A Frothy War is Brewing

As many of you know I have posted often on the Starbucks brand, a leader in creating an experience around what was once a commodity.  In fact authors Joe Pine and Jim Gilmore use them to explain how products evolve through an economic progression as they move from commodity to true brand experiences and create consumers willing to pay for those experiences along the way.  The Experience Economy -a seminal read on the topic, is definitely a book that should be on everyone’s shelf.  

McDonald’s has been testing their proverbial stir stick in the coffee cup for a while and now seems to be brewing up a storm with the launch of their McCafé.  As I try and discern McDonald’s marketing strategy, it seems to be all about price and convenience.  No shocker coming from the pioneer of the value meal.  Starbucks won’t be going down without a fight however.  While they can probably match McDonald’s on convenience and location having a pretty similar footprint of stores- they seem to be very protective of the premium price (or economic progression) they have created.

A piece on the Starbucks marketing can be seen here.  It’s a nice warm and frothy (shot in high-def btw - very nice quality) 5 minute piece with Howard and some baristas talking about the Starbucks experience and why it’s better.  Said differently, why they need to defend their turf that they have earned over the last forty years.

Someone once said, “A rising tide floats all boats”.  McDonald’s may be the pirates coming aboard the Starbucks ocean liner.  My only advice to Starbucks is to play your game - don’t play McCafé’s.  If you react to a price strategy against a formidable player in that space like McDonald’s - you’ll come up a cup short.  Tell your story and let consumers decide.

Pardon me while I enjoy my Dunkin’ Donuts home brew.

Get out of survival mode! Your marketing needs to make people feel good.

After taking a year off from blogging I felt I should come back with a post that would if nothing else inspire us all to do better work, smile more often, and approach these challenging times with a better attitude.

First, my apologies for such a long absence.  2008 was probably my roughest year personally and it was hard to stay focused on maintaining a steady stream of creative insight.  But hey, Fish-On Marketing is alive and well and will celebrate our 5^th year at the end of 2009.  And as I always say - The key to life is how well you deal with Plan B. 

Face it, we’re all still kind of battling a hangover from 2008.  Some worse than others.  The only way we’re going to get out of it is by doing better that what we do best – brilliant marketing that connects with consumers in memorable ways.

So I thought I’d come back with a challenge for us all to do work that inspires.  Create products and the marketing that drives them that stirs consumer’s souls, engages their emotional side, and most importantly leaves an impression. The challenge however is that our businesses, the work we produce, and most importantly our creative processes are all on survival mode.   A colleague of mine told me the other day when asked how he was doing, “We’re keeping the doors open.  That’s our goal for ’09. …it’s about all we can hope for.”   They say misery loves company, but this attitude will take you and everyone around you down – fast!  Now I don’t claim to be a Zig Ziglar type motivational guru but we all know that type of “stinking thinking” is very self destructive.  However, what I think will get us out of this mess, at least psychologically, is to take every project we can get our hands on and produce the best marketing experiences that you’ve ever done.  Yes…great work will beget great attitudes.  Winning smiles from clients and their brand customers. 

You may say, No brainer Bud!  But here’s the rub.  Today with many of us, including myself at times, we’re all on survival mode and we must get out of it!  When anyone, particularily animals feel threatened, scared, or may be close to losing life, home, or business…they go into what we know as survival mode.  Many of us including that colleague of mine said that in fact was his goal.  Just survive.  And yes we need to pay bills and keep the lights on.  But here’s the problem.  When we’re in survival mode, our creative mode shuts down.  After all when you’re threatened is not the time to try new things, think outside the box, and get crazy creative.  Because we can’t afford to fail.  No, survival mode is all about being conservative, cautious, and steering clear of risk.  Go with what works, back to basics, and stay very much ”in the box”.  The box is our protection.  But in our business of creativity, the box is sure death. 

Clients come to us for bright ideas, insightful thinking, stellar campaigns and work that resonates and connects with their consumers.  Remember they left the other shop because they were “too much in the same box”.  We must shake the Chicken Little attitude that “The sky is falling”, and instead tell ourselves, “It’s not going to fall on my watch”.

And this is easier said than done.  These are weird times; much is out of our control.  But even though consumers may be hunkering down and holding on to their hard earned cash, they still want products and marketing that dazzles their senses and stimulates their emotions.  And that is what we did best when times were good - and that is what we must do even better when times are bad.

Dunkin’ Donuts knows who they are and who they want to attract

I know I’ve posted a few times about Starbuck’s - the experiential case study in the coffee biz.  However, in an effort to show unbiased attention to the other guys I applaud Dunkin’ Donuts effort to position themselves in a unique and competitively attractive way to the other guys in Seattle.

A recent post from the Hub, interviewed several brand marketers about creating great retail experiences.  One of the panel members was Frances Allen from Dunkin’ Donuts.  A great piece.  What particularly caught my attention was when they addressed the subject of consumer segmentation.  Frances took that question and went on to explain their consumer positioning and consumer target.

How critical is customer segmentation to retail success?

Allen: It’s knowing who you are that is number one. So, we understand completely who Dunkin’ Donuts is and who finds Dunkin’ Donuts appealing. You’ve got to understand the products they want, that fit in with their needs, the service that’s appropriate for them and a value equation that they can feel good about.

It’s certainly not about demographics in our case. When you go to a Dunkin’, you see a construction worker standing behind a nurse standing behind a woman in a power suit. Dunkin’ Donuts has a unique appeal to people who have busy lives. They are working people with places to go.

What Dunkin’ customers want is quick quality. They want to come in and know what they’re going to get. They are not looking to sit around on sofas and chat and have meetings. They have worked a hard day’s wage and want a real down-to-earth quality product at a fair price. That crosses all demographics.

An epiphany moment for me!  You see, I frequent several coffee establishments but wasn’t sure why I went to one over the other.  It now all made sense.  Often the best positioning is the least obvious, but resonates on some deeper emotional and often unconscious level.  As I thought about the times I appreciate Dunkin’ the best, it was when I was in a hurry, stressed, and just needed a great consistent cup of coffee - on the go.  Contrast that with Starbuck’s, where I would go to meet someone, relax, and take it all in - maybe on a couch - or minimally at a much leisurely pace.

This positioning integrates very well with their previous Rachel Ray “On the Go” campaign as well as their new “Keep it Simple” campaign.  It now all makes sense.  I love being an enlightened consumer!

Is this a mall or a trauma center?

Marketing to kids has always been a slippery slope but this one feels like a vertical cliff.  Recently McDonald’s received a lot of negative press for placing subtle advertising on report cards.  And in the face of the childhood obesity epidemic Ronald will now only be promoting healthy snacks such as apple slices and milk.  But this one makes me wonder.

Abercrombie & Fitch has thrown about 10 million dollars to gain exposure, naming rights, and probably more at a new emergency department and trauma center at the Columbus Children’s Hospital in Ohio.  I understand that the company once known for shotguns and waterfowl hunting gear is based there.  I also get that they may see this as their own unique way to give back in a non-offensive way to the kids (and more importantly the parents) that they target.  But where will this lead?

Let’s say your child has a broken arm and is bed ridden in this facility.  Are they provided with A&F designer hospital gowns invariably headed for collectible status?  Coupons in the take home packs.  A&F branded casts?  How about in-room advertising on TV?  Fashion show tours complete with blaring music in the lobby?  Talk about a captive audience.  What does a brand expect (or deserve) for its 10 million dollars?

In my opinion A&F has gone a bit too far with this one.  Grant it there will be an enormous amount of PR generated both positive and certainly negative.  But this is a long-term commitment that contractually has multiple strings attached.  The brand will continually try and push the envelope on this sponsorship deal and while the kids may think it’s cool to be seen in this branded trauma ward - the parents may see it as an annoying intervention of a brand in the wrong place.

A&F would have been better off to set aside their money to help pay for underprivileged kids in this hospital.  Just feels better for everyone involved.

Consumers make the final call

With all the creative shops around I found it interesting that one of the largest beverage brands around has turned to their consumers to make the final pick for a fairly prominent piece of creative -the logo for the Coke Zero 400 Powered By Coca-Cola, the new name of the July Sprint Cup Series race at Daytona on July 5.  It seems like the brand guys in Atlanta are allowing the Coke Zero brand the freedom to go places that the more conservative “red stripe” anchor brand can’t pull off, not the least of which was branded tongue piercing over in Brazil.  But let’s get back to the NASCAR logo.

It seems the folks at Coke Zero had narrowed their logos for the high profile Summer race down to two - probably created by their agencies of record.  However, the final decision was left to the fans and target consumers.  And as the story goes it was a close call - 51% to 49%.  I think it’s great to give consumers (almost 40,000 voted) ownership of a logo that will undoubtely be everywhere those fans look over the next few months - maybe years.  This deal with Coke is part of a fully integrated 10 year deal.

 Lesson learned: trust your consumers with your brand, involve them early in the marketing process, and you usually won’t be steered wrong.  Early and often involvement leads to future engagement and loyalty.

You dance with who brought you - Starbucks getting back to coffee basics.

A recent AP story out of Seattle ran in the business section titled “Starbucks brewing up plan to bring back the romance”.  I’ve always said good marketing strives to build  long term relationships not a lustful few dates.  At the center of those relationship lies consumer passion.  Over the last few years it seems that Starbucks thought its girl was becoming less attractive as competition grew.  Maybe a face lift, more make-up, a new opening line.  All superficial changes that may have proven unnecessary and not really desired by consumers. 

Numbers always looked good because of rapid expansion of new stores.  But a scratch beneath surface showed that its stock has slid more than 50% since 2006 and its most recent quarterly profits rose by a mere 2%.  Heads have rolled with the firing of CEO Jim Donald putting Howard Schultz firmly back in the driver’s seat.  Blame it on greedy revenue growth tactics, conflicting consumer messages or poor leadership Starbuck’s is taking time out to look backward and re-instill the core brand values and consumer experiences the brand was originally built upon .

As I see it, here’s what apparently isn’t working:·        

Stores have gotten cluttered with all sorts of trinkets, teddy bears, coffee machines, and holiday stuff that are taking up space that could provide another table or two for loyal Starbucks fans to extend their experience by sitting and enjoying the product with a friend.  Sandwiches while may have boosted store revenue by about $35,000 annually are average at best and not what most consumers go to Starbucks for in the first place.     

The stores need to smell and sound like fresh coffee being made.  Any effort to hide this sensory experience by blocking the view of the barista, covering up smells with Gorgonzola cheese, or playing music louder than necessary is covering up the ethos of the coffee experience.  Go back to making it the old fashioned way instead of using automatic espresso machines and flavor locked packaging.  Think of Cinnabon and Mrs. Fields’ cookie shops.  Where would they be without the aroma, ovens, and apron-ed cooks?

The specialty coffee market is approaching 13 billion dollars a year.  Here’s the amazing fact – 90% of that is in single cup sales.  So why is Starbuck’s taking up so much room with bags of coffee beans and coffee makers?  Maybe just to support its own internal contest to give away i-pods to the employees at the two stores selling the most pounds of coffee.  A sales incentive that only rewards two stores out of almost 2000?

A test to offer $1 cups of coffee.  For a brand that’s worked hard to get it’s average purchase price over $3, why would you want to discount the price often resulting in discounting equity.  I’m always amazed when strong brands begin heading t=don this slippery slope.  I admire brands like Under Armour that never marks down the price of its quality  products.  Because of this, people position it much higher in their minds than it’s competitive knock-off clothing lines because of this.

Give the brand back to the passionate consumers.  To quote Howard Schultz, “We are not just selling coffee…we are selling a coffee drinking experience”.  Anything that detracts from that pure and simple premise is diluting the brand experience and making it less appealing to its loyal consumer base.  Don’t be so concerned with the McDonald’s and Dunkin Donuts of the world.  They are ones trying to morph their brands into coffee shops from hamburger and donut shops.  Be authentic and true to your vision and consumers will reward you with passion and loyalty.

Addressing that invariable question, “Now what did we get for this?”

I’ve often said measuring the impact, effectiveness, not to mention efficiencies of brand experiences can be a little like nailing Jello to the wall. It seems that the tactics are evolving at a faster pace than the effective tools to measure them. We all have had that engaging moment with brand experiences where we know it has worked at imprinting a brand mark on our souls, and know that this form of emotionally connected marketing WORKS and get people taking.

But for all the bean counters out there, that gut feel doesn’t always pass muster much less get a program expanded or renewed for another year.  So what’s a brand guy to do?  Well while there are some very sophisticated models to measure purchase intent, awareness, imagery, and recall, they are all custom built programs unique to that experience.  However, if you’re looking for some justification for entering into this brave new world of experiential marketing, take a peek at the attached links.  

Some really smart people have tried to wrap metrics around this slippery methodology and have come up with some facts and assumptions that have me re-convinced that I am in the right discipline with innovative marketing.  A quick read from Marketing Daily summarizing a piece of Jack Morton research.  An executive summary of the survey, with comparative results by geography and industry sector, is available online at jackmorton.com. 

Another great ARF piecefrom Adweek that shows in real numbers how event marketing (a tactic that often lives under the braoder methodology of experientila marketing) can incraese a onsumer’s purchas eintent by up to 52 percent.

And for all you B2B folks, check out this piece from the CMO Council.  The article talks about companies’ ability to develop strong interaction/ engagement with customers has “enormous impact” on their returns, and may actually be the most essential competitive advantage and determinant of their overall business performance”.

If these articles don’t have you convinced to swap your  features and benefits push marketing for more experienced based emotional branding, ….well I guess you may want to go back to your direct mail coupons and get excited when redemption rates exceed 5%.  But don’t tell anyone that most coupons are redeemed by people that are already buying your brand.

Trade Show Trends and Tribulations

Took a month or so off but firmly back in the blog saddle here in sunny Ormond Beach.  I hope everyone enjoyed some down time as I did and are beginning 2008 renewed and refreshed.  I begin this post with a challenge to any brand that exhibits at trade shows.  Having just spent 4 days (almost 40 hours on the show floor) at the North American Veterinary Conference with an animal health client I came back with a few observations and tribulations (defined as an experience that tests one’s endurance, patience, or faith).

Booths are getting bigger but not necessarily better:  It amazes me how much money is spent on the exhibit floor.  Two story conference rooms, massive displays, rotating signs, and the like all create a bidding war for attendee attention.  But bigger is not always better.  The bigger companies are expected to be big but the smaller companies can create memories just as effectively.

I’ll pay you to listen to me:  The tactic du jour was to dangle a trinket like a jump drive, book, or i-pod for 15-30 minutes of attendee time listening to a canned presentation.  Grant it the audio visuals are polished and presenters are definitely professional but we’re still talking at individuals and not doing a lot of listening or two way dialogue.  It amazed me how people would barter their precious time for the smallest of premiums.  Interact, engage, and listen.

Graphics are too copy heavy:  People will give an exhibit approximately 2-3 seconds when passing down the aisle.  Even the speediest of readers will not absorb much more than a short headline.  Don’t list bullets that go on forever.  Save that for the printed collateral material.  Keep it simple.

Create a relaxed inviting atmosphere:  The best of booths are open without barriers between aisle traffic and brand ambassadors.  They also need to create an environment that is inviting and does not look like a sales showroom.  The trade show floor is a very staged and artificial environment that is highly overstimulating and confusing to the senses.  Not the best atmosphere to make a decision.  It’s debatable what most brands want from these expensive marketing events but at best you should strive to create awareness and conversation.  The sales will follow when the attendee is in a buying mode and a more familiar setting such as their office.

Get Creative:  The trade show floor often becomes a sea of sameness.  I applaud any brand that tries to break out and create something memorable.  So often attendees return with a bag of stuff only to pitch 90% of it along with any memories of canned presentations, or conversations.  Think about what you want to accomplish and what you want them to remember.  You don’t always have to bribe them with  tchotchkes - just create an experience - not simply an interaction.

Even in a down economy trade show spending is strong.  Trade shows have their limitations but are still very expensive on a per touch basis.  More money can be wasted before you know it and then you’re back again next year.  Take some serious time to think about what you want them to remember - not what you want them to buy or take.

Hotels dial up the guest experience

Someone once said that we do exactly what we want to do or have to do.  Nothing more and nothing less.  So I really don’t have a very good excuse for such a prolonged absence on the Fish-On blog.  yes it’s been busy and yes there’s the holiday thing, but in reality, I guess I had just not been moved to post.  But that blog blandness has subsided and I thought I’d throw out several items in no particular order that have intrigued me from world of brand building and consumer experiences.

As we enter into a heavy travel season with the holidays how about three examples from the lodging industry:

The Travelodge chain is offering couples called Joseph and Mary in Britain, Ireland and Spain free accommodation this Christmas on proof of marriage and name.

The hotel chain said husbands and wives matching their criteria would get a night’s stay on the house, but with more home comforts than the humble stable of the Christian Nativity story.  Kind of cute and creative. 

As for another example of a hotel taking the safe lodging experience literally, here is a link to Boston’s newest luxury hotel that is a refurbished old historic jail.

After a five-year, $150 million renovation, the old Charles Street jail is now a luxury hotel for guests who can afford to pay anywhere from $319 a night for the lowest-priced room to $5,500 for the presidential suite. The hotel, at the foot of Boston’s stately Beacon Hill neighborhood, opened in September.

Architects took pains to preserve many features of the 156-year-old stone building and its history.

The old sally port, where guards once brought prisoners from paddy wagons to their cells, is being converted into the entrance to a new restaurant, Scampo, which is Italian for “escape.”

In another restaurant, named Clink, diners can look through original bars from cell doors and windows as they order smoked lobster bisque or citrus poached prawns from waiters and waitresses wearing shirts with prison numbers. The hotel bar, Alibi, is built in the jail’s former drunk tank.

It’s apparentthat the hotel industry has exhausted its competitive advantages with cushy beds and pillows, office amenities for the business travelers, and free breakfasts and hors d’oeuvres - the next new frontier as Pine and Gilmore would say - is the experience.  And you don’t have to refurbish an old historic dwelling.  How about the Le Meridian chain

Le Meridien would like to be viewed as a haven for hipsters and other creative types — perhaps a European version of the W Hotels chain. Both are part of the Starwood Hotel chain , which also includes brands like Sheraton, Westin, and the W.

Le Meridien has hired a French contemporary art expert, Jérôme Sans, for a newly created position as cultural curator. His job will be to pull together artists, photographers, filmmakers and chefs who will work with Le Meridien and help imbue it with some concrete brand attributes.

In the future, Le Meridien would like to be viewed as a haven for hipsters and other creative types — perhaps a European version of the W Hotels chain. Both are part of Starwood Hotels and Resorts Worldwide, which also includes brands like Sheraton and Westin.

Le Meridien has hired a French contemporary art expert, Jérôme Sans, for a newly created position as cultural curator. His job will be to pull together artists, photographers, filmmakers and chefs who will work with Le Meridien and help imbue it with some concrete brand attributes.

Just look at the little things like key cards.  No element has been overlooked when it comes to applying innovative and artistic design.  Design that is aimed to stimulate our senses and tickle our fancy.

So as we travel over the river and through the woods this holiday season, take a look at the hotel industry and how it’s trying to be more than just a “home away from home” for its guests. 

Would you perosnally read your copy to your customer?

At the risk of inciting envy, this is the time of year I really enjoy Florida - 78 degrees in November with cobalt blue skies and a light ocean breeze.  But anyway, I was traveling around the other day in my top-down Jeep when I see another of my Jeep brethren in my rear view window.  If you need enlightenment on the Jeep Nation please read my post from a few months ago.  Anyway this guy and girl pull up beside me at a traffic light and yell over at me.  “Hey, we’re not from around here.  Where can we get a nice lunch?”  Having seen their California licence plate, I had already pegged them as tourists and so their request seemed more than legit.  What followed was an interesting combination of thin slicing (a term from Malcolm Gladwell’s book - Blink), market research, and the incredible power of word of mouth recommendation.  All in a matter of maybe a minute at a traffic light.

Our little berg has lots of quaint little lunch spots, so when posed with the original question, my retort was naturally - “What are you guys hungry for?” hoping to narrow my list.  His answer, “Something authentic, you know - no fast food chains”.  OK, so I have all the data I need from my target consumer.  The usual suspects of burger and sub shops have just been eliminated.  Some quick assumptions relative to their visual demographics and West Coast personality, eliminated a few more.  When I finally landed on my favorite lunch spot that I personally thought they would enjoy, an incredible sense of power came over me.  I was actually going to be responsible for their first impression in my little town, responsible for quenching their hunger, and perhaps provide for a memorable experience.  Lots of weight on my proverbial “word of mouth” shoulders.  I directed them to a nice little lunch spot that was just up the road.  Nice deli style sandwiches, tables outside to eat, and a great little old-style deli experience in my estimation. 

We both pulled away from the light giving each other a friendly wave.  Over the next few minutes I reflected on what had just happened from a marketing POV.   I had delivered to a consumer a word of mouth recommendation that within minutes was acted upon.  It was the purest form of communication.  No filters, Tivos, extraneous background clutter, meaningless copy etc..  But maybe what was most enlightening as I drove back to my office was the amount of thought I had put into this recommendation.  Not measured in time, as the entire conversation took place within one cycle of a traffic light.  But the seriousness of thought and true personal involvement I felt in my recommendation.  This was a stranger to my town.  Connected by our joint passion for Jeeps, and simply looking for a good lunch.  I held his first impression of this little beach town in my hands. 

What if all marketers viewed their next ad as if they were personally going to show a print ad, read a television script, or hold up a billboard to an individual?  An individual that could look them in the eye and ask questions.  In that scenario would we as marketers be willing to deliver such a personal recommendation to a new visitor in the community.  Nothing to hide behind, the marketing would be tied to our reputation.  I think under that scenario, marketing would be just a little bit better if we took such personal ownership and translated our traditional mediums through a word of mouth experiential model.

 Just for kicks I thought I’d drive by the little sandwich shop.  Even though it was a bit out of my way, I was curious if they were there.  As I drove by the couple were sitting out on the picnic tables, Jeep parked nearby, and they both threw out the universal two thumbs up.  Influential recommendation leading to trial.  The strongest form of advertising had just proven itself once again.   I drove away and felt the power of persuasion.