What Dove and Protein World have in common

That pouting blonde in the yellow bikini has attracted a lot of attention. Nothing new there. But the row about Protein World’s poster, “Are you beach body ready?” has had a lot more coverage than she has in the poster. Apparently it’s offensive. I really can’t see why it’s more offensive than a Dove ad.

How can I say that? Dove and its campaign for everyday beauty has been hailed as some sort of feminist icon. It challenges the narrow, conventional view of female beauty. That’s a good start. The recent “doors” ad shows women having to decide whether to walk through the door headed “beautiful” or the one marked “average”. I think the message is that the world labels us, and we should be proud and confident in our own appearance. Sure. It turned out it was all a set-up, planned and executed with actors – even after their years of campaigning work, the Dove team didn’t expect women to march through the “beautiful” door. That’s not surprising. They’re not the only ones trying to shape our idea of beauty. In that context, I welcome Dove’s challenge to the mainstream view of beauty. But a range of products focused on improving a woman’s appearance can hardly be held up as a paragon of feminism. There’s an implicit presumption that everyone should see themselves as beautiful, that walking through the “average” door is proof of lower self-esteem, and that Dove is fighting this. That’s ok, but isn’t it healthier to be comfortable with your own appearance, ordinary as it is, than to have to believe you’re beautiful too?

Protein World sets a very high standard. Dove takes a more relaxed view of what is beautiful – smart of them to do this, as it admits more women to their hallowed halls. What these two brands share is the endorsement of the world view that women are judged on their appearance, and must work at it. They are both school of the Daily Mail rather than Spare Rib.

In the flurry of tactical responses to Protein World, did you notice that while the women were generally more cuddly than the original, they were all pretty good-looking? Still no room for plain girls or less than perfect teeth. Of course I see that Dove is also about self-confidence and self-esteem, but it still leads with the idea that physical beauty is the goal for women. All it’s really doing is allowing for slightly bigger clothes sizes, while Protein World is encouraging smaller ones. Obesity and the health problems it causes are a major cost in the NHS. Dare I say, isn’t there some value in encouraging people to have a healthy body weight? Turning a blind eye to obesity isn’t any more responsible than pushing everyone to be a size zero.

A survey of Marketing readers came out 85% not offended, 15% offended by “beach body ready”. Even the 15% are probably finding the brand’s position on female beauty problematic, rather than actually being personally offended. You might disagree with what the brand stands for, but a difference of opinion is not inherently offensive. In my view, it’s definitely less problematic than a page three spread, or, for that matter, a Daily Mail story about the dilemma facing middle-aged women trying to stay trim, which inevitably makes their faces thin too, headlined “Your face or your figure?” Neither of these is doing anything for the physical health or emotional wellbeing of women.

I don’t have a problem admiring the female form. That model in the yellow bikini is gorgeous. Let’s just agree she’s winning the bikini battle, and move on.

Comment | May 2015
May’s quote of the month

“Culture beats strategy; people make strategy happen.”

Martin Glenn, Marketing Society president, CEO of the Football Association

Quotes | May 2015
Trains, Enron and the real job of marketers

I knew I was cutting it fine to catch the 19.20 from Waterloo the other night. But I’ve done it often, and know which platform to head for. The train was still showing on the board. So I was more surprised than anything else when the doors closed in front of me, and I watched from platform 3 as the train pulled out. “But it’s leaving early!” I protested to the unruffled train controller who was right beside me as he waved the train off. “Thirty seconds before, that’s the rule,” he explained.

Trains that run on time are totemic, seen as the mark of a well-run country with a strong economy, like Switzerland. But our version, leaving 40 seconds early? This is surely a classic case of marketing myopia. As their name suggests, the train operating companies think they are in the business of running trains to a timetable, rather than that of making it possible (and, perhaps, easy, fast, cheap, comfortable) for people to get from one place to another. Their business incentives are set up to reinforce this erroneous thinking. It’s all about the percentage of trains which run on time. So it doesn’t take a genius to devise ways to ensure they avoid lateness – like leaving early. Which has the added bonus of leaving behind a few pesky passengers who might slow things down getting out at stations.

They have a solution for that too. I was on a train whose guard suddenly declared while we were between stations that it would now run non-stop to the end of the line. This was because of something or other causing something or other, and they apologised for any inconvenience. The thing is, it was a stopping train to a final destination, Guildford, which is also served by lots of fast trains. No one on that train was actually going to Guildford. We were all intending to get off at the stops on the way. The people who did want to get on that train and go to Guildford were on the platforms at those stops, and remained there. But, the train avoided being late at its final destination. That’s one less bonus-able target to worry about.

Running trains is a tricky exercise in logistics and heavy engineering. When it’s reinforced by business incentives, it’s not surprising that people get very focused on how to stay on time, regardless of the consequences. So the challenge is how to balance those forces, and the experts behind them, inside the business.  It comes down to two things: clarity of purpose, and the voice of the customer. It’s the job of marketers to keep those things in view inside the business.

Marketers often worry about their own accountability for their marketing budgets. There’s a lot of focus on measurement, effective investment and ROI in marketing. But it’s just as important that we hold the rest of the business accountable to our collective purpose, as experienced by our customers. This means having measures of business success that show how well the business is achieving its core aims – which must include its reason for operating, the job it exists to do for its customers, and not just the financial outcomes for itself.

When measures fail to be aligned with purpose, things can go spectacularly wrong. Enron executives’ behaviour makes sense when you understand that their main aim was to maintain the share price – massaging revenues and costs to meet the analysts’ earnings forecasts, so as to protect the share price from shocks, because senior execs were bonused on it. This aligned nicely with their share options, too, since smoothing earnings helps to maintain a steady upward trajectory both in profits and in the share price. (This is described in Charles Kindleberger’s book, Manias, Panics and Crashes, a thoughtful academic tome which uses moderate language to describe immoderate behaviour.) Share price might seem like a good measure as it is usually an outcome of running a good business, which would normally include serving customers sustainably and profitably. It can trigger quite different behaviour when it becomes an end in itself.

Back to London Waterloo. In a normal business, customers might take their custom elsewhere, but of course the trains aren’t really a normal business. Next day we were all back on that slow train to Guildford, all eye contact avoided and spirit-of-the-blitz interaction over, until next time it snows.

Thought leadership | April 2015
April’s quote of the month

“Brands don’t just have target markets, they have target moments.”

Rory Sutherland, Vice-Chairman of Ogilvy UK

Quotes | April 2015
How to advertise successfully when there’s not much to say

Effective marketing communications are getting harder to do. It can be hard to find anything (other than price) that’s really worth shouting about. There are whole advertising campaigns built around seemingly marginal features. Take The Ford Motor Company. “Keys”, says the woman in the Ford Focus ad, and I start watching because it is charming and true. Or that buff chap climbing the steps to the diving board, to the opening riff of Hawkwind’s Master of the Universe – the message is loud and clear that the Ford B Max has no pillars, and that somehow this will make my life freer and fuller. (The offspring of these two ads is now on air: one about keyless entry featuring a demi god in Speedos.) These features could be dismissed as trivial in the overall ranking of car greatness, but maybe now that almost all cars are reliable, comfortable and fast, they make Fords seem that little bit better. These are smart features that deliver modest but clear customer benefits, beautifully dramatized in their advertising.

There are, though, plenty of ads out there with nothing much to say. This is usually because what’s on offer in the category is all much the same. When directory services were deregulated, a lot of money was spent on TV advertising by competing providers. There was no pretence that the offers were any different, just a scrum to get their numbers into our heads. 118 118 was the clear winner.

But now free online listings have undermined the whole directory services business model. Classical marketers would see this as proof that lack of differentiation is the road to ruin. Since brand management began, the search has been on for unique selling propositions, differentiation via the offer and/or the brand, in the firm conviction that it is the only way to create lasting customer relationships and long term value for the business.  It’s received wisdom in marketing that brands need to stand out from the crowd. Certainly it’s better to be distinctive and memorable than bland and forgettable. But we don’t live in a perfect world, and sometimes, especially when under competitive pressure, getting a new offer into the market fast is more important than making it different.  In a new category, to teach us all a new habit, the first mover has to establish the generic category benefit. This is certainly true for a real pioneer, Skype for example.  In an emerging category with several competitors, where it’s a landgrab, businesses just want their name to be known. Price comparison sites exemplify this – we all know it’s a mad push to get scale, and all their messaging is simply to establish name awareness and drive traffic. Hence Compare the Market, perhaps feeling they had nothing different to offer, created a very distinctive advertising property instead.

Marketers in search of a USP risk treating their marketing communications as primarily a rational process, a way of giving potential customers useful information to inform their rational choices. This is true, but it’s only half of the story. Human emotion is the other half. Imagery, music, familiar faces, can all be used to trigger positive emotions, which we then associate with the brand. This approach is informed by the work of academic Robert Heath, with his “low involvement processing”, which holds that emotion not cognition shapes our responses to advertising. I believe there can be both conscious and subliminal engagement, and that we can have both rational and emotional responses. The challenge is to make sure we pay attention to both.

As marketers, it is right to push ourselves and our colleagues in the organisation to make the offering better for customers, in a material way, whether through innovation, service, price, or anything else. I’m all for differentiation, especially when it means better for customers. But it’s also valid to think about how our offer makes people feel – the ultimate measure of a brand – and to recognise that great advertising also makes people feel good.

More posts on brand communications:

Breaking bad news

Let me entertain you

Yes there’s a crisis in brand trust but please, don’t try to be nice.

Let’s hear it for the ads we love to hate

Comment | March 2015
Two great reads from Michael Lewis

Liar’s Poker, Michael Lewis’s first book, dramatised the crazy excesses of 1980s Wall St. It was rather like the Wolf of Wall Street but without the 18 certificate. But Michael Lewis knows how to make potentially dull stuff into a good read too, so if you feel you ought to know about the 2008 financial crisis but can’t face reading about it, The Big Short is the book for you. It’s a neat little paperback (or ebook, obviously) that explains the whole sorry mess with clarity and wit. It’s wholegrain but feels like cake: you’ll enjoy reading it and you’ll feel really virtuous afterwards.

His second book on the global financial meltdown, Boomerang, came out of Lewis’s research for The Big Short, and it’s a real page turner. There’s a chapter on each country and its madness – how US mortgage lending caused Greece to go bust, the precarious finances of the European country-sized state of California, and how even some sober-seeming Germans lost their heads, and their liberty. He’s sharp and very funny on national quirks – the chapters on what happened in Ireland and Iceland made me laugh out loud even as I gasped, “How could they get away with that?! And how did we not notice at the time?”


Related posts:

You’re a what?! Why job titles matter

Britain’s banks: our role in their downfall

Banks and customers – a lesson in obliquity

Books | March 2015
March’s quote of the month

“Whenever you find yourself on the side of the majority it is time to pause and reflect.”

Mark Twain


Related posts:  The myth of the leader

What can sporting heroes teach us about business?

Quotes | March 2015
Your nearest exit may be behind you

The future is already here, it’s just unevenly distributed, goes the saying. Logically, the most developed markets are ahead, so what they have now is what we’ll get soon. In Europe, we used to look at the USA and Japan for trends and innovation ideas which we could adopt or adapt to our own marketplace. In food and beverage, this held true for a long time – in part because it’s a self-fulfilling prophecy. Corporations large and small imported or copied successful products and brands from markets they saw as being more advanced. It’s no secret that SouthWest Airlines was the model for Europe’s budget airlines. Yo Sushi’s food on price-coded plates on a rotating belt, which was so novel for the UK, is standard practice in Tokyo.

In technology development, European businesses could usually garner plenty of good, progressive ideas for their markets by studying the USA and Japan. But something strange is happening in industry sectors and product categories where technology can make a difference – which is quite a few. It’s no longer enough to look at developed markets. Real innovation is happening in developing markets which could be said to be behind Europe in that they have not yet adopted some of our technologies – and yet they are leapfrogging us, and bypassing those technologies. Much of this is driven by telecommunications.

For a long time, development in many of the world’s poorest countries was inhibited not only by lack of natural resources, and/or corruption, but also by a lack of transport and communications infrastructure. Even those countries rich in natural resources found it difficult to build a national communications network. The information age seemed beyond the reach of the vast African countries in particular. Impossible to imagine installing the millions of miles of cable it would take to provide national connectivity. Then wireless comms came along.

For us in Europe, there was a natural progression. First we had wired telephony, then wireless telephony, then wired internet connectivity, then wireless everything. But who needs wired anything when you have wireless comms? Better still, wireless everything without the drag factor of having invested in other, more old-fashioned infrastructure. It gives the ability to create and promote new services without having to change consumer habits and behaviour from the old ways. Suddenly, the term “legacy systems” has a whole new meaning. Fixed line telephony and internet are simply not needed. Bank branches are legacy systems. Maybe, with remote learning, university campuses are too. In countries where these infrastructure assets are scarce, it’s no longer a barrier to progress – it may even be an enabler.

We tend to think of African use of tech as affordable or sustainable tech – low cost mobile phones, for example, with batteries rechargeable from the sun. This view suggests we can look there for inspiration for “bottom of the pyramid” ideas, ways to bring tech to the masses. I think that’s not even the half of it. The rapid spread of mobile comms, without the assumptions or costs that come with legacy infrastructure, is creating whole new ways to get things done. Retail banking is a prime example. It’s said that there are only six bank branches in Nairobi – a city of over 3 million people, as big as Manchester and Liverpool combined. The main reason is M-PESA, a mobile-phone based money transfer service run by the dominant mobile network operator, Safaricom, and now used by about two thirds of Kenya’s adult population.

Low tech businesses like farming can also benefit. WeFarm is a communication platform that runs on plain mobile phones, not smartphones, and enables farmers to find out the market price for their crops in different locations – so they can quickly sell their produce at the best price. It’s a simple idea, that doesn’t need fancy hardware or software, and creates the classical economist’s ideal situation for a free market – perfect information, available to all.

African mobile phone owners are also inspiring innovation in marketing services. Brandtone, for example, is helping Unilever, SAB Miller, and others, engage directly with a growing database of their consumers. Their use of SMS is much more subtle and rewarding for consumers than the spam we’ve grown used to in the UK. It’s making one-to-one marketing possible for fmcg brands, at scale.

So it’s true, the future is already here, but not always where you expect.


Previous posts on inspiration for innovation:

Keep dreaming

Desperately seeking dissatisfied customers

Getting customers to do it your way

Why be different when you could just be better?

What coat hangers teach us about business-to-business marketing

Thought leadership | February 2015
February’s quote of the month

“Time is the only unit of scarcity on the web. You only have 24 hours a day per person.”

Tony Haile, CEO of Chartbeat, a digital analytics company.

Quotes | February 2015
The force that the internet was supposed to free us from is back – and this time it’s online

Whatever happened to disintermediation? Terrible word, big idea. The thought was that the internet would enable buyers and sellers to connect directly, cutting out middle men who were just a cost in the system. Ebay is probably the largest and most successful business built on connecting buyers and sellers directly. Uber and Hailo do the same for car travel, in different ways – Hailo leveraging the existing taxi network, Uber seeking to bypass it. Most of these started as amateur alternatives to the established trading systems, but most have become a new channel for professionals – ebay and Amazon Marketplace being the prime examples. Airbnb is another. It may have started with a novel idea about filling your spare room but nowadays it’s mostly a holiday lettings site.

Travel agents and estate agents in particular were the businesses that were expected to be disintermediated out of business through the web.  Seen as adding little value, described as mere aggregators of inventory, logic said they’d disappear. The web created a new shop window where buyers and sellers – of flights, accommodation, or of houses – could find each other easily and cheaply. So why would anyone other than the very rich or very time-poor pay an agency?

There was a good deal of consolidation and hard times in both industries, for sure, but new intermediaries have emerged. In both cases, it’s as much to do with the needs of the seller as the buyer. The harbingers of doom forgot that in these cases it’s the seller who pays the agent, not the buyer. It turns out most of us prefer to have someone else name a price and then show people round our homes. Usually they’re still the estate agents of old, operating with a new shop window on everyone’s desk, and now in our hands. For travel, there is so much inventory that it’s inefficient for the sellers to have only a single channel to market. It’s equally inefficient for buyers to search for a holiday by visiting the website of every airline or hotel – that’s even if you know what to search for.

Now these markets are being re-intermediated, in new ways, online. There are sites which consolidate information on property values, for example, to help buyers and sellers alike. In travel, sites like Skyscanner scrape information from other businesses to present a single view from multiple competitors. This online reintermediation seems to have no limits – Skyscanner scans other aggregators like Expedia and Flights.com. Trivago scans other hotel aggregators like Booking.com and LateRooms. I’m told Secret Escapes is making good money – but it’s little more than a portal and some web scraping, together with a very attractive, upmarket woman as the face of the business on TV. There is a consumer benefit but little differentiation in an increasingly crowded market.

Perhaps the ones we didn’t see coming were those which crowd-source information to help us make choices. Trip Advisor is genius, is it not? Soundcloud has changed how talent spotting in the music business works. Getting noticed on Soundcloud is just another form of crowdsourcing, which means the labels know what’s popular before they sign the talent. Both are adding value, not just using clever technology to repackage information that’s already out there. It would be easier – and more fun – to write the value propositions and brand narratives for these two than for any of the travel-related sites, which I suspect would all be much the same.

So, even in this world of clever technology, there’s still a need for the fundamentals of marketing: motivating value propositions, woven into an attractive, relevant brand. Strong brands are the final frontier in building a compelling business that customers warm to, and flock to. This is different from a flashy advertising campaign to build awareness and generate leads. Hotels4U? Not 4 me, thanks.

It feels like we are due for a new wave of consolidation, to shake out those businesses which aren’t doing anything distinctive, or which add value only through the same mechanical process as many others. The ones which have bothered to create a true brand will surely fare better when this comes.


You might also like these posts about technology-based start-ups:

Hot Chip  – the UK tech start-up scene

Hot Chip 2: David, say hello to Goliath

Hot Chip 3 – can you pick a winner?

Thought leadership | January 2015
January’s quote of the month

“The secret of getting ahead is getting started.”

Atributed to various writers including Mark Twain (wrongly), Agatha Christie and Sally Berger (who may be the person in this picture).

Quotes | January 2015
A breakthrough in managing brand experience?

Last night I found myself asking, “What is this N’duja sausage?” Both Pizza Express and Zizzi’s have adopted it big time lately. The staff member in Zizzi’s couldn’t tell me how to say it, never mind what it is, so I ordered my pizza without it. Today I got an email from Zizzi’s giving me the answer to both. Genius joined-up marketing comms? Actually, the opposite – the person in the restaurant had no real answer for a question which she was probably not hearing for the first time. (She improvised with admirable brass neck but no insight. “It’s a sort of sausage and it’s pretty hot.”) Fortunately, the marketing people realise that people are asking, hence the timely email.

Why don’t the service staff have access to the same helpful information about this novel spicy paté-style sausage, so they can tell customers at the moment of truth, and not when we’ve just had breakfast? I suspect it’s not for want of trying by the marketers, or because they’ve not seen the need, but because of how the business is set up and managed. It’s simply that it can be hard for marketing people to influence the agenda and the activity of other functions, even when those functions clearly represent the best route to customer engagement available.

In service businesses like restaurants, managing front line staff is both critical and challenging. High staff turnover, typically 30-40% per annum, means that maintaining the essentials is a Forth Road Bridge-type task.  Naturally, hygiene standards and regulatory compliance must be the top priority, together with making sure staff know the basics of the job, and that they turn up when needed. A marketer sees the front line staff as the most critical point of contact with customers, the face of the brand. But they’re part of the operations team, not the plaything of marketing.

This is what the third pillar of the Marketing Society’s manifesto refers to – marketers have to find ways to mobilise the organisation to deliver the proposition. It’s so much easier in fast moving consumer goods, where it’s all defined and controlled by what goes through the factory, manufactured to an agreed specification, with lasers and filters that spot and dump an off-colour crisp or a misshapen biscuit. Customer service usually takes the form of a centralised team who become expert in the category and who willingly engage with customers, and with brand managers.

What can you do? One rather daring approach is to overpromise, through marketing communications, to prompt the operations team to raise their game. This was supposedly the aim of the British Airways TV campaign post privatisation in the late 1980s and early 90s, and it seemed to work. Expensive, though, and risky, to blow the budget advertising to your own people, and to customers with a promise that probably won’t stack up with their experience.

“Living the brand” programmes are another widely-used approach, helping people understand the desired customer experience, and their role in it. These are expensive too, in that they take a lot of employee time, and of course staff turnover means the job is never done.

There could be another way, one that relies on the very thing that makes it hard to deliver a controlled brand promise through the people: their humanity. A recent academic experiment, reported in HBR November 2014, has shown that in restaurants when the chefs can see the customers, they deliver better food, faster. That’s a little counter-intuitive, isn’t it? When the customers can see the chefs doing their work, they think they are getting better food, sure, and that also was demonstrated in the study. But the best results were when both sides could see the other. It seems that seeing your customers is motivating. People feel more appreciated, more satisfied with their jobs, and are more willing to exert effort. It wasn’t just an effect of being watched, or the novelty of being part of an experiment. After the study was over, some chefs wanted to keep the two-way cameras in place. One said. “When the customers can see the work, they appreciate it, and it makes me want to improve.”

This is great news for marketers in service businesses. Finding ways to make the customer real for employees, wherever they are in the business and whatever part they play in delivering the proposition, is perhaps more important than trying to define and govern a consistent brand experience. It’s a whole new way for marketers to make a difference, one that is good for employees and for customers.


More posts on brand and customer experience:

The trouble with brand love

You trust your favourite brand – but does it trust you?

What gets measured gets done – make sure it’s what you really want

Chief customer officer? No thanks.

Thought leadership | December 2014
December’s quote of the month

“The most effective way to do it is to do it.”

Amelia Earhart, aviator

Quotes | December 2014
“The Outsiders” by William N Thorndike, Jr.

Here’s a book that flies in the face of the zeitgeist. Subtitled, “Eight Unconventional CEOS and their radically rational blueprint for success”, it offers lessons from business leaders who have delivered consistently great financial returns in the long term.

Partly in response to the cult of the celebrity CEO, personified by Jack Welch, Thorndike identified all the US companies who had outperformed both their industry peers and GE under Jack Welch over a period of many years. He found only eight.

Who are these outstanding business leaders?  Apart from John Malone, whose Liberty Media recently bought Virgin Media, and Warren Buffett, the legendary “Sage of Omaha”, you probably won’t have heard of them. Yet their returns to shareholders outstripped those of the mighty Jack Welch by far.

So what’s the blueprint?  Putting the consumer at the heart of the business? No way. For these guys (and one gal), tax planners are the only window on the outside world deemed essential. Focus on creating customer value and shareholder value will naturally follow? Nope, customers don’t get a mention in this book at all, except in passing on page 205. The CEO as cheerleader and visionary, providing inspiration to colleagues?  Not his job. Capital allocation is the only task that the CEO must handle. Everything else can, and should, be delegated. So says Thorndike, a US investment manager.

His conclusions are quite a challenge to conventional marketing wisdom. Of purpose, mission, vision and values, there’s not a cheep. No concerns about employee engagement or satisfaction here. Creating value for customers doesn’t feature.  Instead these leaders delegated just about everything, and focused relentlessly on how the capital of the business was invested. Often that meant passing on expensive acquisitions that would have brought scale, and buying back their own shares if they felt they were undervalued. In fact share buy backs shrank their businesses in the short term – but increased the value of each remaining share. This has been criticised as a tactic to trigger CEO incentive plans, but these CEOs were taking the long view. They looked for free cash flow rather than reported net income, and share value growth rather than earnings per share.  They seldom paid dividends and eschewed giving stock market guidance on forward earnings. Needless to say, this did not get them on the cover of Time or Newsweek.

This is a book about the CEO’s role. Thorndike has nothing to say on marketing and customer issues. As an investor, he cares about long term value creation for shareholders – so should we all. Post RBS, no one endorses the ego-driven pursuit of scale at any price, but this book rebuts the standard assumption that growth is good for a business. Most of all, it should give courage to those who see the world differently, and believe in their strategy for the long term, to be prepared to zig when others zag.

Books | November 2014
November’s quote of the month

“Speak softly and people lean towards you. Speak loudly and they lean away.”


Quotes | November 2014
The trouble with brand love

Most brand managers want their brand to evoke strong feelings. We naturally want our customers to like the brand, to feel attached to it. Books have been written and careers have been built on the idea of brand love. But let’s be honest: as a human being, rather than a marketer, how many brands do you really care about? Love?

When Coca Cola changed its formulation in the 1980s, Americans rose up in horror, in a way I don’t think we would ever see here. We seem to prefer brands we can visit, rather than those we eat or drink. Marks & Spencer used to be a national treasure – a position John Lewis is now vying for, primarily wielding the weapon of sentimentality. It’s a clever ploy. Not even Richard Dawkins is against children having a happy Christmas.

Luxury brands seem to evoke strong feelings too. We could do all the deep psychological stuff about outer directed and inner directed values, badge value and self-worth, and all that, but there’s also a very simple reason. We pay more for them so we invest more in them, literally and emotionally. And, we expect more of them because we pay more for them.

A consequence of this is that the bar is set even higher for luxury brands when it comes to meeting our expectations. Of course, rationally, we expect expensive things to last longer, perform better, or look nicer than cheap ones. But emotionally too we expect our investment to be recognised – not just by others but by the brand itself. We expect respect. Apple do this well – I always feel they will stand behind their name on any product I buy, and won’t quibble or try to weasel out of taking responsibility if something goes wrong.

I’m not sure the people involved in luxury brands always realise this. A friend had a TAG Heuer watch which stopped working. He was quoted almost the price of a new one to get it fixed, and was told the problem was he hadn’t had it serviced by them. No, I hadn’t heard of having your watch serviced either – and neither had he, not even when he had taken it to TAG Heuer to get the battery replaced. This is the sort of “gotcha!” approach to customer service that gives the insurance business a bad name.

Luxury cars are at it too. They’re pretty good at seduction – that Jaguar ad with the English villains makes the F-type a car to dream of. But there’s a problem right now with some luxury cars – expensive 4x4s and others like the Jaguar XF that have diesel engines. The particulate filter on the diesel engine, which is required by law, fills up and stops the car. Some car owners have been told the problem is their “driving profile”. Apparently you need to drive at a steady 50mph for at least 15 minutes at a time to stop this from happening. Town driving really doesn’t suit this engine. This feels to me a lot like the manufacturer blaming the customer for using the product. If you’ve paid forty grand for a car, you decide how you’ll drive it! Better that they come clean and admit this is a first generation technology that isn’t working properly. Mistakes happen; blaming the customer is rarely a wise tactic.

The moral of this tale? Forget about brand love. Aiming to “surprise and delight” your customers is another popular aim but even that is asking a lot. Simply knowing what customers value, what they expect, and delivering that, would do nicely. What we expect as customers is largely a product of what the brand promises, and the more we pay, the more we expect. When a brand meets our expectations, consistently, well, we tend to become rather fond of it. Love your customers, and they may love you back.

Comment | November 2014
HOT CHIP 3 – can you pick a winner?

If only. But you need some basis for deciding who you’ll spend your valuable time with. That depends of course on why you’re doing it. Let’s assume for now that we’d all like to be able to spot which businesses are likely to survive and grow. The benefits to the investor are obvious, but no one who values their time wants to spend it with a loser. That’s a harsh word, given many entrepreneurs learn from failed ventures and go on to success. That’s not much use to marketers though. Much more useful to be at the vanguard of emerging and effective marketing tools than to be the best-briefed on obscure ideas that never go mainstream.

So, setting aside any expectation that reading this will guide you to a large stake in the next Instagram, here’s my guidance on picking the tech start-ups with the best prospects.

Spotting a top team

The classic VC criteria are: team, market opportunity, and product advantage. Most will say team is the single most important factor. Perhaps this is why many start-up pitches talk first, and more, about themselves, rather than about their prospective customers. This leaves me cold. Team is important, but assessing the quality of the team is not the same as being told about where they studied or what they’ve done before. My top three factors are:

  1. Look for a team* that starts with the need they’ve identified. Can they describe that client or customer painpoint vividly? How do they know about it? Are they hungry to know more? Founders with personal experience of a business need can be very compelling.
  2. Do they seem like people who can get stuff done? Success is partly luck but those with energy and hustle seem to make more luck.
  3. Which of the vital skills are in-house and which are outsourced? Often the tech development is outsourced, which isn’t a show stopper but then the team needs some other X factor, which may be their deep understanding of their target market.

Then there’s the listening thing. It’s tricky because starting a business takes resilience, and demands self-belief, but why waste your time with people who aren’t interested in what you have to say? The best teams are both confident and curious – so they engage when you challenge, rather than defending their position. Even investors look for founders who will listen and reflect rather than argue and defend. I tell start-ups they must at least appear to listen, because they can always ignore the advice later. Sometimes they must – start-ups get conflicting advice – but they should listen first.

*A team is two or more people each with a meaningful role – not one dominant player with lackeys.

Does the team feel the customer’s pain?

Let’s talk about the pain point.  A genuine and significant market need is as important as a smart team.  I see a lot of nice ideas about doing something for someone, both business and consumer-oriented, like bringing together new designers in one place, or sending me reminders when I need to keep in touch with my network. They’re not bad ideas, but it’s rare that they’re anything more compelling than a minor convenience. Nice to have but I can live without it. These are vitamins whereas real problem-solving ideas are painkillers. Market opportunity is about size, and about competitors, but also about whether the need is worth solving. This is the hardest thing to gauge. It’s why a team that really knows the problem is so valuable.

Many start-ups seem more interested in raising investment than in generating business revenue.  I am wary of those. I also steer clear of the ones whose business model is to generate an audience by providing some minor service to the general public and then selling their audience to advertisers.

Who’s paying?

The popular Software as a Service (SaaS) model can be conventional or fremium, but many new business ideas are free to the consumer. Often this indicates a vitamin idea that’s not worth paying for. As the saying goes, “If you‘re not paying, you’re the product.”  Revenue is usually going to come from advertising or commission on sales, or referrals to other sites. This last one, the “affiliate model”, is a web favourite but to me it’s the least attractive. Building awareness and a large reliable audience is expensive, and affiliates seem to add no value. Ok, now point out the hugely valuable businesses that prove me wrong. Facebook, Instagram, Snapchat. You can take a chance on that, but a service that the customer values enough to pay for is a better bet. (Please get in touch if you think you are seeing, or becoming, the next Google.)

What’s their source of competitive advantage?

Google is free to the end-user, but they did have superb tech applied to a universal problem, which generated a dominant position for advertising. Rare is the business that has unique patented tech that addresses a compelling need. It’s often pointed out that Apple were not the first with mp3 players, smart phones or tablets. I guess they had a fab team. Maybe they were not endlessly curious about their customers and how to solve their problem ever better, but, for everyone except the next Steve Jobs, that’s a good place to start. The innovation need not be in the code. It can be positioning, or pricing, or some simple twist that makes things easier or better for the customer. Equally, I’ve seen businesses with a unique and clever algorithm (and PhDs) struggling to find a compelling application.

Reality check

I can find exceptions to all the criteria above. There are plenty of me-too businesses – such as flight comparison sites and hotel booking sites – which have built scale and made money. But we only see the ones that make it. The quoted failure rate of start-ups is anything from 75% up to 90%. This is not about picking winners but avoiding spending time or money with those that won’t make it.

One more thing. A clear customer-centric purpose can be powerful for any business. It doesn’t have to be evangelical. Just useful.  Start-ups are frequently encouraged by investors to have a grand vision for world domination. This can become a statement about what the founders want, or what the investors would like. The most useful vision is one that shows how the business solves a problem. Ideally this will be a sufficiently irritating problem held by enough people with the money and desire to solve it that the addressable market is clear and sizeable. This means starting with the prospective customer – not the tech, not the competition, not who else doing something similar has raised gazillions in Series ABC investment. These things may add weight to the opportunity but they are not the opportunity.  Why does that matter? Because focusing on the customer need is the best way to figure out how to build a valuable business.


Read Hot Chip here and Hot Chip 2 here


Thought leadership | October 2014
October’s quote of the month

“Always be a first-rate version of yourself, instead of a second-rate version of somebody else.”

Judy Garland

Quotes | October 2014
September’s quote of the month

“THE EDGE, there is no honest way to explain it because the only people who really know where it is are the ones who have gone over.”

Hunter S Thompson, gonzo journalist

Quotes | September 2014
HOT CHIP 2: David, say hello to Goliath

Four tips for marketers to get the most out of the tech start-up scene

The appetite among marketers to get close to the tech city scene is such that one enterprising chap is selling Shoreditch tours. I’m not sure how you measure the ROI of looking at Google Campus from the outside, but it tells me the days of shrinking marketing budgets are over.

Many marketers from big brands are dead keen to engage with tech start-ups. Even for the digital native, it’s hard to feel truly up to speed with marketing innovation, particularly digital and mobile-enabled marketing practices, when you have a busy day job. Secondly, there’s a desire for people in large corporates to be exposed to entrepreneurial attitudes and behaviour. The corporate hope seems to be that some of the entrepreneurial spirit will rub off. A few corporates also want to invest via their venturing arms in the tech scene. Naturally, agencies too want to keep abreast of developments and perhaps take an early stake in the next big thing.

Entrepreneurs are usually delighted to meet with corporate people, as they generally welcome all input, hope for new contacts, and assess everyone they meet as a possible investor, wise counsel or prospective client. Most of these encounters are one-night stands, however, since most people with day jobs don’t have time for more, and those without formal employment can’t afford to hang out with start-ups giving free advice.

It can be a total waste of time on both sides. Meeting a bunch of start-ups doing things unrelated to their sector and irrelevant to marketing practitioners soon loses its shine. Start-ups enjoy the attention of people whom they may perceive to have budgets and therefore potential value to them, but mostly it comes to naught.

Done right, though, it can be valuable to both parties, even when no money changes hands. In Collider, the interaction is structured to make it efficient. All the start-ups have to be doing something that will help businesses connect with their marketplace. Brands and start-ups take part in a speed-dating session, so the brands can see what interests them. They may then want to act as a mentor and business coach, and some even pilot the start-up’s service in their business. There’s a business benefit and some personal reward, as well as a taste of the entrepreneurial life. Occasionally the brand person goes off to start or join a tech business, but this is rare. More typically they share their knowledge of how big businesses work, and take away some inspiration about the art of the possible.

Here are my tips for marketers get the most out of the tech start-up revolution on our doorstep.

1.       Be very selective. Find a forum where the start-ups have a common focus which suits you – there are a few like Collider doing madtech; others are sector-focused, like healthcare or gaming. Don’t be flattered into spending time giving advice unless it’s to a start-up whose activity is relevant to your business or your job.

2.       Play it cool. Some of these entrepreneurs are brilliant technically and quite naïve on how big companies work and clueless on corporate-speak. They may totally misread the signals. I worked with a couple of guys who honestly thought the senior manager who said, “Get in touch if you come to London” was giving a strong buying signal. It could be an expression of interest, but it could just as easily be a polite fobbing off. So if you say “Our business is looking to invest in this sort of thing”, you may give the poor chaps false hope. It can seem exciting, but keep your head and play it cool. Then they’re less likely to latch onto you and pester you.

3.       Be cruel to be kind. Don’t be afraid to say no, and say it loud, clear and soon. This is a kindness to the start-up. Even if you’re going steady, break up if you need to. Then you’re both free to see other people. One of the most damaging things I’ve seen is little businesses hanging on, waiting for a yes from a big business. When they typically only have six months’ cash, waiting in vain is very expensive. I know one that spent six months getting agreement from a large business, which said “Yes yes yes yes” at several stages, then “no”. By the end they had run out of cash and had to fold. Another small business was promised investment by the UK subsidiary, which took months to turn into no from somewhere else.

4.       Make them keep it simple. Don’t worry about the tech – few of us are expert there, and it’s not where they need advice. Instead, challenge them to simplify their message, to articulate a clear proposition in terms that anyone would understand. (This is beautifully covered in The Mom Test by Rob Fitzpatrick.) It’s your best chance of finding new businesses that can be useful to you.Many of these entrepreneurs can talk about tech and algorithms and whatever, but it’s all for nothing if they can’t express simply the problem they solve for their customers. I have found this to be amazingly helpful to them – and to me.  The to and fro of this conversation helps to identify what a tech start-up can do, for me or for others. With a customer painpoint as the focus, I can learn about the tech in a way that’s relevant.  It’s also the best way to know which things compete – not because they have similar tech but because they address similar painpoints.

With these four principles, you can go boldly into any incubator in the country without fear of neglecting your day job.


Read Hot Chip here and Hot Chip 3 here

Thought leadership | September 2014
August’s quote of the month

“The bitterness of poor quality remains long after the sweetness of low price is forgotten.”


Benjamin Franklin

News, Quotes | August 2014
Breaking bad news

The trailer for the new Call of Duty game, Advanced Warfare, says it is expected to get a “mature” rating. If an Xbox shooting game is mature, what’s immature?

A film I saw recently warned upfront that it contained sex, violence and “mature themes”. So sex and violence are no longer considered mature, but shoot ‘em up games are. What exactly are mature themes? Whether to buy an annuity with your pension pot? Yoga? There’s a risk here of everyone being disappointed.

We all know it’s foolish to overpromise and under-deliver. Any business gain through weasly words or false promises is only short term, and can come with a harmful backlash. So why do people and brands keep doing it? Often this is because incentives are aligned with the wrong things – signing new customers rather than retaining overall revenue is a common one that leads people astray. The longer they get away with it, the greater the shame and the cost when it is finally revealed. Financial misselling practices are the proof. The financial hit is huge, even if they appear shameless.

I once stayed in a hotel in the west country whose promotional photos turned out to have been taken at another hotel entirely. In the flesh, its guest rooms bore no resemblance to those in the brochure. Shortly after my visit, a well-known consumer affairs publication picked up on it, as did the local trading standards people, so they didn’t get away with it. This was a particularly blatant misrepresentation, being objectively false, so it was easy to challenge.  But there is a widespread view that the marketing industry exists to sweet talk people into things they don’t really want, and to spin products and services to make them deceptively appealing.

Most advertising is not downright dishonest, or even deliberately misleading. Some of it is just plain pointless. A large building society is currently communicating its new logo with outbound email that encourages you to go to the website for more information. There you will find much the same information that’s in the email. They say that they “know it’s important to respond to how the world is changing, to evolve so that we can continually offer great service and value. That’s why, after speaking to lots of customers, we’ve decided to change the way we look.” Err, that’s it. No, there’s no change in the service, no promised change in their behaviour, not even news about opening times. Just the logo. Well done chaps. All risk of over-promising successfully avoided.  Customers only mildly irritated.

There are times of course when businesses have to deliver bad news to their customers – price rises, or withdrawal of certain features or benefits. It’s widely accepted that advertising messages need to be seen several times before they are absorbed. By contrast, the good thing about bad news is you usually only have to deliver it once. That’s provided people recognise it for what it is. Pretending bad news isn’t really bad is a waste of money.  If they have to work it out for themselves, it’s only going to be more annoying. When a brand slips something past me, and then tells me later that I have been told, I don’t think, “Fair dos.” I think, “You b******s.” Don’t you?  If there is something unpalatable to be said, my strong advice is, don’t sugar-coat it. If you want people to get the message, tell it straight, and let them decide.

Incidentally, I watched the film and still don’t know what the mature themes were. Perhaps I need to ask my teenage children to tell me.


More comment on brand communications:

Let me entertain you

Yes there’s a crisis in brand trust but please, don’t try to be nice.

Let’s hear it for the ads we love to hate

Comment | August 2014
Think Like a Freak, by Steven Levitt and Stephen Dubner

Almost ten years ago these two – Levitt the iconoclastic economist and Dubner the journalist – published Freakonomics, in which they confronted received wisdom and political correctness. Levitt’s approach is about finding true cause and effect by daring to ask different questions and using data without prejudice.  In a way it’s the precursor of behavioural economics, nudge theory and all that, because it reveals how frequently outcomes are shaped by unseen forces, rather than being conscious choices. It’s still worth reading. Superfreakonomics followed with more examples and stories. Think Like A Freak recaps on those principles neatly, without really taking us anywhere new. It’s a quick, easy and fun read though, with a few good stories – why Van Halen demanded bowls of M&Ms with the brown ones removed, and why Nigerian fraud scammers don’t make their scam letters more convincing.

Incentives loom large in these books. Of course Levitt believes people respond to incentives, but there his conventional economist wisdom ends, as he shows how incentives don’t always achieve what was intended, and in some cases do quite the opposite. TLAF contains his simple set of rules to design the right incentive scheme. These should be read by every marketer – because they also apply to marketing more widely. His first rule is, “Figure out what people really care about, not what they say they care about.” Good advice for all of us. The second is, “Incentivise them on the dimensions that are valuable to them but cheap for you to provide.” Again good advice, and a strong rationale for building attractive brands that people find emotionally rewarding, which usually reduces your reliance on price.

I have one major disagreement with these two. They say, “To the average company, a customer is a human wallet from which the company attempts to extract as much money as possible. Everyone understands this but no one wants it to be so explicit. That’s why companies use super-friendly logos, slogans, mascots and endorsers.”  Harsh words indeed. There are businesses like that, but I believe good businesses create value by seeking to satisfy both sides in every transaction, and that long term profitability is their reward. So here’s our challenge. Can we use their own principles to prove them wrong?

Books | August 2014
July’s quote of the month

“Just as you would not permit a fellow employee to steal a piece of office equipment, you shouldn’t let anyone walk away with the time of his fellow managers.”

Andy Grove, former CEO of Intel

Read The true cost of regular team meetings, and why we should care

Quotes | July 2014
Hot Chip – the UK tech start-up scene

The UK start-up scene is hot.  There are lots of incubators, accelerators and shared workspaces. The biggest growth sector in London is probably TechSeedCityHubbery.  There are similar set-ups in half a dozen other UK cities. Both big brands and agencies are keen to get close to tech start-ups, and some are investing, providing mentoring, office space, and more.

I see a lot of start-up and small business pitches. In this post I’ll focus on what I’ve seen in the start-ups themselves. In Hot Chip 2, I will cover how big businesses, and marketers in particular, interact with start-ups in a separate post. Finally, I will share what I’ve learned, mostly from other smart investors, about picking winners.

Who are the start-ups and what are they doing?

I help select and coach start-ups in a specialist accelerator called Collider (collider.io), which focuses on tech businesses that help brands connect with their marketplace. That sector is commonly referred to as adtech but of course there’s more to marketing than advertising. (Sarah Wood from Unruly called it “mad tech” which she said was a fair reflection of the culture at her business.)

I’ve also seen many businesses in healthcare, fashion and furniture retailing, financial services, property management, all web or app-based.  There are some clear trends.

1. In marketing tech, the big themes right now are social, mobile and video. Social media – managing it, measuring it, influencing it – is still a big challenge for brands that a few good start-ups are working on. Mobile and video are a bit different since both are tools, and not an end in themselves. Both can be social, both can help with brand communication, both can be used for consumer insight – all applications we’ve seen in Collider. There is so much potential in all these for marketing professionals, and for our customers, and the new businesses just keep coming. You might expect to see “big data” as a theme here too. There’s a bit of that but not much. Maybe it’s too hard for non-specialists to get into.

2. Over the past year, I’ve seen only two businesses which were actually planning to manufacture something: JAM vehicles making electric folding bikes (jivebike.com), and ZippyKit making electronic self-build toys (futurecouture.com).

3. Everybody wants, and needs, an app.

4. Nobody delivers actual stuff any more (except Amazon). Software as a Service (Saas) is the preferred business model for b2b start-ups.

5. It’s easier to imagine a consumer-facing business, but it’s probably smarter to build a business to business one. Many seem to think building a consumer-facing brand is easy and cheap, since they usually claim they will do it by going viral.

Why are they doing it?

The best pitches lead with a business or consumer problem they’ve experienced personally, and how they are tackling it. This is especially true in Collider where people have come out of the marketing industry themselves to start something they needed that didn’t exist. But far too many other pitches start with either a market that is big and potentially lucrative, or a business they want to copy (yes really).  I’m all for making money, but neither of these is sufficient reason to back a business.

It’s practically free to start a tech-based business, if you are willing to forgo income. Younger entrepreneurs do their own coding which is a real benefit for them, but they tend not to know their market so well. More experienced business people who are starting a business that they’ve seen a need for are more likely to understand their customer and the need but also have to pay youngsters to do the coding, so they need to raise real cash sooner.

There’s a lot of excitement around raising money. London is well stocked with venture capital funds investing in tech-based businesses. Then there are all sorts of people styling themselves “angel investors”. Anyone who invested in anything which has yielded some sort of return on exit can claim success, but that is very much the minority. Those rare angel investors with a good track record are the rock stars of Tech City, wooed and flattered by event organisers and start-ups.

Many start-ups seem more interested in raising investment than in generating business revenue.  A growing business needs to raise money to survive, but a new business has a much better chance if it’s doing something that potential customers will pay for – not just something a VC might invest in.

What next for Tech Seed Hub City?

The low barriers to entry suggest there’ll always be more start-ups, as long as London stays in love with them and gives them a home. It’s too soon to say whether many of them will make it big, or make it at all. We hear about the successes but, as Harvard academic Shikhar Ghosh put it, venture capitalists “bury their dead very quietly.” He estimates 3 in 4 start-ups fail. But any centre for hosting start-ups has created its own industry. The entrepreneurs will come and go; as long as people believe in themselves and in the possibility of success, the hub will flourish.


Read Hot Chip 2 here and Hot Chip 3 here

Comment | July 2014
June’s quote of the month

“To sell well is to convince someone else to part with resources – not to deprive that person but to leave him better off in the end.”

Daniel Pink, auther of “Drive” and “To Sell is Human”

Quotes | June 2014
To Sell is Human, by Daniel Pink

Selling has a bad name, especially in Europe. And here’s an American trying to tell us we are all selling, all the time. Sounds yuck? Fortunately it’s a lot more subtle than that – in fact he’s really saying that true selling is not about foot-in-the-door persistence but about listening, empathy, and seeking to serve others. You knew that already didn’t you? So you can skip the first section, where he redefines selling and illustrates how we are all natural sales people. Go straight to section two, where he appropriates the old ABC of sales – “Always Be Closing” – to create a new mantra for the sales person, Attunement, Buoyancy and Clarity. Unlike many popular writers in this territory, Dan Pink is neither an academic nor a journalist – but he is a master at coining mnemonics. His TED talk about Mastery Autonomy and Purpose (oh yes they need capital letters) based on a previous book, Drive, was a huge hit, and deservedly so. His overall approach here is pretty compelling, and nicely expressed, even if it’s a bit obvious now it’s written down. Section two is “how to be”, section three “what to do”, with a framework for putting the theory into practice. You’ll also like his round-up of different approaches to making a pitch – essentially, ways to tell a story. These range from just one word – the Saatchi approach – to a whole narrative. For that, he cites the now-famous Pixar pitch, illustrating by the structure of Finding Nemo.

We marketers know we are selling all the time, to clients, colleagues, bosses, as well as to customers. But it’s nice to be reminded how good sales conversations create value for all concerned, and how fulfilling that can be.

Books | June 2014
The true cost of regular team meetings, and why we should care

Time is money but few organisations treat it that way. A junior person who can’t sign off a £1000 invoice can schedule a regular meeting which costs twenty times that in management salaries, with no approval process at all. So says a well-researched piece in this month’s issue of Harvard Business Review (Reprint R1405D). A team from Bain used information from the online calendars of executives across more than a dozen large corporations to show how casually time is treated. There’s none of the scrutiny that is applied to other forms of expenditure. Oh sure, there’s time management, but it’s mostly personal. It’s about helping people cope, rather than using the company’s resources better. Time management programmes are about training individuals to behave differently – prioritise tasks, recognise the difference between important and urgent, all that sensible stuff. The trouble is, most of us don’t work in a vacuum, where we can choose how we spend our time. Their analysis shows that people in senior management roles spend almost half their time in meetings with three or more colleagues.

As technology has made it easier for people to communicate and to meet, in person or virtually, the amount of corporate time spent in meetings has grown year on year since 2008, and is now about 15% of organisational time. This does not mean more collaboration though, since most of it is within departments rather than being cross-functional or between businesses. The article sets out some approaches taken by major corporations to tackle the meeting culture and put a value on people’s time. One method is to have a zero-based time budget. Just as the capital and operating budgets can be built from scratch each year (though many simply build on last year’s budget), meetings and projects which use people’s time can be reappraised and reset each year based on their merits. Instead, many of us roll from one week and one month to the next with a comforting set of meetings in the calendar so we are never truly alone with our thoughts. Have you, like me, ever wondered whether it might be perfectly possible to avoid work altogether in a large corporation by getting invited to enough meetings?

Why should we care?

Marketing people should care about this even more than finance people tracking productivity or HR people worrying about employee satisfaction. Why? Because an organisation that doesn’t value time is bad for customers. It’s going to make bad decisions and create poor processes that waste people’s time, and nowadays that is a reason for people to switch. There are lots of businesses that make demands on their customers’ time but are barely aware of it. For example,  the ones that have a requirement to read you the terms and conditions every time (yes even you First Direct) and that crazy 17 pages on your iPhone every time Apple update their operating system. No one honestly thinks that is good for customers. They are fulfilling their own need, without a thought for the customer impact. Similarly, we’ve all seen customer complaints systems that put the onus on the customer to do all the work. In that case it may well be calculated to reduce complaints, and it may succeed, but there’s a consequence somewhere down the line. Once again, what gets measured gets the focus – even if fewer customer complaints leads to fewer customers.

What can you do about it? It’s hard to change the culture of an organisation, but as customer advocates we can check how things will work from the customer’s point of view, and help design processes that are quick and easy for the customer, rather than defaulting to those which are efficient for the organisation.

Meanwhile, just for fun, here’s a challenge. Think about meetings you’ve been in recently. Do any of these apply?

  1. It’s a standing meeting – it’s a regular slot in the diary and we nearly always have it.
  2. People often drift in and out of meetings, taking calls or checking emails.
  3. I attend meetings just to listen.
  4. There are meetings I go to because I’m expected to be there, to show support or respect.

If they do, maybe you can be the brave person who will check what outcome is expected from the meeting (the polite way to wonder whether the meeting needs to happen), or what input is required of you (i.e. whether you need to be there). Be careful – and good luck!


More posts on business metrics and measurement:

Real marketers don’t do ROI

Desperately seeking dissatisfied customers

What gets measured gets done – make sure it’s what you really want

Why happy employees aren’t always a good thing

Dashboard schmashboard

Dashboards part two: taking action

Thought leadership | June 2014
May’s quote of the month

“I think as a species we’re not designed to be able to think more than one year into the future – if that. Even trying to imagine one year from now makes most people feel like they’ve been given a huge boring chunk of homework that’s too hard to do.”

Douglas Coupland, American author

Quotes | May 2014
Keep dreaming

What do Chelsea tractors and email overload tell us about forecasting?

Picture yourself in a trends workshop, innovation brainstorm or scenario planning day, one day in the not-too-distant past.  Your task is to help an automotive company see what sort of vehicles people in Europe will want in the future. Here’s what you’re being told. Fuel prices are rising. There’s a lot of talk about “peak oil” (whatever happened to that?). There are more and more cars on the roads, which are getting ever more crowded. Many of these cars have only one person in them on most journeys, which are taking longer as the roads fill up. Pollution is a concern, as is parking. In some urban areas there are so many cars that people can’t always park near their home.

So what might you come up with? Obviously the trend must be to smaller, more fuel-efficient vehicles. They’d be easier to park, more efficient to run, and if we all had them there’d be a lot less congestion on the roads so we’d all get around faster.

Now then, what did we get? There are some smaller cars, like the Smart, but they’re still not mainstream. Lower-polluting electric cars are even more of a novelty. In fact, one of the biggest phenomena of UK motoring in the past twenty years has been the rise of the thirstiest thing on the roads after a Sherman tank: the sports utility vehicle, or 4×4. Looking around London’s streets, you might think the pothole problem is very serious indeed, such is the prevalence of these four-wheel drive beasts. As for parking them: if you can fight your way into a multi-storey in one of those, and squeeze it into a space, then good luck trying to open the door and get out. Doesn’t that seem really perverse? How on earth is that a rational response to the state of motoring in the UK?

Of course it isn’t a rational response – that’s the flaw in your logic right there, Spock. We are not rational beings. Any attempt at forecasting the future and planning for it can’t be totally rational either.  If, back in our hypothetical future-gazing workshop, we’d looked at how people feel about being on the roads, instead of looking only at the functional aspects of motoring, we might have spotted something.

The current fuss about limiting the use of email at work shines a light on another case of unintended, and unexpected, consequences. On the face of it, emailing is an efficient way to communicate: no small talk, just straight to the point. Yet it’s become massively inefficient. Instead of helping us work smarter and get out of the office sooner, it eats our time at work, and at home. You can list the reasons – but who’d have thought we’d all love to type instead of speaking?  I didn’t imagine ten years ago that companies would experiment with no-email days, or that governments would consider legislating against the use of work email after work officially ends.

That’s how hard it is to predict the future. It’s so easy to get it totally wrong, especially when you look at trends at scale, and with a rational focus.  Data and trends provide a way of aggregating current and projected behaviour to describe the external world. But we respond to this macro environment as individuals, and not wholly rationally. What is best for a herd might not be what is best for me as an individual. That’s part of the challenge for those trying to get us to reduce our environmental impact. So with motoring, my individual response to feeling threatened on the roads is to get a bigger car.

So what to do? One way to counter this is to take each trend or data set down to an individual level, so as to start thinking how it feels to one person. I find that stepping in to a customer’s shoes is a stimulating and productive thing to do. Even that’s not enough, if it becomes overly rational – as is so often the expectation in the workplace.  Marketers, as the people who connect the capabilities of the business with the needs of customers, need to keep our emotional being alive and active at work.  In the era of big data, we have to be extra vigilant. Gloria Steinem wrote, “Without leaps of imagination, or dreaming, we lose the excitement of possibilities. Dreaming, after all, is a form of planning.” It’s our job to keep dreaming.


Previous posts on inspiration for innovation:

Desperately seeking dissatisfied customers

Getting customers to do it your way

Why be different when you could just be better?

What coat hangers teach us about business-to-business marketing

Thought leadership | April 2014
April’s quote of the month

“Those are my principles, and if you don’t like them… well, I have others.”

Groucho Marx

Quotes | April 2014
You trust your favourite brand – but does it trust you?

A friend, let’s call him Alan, confessed to me that, through a combination of devotion to Nick Cave and a senior moment, he had pre-ordered a new Nick Cave album on Amazon twice, three months apart. Realising his mistake when two CDs arrived separately, he contacted Amazon to arrange for a return and a refund. Their response: we understand how these things happen. Don’t bother to return it, we’ll credit your account anyway.

Now imagine some other possible responses.

The process-driven approach: Please return the item, obtaining a proof of postage, and we will credit your account in fourteen days.

The “rules are rules” approach: I’m afraid we don’t do refunds just because you’ve changed your mind. Maybe you can give the spare one to a friend.

The friendly making-it-up-as-we-go-along approach: Really? What a nuisance! Ah you see, what I do is, I make a note of what I pre-order and then those mistakes don’t happen.

I bet you can think of brands, and sectors, where those sorts of responses are standard. In some cases they are written up as policy. In theory they are all defensible, but if you’re on the receiving end they are all equally self-interested and mostly unhelpful – the opposite of customer-centric. The refund approach seems fine until you think about the hassle and cost for a relatively low-value item. Amazon may well have worked out that it costs them more to return the item to stock than a single CD is worth. There’s also the value of making life easier for the customer, so it’s probably worth taking this magnanimous approach even if it’s at a marginal cost to Amazon. We all know the stats about how these stories are told and retold, the value of which is harder to track and so, in our metrics-driven world, can be totally overlooked.

Think of M&S’s famous policy of always accepting returns even if you had no proof of purchase and no matter how long ago the item had been bought. It shows confidence in their own products, sure, but it also says, we trust our customers not to try it on. Over the years some people must have taken advantage of this, but it has also generated huge goodwill, confidence and trust in M&S among the decent majority who don’t. A business that acts otherwise, as many do, demanding proof of purchase for things with their own brand name on, is a bit like a court that assumes everyone is guilty until proven innocent. Amazon and M&S are willing to let a few guilty people go free for the sake of the innocent majority.

By contrast, there are organisations which make you jump through hoops to prove you are telling the truth, or which won’t take your word for anything. Allowing for money-laundering requirements, identity checking and all the rest, there’s still a culture in some sectors that seems to start from an assumption that all customers making a complaint, asking for a refund or generally doing anything other than handing over money must be small-time con artists and should be treated accordingly. There’s even a name for it, coined to describe the insurance sector’s approach to resisting complaints in the USA: delay deny defend.

Alan certainly felt that Amazon took him at his word, and didn’t make him jump through hoops to get his money back. Of course it’s not just about refunds. Brands can undermine their customer relationships by treating customers with suspicion even when they think they’re just following procedure. I once had the temerity to ask at the executive lounge of a well-known airline whether my children could come in too. Despite my gold status at the time, I was told it was out of the question, with the firm and very public admonition, “You know the rules!” The clear inference was that I was trying it on and this was TOTALLY UNACCEPTABLE. But really it’s not my job to know the rules – that’s why they’re there. I’d have settled for, “Sorry but the lounge is very busy; that’s why we allow just one guest per member.” Now I have become a non-person with said airline, I fear they’d trample me to get to the emergency exit. I dare say if Alan had asked them for a refund he’d have been given short shrift for his foolish error and told to be more careful in future.

Every brand manager wants their brand to be trusted by its customers. This is such a truism that trust can’t really be a differentiating brand attribute. It’s a necessary but not sufficient part of any successful brand that it can be relied on to keep its promises. But trust is a two-way street. It may not be rational but I find it hard to trust someone who acts like they don’t trust me.

Thought leadership | March 2014
March’s quote of the month

“Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard.”

Warren Buffett, aka the sage of Omaha

Quotes | March 2014
Real marketers don’t do ROI

Marketers should not focus on return on investment (ROI) as their key metric. Why not? Because it is not ambitious enough.

Don’t get me wrong. ROI is a helpful way to compare media choices, or different creative options, or even different service models. It is an important tool for marketers to make choices, and to improve. But be careful: it’s also a trap.

Sometimes ROI looks like clear proof of money well spent, to justify budgets to others. But the right measure of wise investment is overall business results, not short term return on marketing investment. We invest to achieve business outcomes – to achieve sales, profitability, sustainable revenue. I don’t think we marketers should expend our energy, or our colleagues’ time, in a conversation asserting our competence. Sales directors don’t seek to prove the ROI of their sales team to the rest of us. They use internal team measures to compare performance and set benchmarks within the team – quite a different matter. Marketing activity, just like sales activity, is part of the whole business enterprise that generates value for customers and for the enterprise itself.

Two problems

There are two big problems with ROI. First, it is vital for marketers to experiment, in order to improve how we do things. New services, new propositions, new channels, new forms of engagement, new offers – it’s down to us to initiate and drive change that makes our business more competitive, more distinctive, better at understanding and connecting with people, better at keeping satisfied, profitable customers for life. To do this, we have to test, then learn and optimise. It can’t all work. No self-respecting marketer leaves innovation to their competitors.

Second, the work we do as marketers is part of a complex, inter-dependent system that builds demand and creates customer satisfaction. We should not promote a device that presents our activities as if they are freestanding, and as if marketing’s only contribution is to feed customers into the business cost-effectively.

It is right to measure whether marketing activities deliver as intended. It is also professional to show that you measure, and how you measure, the impact and value of marketing budgets. But don’t confuse ROI with marketing effectiveness.

We can do better. The real point is not to get a return on marketing investment but to achieve business targets. That’s the only measure that really matters. ROI isn’t sales or profits. So even in this world of measurement, rigour and accountability, ROI should remain a tool for intra-marketing comparisons, not the currency by which marketers prove their value.

The value of marketing is still not a given, and sometimes it can feel like a battle for survival. It’s for us as the experts to set the ground rules, and to choose our weapons. Within the marketing communications bit of the marketing function, it’s more useful – even if it’s harder – to show people the value created by brands and consumer relationships than the simple return on investment generated by individual activities or campaigns. More broadly, the challenge is to raise the focus from efficiency to effectiveness, and marketing’s contribution to the shared business goals.

You might be pleasantly surprised, as I was in a senior marketing role, when the CEO and CFO were wowed by the work we were doing on marketing effectiveness. They had not had a sensible conversation with anyone about how marketing communication works in the short and longer term. Seeing the value of a brand demonstrated was new and helpful. They were smart enough to see that the financial ROI metric used for other business decisions didn’t apply – because some of the value we create is intangible. That, ultimately, is what a brand does for a business.

Prescribing aspirin

ROI can be misleading. It measures only the known positive impact of an activity. An obvious example is irrelevant or poorly targeted direct marketing that appears to pay back, but doesn’t reveal how many customers are upset by receiving stuff that reveals how little the brand knows or cares. When you see tiny click-through rates or response rates of a few percent, you have to wonder about the impact on the other 95%.

That’s the risk of price promotions – they will always show short-term uplift, but over time they can erode brand equity because they reduce people’s willingness to pay. They also mask the underlying issues a brand or product may have, by creating an artificially inflated rate of sale. Yet it is our job as the marketers to find out the weaknesses in our offering and make them better. A focus on ROI is like a doctor who gives the patient aspirin to reduce their fever, and then says they’re better because their temperature has come down. I can always get you positive ROI, as long as you turn a blind eye to what I have to do to get it.

If we let ROI become our key metric we are tacitly agreeing that our only job is to spread the word about the business, to drum up customers, and that we can’t really be trusted with large sums of money. The irony of this is that when we do real marketing, we influence what the business makes, decisions to build factories and investment in people and processes – with far more lasting consequences than an annual media budget.

Comment, Thought leadership | February 2014
February’s quote of the month

“Big data doesn’t replace big ideas.”

Tom Fishburne, Marketoonist

Quotes | February 2014
You’re a what?! Why job titles matter

I have a relationship manager at the bank where I have my business account. I wonder what relationship he’s managing.

Is that unfair? Here’s a bank trying to do better. The problem with their monthly courtesy call is that it is content-free. They offer me nothing – no information, no news, nothing that could be useful to me. In truth it’s unlikely they’ll chance upon something I want to hear anyway. It feels like something they’re measuring for their own purposes: “We call all our business customers at least six times a year and check all is well.” The presumption here is that I will value the calls, or perhaps it’s a tool to alert them to potential defectors.

The last time he called to check all was well, he failed to mention that it was also the last day of my introductory period of free banking – I only found that out when the charges came through. Somewhere in that organisation there is a lovely powerpoint deck showing the customer journey, and how they manage the transition at the end of the free banking period. Whether he bottled it, or whether making the call was really enough to tick the box and meet the target, somehow I don’t think that’s what was envisaged.

People calling from financial institutions are on a hiding to nothing anyway. Twenty years of receiving their outbound calls tells me that they probably have a target for some new “product” they’re trying to sell and I must be on my guard, reveal nothing and end the call for my own protection. I’m sure I’m not the only one who treats their calls like a training exercise in withstanding interrogation. I can’t respond to it in isolation from all my previous experience with banking. When someone calling himself a relationship manager calls I’m baffled and defensive in equal measure. It takes a long time to change entrenched views, especially when they’re emotional as much as rational. Honest and transparent communication would be a good start.

Perhaps they could take a lead from the insurance industry. After all the recent flooding there’ll be a lot of loss adjusters out and about. Now there’s a job title to focus the mind. The closest I’ve ever been to a loss adjuster is when I read William Boyd’s novel, Armadillo, but there seems to be a widely-held view that the loss to the insurance company figures as much as the loss to the householder, and any adjustment tends to be in one direction only. Consequently, you hear stories of people’s surprise and delight when a loss adjuster turns up and is helpful to them.

Driving expectations right down certainly creates the opportunity to exceed customer expectations, but it’s not a strategy I’d recommend (though it seems to be working for Ryanair). Clarity about your purpose, on the other hand, is helpful to everyone, and works at the individual level as well as for the whole enterprise. If the loss adjuster is clearly acting primarily to minimise the claim, they may as well come right out and say it – more or less as their job title does. By contrast, HSBC’s relationship manager doesn’t improve their “relationship” with me (if such a thing exists) by having a cuddly job title. Maybe it was even a factor in why he didn’t want to mention the nasty topic of bank charges – in case it spoiled the relationship, at least in that moment. More transparency to him about what’s expected might enable more transparency from him. In valued relationships each side gains something, and we don’t mind that the other side gains too. In good relationships people don’t have to conceal things from one another. So there should be no problem with the bank charges. If matey at the bank feels he daren’t mention it, something is wrong. Does he feel that they don’t represent fair value for me as the customer, or that I will give him a hard time if he flags it? Perhaps next time he should try asking me how I feel about it. I’d respect him for that. Listening is part of building a relationship too, so it wouldn’t do any harm on that front. Frankly I’d choose bank charges that come with efficient service in preference to the tedious phone calls. But they don’t know that because they’ve never asked. Rather than use labels and job titles to try to make things feel nicer, a bit of old-fashioned discovery about what delivers value could be liberating all round.


More comment on the financial services industry

Britain’s banks: our role in their downfall *

Banks and customers – a lesson in obliquity

Still not really “on your side”

Comment | January 2014
January’s quote of the month

“It is never too late to be who you might have been.”

George Eliot

Quotes | January 2014
A SCARF for Christmas

Do you find queueing stressful? For me, it’s not the waiting, it’s the uncertainty. Give me an orderly queue with a guaranteed outcome at the end, and I can wait happily. Contrast that with the Apple store at Christmas. The dudes in their red t shirts and beanies are the same as always, chillaxed and cheerful. But in mid December, most people aren’t there for the joyous experience of a browse through all things Apple. We want service, and we want it fast – and if not fast, then we want our turn. The messy flow of people round the tables, staff all over the place, sitting at bars, standing around against pillars. All seems to indicate that it’s every man, woman and teenager for themselves. Surprising, then, that I didn’t take advantage when I was about to be served ahead of someone who’d been waiting longer. The Apple store experience was clearly designed for quiet browsing. Maybe it’s time to think again.

The SCARF model, devised by an Australian academic in leadership and coaching, David Rock, gives businesses another way to think about what people value, and how we can create more value for them – and hence for us.  SCARF stands for Status, Certainty, Autonomy, Relatedness and Fairness. Rock says people respond positively when one of these is increased. Conversely, situations or behaviours that threaten someone’s status, autonomy and so on can trigger a visceral negative response. Applied to marketing, the SCARF model suggests people value, and will pay for, things that increase one or more of these factors. Status is one we marketers have always known about. Certainty is less obvious, until you start looking. Getting priority is one way – friends or members of an arts venue get priority booking, which delivers near-certainty blended with status. Paying extra for guaranteed delivery is another. Airlines have spotted this one – speedy priority pre-boarding can double the price of your flight without getting you to your destination any sooner.  The airports are getting in on it too – book online for the car park at Gatwick and you can pay £5 per person to go through the premium security channel. I think they’ve made that one too cheap.

The ultimate expression of Autonomy is, I suppose, the fantasy about that last day at work after winning the lottery: there are so many ways one can make one’s feeling known about the boss/ the job/ the company before making a spectacular exit, perhaps by climbing out of the office window and leaving via the roof.  I suspect even that would be a fleeting pleasure – fortunately there are many other ways to experience little moments of autonomy. Ever walked past a huge ticket queue to the pre-paid window? Or when you print your own tickets, securing freedom from any interaction with the ticket office staff. Autonomy is a win-win for businesses. Most people like to do things themselves if it puts them in control, along with rational benefits like saving time. This will usually save time and money for the business too. Notice how Odeon cinemas no longer have a separate ticket desk – so many people buy online that they’ve merged it with the popcorn counter, saving headcount. It can go wrong though if the customer feels coerced into a DIY approach, or if it looks like they’re doing the company’s work – it has to be good for them too, and it has to be a choice.

Relatedness and Fairness are about our humanity, and this is where we see the greatest dissonance between an economist’s view of the world – rational, money-driven, utility-maximising  – and a behavioural economist’s view. Relatedness means safe relationships and connections with other people whom we trust. Fairness means we will sometimes disadvantage ourselves if it seems fairer. Not everyone feels these things but when I let the Apple guy know someone else is next, I’m showing that these things matter to me and influence my behaviour. Being fair to a stranger when you don’t have to and appear to gain nothing from it might not seem rational to an economist, but to a human it delivers a little moment of relatedness and fairness – a tiny connection with that stranger and a demonstration to you both of your fairness.  The old saying, “Money makes the world go around” must have been devised by an economist. It’s these little moments of human interaction that do it for me.

Comment | December 2013
December’s quote of the month

“In theory there is no difference between theory and practice; in practice there is.”

Yogi Berra, legendary baseball player and manager. Still alive.

Quotes | December 2013
Desperately seeking dissatisfied customers

It’s 10 years since the development of the net promoter score by Fred Reichheld, a partner at Bain. It’s been widely adopted. Your bonus may be partly dependent on achieving an NPS target. Its promoters say simplicity – boiling everything down to one number – helps people across the business engage with customer satisfaction. Detractors argue that this simplicity obscures the causes of satisfaction and, more importantly, dissatisfaction. Whatever the chosen method, customer satisfaction scores are often one of the measures most tracked and quoted in large service businesses.

So is it making a difference? Sadly, these scores are used to justify the status quo as much as to make the changes to benefit the customer, and hence the business. Targeting bonus on it may only make this worse. It takes courage to focus on what isn’t working well, and even more to draw attention to bad results, especially if it might cost money. Logic says that people will try to improve customer satisfaction scores if their bonus depends on it. That’s true – the only question is how. Human ingenuity is at its best when faced with the challenge of how to measure to get better results. NHS admissions were reduced by keeping people hanging around in A&E. Then, A&E waiting times were reduced by admitting patients. GCSE results, school league tables, even government borrowing targets – they all drove change, but not necessarily as intended.

Even with the best intentions, we tend to look for the good news not the bad. 85% of customers are very or quite satisfied – that’s great! The killjoy who pipes up with, “What about the other 15%?” just might not get an invite to the next presentation. People like that are a liability, aren’t they? It’s just not helpful.

Or is it? The real value in measuring people’s satisfaction is surely to identify where a business can become better: both better than it is now, and better than the alternatives that its customers could choose. That means discovering what you already do well and reinforcing it. It also means finding out what could be improved beyond the hygiene factors. This is not just about checking for anomalies or failures in your current system.

The bigger gain is listening to people’s fundamental frustrations and wishes. There lies opportunity to create competitive advantage for the business. Maybe the whole sector does things a certain way – and people routinely moan about it. Maybe it is that way for sound operational reasons, and so we learn to live with it. These are the classic ingredients for a disruptive competitor to come into the industry and change the rules. Incumbents end up having to respond, but are already disadvantaged, in time, cost and reputation. Accepting the status quo can be costly.

The issue here is not what measurement technique is used. It’s a very natural human instinct, to focus on the good, and to gloss over the bad. A change of measure may disrupt this for a time but as long as satisfaction is the focus, nothing much will change.

I propose a new measure. It’s this: that action taken from customer satisfaction measurement should be the measure, not the absolute cust sat score. This will drive people to look for things that are sub-optimal, and to listen to people who point them out. It will make a complaining tweeter a valuable source of information, not a loose cannon to be dealt with offline (though that will remain). In the worst cases, the “delay, deny, defend” culture would have to compete with the incentive to find things to improve.

Ah, but wouldn’t human ingenuity find things to change, just to drive the score up? Probably. So, to stop people making changes for the sake of it, the score can be linked to value for money – perhaps the number of improvements implemented per £X spent on measurement, and per £Y spent on implementation.

Boy, would that focus the mind. Suddenly, people would be interested in those little things, minor irritations, things that barely merit a mention when they come up in focus groups, or that don’t lend themselves to big internal projects or campaigns. Imagine the power in the combination of cheap listening – ask your service people, listen to sales people, visit distributors – and cheap implementation – looking for marginal gains not giant overhauls and triumphal relaunches. Meanwhile the big things that have long been accepted as how we do business would finally get some serious attention. I have great confidence in human ingenuity. It just has to be pointed in the right direction.


Previous posts on inspiration for innovation:

Getting customers to do it your way

Why be different when you could just be better?

What coat hangers teach us about business-to-business marketing

Thought leadership | December 2013
November’s quote of the month

“What I was given to study in school I have forgotten; what I decided to read on my own I still remember.”

Nassim Nicholas Taleb, in Anti-fragile.

Quotes | November 2013
What gets measured gets done – make sure it’s what you really want

It’s all the rage to talk about purpose in business (I’m keen on it myself) but business also has to be about the numbers. The financial results are the ultimate numbers. Targets, KPIs and incentives are management tools to drive and track progress. But, there’s more to the old adage, “what gets measured gets done” than setting KPIs. Not all customer metrics are good for customers; even the best-intentioned metrics can have unintended consequences. Here are a couple of examples.

First, let’s think about efficiency. This should be good for customers and business alike, as long as you and your customers have a common view of what is efficient. I know a contact centre for a financial services business, which had, like so many, efficiency targets for its staff. They were measured on the number of calls they could handle in the day, to encourage them to be swift and efficient. As revenues declined, the drive to reduce costs through even greater efficiency meant pressure to get through more calls in a day – but the call centre people were committed, and experienced, and rose to the challenge.

Then, a new customer service director arrived who decided this was the wrong focus. He removed all time-based measures, and instead targeted them on resolving customer inquiries first time. Call times went up, and the number of calls per agent per day declined – but over time, the number of calls fell even more, because agents were resolving issues on the first call, even if it took a little longer. Soon, the business was able to reduce its contact centre staff by not replacing leavers, reducing costs while increasing customer satisfaction. The hidden cost of the old model was that customers had to call back time and again to get the job done. It incentivised staff to get customers off the phone as quickly as they could, with little regard for customer satisfaction. Those LED screens showing the number of calls waiting and average call handling time had no indicator for call outcomes – perhaps the thing customers cared about most.

My other example is about imagination as much as metrics. A high street bank had a tried and tested direct marketing process to encourage those with short term unsecured loans to borrow again as the current loan drew to a close. A letter offering a new loan was sent out when there was one month left on the current loan, and then monthly until the customer responded (or until the budget ran out presumably). The IT systems didn’t distinguish between those with 12 month loans and those with 24 month loans, which meant that customers with a two-year loan were getting offers to borrow again while they were barely halfway through their term. The prevailing view in the bank was that while it cost a few more letters and therefore reduced return on investment, it wasn’t a problem because the renewal rates were good enough to ensure the campaign was still profitable. In vain, the junior marketer (who told me this story) pointed out that while the campaign might deliver “positive ROI” financially, there could be a cost in reduced credibility and trust, damaging the bank’s relationship with its customers – but the negative impact of repeated unsolicited and ill-fitted offers wasn’t so easy to measure. I’ll bet it was heard in more than a few focus groups though, even if customers didn’t bother to complain proactively.

In both these cases, a bit of thought about purpose would have helped. A good purpose reflects a customer need, so it naturally prompts thinking around what customers expect and value.

Alternatively, common sense can do the same job. For any given customer interaction, ensure the dominant metric relates to the customer’s primary purpose in that interaction – the what, not the how. While the trimmings, like politeness and promptness, do matter, they cannot be at the expense of the what.

A customer-centric approach engineers processes that suit customers in the first place, and removes things that are not intuitive for customers. Just like elite athletes with their focus on finding marginal gains for the team, marketers can do the same for their customers, knowing it will deliver for the business in the long run.

Thought leadership | October 2013
October’s quote of the month

“When you’re not concerned with succeeding, you can work with complete freedom.”

Larry David, creator of Seinfeld and Curb Your Enthusiasm

Quotes | October 2013
Chief customer officer? No thanks.

That American business import, “the C suite”, gets some bad press. In the FT recently, Lucy Kellaway wrote a whole column about how she abhors it, prompted by the appointment of Charlotte Hogg as chief operating officer at the Bank of England. I confess I was a chief innovation officer for a while, though, in my defence, I never really called myself that. I don’t mind CMOs and CEOs, nor even COOs. But I do take grave exception to the latest addition to the C suite, the chief customer officer.

What would a chief customer officer do? Find out what customers care about, perhaps. Test people’s willingness to pay, so as to identify what they really value. Share this understanding with those who design and deliver the customer experience – whether that’s made in a factory or delivered via a call centre. Set up two-way communication with customers to shape their expectations and check that the business is meeting them. Drive the organisation to implement change for the better.

You know where this is going, don’t you? The Marketing Society’s manifesto for marketing talks about mobilising the organisation and this is what we mean. It’s part of the marketer’s job to match the capabilities of the organisation to the needs of the marketplace. Marketing communication is when you tell people about that – it’s only part of the job. Brand management was invented in fmcg as the place where the whole enterprise came to a focus around meeting a promise – the brand – being made to a customer (originally the end-consumer but now encompassing the retailer or distributor too). So, learning my trade in fmcg, where brand management and marketing are synonymous, I never had any doubt that marketers were best placed to help the organisation identify and create market opportunities. Marketers carried both the responsibility and the authority to orchestrate the organisation and its resources to meet consumer needs better than competitors, so as to gain market share and grow the brand profitably. This meant a brand manager had to be connected to the marketplace and to the commercials of the business equally well, and able to share that understanding with others. We should not cede that ground. And yet, some chief marketing officers, including one in a highly respected fmcg business known for its smart marketers, have added a reference to customer to their title. As if marketing isn’t about the customer.

So what’s gone wrong? Part of the problem is that in the USA, and increasingly here too, marketing is used to mean the promotion of whatever the business is selling – but that’s just marketing communications, an important subset of marketing, not the whole thing. Perhaps it’s no accident that brand management was invented by an American company – maybe because marketing was already limited as a term.

I know from experience that it’s harder in other sectors like financial services where the authority of the marketing department is constrained. We have to find other ways to influence the rest of the business. A common response to this is to set out a brand vision or purpose-led brand promise, and then promote it internally as a unifying concept that can set the direction for the whole business. This rarely works (unless the CEO leads it), precisely because marketing as a function doesn’t have that kind of authority or credibility. It’s frustrating for marketing people in service businesses that other functions tend to see the brand as communications and design, maybe a promise, but not as an agenda for anyone else to follow. I used to share their frustration, but I’ve changed my view – why on earth should other parts of the business see the world in a brand-centred way? I’d go further and say that brand can be a divisive concept inside a large business, especially in service businesses where there’s no pack labelled with the brand name. Such businesses often have lots of initiatives going on, led by different functions. This can be confusing for people in the business, at best, and they may cause different functions to compete for initiative supremacy – HR with their culture change, marketing with their brand-led change, perhaps customer service with something about service excellence, all of them with merit. Notice that all these initiatives have internally-defined reference points. However much marketers insist that brands are created in the minds of consumers, a brand vision is something articulated by the marketing department. Why should the other functions all accept marketing’s view of the world, as defined by their brand ambition?

The solution is to take an external reference point – your customers. It’s still strategic marketing, because no business can serve all customers equally, so the core disciplines of market segmentation and positioning are still vital. The benefit is that the customer, unlike the brand, cannot be owned by one department. Everyone plays a part in serving customers. If marketing see their job as being to identify the best fit between customers’ needs and the capabilities of the business, well, that’s an agenda that everyone can engage in. So I’m all in favour of every business having a chief customer officer, as long as she’s called the marketing director. Step forward, marketers – it’s our job to represent the customer. Sometimes it helps to spell things out so there is no room for doubt. But even if it’s not in your job title, it’s in your job.

Comment, Thought leadership | September 2013
September’s quote of the month

“It is in our idleness, in our dreams, that the submerged truth sometimes comes to the top.”

Virginia Woolf


Quotes | September 2013
What should brands do about anti-social media?

Where do you stand on the debate about whether brands, in their role as advertisers, should use their influence to make Twitter and Facebook clean up the nastiness that’s to be found there?

Let’s review the situation. Most media channels need advertising revenue. So brands have power and influence. Equally, brands want to reach their target markets efficiently, i.e. cheaply. Media that get attention, for whatever reason, can offer large audiences, which attract brands. But brands don’t want to upset their customers, or be sullied by association with Bad Stuff. Most, then, live with a pragmatic and commercial compromise. They don’t actively campaign to change the media in line with their principles. Some don’t even avoid media that might be at odds with what they profess, as long as they can steer clear of the inappropriate content. But when something unsavoury gets sufficient secondary media attention, i.e. when it becomes the story, that’s when most brands will feel they must act. At that point, doing nothing looks like collusion.

Facebook and Twitter’s defence is, broadly, that they are just a channel in which others communicate – that they are responsible for the medium not the message. The scale of this issue may be new  – there are now upwards of sixteen million tweets every hour worldwide –  but the problem for brands, and people, of what to do about public displays of nastiness is not. Remember the row about racist abuse of Shilpa Shetty by Jade Goody and others on “Celebrity” Big Brother? It became a huge news story, and advertisers ran for the hills. Jade Goody’s publishers stopped the planned paperback edition of her autobiography, and major retailers removed her perfume from their shelves.

Let’s compare that with the recent sexist abuse on social networking. It’s like Big Brother, in that the channel owner doesn’t create and manage all the content, although they can and do edit it. But this feels different, and not just because of its scale. I think it’s because, unlike BB, there’s no screen to act as a boundary, with us the viewers safely outside. The perpetrators and the victims of the abuse are all on the outside, with the rest of us. Nor did the victims volunteer for this horrible and public treatment.

So what should brands do? Should they withdraw, to show their disapproval, as advertisers did with CBB and later with the News of the World? Advertisers withdrawing spend from Facebook or demanding different targeting seems to have worked, for now, but it only happened because other campaigners targeted the brands and challenged them to take a position. There’s much talk of brands leaning on social networking sites to force them to police their content better. But if we expect this of brands, then shouldn’t they also object to other content in other media that might be offensive to their target customers? What about page three in The Sun, just for example? Lots of women find it objectionable, but as far as I know, not even brands like the saintly Dove, which might benefit from being seen to be supportive of women’s equal status and right to respect, have said a word against it.

A headteacher once told me her approach to managing children’s behaviour at school was to “catch them being good”. So here’s the bigger challenge that the FB and Twitter affair throws up. Shouldn’t a brand live its principles all the time? Actively? Proactively? Even if it comes at a cost? Most people would agree that of course, a brand is what it does, actions speak louder than words, and so on. Most brands stand for positive things. I don’t know any that have misogyny or abuse of power or racism as a core value. So, in theory, brands shouldn’t wait until nastiness gets in the news to take action, should they? To react only when pushed makes the principles look like window dressing. In their own long term interests, brands need to live their principles, and not just when someone is looking. That means using their power, actively, in line with what they profess to believe in, and in the interests of their users. This is where corporate (social) responsibility has gone, and increasingly it is aligned with the brand’s interests and expertise. We as marketers, whose decisions represent our brand’s actions, must do the same, whether anyone is watching or not.

Thought leadership | August 2013
August’s quote of the month

“People don’t want quarter-inch drills. They want quarter-inch holes.”

Theodore Levitt, legendary marketing professor and writer

Quotes | August 2013
Anti-fragile, by Nassim Nicholas Taleb

This may be the only business book you read that covers Greek philosophy, ancient myths, modern parables featuring Fat Tony and Nero (characters from Taleb’s earlier books) and some personal stories, both from the author’s early life in Lebanon and from his more recent experience as a hate figure for classical economists. It’s a demanding and exhilarating read – skim-read half a page and you could jump two thousand years – but it deserves to be read properly. Taleb is funny and irreverent as well as original and hellishly smart. He says this book is the culmination of the thinking he’s been working through in Fooled by Randomness and then Black Swan. The big idea in here is that systems that build strength through responding to stress are stronger than those which simply resist stress – these latter types may be robust up to a point, but then fail big. Banking, the human body, entrepreneurs and corporate journeymen all feature in bringing this idea to life. I’ve taken my investment strategy from this book: limit your downside, create exposure to large potential upside even if it seems unlikely (something he calls creating optionality). This is the natural evolution of his Black Swan theory. For a business, it translates into a totally different approach to risk assessment: forget about prediction and probability; instead identify and mitigate your areas of vulnerability, based on their potential impact. Strong stuff that may change how you see business and government – and you will also laugh out loud. What a joy.

Books | July 2013
July’s quote of the month

“You may be disappointed if you fail, but you are doomed if you don’t try.”

Beverly Sills, American opera singer

Quotes | July 2013
Getting customers to do it your way

Have you, as a customer, ever had it patiently explained to you by a sales or service person that “it doesn’t work like that”? Don’t you just hate that! To paraphrase Steve Jobs, it’s not the customer’s job to know how it works. On the contrary, it’s the marketer’s job to know how the customer thinks and acts and wants it to be. All the same, it is possible to create customer behaviour that is efficient and smart for your business. The common mistake is that people start by trying to persuade customers to do what the business wants, rather than daring to let go of that and explore what customers want. If you can let go of your own agenda and really go with the customer, eventually you’ll hear how your interests and theirs can be aligned.

I had this experience back in the late 90s working as a consultant to a UK health insurer which had a huge problem with rejected claims. Back then, having private health insurance meant you could see any medical practitioner you wanted without waiting; pay for it; and then send your insurer the bill to be reimbursed. At this point, lots of people would find their policy did not cover them, resulting in a huge backlog of disputed claims, unhappy customers and in some cases disgruntled medics facing late or no payment. Insurers in the USA used a system called pre-authorisation to avoid this: you had to call up and get an approval code before seeing the doctor. Our clients in the UK health insurance business believed that the freedom to choose and obtain treatment was a key product benefit, so they were very fearful of doing anything to curb this freedom.  They weren’t making this up. They had, tentatively, sounded a few people out on whether they’d accept this need to seek permission in advance, and got a firm no. So we did some consumer research exploring the process of seeking treatment, from the customer’s point of view. We discovered that, along with the anxiety of the medical condition, it was troubling to have some uncertainty about quite what would be covered until after the event. But in the current model there was no way to find out until submitting your claim. So we were able to position pre-authorisation as a customer benefit – a simple phone call so you know exactly what you’re covered for before you incur any cost. Everybody wins. In due course, it became the norm, and it made possible the move to direct settlement of medical bills by the health insurer, taking the customer out of the financial transaction completely – another win all round.

The essential step was the client’s willingness to stop, for a moment, trying to solve their problem – the hassle and cost of disputed claims – and instead to go with a much more open exploration of the whole process, end to end, with customers. Market research, and especially qualitative research (as in the infamous “focus group approach to policy making” attributed to New Labour), gets a bad rap these days, but this shows how it can work really well: not to ask customers what they’re thinking and feeling (they’ll try to tell you but it’s unreliable testimony), but as one important input to understand and unravel a situation. Most people know not to take all market research literally. Sometimes very specific questions are being asked, with unequivocal answers that should not be ducked, but just as often, and particularly in qualitative research, it is best seen as an exploration not a prescription. Terry Leahy writes extensively about this in his recent book, Management in Ten Words. When you use market research to listen to customers with a genuine curiosity and willingness to hear what they want to tell you – whether it addresses your immediate issues or not – good things follow. This is true both for specific problem-solving, as in the health insurance case above, and when seeking to develop new products or services, or looking for opportunities to innovate more generally.

It’s often been noted how framing a good question gives a rapid start to any problem-solving or innovation process. (I treat problem-solving and innovation as essentially the same activity, because an innovation that doesn’t address some sort of market need, however modest or unarticulated, is unlikely to succeed.)  As Picasso reportedly said of computers, “But they are useless. They can only give you answers.” Market research used well gives us the questions that we should tackle in our businesses, on behalf of customers. It’s not always fresh and inspiring – how to lower prices is a hardy perennial, though no less real a challenge for that. If you can listen generously, openly and not defensively, people in research give valuable clues about where best to focus your problem-solving and creative energies to build competitive advantage. Shape your processes to match their natural preferences and expectations, and they’ll happily do it your way.

Thought leadership | June 2013
June’s quote of the month

“The most common way people give up their power is by thinking they don’t have any.”

Alice Walker, American author

Quotes | June 2013
Still not really “on your side”

Last year I wrote in Market Leader about what financial services providers need to do to rebuild trust. Mainly it comes down to the basics of any decent brand or business: figure out what people expect, value and will pay for; offer whatever aspects of it make commercial sense for the business; and deliver what you offer.  Implicitly, that means don’t mislead, don’t offer something you can’t or won’t deliver consistently. I mentioned the banks’ habit of defaulting your savings account after a fixed rate term to their worst possible rate, with the justification that they don’t know what you might want – as if anyone wants 0.05% on their savings, an interest rate so derisory one assumes it’s the lowest number they can put in their systems. Then there’s the Nationwide Building Society, with its assertion that “you do need a bank account, but you don’t need a bank”, and its claim to be “on your side”, gently voiced in a sweet female tone in their TV advertising. An empty claim, because  they too are still at it. My mother’s two year fixed rate ISA  ended in April 2013 and immediately the interest rate reduced to the magic number – 0.05%. Even their worst instant access ISA offers 0.5% to a stranger. But this is how they treat their customers. On your side? I don’t think so. They call themselves a Building Society. Nationwide BS, more like.

Comment | June 2013
May’s quote of the month

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

Peter Drucker

Quotes | May 2013
How to cope with digital FOMO

Ever had a boss who habitually seizes on something another business is doing and says:“Should we be doing that?” Social media is causing the same insecurity complex in the digital immigrant generation. It’s a sort of digital Fear Of Missing Out. Questions often asked include: how many Facebook friends does the brand have? Is everyone moving to Instagram? Will being on Pinterest make us cool? Can we do a partnership with Foursquare? Or, more likely: Now that we have our Facebook page/Twitter feeds/app, how do we monetise them?

This is a bit like walking down the high street, considering everything you see: passing Thomas Cook (do I need to book a holiday?), past the newsagent (do I need a newspaper?), past the funeral director (do I need a funeral?) – other people are in there, so maybe I should be too.

Of course it’s useful to look around. It’s a great source of ideas and it’s good to be aware of competitors’ activity. But only you know your business strategy, your proposition and your target customers. Facebook and Twitter don’t. They have their own. (You’re one of them.)

Yes, many brands are there, including – you can be sure – at least one competitor. On the other hand, your target market is almost certainly different from that of most of the brands that are big on Facebook or YouTube. Maybe it’s right for them. Maybe it’s right for you. But, as David Taylor pointed out in Market Leader (January 2013), the fact that they are doing it doesn’t automatically make it so.

Marketing strategy for a digital world should go way beyond communicating via social media. For businesses with a clear purpose, it’s a great time for creativity that is anchored in two fundamentals: first, who you are as a brand or business; and second, a sound understanding of your target customers. New technology gives us ways not just to communicate or engage better, but to shape the customer experience and deliver better services. This is best tackled from the customer’s point of view so that the new applications are not just techy gimmicks but are fully integrated into consumers’ natural way of doing things. When it’s done right, this isn’t e-commerce, or even digitally-enabled commerce – soon it will all just be commerce.

Many retailers are using location-based services and social media brilliantly, applying tools and tech to be more helpful to customers. Fashion retailers are doing new, sexy things, such as recognising the customer as she enters the store (by her phone, not her face), directing her to her preferred styles or colours and enabling her to take a picture of herself wearing the new item – without needing to try it on – so she can send it to her friends to ask for their opinion. It’s an obvious step to connect what’s in the fashion pages of magazines with retail outlets so that when you see something you like in the media, you can easily locate it, or request it in your size at a convenient branch.

Food retailers are also using tools and tech to make grocery shopping easier. In Korea, you can shop from digital walls of product displays in places where people are already, such as subway stations. You use your smartphone to buy what you want and it’s then delivered to your home. China’s biggest food ecommerce merchant, Yihaodian, is even putting up virtual shops outside competitors’ stores. In the UK, House of Fraser is trialling a real but stockless store. If you are old-fashioned enough to want to visit a store with products in it, Tesco’s shopping app helps to find specific products in an unfamiliar store quickly by directing you to their location.

Our job as marketers is to build bridges from the inside of the organisation to the outside, allowing information to flow both ways. So we need to know how people are living, getting information, being entertained, making choices and buying stuff – much of which now has a digital, and even a social media, element. But the core purpose of a business – the need it meets for its customers, the values it stands for and the benefits it brings – don’t change, even if the route to market does. Knowing what’s happening in the outside world is a vital part of our responsibility, but helping the business to stay true to its customer promise, and engaging in a way that is authentic and relevant for us and for our customers, is even more important.
This article was published in the March 2013 issue of Market Leader.
Comment | May 2013
Let me entertain you

The death of the 30 second TV ad was recently declared (again), this time by an advertising guru, Trevor Beattie. Yes, online overtook TV in its share of advertising spend some time ago, and YouTube is now the second largest search engine, as Google love to tell us. Along with the rise of social media and two-screen activity, Sky+ and TiVo, it seems quite plausible that the TV commercial should be replaced by advertising that we either choose – like online search – or can’t avoid – like the first five seconds on YouTube, after which the viewer can skip, and the advertiser doesn’t have to pay. Hence Trevor’s advice to ensure the message is in the first five seconds. I’m not sure. We don’t recommend tricking people into buying things they don’t want. So why try to trick people into seeing advertising messages? There is another option. This is to make ads that people are happy to watch. This is possible, but it needs a shift in approach. We know that good propositions are a win-win: they meet the needs of the customer on terms that are good for buyer and seller alike. That’s because buyers have a choice about who they buy from. But we don’t think about promotional messaging in the same way. In previous roles as a client of advertising agencies, I don’t recall ever giving much thought to whether the ads we were making would be enjoyable. The main preoccupation was with whether it would land the intended message. This is a bit selfish, isn’t it?  The five-second approach seems to assume that people won’t want to hear your message so you have to gabble it quickly before they get their mouse to the little x in the corner, or skip on through the ad break. It’s the advertising equivalent of shouting out your message before people can get their fingers in their ears.

We watch TV because it informs, educates and entertains, as the BBC’s mission says. But mainly because it entertains. Advertisers’ purpose needs to be the same: if it doesn’t inform, educate or entertain we can skip it. Shouty ads about something people don’t want to hear are doing none of these things. By contrast, talented actors with a decent script can make a neat little piece of entertainment in thirty seconds – think of Simon at the door with his piece of toast in the BT ad when the Spanish girls come calling. I look out for new Aldi ads because they’re funny, and they make their point brilliantly. (Although since I never go to Aldi, I guess it also illustrates how there’s more to success in retailing than the products you stock.) Think of the Snickers ad with Joan Collins in the locker room of a football club – the payoff line, “You’re a right diva when you’re hungry”, is a rich expression of the insight. I love it. Celebs in ads can be good if they can act. Lionel Messi and Kobe Bryant in the Turkish Airlines ad do really well and we have a laugh at their expense. On the other hand, celebs who can’t handle it make five seconds too long. I cringe at the Santander ads in which innocent people are stalked in their own home, culminating in one apparently being threatened by Rory McIlroy – and with her own apple.

We also watch TV because other people do – that’s why 40% of Twitter activity in peak TV viewing time relates to TV. Word of mouth has always been there; social media is amplified word of mouth. The water-cooler moment is now online too. Even those who declare the end of TV advertising harbour dreams of their film going viral online. But to have any chance of being talked about, shared, or going viral, it has to be worth sharing, and that means it has to be enjoyable.

We still love TV in the UK – in fact TV viewing is growing – so there’s still a place for TV ads, but only those that people enjoy will be watched, shared, and talked about. So rather than worry about double-screening and ad-skipping, make the ad worth watching,

Now I come to think about it, the other thing Trevor Beattie is famous for is those Wonderbra posters – they didn’t inform or educate but I think half the population were entertained. I bet some people even looked at those for more than five seconds.

More posts on brand communications:

Yes there’s a crisis in brand trust but please, don’t try to be nice.

Let’s hear it for the ads we love to hate

Comment | May 2013
April’s quote of the month

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

Bill Gates

Quotes | April 2013
The myth of the leader

Can Marissa Mayer save Yahoo? If she does she’ll be hailed as a great leader, in demand to turn around the next struggling digital media business, or maybe she’ll make a leap into another sector that needs her touch. If Yahoo doesn’t make it, well, it’s probably not her fault. There are lots of factors working against her, not least timing – it might just be too late. Do you see the logical fallacy here? Success is usually attributed to the leader, failure more often to the circumstances. Try the opposite to see how established this pattern is. It’d go something like this. If she succeeds: “She got lucky!” If she fails: “Well, it was there for the taking and she messed it up.” You just never see that, do you?

I’m sure Marissa Mayer has plenty of strengths and, I dare say, a few weaknesses. Most of us do. Her experience is all from Google but that’s not a bad place to spend your formative years and more. Her strategy for Yahoo seems to be to adopt some of the things that worked at Google, particularly localisation and personalisation (hard to argue with that; everyone’s doing it). But no one is saying they hired her to do what she did, or saw being done, at Google. No one wants to think they are aping the strategy of another business.  Instead, we have the myth of the leader, the belief that there is specialness in her. Undoubtedly there is some. Not everyone could take on the challenge of leading Yahoo. There is much more to leading a business than repeating actions that seemed to work before. At the same time, it is perhaps more honest to acknowledge that there is always an element of luck. Some people do similar things, and it works some of the time. There are all sorts of random factors at work – the patience of the shareholders maybe, the lucky break with winning some revenue that reinforces apparent success, even the media coverage that creates a positive narrative about what’s going on and so builds confidence and belief among employees, customers and investors, which in turn builds further success. A bunch of things happen to come together to create success; in different, equally random so equally probable, circumstances, the same strategy would not yield the same results.  That brilliant iconoclast Nassim Nicholas Taleb, best known for his second book, Black Swan, wrote entertainingly about this in his first book, Fooled By Randomness.

I’m tempted to wonder whether the whole media frenzy around Marissa Meyer would be different if she wasn’t a good-looking blonde. But then, Sheryl Sandberg is a brunette, and look at what she’s achieved. Now she’s shared her secrets of success in a book.  Thing is, unless you believe that all the  others who didn’t quite make it failed to “lean in” and all those who did “lean in” got to the top – patently not the case – then you can’t take her advice as a recipe for success. All you can conclude is that her approach has worked for her, in that particular set of circumstances. Perhaps we can learn from her experience, but no one should feel they have failed because they didn’t do what she says she did. It’s likely to be far more random than that.

So what does this mean for us ordinary folk?  The good news is, you don’t need to be Wonderwoman or Superman. The element of luck works both ways. On the other hand, we can’t just say, “Hire me, I got lucky before!”  Our actions do matter. They’re just not the whole story. When you approach a new role or challenge at work, your value is in what you’ve done and what you’ve learned. We, too, can reflect on our experience and see how our actions may have contributed to the outcomes and how different actions might have – might have – produced different outcomes. The result is double bubble: what you will replicate from past good outcomes, and what you will do differently to increase the odds of better ones. None of this is a certain formula for success, though. There are just too many variables beyond our control. That’s why I think the ultimate lesson is to do what you love. That way, whatever the outcome, you can enjoy the journey.

Comment | April 2013
Yes there’s a crisis in brand trust but please, don’t try to be nice.

It’s hardly the end of capitalism, but the horsemeat scandal is showing large food retailers and manufacturers how it feels to be a banker. Meanwhile consumers – or people, as we might style ourselves– don’t know who we can trust. Marketing is seen as manipulative, and delivering profits is represented in the media as exploitation of customers. Sam Laidlaw of Centrica announced decent but hardly sensational results last week – and had to explain to John Humphreys on the Today programme why they hadn’t forgone profits for the sake of “the squeezed middle”.  Somehow being a shareholder seems to be equated with being evil, rich or plain undeserving, while all customers are seemingly in need of a discount. Yet many customers are shareholders too – interested in the long term growth of their pension pots as well as in getting a few quid off their gas bills.

So the banks are baddies, the utility providers are exploitative and now we learn that supermarkets and food manufacturers are mostly incompetents being hoist by their own over-extended-supply-chain petard (if you can say that). Morrison’s and Waitrose are out there talking about their local sourcing and close relationships with farmers. This is a highly credible response, since it’s rooted in who they are – their brand, if you like – and so is already reflected in their established working practices and instore offerings. It’s also delivering a benefit to their customers, and I hope they get their rewards.

There are other brands, not mired in scandal, which are also trying to build trust by doing Good Things, presumably to show they are nice people and therefore can be trusted. On first glance these seem like the actions of a very caring company – but look closer and you’ll see it’s not about doing what’s best for their customers, it’s about caring about their own reputation, and looking like a nice company. When Virgin Trains finally won their legal battle against the flawed tendering process for the West Coast main line franchise, The Bearded One “pledged to donate all profits to good causes”. Why, for goodness sake? If you don’t want them Richard, have you thought that maybe your customers might? Why give the profits to charidee when you could reinvest them in making the service better or cheaper for the people who generated those profits in the first place. Then there’s Simply Health, the people who advertise that they “can be bothered”. For every like they get on Facebook they’ll give £1 to medical research, and they’ve made a TV ad about it. This is just daft. Give money to research by all means, but don’t waste serious money telling people about it. We don’t care! Better still, why not spend the money doing something for customers, and make an ad about that? Then they might win more customers. As it is, a customer could be quite annoyed that they’re spending money advertising a giveaway which non-customers can increase.  Businesses have a responsibility – both to their customers and to their shareholders – to care about their customers, but that’s not about being nice, it’s about keeping customers satisfied, so as to keep customers.

I saw a lovely example in Homebase, which may be driven out of the necessity to reduce staff numbers in quieter periods, but which recognises the value of customers’ time.  There’s a big colourful button at the paint mixing stations which you press for service if there’s no one there. If they don’t come in 2 minutes you get 10% off your paint. Pizza companies have long used these approaches – if it takes more than 30 minutes it’s free – as a way of showing their confidence in their speedy delivery. This is a bit different, because you’ll only press the button if there’s no one there to serve you; it says, we know that waiting around is a drag so either you won’t have to do it or we’ll compensate you. Now that’s the kind of caring I’m interested in. Homebase can give a fiver to Richard Branson every time the button is pushed for all I care*; as long as they’re putting me and my needs first, I can recommend them.

*though I’d rather they didn’t so if you do, Homebase, please don’t tell me, I’d rather not know.

Comment | March 2013
March’s quote of the month

Quotes | March 2013
The Strategist

I’m always on about the importance of having a clear business purpose – not necessarily the lofty do-good type that P&G, Unilever and co now seem to think they must have, just a reason why an enterprise exists, what it’s there for, in terms that its customers would recognise and value. This Harvard academic thinks so too, and makes the case brilliantly in this pithy book.  It’s an accessible, human approach to business strategy development, with lots of examples and a how-to guide. Montgomery’s ”purpose” is what I’d call a proposition, for the overall business rather than an individual product or service, and she shows how to use it to build an integrated business strategy. Her other big point is that a business strategy is not a static thing that can be declared complete, and it’s the leader’s job to keep challenging and evolving the strategy – hence the book’s title. The Gucci and Apple stories are great, too.

Books | February 2013
Why happy employees aren’t always a good thing

According to the service profit chain theory, satisfied employees deliver satisfied customers, which means sales will rise and profits will grow. So in a service business, if you focus on keeping employees happy and motivated, that’s job done. Who could disagree with that? I can.

I once worked with a contact centre business in the US mid-west which had the happiest employees in the state, and probably in the entire contact centre industry in the USA. Why? Because they had full employee benefits: specifically, comprehensive healthcare. This business found recruitment and employee retention easy, of course, and it won large contracts from telephony and cable companies across the US. Its staff, the agents, were trained in representing whichever client company they were assigned to, and took calls to handle customer inquiries, sell packages, and “save” customers who were trying to terminate their cable or telephony service. The leaders of the call centre group took pride in investing in their people, because in outsourced customer contact centres, the quality of your agents and their ability to learn new tasks is critical. To grow, the business has to win new contracts, and train existing or new agents in new assignments, with new scripts, pricing packages and the rest, so they can represent the new clients and handle calls from their customers. The agents did a great job, delivering a good experience to the callers and the client company alike, and clients were very satisfied with the call centre agents’ performance. Of course, satisfied clients wanted to give more contracts to their best-performing supplier.

But winning call handling contracts is a competitive business; new competitors were setting up shop, increasing the options available for clients awarding contracts. As a result, pricing was cut-throat – as supply in the sector grew, contracts were being won or renewed at lower rates. But even when the rate per call was forced down, this business’s happy employees did not see a cut in pay or benefits. They did a great job, and everyone was happy – except the shareholders. The business lost money faster and faster as it won new contracts, with the longest serving employees setting the benchmark for pay and conditions. Newer contracts were less profitable, and every time an old contract was renegotiated, the shareholders bore the pain, not the employees. Sounds crazy doesn’t it? But the fixation on looking after the agents and keeping them motivated, in order to deliver great customer service, had become a non-negotiable inside that business. Only with new leadership, and significant challenge from new shareholders, did anything change.

The fallacy of the service profit chain is that a single-minded focus on employees will deliver results, when in fact employee satisfaction is necessary but not sufficient. Of course it’s important to have motivated employees, but a total fixation on any one stakeholder group in a business will fail the others. Even the much lauded John Lewis Partnership, whose purpose is “the happiness of all our members, through their worthwhile, satisfying employment in a successful business” recognises that employee happiness at the expense of business success is not sustainable. The JLP purpose is very unusual in being so focused on employees; more commonly, a good purpose expresses why an organisation exists, what it’s there to do – generally, something its customers will find useful. Google’s for example, is “to organize the world’s information and make it universally accessible and useful”.

It’s important to simplify and focus inside a business, and maybe that’s why the service profit chain idea is so appealing. Resist its siren call and instead ensure the enterprise has a clear purpose. It’s harder to get to, but provides a more powerful and lasting focus.  A purpose which articulates how the whole enterprise creates value in the world does two vital things.

First, it ensures everyone knows why they’re there – not just to do whatever it is they are currently keeping busy with, nor to keep employees sweet, nor even to make shareholders happy – these things are an outcome of serving a useful purpose for customers. This is essential to the current and future value that the organisation creates.  A clear purpose is a spur for continuous improvement, modest tweaks and radical innovation, because it’s a constant reminder that everything the enterprise does is ultimately for a reason which comes from customers; keeping purpose in mind keeps an enterprise connected it with the outside world. This, more than anything, maintains shareholder value.

Second, it gives people meaningful work, which has been shown to be probably the most important single factor in creating employee satisfaction. Which has to be good, because, as we all know, satisfied employees lead to satisfied customers.

Comment, Thought leadership | February 2013
February’s quote of the month

“It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.”

Henry Ford

Quotes | February 2013
Why be different when you could just be better?

Jeanette Winterson wrote in her autobiography that her mother despaired of her, saying, “Why be happy when you could be normal?” Mrs Winterson saw conformity as a virtue. In her worldview, Jeanette’s job was to fit in rather than be fulfilled by being herself. Jeanette couldn’t help it though – she wasn’t trying to be different, she was different from the sort of girl her mother expected her to be. Accepting the status quo wasn’t an option for her. Good for her! We marketers generally don’t accept the status quo either, and we take pride in finding ways to differentiate our offerings versus competitors. Good for us! And yet, I find myself increasingly wondering whether aiming to be different from competitors is the right battle to fight.

Granted, there are well-developed sectors where it is essential to be different. But then there are so many categories where no one does a great job, where a business that just tries to be decent would win hearts and minds, and willing rather than distrustful customers.  Personally, I resent businesses that levy a booking fee for their own venue – it doesn’t cost Odeon any more to sell me a cinema ticket online than if I buy from the cinema staff, but they charge a fee, not just per booking but per ticket.  It feels opportunistic – ticket agencies charge booking fees so they’ve seen a chance to extract more money from cinema-goers. Then there are mobile phone networks that –still – offer their best deals to new customers only. Mustn’t forget banks that default your savings to the lowest available interest rate – that’s almost all of them. You’ll have your own pet hates.

Meanwhile in marketing departments lots of fancy differentiating ideas are being dreamed up – such as novel combinations of cashbacks and bonuses, like Santander’s 123 account (though I’m darned if I know what need it fulfils). Lloyds offers free software to help you manage your money. Then there are all those reward schemes offering benefits from other brands, like discounts in restaurants. (Funny how these brands stick together – O2’s rewards scheme gives you discounts at the Odeon.)

Sure, these offerings give the brand something to talk about. If a marketer’s main job is to think of something to say, then I can see the appeal. It’s certainly better than “There’s not much to choose between us and our competitors – we all do pretty much the same thing.”  Though I suspect many a marketer has said as much to their agency, no one has yet put this message in an ad.

Where a whole category is samey, like retail banking, and customers are generally not happy, there’s a great opportunity for marketers to help their business to be better – not just through distinctive advertising or a perfectly crafted brand personality or a bolted-on rewards scheme, useful though they are, but by changing the things that customers dislike.  This approach, using sources of customer dissatisfaction, is covered in depth by Seán Meehan and Paddy Barwise in their books Simply Better and Beyond the Familiar.

Often, the things customers don’t like are glossed over inside businesses. Sometimes it’s because they are hard to change – limited by systems, or just accepted industry practices. Some issues aren’t truly heard because they are seen as the usual gripes, familiar complaints that always come up. We’ve all heard versions of: “Why don’t they stop all this advertising and just make it cheaper?”  But a brave marketer can see it from the customer’s point of view, and mobilise the business to respond.

For years, every consumer group BT ran started with a general moan about line rental – people hated it because they had no choice but to “rent” the line. I’m ashamed to say that, back in the 90s, as a marketing consultant to BT, I would mention this in passing and move quickly on – it wasn’t the point of the research, and besides, that’s the way it was.  Wrong! Eventually someone at BT decided if people didn’t like it then an alternative was possible, and they brought out integrated pricing packages with no separate line rental element. Competitive and regulatory pressures may have played a part, but at least someone inside BT heard it afresh and acted on it. That’s one benefit of bringing people into your marketing team from outside the sector: they think more like customers. That lasts until they “understand the sector”, that’s to say, until they go native and stop hearing the gripes.

This is where marketing leadership comes in. We all know that a marketer’s job is more than communications and lead generation. Even if you have to settle for an undifferentiated proposition, you can help to make sure the company delivers better than its competitors for your target audience, so that leads convert and customers are retained.  Even where marketers are relatively powerless, they can bring the voice of the customer in to the business.

Of course you don’t have to be in the marketing department to take a customer-centric approach, as illustrated by London2012. Hyperbole knows no bounds to describe the triumph of London 2012. It’s universally agreed they were wonderful. How did they do it? Their customer-oriented approach, seeking good rather than different, was certainly a key element. Soon after the games were awarded, nine different customer groups were identified – spectators, athletes, sponsors, media, technical staff, and so on. Each group was asked three simple questions: What do you expect at London2012? What would delight you? What would ruin it for you? Turns out, a good night’s sleep is the most important thing for an athlete – and that basketball players’ beds are never big enough. Problem solved, with bed extensions. It’s why we all got travelcards. Getting around London was a worry for everyone, but many athletes have no money and worry about what they’ll do when their event has finished at any major games, so for London they were given travelcards for the entire duration. Anyone could do it – but no one did, until now. A brilliant use of old-fashioned market research – and they acted on what they heard.

So maybe the way to stand out is to try less hard to be different, and simply aim to please customers more. Listen to the things they hate, and get the business to change it. Marketers who focus on customers rather than brand personality or communications and the business will help to create brands that are better and different.

Comment, Thought leadership | January 2013
January’s quote of the month

“Without leaps of imagination, or dreaming, we lose the excitement of possibilities. Dreaming, after all, is a form of planning.”

Gloria Steinem, American journalist and political activist

Quotes | January 2013

Syed wanted to know why his neighbourhood in Reading produced so many top table tennis players. The clue is in the book’s subtitle, “the myth of talent and the power of practice”, and you probably feel you know what’s in it – yeah, yeah, the 10,000 hours it takes to be a virtuoso musician or a world class tennis player. But that’s just one chapter. If you’re a parent you have to know why praising effort is so much more important than praising achievement (and read about the Polgar sisters, whose father wanted to prove that anyone could be a chess grandmaster). The piece on athletes’ superstitions is a cracking read, as is the insight on what choking really is. He even dares to write a chapter called, “Are blacks superior runners?”, and really answers the question. Brave man. Maybe there’s more to his success than mere practice, after all.

Books | December 2012
December’s quote of the month

“Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity.”

Charles Mingus,  American jazz double bassist, composer and bandleader

Quotes | December 2012
Spot the deliberate(?) mistake – not one but two

This advertisement was on the outside back cover of the Independent’s Saturday listings magazine, Radar, on 16th Nov. If these are deliberate mistakes then I don’t get the joke. Can anyone explain it to me?  Call me old-fashioned, but a book retailer that can’t spell its own name somehow isn’t as appealing as it might be…


Books, Comment | November 2012
Let’s hear it for the ads we love to hate

No sooner has the GoCompare opera singer been silenced than we have the TopCashback man, dressed in the world’s weirdest outfit – neon colours and those awful nappy trousers that sometimes look cool on young women but never, never on overweight men. He prances about to a jingle that lodges as firmly in your ear as any earworm, and an annoying voice that makes me nostalgic for the “We buy any car” voiceover. Is this “good” advertising? Begrudgingly I have to say yes. It doesn’t make me like the brand, or inspire me to tell my friends, but this is a relatively unknown business that needs to get to first base: being known. Of course it’s great to be liked, talked about, passed around virally (every marketer’s fantasy, which happens only rarely and usually for the wrong reasons). For a new business, though, it is more important to be noticed, and for people to know what you offer them. TopCashback’s proposition is crystal clear: he sings it, so now I can too: “Money back when you shop online”.  Having read that, you’ll be doing it too. I’m sorry.

A couple of years ago I was incensed when Compare the Market narrowly won a vote among Marketing Society members to be brand of the year, beating Waitrose by one vote. Why my outrage? Because the much-loved (back then) Meerkats campaign was a witty, memorable trick that covered the total absence of a differentiated proposition. Full marks to the advertising agency, but surely no more than a C for the marketing director. This may be harsh as I have not seen hard data on its business performance, but I’m told that the Meerkats campaign has helped shift Compare the Market from a little-known minor player in its sector to a well-known minor player in its sector.  This may still change, because, luckily for them, in the scrum of comparison websites, all shrieking to be heard, their competitors mostly have nothing much to say either, other than their names. That’s not great marketing, even if it is good clear communication. So I am reluctantly grateful that TopCashback not only tells you what they do and how it benefits you, the customer, but even covers the main differentiating points as well (no fees etc.) – all in a traditional thirty second TV ad. Full marks.

Meanwhile Nikon is airing a couple of lovely feel-good ads full of wonderful memorable moments, with something for everyone, and a great soundtrack.  I wonder why.  From a viewer’s point of view, it’s a much nicer experience than any I’ve mentioned so far, and no doubt they scored well in consumer research.  Advertising research models, like Brainjuicer’s, increasingly correlate positive emotional responses with advertising effectiveness. This is a sound approach in many big categories like fmcg and retail, where brand communication is judged by its ability to drive consumer preference for one brand over another, the assumption being that people are in the category, and the challenge is to be the chosen brand. This campaign may well create a warm glow around Nikon, and may even make it people’s preferred camera brand (or, one we can name, at least). But from a business point of view, what can it do for them? It doesn’t say much about Nikon. Although it does subtly show different models through different executions, you have to be really interested to spot that. The ads are constructed around different moments worth capturing, not different features of the cameras. To the averagely attentive viewer, it feels like a generic ad for photography, providing a basic reminder that cameras exist. Yes that may be necessary – who remembers to bring a camera nowadays when your phone does the job? – but will reminding us really improve their fortunes?

Of course I know Christmas is a critical time for them, and they must seize the gifting moment while it’s here. It’s also possible that they’ve negotiated retailer promotions on the back of their TV campaign, or even that TV advertising was a requirement to gain shelf space in the major outlets at Christmas.  They may feel they have no option but to advertise, just to stay on the shelves. No doubt about it, being the marketing director of a camera company right now is not for the faint hearted. Along with alarm clocks, fax machines and camera film, there’s a market for them but their best days are behind them. Sadly, lovely advertising can’t save them if the product is obsolete, or if they don’t give us good reasons to choose it.

So what’s next for our neon-clad dancing friend from TopCashback? Well, there’s lots of evidence that consistency helps a brand to be recalled, which helps generate business. Oh dear. If TopCashback keep up the good work, we’ll all be singing that wretched jingle for a long time.

Comment | November 2012
Management in 10 Words

Well it’s not rocket science, is it? So if good business is mostly common sense, here’s a book that lays it out clearly and simply, with a few guiding principles, and the recurrent theme of seeing your business as customers see it. According to Leahy, this means eschewing conventional market definitions and boundaries, constantly looking around and listening to customers for things you can do better for them, and then trying things out. It’s a good straightforward read, with a nice focus on customers and clarity of purpose. The bit that doesn’t quite ring true is that Tesco sounds like a lovely place to work; treating people with respect is, we are told, a core value. Reading this, someone who’d served Tesco as a supplier might feel short-changed. But then maybe that’s how Tesco suppliers are meant to feel.

Books | November 2012
November’s quote of the month

“People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

Maya Angelou

Quotes | November 2012
Thinking, Fast and Slow

You get a concept a chapter in this packed book, which covers two broad areas: how the human brain/ mind makes judgements, and how we make choices (aka behavioural economics). Fast thinking is when our automated processor steps in, which is the default because slow thinking – that’s to say, really thinking – is effortful. Trouble is, we mostly aren’t aware which thinking mode we are using, nor of the errors the fast thinking mode can make. The most striking, and original, aspect of this book is the demonstration of the many errors of judgement we can make, either through one of the fast thinking shortcuts – and remember you don’t know you’re doing it – or through how memory works. There’s lots available on behavioural economics (look for books with one-word titles: Nudge, Herd, Freakonomics), a lot less on the thinking stuff; for more of that, read psychologist Guy Claxton’s “Hare Brain, Tortoise Mind”.

Books | October 2012
What coat hangers teach us about business-to-business marketing

I heard the great Gary Hamel, co-author of Competing for the Future, give a talk on innovation a while back, at the London Business School. He cited the classic hotel clothes or coat hanger as “stupid” – this one. Because it is infuriating to use, isn’t it?

Professor Hamel used it as an example of poor innovation – and of course he’s right, it is rubbish for the end user, the hotels’ customers, you and me. But it is ubiquitous, so there must be lots of people who think it’s a great solution. That got me thinking, a solution for whom?  The customer who paid for it, of course, the hotelier. If the brief from the hotelier was, “Help us to save money, by stemming the loss of coat hangers”, then it’s a perfect response. Viewed narrowly, it’s great innovation! No one’s going to steal one of these. (Good job they didn’t take the same approach to the loss of hotel towels – one end would be tethered to a hook on the bathroom wall.) But in solving the direct customer’s problem, the designer created a problem for the customer’s customer, and that can’t be good.

So here’s a challenge: a great response to the business need, as articulated by the client, creates a bigger problem for the client that they may not even be aware of. Did anyone think to check why hangers were disappearing, and try to solve the problem another way? I can think of a couple of alternatives that might cost less and make customers happy.  The Malmaison Hotels Group  do this nicely with toiletries – they give generous-sized bottles which are labelled “Take me home”.  You feel like you’re getting some extra value, even as you pay their super-premium room rates. Or how about an approach informed by behavioural economics? A friendly sign saying, “If you like our chunky hangers, you can buy them and take them home – just check the box on the minibar list”. That’s how hotels deter people from taking bathrobes, so why not use it here too. Maybe people would be happy to have a fiver added to their bill to make it ok to take them. It would certainly make me think twice about popping them into my case and hoping no one notices.

OK, so we don’t choose our hotel based on what sort of hangers they have, but if this is indicative of the general approach they take to improving their business, then there will be a cumulative impact on customers, not to mention the penny-pinching attitude that employees will feel and will express to customers.

The goal in business-to-business marketing must be to help the direct customer do what they do better. Innovation should be to enhance the experience of their customers, and/or their employees, so as to improve their own business performance in the long term. The best innovation saves money and enhances the experience – online order tracking, for example – but so-called innovation that focuses solely on cost reduction is risky (unless the savings are to be shared with the customer). Short term gain can be had, but it will usually at the expense of the very people that business is relying on, their own customers. Marketers can make the difference here, by thinking about how cost-saving initiatives will impact customers and employees.

Why wait to respond to cost cutting measures, though? We can be proactive: thinking through the customer journey – both the purchase journey and the usage experience – is a great way to pre-empt these cost-led initiatives which are value-reducing  as well as cost-reducing. Instead you can create a true win-win in which costs are reduced, time saved, and value increased for the customer.

I’ve written, and you’ve read, a whole piece about this stupid coat hanger. Particularly in luxury categories, details matter. They help me, the customer, rationalise my expenditure.  This one tiny detail – like Malmaison’s “Take me home” toiletries  – can make a big difference to how customers feel. Our job as marketers is to create value for customers and thus revenue for our business. The coat hanger indicates a value extraction mind-set at work – how can the hotel spend less on its fittings while charging guests the same rate – rather than a value creation mind-set. A great marketer would see the opportunity inherent in the disappearing coat hangers: customers want them. So let them have what they want, and make it nice for them, at a price we can all feel good about, so they feel good about you. And the rest of us can have proper coat hangers in our hotel rooms.

Thought leadership | October 2012
October’s quote of the month

“It’s always better to look for the strengths in a competitor’s innovation than the weaknesses. You may feel better attacking a competitor but in the long run it is wiser to learn from them.”

Terry Leahy, former CEO of Tesco

Quotes | October 2012
Is behavioural economics the new marketing?

behavioural economics

Ever since the Conservatives discovered Nudge, a book by the American writers Richard Thaler and Cass Sunstein, people in business, and especially in communications, have got excited about behavioural economics. Seasoned marketers are leaving their jobs to set up behavioural insights consultancies, a bit like a previous generation of marketers went off to create web-based businesses at the turn of this century. Most of those marketers, and many of those businesses, came back into the mainstream, bringing the digital world with them. The same will happen with behavioural economics. There’s a lot of value in BE, not least in understanding our irrationality. Someone wise has pointed out that we are rationalising creatures not rational ones – we try to explain our decisions and behaviour, without really knowing half the time why we did what we did. Behavioural economics taps into the little things that “nudge” us to do things, sometimes unwittingly – for example, seeing other people do things makes it more acceptable. Behavioural insights can thus be used in communications to persuade people to do things. The government’s behavioural insights team tries to find ways to nudge us into better habits that are healthier, better for the planet or better for the Treasury. For example, hearing that most people pay their tax on time makes us more likely to do it because we see it as the norm to do so.

Some people are wondering whether this is the new marketing, replacing our old marketing concepts. It’s not. Having a relevant product or service offering, built on insight about people’s needs and behaviours, is still the sine qua non of successful businesses, and it’s the job of marketers to help the business arrive at these – telling people about your offering in a persuasive way is just part of it. But it might be the new market research, at least in part. It’s smart to look seriously for behavioural insights, because they can help create effective communication strategies that connect with your target customer. Great communicators have always incorporated this thinking into their work, perhaps not always consciously. BE models help all of us do it more systematically. But as always it’s important not to confuse marketing communications with the business function of marketing, which is so much more than a collection of persuasion techniques (see BE cribsheet by clicking on September 2012 posts). You can’t trick people into wanting what others have if in practice it delivers nothing of value for them. At the same time, marketing is also so much simpler – it’s finding out what your target customers value and will pay for, and making sure you provide it consistently and reliably so that they choose you. Using clever subliminal techniques to persuade or prompt the behaviour you want – to try, or buy, your offering – those are just small parts of the whole business process of creating satisfied customers.

Comment | September 2012
A behavioural economics crib sheet

If you’ve ever said to a child, “Everyone else is going” then you’ve used behavioural economics. Lots of it is common sense, and you’ll see ways in which we do it all the time, but it’s useful to separate out and name the various concepts and levers. The basic model from Downing Street’s Nudge unit uses the acronym MINDSPACE:

Messenger – think who should deliver the message. For example, people whom the target will see as peers, or their own family, rather than authority figures – this has been demonstrated with health messages.

Incentives – strongly avoiding losses is a big incentive, because loss aversion is stronger than positive gain. Some BE people say loss aversion is the reason why free trials (where you sign up with payment details, and have to cancel after the free trial period) work well – they say it’s because you don’t want to give it up after you’ve had it. Personally I think forgetfulness is the reason – Default, in BE terms, explained see below.

Norms – positive norms can be created, eg most people pay their tax on time; but negative norms can apply too, eg pilfering from petrified forest. A great example of this is given in Freakonomics, where a day care centre imposed “fines” for late pick-ups, which parents took as being the price for the late service, causing an increase in late pick-ups, albeit paid-for.

Defaults – we tend to go with the flow of pre-set options, hence the talk of setting things up so that people will have to opt out of a workplace pension rather than deciding to go in. Also why you have remember to tick the box to avoid being on mailing lists.

Salience – our attention is drawn to novel and/or relevant information

Priming – our acts are often influenced by subconscious cues, eg smaller containers for pop corn; seeing flowers not dollars on screen saver make people less aggressive, apparently, in doing a screen-based simulation task in which they have to decide how to behave towards others.

Affect – They do mean affect, not effect – our emotional associations can affect our actions. In a “hot” state you are less rational than in a “cold” state (and hence caution is advised re market research asking someone in a cold state to explain or predict “hot” state actions). This is why good intentions are not always acted upon. What a person says they’ll do when calm/ rational/not hungry/sober isn’t always what they do once they get to the pub/ to work/ walking past McDonalds.

Commitment – get the person to say or write it, eg filling in your own appointment card makes you less likely to miss the appointment.

Ego – we act in ways that make us feel better about ourselves – eg get people to sign the tax form just after the declaration instead of right at the end, to ensure honesty.

Social norms can be more powerful than positive financial incentives, but introducing financial incentives can drive out social norms. Therefore the two can work well together – small financial incentives, eg linked to the cost of smoking, combined with the value of giving up, which is much greater than the money saved. Smoking cessation increasingly uses multiple components, eg public commitment, family support, a peer network.

Other components often cited are:

Anchoring – establish expectations, eg of price or frequency. This is why reduced price things are appealing to many of us (I admit I’m one of them) – although common sense might say these are the items that no one else wants.

Exclusivity/ scarcity – “Your policy entitles you to….” vs “Would you like to have….?”  makes it more likely they will accept what is being offered, as it appears to have more value.

So that’s the model used by the No 10 behavioural insights unit aka the “Nudge” unit.

Comment | September 2012
Britain’s banks: our role in their downfall *

It’s easy to take a swipe at banks, and tempting to think it was all about the good old days, when the bank manager knew his (mostly, his) customers personally. Dave Fishwick of Burnley Savings and Loans seems to think so. Frustrated at seeing loan applications from apparently credit-worthy local businesses refused by faceless administrators, or even computers, located far away from honest Burnley – probably in the wicked South – he set up his own bank, though he cannot legally call it that. In the Channel Four documentary, Bank of Dave, he meets each potential borrower, face to face, to assess their business situation, and to determine their credit-worthiness.

His approach, based on mutual trust, contrasts sharply with PPI and other mis-selling, when totally inappropriate “products” were sold to personal and small business customers by people in financial services who seem to have been chasing internal targets rather than providing a service. Those mis-selling scandals were enabled by the one-sided trust that ordinary folk still had at that time for big-name (formerly known as “reputable”) banks, That’s to say, we still thought we could rely on the big brands in financial services.

Bankers are now the nation’s whipping boys (and a few girls), but marketers must share the blame, for two reasons. Firstly, the principles of brand management, imported from the fmcg world and misapplied in financial services, are part of the problem. Secondly, marketers have a responsibility to bring the voice of the customer into the organisation, and not just the voice of the organisation out to the marketplace.

About twenty years ago, there was a big push among service businesses, financial and other, to recruit classically-trained marketers from fast-moving consumer goods companies like Procter & Gamble and Unilever. This seems to mark the start of a shift from providing a service to promoting a range of products. It wasn’t true brand management, in that there was little regard for building and delivering on a clear promise and fulfilling customer expectations consistently; it was product management – product P&Ls just like in fmcg companies, clear targets for each product, promotional budgets attributable to each, and so on. You can see how this was helpful internally, but what’s lost is a joined-up view of the job the organisation is doing for each customer, and, indeed, the ability to see enough about each customer to be able to make informed decisions. Adopting those principles of fmcg marketing that seemed useful to a profit-centred way of managing the business fragmented the overall banking service and contributed to FS companies losing sight of their purpose and of their customers. The latest mantra is a “single customer view” – good news, if used for mutual benefit, not just to push more “products, though it’s in danger of being hijacked by the IT consulting and systems integration industry, to create a new round of mega IT projects.

Then there’s the role of marketers to represent the customer inside the business. In Market Leader, June 2012, Hugh Davidson argues that the answer to capitalism run wild is proper, customer-centric marketing, and that long term sustainable profitability will follow. He contrasts sectors which are value adders with some, like retail banking and financial services, which he says are value extractors. It can be hard for marketers in financial services, where other functions dominate and the marketing team is expected to promote “products” rather than shape them. In Market Leader, Sept 2012, I suggest how marketers in financial services can take up Hugh’s challenge, even if they are not represented on the board.

By the way, when people get sentimental for the good old days, perhaps it’s worth remembering that back then many decent people could not get credit because the all-powerful local bank manager made his own decisions, and credit was often refused for spurious reasons or none at all. Centralisation may be in part at fault, but restructuring isn’t the answer, unless focus and motivation also changes. Profit as a motivator is fine as long as it’s understood that long term sustainable profit comes from meeting customer needs well. Which is the definition of marketing.

 * with apologies to Spike Milligan
Comment | September 2012
September’s quote of the month

“A problem well stated is a problem half solved”

John Dewey, American philosopher

Quotes | September 2012
What can sporting heroes teach us about business?

There’s a whole industry built on having sporting achievers speak to business people, and the received wisdom is that we can learn from them. We can – but not what you might think. It’s not so much about the value of commitment, belief, teamwork – all that inspiring stuff – as it is about seeing a fulfilled person, and wanting to share that feeling. Here’s my blog post from Brand Republic.


Sir Matthew Pinsent is a very big man, with a big voice, and when he walked up and down the stage at the Marketing Society conference, describing how his crew worked in the Athens Olympics, the whole room listened in awed silence before erupting into rapturous applause. I felt inspired. Afterwards, I wasn’t sure what I’d taken away from it – but we all agreed he was a brilliant speaker and we’d loved it.

There’s a whole industry built on having sporting achievers speak to business people, and the received wisdom is that we can learn from them. Matthew talked about teamwork: when at last they were racing for gold at Athens, it was time to know your job and focus totally on doing that well, and trust that the others in the boat will do theirs. But is that a useful analogy for business? It could just as easily translate as, “Not my job mate“.

I recently heard another Olympian, Steve Williams describe his odyssey to win gold at Athens, enduring five – or was it six – hours’ training a day, and doing this six – or was it seven – days a week for four years, preparing for one race. Also on the stage was former Olympic swimmer and Gladiator Sharron Davies, and I asked her what lessons there might be for a business person, since we can’t dedicate ourselves to preparing for one thing like that. Her answer? We all spent all our teenage years as well, so really it’s more like twelve or fifteen years’ dedicated training. Ok, thanks Sharron. So…that seems even less relevant to business doesn’t it?

Athletes talk a lot about personal commitment and hard work, especially those in swimming and track events where achievements are individual. That leaves me confused about whether sport as inspiration for business is meant to inspire me, as an individual, to compete and win – against whom? My peers, for personal recognition and advancement? Surely not. Perhaps it means each of us as representatives of our organisation, then, to help our business or enterprise to succeed, to win? But business isn’t a race, or a team competition – it’s an obstacle course on a rollercoaster, with obscure and new rivals arriving all the time, and no finish line.

In swimming, in rowing, in fact in any sport, you all know the rules in advance. You can work hard but you can’t change the rules – and if you try to find some wily wheeze to change the situation to your advantage, you risk disqualification. In business, by contrast, people who accept the status quo are LOSERS! Winners in business change the rules to their own advantage – they spot opportunities that are not yet apparent to others, make things no one else has made, find new suppliers or manufacturing processes to gain cost advantages, lobby for different laws, get creative with tax and domicile, even. It’s the job of a business leader to create change. They definitely, totally, should not seek to conform to the “rules” of the category in which they operate.

So we’re back to personal dedication and commitment? Actually I think there is something more here, beyond he hard work, commitment and belief. It’s not that we are in the presence of genius which might rub off on us. It’s that they had a clear goal, a stated purpose, and they focused on it single-mindedly, and worked extremely hard, enduring setbacks, injuries, moments of self-doubt, but never giving up.

Lucky them, of course. For all the horror of having to get up at six every morning to go rowing in a gale, and then lifting weights in the gym for two hours, followed by whatever the latest training guru has thought up, their job is simple – not like mine or yours, right? It’s so clear what they have to do, whereas business is complicated. Maybe so, but the inspiration I take from Matthew, Steve, Sharron and the rest, is that you first need that clarity of purpose. Why are you at work, and what does success look like?

There’s a personal answer, and there should also be an answer you share with your work colleagues. Like Matthew Pinsent in his crew, we can all focus on our roles, and leave the others to do theirs, if we are all clear on the collective purpose, and we all care enough about achieving it to intervene – constructively, helpfully, and at the right time – so we can all be better together. The ethos of the GB rowing squad reflects this focus on purpose. Their touchstone and mantra is, Will it make the boat go faster? Everyone in the squad can question and challenge everyone else’s actions, if they might not be in the best interests of the team.

Sports team managers like Dave Brailsford, who leads the Sky and GB cycling teams, know there are no short cuts or magic bullets. He appointed a director of marginal gains whose job is to look at every aspect of preparation and training, and find all the tiny tweaks that can be made, which all add up to faster races.

I think the real reason we love hearing from sports people is that we are inspired by personal fulfilment. What we see when Sir Matthew, or Steve Richards, or any one of them speak, is a fulfilled person, someone with a clear purpose on which they have delivered. It is exciting and refreshing to be in the company of someone who has achieved something great, whether climbing a mountain, winning an Olympic medal , starting a charity that changes lives, or growing a successful business. It inspires me to revisit and commit to my purpose with renewed energy. With sports people there’s the added bonus that, compared with their schedules, my day at work is a walk in the park. Lovely.

Comment | August 2012
August’s quote of the month

“The business schools reward difficult, complex behaviour more than simple behaviour, but simple behaviour is more effective.”

Warren Buffett

Quotes | August 2012
Banks and customers – a lesson in obliquity

Banks, eh? Easy to knock them, but what can we learn from their travails? Well, they illustrate perfectly how a. incentives drive behaviour, and b. delighting shareholders is unlikely to be a winning strategy in the long term. John Kay’s book Obliquity explores the principle that complex goals are best achieved indirectly, with examples of companies which achieved sustainable profitability by focusing not on their profit goals but on what their customers needed from them. Jim Collins, in Built to Last, made the same observation. He compared Merck with Pfizer, contrasting George Merck – “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear” – with the direct profit-focused philosophy of Pfizer’s leader, John McKeen: “So far as humanly possible, we aim to get profit out of everything we do.” During this phase, Merck made more money. Later, under different leadership with a more direct profit focus, Merck stumbled.

In the case of the major banks, I can’t see from here whether the focus was on shareholder profitability or on personal incentives, but it clearly wasn’t on customers (except to the extent that you need customers to buy things from you if you’re going to hit your targets). I don’t just mean at the top of the banks – every mis-selling scandal in financial services has been because large numbers of customer-facing staff have responded to targets to sell specific products, often with cash rewards for doing so. Full marks for a consistent focus through all levels of the organisation. Shame it’s one that exploits and damages customers. Both shareholders and employees have benefitted from this approach – but at the expense of customers. The evidence is that companies can get away with this for a while, even years, especially if their competitors choose to operate to the same standard. It would be nice to believe that eventually market competition ensures that the truth will out, but in banking at least it appears that, without financial regulators, it might not.

Comment | July 2012
Dashboards part two: taking action

So you agree with my point on customer dashboards (see Dashboard schmashboard that they should measure how the business is delivering on its promise to customers  (or consumers), and not how well the marketing department is spending its marketing budget. Every function is responsible for managing and spending its budget wisely. Marketing communications budgets may be subject to board scrutiny from time to time, just like other large budgets, but that’s nothing to do with the customer experience. Great advertising isn’t what customers pay for.

Here’s what I suggest.

I don’t believe there’s a neat and tidy solution with a clean objective set of measures on a chart. Listening with an open mind, both to colleagues and to customers, remains essential. Value your own experience as a customer too, and your instincts and judgement. Absorb what you’re hearing from these multiple sources, and act on what’s important. This may mean sharing the information and getting others to devise the solution.

For quantitative metrics, I support the Barwise approach (as per the book reviewed here), of starting with the key drivers of customer dissatisfaction. Find out which failures or pinch points upset customers most, and track how well the business is delivering against these. Each product or service refinement – large or small – should be addressing an unmet customer need – large or small – so looking at dissatisfaction is also a great springboard for continuous improvement and innovation.

Dashboard schmashboard

Customer dashboards are popular now – everyone’s talking about them, and feeling great about using them to “bring the customer into the board room”. Your average customer dashboard is usually a table of measures, sometimes as many as twenty or thirty, that come directly or indirectly from your customers or consumers. These can be simple things like market share or retention measured by the business or third parties, along with data from custom research like customer satisfaction or net promoter scores, brand approval scores, and the like. Sir Terry Leahy says, Listen to your customers and they’ll give you your strategy. He says the primary job of marketers is to bring the voice of the customer into the business so that people can do the right thing for the customer. His is a simple logic that’s hard to dispute: Keep giving customers value consistently over time and they’ll reward you with loyalty.

So getting customer metrics into the boardroom is a win for marketers, isn’t it, because it’s the voice of the customer at the top of the organisation. Sadly, I think it’s being conflated with another issue that concerns marketers, especially those less confident or who operate in organisations which see marketing as a promotional tool rather than the guiding force Sir Terry describes. These marketing people talk about demonstrating return on investment for their marketing activities. It’s not entirely their fault that they have to put a lot of time and energy into proving the value of marketing communications to a sceptical organisation, but they often end up linking the two – customer metrics and dashboards become their way of proving the value of “marketing”, by which they really mean “marketing communication expenditure”. What a missed opportunity – the voice of the customer shouldn’t be used to report back on whether the marketers are making nice ads or creating efficient web journeys! It’s even questionable whether to report on how much customers love the brand. The voice of the customer is how marketers can help the board report back on how the entire business is doing in serving customers.

Now read Dashboards part two: taking action

Fooled By Randomness

Fooled by randomness, by Nassim Nicholas Taleb

It’s a cliché to say a book changes how you think about things, or how you see the world, but this one does. Taleb, a Lebanese trader working in the New York financial market, is original, iconoclastic and entertaining. It made me question what I read and hear in the media, and how people report events and achievements. The central idea is that we look for causality and frequently infer it where it does not exist. As a result, people are accorded – or claim – credit for outcomes they did not create – like fund managers who beat the market. They all claim they will, and statistically, someone has to. The key test is, if a specific outcome is predicted and then delivered, they may have had something to do with it. If they point to it after the fact, it’s probably just luck.

Buy on Amazon

Books | July 2012
How brands grow

How brands grow: what marketers don’t know, by Byron Sharp

Based on analysis of twenty years of rigorous purchasing data from many categories and markets, this book debunks some of the myths about how marketing builds business success.  An Aussie academic who worked with the great Andrew Ehrenberg of London South Bank University, Sharp shows how a lot of marketers focus on the wrong things, and tells you what you should focus on. Perhaps the most fundamental, and counter-intuitive, finding is that consumer loyalty and market penetration go hand in hand. That’s to say, big brands have more users, who use the brand more of the time, while small brands have fewer users, who tend to use them less. He calls this Double Jeopardy: there’s no such thing as a small brand whose sales come from a small band of intensely loyal users. To grow, a brand needs more users as well as more usage – both penetration and loyalty. This one finding alone would embarrass many a marketing plan I’ve seen – and some I’ve presented.

Buy on Amazon

Books | July 2012
Beyond the Familiar

Beyond the Familiar, by Patrick Barwise and Sean Meehan

These two take an enterprise-wide approach to creating organic growth,  with a simple, clear and actionable model. They agree with Sharp that the only differentiation really worth pursuing is to be the business that delivers on the category basics better than competitors. Their previous book, Simply Better, laid out that argument in full. This time they’re showing how to put it into practice. They place a very high value on customer feedback, especially on understanding the causes of customer dissatisfaction – a neat twist, since most businesses focus on their positive raters, whether through customer satisfaction or  net promoter scores. It’s not easy for people in business to focus on and report on the bad stuff – but it may just be the best way to find the most significant opportunities for improvement, and hence get better results, not just on the surveys but in the marketplace and on the bottom line.

Buy on Amazon

Books | July 2012
This much I’ve learned

The best advice I got…
When I was a graduate trainee, a sales manager who spent every lunchtime in the pub told me: ‘Everyone has something to teach you.’

The worst advice I got…
When I arrived in a new company as CEO, a very experienced account man told me not to bother getting to know a major client as he had it under control. Of course, we lost the business.

Don’t Underestimate…
How you can help and liberate people around you just by articulating things clearly and having the courage to do so.

Don’t overestimate…
The importance of meetings. Meetings aren’t work.

The experience that taught me most…
I joined WPP Kantar in a newly created role with no job description and no plan to follow, just a clear purpose given by the CEO, Eric Salama. I learned to work from first principles and do what would make a difference.

The worst moment…
A new colleague I had not met phoned to complain about how one of my team, also called Fiona, had been rude to her on a conference call. It was worse for her though – when I revealed it was me on that call.

My peak career experience…
Is still ahead. If you keep learning and making a difference then every stage is better than the one before.

From Marketing Society

Interviews | July 2012
July’s quote of the month

“Not everything that counts can be counted, and not everything that can be counted counts.”

Sign hanging in Einstein’s office at Princeton.

Quotes | July 2012