Monday, September 22, 2014

Consumer insights make marketing work.

I recently agreed to teach two marketing courses for “execs” at the University of Toronto, so in between shopping for a natty tweed with leather elbows and a burled walnut pipe I have been thinking about some brand fundamentals. One of the most challenging yet critically important concepts is the Consumer Insight. To keep our Marketing jobs we occasionally have to demonstrate that we can sell stuff by figuring out things about consumers that others have overlooked. Finding meaningful insight when you need it is a challenging task; a good first step is understanding what it is or is not.

It’s useful to make the distinction between THE Consumer Insight and Consumer Insights. THE insight is part of the Creative Brief (or sometimes a brand strategy document) as the link to the brand benefit to be conveyed. THE Consumer Insight might be: “Younger buyers still believe Cadillac stands for quality but are embarrassed by its lack of performance credentials”.  Consumer Insights, in general,  can happen at any level from merchandising to a great idea for a promotion. The principles are the same, but it is good to be clear on the context.

What’s your problem?

Consumer Insight is strategy work. Strategy is just a solution to a problem. Richard Rumelt one of my favorite strategy gurus says, “Unless you state what the problem is – and how to overcome it, then it’s not a strategy.”
A key component of any Consumer Insight is the definition of the problem (call it an “issue” or an “opportunity” if it fits better). The definition is not the preamble or just context. There is no Yin without a Yang.

In simple terms you can define the problem as a) target group plus b) action. As in, “get 19-24 year olds in Ontario to purchase Labatt Blue more often” Or, “get current Hall’s cough drop users to use the brand more frequently in the spring and summer”.  There may well be additional nuance that is useful in framing the problem. Go for it. In classic strategy work defining the problem, the depth of problem and the gains from solving the problem are essential parts of “insightful” planning.

Consumer observations

Having defined the problem, marketers can then set about looking for solutions by studying the target group in the context of the category. It’s obvious but the relationship between the consumer and our brand is only part of the story. You need to explore the buying process and the performance of competitors or substitutes.

It doesn’t matter HOW you do the research. Well, actually, it matters a great deal but the choice of methodology is idiosyncratic. Invariably, you will learn all sorts of things that, to a greater or lesser degree, shed light on your problem.  Some people call these learnings “insights”; I call them “observations”. You need to find the best solution to the problem at hand; that will be your Consumer Insight.

Choosing a Solution

Strategy is a solution to a problem. It is also matching opportunities to capabilities. Brands have limits to their effectiveness.  The limits, like the brands themselves, are a function of existing consumer perceptions. Having identified a particular problem the best solution will work with the “assets” of the brand in a way that is credible with consumers.

If Coca-Cola brand observes that it is losing consumers to beverages that are perceived to be more healthful, it strains credibility to pitch Coke as a healthful drink. This would likely be the case, even if they added vitamins and ginseng to it. While you may be chuckling at the absurdity of that example, the genuinely smart people at Amazon launched the Fire smartphone at $199 and are now flogging it for 99 cents.  Brand owners generally overestimate the capabilities of their brand. In my case on Labatt Blue in the nineties the problem was “Dad’s beer”, the DNA was as a fun/party brand and we had to figure out how to dip it in the Cocoon pool or market it to older drinkers. The Consumer Insight among the younger segment was that “the best kind of fun was spontaneous fun”. So, we chose to be the brand of spontaneous fun. Was it credible? Not so much.

The Consumer Insight is the observation about the consumer that solves the brand problem in a credible way. The insight is “leveraged” as a deliberate choice is made to follow a particular route. I suspect it is more of an “aha moment” only in the retelling of war stories years later. In practice, choosing a strategic path usually means rejecting a reasonably attractive alternative. They can be tough decisions.

Putting it into Practice

I often hear business leaders complaining that the Research team or Brand Management are failing to bring forward the “consumer insights” required for success. Assuming that the business is willing to do some studying of the consumer, the main cause of “no insights” is “no defined problems” to focus on. Use your planning process to figure out and define the important problems. Then allocate resources to studying the relevant consumer groups to reveal Consumer Insights that make marketing investment actually work.

Wednesday, May 14, 2014

Process and Creative are having an affair

Creative is the tall, curvy, sensual woman in the corner office. With her wardrobe and great hair she could have any man she wanted. Strangely she has been quietly hooking up with Process. He of the pocket protector and RACI charts. He is skinny and socially awkward but not without his own quiet intensity.  What on earth does she see in him? What do they have in common? Apparently this has been going on for a long time.

Developing Marketing Communications is not the least bit difficult; the challenge is doing it well. To get the kind of ROI most of us crave obviously involves applied creativity. That’s where it all goes sideways.  To achieve creative creative even the most experienced marketers can be challenged by the tango of Creative Development.  For over 10 years I have worked with Marketing groups and their agencies to install and train best practices in this regard.  Starting a recent project with a top 10 multinational reaffirmed for me the value of getting the process right in Creative Development.
The right approach is never one size fits all, but there are 5 simple practices that almost always help you get to better stuff and happier people.

Explicit Process:
Make it someone’s job on the client side to create, communicate and monitor the process.  Among other things it should include: who is the project team that should be in all the meetings, who is the ultimate “Decision Maker” and a realistic budget. “TBD” is not a budget. 

Have a Great Brief (ing):
Make sure that the Brief form you are starting with is reasonable. Sometimes they can get quite bent out of shape to serve a “distinct creative approach”.  Whether the Brand Manager or the Account Manager/Planner starts writing the Brief, make it a shared responsibility. In the end  It has to be owned by both parties. When the Account Manager briefs the creative team, a client should be there. It’s funny how some agencies resist this; usually this is a vestige from bad briefs that had to be ignored and reinterpreted or badly behaved clients.

One Creative Presentation:
Or, as close to one as you can possibly get.  Manage your client culture to have the important people in the first and only creative presentation, including the ultimate Decision Maker. To do this, clients need to learn to have a productive discussion about the concepts presented without too much regard for rank. They need to get over the obsession with making decisions on the spot and spend more effort on understanding the submissions and getting comfortable with risk. You can actually make the decision “tomorrow”. 

One Creative Presentation Part II:
I am not a fan of “tissue sessions” (rough/early idea presentations). Most clients have a hard enough time envisioning the end product at a tight creative presentation. It is hubris to think they need you in the creative process. You will enjoy the Creative so much more if you the skip the trailer.  Many agencies like to present “Creative Platforms” or Areas. What you really need is a good idea (subject for a later post).  Ask the agency to present ideas and executions concurrently.  Most of us are not skilled enough to judge a “platform”  divorced from its “output”.  Its only purpose, after all, is to create good executions, so let’s see it do that.

Provide Written Feedback:
Do it always.  Your response might be a one line email for a dangler or a three pager for a major campaign.  Writing has several advantages: it creates a record, forces alignment among clients (amen) and benefits from the precision of the written word. If the project is substantial, deliver this written feedback in person or at least on the phone to allow for conversation.

It is easy to find people who disagree with these practices. There are many ways to do it, and they are welcome to their methods.  The most popular ice cream flavour in Canada is still vanilla. I guess it just works. I have firsthand experience with both large and small Marketing teams witnessing improvement in their Marketing Communications when they apply these simple process improvements.  But simple is not the same as easy and they require both clients and agency partners to raise their games.

Friday, April 4, 2014

US Tax reform proposes unbelievable changes to marketing and advertising

The United States government needs money. Wars and recessions can do that to your financial health. They also want to lower corporate taxes to be more globally competitive. I guess that leads to some very different ideas being put on the table...and some stay there.

Early last month David Camp the chairman of the House Ways and Means Committee brought forward a draft tax reform package fully bent out of shape by lobbying efforts. In an effort to offset proposed corporate tax breaks he is recommending a wholesale change to the way in which adverting is expensed for tax purposes.

Camp is proposing that the first 50% of advertising costs are expensed in the year they are incurred and are tax deductible (like most other business expense). The deduction on the balance would be amortized over the next ten years. Apparently this passes for tax “simplification”. The impact of a change like this would be significant reductions in near term media spending and all that implies. Needless to say, agency, media, marketing jobs would go away. It would undoubtedly affect Canada as well.

Thankfully, what started as bi-partisan tax reform has quickly become no party non-reform. The general belief is that this bill will never make it to the floor for a vote this year.  Mr. Camp has also recently announced that he will not be running for re-election this year, making it unlikely that anyone will provide the impetus to move these reforms forward.

It still scares the heck out of me! Where on earth did it come from and can you put that genie back in the bottle? Once an idea like this gets floated it can be tough to sink. The advertising industry lobby will be doing their best to kill it once and for all.  I know that Tony Clement is not on my distribution list. I don’t think he reads Ad Age and I suggest that you NOT tell him about it.

You can read more about it, or at least verify that I am not making it up in the Adweek article here.

Monday, February 10, 2014

Stop wasting money on market research

Everyone in business does Market Research. Some even pay for it.  Whether you are an experienced and sophisticated marketing manager or a startup trying to better meet your customers’ needs you need to make sure that you are asking the right questions.

My favorite story in this regard  comes from Sergio Zyman’s book “The End of Marketing as We Know It”. As you likely know, Mr. Zyman was, for many years, the Chief Marketing Officer of Coca-Cola Ltd. His tenure included that legendary marketing mistake, the New Coke fiasco when they “improved” the ninety year old Coke formula and “relaunched” the brand with the new product. Consumers, of course, were outraged, the company was humiliated and within the year they reversed course and returned to the original formulation.

Mr. Zyman explains in print how the marketing team did extensive market research to inform their business decision (no kidding!) and they felt certain that the new formulation was preferred by both competitive users and current users. He distills his mistake this way: “we asked them ‘what would you do if we gave you [this] product as Coke? They told us, ‘they would buy it’. We didn’t ask The Question…‘if we took away Coca-Cola and gave you New Coke, would you accept it?”

If those smart, experienced and well-resourced people in Atlanta can get it wrong…well, anyone can.  To get it right you need to do what I do at the outset of every research project, a Strategic Research Review.  By doing it you will a) save money by avoiding useless research that you don’t need b) ensure that your research is relevant and has a high value to the business c) enjoy the long term benefits of making smarter decisions.

Like most “problem definition” documents the SRR is neither easy to do nor easy to explain. It is not something you do perfectly; it is a continuous improvement thing. Experience helps. Despite the obvious challenges I want to give you a sense for how you can ensure that you have done your homework prior to implementing market research.

Why do we need research?

This is relevant background. It has to describe the business situation and category dynamics that have created the research need. It should demonstrate that you have identified what you think is the root cause of the business problem. To do that it usually breaks the problem down into its component parts.

Example: Brand X is getting squeezed in the yogurt category between a local brand with superior quality and a global brand with extensive innovation across flavours and formats. (and so on)

What relevant research has already been done?

What is that George Bush-ism about “known unknowns and unknown unknowns?” Previous research is a “known unknown”, that is, there is almost always something useful if you are willing to look carefully. Articulate a concise summary of what you learned and note the studies for future reference.

What are the business decisions to be made with the research?

Clear links to the decisions to be made are your security against useless research. Articulate realistic and accurate aims for the research. There may be multiple decisions to impact, but it is important to convey their priority. There is nothing wrong with having secondary decisions, they can be handled on a “nice to have” basis.

Some projects are suited to “decision choices” i.e. the brand needs to do A or B depending on if the research outcome is 1 or 2.  These decisions should relate to the components of the problem outlined earlier.

Example: Yogurt Brand X needs to choose  where  to focus investment and how best to position the brand to win in those segments versus competitors.

What are the research objectives?

What are the specific questions, the things you want to learn? What information would enable you to make the decisions? You can frame them as questions (How do consumers switch among the various brands?) or as information needs (Determine brand interaction). This section will also convey exactly whom you want information from. Again, it is important to convey the priority of the various objectives. “Self reported media habits” may be nice to have, but brand image perceptions would be critical. This is where the new Coke team failed to pull out the precise question that related to the specific business problem.

To understand yogurt consumer purchase habits in terms of frequency, location of purchase, formats, brands, container size.
To understand consumption behavior in terms of who consumes the product and  the type of occasion.

What is the expected use of the results?

This section articulates specifics of how will the research information help with the decisions? It may not be required for simple projects. For others, however articulating specific analyses and uses ensures that you are getting the right data.

To develop an in-depth profile of the yogurt purchaser, particularly the heavy purchaser both for the category overall and for the most profitable yogurt formats.

To populate a scorecard of key measures that will evaluate the overall effectiveness of marketing programs.

Once those questions have been answered, only then can you  start designing a methodology. In general, there is far too much attention on innovative methodologies (MRI scanning? Sentiment monitoring?) and not enough focus on defining the research problem.  The issue is exacerbated by research suppliers who are selling off-the-shelf “products” that are standardized and easily executed by relatively junior staff.

What happened to poor Mr. Zyman? Well he had to leave in disgrace a year later…but he may have been out to prove something.  He wrote a bestselling book , started Zyman Group consulting, sold it seven years later to MDC for $64million  and was hired back at Coke as CMO for 3 years. It seems he did okay… once he learned to ask the right questions. Luckily, I have not sold out yet – just call or email.

Lighthouse Clients

Cases, examples and client references are available upon request. Some of my clients over the last few years are:

Toyota Canada
Labatt Breweries/AB-InBev
Canadian Blood Services
Cadbury Adams
Constellation Brands/Vincor
Prime Restaurants - Casey's, East Side Mario's, Fionn MacCool's, Bier Markt
Sigma Alimentos - a large food company in Mexico
Multiple Sclerosis Society - MS WALK
Yellow Pages Group
New Balance Canada
Ideazon -(Gaming Hardware)
Edwards Builder's Hardware

Going further back:
Pfizer - Viagra, Detrol
Volvo Canada
Red Lobster USA
Xerox Canada
Sprint Canada
Absolut (Maxxium)

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