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The 3-Word Competitive Strategy for Middle-market Companies

18 Tuesday Aug 2015

Posted by in Alignment, Strategy

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bigfishsmallpondIn 1980 Michael Porter transformed the marketing world with his text on Competitive Strategy. It remains a brilliant work in its simplicity, a fundamental approach to analyzing the competitive landscape.  Porter’s five forces brought clarity to a topic muddied by countless unproven approaches.

But there’s even a simpler approach: Three words that inspire even the smallest competitor to dream big.

Be big somewhere.

If you can’t compete with the big boys in their space, make a smaller space. Control the scope of your solution to one only your brand can satisfy. Of course it has to be realistic and meaningful to customers. But by the fundamental laws of mass merchandising, customization of solutions will almost always be rewarded with greater target attention and higher profit margins.

Many marketers mistake market opportunity for market size. But consider this: Would you rather own a 1% share of a market that’s 1 million strong or a 30% share of a market that’s a tenth that size…with higher profit margins?

I know. It’s against a marketer’s very nature to think small, but as a strategic consideration, it can be the best fuel your small or middle-market brand can get. And with all you’ll learn at a lower risk inherent in a more tightly defined market, you’ll be far more efficient at expanding to larger ponds later. This kind of long run approach drives long-term brand profitability.

If you can’t be a big fish in a big pond, shrink the pond.

You can’t put a whale into a fish bowl. But it doesn’t take a huge fish to rule there. So here are a few tips to shrink your way to success.

FOCUS, FOCUS, FOCUS.

First focus on your customers.

Draw careful distinctions between what customers think they WANT and what your expertise tells you they truly NEED to satisfy that want. For example, people have long searched for their favorite radio station that plays the kind of music they are in the mood for, when they are in the mood. What they really needed was a way to access a personally customizable music playlist without buying all the recordings.  Enter Pandora. People couldn’t “want” it because they didn’t know the technology existed. The magic lies in the way you analyze and interpret a customer stated want.

Next focus on your offer.

Second, focus your offer and positioning so tightly that the offer itself actually defines a segment, albeit smaller. Competitors tend to disappear when your brand appears to be the only one that can satisfy a very specific set of needs. This strategy done right can make your brand appear as prominent as the giants, to those who matter.

Then focus on your motives.

Be authentic. If your brand is truly customer focused in the most authentic way, you have no competition in the traditional sense. In its place, you have a commitment to serve your customers in a way they cannot be served elsewhere. That demands being constantly connected to your customers as well as non-customers. Anticipating their needs. Developing solutions based on your thought leadership around the application of new technologies, techniques, and trends.

And don’t forget about alignment. Aligning your business goals with those of your customers and your employees makes for a self-perpetuating success. Be sure to conduct a strategic alignment exercise at least once a year to be sure your brand is keeping up with changes in technology, regulation, competition, and other market forces.

For more on this topic, see Getting There From Here: Bridging Strategy and Execution, by Greg French.

GroPartners Consulting

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For more perspective on bridging strategy and execution, including practical tools and processes for brand operationalization, get a copy of Getting There From Here: Bridging Strategy and Execution, by Greg French, founder of GroPartners Consulting. E-book at iBooks or hard copy from Amazon.com.

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The Sad State of Corporate Vision Statements

13 Monday May 2013

Posted by in Branding

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shutterstock_94813702In their book, “Built to Last, Successful Habits of Visionary Companies,” Collins and Porras found “companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices endlessly adapt to the changing world. The dynamics of preserving the core while stimulating progress is the reason that companies such as Hewlett-Packard, 3M, Johnson & Johnson, Procter & Gamble, Merck, Sony, Motorola, and Nordstrom became elite institutions able to renew themselves and achieve superior long-term performance.” Collins and Porras found that these companies, and those like them, have outperformed the general stock market by a factor of 12 since 1925.

How Corporate Vision fits with Corporate Objectives

Corporate vision is what provides a long view; a plumb line to reference in all decision making. If the vision is aimed at the greater good, all business objectives will be guided by those tenets and act as guidelines within which the business must operate. Consequently, business objectives should always be subject to the boundaries of the vision. That means the vision should be carefully thought through at the highest levels of the organization and articulated with crystal clarity. Often a facilitator skilled in this area is needed to offer perspective.

What makes for a terrific (or horrific) corporate vision?

Vision statements should not be long or complicated. Too many times I’ve walked into company lobbies to see a plaque on the wall with three paragraphs of “mice-type” under a bold headline “Our Vision.”

What makes for a great corporate vision? I decided to reach out to a few leading brands to provide examples of solid vision statements that bridged the gap between business and customer objectives. Instead of clear vision, what I found (for the most part) were horrifyingly ham-fisted collections of words thrown together into heaps of nonsense.  Few of them were well written. And the meaning of them was often even worse.

Let’s Grade Some Vision Statements

Keep in mind that a good vision statement is one that balances the health of the business, the customer relationship, and the greater good of society.

HP: A++

“Human Progress”
(http://hpbrandcenter.com/strategy_overview.html)

This one blows my mind. I don’t believe I have heard two words together that have resonated more deeply. Like chest-rumbling summer thunder in the distance, these words communicate on a visceral level. The HP Brand Strategy website continues, “Brand strategy is the connection between our business goals, our marketing tactics and our company’s soul — turning theories and ideas into tangible actions that build the brand we want customers and other audiences to experience when they think of HP.” Wow. These guys get it.

Virgin Atlantic: B

“Our vision is to contribute to creating happy and fulfilling lives which are also sustainable.”
(source: http://www.virgin.com/people-and-planet/our-vision)

This vision statement is directionally valid because it speaks to improving the quality of life of people, and not the company. In order for a corporate vision statement to endure just about any external force, it should speak to what it’s endeavoring to do for the world, not just for itself. With this sustaining energy, the brand can transform to adapt to anything in the future because it’s not product based, market based, or even industry based. It’s about making people’s lives better, no matter what business they’re on. Virgin started as a record store. Now it has more than 50 branded companies in businesses as diverse as space travel, wine, and charities. To founder Richard Branson, it’s all about the experience – making people happy with sustainable living. I must admit, though, it could be a little more focused, and better written.

Pearson Education: F-

“To fulfil the educational needs across a spectrum of individuals with reliable experience and technology.”
(source: http://www.pearsoneducationservices.com/visionmission.php)

Even if you could forgive the spelling error (it was published on their website), the syntax indicates that Pearson’s target is a segment of people with reliable experience and technology. I don’t think that’s what they really meant. It’s one thing to get the purpose and focus of the vision statement wrong – it’s a whole different level of brand neglect to post something this important on a corporate website with incorrect spelling and syntax errors. And OMG, from an education company? Seriously?

Microsoft C+

“Create experiences that combine the magic of software with the power of Internet services across a world of devices.”
(source: Seattle Times, blog by Benjamin J. Romano, September 8, 2008)

(delivered by COO Kevin Turner at a buzz event, circa 2008)
Updated from the former original Bill Gates and Paul Allen vision of, “A computer on every desk,” neither of these statements are very altruistic in their service to mankind. But then again, I guess Gates was pretty good at separating his philanthropy from his juggernauts, waiting until after the corporate rat race was behind him to get all humane and everything.

B-  Walmart:

To promote ownership of Walmart’s ethical culture to all stakeholders globally.‘
(source: http://www.ask.com/question/wal-mart-s-vision-statement)

This is less of a vision statement than an internal cultural objective. At any rate, I didn’t downgrade this one too much because it speaks to ethical treatment of stakeholders and not to its own capitalistic interests and because it’s supported by values of being fair, having integrity, respecting others and embracing diversity.

Get the picture?

The vision should be in the service of people first while balanced with the corporate health. That’s what makes brands sustainable. And that’s why you’ve got to start with a really grounded vision before you can focus your corporate goals, objectives, and strategies. Take a look at your vision, does it pass the “vision test?”

  • Speaks to how the brand will make life better for people
  • Implies how the brand will sustain its business continuity and economics
  • Is short enough for every employee and customer to internalize and evangelize

What’s your idea of a great corporate vision? I’ll grade it for you 😉

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The True Measure of Customer Delight

07 Wednesday Nov 2012

Posted by in Measurement

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Delighted customers are worth more than their individual revenue streams.

In my August, 2010 frenchonbrand.com, “Is Customer Delight Overkill?” (http://wp.me/pU6PC-25), I downplayed the concept of customer delight as potentially over-performing on the premise that people don’t necessarily want to be delighted, merely satisfied. My logic was that over performing in this area causes excess cost. Since then, and as a result of one of my reader’s well-informed and thoughtful comments (thanks, John H. FMB!) —  and more research on the subject — I’ve moderated my position on customer delight and pass along the following convincing metric: a way to measure the impact of customer delight on word-of-mouth promotion to optimize the investment.

I realized the impact of customer delight extends far beyond the customer, after a review of W. Edwards Deming’s Profound Knowledge and Fred Reichheld’s “The Ultimate Question” (Net Promoter Score a.k.a. NPS). In this holistic approach to business, operationalizing customer delight becomes essential to its importance. Instead of viewing “delight” as overkill, I can now reconcile it with other favorable business results, such as increasing the lifetime value of a customer (promoter) beyond the customer revenue stream, and into areas such as:

  • Low-cost customer acquisition via referrals (reduced marketing costs)
  • Viral customer acquisition (referrals of referrals)
  • Lower customer attrition (customer loyalty)
  • Lower employee attrition (employee loyalty)
  • Lower customer price sensitivity (perceived value)
  • More nimble market response due to vibrant customer connections (innovation)
  • Continuous improvement of operations through cultural alignment (operationalized brand)
  • And many more

The result is sustainable growth.

To measure customer delight word-of-mouth radiance, Reichheld offers the following formula (this can be modified per individual situation). A customer survey is needed to capture the information needed to perform the calculations below (contact GroPartners for specific survey content).

Pick a benchmark date in the past (for example,  the past 12 months, or last fiscal year). Then use this measurement process.

1. How many delighted customers do you have?
Find out how many of your new desirable customers were referred by other delighted customers (NPS of 9 or 10, meaning “on a scale of 1-10, how likely would you be to refer a friend or colleague to your brand?)

2. What is your average new customer worth?
Calculate (or see industry analysts’ calculations) what your average new customer is worth in dollars and cents.

3. Calculate the total value of those new delighted customers
Multiply the data from #1 (above) by #2 (above)

4. Calculate the value of positive comments
In your NPS survey, also ask respondents for positive or negative comments that support their NPS rating. If x number of positive comments generated $y in revenue (from 3 above), divide y/x to calculate the value of each positive comment

6. Calculate the value of each promoter
In your survey, find out the number of people per year to which each promoter might have commented, and multiply the average number by the value in #4 (above) to get the value of word-of-mouth per promoter.  This is the “magic number” that helps optimize customer delight.

Anything can be measured. Even the power of customer delight. Now I’m a believer. How about you?

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GroPartners Consulting - Beyond Marketing

GroPartners Consulting helps middle-market organizations bridge strategy and execution for better business results.

Brand marketing. Oxymoron? Or CEO Secret?

24 Monday Sep 2012

Posted by in Branding, Measurement

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Brand is the network of relationships that surrounds a business or product, including all its touch points.

I once spent the better part of a year convincing the CEO of a marketing organization that brand was not a subset of marketing, but instead, the reverse. To my surprise, during that year, I noticed his perspective is fairly common, even among marketing folks.

To many people (especially direct marketers and finance folks), “brand” associates with really fluffy connotations. In reality, brand is much bigger than marketing. In fact, it’s bigger than the products brought to market and even bigger than the companies that make the products that go to market. Why? Because the brand includes not only the company and its products, but relationships among its people, all its functions, channels (distributors, etc.), customers and even – to a degree – its competitors. It encompasses values, purpose, beliefs, and ultimately, identity. Essentially, brand is about that precisely dicey issue of “what you stand for” and what that means to people in the context of their lives. Finance guys often get heartburn from brand discussions mostly because they can’t easily and accurately prove out ROI on brand investments. An operationalized approach to brand investments can quench the heartburn. This means placing strategic metrics among and between internal operations, customer touch point metrics, marketing results, and financial results.

The difference between Marketing and Brand

Click image for a larger view.

Marketing builds and measures transactions. Brand builds and measures relationships. Even though marketers refer to building relationships through marketing, the goal is transactions, so technically, there’s a little brand blended in with the marketing mentality.  Brand relationships continue after marketing has delivered products to customers. The goal of branding is to build relationships as a pipeline for transactions.

Where marketing is about all the intelligence and activities it takes to drive transactions, brand focuses on the underlying relationships and expectations among stakeholders around the transactions. When positive relationships exist and expectations are met, the stage is set for a continuous stream of transactions (i.e. successful sales and marketing campaigns).

This sets into motion a chain of operational implications, both internal and external. Brand-aligned organizations use this as an opportunity to examine the dynamic and causal relationships among employees, customers, and operations. Identifying cause-and-effect among these forces builds business value – the goals at the core of business operations. To do this successfully, an operationalized brand metrics program should first be in place (for more on this, contact Gropartners).

The truth is, most people feel more comfortable gaining a level of trust before they take the leap into a transaction. Until they experience a level of satisfaction or value as “compensation” for the currency they trade, customers experience anxiety and feel vulnerable. But they may not even take the leap until they feel they can trust the seller (kind of “chicken-or-egg” first). So whether an ad campaign puts a friendly face on the brand, a sampling campaign lets you “try before you buy,” or a recommendation from a trusted friend disarms you, some level of pre-transaction relationship is usually required to help minimize the feeling of risk and start the flow of transactions. This, and it’s post-transaction counterparts (“customer care,” etc.), wrap the transactions up in “relationship wrappers.”

Brands are relationships between people and products, services, or ideas, which are made of three fundamental elements: focus, distinction, and trust. The word “brand” should be distinguished from  ‘branding.” “Brand” focuses on the strategic dimensions of a relationship while “branding” refers to execution. “Branding” is a term that broadly defines the scope of activities that bring the brand to life for stakeholders –- creative application of brand values, identity and communications (logos, taglines, guidelines, messaging, etc.). These activities “voice” the brand to stakeholders. And while these are certainly essential elements of brand, they are usually products of creative execution under strategic direction.

So when you hear or use the phrase “brand marketing,” it generally relates to issues about customer relationships and delivering on the promise. In contrast,”product marketing,” issues are mainly about transactions and delivering the product. That’s how brand marketing and product marketing work hand-in-hand to build business value. And that’s why you find many high-profile CEOs personally driving brand conversations and initiatives. The big picture guys get it.

Your thoughts? Post them below!

### GF

Bridging Strategy and Execution: Content is King

15 Wednesday Feb 2012

Posted by in Branding, Messaging, Social Media and Branding

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Crown

Today, content is king in branding. This is a long post but worth the read, with practical tips you can use today!

Mark Addicks, CMO at General Mills, predicts, “…many marketers will start with content as a way to engage their best customers and grow their business versus advertising.” This powerful statement carries with it some game-changing implications, and signals the realization by Corporate America that brand—the baneful black hole to bean counters everywhere—isn’t some fluffy little eccentricity.

Think about it. If brand is the relationship between two entities (corporations, products, people, etc.), based on focus, distinction and trust, then building that relationship requires more than self-indulgent glorification (aka “brand advertising”). Consumers and end users are more well-informed than ever before and they reward with consumption those who make their lives easier. They are not the lemmings of times past who were really glad they used Dial and wished everybody did. Or who got too wound up after drinking a pot of fully-leaded coffee, so they switched to SANKA and became a better person. No, today, we are a nation of jaded consumers searching for the truth under all that brand advertising.

We digital-age consumers do this with research and social media, mostly. In the epoch BW (before the web), research was hard work, and not often worth the consumer’s time. By contrast, today we can find out in 30 seconds how much a worker building iPads in China earns in a day ($17/day in a single facility employing more than 250,000 workers – one of the best jobs in China, reportedly). So, getting right down to “just the facts, ma’am,” has become the great global kneejerk reaction to seeking the skinny on a product before purchase.

The bottom line for branding? In my opinion, it’s actually good news. While brand advertising as we know it may fade in favor, it will be upstaged by a branded form of content that actually helps people become more productive. Much of this new branded content will be driven by processes such as message mapping.

propeller image

Propel your brand with content that bridges strategy and execution resulting in transactions

Case in point: I’m shopping for a new boat propeller (the old boat prop looks like it went through a shredder). Most marinas are closed this time of year and I don’t want to travel to get one. But I don’t know what size it is, or any of the other technical stuff I should know before attempting to order one on the web. So, I consult Google for “how to size a boat prop.” The results return all kinds of help from places that sell props. I wasn’t yet searching to buy a prop, just to figure out what specs I need. So I clicked on a paid ad that led me to a landing page whose ad seemed to be aligned with what I wanted to know.

A site named prop.com hosted a very helpful landing page, explaining in readily understandable terms how to determine what size, pitch, and style of prop is needed for various applications. It also showed me how to optimize the boat’s power performance by selecting the right prop. It really seemed these guys knew their stuff.

Even though the page design wasn’t highly professional, the content was pretty well written and exactly what I was searching for. The content quickly built my confidence in the brand, which transferred my trust into a same-session transaction. Here’s why:

  • The content matched my search query far better than others (promise matched performance), whose links took me directly to transaction pages of their websites without any acknowledgement of my search for propeller info (promise/performance mismatch).
  • The content was complete yet brief, so I could get on with my transaction. It built an appetite for my transaction without overshooting or losing my interest (didn’t waste my time).
  • An easy-to-find link at the bottom of the prop.com landing page led me directly to the host brand site transaction page (very convenient access to get my prop now that I knew what to buy).

But just when I thought I’d won the ecommerce lotto (found exactly the information I needed, became educated enough to make a confident online purchase over $100, all in less than eight minutes), the entire process derailed. When I clicked on the link at the bottom of the page, the host-brand site loaded and – OMG – charts chock full of unfamiliar jargon and specifications bullied me into a psychological fetal position. No way could I begin to connect the knowledge they provided on their highly informative landing page with my needs. The result: no sale.

In a nutshell, although their content and search strategy was great and the landing page motivated me to visit their website – ready to spend – they fell woefully short at the point of sale. It was not easy to buy! Where was that helpful brand whose content wooed me to the point of transaction? Lost somewhere in transition, I guess.

Lesson? Content-driven digital presence has the potential to immediately and dramatically close the distance between brand building investments and ROI. That translates into excellence in bridging strategy and execution, the key to survival in this New Age of brand marketing.

So here are some useful tips for planning your brand content-to-transaction strategy:

  • Use a content-driven landing page with useful info and no selling between your search ad (or organic result) and your transaction site.
  • Be sure that your search result is relevant to the search term. This builds the first rung of trust.
  • Offer content that is well-written, brief and to the point, yet complete within the scope of the topic (don’t try this at home – consult a professional, and test it) — again … no selling.
  • Use Message Mapping to help you keep your content organized, prioritized, and consistently aligned in all communications (click here to find out more about Message Mapping).
  • Make it easy to buy, by placing a courtesy link to a transaction page that matches the topic of the landing page and makes it as easy as possible for the visitor to buy.

This is the bridge between strategy and execution that will pay off your content posts with a transaction.

How are you turning brand into money using content? Let me know! I love to share examples, good and bad. Post your comments and links here, in frenchonbrand.