Tag Archives: strategy

Single Customer View post GDPR

The new General Data Protection Regulations (GDPR) have led most companies to review not only their marketing consents and processes, but, based not least on the veritable explosion of requests in my email inbox just before, on and indeed after, May 25th 2018, to more fundamentally consider the state and value of data as an asset.

This is the real positive of the regulation in my opinion. I wonder if it may, in time, lead to a balance sheet thought around data equity in the same way as ‘Brand Equity’ was considered in the 90s as something that had a tangible and quantifiable GBP value.

The challenge facing marketers post GDPR strikes me as being initially straightforward, but time will tell if the impact of the changes makes this more complex.

In my view the single view of a customer (SCV) is becoming paramount in ensuring the valuable asset that is personal data, works for the benefit of the business concerned post GDPR, and does not adversely jar with customers. It is trying to create the dreaded ‘win win’ scenario in a landscape where the value paradigm has shifted significantly, and that is never an easy balance to strike.

In my view the twin and very simple benefits of a SCV of customers are:

the customer enjoys a consistent experience with the company concerned that they attach a value to, and
a ‘knowing’ personalisation level is possible and can be expressed in communication which the business can attach a value to (relating to relationship or sales and so on). The key word here for me is knowing.

The SCV should demonstrate the company knows the customer in a positive and unobtrusive manner. GDPR empowers the customer to manage their relationships more proactively and transparently. The value of an individual’s data to any company is more visible and obvious post regulation to the customer. For some the value of their data may be surprise, but the volume of email and white mail will have fuelled that understanding (or at least awareness) in a way that if not acknowledged is a risk for business success.

The emails, direct mail, calls and texts we have all received have created a long-term impact in changing the dynamic of the relationship, the paradigm shift is that SCV should now be read as Single Company View not single customer view: The dominant partner is now the more educated customer or prospect, one who will recognise on some level the value of their personal data.

To not recognise this shift is a high risk strategy for any data led business.  Customers are choosing to ‘freely’ interact with a company and this choice can be reversed easily and quickly if the company forgets the customer is dealing with a single company in that moment. If the SCV acronym we know and love as marketers is to stand, it must recognise the power shift to customers and be read as both single customer and single company view.

My thoughts on some post GDPR imperatives are below:

Seek to acknowledge the value of data
reassure the customer or prospect by dint of action, value offered and by not overusing the data. Thinking of the data as fragile and easily damaged is more likely to be a winning formula.

Make sure the personalisation is appropriate
a fine balance to strike and however good the marketing asset the best way to monitor this is likely to be opt out rates within the campaign decay curve and customer feedback. Thinking of the data as an asset to be retained for longer term value becomes more important, cherish it!

Make sure the personalisation has a test (and then test some more)
and use a control cell, this will give a quicker read on the level of personalisation that resonates and will protect the single view of the company by the customer (but make sure it is statistically significant).

Make the content rich and relevant and balance sales to service
Post GDPR service contacts can be an opportunity to drive marketing consent, but be careful, it is possible to damage consent levels if legitimate interest is abused for the sake of a quick sale. Remembering the customer may not have freely volunteered marketing consent for a reason …making the service contacts valuable may reverse that.

Remember the data has a value and that can be eroded
This mind-set change here is as important as thinking SCV is a single view of the company (in the moment) for the customer or prospect. Thinking of data like this should ensure the business considers its actions more deeply post GDPR and not lose long-term value by short termism.  Remember a chipped china cup might still function but it’s value is much less than the perfect version.

These thoughts are my own, and I would love to know yours, if you get chance send me a comment or two and thanks for reading.

Paul Hemingway
01 June 2018

Image courtesy of Pexels.com

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Disruption


Disruption is an often used term in marketing but it is rarely seen in reality.  For many, in the hurly burly of marketing communications, it remains talked about and revered, but not delivered.

When it is seen it is rarely from a ‘smaller’ brand, but where budgets are bigger and the Agency voice may be more compelling and passionate it does show itself more frequently.

Disruption as a technique for me has a number of elements to it, a good disruptive execution will combine these rather than rely on just one factor;

  • Breaking the norm … if the world is beige then paint your comms or idea bright red, make it stand out.
  • Intensity … make your creativity stand out through intensity or through a ‘laser’ focus on your target audience
  • A novel delivery … make the delivery stand out through exaggeration or media choice or even solely by design, make the audience curious to find out more about you or the offer you are making

The aim of such disruption, for me, is always only appropriate if you have an end game that is  driven by a desire for an increase or a reinforcement; disruption should not be an end in itself.

Increased sales and/or revenue are the obvious objectives of disruptive activity in marketing, but consider also increased curiosity and memorability as well as overall awareness.  These latter elements may be a precursor to the increases in financial returns which are your ultimate aim and can be used to reinforce the brand image or values which may be necessary in some cases.

If the offer itself, be it a product or a service, is truly innovative that may itself be disruptive enough. If, however, your task is to disrupt your audience through the communication then the process of disrupting may take more time as you establish the brand credibility through communications designed for memorability and cut through.

This reinforcement is required in my opinion to ‘mask’ the ‘me-tooness’ or ordinariness of the actual offer in many cases.  This is a strategy with a higher risk but the advertisement I saw recently, and which prompted this post, is really interesting and I think falls into this category.

It is interesting enough to drive me to post again, having been quiet for a long while on my blog.

The category:​  Car sales

The offer:  No different to any other car dealer, albeit I am sure they are a good company with a good offer

Disruptive comms? Hell yeah !

The ad is from Trade Centre UK, its disruption … silence !

TV Ad for Trade Centre UK

The silence is incredibly disturbing, the TV going quiet in an ad break is so unusual and the result initially, and repeatedly, is to watch TV while checking it’s not on mute.  The result being you watch the ad itself. The disruption is complete.

This is clever, low cost, disruption and my out-take … they have good prices.  Job done I expect.

Paul Hemingway

03 May 2018

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Pay Day Loans: A lesson in naming strategies

Payday_loans2

Payday loans are clearly big business.  The APRs they charge are, in my opinion, outrageous and whilst you can argue the point that they are lending to people who cannot use mainstream banks and whose only other option would be the even less palatable money lending that exists outside of the law and regulators view,  I would contend that they are exploiting a group of society that is limited in its ability to change the model through its own actions.

The Government and regulators seem to be acting, slowly, and I see a real positive action in the growth of  credit unions – great institutions & a wonderful model of co-operativism.  The OFT investigation and referral to the competition commission has led to a reduction in companies already, and you have to believe that those who have ceased trading were the least well placed to survive an investigation, because the model itself looks profitable for the companies. You even have to admire the Church of England and its intent; using Churches for social good and allowing Credit Unions to use them is a great idea.  It’s a shame about the £75k (tiny !) VC investment in Wonga getting the greater publicity.

But this post is really about how the payday loan companies have cleverly built their brands by use of some very clever naming strategies that they then follow through in the brand experience, advertising and customer journey.  All designed to make you feel happy and that this is somehow not really a big deal.

Think about it … you usually borrow money from venerable institutions like Lloyds, Barclays, Nat West and so on.  There are a few outliers like Tesco Bank, Virgin Money and M&S Bank – but in the main these are serious brands with serious names and a lengthy heritage in banking/money.

But this is not the case with the Payday loan companies.  Check out the list below;

  • Wonga = slang for money
  • Payday Pig = plays on piggy bank
  • Moneybox = plays on piggy bank
  • Cash Cow Now = plays on well known phrase implies easy
  • Cash Lady = gender specific and unthreatening – uses Celebrity endorsement … not A list !
  • Sunny = happy light feeling
  • Peachy = happy light feeling – “everything is just peachy”
  • Pedro = happy singing mexican imagery
  • Uncle Buck = family friendly associations
  • QuickQuid = slang and presents low value implicitly by use of quid
  • WizzCash = majors on speed
  • BeeLoans = friendly imagery
  • Moola = slang for money

Example imagery below:

banner

 

Bee-Loans

This is clever marketing designed to mitigate the awfulness of knowing the APR is running into thousands of percent.  These names as they appear are often tertiary brands and as you click through you find yourself at a differently named website.  It is a confusing marketplace – with low entry costs and a proliferation of brands using ‘names’ to target different sectors.

Wonga for example is using older characters perhaps to demystify and appear less threatening but also to appeal to an older demographic.  Cash lady, clearly identifies with a gender specifically.  Clever segmentation strategies that are more sophisticated than you first think.

cash lady

The websites and collateral are all bright primary colours, simple and easy to read – perhaps based on an insight that the audience is less sophisticated.

The imagery is typically friendly, illustration of sunny uplands, rounded fonts and simple forms and actually there is very little traditional loan imagery, no money symbols in evidence, just lots of sliders and dials that you can interact with.

You have to admire the way these companies have presented themselves as friendly, professional and appealing with warm cuddly advertising.  Cartoons and illustrations  are happy and welcoming and resonate with an unsophisticated target.  But they, like the naming strategies they have employed, are a distraction designed to move the eye away from the APR and the reason that the target audience has to use them.

I might not like them, but their advertising and marketing is well positioned and well executed.

I do hope that the Competition commission do something swiftly to address what I see as a blight on our society, but the cleverness of their advertising will stay with me for a long time I think

Paul
10 Aug 2013

 

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Marketing Futurology

The final stages of the Customer Review are vitally important and we have just one more to go before we start stitching things together.  If you remember, the first stage in developing a marketing strategy is thinking – which I call the Customer Review – and then we move into delivery.  We are now at the final step, 7 – Future proofing of the Customer Review.

  1. Customer insight ✓
  2. The marketplace ✓
  3. Critique the current strategy ✓
  4. Identify and critique your enemies ✓
  5. Critique your current/planned offer in detail: Product / Service / Channel ✓
  6. Pricing Review ✓
  7. Futurology
Futurist Cinema - Scarborough

Futurist Cinema – Scarborough – nice building !

(7) Futurology

This step is the final step in customer thinking and is in fact a sense check of the customer research and trends exhibited in your marketplace currently.  It requires you to think qualitatively and quantitatively.  It requires you to think forward 3+ years;

Purpose:

  • To give you confidence that your 1 to 3 year strategy is not going to hamper your next strategic step that takes you out to 5 years.
  • To make sure you are future proofing where you can.
  • To make sure you are labeling no regrets strategies and tactics clearly as ‘no regrets’ if you pursue tactics that contradict your 5 year view of trends and market/customer developments.

Process:

  • The first step is to review your products and channels for innovation in the marketplace.  You should have this information in your Marketplace attractiveness research that informed your early matrix.
  • A useful tip to pick up trends is to use some of the trend-spotting websites and email alerts.
  • Review the industry reports and the Annual Report and Accounts of your competitors/enemies and use logarithmic trend-lines on sales growth etc to forecast out.
  • Your IT department can be tasked with keeping you up to date on technology trends – ask them for a monthly or quarterly report.
  • Do the same with your media planners, creative agencies, email dispatchers and so on.
  • Utilise the delights of your Industry bodies, ISBA, DMA, IDM, etc as well  as your trade press and marketing press.
  • Using these free channels greatly reduces your costs and makes this futurology task as simple as mapping the trends.  But don’t be afraid to pay – I find eBenchmarkers historic assessment of web channel usage really helpful in informing my expectations of web and telephony 5+ years out as Insurance looks more and more like a digital channel, for example.

My sense is that the universe you need to map is helpfully covered by your PESTLE from the very early steps of the Customer Review – just don’t overlay the SWOT in this step – this is about drawing a picture.

I worked for a CEO who used a very simple tool that was an email from himself in the future to his current Exec team today:  He liked to use either a press release or a piece on the company on BBC.co.uk.  This works well and is a nice idea to engage the team.  Ask all of them to do this in isolation, and then to discuss why they have led on (usually) different things.

Finally don’t forget the Office for National Statistics if you are in the UK – a mine of census and other useful information.

The final step in this process is then to torture test the pictures you have drawn vs your emerging strategies i.e. does your channel pricing strategy look acceptable if you are seeking to retain customers for 4 to 6 years, but now can reasonably expect that channel to be radically more expensive and less used in 3 to 5 years time? Do you need different strategies and tactics to actively manage those customers you are recruiting now?

The hard part is making sure you have persona’s or pictures of how your customers will interact with you in 5 years time.  You might need to practice this, but Ad agencies are great at it, so use your retained agencies to help

Pay-offs:

  • You will have a clear view of future trends at a more granular and industry specific level than just, say, “we have an aging population”.  Which is helpful only if you have strategies to exploit or manage it.
  • You will have a list of some activities/strategies that when assessing for costs & effectiveness you know must be no regrets or not at all.
  • You will be able to demonstrate a longer term vision with customers, and with your members, or owners, or indeed shareholders.

Looking forward like this is enjoyable, try and use this as an opportunity to have a bit of fun with the team … I recently started a presentation with a view of what the makers of Space 1999 thought 1999 would look like when they created the show 20 years earlier – spectacularly wrong – but funny nonetheless.

That ends the Customer Review section … getting to the bones of your strategy.  You now have to make a coherent story from these parts to make your strategy come to life.

More of that next week though.  As ever if you have any comments or builds please post them.

Paul

02 May 2013

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Pricing Review: Step 6 in developing a marketing strategy

The final stages of the Customer Review are really important and we have just two to go before we start stitching things together.  If you remember, the first stage in developing a marketing strategy is thinking – which I call the customer review – and then we move into delivery.  We are now up to step 6 – Pricing review.

  1. Customer insight ✓
  2. The marketplace ✓
  3. Critique the current strategy ✓
  4. Identify and critique your enemies ✓
  5. Critique your current/planned offer in detail: Product / Service / Channel ✓
  6. Pricing Review
  7. Futurology

(6) The Pricing Review

pricing

My comments here can only be generic, but I will try to use examples, and forgive my inherent focus on Financial Services, it is what I know best.  There are clear and significant differences between actuarial pricing strategies and pricing an add-on service that is for related goods say.  The principles, process and purpose remain valid cross industry I believe.

Purpose:

  • To bring together your current pricing strategies and establish your position or powerbase in your chosen markets
  • To place you in context of customer and market expectations and reality

Process:

  • You will need to review your Boston matrices to remind yourself of the market and product attractiveness scores
  • You will need your value engineering that we completed in the last step
  • You will then need a clear and concise view of competitors.  You can use the Good Better Best tool and apply that to price if you like.  I find that helpful if using comparative advertising.  On that topic I was at an interesting DMA seminar last week on the improved ability we have as marketers to complete comparative advertising.  An area of legal flux that offers greater opportunities for exploitation than it once did. But only IF your target customers respond to comparative advertising or if one of your enemies is targeting you.
  • Establish answers to the following for the following three timeframes: 1) Now, 2) Go to in 12 months, and 3) desired position in 1-3 years i.e. where do you want to be in the pack?  Use a simple checklist for each of your offers:-
  • Best Market price – designed to drive SoM and place you as ‘new’ or as pack leader or innovative or indeed acquisitive territory.  Hero prices may be a tactic you employ here and of course you can, if your customers think it reasonable, come and go in this quartile e.g. by use of Sale pricing strategies
  • Best to Middle market pricing – compromising the profit of each sale, potentially, for higher than average growth in SoM.  Like best market pricing it may not be sustainable long-term unless you have a cost advantage vs the market – see Value Engineering in step 5
  • Mid Market – where the noise is in the field, you may want to have several competitive offers available rather than be a pack leader with a hero product.  This position is the mainstream and is usually a hard-fought battleground where leaders of the pack will emerge and others will fall back. This mid market price position usually drives long-term sustainable profit, but constraining growth potentially.  You may go here for cash cows to test elasticity of pricing – use your Boston Matrix from earlier
  • Worst in Market Quartile – you may have cost issues or exposure issues that drive this strategy or it may be that you have few strong competitors and no enemies attacking you.  Equally a new product or innovation as well as being keenly priced could be placed here if it truly is unique.
  • I would resist establishing too hard and fast a set of rules for competitive position vs your enemies.  I worked on a brand once that had a stated price position of being ‘the cheapest’ vs a basket of enemies.  The result – we had to move price and therefore profitability irrespective of our cost and performance if one of the enemies moved – not a great strategy I would suggest.
    • But do think about building in new year/summer sales, seasonality lifts in demand, making a new market in a new time period as options to allow you a pricing advantage or to beat your enemies.  One tool I have used in the past is to look at where companies over indexed on one product line e.g. ISAa at a specific time and used a great price in a different product line whilst their attention was diverted.  Your business intelligence of the strategy and performance of your competitors is invaluable here.  I love the HSBC New year sales … very good controlled marketing.
  • In pricing terms the value engineering and financial assessment we did in the last step is crucial but overlaying it with that of your competition is equally important … Try and look at what shifts they make and what their overall matrix of price positions look like – are they the same as yours?
  • Be clear what you can afford to charge/pay and know what your price elasticity is in each of your target customer groups and/or products.  This is critical.
  • Don’t neglect the new customer/existing customer balance either – in elasticity terms most consumers now ‘get’ the idea of an introductory discount, but too high a level of price shock at renewal (especially if there is an annual renewal or maturity) will drive churn and push costs up even higher.  In Insurance this allows the Aggregators to win – especially where prices are easily compared.
  • Finally write down and communicate the lead times it takes to make changes in prices for each offer – this could drive your responsiveness to changes by your enemies and could, at worst, mean you compromise your desired price position.

This process step is short – you have done most of the work earlier, but wide-ranging and it’s absolutely vital that Finance are engaged throughout to help you model your outcomes.

You need strategies for new sales, renewals, add-ons, cross sales and up sell and down sell levels for your customers.  Plus you need to be clear in what part of your Boston matrix is your brand and price offer credible.

  • You may also wish to determine how much first line flexibility in prices you want to give your sales force.  I would contend that unless you have good CRM systems or segmentation this is challenging as you may be discounting to customers whose lifetime profit is low and ignoring those in the opposite position
  • Don’t ignore transfer pricing either – if your organisation cross charges for goods and services, make sure they do not constrain you

Pay-offs:

I appreciate the above process is quite qualitative, but that is only because as a step this is using the outputs from earlier stages and asking you to write down your strategy with pay-offs in the following areas:

  • You will know the price elasticity of your customers
  • You will have a price strategy / actual price that you can then research how best to present to customers
  • This will then inform how you discount your prices and where you do so e.g. front line responsibility
  • It will also, off the back of your value engineering, have identified internal areas to target i.e. low value high cost impacts on your price position
  • You will price according to market attractiveness and in the context of your enemies and your own offer strength

Pricing is a difficult and wide-ranging topic that covers not just core price but also discounts, offers and so on.  In this field more than any other identify your RACI early in the process to define who is doing what.  Your P&L owners will be the ultimate owners and they must have the final say.  This is unlikely to be marketing, so be relentless in trying to get a good deal you can communicate to customers, but acknowledge that in some cases your business costs and performance may constrain you .

I hope you enjoyed this post and found it a prompt for how you may look at pricing differently.

Futurology is the final step in the Customer Review … see you next week !

Paul

25 April 2013

Price Image : Copyright (C) F. J. Cahill & Son Ltd., 2013

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Marketing torture tests: A critique of your strategy

By now we are about half way to having completed our Customer Review.  The first stage in developing a marketing strategy.  Strategy starts with thinking, and then moves into delivery.  I call this thinking stage ‘Customer Review’.  I have covered the first 4 of the 7 steps.  In this 5th section we have to get down and dirty with our own current offer – I worked on a brand that called this session the ‘torture test’, a bit scary sounding, but you get the idea.  Sacred cows are about to be identified and any flights of fancy and JFDs you have had will be clearly exposed.

  1. Customer insight ✓
  2. The marketplace ✓
  3. Critique the current strategy ✓
  4. Identify and critique your enemies ✓
  5. Critique your current/planned offer in detail: Product / Service / Channel
  6. Pricing Review
  7. Futurology

(5) Critique your offer in detail: Product / Service / Channels

Purpose:

  • To evaluate your current/proposed offer to customers
  • To evaluate how well you are performing now
  • To understand how well your target customers view your offer (and how much value they place on its component parts)
  • To understand the profitability of your offer in it’s entirety and hopefully in granular detail.

Process:

  • There are a number of steps to this:
    1. Product offer assessment
    2. Channel assessment
    3. Communications assessment
    4. Profit assessment

Product/offer

  • Start with the portfolio analysis you have already completed – and ask yourself … is it working?  Is it meeting the needs of customers.  Do you have an abundance of growing products in the growth areas of the matrix?  Identify your gaps as a minimum.
  • Use research and listen to customers when identifying your gaps.  The gap is not where you think you should go … it is where customers tell you, you should be … if that is doable for your brand and business of course.
  • Evaluate critically your track record;
    • Volume of innovation and speed/technology to deliver
    • Ability to grow products/mkt share
    • Ability to increase advocacy and satisfaction
    • Have your new products/services launched in the last 2 years delivered to your forecast?
    • Alternatively are you happy being a follower?

Then land on your proposed offer and complete the exercise below for current and planned offers:

  • Evaluate each offer using a value matrix based on the views of your customer vs your actual costs.
value engineering matrix

value engineering matrix

  • Assess where your offer will appear in price competitiveness rankings (if that is important – in my experience it always is!)
  • Assess the product/offer – using the “Good Better Best” tool below.  Choose as many categories as you like down the left hand axis and score and then rank your assessments – oh, and don’t be defensive about low scores, this is a critique you know !
Good Better Best Assessment tool

Good Better Best Assessment tool

The next step then is to assess channel efficiency.

Start with  another Boston matrix and use your insight about channel growth from earlier.

  • Is your chosen channel a growing channel? Or declining?
  • Are you exploiting new channels e.g. social media that are opening up? Should you be?
  • Are you in the place where customers tell you that you need to be?
  • Brainstorm what you need to be a success in each channel – based, as always with me, on what your customers tell you.  So, if speed of response is a given in social media, is a guaranteed counter service the equivalent for a branch? And what if you are a High Net Worth or Premium customer in the same channel?  Or what if your core target market works shifts? Are you even open?
  • The difficult step here, is to really assess your customer service – review complaints, customer satisfaction scores, research etc & don’t be fooled by awards – they may mask an issue (not always).  Ask your colleagues what stops them being better at what they do.  My current business refers to this as mending broken windows.
  • I also like Net promoter score assessment – but I accept it is not for everyone/every business

Next we come to communications effectiveness

This is a big review – a real drains up on how well your communications are working.

All of them , inbound outbound, mailed, emailed etc etc.

Decide what criteria you will use to assess effectiveness – it should be as simple as summarising your KPIs – but it never is.

I’m a direct marketer so I like everything to have a clear cost of acquisition/retention visible, but that is not appropriate in some cases.  Here are some suggestions to complete this task:

  • What works with your offer in the marketplace – are you bucking a trend?
  • Are you getting complaints over contact rules/over contacting etc
  • Are your comms consistent and integrated (a really important point to improve awareness of your brand)
  • Are your calls to action clear and channel appropriate
  • Are you ‘on brand’ and ‘on strategy’
  • Are you over indexing in a particular media vs the market
  • Is your correspondence as good as your comms marketing? (alright I’m a Comms marketer – so I left that to last)
  • Ask your media planners and creative agencies to critically assess the work as well – then ask them to switch roles: creative assesses media plan successes and vice versa – remember what I said … torture testing, this is supposed to be challenging.

CEOs have a bad habit of asking we lowly Comms marketers to come and see them every now and again and twice I have been confronted by a boardroom table with our comms, and those of the CEOs favorite brand, all over it  … this meeting never ends up with a ‘congratulations’ but it is always effective.  Try it with your team. I dare you!

Finally in this long stage of our development work – address profitability, and for this you need the help of your Finance teams.

Im not going to labour this point – your business will know what its key KPIs are but as a minimum you need to forecast out sales and profit trends by product, sector, channel, segment of customers, media etc.  You will then need to model internal attrition, external attrition, contribution from new offers, new channels, cost overheads etc

Use all the tools your finance team have at their disposal to feed into this section… its very very important to ensure your product, proposition and offer builds are profitable.

Pay-offs:

  • A clear line of sight of the most likely ways / places that you can optimise for profit
  • A robust assessment of whether what you are planning is appropriate and likely to succeed vs competing offers from your enemies
  • A(nother) customer insight led view of what you are proposing and what you will need to be successful
  • A view on the competencies you will need to develop for each channel/offer/proposition

Well, apologies, that was a long blog – I’m enjoying writing these posts, I hope you find them interesting or at least an interesting insight into how I like to market !

A short one next week – Pricing review

Paul

19 April 2013

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Enemies or Competitors? Step 4 in developing a marketing strategy

Assessing competitor strengths and weaknesses is essential and this is an activity that, by its breadth, you can use to bring your entire team into your strategic planning, allow them to ‘own’ some of your enemies, ask them to be your eyes and ears throughout the year so you can complete this step in developing your marketing strategy quickly and without having to start from scratch.

I used to work for a brand that had enemies, not competitors.  I used to play rugby and I did not have competitors, we had competition and we worked out how to beat each team we played (as well as focussing on what we were doing of course).  Enemy vs competitor.  Enemy is a bold word, and I don’t mean to imply that what marketers do is in any way similar to what ‘States’ with enemies or fighting forces face in battle.  For me, it’s a subtle change in mindset that sets you out on a winning strategic direction.

A quick recap on where we are up to : Strategy starts with thinking, and then moves into delivery.  I call the thinking stage ‘Customer Review’.  I have covered the first 3 of 7 steps already;

  1. Customer insight ✓
  2. The marketplace ✓
  3. Critique the current strategy ✓
  4. Identify and critique your enemies
  5. Critique your current/planned offer in detail: Product / Service / Channel
  6. Pricing Review
  7. Futurology

(4) Identify and critique your enemies

Purpose:

  • To identify the strengths and weakness of those companies your target customers see as alternatives to you (crucially this is a customer led view … not that of your Exec or Board – you have to be realistic and grounded in reality)
  • To identify areas where you can ‘beat’ those companies to the benefit of your target customers and your business
  • To identify the strategies they pursue in the same markets in which you play

Process:

  • Review the brand iceberg you have already developed to identify the strengths of your brand and use those as a rule to measure your enemies.  I am making the basic assumption you know who they are !
  • Review your MI – which brands are you losing customers too?  Where are your customers coming from?  Over indexing in either version tells a significant story about who you should be concerned about
  • Review market research to see who is growing – and then marry that to spend, advertising changes etc.  The Annual reports and accounts of companies should be reviewed – they are a mine of useful strategic information and show you areas of growth and decline by brand
  • Understand your SoV and SoM – are they correlated?  Then do the same for your identified enemies.  Finally review what differences there are in: spend, strategies, propositions, balance of ATL to BTL to digital etc
  • Use the information your media planners and creative agencies have on market changes and channel strengths/costs.  Ask them to complete the matrices below independently of you – see if they hold the same views.
  • You must also use your regular monthly competitor reviews to identify who is winning – who is weak? could you target them? If they are regional, could you over-invest in marketing in that region for example by using proximity outdoor with targeted messages  e.g. find who is at the bottom of the service scores and then use service messages in proximity to their branches / heartland
  • … But you need to try to be scientific about your assessment;

Portfolio Tool

Portfolio Analysis Tool

Portfolio Analysis Tool

Marketing/Product Strength Scoring tool

Marketing Offer strength scoresheet

Marketing Offer strength scoresheet

You have a market assessment already as regards attractiveness & you now have one for product/marketing offers. Simply start plotting the scoresheet outputs to sense check your customer strategy vs that of your enemies in the same market.

  • You must ask customers what they think about you and your identified enemies – do they see them as your competition for example.  Do this when you have the matrix views
  • Ask your suppliers for a view on what you could do better and what they think your enemies do better than you – and ask then to identify why they think that.

Pay-offs

  • A list of, and assessment of, your top 3 to 5 enemies
  • A list of learnings about what they do differently – and how you can use this information
  • A good idea of who your customers like – as well as yourself of course !
  • A sense of what the trends in the market(ing) are
  • A detailed view of SoV, SoM and the strategies that have driven growth and decline amongst your enemies
  • A view on which enemies might be vulnerable in a manner that you can exploit

This is a crucial step in developing your strategy and as ever I hope you find my thoughts useful.  One option that I saw on a visit to a subsidiary of one of the brands I worked for was interesting – they had a strategy room and the walls were covered in the marketing material and press cuttings of their enemies.  There was none of their own work.  They used this environment to make sure they were critical of their own efforts and to see what customers saw.  I like that a lot, it’s tough though – I think they had enemies not competitors !

Paul

13 April 2013

Thanks as ever to the teams that have helped inform my views, & Messrs Fisk, Davidson, McDonald and Kotler

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Developing a successful marketing strategy : the marketplace

Last week I started to share my thoughts on developing a marketing strategy.

For me it starts with thinking, and then moves into delivery.

Thinking

I started with the Customer Review.  I covered the first and arguably most important topic in my last blog – Customer insight.  Now I will move on to assessing your marketplace;

Customer Review

The building of the concrete foundations in 7 stages;

  1. Customer insight ✓
  2. The marketplace 
  3. Critique the current strategy
  4. Identify and critique your enemies
  5. Critique your current/planned offer in detail: Product / Service / Channel
  6. Pricing Review
  7. Futurology

2. Analysing the marketplace(s) you are in

Purpose:

  • To really understand the big picture, the significant changes affecting your target customers and the wider market
  • To understand if the same market is being addressed differently elsewhere
  • To understand the macro economic environment and then drill down
  • To understand the impact of technology, media changes, new channels, legislation and consumer trends
  • To place your offer in context of the ‘marketplace for the offer’ as well as the wider marketplace that consumers will experience

Process:

  • My start point is always a qualitative marketplace audit.  In this model the macro view should focus on the general economic situation, taxes, new media, new distribution channels, new technology, legislative change and so on.  Then get tighter and try to bring to life any channel shifts that affect you and your competitors equally e.g. the recent EU Gender Directive in Insurance.  This is the market-wide ring. Then finally assess the direct impact for your business alone – short term and long term – but just you.
Marketplace audit visual

Marketplace audit visual

  • This leads nicely into the next step …
  • … a PESTLE  and overlay a SWOT into it to drive some conclusions out
PESTLE with a SWOT overlay

PESTLE with a SWOT overlay

  • It is important to identify the key market trends – are there elements to the market that you like and some you don’t?  A Boston Matrix still works for me

Boston Matrix – Wikipedia

  • I also like the GE/McKinsey model – which gives you an “invest or not read”.  Do you actually have any opportunity left in your market?
GE-McKinsey-Matrix

GE/Mckinsey Model – just replace Industry with Market

  • NB: both of these tools are quite old, but I have used both in anger and find them helpful, simple ways to assess opportunities.  They are a staple of marketing training … don’t forget them !
  • Map past sales and attrition over a number of years to show seasonality – and overlay any market trends you can get to see if your brand behaves differently.  I indexed sales to a rolling three month average in the past to try and eliminate spikes of spend – but mapping your sales to your spend, then to market spend is essential in giving a view of your activity in your marketplace context.  You will know how best to visualise this
  • Examine competitors strategies (more of that later, but here) look at ATL vs BTL strategies and the impact on their market share
  • In short try and use these tools to drive out critical views on your brand in the market.  I did an exercise last week which may be a tool I use in the future:  Ask yourself what would convince someone to buy my brand?  Then reverse brainstorm it and ask yourself why would they not.
  • Look to other countries for inspiration too – the internet is your best friend here, it used to be expensive to commission that research, now it is just a click away – for lists of like companies, ask your trade bodies for their counterparts in the countries you want to look at, they should save you some time
  • Market prices should be assessed quickly at this stage.  If prices are falling and squeezing margins then look deeper into why that is happening and assess if it is you, a sector of the market or the whole market.  Can you buck the trend, realistically?
  • Market sustainability assessments need to be made at this stage.  What has fallen out of favour with customers vs what lines have been stopped.  A good example of a market shift here has been the flight to fixed term savings accounts from variable rate ones – a factor that would have been picked up in the PESTLE – as a consequence of record low base rate in the UK.
  • Finally do a sense check of why new entrants have entered the market – what did they say in their press releases and then reverse this and look at why companies have consolidated or left the market or exited product lines in your market

Pay-offs

  • A view on emerging trends you can exploit/or should be wary of that mean something to consumers – remember to view this with your brand eyes and the eyes of your customers
  • Prioritised views of attractive market sectors and what you need to succeed in them with a preliminary view of which market segments may be growing and at what times of the year to begin the journey of focusing your marketing investment
  • A start point for your risk assessment of the strategy you will recommend

I hope you continue to find my thoughts useful … let me know what you think as always, leave me a comment or two.  I am pleased with the number of boxy charts I have managed to weave into this blog too – sorry, it often happens !

Part 3 on critiquing your existing strategy to follow next week

Paul

28 March 2013

PS – Happy Easter !

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Chess and marketing strategy

chess

I am acutely aware this blog is going to start off sounding  a little pompous … but here goes anyway.  I have set myself a personal objective of improving my chess skills.  My computer keeps beating me.  I have, at least, figured out how to prolong the games, but in reality I am no more offensively successful than I was a year or so ago.  This is frustrating, so I have retreated to test and learn (I am a direct marketer after all) and doing a bit of research to improve my strategies.

I was surprised to see in my research a lot of similar quotes to those I see in relation to marketing strategy – Sun Tzu & Eisenhower featuring strongly.  So with progress on chess being difficult, I wandered off down a more comfortable road of looking at marketing strategy.  Everything I started to read was very clearly rooted in the learnings of the past and is for the most part grounded in the same strategy development I learned early on in my marketing career.

It strikes me that it have become a little unfashionable in business to devote enough time to do some of the old school strategic planning, perhaps assuming that the new media opportunities, the new generations of x and y, mobile devices etc mean the old skills and approach are no longer meaningful, or that we have too little time to do the detail.

I think that is a mistake.

A  strategy is not ‘in year’ it has to have a longer relevance.

Marketing strategy and planning still needs, in my view, to reflect two distinctly different phases : Thinking and then Action.  

My use of “Offensive” earlier was intentional – my thoughts on developing marketing strategy are influenced by Davidson’s Offensive Marketing and is guided in delivery by MacDonald’s Marketing plans (you can tell I am the age I am !) and more recently has been inspired by Peter Fisk and his work on customer propositions.  I will use my blog over the next few weeks to share my own views on how this works for me.

Thinking

My starting point is always a belief that you need to look inside and outside and do some detailed thinking about what your strategy should be before leaping into delivery.

I will call this thinking stage the Customer Review.  But even before that step I believe you have to be clear what your overall business vision or long-term objective is.   If that is unclear then the development of marketing strategies that are effective is going to be down to luck not judgement.  Let’s assume we have that clear vision expressed, or even better that Marketing have been asked to develop it based on Customer Insight already !

Customer Review

This is the grunt work. The building of the concrete foundations in 7 stages;

  1. Customer insight
  2. The marketplace
  3. Critique the current strategy
  4. Identify and critique your enemies
  5. Critique your current/planned offer in detail: Product / Service / Channel
  6. Pricing Review
  7. Futurology
  1. Establish Customer Insight

Purpose:

  • To understand who the customer is in the market you are in
  • To understand their needs, wants, desires and dissatisfactions
  • To understand their scale and how this shows in segments
  • To understand growth and decline in the marketplace by segment
  • To understand what drives purchase, retention, apathy
  • To understand what and who they believe meets their needs now .. and how .. and where … and when ..
  • To understand their value to your brand

Process:

  • If you have a preferred segmentation already, then map it and show movements; growth, decline, size, profitability – in short mine the data to understand the mapping – sense checking its continued validity as you go
  • Talk to customers, and more importantly LISTEN to them.  This need not be expensive research, think about using the communications you have already and ask pointed questions you have thought about.  Pay attention to recording answers.  If you can afford a ‘Usage and Attitudes’ Survey then do one – gain attitudinal as well as more tangible insight.  But in most cases there is plenty of research in the business so collate it – borrow a room and create a customer wall/data-room – live and breathe it.  It’s especially important to understand how customers use what they already have bought from you, is it as you expected? Remember Lucozade !
  • I like to use boxy charts to identify basic needs/wants – then map outliers over this; variations by age, demographic, life-stage etc
  • Use publicly available insight – sign up for a few white-papers & use the research conducted by the likes of the IDM, DMA, ISBA, Thinkbox, MMC, Google etc.  And remember to ask your agencies & business partners what they have available that you can use
  • Talk to the people who talk to customers – a rich vein for feedback on customer satisfaction and dissatisfaction.  Your front line staff will know what drives customers to leave/join the brand first hand
  • Review customer complaints
  • Review Ombudsman rulings – mine the data that identifies the causes of dissatisfaction amongst customers
  • Pay particular attention to loyalty – what makes advocates for your brand – use your management information to establish the lifetime value of your customers based on price elasticity and include cross fertilisation of products.  Do some modeling of loyal customers to determine the financial impact of what an increase in loyalty will deliver vs acquiring new customers
  • Document their responsiveness to media types/channels and compare to their attitudinal assessment of channels.  Ask them how much a USP or differentiation matters vs relevance and brand appeal vs cost
  • Finally – if you get the chance to do some research think about asking harder questions than normal … try some value engineering;  Establishing how much ‘value’ a customer puts on say, great customer service vs good customer service, is really informative in developing your proposition.  It drives investment decisions and informs/creates customer focussed strategies  Use a 2×2 matrix of Value (high/low) and Cost to deliver (high/low) – simple and easy to understand priorities.  You will need to have at least a high level view of your customer journeys by channel to truly leverage this insight

Pay-off

  • The simple pay-off of a rich understanding of customers is a strategy based upon what they will respond to/buy/keep not one that is grounded in what you as the brand owner think they want.
  • This moves you significantly to a customer pull model rather than a product push model and will validate your ‘value’ assumptions, ready for financial planning later

This is the very start of the ‘thinking’ phase for me.  And the most interesting.

I hope you find my thoughts useful … let me know what you think as always, leave me a comment or two

Part 2 on developing market place insight to follow next week.

 

Paul

24 March 2013

Links

Peter Fisk & Genius works

 

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