Value Add -er

Value Add-er

Too many people interpret value in the context of price. Especially in the economic environment we are working in today. But if value is in the eye of the beholder, so to speak, is that beholder a consumer, a customer or a user?

There are value ranges in supermarkets which is the basic no frills own label products. There are take away food offers which offer ‘all this’ for £6.99 – with the emphasis on the price. These products are treated as a transaction. These supermarket goods and take away meals are consumed and it makes sense to treat them as a transaction led by price for those consumers.

Many companies have customers, not consumers, who use the service themselves or provide it for their own customers. The worry is that many businesses, when dealing with suppliers, are using heavy procurement processes and tough tenders that also focus on the cost as the most significant differentiator in a decision to award a contract. These processes focus on price as it’s an easily compared metric. But these businesses are not selling a product that is quickly consumed but a service that is used.

This service is experienced by their customers and their staff. This experience has many elements in the customer journey that sends signals of understanding the customer (& the staff) that add or take away value to the service. These small elements and traits are not always so easy to measure. Procurement can miss them. But customers and users don’t. These elements of satisfaction can have metrics. Preference and word of mouth are measureable.

Designing the service from the customer’s point of view and getting the staff on board to highlight those stories that illuminate the customer’s needs will differentiate that service over and above a price led transaction.  Those that use the service will prefer it over and above other similar services if it feels the most in tune with their needs; is most helpful; if it “gets them”. That is derived from regular dialogue with them and needs great listening and being able to interpret insights. It’s important to be sure to use all the company’s people, who touch the customer journey or can influence word of mouth, to be able to tell the same brand story and then subsequently share their own insights back to the company – so as to continually learn and further hone the service.

Value added service for customers and users allow businesses to not only grow ahead of their competition but also to do so at a higher price. Profitable growth.

Customer Driven Innovation

Customer Driven Innovation

Today the British PM, David Cameron, is holding a summit with the heads of many of British motor insurers to address the spiralling costs on insurance premiums, driven mainly by the compensation culture that has grown rapidly over the past decade making Britain the Whiplash Capital of Europe.

With the growth of “no win, no fees” lawyers forcing up the daily claims to more than 1,500 a day, the premiums have shot up on average by some £90 per driver. Whether the Government can force enough change to halt the problem quickly seems a distant reality – but it’s good that they are trying.

What caught my eye is how the Insurers themselves are reacting to this pressure. Cynics may suggest that as it may hurt their revenue targets, they will do nothing of consequence. That’s not true of The Co-operative Insurance.

True innovation these days must be completed from the customer’s point of view rather than that of the company per se. Companies that understand the issues their customers face and change their service offer to help meet those needs will reap the biggest reward – that of differentiation and better still, customer preference . With customer preference – based on a great experience – comes advocacy and positive word of mouth. Word of Mouth is the most sought after of all marketing communications today.

The Co-operative insurance deserves this positive word of mouth.

Young Drivers are the hardest hit by these rising insurance premiums. It’s quite normal for young drivers (17-23) to pay three times more for their insurance to drive a car, than the car actually costs! Many young or first time drivers can be charged £3,000 plus for insurance – without having had an accident!

The Co-op insurance has recognised the inequality of this situation by developing a special package for young drivers that measures how the driver is actually driving – driving safely is measureable – and then rewards the driver by reducing their premiums. This “Smartbox” is installed in the car and, like satnav, records how the car is driven and feeds back to the Coop people. They then update the online dashboard to show the driver how they are driving too. Good, safe, consistent driving is then rewarded. And the premiums come down.

Customer driven innovation comes from listening to customers and doing something about it. Sounds simple, but it usually involves much investment in time, energy and focus – traits that are a scarce resource these days in many companies. However the upside in the relationships those customers have with those companies that clearly recognise their needs and not only listen, but do something about it, are enormous.

When my son starts thinking of driving in a couple of years, the Co-operative Insurance should be a market leader in the UK for Young Driver Insurance. Quite right!

Marketing Small Businesses

Marketing Small Businesses

Had a very productive session with a small business this week, when bringing the company together around a new brand proposition. It’s interesting to note that if all the changes that are affecting marketing & branding in the 21st Century is hard to grasp for some big multinationals, it’s pretty mindboggling for those SME’s who represent the engine of most economies.

As people, the leadership of these small companies are aware of the big marketing tools like Advertising and Social Media but know that to fully engage with them is costly, confusing and time consuming – in many ways they are scared off. But given that most are B2B organisations, the fundaments are actually relevant to them.

As a service focussed company, there are two important shifts that are usually needed to help bring  a marketing approach  that can help them grow.

First, a deeper understanding of their customers’ needs (current and future).

Second, to reframe their service offer, less as a series of products, but as a way of helping meet those customer needs.

Making these 2 shifts will allow the company to tell a new brand story from an outside in point of view. These new stories will make future growth more achievable. Most small businesses are constantly trying to sell. Often, they are all consumed in the process of selling and doing, they spend all their time in the business they’ve always done. There’s no time left to think about where their business could go…let alone how to get there. By chasing the sell, they can end up differentiating more and more on price and price alone. This means their offer is treated as a transaction rather than a service

Making these 2 shifts, will allow their service to be more valued – over and above the transactional price negotiation. While there will be a fair bit of change in getting to understand their customers and amending their dialogue and future conversations with these customers, the cost will be mostly an investment in time. Time with their own people. It will also involve time for deeper conversations with their clients.

Both these “time investments” will be rewarding. There will be no need to have big, new, costly campaigns in marketing communications. It will need focus around clarifying the brand story and a way of sharing the customer insights amongst the whole company, so that the new story is told consistently and coherently by everyone. But the service will become more valued as customers will feel more engaged. And they will value that engagement over and above the price they may receive from competitors who offer a similar service. That customer-centric approach, when delivered, will also cause these customers to become advocates of the company and generate a better word of mouth for them too.

And positive word of mouth is the most valuable of all marketing communication there is today.

 

 

A few tips on building customer dialogue.

A few tips on building customer dialogue.

As marketing evolves to understand and harness the power of social media, we hear a good deal about creating dialogue and positive conversations with customers. I was asked this week about a few tips to start having these conversations quickly and am sharing that discussion here.

Dialogue is an interaction between the company and the customers – a chance to listen, to answer, to understand each other. Ways to get insights into customer needs.  Companies know that this understanding is vital and need to find ways to capture this whether through formal functions like customer service or research methods or how to start to use (or perhaps importantly how to react to) social media.

Keep talking after the sale

Some companies forget to increase customer contact and conversations once a sale is complete – and have a customer service function that is really only set up to answer unhappy customers. These can be telephone call centre approaches that ultimately frustrate customers rather than encourage them. They are unlikely to want a dialogue and indeed are unlikely to want to make another purchase. Keep or increase your contact with customers once they have purchased. This is becoming as important to B2C companies as it already is to B2B ones.

It’s more than training, it’s your culture

Staff as an important part of your marketing workforce as they all have their own network of people that they use to communicate and listen. It’s good to have them share good stuff about the company or brand with their networks. Many new staff are much more savvy than we often give them credit for and while many companies do understand the mantra of hiring for passion and attitude then train for skills, it can be forgotten that companies themselves can learn from each other. A company culture that encourages dialogue and sharing amongst its own people will be better placed to have conversations with its customers. It is a company culture not a training program that encourages this.

Online methods over time, rather than moment in time research

Many companies use real-time research to gather insights. These are structured conversations that can, with good questions, illicit smart answers. Panels and diaries and ethnographies are important methods of allowing for broader conversations over time – and all can be improved by using online research which can be quicker, in real time and confidential. By building big panels of customers and having regular discussions with them, you can also share how their inputs help companies change – and this in turn will reward customers as well as encourage further dialogue and loyalty.

Human behaviour not corporate behaviour

Corporate concern over what to do in social media often means delay in using it. Where customers mention your brand or complain about it, this is an opportunity. One that can be ignored by companies not used to unstructured ways of having conversations with customers. How companies act on social media is important and that you do it in real time. Try to do it personally by behaving as humans rather than as a corporation.  Saying sorry, saying thank you, using real names in twitter or Facebook to complaints, is a big step in the right direction.

And do so in real time; in full view and not using private direct mail placating with coupons – because a complaint once posted is out there. The response needs to be seen, not just for the person complaining directly, but for all those who read and watch. And keep the practice up so that it becomes second nature.

When you build communities with customers who have actively contacted the company – whether for a positive or negative initial reason – remember to behave like a person would – treat them like you would want to be treated. . Invite (don’t demand or expect) feedback.  Use the feedback to create further dialogue and share progress. Ask don’t tell. Say please and thank you. Say sorry. Use their name and your own personal name – not the brand’s name.

What other tips would help build meaningful dialogue?

A sense of Community

A sense of Community

A lot of the Brand 3.0 thinking has been influenced by the digital shift from simply being interconnected (dot com boom) to the expectations of those who are now connected (the digital communities) with the rise of social media. These connections bring a change to the quality and nature of relationships – who has 3000 friends really? – but also in how to access these broader groups, which in turn, encourages others to “serve” these growing communities.

Community is a positive term & those who serve communities need to ensure that service is positive. This is a relative term – and judged by those in the community. Communities thrive as a whole and the highs & lows quickly feedback into the community via word of mouth (or word of mouse).

Communities are made up of people – whether customers, staff, buyers, sellers, influencers or antagonists. Brands have always had an innate sense of human behaviour and recognise that within the communities in which they interact, brand behaviour cannot be at odds with the accepted behaviours of the community.

Therefore, for brands to succeed they must seek not only the insights that reveal the needs of their customers, they must probe behaviours too. They must ask better questions. New questions. Sometimes the answers are there but they appear, unrecognised, from over the horizon. These are answers to the questions not asked yet. But will reveal insights of what behaviours will be and what is to be expected.

“Moment in time” research will struggle to capture these so called “unknown unknowns” and why many brands need to have a more regular dialogue with these communities. This is as true of their staff, that can make the customer journey so memorable, as well as the customers themselves. Keeping the dialogue going after a sale is a powerful tool that lifts a brand from a product transaction to a service relationship. Anticipating needs and demonstrating a clear understanding of them through the behaviours of the staff on the customer journey is a mandatory for successful Brand 3.0 thinking.

Understanding the human side of business (a brand re-requisite) allows the continuing dialogue amongst the community to shape change and demonstrate rewards that delight. Listening and then acting demonstrate the desired behaviours. Assuming the past was right and/or promising action will disappoint and lose customers. How you deal with customers, who are unhappy or angry, is a strong opportunity to show you listen, you understand and will do something about it. If your people are in a dialogue or who behave “on brand” to these disgruntled customers will reinforce the brand just as successfully as if the customer was being surprised and delighted. Regular dialogue also allows the wider communities of staff and customers to share and shape the brand – to share the ownership of a brand. Feeling involved is a core trait of a strong community. Linking the purpose of your company to the customer’s community via your own staff & brand behaviours reinforces the role your brand has within these communities.

And with all things digital happening at warp speed, the negative word of mouth can lose your customers and their advocates and those they influence inside a day.  Reframing your customers and your staff as communities and recognising behaviours that humanise the sense of belonging to a community will help underpin the future success of y(our) brand.

How busy clouds your focus on the key decision: urgent vs. important.

How busy clouds your focus on the key decision: urgent vs. important.

Everyone is busy these days. Busy equates to effort. Too little time. Less people helping me. Too many projects. Too many competitors. Juggling too many balls. People make themselves busy as proof of value or to ensure they are in the know.

Busy distorts a key choice we face – on what to focus. The focus on what is urgent versus what is important. It’s hard enough to balance the urgent without forgetting the important. Being busy creates urgency for the wrong reasons. Worse, busy seems to cloud (and worse, postpone) any decision or discussion on what is important. Important should be the key determinant of focus. But busy means we put off things, we do other things and we end up doing them poorly – under the guise of being busy.

Yet it matters to us all. Whether as a leader or a manager. As a core team member or one of the troops. As an organisation or an individual. Identifying the important isn’t something you do annually. Defining the important isn’t something you do in isolation. Agreeing the important can’t be something to do in a hurry.

But busy gets in the way. In business, how often do we have meetings about meetings? How often do people sit in meetings and not contribute but insist they “have” to be there? How often do you see presentations with 200 slides – that people have been busy putting together? How many times do you hear people are too busy to talk?

Often, as people busy themselves to keep up with the day to day needs; they end up running to keep still. They expand their time on doing repetitive things and lose any focus on the why they need to do things. Busy doing what you did before usually means you are adding to the urgency tomorrow. By increasing the urgent, you forget to prioritise the important. This makes you busier still.

The important thing is not to forget the important. Plan a 5 minute break as an individual or as a team (or preferably both!) to remind you what is important. Start with a blank post it, a pencil with your morning coffee. Write down the important in a sentence. Put it on the wall. Email the sentence to you. Put it on your phone. Share it with your busy colleagues or families. Let the important guide you.  If the important is changing or adapting, then plan a longer session in the next 24 hours. Let the important dictate the urgent rather than busy cloud both.

The important should be discussed often. The important should be all a leader discussers. But today, even our leaders are often too busy to simply focus on the important and how it changes. The important decides how to prioritse, how to accomplish goals and keep making a difference.

Imporant stuff.

Running to stand still? Break the inertia, creatively.

Running to stand still? Break the inertia, creatively.

 

Do you feel like the hamster in the wheel? Running like crazy to stay where you are? Expending massive energy without moving onwards? Pressure is on to deliver more from less. Stress levels are rising as leadership expect new things faster while, at the same time, demanding nothing slips. The day to day processes are busier than ever, yet new growth needs something different to ignite change. Do you suspect external change is a great opportunity but the internal change needed to stimulate it is impossible to budge?

It’s never been as important for companies to develop new ideas, or as difficult to successfully launch them. After years of efficiency-driven cuts and bottom line focus, companies need new growth and meet new customer needs. Most of the skills required to address these needs have been eroded or outsourced by organisations. Marketing departments have been cut along with their budgets, yet leadership is demanding more from less in double quick time.

Companies see there are opportunities out there but are often stuck focused on the day to day processes needed to survive, or so concerned by gloomy predictions, that they become stuck in fear-fuelled inertia. Breaking out of inertia is vital as new ideas and innovations need to be tested quickly. Often, change needs to happen inside organisations in order to successfully create change & growth externally.

Innovation is no longer simply the focus for developing new, disruptive technologies and products.

Increasingly, companies are attempting to reshape their culture and physical work environments to encourage creative thinking across their enterprise.

But too many of the creative skills needed for change are being outsourced, yet new ideas that are owned and driven by internal people have more chance of being implemented.

One problem in attempting to instigate a new culture for encouraging creativity is that it can take time to set up. Failure should be treated as a positive learning experience and encouraged. At first, ideas are often generated in isolation of those they are intended to influence and this adds further time before the new ideas can be implemented. More time can lead to further pressure from leadership for the change, often adding to the inertia.

Perhaps the best idea is to consider smaller scale projects to create a short term actions in order to escape the inertia. To start to add some business creativity inside the organisation via a new initiative with a team that spans different silos – and include some “Doubting Thomases”. Give these teams’ space and time (a week or so) to try something new. Mentor these teams in benefits of collaboration and let them create some internal actions for change. Don’t put more stress on them – free them up to have fun in creating new things.

But make sure the context is clear. Interrogate the customers. Bring the competition to life. Use newcomers to the company in their first few days to represent customers or competition as part of their inductions. Create a map of opportunity that could your offer be outside & evaluate what is stopping you on the inside getting some new actions to address them.  Challenge the teams to create a momentum that gets noticed but via new initiatives that create a bit of a stir. Encourage them. Forgive them. Celebrate a failure & get them going again. Ensure they establish the barriers that stop a company experiment more freely. Maybe make the exercise all about breaking down such barriers!

By making the projects have an outside-in context in order to shape the initiatives and innovation, the possibility of change attaining growth increases. As changing the inside in order to deliver on the outside may allow the hamster wheel to move off its fixed axis and allow all that energy to burst forward and start a new momentum.

Tesco. A brand new story needed. What will 2020 hindsight say?

Tesco. A brand new story needed. What will 2020 hindsight say?

Tesco hit the headlines today having had a big wakeup call over Christmas with a significant fall in Sales.  Are Tesco losing their way or taking their eye off the ball?

The globally successful retail giant, revered abroad and reviled by some here at home, saw like for like sales fall of some 2.3% in the 6 weeks before Christmas – while its competitors saw growth. Much blame was put on a misleading “Big Price Drop” campaign, but it’s clear that Phillip Clarke, Tesco’s new CEO, understands the issues are strategic rather than tactical. These surprising results, along with disappointing profit forecast, caught the City out – a 16% fall in share price that also hit their competitors. Mr Clarke’s statement yesterday signalled that Tesco had taken their eye off the ball.

They’d been running UK stores “hot” for too long – boosting productivity by under investing in staff and service – in order to keep the international expansion going strong (under Mr Clarke for recent past) and keeping analysts happy at continuous quarterly growth messages. The core business suffered as Sainsbury’s, Morrison’s and the others got their act together and improved their own offer – the service, the location, the choice – and everybody competed on price. Low prices have become cost of doing business rather than a differentiator for supermarkets, which means customers acknowledge these other elements of the offers to help decide and choose to shop.

Where the “Big Price Drop” made a mistake was the decision to reduce the clubcard points on offer to loyal shoppers, in order to pay for some of the price discounts. The Tesco Loyalty scheme has been hugely successful, but to deliberately reduce its effectiveness has had the opposite effect for Tesco than it had hoped. Rather than bring in new customers alongside its loyal customers, it has swapped them. Some Tesco loyalists have become disillusioned and tried out the competitors. For some this may be terminal. Price is not a differentiator. Clubcard points are.

By under investing in UK stores, Tesco has exacerbated the perceived value of their competitor’s over investment in raising their offer. More staff who better informed, fresher produce which more regularly replaced, good reward programs – some of which were pioneered by Tesco but improved by competitors.

Mr Clarke knows this. He says he will increase staff levels quickly. He says they’ll reduce their Hypermarket growth plans too. Tesco’s locations are pretty much ubiquitous for most of the core UK market anyway. If Tesco’s in store experience and service improve then this could be a positive pivotal point in Tesco’s history. If this is lip service, and the in store experience doesn’t improve to better Sainsbury as a minimum, then the pivotal point may be much more negative.

The core Tesco UK business experience – from the different store formats, to the digital offer, to the environments and different categories of offer and, vitally, to the communities they serve – must become the prime focus for Mr Clarke. His old remit of International must not effect investment decisions at home.

The Tesco brand can help. My friend, Robert Jones, tweeted yesterday that “Tesco needs a big brand rethink – one that’s too big to fail.” He’s right. But the knee jerk reaction is not to start this by launching a new master advertising campaign like “Every Little Helps” or looking at a new set of guidelines that shift colours and packaging and periphery collateral. The Tesco brand must aim high – and stand out again. It must stand for the best experience of UK retailing. This experience will be delivered by real staff, who are interested and knowledgeable in store. The products in store must be the best value not simple the best price. The store experiences must be positive as judged by the communities it serves. No easy fix. No single answer. But the brand must become strategically grounded in the core UK businesses for the next 2 – 3 years. This isn’t in rapid growth via new stores. This isn’t in low price tactical campaigns. Customer loyalty must be earned and re-earned not bought by discounts. The brand effort must start inside first. Staff and customers must be intrinsically involved in building and testing this experience positively.

The next few months will be interesting for one of the UK’s biggest organisations. How they reinvent themselves for their customers will be a huge case study in 2020. What we don’t know is whether it will be a positive or negative story. We just know it starts this week!

 

Let’s not talk ourselves into a Double Dip!

Let’s not talk ourselves into a Double Dip!

Interesting reporting today on the British Chambers of Commerce’s (BCC) latest quarterly report which suggests that some 6000+ British Businesses believe that the British economy is weakening but may well just stagnate rather than slump back into a double dip recession. The reaction seems to be either one of gentle relief and a tad of optimism or one of cautious disbelief and a tad of pessimism.

The danger lies in talking ourselves into the latter, worrying further about the effects of further indecision over in Eurozone-land, so that we do then spin into a double dipper. This negativity will add further worry and mean many companies will continue to cut back on people and delay much needed innovation by becoming stuck in yet more inertia. Action is needed to break out of inertia. New actions.

While it is really hard to successfully launch new initiatives in the speed needed today, the danger of not doing so and falling back on tried and trusted processes and messages will allow competitors (both existing and surprisingly different ones) to reach out to your customers with something new that they value. That will leave companies trying, as Einstein said, to ”solve problems by using the same kind of thinking we used when we created them.”

The BCC is right when it urges action to be undertaken to boost business confidence. But whether that is a reduction in VAT, the removal of the 50% income tax rate or equalisation of corporation tax to woo back those HQ’s is out of the their hands. What is in the hands of the BCC’s members is the ability to try to bring in some creativity, some innovations, some new forms of testing out new ideas – but quickly. Bringing in some Business Creativity could allow companies to steal a march of their own.

There is a chance that the UK will survive the threat of Double Dip, but there is more than a fighting chance for companies, who take some quick, innovative action now, to not only survive but thrive.

Fixing brand for the outside starts on the inside but with only with an outside-in view!

Fixing brand for the outside starts on the inside but with only with an outside-in view!

Had a quick coffee today with a small business owner who was struggling to change the focus of his company culture from one that was Sales driven to one that needed to offer more of an experience. He was struggling because they’d been successful and to stay successful he felt he needed to change. He wondered if a new brand would help but his view of what a brand is, suggested that it wouldn’t help. Yet. For brand change to work on the outside, they’d need to change the inside first…and fundamentally so.

A B2B service organisation is often driven by customer numbers – whether by driving new customers or focusing on client retention. Companies that have grown primarily by the former have a dominant sales culture that pervades the organisation and dictate the Silo hierarchies. Those that have grown by focusing on client retention have a dominant customer service culture that coordinates the organisation to be customer centric.

Both types of culture use marketing and brand practices to achieve their goals. In the former, Sales & Marketing are often under the same leadership and communications are judged on their tactical success in delivering numbers. Short term offers, usually price discounts, occasionally delivered “loudly”. For the latter, Marketing is focussed on understand customer insights, trialling solutions and offers with those customers and rolling out the offer to reward the customer’s experience of the service.

In the former, brand is used to carry the messages out to potential customers. You’ll hear terminology like direct, consistency, efficiency, offers, brand manuals. In the latter, brand influences the organisation’s culture, their service delivery, response times, their processes and capabilities as well as their external communications. Here, you’ll hear terms like dialogue, satisfaction, innovation, brand stories, effectiveness.

While each can be successful, what is really tough is to change from one to the other – especially if tried quickly. What can happen is that brand and marketing can be tasked to change the perception of the service before the internal offering is able to deliver it. Promising something, that is not then actually experienced, leads to rejection. These are empty promises. However well executed the promises are they will be empty. Price driven tactics cannot deliver a premium brand experience. Telling customers is not the same as listening to customers. Showing customers you are prepared to listen by a sms or email campaign isn’t enough. Changing your name or logo, to suggest you care or you are a premium offer, isn’t enough.

If success is not instant because the service offer is left unchanged, or the organisational silos remain disconnected and the company then blames Marketing for subsequent customer churn, then the understanding of brand and its influence remains old fashioned and so ineffective.

Brand will be effective once the organisation recognises the changes needed inside to affect those on the outside. By listening and talking to the customers – about what they value, what they want and what they will or might want – you’ll have a blueprint for change. These changes start on the inside – from the top of the company, to all their people on the customer journey that tough the experience of the service offer – by signalling change, recognising change, rewarding success, adding new companywide service KPIs vs. Sales KPIs will start to affect the internal culture. This can lead next to a change in where and how the service is experienced by the customers so that it is actually experienced by those customers and their reactions will create positive advocates and cause loyalty and importantly, recommendations much more powerful that a 50% short term discount. Indeed this is the premium service of the future.

Such change is hard. It is fundamental change. And brand can indeed help. 21st Century branding encourages the outside in blueprint for such change.