target market? Things that may seem unimportant at home may be leveraged to advantage internationally. While your location may have little relevance to home customers, it may be a strong plus abroad. Consider the cultural context: for example, history of a family business may be very important in certain markets.

4. Competitive positioning

The perception of your brand position relative to your competitors from market to market. Be aware and be sensitive, you can often use this to your advantage. Don’t assume that your positioning will be the same as it is at home.

5. Core Values

Your core values are what makes your brand what it is. They should be strong and consistent wherever you do business. You must be clear about them and communicate them to all you work with – your staff, your partners in market, your customers and supply chain. Don’t tinker with them, but just be aware that certain values may be more important in some markets more than others.

6. IPR

Intellectual property rights – consider them all; brand names, trademarks, patents, designs, copyright etc.

Legal protection may be difficult or costly across export markets, but you must give them consideration. It is important to give your brand all the protection you can apply or afford. It is equally important to make sure you don’t infringe the IPR of others.

Remember, a strong brand can often be the best protection you can get – be first to market, establish a strong presence and leave potential copyists playing catch-up.

7. Visual communications.

Though language is important, visual and non-verbal communications have an equally powerful part to play. When you see the ‘golden arches’ of Macdonalds, or the Apple symbol, you don’t need the name. Strong visual symbolism can be a means of transcending language difficulties.

Consider the elements of your corporate identity, symbols, colours, typography. Maintain rigid visual standards.

It’s important to look at the cultural context of your visual elements. What semantic connotations do your colours have? In many cultures colours are far more important, and signify different states.

Brand quirks are good for you.

A brand quirk is a feature or attribute that does nothing to enhance the performance of the product or service, but provides a unique point of differentiation.

QQIn areas where the delivery may be considered a commodity, differentiation is at a premium. This is where the value or a ‘quirk’ may be really telling  – it ups the ‘Quirk Quotient’.

Some of the most notable examples appear in the confectionery or countline sectors. There are very few real differentiators between chocolate bars, few notable differences you can make. The most we can manipulate are marginal variations around a few popular themes.

Consider the shape of the ‘Toblerone’ bar. It has no effect on the taste of the product, provides no enhancement in itself – but it is a quirk or huge value in brand identity and differentiation.

The round Smarties tube is another quirk. It provides no tangible benefit. In fact, I heard a well-reasoned argument from a packaging specialist that a rectangular tube makes far more sense, providing better space occupancy in transit. I understand it was even tried once, but for the public, the round tube is part of the Smartie offer.

The hole in a Polo mint or a Lifesaver has no flavour enhancing property – it is a quirk – but of inestimable brand value.

Quirks are as important as brand assets as are brand names, logos, colour schemes and all the other identity collateral.

Though we understand their value, quirks are among the most difficult things to create successfully. They are often serendipitous, springing from creative irrelevancies and often coming from unlikely quarters within the organisation.

Consciously creating a valuable quirk is as difficult as creating a video that is ‘guaranteed’ to go viral.

If you have a brand that is clearly differentiated in terms of the benefits it delivers, you should concentrate on communicating them. If not, a quirk may help. There is no handbook to creating a killer quirk, but I suspect that the necessary conditions include an organisation that loves and believes in its product or service, that creates a truly innovative environment and has people with a sense of fun and playfulness.

Brand lessons from Starbucks, Amazon, Google et al.

Euro coinLesson #1: The brand is everyone’s responsibility including the CFO.

The recent furore and public backlash at brands which take UK tax avoidance to the extreme was wholly predictable, and avoidable. But how many organisations involve their senior financial people in brand management – how many CFO’s see the brand as part of their responsibility?

I don’t want to get into the rights and wrongs of the tax avoidance activities of these multi-nationals. A CFO had a right and responsibility to maximise post-tax profits for his or her shareholders. They may even be held liable if they do not act to avoid excessive tax burdens.

Boards must share brand values as part of their corporate responsibility. Many of the brands involved in the recent ‘scandals’ take their customer focus very seriously. They have made huge investments in their brands and would probably include such values as fairness, probity, honesty and fiscal responsibility as part of their brand ethos.

Brand leadership v finance.

There seems to be some disconnect here between the brand stewards and the financial stewards.

I’m not suggesting that anybody has acted illegally, but as with all brand issues it is a matter of perception. When the public see successful businesses apparently thriving, they take that as a positive brand virtue. When they hear of shadow companies and ‘management’ and ‘royalty’ fees from overseas that lead to minimal taxes being paid, they smell something bad.

When the tax advisors came up with a great scheme to minimise corporation tax, and when the FCO presented this to the board, did nobody say; “Hey, this does not square with our brand values – it looks bad to our public.”

The problem is one of brand leadership. If the brand is at the centre of corporate decisions it is a great safeguard and reality check for corporate responsibility.

We are already seeing the outcomes: brand aware customers are making their feelings known by using their consumer power. Perhaps the FCO’s will think again. Rather than saying; “I’ve done nothing illegal”, concentrate on explaining falling customer revenues at the next board meeting.

What will do the Google brand most damage – profit slump or communications bungling?

Google logoShare trading in Google was suspended for a while when its third-quarter results were published early by mistake.

The results revealed a 20% profit slump, but what was the biggest potential long-term damage to the brand – the figures or the bungling?

Business results matter, but all companies have ups and downs. Many traditional media companies have suffered reversals in the face of changing markets – areas where Google has benefitted in the past. CEO’s present to the analysts, explain the figures, make their future forecasts, and get on with job.

Share prices suffer for the company (Google was down 9% when shares were suspended) – but that is a business fact. Investors will take a long view of performance and projections and move on. It is a pragmatic decision.

Brand damage is another thing – it is an emotional dimension. We don’t have quantitative measures such as share prices, though all are interlinked. Crucially, the brand is more likely to be damaged by the apparent bumbling and fundamental errors in releasing the results early.

The Google brand has ridden quite high, displaying sound judgement and competence, where other internet brands have skidded from error to error.

The general public is often unconcerned with corporate performance so long as the brand is comfortably between the extremes of insolvency and excess profits.  PR disasters are likely to inflict more lasting dents.

This blip for Google is unlikely to be an enduring or terminal issue. It should be a warning to all of us however not to take eyes off the details of process, especially in corporate communications, however big and successful we grow.

How to learn from what Toyota learned.

Image of Toyota LogoToyota have had another recall issue to come to grips with. This should be no big deal. Most manufacturers have a number of these each year. Toyota’s always seem to come under a rather brighter spotlight which may be a reflection upon their reputation for process, reliability and build-quality. So, when an issue arrises, the media is quick to jump upon it.

You may remember the previous recall of 2009 that received a lot of high-profile press comment. One of the things that characterised that event was the surprisingly bumbling way that the company seemed to react. By comparison, this latest event was an object lesson on sound press relations and crisis management.

What can the rest of us learn from this?

  1. If it can happen, at some point it probably will. Don’t assume it can never happen to you no matter how sound your practices. Be prepared.
  2. Have your ‘spill-drill’ in place – know how you will deal with a media storm in practical terms. Who will handle what and how.
  3. Identify spokespeople in advance. There is nothing worse than journalists calling various different members of staff for comment. Some may have no experience with the media, others may know nothing of the problem. The result  can be conflicting, ill-informed and clumsy stories. Nothing looks worse. Get your spokespeople in place in advance: make sure everyone knows who they are and directs any questions to them.
  4. Don’t hide – nothing makes journalists more curious and antagonistic than, ‘No comment.’
  5. Act fast – in today’s digital world news flies! Deal with one story straightaway and you won’t have to deal with 100 ones in the morning.