Differentiate Better Marketing Strategy - Blog

Getting beyond "drivel" about brand building?

Thu, 22 Mar 2012 16:07:34 +0000

I just got this in my inbox from Drayton Bird He does not use my style, but his language is clear and easy to follow.

People talk a lot of drivel about brand-building.

British Gas (who supply my electricity!!) and with whom I have spent hours going from one department to another because they are badly organised just sent me what they think is a letter.
It summarised my past year's bill, and said I have paid nothing and owe nothing.

The first part is 100% not true.

The poor copywriter was obviously told by some "planner" to drag in their fatuous boast "looking after your world". For the life of me I can't see how this makes sense. The army could say it more credibly. Good slogans say something nobody else could say.

Anyhow, they said this summary was just another way they are looking after my world.

No it isn't.

I just remembered how much they charge - and how much of my time they've wasted.

No doubt this was intended to "reinforce their brand values".

Building brands starts with what you do, not what you say.

The bit that we believe most strongly is the last phrase Building brands starts with what you do, not what you say. Was a thought for the day really

Get beyond conventional theories of growth - Use more science

Mon, 12 Mar 2012 22:15:41 +0000

Science has revolutionised every discipline it has touched; now it is marketing’s turn. All marketers need to move beyond psychobabble ….. or be hopelessly left behind”
Joseph Tripodi - the CMO, The Coca Cola Company

How often have you heard that “Existing, loyal, heavy users are more important than light users and brand switchers?”

It is common sense. It makes sense that a heavy user accounts for more sales than a light user then they are more important buyers. It is also said to be much more expensive to acquire a new customer than to retain an existing customer. So to grow we should focus our efforts on getting the loyal customers to buy more or buy more often. This group offer easier pickings for more growth.

The problem with this argument is that it is a theory built on anecdotal evidence and hypothesis. But it is not based on any empirical evidence of how buyers behave and which types of buyers contribute the most to brand growth.

This post brings some science to analyse this theory. What science does is to use empirical evidence to discover patterns that repeat themselves. This validates or contradicts the theory. Then we understand what actually happens, not our own projection of how it works. We can develop scientific laws. It is surprising how little marketers refer to scientific analysis. But maybe the tide is turning.

Andrew Ehrenberg pioneered bringing science into marketing. He started this as long ago as the 1960’s using scientific research to explore patterns of buyer behaviour. Read about Ehrenberg here.

One discovery he made is that bigger brands always have far more buyers than smaller brands. Buyers are also a little bit less loyal to the smaller brands. The difference in brand size is almost entirely explained by the different number of buyers. Bigger brands have higher penetration. Differences in levels of loyalty are small.

There was further evidence of this truth revealed in an IPA report called “Marketing in the Era of Accountability”. Les Binet and Peter Field used the IPA Effectiveness Awards dataBANK to identify the marketing practices and metrics that truly increase profitability create growth. Campaigns that aimed to increase penetration were more than twice as likely to report very large improvements in sales and profitability

Target to increase
Pentration % Loyalty %
Gold 21 2
Silver 20 6
Bronze 18 3
No Medal 41 89

This has important implications for us as marketers. Focus on loyalty and persuading existing customers to buy more is not the best way to grow a brand. Customer behaviour and attitudes mean that ‘loyalty’ does not work as might be expected.

This means there is the right and the wrong way to use customer loyalty schemes and other types of ‘relationship management’. This means we need to assess all marketing programmes based on their ability to attract more buyers and increase market penetration. To keep it simple.

Increasing penetration is the most important objective to get growth

But what about creating customer delight so that we keep our customers? Surely this is important. Well it is. We also need to distinguish between buying customer loyalty with promotions and schemes and creating loyalty through customer delight. Buying loyalty will not contribute much to increasing penetration. Whereas creating customer delight, builds advocates who recommend our products. A powerful way to increase penetration is to create word of mouth referrals. So customer delight is a tool to build penetration and attract more buyers.

Despite the evidence, Ehrenberg was often ignored by marketers and sometimes dismissed or criticised for trying to bring the rigours of science into the creative world of marketing. Fortunately for us all, his great work is now carried on by the Ehrenberg Bass Institute for Marketing Science.

If you want to see why understanding the science of customer behaviour is important. Please watch this video of Byron Sharp explaining his view at a Tedx event. (it is also good fun to watch)

For us at Differentiate, we want to bring more science into the art of marketing. Bringing science into marketing is not about supressing creativity. We know it is important to be creative and have great ideas. But we believe these ideas will be so much more powerful if they are founded on how customers actually behave and the facts about how brands grow. We have been using this evidence to design our processes so that we bring a more robust approach to create better strategy. We find this is more convincing to the business team. This helps us to help you create new products and services and messages that the whole business will support and get excited about.

We will develop this theme further. For the moment we leave you with the thought that we should all

Bring more science into the art of marketing

The search for the obvious – being both obvious and right

Mon, 05 Mar 2012 13:18:29 +0000

“It is the obvious which is so difficult to see most of the time. People say 'It's as plain as the nose on your face.' But how much of the nose on your face can you see, unless someone holds a mirror up to you?”
― Isaac Asimov, I, Robot

Great insights can seem obvious to us when we hear them or discover them, but were often so hard to spot before we saw them. On a number of occasions we have revealed to our clients the most important thing that customers want from their products. This has been the result of substantial consumer research and management workshop activity and data analysis. When we explain the conclusions, the effort and expense in coming up with the finding can seem strange. the insight just makes perfect sense to everyone, especially with the wisdom of hindsight.

I once received this remark when making the statement that the most important thing about weed killers is that they kill the weeds.

“How much did we pay you to come up with that Chris!”
N.B. There was more to this insight, and this was not the differentiator, but that was really proprietary to the client, so not for sharing in a blog post. However the differentiators were similarly simple and obvious with hindsight.

Another example is something that we discovered about estate agents. It is easy to think that since the estate agent is paid a % of the house sale as commission, they are motivated to get the best price for their clients to maximise their income. Seems obvious and true, but do the analysis, look at the real motivations and talk to estate agents and you discover this is not true. In reality they are most concerned that the sale goes through so that they get some commission. The bigger risk for them is the sale falling through and the longer it takes to complete the transaction the more likely the sale will fall through. So actually they are focused on the speed of the transaction. What this means if you have a service to help estate agents, then supporting transaction speed is critical. We found this out in a client study. Freakonomics also reported on how this works for estate agent clients and used an empirical approach to get it right. They explain in this video. or you can read in this post

Many insights about what drives purchasing have an element of the blindingly obvious about them. The best insights are easy to understand. However they are often not so easy to spot if your vision is clouded by some existing conventional wisdom or common sense about the market. In fact it often takes uncommon sense to discover them.

Once we have simple clear insights, we can use these to develop products that will work and the whole business will understand that they will work. As we all know, insights and ideas seem hard to come by. But discovering these insights is still easy compared to engaging the business to implement the resulting plan.

Simplicity and clarity are valuable tools to engage the business.

What distinguishes more effective marketing teams from less effective teams?

Tue, 31 Jan 2012 18:04:42 +0000

I was reminded of some important insights about the reputation of marketers and how to get the business to be customer led whilst attending a recent marketing society event.

The event was to launch a campaign to boost the reputation of the marketing function amongst the financial community in "The City". The society has asked Nicola Horlick to spearhead this campaign.

She is clearly enthused about the idea that marketing drives growth and is fundamental to profitable success. It was fascinating to hear this from a successful fund manager. What was particularly interesting though was to learn from 24 CMO's and senior marketers at the event how they saw the current reputation of marketers and what could be done to improve it.

You can read a summary of this on the Marketing Society blog.
click here>>>>>>>>>>>>>>>>>>>>>

Please feel free to contact me to find out what was discussed.

Things do seem to have moved forward a bit. The CMO's reported situations from quite a broad spectrum. Some reported investors and financial directors having too much faith in marketing! (When we did our research, we found patient tolerance of marketing was about the best that could be expected) .

Some CMO's described a more balanced situation, where marketing is recognised as necessary but not always appreciated. There also remain financial directors who struggle to see the justification for many marketing activities. Where marketing is well regarded it often has broader responsibilities including influence over product development and profit accountability. Where marketing is more marginalised, it can be confined to marketing communications.

But it seems our original insights remain true.

Marketers are highly regarded for their ideas and creativity, but can lack strategic and commercial credibility. Marketers can be seen as spending too much time talking with themselves and their agencies and not enough time learning from and convincing the business.
Successful and influential marketers make a disproportionate effort to communicate with the whole of the business. They do it more frequently. They use business language not marketing speak.
Many of the most highly regarded marketers are not marketing specialists, but business leaders and entrepreneurs with a full commercial approach. e.g. Stelios, Steve Jobs, Richard Branson,
At the heart of these successful leaders is powerful customer insight, often not drawn from market research but by talking with people.
Marketers must work at creating quantifiable measures to assess effectiveness. These measures must be accepted by the business.

There was one thought that came up time and time again.
"Successful marketing teams talk with the wider business team more often than less successful marketing teams"
This is because these discussions develop marketers credibility and help them learn more about the customer and the business capabilities as a result.

We have more detail on our original research, the Marketing Society lessons and other published research Contact us to get some reports

Complimentary workshop
We have a Marketing Influence programme to help your marketing team to understand this and adapt their behaviour. Contact us to discuss a complimentary session with you and your team.

Better Strategy

Fri, 06 Jan 2012 14:42:25 +0000

This is now the title of our ezines. We have also included this phrase in our logo because we believe it more accurately describes the best work we do for our clients. This thought came about when I was reading a book by Richard Rumelt called Good Strategy/Bad Strategy - The difference and why it matters. He really brought home some simple truths about strategy and helped us focus on why the search for competitive advantage is pivotal to creating successful strategy. If you haven't read it. Just click on the image to go straight to Amazon and order the book or the Kindle version.

Reading this book reminded me that for us strategy is not about visions, goals and aspirations. Some strategy work can get confused with the company mission and goal setting. For us better strategy is about creating a plan of action (which is designed to achieve specific goals). So we included the definition in the blue circle below as an image on our new website as a valuable reminder to us.

We have also updated our short paper to describe how you can discover your competitive advantage and develop A Plan of Action that is designed to achieve your goals. This is called The Growth Game. We use a metaphor of seeking competitive advantage in sport and show how this translates into business decision making on growth strategy. If you have not had a chance to read it, you can download it by signing up here

What can bad science teach as about good marketing?

Fri, 18 Nov 2011 12:10:10 +0000

I have just been reading a book called "Bad Science" by Ben Goldacre. Much of the discussion in the book reminded me of some "Bad Marketing" that I have witnessed over the years.

Ben Goldacre is a doctor and a journalist. He takes a very well researched and scientific approach to examine some of the medical and health fads that we get to hear about in the media or in the advertising and promotion of various miracle cures.

He is particularly acerbic about Patrick Holford (vitamin pills), Gillian McKeith (examining toilet matter on TV) and Homeopathy, as well as exposing some of the more dubious techniques deployed by pharmaceutical companies to conceal information and selectively present test results to demonstrate the effectiveness of their drugs. He then goes on to question the way the media distort findings using bad statistics to make risks seem more serious than they really are.

The most potent chapter for marketers and business leaders though is one called "Why clever people believe stupid things". He identifies 6 influences that can lead us astray.

Randomness - we can be blind the really random nature of events
The dominance of the mean - we see favourable results when really they are just average and normal
Bias to positive evidence - the peculiar and perpetual state to be more moved and excited by affirmatives than negatives
We are biased by our previous beliefs
Influence of what we personally witness - seeing something yourself is more persuasive and powerful than studying or reading or seeing data about it.
Social conformity - the prevailing beliefs around us in our business or social group will always

In medicine and health, these things can lead us to believe risks that are not true (e.g. MMR scare) or seek cures that are just a waste of time and money. The parallel in business is that these things lead us away from the evidence about what works and what will be most effective in stimulating more growth or more profits.

Of course none of us have ever done any of these things?!

Found the research evidence that process our point and stopped looking any further.
Commissioned further research because we did not get the answer we were looking for
Failed to set up measurement that allows a full assessment of our campaign results.
Argued that we should not spend money testing the finished TV ad because we have already made the ad and therefore we could not change it anyway.
Accepted the conventional wisdom in the company about what works and what does not work.
Choose the statistics that make the point we want to prove.
Argue that we need to make intuitive judgments and these can override the need to get evidence or analyse the results

Well I think I can put my hand up as guilty on each count at different times.

The single thought for me is "why do clever people believe stupid things"?

Should marketers know how to add up?

Wed, 16 Nov 2011 17:53:11 +0000

I was prompted to write this by reading a blog post on Branding Strategy Insider. The post describes a number of quick and easy tests to assess the marketing competency of an organisation. A number of these tests are relevant and compelling. What is striking is what is missing. There is no mention of financial capability, nor sales figures or profit performance or other quantitative measures.

Read post here>>>>>>>>>>>>>>>>>>>

Emotional benefits, brand strategy statements, positioning maps all have their place in creating a compelling proposition. But the trend in favour of developing tools for these things sometimes can be at the expense of linking them to business fundamentals (profit, sales, etc)

We know that financial criteria matter in successful profitable growing businesses. Marketers risk isolating themselves from the business team every time that claim to develop competencies and skills but then fail to link these to financial performance.

You know you must link your marketing investment to financial results. Investments in marketing communications are frequently subject to this assessment. Insight and research work is sometimes developed in this way. Marketing competency work must include this.
As practitioners we must make sure that we relate everything to the financial impact on the business.

Is this "old hat" in the world of emotional benefits, social networking and brand management tools? It seems that way in some parts of the fashionable marketing world. But in our day to day work with clients, we have the sense that it is not "old hat".

Business results matter and marketers. So we vote for marketers knowing how to add up.