Category Archives: brands

Turning the page on publishing

Stitched Panorama

If you are in the book publishing business right now you might be bracing yourself for an HMV-like end, but it seems to me that publishers still have options and if they make the right choices the end, however it arrives, could still be a long way off.

Those of you who followed my campaign a couple of years ago to try to persuade HMV that there was life after i-Tunes will know that I can’t resist a challenge.  That exercise saw me gathering a bunch of marketing folks with fertile minds on a kind of LinkedIn crowd-sourcing basis and trying to persuade the HMV CEO to listen to a few ideas we had on reviving their business.  I’ll leave you to judge for yourself what his rejection of our offer says about the relationship between success and the “open to ideas” philosophy that I have always promoted.

I’m struck by the similarities between the publishing and music industries.  Both are victims of the digital onslaught.  Technology has provided an alternative to their physical products, everyone is an author these days (even me), pretty well anybody can get published, readers don’t have to leave home to buy a book and last week you could buy any of the UK’s top 10 selling books online for 78pence!  This latter fact is a symptom of another phenomenon, the tendency of business in other sectors, in this case Sony, to give away the publishers’ raison d’etre, in their pursuit of sales of their own dedicated hardware eg tablets.

Publishing also has a similar structure to the music business.  There are publishers like Harper Collins who own numerous brands, they each support many authors and their books are distributed through physical stores and on-line.  Three levels of the business, each of which is under attack.

There are two keys to the future of the book business. The first is brand. It seems to me that publishers have been very slow to develop the brands they own. There are few sectors where brands measure up to the description “community” more than those of a publisher. You’ll know if you’ve been on this blog before that I believe all brands to be, by definition, communities and publishers’ brands are far more readily represented as communities than food products or cosmetics, yet, when I look at publishing houses I can’t see much evidence of them either recognising this or exploiting their good fortune.

The second key is the physical retailers. The front line book stores are suffering the same pressure from e-commerce that HMV did. Businesses like Waterstones are probably making a better job of competing than the music retailer did, but they have a long way to go before they maximise their assetts and even further before they could claim to have a model that will sustain them in the future. Like HMV, physical booksellers need to be more radical in their thinking. Instead of adapting their current model they should be experimenting with complete, ground-up rethinks. My worry is that, again like HMV, they are failing to recognise not just the requirement for such radical thinking, but the urgency with which they need to get on with it.

They might take a leaf out of the book of Ralph Halpern. When he headed up Burton Group he was said to have twenty or so retail formats on test in pilot stores at any one time. It worked for him and I firmly believe that, like any product manufacturer, retailers need think at least two store generations ahead in order to ensure continued success. John Selfridge taught us that retail is about entertainment and bookselling, more than most other sectors, is firmly in the entertainment sector. This means that bookstore owners have to ask themselves, “are my customers looking forward to their next visit to my store in the way they would a football match, concert or theatre?” Sadly most retailers I come across set their bar far too low in this respect. Customers should be feeling like a young lover about their next date with you.

Actually record shops used to be like that, In fact record shops used to be real communities too. I remember hanging out in a record store in Birmingham each Friday when albums were traditionally released, sampling the new stuff and discussing it with the store guys and anybody else who felt like chiming in. You could spend hours at a time in there and I often did. Come to think of it, there was a musical instrument store up the road from the record store with a similar vibe. I met Ozzie Osbourne and Tony Iommi from a new band Black Sabbath there once and they invited me to their gig that evening in the back of a pub in town (Now that dates me!) These days I can get the same kick from a visit to a bike shop like 718 Cyclery in Brooklyn. All these stores are interesting and engaging in their different ways. That’s missing in a lot of retailers these days and its where the answer could lie for retail book stores.

Its not surprising that some of the thoughts I had on HMV apply equally well to bookstores, but these in turn were based on a train of thought I evolved with a mobile phone operator a few years previously. A growing number of retail sub-sectors have to understand that they need to approach selling from a new direction, engaging customers in other areas of their lives creating an environment and establishing conversations into which a sales message can be introduced.

In a similar fashion, a few years back I created a magazine for Philips comprising features on successful projects in highly specialised business sectors. The features were compelling to the target market, but more than that, by ensuring that they were each written as a showcase for specific Philips products and concluded with a call to action and a contact device, we turned an entertaining magazine into a powerful sales tool that is still doing the numbers. I’ve also created community projects for manufacturers and service providers. Introducing products and services to consumers in the context of other areas of their personal lives engages them on an entirely different level. This I believe is how bookstores need to start thinking. Its not new of course. Its commonplace in the US for bookstores to be incorporated into coffee shops or restaurants, an idea that has been adopted in parts of Europe and even the Middle East (I have such a venue close to where I currently live in Bahrain).

While the front-line would benefit from radical thinking, publishers need to start making things easier for themselves and instead of engaging head-on in a battle with digital and e-tail that they just won’t win, turn the page and focus on the aspects of their business that their competitors just don’t have. They need to tighten up their brand definitions, get a better grip on their customers and start building relationships with them based on something other than price. Forget readings and signings, they aren’t sufficiently radical to make the difference that this sector needs.

The real price of discount retailing

With markets as tough as they are it’s not surprising that more businesses than ever are weighing up whether to adopt a short-term tactical approach or hang tough with the longer-term strategic thing.  Retailers are right at the centre of this dilemma and you only have to glance at your local high street or shopping mall to see the choice that many have made.  Stores with perpetual sales or cut-price offers have become a feature of the retail landscape in pretty well every country around the world.

Even though they know that the path to instant gratification has an inevitable pay-off, cake today is becoming an irresistable proposition for idea and cash-strapped marketers, who can only be aiming to be somewhere else when the bill arrives.  So, what is the price of this kind of short-termism?

In this context there are two types of retailer – those who sell branded goods and those whose offer comprises mainly own brand.  The first group can be further divided into premium and mass-market.  The premium retailers, by and large, are chasing margin with high prices.  They are usually the last to have to make the short-term/long-term choice because their clientele are well-heeled and unfamiliar with the financial reality most of us live with.  On the other, far more popular side of the street, mass-market sellers of branded product are “champions of the consumer”.  We rely on them to negotiate with manufacturers on our behalf to deliver the branded products we all hanker after at advantageous prices.

The own brand retailers come from a different direction.  The value of their proposition is entirely their own making.  Customers recognise own-branders as an authority in the things they sell and trust them to use their knowledge and experience  to produce great value product of their own.  Retailers like this that come to mind would be Ikea and Marks and Spencer.

Now consider for a moment discount promotions as a concept.  Again, you could say they come in two kinds.  The first is the seasonal event that we have come to expect.  This is legitimate.  We understand that these promotions are the retailer’s way of clearing slow-moving stock or ends of lines and as long as it remains occasional it and the retailer will retain credibility.

The other kind of discount promotions are those run by struggling retailers to generate sort-term business.  These usually achieve their immediate objective.  The problems arise with repetition.  You must have heard people dismissing retailers as “the place with the sale on all the time”.  The perpetual sale isn’t credible, so let’s not kid ourselves that consumers are buying this line.  If a product appears to always be reduced to 99p then that’s all its worth to the consumer and no amount of double pricing is going to convince them otherwise.  We’ve all witnessed the Pierre Cardin brand get pulped in markets around the world.  Once a respectable, desirable brand, constant deep discounting has reduced it to a bargain basement brand.  Nobody pays full-price for a Pierre Cardin suit because we all know that it will be 70% off next week!

So, when do you start heading into the mire of perpetual discounts?  The answer is the minute you abandon the accepted seasonal event norm.  Then its just a matter of how far you venture in this direction and how quickly you get back to firm ground that determines whether your business is irreversibly damaged.  Discounting is like a drug habit.  Initially the hit is rewarding – you make a load of cash quickly, but as you stick with it your dependency increases and the reward diminishes.  You lie awake at night racking your brains for new superlatives to up the anti in your advertising, margin disappears and eventually your turnover will too.

Your hard-won brand community will dwindle.  We wear the products we buy and carry branded shopping bags with pride as badges of belonging.  Where’s the cudos in belonging to to the cheap shop community?  Customers will feel betrayed.  The brand that you have devalued to junk had defined their status.  Now you’ve pulled the plug.  Your authority disappears over night and whatever you say to try to re-establish value in your offer is futile.  You are just a cheapskate discounter and there’s no way back!

If your regular customers don’t abandon you they’ll do something even worse –   they’ll only turn up for the deals that you make no money on and the only new customers you can expect are all broke like you.  When The Full Effect Company went into one well-know organisation a few years back, we discovered that a third of their customers were actually costing them money because they only bought the bargains with little or no margin.  There was no spoon-full of sugar to help the medicine go down in this case, we just had to loose 30% of their customer base.  However, there are few shareholders who would stomach this kind of treatment unless, as we did, you manage to get back on track very quickly.  We replaced those customers with new, profitable ones within twelve months and met the company’s growth targets.

So, before you launch your umpteenth BoGoF this year give some thought to where this road is leading.  You may not be planning to be around when this chicken comes home to roost, but there aren’t that many juicy retail marketing jobs around, so you might want to think again.

London 2012 – the best Brand Britain could have hoped for.

As a Brit, particularly one who is keen on sports, I find myself swelling with pride at the performance of both the 2012 Olympic committee and the British athletes.  In short, from planning through building to competing, we nailed it!  However, as a marketer I’m even more delighted to see signs that whoever is driving this also knows what to do next – because, when you’ve invested 14billion quid in something there has to be a “next”.

I’ve said before that one of the reasons that countries like the US and Australia have in the past achieved such high national branding equity is that they have used their sporting successes as a vehicle for campaigns designed to boost national pride.  I’m a great fan of  events of any kind designed to generate publicity for my client’s brands and I have invested heavily over the years in initiatives designed to grab press attention.  To be honest I had not really expected the Brits to rise to this occasion.  After all, we are renown for not blowing our own trumpet.  However, London 2012 has been an astounding success and the media have been managed better than I think anyone could have hoped.  The UK habit of highlighting negatives like shortage of security personnel and drugs cheats, rightly failed to gain traction, and once the medals started flowing the PR guys were out of the blocks like Usain Bolt, steering the hacks in the right direction.  This is looking like  PR as it should be, but there’s far more mileage in this yet and managing the post-event campaign is a whole new challenge.

Its easy to see why, when the soccer-players of our football-mad nation are better at rolling around on the floor than they are scoring goals, the masses become cynical, but I think the great British public have received a really well orchestrated education in the last couple of weeks in the hardship, grueling challenges and absolute dedication demonstrated by champions worthy of the name.  We’ve had our attention drawn to the personal stories of real heroes we never knew we had.  We Brits have certainly had our values re-aligned and now the marketers have something to work with.

It will be interesting to see how government and commercial enterprises responds to this once-in-a-lifetime opportunity to build national brand equity.  There is nothing like sport to engage a community, kids love it, young adults rise to the challenge and even armchair sportsfolks get behind it, as we have seen over the last couple of weeks.  Will we have an even bigger squad of champions in 2016?  There’s no reason why not, but there’s whole lot more that Brand Britain can gain from this both domestically and internationally.  Its up to the marketers, politicians and organisers to rise to the challenge set by our new sports heroes.

Turkish Airlines and the price of a reassuring brand

I started writing this somewhere over Eastern Europe aboard a Turkish Airlines Airbus 320 bound for Istanbul the third leg of four in a round-trip from Bahrain to Europe and back.  I can’t recall ever having traveled Turkish Airlines until two weeks ago when I made the reverse trip from Bahrain to the UK, but had I not been a captive of my round-trip ticket I would probably have switched carriers at Istanbul, never to return to the carrier again, such were the horrors of my first leg.

I find it hard to remember a more dour cabin crew than that which accompanied me from Bahrain to Istanbul.  I felt sure their training must have included hours spent in front of mirrors perfecting their scowl.  Their general, attitude toward passengers was variably off-hand or aggressive and they seem to have taken their frustrations out on the in-flight fare, which they had managed to suck all the moisture out of before throwing it at us.

What a contrast, therefore, was the second leg of the same journey, where we were greeted by smiles and tended with tasty, well-presented (by airline standard), in-flight catering.

Leg three of the round-trip was even better.  New plane, pretty attendants with nice smiles and truly good food and as I lounged in leather-clad comfort I reflected on how my opinion of Turkish Airlines may have differed, had this been my initial experience.  The final leg demonstrated how great, well-trained customer-facing personnel can even overcome other deficiencies in your offer.  The last of the quartet of Turkish Airlines planes I was to experience was clearly in the twilight of it’s years and it hadn’t been at the front of the maintenance queue either.  I found myself hoping this was because they had spent so ling diligently servicing the engines!  In the cabin there was only one working toilet, a number of the entertainment centres were faulty and the crew were put to the test by a woman with two juvenile delinquents who were sitting behind me and promised to ruin my flight.  However, they didn’t because the cabin crew worked hard to bring the experience back on track.  The complete event has underlined to me the importance for any business of achieving consistency and the essential role that internal marketing plays in that.

I have spoken many times in my seminars and writing about the importance of consistency in the success of a brand.  Not just consistency between the different facets of your business, but within each one too.  Had my third flight been my introduction to Turkish Airlines and what was my first been a subsequent experience I would have been more ready to accept that it may be difficult to get it right every time.  As things are I need more reassurance before I accept that Turkish Airline’s good stuff isn’t the fluke!  I often quote some statistics I picked up years ago that say it may cost ten times as much to sell for the first time to a customer than to make subsequent sales to the same person, but it will cost a hundred times that to entice a customer back once you have disappointed them.  Such is the price of reassurance.

Customers need the reassurance that only consistency will provide and of course while its best for everyone if you are consistently good, with all the implications that has for customer retention, pricing policy and margin; being average all the time is better than lunging from crap to brilliant in a way that makes doing business with you a lottery.

Achieving consistency is about nothing more or less than internal marketing.  Identifying your brand, its values and attributes and introducing them to every employee at every level of your business in such a way that they adopt them as their own.

If you have the right people in place they’ll take this and run with it bringing their personal skills and experience to bear and adding value to your brand and therefore your business.  There’s no shortcut.  Organisations who have chosen instead to apply a dictatorial approach to what they call “training” have consistently failed.  As dictators around the world have learned, dictatorship only works if you can preempt every eventuality, which of course you can’t, so you have to adopt a more nurturing approach and allow well-trained and motivated staff to interpret your brand values. In fact, one of the organisations that has achieved most success in this is another airline – SouthWest Airlines, who famously wooed customers with a consistent, if off-the-wall, brand personality through two industry slumps, almost uniquely maintaining profitability throughout.

These days we are all looking for ways to squeeze the highest return from investment and with the price of mainstream media what it is, communicating within your own business looks like a bargain.  What is more, most organisations find that the return they get on internal marketing significantly outstrips that of external campaigns.

I’m quite sure that had the cabin crew on my Bahrain to Istanbul flight focused on delivering the Turkish Airlines promise my overall impression of the airline would have been a lot better.  As it is, because I was a captive of my round-trip ticket the carrier had the chance to demonstrate what they really could do and I might just be persuaded to book with them again, but probably only if they were cheaper than their competitors.  As I said … such is the price of reassurance!

Latvians show Greece how to smile in the face of austerity – Its all just National Branding

As you contemplate the austerity that your government has wrought upon you, spare a thought for how national branding can make the whole thing both more acceptable and successful.  You don’t believe me?  Well try this.

So tied up are we with the dire straights that Greece finds itself in, we might forget that not so long ago Latvia faced a worse economic plight than Greece or Portugal are facing right now.  Latvia fixed it with extremely stringent austerity measures and bounced back to become a very successful economy, in a far shorter time than we are anticipate will be the lot of the Greeks.  What’s more, during the process their government was re-elected.  So, what’s the trick?

There’s a hint in the fact that at the time of their crisis, polls of the Latvian public revealed a marked spirit of shared endeavour or one-ness.  They were definitely meeting the challenge in the spirit of all for one and one for all.  Now, that’s a state of collective minds that only a strong national brand can generate.  While the Greek people (and to some extent pretty well all of the rest of us) play the blame game and try to lay responsibility for the mess on someone other than themselves, the Latvians kinda’ got the fact that arguing about whose fault it was, wasn’t going to fix it, and knuckled down to the task.  Result – they fixed it in record time and suffered far less than the rest of us are going to unless we wise up fast.  The big tick in the satisfaction box also makes the exercise self-perpetuating, serving to strengthen the community spirit and give the subject organisation or country the scope for more and bigger challenges.

The difference between Latvia and Greece or Portugal is national pride.  The Greeks, despite their claims to the contrary don’t have any.  If they did they would have been paying their taxes for the last few decades, which might have averted their current plight.  Greeks are largely in it for themselves.  Don’t get me wrong, I’m not saying they are any different from most of the rest of us, driven as we are by the belief that the only difference between happiness and abject misery is lodasamoney.  From that perspective it’s but a short step to topping Gran for her pension.

National pride, in turn, is a product of good national branding (A subject that I have been beating on about for years).  Once you have that sorted you can do some neat stuff – like win wars, bring home the world cup or sort one of the worst financial crises in recent history, in no time at all.

In fact, national branding is no different from any other kind of branding and the benefits it brings are no different either.  Contrary to what I sometimes think is popular myth among businesspeople, branding isn’t just for customers, it’s for employees too.  In fact, employees are where you start with any brand development programme, because unless they are on-board and have that feeling of belonging you aren’t even going to get to first base with customers.

A strong brand is represented, among other things, by a spirit of shared responsibility and those businesses that have set about building one have found that with the right guidance it can be channeled in any direction.  Southwest Airlines employees famously went to all kinds of extreme lengths to create one of the most successful airlines in commercial aviation history.  ABB Brown Boveri returned from the jaws of death and reduced their product development time from three years to three months.  A one-man-and-a-dog operation called Saatchi & Saatchi (The real one not the one we know today) did the reverse takeover trick on the monolith Garland Compton and went on to build the world’s biggest advertising agency and Apple have persuaded millions of people that lap-tops with iffy software are best thing since sliced bread.  I could cite innumerable others, but you get the idea.

So, if you are running a business or a country that’s facing a bit of a challenge right now, consider what the power of a strong brand can achieve and start building yours.  You’ll be able to achieve more with less, probably give your competitors a good kicking and could even do all of this with a smile on your collective face throughout.

Building a brand like Fender

The attention of anyone who is even vaguely interested in music and many more who wouldn’t know their crotchet from their elbow, has been drawn this week to the news that Fender, who have been making guitars for musicians around the world since 1946, is going public.

If you are thinking of taking a stake, you’ll be buying into a true icon, not just of twentieth century music, but of branding, because whatever else Fender may be, this is what a great brand looks like.  What Fender have done, of course, is create that most illusive, yet essential ingredient of any brand – a community.  And what a community!  When I was a would-be pop star the Fender Stratocaster (or Strat to its friends) was the six-string of choice for greats like Jimmy Hendrix.  The musicians around me were readily defined as either Fender or Gibson guys (although Eric Clapton somehow managed to straddle the two quite successfully for some years).  But it wasn’t and isn’t just about the Fender corporate brand.  What gave the business its sustainability was the way it catered for a widening range of musical genres and cultural sub-groups with a range of products that, whilst sharing the same DNA, each enjoyed its own dedicated following –  Stratocaster, the original Precision (which probably was more of a revolution even than the Telecaster) and Jazz basses, catered for clearly defined musical types, giving, what could easily have become a niche brand, essential breadth.  The business was also smart enough to listen to and watch its customers (Oh, how I wish a few more businesses could say the same!).  Musos were increasingly customising their guitars and Fender responded by creating its custom division where pros and enthusiasts to this day can specify their unique Fender incorporating all Fender assets – the tremolo bridge, solid state, pick-ups etc. crafted for them.

The trick of broadening your appeal (and thereby both increasing your customer base and deepening the relationships you have with them) by applying your core brand values to a range of niche products is one every business needs to practice.  In recent months I have been working with a perfume manufacturer and retailer where the principal equally applies.  In our case the corporate brand is built on ethnicity and high quality, but each of the range of perfumes and other products if played correctly has niche appeal and personality that we are building communities around.

But while you can’t afford to be a one-trick pony these days and innovation is definitely what it’s all about, it’s equally essential to approach your product and offer development  in a structured fashion.  I’ve highlighted before in these pages the need for every business to not only define their brand and have a clear strategy, but to support that with a methodology that ensures every new initiative contributes rather than detracts from the objective.  Businesses go off-track and waste fortunes every day on initiatives that either don’t contribute or even have a detrimental effect on their business, don’t be one of them.  My Brand Discovery program me has a built-in briefing process that comes into play with every new initiative, forcing those in the driving seat to justify the project against pre-defined criteria.  If you haven’t adopted a tool like this you need to get onto the programme.  Get it right and in a few years you could be floating your business for $200million!

How catering franchises change the world

As I have travelled around the world, I’ve become an observer of retail food franchises and the way they perform when they are a long way from home.  Catering franchises are among the most potent brands we have.  Customer loyalty can be the strongest you’ll find in the retail sector and the emerging capacity of some brands to develop their brand communities is only going to enhance that.

These brands change the communities in which they reside just as the individuals that join any brand community changes that a little by bringing with them new character traits and values.  Restaurants like McDonald’s and KFC have changed countries and lesser retail food brands do the same to a lesser extent.  Today I made my second visit to what is fast becoming one of my favourite restaurant chains Tony Roma’s and as I sat there listening to The Eagles’ Hotel California I considered the impact they are having on the local community.  Quite significant I believe, because this is Saudi Arabia, where music is banned in any public place.

Here Tony Roma’s is a franchise run by a local Sheik already heavily into retail.  Clearly he is rather more progressive than others of his countrymen and though I don’t know him I am sure he must be a controversial figure.  Although Tony’s famous pork ribs were conspicuously absent from the menu the music isn’t the only taboo he is breaking.  Restaurants in Saudi Arabia are segregated.  Single men sit in one part and families and women on their own sit behind impenetrable screens in a separate part of the building.  They usually even have different entrances.  I’m not sure how this is supposed to work.  I guess it’s something to do with women not being able to eat through a veil and men not being allowed to look at a woman who isn’t wearing one, but, like many things in this country it is a mass of contradictions, doesn’t work and ends up being a bit of a farce (although the “Emperor’s New Clothes” applies here as everywhere).  Certainly in Tony Roma’s it doesn’t work because although they had areas designated as “single men” and “family”, everyone was allowed to sit where they liked, almost like real life!

The success of Tony Roma’s in Saudi Arabia is a testament to the changing tide.  The manager in this restaurant told me that he has clear instructions from head office that the music will be turned off at prayer time and should anybody complain at any other time.  So far though, in three years, complaints have been minimal and mostly from religious police who make inspection visits from time to time.  The real measure of popular feeling however has to be bums on seats and by all accounts the liberals have a landslide.  Whether any other businesses have the bottle to join this movement for freedom of choice remains to be seen.  I suspect they will, but while they are getting their act together maybe you could ponder on two issues this raises.  Firstly, as I have said the power of brands like these to influence change and secondly the fact that maybe the Saudis are not as completely inflexible as we Westerners think.