Saturday, April 3, 2010

Is this as good as it gets?

The ASB is clearly feeling insecure and short on value as it takes a crack at the government sponsored Kiwibank. This is so pathetic and says a lot about the state of business in this country right now if not the state our banks.
Why would a bank spend this sort of money telling us it is more Kiwi than its competition? We are talking serious dough for bill boards this big (as much as $8,000 a month for some sites and that excludes production and creative; or should I say the lack of it). This bill board goes beyond stupidity, it is insane. I couldn't care if they were French, as long as they offered me banking and financial services that showed they really cared about me. But no they would rather scrap with the other banks for bragging rights than offer better products and services.
I mean it's not as though banks have got it right, there is plenty to improve on!

At the end of this recession (and that is at least a year away in New Zealand), when many of our businesses are exhauseted and on the brink of financial ruin, when our unemployment has soared to new heights, I will be interested to hear from our banks; how they helped build and support our economy through the tough times. I can just hear the spokesman for ASB:
"Oh well we told everyone we were more Kiwi than anyone else, does that count?"

Well thanks for nothing

Sunday, March 7, 2010

No points for Weight Watchers

McDonalds will be thinking all their Christmases have come at once. Who ever did the deal with Weight Watchers should be given a lifetime's supply of Big Macs for free. This is one smart move but one sadly that will cost Weight Watchers dearly over time. Both these brands are iconic and stand for very different values (nothing either should be ashamed of). When these brand alliances are formed they really need to be a win/win situations and the value for each party carefully considered.
McDonalds has been in the firing line from health authorities for some time and as western governments globally try to tackle the obesity tsunami brands such as McDonalds are very exposed.
First McDonalds responded with a switch to canola-sunflower oil to reduce saturated fats, they then decreased the sugar in their buns by 40% then it was the salads and now brilliantly it is the Weight Watchers endorsement. This is the big slam dunk compared to the previous initiatives.
Hands up all those who think McDonalds make a killing on salad sales? Correct; they aren't selling many, in the supermarket trade these products are called 'lost leaders' and this is a very apt term for McDonalds salads.
Keep an eye on how McDonalds respond because they masters at this game. Perhaps Telecom executive should spend a semester at McDonalds university and learn the art of 'positioning'.

So what is in it for WeightWatchers; a very expensive erosion of values. I'm sure members will feel betrayed and abandoned. Forget the semantics; "we are trying to show you that losing weight doesn't mean you have to avoid every indulgence". They are partnering with a fast food giant and that by association translates to a cop out. It would be like Tag Heuer selling watchers through the Warehouse.

So why did they agree to it, was it money or fame or perhaps they have run out of ideas as to how to re-energise their brand. Fill me in here guys?

Saturday, January 30, 2010

Telecom's new logo loses its gloss

Dr Paul Reynolds has been I'm sure reluctantly dragged in front of the media to try to stem the current Telecom reputation hemorrhage. The significance of the damage the XT problem has caused is highlighted by his on camera presence. This is not a small issue, in fact it has and will do Telecom severe long term damage. But let's have a quick look at why they are or at least should be in panic mode.

Telecom is an oligopoly and as such can do pretty much what it likes without suffering any immediate major fallout even in an instance like this. Everyone just gets grumpy; Telecom tells everyone they are sorry, in fact if they use the CEO that should let everyone know they are really, really sorry. It is what I call 'brand chauvinism'. Other large institutions such as banks often display this same attitude. If everyone in the business (and let's face it there are only a few) all behave in a similar way then what options do consumers really have; bugger all!
The effort required to switch and the prospect of really getting a better deal creates a kind of 'brand atrophy'; "better the devil you know than the one you don't".
In effect Telecom has 'brand frenemys' rather than brand loyalists. Now Telecom know this and they can leverage the fact to their advantage

They will just try to see this one through and wait for the dust to settle, let it blow over. So what's the problem?
It is two-fold. The damage that has been done is not that apparent at this stage. It is a type of internal market hemorrhage, no one at this point can see it. What has happened is that no one trusts Telecom any more and trust is a vital component in a brand relationship. We have all seen evidence of this phenomenon in our own human relationships. Some one lets us down...they say they are sorry and we tell them it is OK and doesn't really matter, but inside we are angry and disappointed. That feeling stays with us and colours future decisions we make relating to this person.
Telecom have just made a lot of people angry and they won't forget it. Telecom's apology is weak and will be perceived as insincere.
Consumer's future decision making about all Telecom's products and service has now been compromised.

The other problem Telecom has is politicians. Telecom is dependant on 'other important relationships' if it is to have a secure and profitable future. Politicians are swayed hugely by public opinion. They will see this market disaffection and when the time is right they will leverage this to maximum effect. When it happens Telecom will be gob smacked...wondering why no one likes them.

Telecom is struggling now on three fronts:

1) It has an aggressive 'advertising strategy' but no 'brand strategy'...now why might that be? One look at the board structure and you will have your answer. Telecom director and Saatchi & Saathci CEO Kevin Roberts in his recent book 'Lovemarks' only emphasised how much he is addicted to advertising and how little he understands branding. Mass advertising has built consumer expectation (expensive, excessive skiting) and it is not a good look. So it is no wonder there is a back lash particularly from the media...anyone who skites can expect the same treatment.

2) Telecom has handled the network failure appallingly. There was a chance had they done a good job at fixing the problem (and I don't mean just the technology) then they may even have won over some advocates but they have failed.

3) No evident brand strategy. With their new paintwork seriously dented they have made their future just that bit more fragile and uncertain, something no doubt they will expect consumers will simply pick up and pay for. What they will find however is that things are different and chauvinism is a burden not an attribute. They will need to shift their efforts from peddling products to building customer relationships. How will they do that?...they should go and ask Steve Jobs.

Maybe it is time for a brandnew new logo?

Saturday, November 28, 2009

We are losing our heritage brands.

We are losing our heritage brands. After the collapse and loss of businesses such as Deane Apparel, Line 7, LWR and in Wellington Radfords the question must be asked why such iconic businesses fail. In the case of Radfords this was a brand that had been in the market for over a century.
Well stand back because there are many more brands of significance on the path to extinction. There are two issues I need to draw attention to; first these failures don’t have to happen and secondly when it does occur the nation is robbed of hugely valuable assets.

We are mis-managing our businesses. Not deliberately but because we are averse to change. It is easy to understand that the science of making stuff and the art of creating a service should be the primary focus of any business. I’m not suggesting this isn’t important but it is rapidly taking a back seat to another business prerequisite 'engaging an audience'; skills and experience more akin to marketing than the legal and financial skills we currently see.
Marketers, advertising and PR people have struggled to find a seat at the board room table mainly because their profession has relied for the most part on creativity and suspect research (not the kind of skill sets needed around a board table).
So for the most part, warming the seats of our board rooms are accountants and lawyers.
Let’s understand why accountants and lawyers on their own can’t run modern businesses (with some notable exceptions).
A lawyers primary reason for being is to protect legally what you own (that assumes you have something worth protecting). A laudable enough idea except you can’t own a brand because it resides in the minds of your customers. Once upon a time when markets and audiences were more static and easily defined legal protection was sensible, but legal protection comes after you have built the business.
Accountants view businesses through a rear vision mirror (they have a forensic approach). Their job is to study where you have travelled and predict where you might head and ensure you have the right measurement and assessment tools in place. They base their predictions on past activity. Again a long time ago when markets performed in the same old ways year in and year out this was a very sensible and effective approach but now no longer enough.
Neither of these groups have skill sets required to tackle markets that are at best chaotic, now global, and in constant and rapid change.

The marketing view is about understanding markets today and how they will trend based on how consumers might behave tomorrow so that you can manoeuvre into the right place at the right time. Most marketers have been trained in the old world practises and are unlikely to understand the new chaotic commercial environments. They still have a penchant to call in the advertising agency as their solution to growing the business.

The new path forward will come from understanding the science of branding and brand building
With the assistance of neuroscientists and psychologists we can now make far more accurate predictions about purchasing and decision making behaviour than we could have even a decade ago; many of these advances have occurred in only the last five years.
Brand building (the science) is a skill set required at an executive and board level if businesses are to survive let alone thrive. These new skills are unlikely to be found in traditional advertising agencies or marketing firms; these people are thin on the ground but they are out there.

But these new business builders are struggling to push back old paradigms and are battling entrenched thinking.
Unless business embraces these new business builders and give them seats on the executive and in the board rooms, then the future will be difficult indeed.
It is time to accept the new reality; there are too many products and services, traditional media is failing, old marketing methodologies are struggling and the new 'more for less' economy is here to stay. It all adds up to a need for a fresh approach and the refresh starts at the top.

If businesses want control and certainty then they must embrace the new brand building dynamics and enshrine it in the planning process.

They need to or they will perish.

Sunday, November 15, 2009

Remember the bank queue?

Having slagged the BNZ (I’m allowed to given I am a customer) I now find myself sprinkling a little praise. In this world we need to both give and take so back slaps where back slaps are due. The bank hasn’t surrendered its childish pigs yet but something profound is taking place right where it matters. I went into one of their branches several weeks ago and stood in the cattle race with a bunch of others during the lunch hour rush when bank tellers obviously desert the counters to also have lunch. But here is where the classic bank paradigm changed.
As I stood patiently in line I observed a bank employee emerge from an office and head straight for the woman standing in front of me. He asked her a question (I didn’t hear what was said) and took a keen interest in the wad of papers in the lady’s hand. They both headed off for his office and disappeared.
Now I was left pondering because there is little else to do in a bank queue. Did the banker know this woman, why had he picked her out of the cattle race, if she was here to see him why had she lined up with all the rest of us plebs?
As these thoughts raced around in my head I spotted another man emerge from another office but this character was making a bee line for me.
"Is that a cheque you are depositing sir?”, he asked me with a smile. I admitted it was. “Then I can sort that for you”, he said as he took the cheque from my hand and headed back to his office.
Now I know this isn’t exactly Mohammad going to the mountain but culling me out of a queue is a significant step forward and one that I think deserves a mention.
What is even more impressive about this ‘customer interface improvement’ is that the BNZ haven’t advertised it. My advice is don’t. It is better we discover this great service than hear you skite about it and then not deliver.
In fact lose the pork guys and beef up your customer service; we might just get some real competition in the banking industry.

Monday, July 13, 2009

First Impressions Count

Jet Star is struggling to get off the ground. It is hard to believe an airline with the experience and resource such as Qantas could get it so terribly wrong. While they may put it down to ‘teething problems’ the New Zealand public are unlikely to be as dismissive. The current global economic predicament seems to be completely lost on Jet Star and their advisors. This is no time to ‘get it wrong’.

Not only are they off to a bad start but their response suggests they are hell bent on making things worse. Full page apologies might make the advertising agency happy but it cuts no ice with today’s consumer. It is possible to make a mistake and enjoy a great recovery. In fact there are some great cases of businesses that have turned a ‘screw-up’ into an opportunity to engage with customers; because mistakes can happen. As Alan Martin famously said, “it’s the putting right that counts”. He didn’t say, “An ad in the paper will put it right”
Come on guys this is pathetic, you are well on the way to becoming the 'Skoda of the sky'.

Something truly frightening is happening in the corporate world right now. These businesses are either being run by ‘unqualified communications executives’ or they are getting atrocious advice (or perhaps both).
Jet Star are not alone in the dunces corner. With them stand Cadbury who have recently tried to slip passed their trusting customers a shrunken chocolate block full of Palm oil. Whittakers, the eagle eyed competitor, spotted the sleight of hand and ratted on them. (Good honest Whittakers); this only weeks out from Readers Digest announcing Cadbury’s as our most trusted brand (yeah right).
Joining the duo is Methven, New Zealand’s iconic tap ware manufacturer. They have come to the attention of the Commerce Commission (once again courtesy of a helpful competitor) for allegedly ‘telling porkies’ in their ads about one of their showerhead’s ability to deliver savings to consumers.

At a time when businesses are trying to make efficiencies (and need to get it right) we instead are witnessing horrendously expensive screw-ups. These mistakes are costing business hundreds of thousand of dollars in unnecessary expenditure, lost sales and long term ‘brand damage’.
Sure strong brand reputations can weather storms better than the also-rans but having a reputation also means it can sustain damage; damage that could take years to repair.
Now if anyone from Jet Star, Cadbury or Methven are reading this, then here is the best advice you will ever get and it won’t cost you a cent.
A brand is simply a reputation that resides in the minds of others. Like any reputation it can sustain damaged. Human nature demonstrates that you can get ‘it’ right a thousand times and do yourselves proud; but get it wrong once and you will get a caning.
But if you do get it wrong please don’t apologise; simply get some grown up help and put it right.

Sunday, May 24, 2009

To hell and back

This is the best news I've heard for a long time. Callum Davies and his mates at Hell have bought back their baby. The Tasman Pacific Foods Group purchase three years ago was a disaster. It was fifteen million dollars the boys needed to take Hell to the rest of the world but they also now know that large corporates are not the best custodians of boutique brands (see my last blog). In just three years Tasman Pacific succeeded in getting seriously offside with the franchisees, they tried to lift sales by slashing costs, they showed a complete lack of understanding of what they had bought.

Fontera’s purchase of Kapiti has all the hallmarks of a similar fate. The only difference is that Fontera will know how to milk the brand dry before they destroy it’s ‘heart’.
It took Ross McCallum twenty plus years to create Kapiti (Callum has worked in Hell for a similar time period). Brand bashing corporates can bleed delicate brands dry in only a couple of years.

Lane Walker Rudkin has gone down the toilet along a frightening number of other one hundred plus year old companies in the last few years. These iconic brands are worth fortunes and large corporates are seriously mismanaging the brand equity that has been built up over years of investment, toil and sweat. It is a form of asset stripping gone mad. It is also at the crux of this so called global recession. Mass destruction of trust, value and quality.
I’m sure businesses would protect their investment if they knew how but the problem highlights the fact that major companies, their legal, financial and marketing advisers know next to nothing about brands. They think brand is something they own and bleed rather than something thay should nuture and ‘garden’.

So here is my advice to all big corporations. Watch carefully the road to Hell and learn. Callum and his team will get things back on track I know. They are very clever people. They understand the essence of a brand. They understand Hell connects with franchisees and customers alike. They understand that Hell is more than fast food. They treat it with care, they love it to bits and they will stay with the game plan.

Callum's road to Hell has always been paved with good intentions. He now sits on a well deserved wad of cash in his back pocket after buying back the franchise for a fraction of the original sale price but a devil of a job in front of him.

Bring on the resurrection.