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Headgames

I love this observation by Jay Deragon about the Social Learning Curve: “All things social are creating a herd of copycats following practices, methods and behavio[u]r created by the frenzy of learning something new …”

To what end? is the inevitable question.

Once learned, something is no longer new. In fact, it retains distinctive value only whilst the numbers of people who have access to that knowledge remains small. And yet, thanks to all things social, the chances of that happening are becoming less and less. And the pressures to democratise what one knows are also increasing.

So everyone feels a pressure to learn, and many brands feel a pressure to share, but once accessed by many people, learning retains diminishing competitive advantage. It quite literally devolves to common knowledge. It becomes how ‘everyone’ does things, what ‘everyone’ agrees on, the way ‘everyone’ sees the world. Soon, what was new is basis.

The tipping point for example. Once breakthrough. Now mainstream.

Knowledge commoditises.

I happen to really like Collins’ book ‘Good to Great’, but if you believe that by reading it today somehow you will emerge with an understanding that presents you with a clear competitive advantage, you couldn’t be more wrong. Why? Simply because everyone you’re competing against has read it too. And between those readings, the reviews, the lectures and assignments at every business school across the world, and the many subsequent discussions, all the learnings are now widely circulated and applied. There is no secret to be had. ‘Hedgehogs’ are now relatively commonplace.

That dynamic puts so many brands in the knowledge business in three ways:

  1. They must keep pace with the learning around them to avoid being left behind;
  2. They must share new learnings publicly in order to make their brand more findable, to gain authority in the marketplace (ironically by making more and more people aware of, and accepting of, what they know), and to encourage others to feel that they should share their learnings too; and yet
  3. Brands must retain and protect some learning, or some aspect of their learning, and continue to generate new learning or new variations of their cornerstone learning, in order to differentiate their brand from that of their competitors. Otherwise they too will become an also-ran.

Increasingly it seems to me brands must steer a knowledge course between three very different principles:

  • Momentum: They must use knowledge to gain thought leadership status in their sector and to move customers’ and investors’ thinking forward to the point where it aligns with what they offer.
  • Protection: They must take care not to be so open with their thinking that competitors gain the upper-hand or that customers feel they can do things themselves.
  • Reaction: They must be prepared to react astutely and decisively as competitors choose to advance their own thinking in order to meet the insatiable demand of the market for new learning.

I liken this to trying to get anywhere by car in Rome during rush-hour: accelerator, brake, lane change …

When was the last time you actually changed your mind?

The hardest thing a brand can do is convince – to go against what people already believe and to ask them to believe something different. Actually, that’s not just true for brands, it’s applicable to anything or anyone. In the scheme of natural human interactions, conversion is relatively rare. To succeed at convincing, you need to overcome all the natural resistance that comes with encountering something new. Essentially, you need to break down all the inclination that has already amassed for an idea or a storyline. You need to destroy the loyalty that already exists for what people have and replace its equity. That’s amazingly difficult. As Seth Godin once observed, “If the story of your marketing requires the prospect to abandon a previously believed story, you have a lot of work to do.”

Redirection is simpler. You change soaps. You change airlines. You change shirt brands. Particularly if soap, airlines and shirt brands don’t mean that much to you. Changing from a brand that says and does one thing to another brand that seems to say and do the same thing under a different name is easy. That’s why and how things commoditise. When we see no difference between them, when changing makes no difference for us, because it doesn’t represent a change to our core belief system, we can do it without hesitation. Add in a good price, and we’re gone.

The irony is that as consumers, we all say we welcome change. We don’t really. What we really welcome is improvements, additions or extensions. And we have strong preferences and priorities. Some things, packaged in some ways, appeal to us more than others – but only if those elements conform with our worldview. A dispositionalist would explain this by saying that as humans we are significantly, if not completely, influenced by the cache of beliefs that we run behind the scenes and that subconsciously decide huge amounts of what we agree with and disagree with every day.

Marketers are optimists. We naturally believe that the power of a strong, well-presented argument must win through. It’s simply not true.

The easiest thing a brand can do is confirm – to give us more, by way of physical product or perspectives, of what we already know and agree with. Loyalty jumps when brands tell their customers, show them, present them with something they had always wanted to hear, see or think about. Launching iCloud recently, Steve Jobs told Apple fans the world was entering a post-PC age. It was an idea that was readily and speedily embraced, because it confirmed what Apple fans believe, or would like to believe, anyway.

Marketing may help decide preference but it cannot alter fundamental inclination. On the contrary, inclination pre-decides the success of so much marketing.

An option or a choice?

Just getting a presence in most markets can be hard work. One of my friends is finding that in the beverages game – a longer runway than he and his partners expected, and a lot more patience required as well. Long days, he says, having to justify every metre of shelf space you’re allocated.

Same with being a speaker or a consultant. But doing all the work to get on the map just elevates you to the status of another option.

That’s not the same as being a choice.

Options form part of the line-up for how customers decide. Choices are a conscious decision in themselves. Option means you’re available, you’re on the list, in the books. You’re a speculation. Choice makes you an active decision, one part of yes/no, either/or. You’re known, you’re quantified, you’re considered.

Now if you’re in the business of selling variety – like supermarkets, book stores, speakers’ bureaux, search engines – options fill out the stock book. They reflect well on you because they prove that you can tap the market. They give you a long tail. And they give your clients the sense that they have the full pick of what’s available. Chances are, for that reason, if you’re in the business of selling variety, you welcome options (or at least the best options) with open arms.

Being the option isn’t quite so glamorous. It may have boosted your ego to have made it past reception, but if you just stay an option, frankly, you’re making up the numbers. And it’s easy to forget that, in order for the market to continue to work efficiently, for every brand that becomes a choice, so many more must either become or stay options.

Today’s marketing environment has tricked many brands into believing they are contenders. They post a website, they get traffic, they’re making their metrics. To them, they’re a choice.

But until that traffic monetises or that shelf placement improves, or the call volumes really lift, they’re more likely to be an option.

The thing is, most times you don’t get to decide your status. Customers decide – based to some degree on what distributors decide, agents decide, the media believe you will be worth to them. Fundamentally, the shift from option to choice isn’t based on attention, luck or talent alone. It’s based on consciously shifting influencers’ perceptions – of your value and your potential value.

A brand strategy blog

Upheavals: A blog for people who love branding

Welcome to my blog. Here you’ll find my observations, perspectives, questions, ideas, new thoughts and models for brands. I focus on the changes and developments in business and brands that catch my eye (and perhaps will catch yours) – things I read, things I observe, stuff I theorise about, attitudes that frustrate me, and conversations I have in passing about market changes and their implications.

If you’re a brand owner or a marketer, responsible for retaining the value and competitiveness of your brands in our rapidly shifting and increasingly social world, please take a look, add a comment, make contact … Cheers.

Conversation vs recommendation

Nice piece from Neil Glassman draws a distinction that I think has escaped many of us between conversation and recommendation. As the author himself says, he thought of social media as a platform to directly scale up word of mouth (WOM) marketing. But the synergy that looks so obvious doesn’t happen. In fact, says Glassman, compared to the effectiveness of what takes place offline, surprisingly little WOM is generated on social media.

My sense is that while there is plenty of talk being pushed into the media, that content is then not, for the most part, being transmitted-on (or more specifically picked up) in the way that it is when WOM is in full flight.

Glassman himself hints at why. People, he says, participate in social media to interact with friends and like-minded strangers about things that interest them. Social media marketers, on the other hand, engage with their customers hoping to encourage them to spread the word. The first interaction pivots on “us” – about the things that “we” share, which means ownership exists. The second is about turning “mine” into “yours”. It’s about encouraging people to take ownership.

Glassman continues, “It appears that as much as social media has changed our networked world, it hosts only a small bit of the conversations about brands, products and companies. Not what social media marketers talking amongst themselves would expect.”

One observation on the difference between WOM and social media did surprise me. While 20% of WOM conversations are triggered by media/marketing, half of all conversations about brands have references to media/marketing, and positive experiences trigger more WOM than negative.

We share what we enjoy – no surprises there. But we share what we enjoy most effectively when it has affected us personally. In other words, we convert mere talk into active endorsement when we have emotional skin in the game. By contrast, Glassman observes, most people on social media networks are passive. They’re talking, passing time.

The key aim for people engaged in social media is bonding and the subject matters they discuss are just part of the conversation. This may make them less inclined to endorse a product or an idea. By contrast, WOM focuses on shared subject matters because people talk about they have in common, so they are much more likely to recommend something that they think the other person would like.

Key message for brands: until people see your brand as part of their world, they may talk about you but they are less likely to recommend you than most marketers would like to imagine.

Becoming a cultrepreneur: the first 3 secrets

I coined the term ‘cultrepreneur’ some years back to describe enterprising business people who consciously set about developing brands that are anti-scale, hard to find and fervently followed – cults. A number of people have asked me how you go about building a cult brand. So here’s my first three secrets:

1. Make something amazing, and then make it unavailable. Alright, not completely unavailable. But part of the secret of growing a cult brand is to grow the legend, and part of growing the legend is to cultivate a myth of short supply. With a cult brand, you always want to be making just under the market demand. Enough to cover costs obviously, but too little for everyone to be able to get hold of it easily. The thought of missing out intensifies the pleasure of getting and the desire to procure.

2. Nail the long tail. Cult brands appeal to those who think they know better about a particular subject, and who want more than what is widely available. The secret is in the discovery. So that’s about two things. First of all a product line that’s far enough off the beaten track to appeal to collectors rather than consumers. And secondly, something that takes some finding. That search for something special starts with a mention, a hint, a throw-away remark or endorsement – and that reference kicks off a journey that could end in a garage sale, a bar 400 miles away or at a club in the down-beat part of town. Cultrepreneurs are masters at leaving bread-crumbs for a journey that a passionate few will take. The challenges of course lie in where the crumbs are left and creating a journey that is enticing enough to persevere with.

3. Deliver what’s missing. Sometimes that’s about sheer quality, or a particular quality. It could be authenticity (in a market where everyone else is just putting up an appearance). It could be an irreverent attitude or just plain rudeness (in a market filled with stuffed shirts). It could be humour. It might be availability or recognition. Whatever it is, it isn’t seen by some as being there now, and there are enough people who want it, or who would want it, to inspire a cultrepreneur to make it happen. Almost inevitably, a cult brand is edgy, polarising and unafraid to fray a few nerves. Protest and outrage often act as fuel, and persistence, especially when greeted with derision by those regarded as the status quo, is read by brand followers as a sure sign of deep conviction. There’s a real skill in pushing that outrage far enough to keep it interesting without having it universally dismissed. Cultrepreneurs possess that sixth sense for being fashionably unfashionable.

The alternative to free

Regular readers will know that I have a major problem with the free model. To me, it’s misleading – and the reason why is that it’s based on a false premise: that if you offer goods for free, people will be in time upgrade to the paid model.

I see why people are tempted to go down this track. It’s easy to see free as a simple way to open the jaws of the funnel. Free gets you awareness and therefore volume, the thinking goes. And there is an implication given by some that you can then trust the conversion process to secure enough sales off that added volume to make the give-away worth it.

Easy too to believe, as you look around the social media environment, that with so many people giving away so much, you have little choice but to do the same.

The problem with this reasoning as I see it is that free is not a generator. On the contrary, it is a competitor. And the reason is that giving so much away sets up an expectation that more should be free. Free becomes a right, an entitlement. It actively competes with the willingness to pay.

Don’t get me wrong. I think there are things you can and should share without cost. You should share some thinking, for example, because there is a pay-off, if you do it well. Hubspot gives away lots of great content to entice you to trust them to at least trial their inbound marketing software. And as Seth Godin points out in this thought-provoking piece McKinsey’s consulting philosophy is free, it’s the bespoke work that costs money.

The problem is not that companies offer things for free, but rather what they give away in the pursuit of the freemium model. As Godin puts it, “There’s a growing disconnect between making something worthwhile and getting paid for it. The digital artifact is heading toward free faster and faster, and the inevitable leap to a paid version of the same item is going to get more difficult.”

His closing challenge, whilst directed specifically in his post at digital content, I think applies much more broadly to brands in almost every sector. “Now it’s up to us to wrap those items in such a way that they’re worth paying for again.”

Worth paying for again … That should be the real success metric brands make it their business to chase.

Paying less and less, getting less and less

The response by airlines to customers’ demands for lower and lower fares has been to do exactly that, lower seat costs, but at the same time to strip more and more of what is included in the fare out of the price.

This process – referred to by Time as “the unbundled skies” – points to a business model that I see becoming more prevalent, and not just in the heavens, as price-sensitive brands lower entry points in order to get customers to commit, and then use “upgrades” to restore margin and, according to the article, add another 50% or so to the real price. Pay less, get less. Want more? Pay more. Ryanair have even suggested, somewhat controversially, that “more” could include access to the toilet. In fact, according to one consultant quoted, there are up to 35 add-ons available when you fly, ranging from baggage and food fees to flight-delay insurance and keeping the middle seat empty. You literally get what you pay for.

This seems like an expedient answer to customers’ demands for cheaper goods. Lure them in – then trick them into paying more. It’s not exactly customer-friendly but at least, some would argue, it’s a way to compete.

True, but changing the competitive model this way is not without its consequences. One is that as the product itself becomes less valuable and valued, service now comes not just at, but with, a price. That in turn shifts the emphasis from what customers get to what do they not get, and what shortfalls they are prepared to do without.

For the moment what’s happening in the aviation sector amounts potentially to a complete economic rebalance of the product at that end of the market. As the article points out, “In the unbundled world, airfare is merely the price of admission to get on a jet. If you crave comfort, convenience, less stress, decent food — what was once called good service — expect to pay up.”

In time, the service itself, not the seat, will become the real competition point, as customers look to ‘build their own flights’ made up of base product and services that they are prepared to ‘add to cart’. Staff meantime will find themselves being judged on their ability to up- and cross-sell services in order to make targets.

We shouldn’t be surprised. As sectors continue to fill with competitors, radicalisation of branded business models is inevitable, with all-included at one end of the market and not-included at the other, and increasingly little between them.

While the model has far wider applicability than the airline industry, the dilemma for brands in such a scenario is that when you uncouple what people get from how you want people to feel, you reduce every part of the experience to a transaction, and every element of loyalty to the same level.

Everything becomes “do I or don’t I?”

As to where this might go, well that seems fairly predictable too. As the fight for seats gives way to loss leader seat strategy, and a squabble over a la carte services and the quality and profitability of those services, medium-term we’ll probably see airlines respond by using a mix of lower fares, bundled services and loyalty incentives to adjust and respond to value perceptions.