Back Seat Marketers

While we’ve covered the purpose driven brands, the next two years will also mark the beginning of brands being driven by the people at the companies they work for, or their own businesses. Gary V. is the story worth learning on how a person can drive the sales and marketing of a business by creating content everyday that builds into a contextual marketing platform.

Companies are going to need brand meaning as told by a person that can be trusted. Steve Jobs is an easy example, but, in reality, all but one company don’t have Steve Jobs and need to understand how to create a role for a trusted communicator for the business. Having one personality will be hard enough, but scaling that role into more than one person will get even more complex. In fact, Google has done exactly that by allowing multiple people to be the voice boxes for the company exemplifies how the activity generators can directly communicate with their target audiences. To be sure, Google has a more formalized process for how employees are to communicate on their own.

Organizations have built traditional infrastructure around communicating outside the company in a polished way for a reason: the message is created by professional creative folks, approved by management, tested with consumers and launched in a controlled way.

Companies turning to employee talent for communications have benefits and risks. The benefits are:

• Speed of interaction between the line managers and consumers and with it discovery of more problems/solutions,
• Increased lead user identification, and
• A higher rate of communications.

The risks can create real reasons to question implementation:

• Loss of senior management control over message content and timing,
• Increase of employee talent awareness within a company by outsiders, and
• More visibility to vision, commitments and failures after the fact.

These risks are real and leading brand driven companies have succeeded by building a product driven brand based on less personalized, indirect communications (e.g. TV and radio). As blogging and social networking take hold, how many layers of communications infrastructure (=PR, agencies) will be needed go-forward? Tools to empower communications will definitely continue to roll out to meet this area much like Salesforce.com did for the sales process in many companies over the past five years.

Let’s face it, if you’re reading this, you’re likely as addicted to being connected as I am. One thing I’ve realized in 2008 is that one place that needs to be off limits for my online presence is in my car. I’m going to make a conscious effort in 2009 and beyond to avoid driving and using my Blackberry, my iPod, my wife’s iPhone or any other ‘heads down’ display. Honestly, auto makers have a lot of innovation room to grow in this area (and Sync is only the beginning) as I’m quite interested in using my dead time in my car, but really need to be focused on the task and not on a page load or typing a quick tweet.

Join me in my resolution, or add a comment on any other plans of your own.

In a product marketing class we took in undergrad, we played a simulation game each week that was supposed to replicate a market with consumers that had shifting preferences over time. All of our teams were given comparative advantages and then had to determine where we fit today in the market, and had to read the tea leaves of only a handful of data points to understand where consumers’ interest would be for the future weeks and make changes accordingly. The game proved to be educational in its interactivity as well as the point it relayed: things change and companies have to think ahead to be where consumers shifting preferences will be. Sort of throwing the ball to where the receiver will be, not where he is.

A great example was Porsche’s choice of getting into the SUV market with its Cayenne. Generally regarded as a huge bet on the company’s future, the Cayenne has been a very profitable move by a savvy company in touch with what its clientele wanted. While its 911 sports car was a icon, it had spent too many years trying to create a ‘mini-911′ which never seemed to carry the same weight. In the past 15 years, the company saw SUV’s grow wildly and put its own spin on one. While not revolutionary in design, it offered those interested in a Porsche a chance to get one in the right flavor.

What happens to the other SUV manufacturers as Porsche enters is where the real problem develops. Customers’ choices increase, volume at each legacy player decreases and old less desirable lines die. Chrysler started the minivan category and Ford owns the truck category with its F-series yet both companies are not profitable. In time, competitors new and old can shift to meet consumers’ preferences and hone offerings.  In fact, automobiles are no different than any category in Wal*Mart. Why are so many auto companies in trouble? Over time other players targeted all the right features of the best products while very little new technology (read: alt energy vehicles) emerged.

Avoiding strategy decay requires looking through the crystal ball and charting a course. Here are some general areas to consider when placing time into the marketing strategy mix:

1. Innovation over time is unpredictable, but measuring innovative successes has greatly improved making ‘fast following’ or copying features/products a profitable venture with a far lower cost structure. Additionally, as fast following becomes a norm in society, rules protecting unique properties have been weakened to allow consumers access to more manufacturer options.

2. Optimized business models for fast following strip away needless innovation and hone product offerings by all companies to the most successful options. Value chain leaders integrate or contractually lock up fast followers stripping costs out of identifying consumer preferences and integrating them into the product mix.

3. Traditional innovators unable to sustain multi-year investments must move downstream into being fast followers (being locked up or bought) or upstream into core technology developers that are harder to replicate. [Note that Apple continues to buy small technology companies to ensure its edge on core technologies over its suppliers.]

4. Supply chains are adapting into mass market, large scale ‘best product mix at lowest cost’ v. ‘newest technology / design at premium or value-for-features price’. In automobiles, think BMW and Porsche v. GM and Kia. In grocery, think Whole Foods and Harris Teeter v. Wal*Mart and Kroger. [Along this case, I’d note that Hulu v. YouTube is sorting this out where Hulu is the lowest cost distribution point for content producers like NBC while YouTube will need to differentiate by being a value-for-features option (begs the question: what are those features?)]

The next two years will mark a very difficult time across the board. Consumers will push for value and a purpose forcing companies to think about where they fit. Only a few like Apple are lucky enough to have its consumers next gen versions of its products for them.

The WSJ reports that spending is far off, and the more luxury and discretionary, the less people chose it.

As people hunker down, lose their jobs, see iconic corporations change dramatically, and face a new reality of a more fundamental lifestyle, we’re going to see a shift of importance in creating value. Value in 2007 was about trading up the ladder by adding features that offered more for slightly less more money.

If you’ve got a brand that’s about creating something of value, then you better focus on it. If you’ve got a brand that has lived on being a lifestyle, then you better find a meaning or plan on being smaller for quite a while. Brands that were making money by being slightly better for slightly less, be aware of the old strategic phrase: getting stuck in the middle.

Brands and companies in the middle will shrink in 2009 and companies that aren’t able to shift down, or hone a premium message, shrink and stay on the top (of mind) will not fair well.

Here’s a thought, retailers, do something different than super low prices to get my attention. Door busters were interesting, but they’ve run their course, but now, as your shopper, I’m tired of the mayhem that comes with 6 AM start times, elbow throwing and not getting the 1 of 6 ultra-low priced items I went to buy leaving me frustrated, tired and bruised.

Isn’t the idea that a store employee died today proof enough that door busters have gone too long and too far? In fact, the use of ultra-low priced items to draw traffic has gotten earlier and earlier (Kohl’s went to 4 AM to beat most other retailers this year) with ever more participating members (Old Navy with a door buster?; TigerDirect.com doesn’t even have doors!). Along with the hype, a whole new information economy is being built on top of Black Friday.

A great example of your massive success in creating Black Friday is shown by bfads.net, a website that aggregates all retailer’s information at one site and approaches the popularity of the NY Times:

Retailers, your success is measurable: One estimate puts expected shoppers this weekend at 128MM which is almost half of all US citizens.

Being transparent (as consumers, we’re growing to like this idea more and more), this tactic has one main goal for you: Get the total basket of my purchases high enough to justify the loss on the Door Buster. Sure, sometimes you can partner with a manufacturer to make money on the product being used to lure me in, but most consumer electronics, including highly popular LCD TV’s and digital cameras, earn retailers less than 10% for you and most manufacturers already live on razor thin margins. I’m on to these games and would rather just shop for the hot price on the hot shopping day leaving my other purchases for other times. Sorry.

Like BOGO’s and other high-low pricing strategies of the past, the door buster is becoming its own enemy. When we consumers get the weekend circulars for Black Friday, like Pavlov’s dog, we focus on what hot items will be almost given away for our attention. The earlier the better, as we may go somewhere else with our credit cards. In these value marketing times, how many of this weekend’s customers will buy enough in that store visit to cover the lost margin on a $600 TV that was marked down $300? I stress ‘this visit’ because these busters aren’t building loyalty, they are training us to jump at low prices.

Here’s an alternative use for those margin dollars: Use all that consumer data you’ve been accumulating on us and offer up a customized Black Friday event for us, your most loyal customers, via an exclusive invitation at an exclusive time that doesn’t have obnoxious shoppers and the stress that goes along with it. If you feel you need to give us more incentives to show up, then hand us a coupon that gives us a target for a reasonable spend level based on what we’ve bought throughout the year (instead of skewing to the ‘go big’ incentives for everyone that walks in the door like “busters” do today). All of you, major national retailers with names like Target, Wal*Mart, Home Depot, Lowe’s, Safeway and Kroger, know how often we come in, what categories we buy and how much on average we’re spending. Use a scalpel for our dollars instead of a mallet.

Even better, once you create an experience that isn’t about everyone, then you’ve built an experience for us, the ones that you want to build your relationship with. While all those faceless shoppers that storm through the stores seeking the latest super-deal won’t show up, what needs to be asked is this: How many of those shoppers are buying your door busters at ultra-low prices and then just reposting the item on eBay to profit from a your lost margin?

This year is over, but most of you retailers will be planning for 2009 soon. Take a stand, end Door Busters this year and try something completely different. Who knows, we may actually look forward to shopping again.

Being spread on Twitter is a little free promo from Dr Pepper for a free soda to everyone in America. Sure, it is an email list-build exercise like any other, but Twitter makes this incredibly viral and the ticking clock gives it a hot potato kind of feel. As an experiment in meaningless fun turned marketing event, getting the message in time (sort of, they extended it) gives you the sense of being an insider.

Discovered thanks to popacular.com/twitter.

The WSJ reports today that P&G and Google are swapping employees to get a better understanding of each other. With P&G as one of the leading advertising companies in the world, this move has long reaching upside for Google and P&G.

I’ve noted that Yahoo and Google shouldn’t be focusing on each other, they should focus on growing the market and this move goes further than replicating the Madison Avenue model. If Google can show how it creates value to P&G, and P&G can explain how it builds brands, these two players will revolutionize how interactive marketing is done.

During downturns, companies are forced to find new ways to compete that are under-leveraged while creating real consumer value. What P&G begins testing out of this relationship will be worth watching. At a minimum, Google will better understand what big companies need and how to go after a bigger piece of the traditional marketing pie.

Obama is going to do his weekly address to the nation not only on the radio, but also on YouTube and posted on his transition site change.gov (from a domainer’s perspective, nice name). He is following the the new social media tenant of person-as-marketer. The most credible person to represent his administration is himself, not his press secretary, not only with access to him via a press conference, but in timely response to the problems and in person. You may not like the political man, but you have to be impressed with the almost Steve Jobs-like persona Obama is putting onto the first weeks of his president-electancy. [Washington Post]

No doubt, these times are increasing the focus on value marketing. What is becoming more obvious is the need to increase the focus on ensuring that a company’s strategy has meaningful purpose beyond the financial statements.

What do I mean by purpose? Umair finally kicked me in the head on this one last week with his post on the 7 ways P.E. Obama has confirmed a real shift in strategy. If Google wants to organize the world’s information, then what is it that your company is going to do? Regardless of profit, Google can point to its successes in healthcare, government data and small business services and show an increase in user value. At a time when all businesses will shrink in some way or another next year, having non-growth measurements become critically important for morale.

Some non-growth strategic measurements: new product vitality, value creation v. substitutes, new product profits as a ratio of R&D, unaided brand awareness, customer service levels, and so many more.

If times are hard now, being motivated to do something great while hitting specific targets will at least mean feeling like we all have a worthwhile jobs to do. Honestly, the folks working in the mortgage and auto industries have to turn the corner here - they are not just salvaging shareholder profits, they are also restabilizing the financial base of our country and leaders in those companies need to offer reasons on why their people need to dig in and put in the extra effort.

Trust me, staring at all those red numbers in my 401K and IRA accounts isn’t getting anything productive done.

Picture via the WorldRenownedPhotographer

If you haven’t voted, go do it. If you have, good for you.

If election polling is directionally correct, we’re going to see a whole group of people feel inspired in a way they never thought they could. Good. We can use a change in tone and our collective view on the world. No one feels comfortable with a lame-duck president, or being in the middle of a recession. Let’s move forward and fix the messes.