Archive for the ‘community’ Category

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.

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.

Get the Word Out

Mark Twain once said, “Facts are stubborn.”  Well how about the enlightening analysis below pulled from the Nielsen Online Global Consumer Study from April of this year.  More of a reinforcement of what we may have already known, but I always like to support opinions with facts.

 To quote a summary piece on this from Retail Wire:

 The recommendation of someone else remains the most trusted source of information when consumers decide which products and services to buy,” said David McCallum, the global managing director for Nielsen’s Customized Research Services, in a statement. “Even though new media technologies are playing a role in ‘globalizing’ society, many purchasing decisions are still based on firmly held national and cultural attitudes. Furthermore, given that nothing travels faster than bad news - with estimates that reports of bad experiences outnumber good service reports by as many as 5:1 - the importance of responsive, high quality customer service is yet again highlighted.”

The survey of 26,486 internet users across 47 markets in Europe, Asia Pacific, the Americas and the Middle East probed consumers attitudes on 13 forms of advertising. Other findings:

• Traditional advertising channels continue to retain consumers’ trust. Newspapers rank second worldwide in credible advertising mediums while television and radio each ranked above 50 percent;
• Brand web sites were trusted by 60 percent of respondents, but brand sponsorships were only trusted by only 49 percent;
• E-media advertising received particularly low trust grades: search engine ads, 34 percent; online banner ads, 26 percent; and text ads on mobile phones, 18 percent. “E-mails I signed up for” rated 49 percent.

Some of you may be going well, “duh”, we all knew that word of mouth trumped just about everything else and is very powerful.  No wonder it’s the most trusted source.  After all it’s about as authentic and real as it gets.  But here’s the rub.  Why do we keep trying to influence word of mouth and harness it.  This is where I may disagree with such “sanctioning bodies” like the Word of Mouth Marketing Association.

You can’t create word of mouth any more than control it.  Word of Mouth is the end product of a remarkable and memorable consumer experience.  As I like to say it comes after the = sign.  It is not created in some brand strategy Petri dish.  There is an old saying in small businesses that never really tires that goes, “If you like the service you received,  tell a friend.  If you don’t tell me”.  Me being the proprietor of course.

It’s simple in concept yet very difficult in execution.  Consumer’s words come from their mouths -not ours as brand marketers.  We can facilitate it and respond to it, but we can not create their words anymore than we can create their mouths.  What we can do is create an engaging experience worthy of discussion. 

From the simplest retail and transaction customer service experience to other related touch points like on-line, brands need to make it fun, stimulating, and pleasurable to do business with them and use their products.  That’s what people talk about.  The ordinary and mundane seldom gets a mention around the proverbial water cooler. 

And much to the dismay of price discounters….people don’t usually start a meaningful conversation with what they paid for something.  Not to slam the success of our friends in Bentonville, but price is very seldom a firm foundation for a remarkable brand experience.

Marketing is seduction.  Treat them like it’s your first date…every time.  Make them want to tell their friends how HOT you are!

The new kid: connected meaning and relevance

Connected meaning and relevance.  You’re probably thinking this phrase is fast becoming the new buzz words in marketing now that we’ve tossed aside ”breaking through the clutter”.  But hang with me.  I write this in response to some good chatter on the  Experiential Marketing Forum on the topic.  And by the way I would encourage anyone that plays in this brand game, or just looking for stimulating conversation on the topic of consumer engagement through experiences, to join IXMA and get involved.

Anyway back to connected meaning and relevance.  Way too deep of a topic to thoroughly cover in this format but good brand building that hits on these two sweet spots ultimately wins over consumers hearts, minds, and souls.

In its simplest terms connected meaning is something that is controlled by the consumer.  Brands that have done their homework  will present a brand personality and proposition that consumers will want to connect with in a meaningful way.  Not just lustful infatuation but a long term relationship. 

Relevance is even more controlled by the consumer.  Brands that say they speak the language and embody the lifestyle can only cross their fingers that their brand is relevant.  Relevant to a consumer’s lifestyle, passions, and ultimately relevant to who they are as an individual - not just their social community.

So if everything is controlled by the consumer, “What’s a brand to do?”  Sit back and let the consumer rule our marketing?  Well, kind of, sort of, but not really.  Strong brands need to aspire to understand their consumers better than the consumers know themselves.  Not just in a focus group kind of market research way (not that research isn’t important- it is), but live among them, hire them into your company.  Ruminate amongst their tribe (social community) and most importantly listen to what they’re saying about your brand and other brands they are passionate about.  Then once you gain clarity about their passion points and personalities make your brand personality (and any experiences that come from that) fit within that space - naturally. 

Think back to elementary school days.  How often did your group accept the “new kid”?  And what typically did the new kid need to do to become accepted?  Usually follow the leaders, act like they did, and assimilate naturally without being noticed or ostracized. 

Is your brand trying to be the new kid?  It’s tough.  Consumers don’t let just anyone, much less everyone, in the pack.  While the schoolyard analogy may be a stretch, I believe kids exhibit a very sophisticated consumer behavior even at a young age in how they adopt friends, trends, and ultimately brands.  Where do you think we as big fancy educated adult consumers learned all this stuff we call connected meaning and relevance?  It certainly wasn’t from blogs.

It’s a Jeep thing.

As a new Jeep owner I feel compelled to write a short note about branding and community.  When I recently bought my ‘99 Wrangler, the previous owner mentioned something about you’re now part of a “club” as she put it.  “You’ll be amazed at how many people give you the Jeep wave” she said.   Fast forward a couple of months and now I get it.  Its bigger than just a club.  I am part of the Jeep Nation.

A group of loyal owners, we never hold meetings, there are no ID cards, and no official rules, ethics, or code of conduct.  But don’t be mistaken it is as strong as any fraternity, civic organization or even some religions.  You see this community is held together by a brand that has been around (virtually unchanged) for over 60 years.  Its brand personality is fun - plain and simple.  In fact the new Jeep campaign asks its owners to “Have Fun Out There”.  And I do!

Loyal consumers have a tendency to coalesce around strong brands and will ultimately form these communities that are tightly held together by the brand promise or the Jeep experience.  An experience that is universal - yet personal for each owner.  Jeep owners don’t know each other, but yet we always wave.  We may not know each other’s name, but we can talk for hours about our Jeeps.  And at the core of our being there is surely some strand of DNA that is probably shaped like a J that bonds us together.

When the product and its story is strong enough to create community, consumers will want to be a part of this brand experience.  And if you’re not in the community…well as the bumper sticker says…”It’s a Jeep thing, you wouldn’t understand”.   If you want to be a strong brand, tell a good story, create a great brand experience, and get people talking.