Beyond No Logo

This post is co-authored with Jo Allen, Creative Director with The Marketing Eye.

Several years have passed since ‘No Logo’, Naomi Klein’s seminal backlash against multinational corporations. In her book, Klein uncovered a betrayal of the central promises of many of the world’s most revered brands: Bill Gates became a global whipping boy, Nike's swoosh was equated with sweatshop labour and McDonald's arches turned into a synonym for childhood obesity. Little wonder that these brands found themselves on the wrong end of a can of spray paint.

Since ‘No Logo’ we have seen some seismic shifts. The world’s most valuable brand, Coca Cola, recently acquired a stake in Innocent Drinks, in part, because of the positive light Innocent would reflect back onto the corporate brand. We have also seen Coca Cola focus on healthier drinks with the launch of Diet Coke Plus and Coke Zero.

We see a similar situation at McDonald’s, which has been addressing the healthy eating issues that have dogged it in the past. Starbucks too is looking at how it can realign its proposition with the needs of a more informed and discerning audience.

Business direction is now being moulded by brand strategies dictated by customer values not business values. The information age means there is no place to hide any actions, policies or values that run contrary to the core values of the consumer. Audiences are sophisticated and informed. They choose the brands they want a relationship with, not the other way round.

The important lesson in these case studies is that branding doesn’t have to mean greed and excess, nor, incidentally, does it have to have to be the exclusive domain of large corporations: it is only when we realise this that we can understand how important and positive it can be for a business.

Think of any well-known modern day brand and you will find an organisation behind it that has:

· A clear customer promise

· A well defined set of values

· An ‘all for one’ philosophy among the people who work there

· A strong employee proposition designed to attract and retain the best employees

· Consistent and well targeted communications that inspire

There is nothing morally wrong in any of this, on the contrary. If the honesty exists; if the values of the business are properly aligned to those of the consumer and lived and breathed at every level within the organisation, then we create powerful businesses that can be a force for good.

An unfortunate consequence of the global downturn is that businesses – particularly smaller businesses - have become more inward looking. With the focus being on short-term cost-cutting and survival, ‘the brand’ as a concept is seen by many as too intangible and too esoteric to justify time and investment. How unfortunate and what a missed opportunity.

The truth is that building a brand doesn’t necessarily require significant investment: it needs vision, commitment and structure. A brand strategy, fully embraced from the start and consistently nurtured throughout its life, can be the difference between average performance and stellar success.

To achieve all this isn’t easy, but the prize for those that go for it is a significant one.

I wanna be a rock star - a new model for marketing

In his post ‘Will 10% unemployment be the new full employment?’, Charles Besondy predicts that permanent marketing employees will soon be a thing of the past.

He argues:

“There is too much uncertainty in the land to confidently invest in a strong and capable marketing department. There is too much volatility in the marketing programmes budget to justify a fully staffed marketing department. Better to keep fixed labour costs to a minimum and bring in the rock star interims for a few months as needed. No long-term commitments, no health insurance concerns, just the perfect skills and knowledge applied to the opportunity or problem for a season”.

Besondy is an interim manager and we shouldn’t be surprised, therefore, to hear him take this position.

Certainly, it is the case that economic conditions are imposing long term changes on business models. The move towards the outsourcing of non-core skills, be they marketing or otherwise, continues unabated: probably because it works, but does this mean the end of the in-house marketing team is inevitable?

Besondy stops short of looking at the pros and cons of a permanent marketing team or analysing which parts of the marketing discipline should be kept in-house. Having operated on both sides of the inustry, I feel qualified to have a try.

Pro’s of a permanent marketing team

• Dedicated to the business
• Deep understanding of day-to-day issues and developments
• On-hand whenever it is needed
• Potentially cheaper in the long run if fully employed

Con’s of a permanent marketing team

• Risk of silo thinking and loss of perspective on what is going on outside of the business
• Risk of temporary or permanent loss of drive and focus
• Potential to be absorbed by the minutiae at the expense of ‘the big picture’
• Potential to be under employed
• The substantial and inflexible cost of full time salaries, holiday pay, sick leave etc.

The case for outsourcing is certainly a strong one, but is it an open and shut case?

I have posted regularly on the difference between the marketing discipline and the marketing department. The marketing discipline has to be owned by the board: the marketing department has to look after the elements of the marketing mix that are assigned to it – more often than not, this is brand and promotion.

Besondy has his focus on the traditional marketing department and I agree with his views in this area. I have never seen any benefit in an in-house creative team and believe too that many, if not all, forms of campaign development and delivery can be delivered more effectively by external resources.

The picture becomes more blurred in the areas of strategic marketing and marketing management. To think of strategic marketing as something that can be stopped and started according to the ebbs and flows of business fortunes is dangerous. Marketing, in its broadest definition, has to be constant and this means there needs to be somebody who is able to link the strategy of the board with tactical implementations in all areas of the 8P’s. Whether this should be resourced in-house or outsourced is a question of scale and affordability.

An outsourced marketing operation that can provide strategic consultancy as well as tactical implementation is the ideal solution for a small or medium sized business: not only is it more cost effective, but the client can access a level of experience that it would take several years to build in-house. With the right provider, there is no reason why this outsourced resource shouldn’t be fully focused on the business and available on demand.

The larger business is likely to have the scale to warrant permanent resource, but it too will benefit from blending internal structures with outsourced experience. I predict the corporate of the future will have a non-executive Director of Strategy & Marketing on the board and a permanent Head of Marketing in a senior management position. The non-exec will be somebody with deep marketing experience in a range of industries, who is able to guide and advise the board on its marketing strategy. The Head of Marketing will be responsible for the delivery of the plan and management of agency relationships. Naturally, for the model to be effective, the Head of Marketing will need to see the non-exec as an ally and mentor, not a threat.

In conclusion, therefore, even if the days of the permanent marketing employee aren’t completely numbered, the nature of the roles that many of them fulfil at the present time are. Jobs for life, if they ever existed in the first place, will go and short to medium-term performance related contracts will become the norm.

Marketers should embrace the opportunity the change presents. The chance to move from business to business makes for an interesting and varied career and, moreover, it allows greater value to be delivered to the client. Through this transition, marketing as a discipline might finally gain the respect and recognition it deserves.

Whether we should swagger in like rock stars is a different question!

The future of print advertising

I have often complained about the dearth of business news in our area. Our local weekly paper, the Courier, can only manage a double page spread and the resources of one freelance journalist. The Argus, which is daily, has business news once a week and tends to be centred on Brighton. Across the border in Kent, The weekly Kent Messenger produces an 8-page supplement once a month.

In magazine form, we have South East Business, which is increasingly beholden to thinly disguised advertorials. Kent Director is run out of Cambridge, Sussex Business Times has disappeared and I haven’t seen a copy of Business First for several months either.

The issue, of course, is advertising, or rather, a lack of it. With advertising revenues having plummeted and so much content being available for free on-line, there is no money to pay the journalists. This is not a healthy situation for any of us. We need quality journalism in a democratic society, whether it is reporting on local news or international conflicts.

The dilemma for media owners is well documented, and, whatever the answer to their conundrum is, it is hard to see how it lies in advertising. A recent survey showed that most marketers now find print advertising the least effective form of promotion when measured in ROI terms.

This is hardly surprising. The Internet in general and Twitter in particular has allowed us all to become our own editors. We can pick out the content we want from a vast array of sources and easily filter out anything we don’t want – most commonly, the advertising. There is no shortage of readers; it is just that they have gone to other sources, such as blogs, e-newsletters and social media.

I had these thoughts in mind when The Courier came to see me this week to talk about its new approach to business news. The paper, like the Kent Messenger before it, has decided to consolidate the business news into a monthly 8-page supplement. I like the idea. In fact, I’d like to see it go further and set up an on-line forum to allow two-way dialogue with the business community on business news.

Naturally, the representative didn’t come to see me for my insight: it was to sell advertising and what struck me this time was, rather than give me the usual spiel about stellar circulations and perfectly aligned audience demographics, the approach was to say “if local businesses want a business paper, they will have to support it with advertising”.

I don’t know if I find this resigned or refreshingly honest. Either way, it does raise the question about how media owners will be selling their advertising in future: as a means of raising awareness of products and services, or as a form of corporate social responsibility?

But isn’t this the way that newspapers started in the first place – as a way for business people to promote their political persuasion and points of view? Perhaps it’s true. Everything does come full circle in the end.

What do you think? Do businesses have a responsibility to support their local media with advertising?

Putting the star and bucks back in Starbucks - Starbucks trial brand strategy

Coffee is a regular topic of conversation in The Marketing Eye office. Normally it’s an argument about whose turn it is to make the next one, but now, for a short time at least, we can claim a professional interest.

Recent reports have revealed that Starbucks is planning to open 3 unbranded coffee shops in its home town of Seattle. We are told that each of the new shops will be unique and tailored to the community in which it is situated. One of the test outlets will feature poetry readings and live music and there will be alcohol on offer and free Wi-Fi. The address of the cafe will be used in the branding, for example one is to be called 15th Avenue Coffee and Tea. Most importantly, there will be no Starbucks branding.

Lambasted by the conspiracy theorists as stealth marketing, the Starbucks experiment is a fascinating case-study in brand life-cycles and brand strategy.

Globally ubiquitous, the Starbucks brand is a phenomenon. Since expanding out of Seattle in the 1990’s, it has re-defined the coffee market and become synonymous with the boom years and globalisation. The signs are, however, that Starbucks might now have reached its peak. Last year’s results showed a heavy decline on previous years and in April, Starbucks reported a further 77% fall in quarterly profits.

The reverse can’t be blamed entirely on the recession as the evidence is that, even with less money in our pockets, there is still plenty of coffee being drunk. The Starbucks star has definitely lost its sparkle. We shouldn’t be surprised, therefore, that returning CEO Howard Schultz is looking for new ways to invigorate Starbucks' performance and return it to growth. The brand has got too big too quickly and is in need of re-invention.

Tailoring a product to the needs and wants of the market goes back to the basic principles of good marketing. The ‘one-size-fits-all’ Starbucks’ model needs modifying and evolving. People have grown tired of the homogeneous outlet and its mass produced product. As consumers, we know that a far more satisfying experience is found in the local coffee shop where a bespoke and lovingly produced beverage is mixed with a genuine appreciation of our custom. Schultz recognizes that Starbucks must present itself as a neighbourhood coffee shop instead of the corporate conglomerate that it has become.

Management Today said: “The move is interesting because it’s essentially a reaction against the kind of bland, ubiquitous corporatism with which Starbucks has become synonymous to many people. It’s basically admitting that some customers are now put off by well-known popular brands and are more inclined to favour smaller local ones instead”.

Opinion on Twitter is divided:
@karentoms said: “How cruel, I'd be gutted to find I'd been inadvertently lulled into Starbucks”, whereas, @bellakatz posted:” Interesting idea. I kinda like it”. @danielmarino summed up most people’s views with his simple: “questionable, but very interesting” comment.

The chief concern seems to be about honesty. @jeremyrandall said: “Unbranded shops feel like subterfuge. How about unique cafes/names, but keep a small Starbucks logo, so it doesn't seem like trickery?”

Starbucks will do well to heed this tweet of wisdom. Adopting and implementing a local marketing strategy under the umbrella brand would be seen as a much more open approach.

As we have said in previous posts, there is no reason why a business shouldn’t operate two or more brands and even allow the brands to compete against each other.

A different brand for a different market is not a new concept: Toyota does it with Lexus: Donna Karen does it with DKNY and there are many more examples. The important point is that there is something different in the customer experience and the customer promise. The early evidence is that this is the intention with the new Starbucks brand, but the strategy will unfurl if it can’t be maintained. The organisation will undoubtedly want to leverage the efficiencies of its larger operation, for example in purchasing. If that also extends to recruitment and training, one wonders how different the customer experience can really be. Same coffee, same staff, same processes - will we essentially be left with only a change in decor?

To work, the change must go deep into the core values. As The Community Room posted on its blog: “Starbucks needs to whole heartedly handover its stores to the community.... How many people would love to host something in these pieces of real estate? Let customers run everything and change the emphasis, so it’s honestly about the local community”.

Starbucks will be faced with some fascinating dilemmas if the new stores out-perform the branded ones: What is the future of the corporate brand? How does it achieve economies of scale in a brand with unlimited physical iterations? How does it become welcomed and not isolated by the communities it wants to be part of?

The authors of brand and marketing text books around the world wait with bated breath.

Leave Auntie AIDA alone - understanding consumer buying behaviour

The esteemed consultants at McKinsey have been burning the midnight oil to come up with the startling revelation that consumer purchases are, wait for it, needs and wants driven.

Yes, it’s true. In its recent paper on the Consumer Decision Journey, McKinsey challenges the linear progression of consumers from awareness to purchase and now says that consumers start with a trigger event that spurs them into action: they decide they need or want something and then set about finding it.

Well, knock me down with a feather.

The disturbing thing, beyond the fact that people are actually paid to come up with this stuff, is that Mckinsey is confusing the psychology of buying with a marketer’s approach to intervening in the process.

The linear progression that McKinsey challenges is based on AIDA – Awareness, Interest, Desire & Action.

To my knowledge, nobody has ever maintained that this is how people buy. We have understood since Maslow was a boy that human actions are based on fulfilling needs. When we have a need, we set about fulfilling it at a speed dictated by the urgency of the requirement and the degree of risk in the decision.

A B2C or B2B marketer’s challenge is to intervene in the process and create a purchase of their product at the highest possible price. This could involve stimulating an impulse buy or making sure that the brand is on the consideration list for a more measured acquisition.

‘A’ stands for ‘attention’ or ‘awareness’ and makes AIDA a good guiding principle when developing the approach to anything from a new brochure to a long-running multi-media campaign.

In the context of a shop, AIDA can mean grabbing attention with a compelling display and then turning the initial curiosity into desire with a great product and packaging. This, in turn, should lead to the action of a purchase.

A brochure or a website, be it B2B or B2C, should follow the same principle. The creator must find the compelling Home page or cover message that encourages the reader to delve deeper and deeper until action is taken.

Awareness comes into play for the more complex decisions when the purchaser may decide to explore the market. A marketer needs to create awareness to ensure the product or service is in the consideration set in the first place. This awareness could be created by brand advertising or a face-to-face relationship, either way it is a necessary pre-curser to interest in the marketer’s product, the decision that it’s the right solution and the action of purchasing it.

AIDA remains valid and has its place for those that understand it. To claim insight from the revelation that purchases are needs and desires driven is like proclaiming the Earth orbits the Sun.

Next...

When the tail wags the dog – the great sales versus marketing debate

How can you tell if a salesperson is lying?

His lips are moving.


Don’t you just love the arguments between salespeople and marketing? Ali v Foreman was nothing compared with the constant bickering between these two old adversaries. Like brothers, they defend the family honour in public and snipe at each other in private.

I came across an excellent LinkedIn discussion last week started by a sales guru who was giving marketing both barrels: sack the Chief Marketing Officer; make every marketer spend at least a year in sales and measure marketing performance solely on the basis of reductions in the cost of sales where among his more strident remedies.

Never one to resist an argument, I couldn’t help but wade in with a view.

So, let’s try and resolve this once and for all. Should the marketing department be a support function to sales or is sales a function of marketing?

In my career I have seen examples of both. Now I’m running my own business, I see it from yet another perspective.

Among my favourite definitions of marketing is the one provided by Professor Paul Fifield who says that the sole purpose of marketing is to sell the maximum amount of units at the highest possible price.

So there you have it, even a Professor of Marketing admits that, in the final analysis, marketing has to deliver sales and profit. Perhaps the salespeople are right? Marketers should immediately bow down to Sales and accept their true position in life.

But what would happen if they did?

I have worked in organisations where salespeople rule. The top roles were filled by the top salespeople and every conversation was about turnover and pipeline. In this environment, the role of marketing was invariably limited to tactical direct mail campaigns, brochures and corporate gifts: all geared to supporting this week’s idea and today’s income target. To create a discussion, let alone gain sponsorship for more strategic initiatives was all but impossible.

This is not to say that the salespeople who were promoted into the senior management positions didn’t have the ability to be strategic. Of course they did, but because the culture was so heavily geared towards short term measurable results, tactics tended to dominate the decision making process. Business performance was highly cyclical as a result with great highs and near catastrophic lows.

Another great definition of marketing is ‘making friends with people who might need you one day’.

The definition needs some work. ‘Might need you’ feels untargeted and ‘one day’ too uncertain, but I love the whole concept of marketing and business being about ‘making friends’ and forging relationships. The idea that a customer would consider a business a friend is a brand Nirvana, providing as it would a platform for long-term sustainable growth and resistance to the worst highs and lows of economic conditions.

Inevitably the idea of building a brand and making friends is too soft and intangible for many people.

Let’s be in no doubt, and I see this first hand in my own business, Sales is one of the most important components of the marketing strategy. If the leads aren’t being found and converted, there is no long term to plan and position for, so the marketing department needs to get its finger out and do its bit to feed the machine.

But Sales is exactly that: one part of the marketing strategy and it puts the cart firmly in front of the horse to have Marketing reporting to Sales. All of the elements of product, price, place, promotion, people, process, physical evidence and positioning need to combine before a business can make friends with customers and sell the maximum number of units at the highest possible price.

A Head of Sales who has the ability to do all of this - manage sales performance as well as think about strategy, targeting and positioning - isn’t a Head of Sales at all, but a Head of Marketing... and thoroughly deserving of the title.

Let me entertain you

With Wimbledon filling the screens and my old chums at RBS coming under attack yet again, this time for laying out £300k on tournament tickets, I couldn’t help but stick my oar into an online discussion about corporate hospitality.

Twitter led me to a blog post aimed at the professional services sector. The post held that entertaining clients and referral sources wouldn’t, by itself, lead to new client work. The phrase ‘by itself’ saved the post from being overly contentious, but I couldn’t stop myself jumping to the defence of good old fashioned client entertainment.

The recession has led to a rapid reining in of hospitality. As The Marketing Eye reported in its news pages last month, many marketers have considered removing corporate hospitality from the marketing mix altogether. A corporate paranoia has emerged, where companies are afraid of being perceived as being profligate in their expenditure on clients.

This is understandable, but we shouldn’t throw the baby out with the bath water.

The value of corporate hospitality was reinforced to me on Friday when the business development manager from our printers came to see us. Brian might be described as being from the old school of sales. There’s nothing he doesn’t know about us: where we go on holiday, how many children we have, what our hobbies are – is all information stored in his mental hard drive. And, of course, he doesn’t just know about us; he has the same information stored on all of his clients.

Brian’s knowledge of his clients is second to none. The occasional lunch has been part of his information gathering strategy and has done wonders to reinforce our opinion of him as a genuine nice guy. The result is a loyalty that is hard to break.

While we wait for the economy to recover, there are few better investments than getting to know clients. Generation Y decision makers might be satisfied with getting to know people through Facebook profiles, but until they dominate there is no substitute for getting to know customers face to face. Relationships will always be deeper, more enduring and more productive.

Whether it is to seal a deal, embed a relationship or say thank you for the business, lunch or a round of golf is an ideal way of spending a concentrated period of quality time with a client or prospect. Just remember why you are there.

Anyone for tennis?