Tuesday, April 21, 2020

Pandemic Planning: Winning at Transition

What problem are we solving? This is probably the single-best question to ask in any in strategic planning exercise. So, what follows are a few insights based on some recent questions from clients who are starting to plan for the next phase – that we are calling “Transition”.

In addition to reading the basic data at ourworldindata.org I had the opportunity recently to participate in a private Q&A with Cam Harvey a Professor of Finance at Duke University. Professor Harvey has stellar experience and credentials around the behavior of markets in periods such as this.  I also found Tomas Pueyo who writes brilliantly researched, data-intensive articles on COVID-19. He is a super-genius Silicon Valley engineer dabbling in epidemiology as a public service.  Prof. Harvey’s is profoundly a top-down academic perspective, whereas Mr. Pueyo’s is a wonderfully granular bottom-up pragmatic view.

How long will this last?
Campbell takes this on with a historical perspective on pandemics and recessions generally. He is emphatic and optimistic that this time is different because the cause is a bio-based hazard with a clear solution. Once we have a vaccine or to a lesser degree an effective treatment – problem solved, all clear. If policymakers support the millions of small and medium-sized businesses in North America so that they don’t permanently fail we can have a quick recovery, meaning growth in Q1, 2021. He is assuming that unprecedented global pharma R&D will save us.

What is “this”?
How long will what last? Pueyo uses an elegant metaphor of the Hammer and the Dance to describe the transition period. The Hammer is the blunt instrument, total lockdown to flatten the curve and significantly reduce the death toll from the virus. The Dance is management of society through a wide variety (Taiwan has 100) of tactics that contain it. Basically, learning to live with it. In North America we have only experienced the Hammer, in Taiwan, South Korea, Hong Kong they have moved on to the Dance.

That Dance is strongly enabled by your phone plus testing. Police and Public Health know where you are, where you have been and everyone else who has been near you. It is crazy surveillance and contact tracing and civil liberties aside it will happen here because it is much better than the alternative.

Importantly, Pueyo documents the mutation of the COVID-19 virus since its inception in China, which means that Transition may go on for years. No one knows how long it will take for science to make it go away. We can be fairly sure that we can learn to live with the virus because those models exist in other countries. That is what we are planning for.

Learning Flexibility
For office people it took two or three weeks to operate with everyone working from home. Manufacturing is a tougher task and retail is even harder, but we are making great strides at it. Let’s call this “learned flexibility”.  Once we agree that people can return to the office there is a good chance that for a period your office may have to shut down for a while again. No problem, been there, done that. Now apply that same mindset to mitigating the risk for the hard stuff.
The strategic capability is to achieve operational flexibility around the initiatives that limit the virus spread in your particular business.

An important part of the “planning” is to identify the initiatives and their impact on spreading the virus as well as their costs. As always you are looking for efficiency – biggest impact at the lowest cost. Seating half the restaurant may be effective, but it has a significant loss of revenue; maybe partitions are a more efficient solution. Simple, but not easy.  Flexibility will come into play because as the environment changes, more or less efficient tactics will be deployed in response. Maybe the hostess has to take a guest’s temperature, maybe not.

Other Stakeholders
As an industry you will need to lobby policymakers that you can Dance in your sector.  Namely that it may be unnecessary to mandate 50% seating when risk can be mitigated in other ways. Consumers are another critical stakeholder who will need to be persuaded.

Consumer perception of risk will likely vary from reality. Their feedback on what makes them feel safe and comfortable in a bar, restaurant or movie theatre will help you bring back the required volume for recovery. A little like some aspects of airport security post 9-11. It looks like they are making me safer!

Lockdown is unprecedented and for many businesses no advanced strategizing would have helped much. Transition though is coming and while it has unknown elements, in that way it is similar to all your planning, not radically different. The good news is that developing a menu of initiatives, learning to implement in a flexible way, getting feedback from stakeholders are fundamentals that will help you win in the transition to a post-COVID 19 world. As always, we are here to help.

Tuesday, January 14, 2020

On the eve of Cannabis 2.0 in Canada, with the addition of edibles and beverages, investors and producers are excited by the potential growth. With the rock star alliances between major brewers and Licensed Producers, the level of investment and the hype you would think that it is a big deal. It’s not.

Read the full article at New Cannabis Ventures

Tuesday, October 8, 2019

Why are most marketers messing up on support points just when it matters most?

For a brand to effectively drive sales it needs to be seen as authentic. That authenticity won’t be built by positioning around the ideal benefit or by demonstrating affinity for the prospects’ values. Brand owners need to tell a story about the brand itself and the building blocks of that story are support points. Those “reasons to believe” are increasingly critical because the growth of online media provides a great opportunity to dialogue about the brand itself – provided that the Brand Manager knows what to talk about.

Let’s step back a moment and look at why “owning a benefit” creates challenges and directs strategists away from the brand itself. “Benefits” are often the pinnacle of brand strategy. It is the answer to the question “How will using or buying the brand benefit the consumer?” Generally, the prevailing wisdom is that whether we are working on cat food or vodka the consumer decision and the resulting benefit is an emotional one. The consumer may cough up a rational alibi under research interrogation, but scratch the surface (or run a functional MRI as Martin Lindstrom did  and underneath it all is a Freudian buffet of unconscious emotions.
The brand manager’s battle cry is to seek out an emotional benefit that can be fulfilled and executionally attack it more poignantly than the competitors.  It gets even tougher within the school of thought that the strategy is more durable if the emotions are “values-based” and grounded in a deeply held attitude that is unlikely to change situationally or over time.

With this widely practiced approach one big problem is maintaining relevance to the category consumer. Lacking a great insight, there are a limited number of emotional benefits that are relevant to the category and an even smaller subset that might be reasonably owned by the brand. With the array of competitors in a mature category (launching a craft beer?) there is usually little to no “white space”. You are circling the block but there is nowhere to park your brand.

With no spots in sight, a popular solution is to talk about the user rather than tell a story explicitly about the brand. “I am Canadian!” means, naturally, that you are a proud Canuck and that this brand aligns with those values. Importantly with beer, the brand and its imagery will allow you to express that to others. A less famous and less effective example was the “Bud Light Institute” an imaginary place that developed solutions that enabled you to have more fun “with the boys”. Put another way, the message was “you are a real man who likes his male-bonding time”. With this user-centric approach, the strategic focus increasingly becomes aligning the brand imagery with prospects’ self-image or identity. What often gets left out of the communication though is a story about the brand itself and this is a lost opportunity to build authenticity and ultimately effectiveness. In a highly competitive category that may be the difference between winning and losing.

At the same time, strong consumer skepticism about your marketing claims continues. The Edelman Trust Barometer, 2019 reveals that 44% of Canadians now distrust businesses. Digital media have made people instantly knowledgeable about brands, wary of “fake news” and rightfully skeptical about the authenticity of  brands. One way to think about the rise of all things “artisanal” or “craft” is a consumer yearning for authenticity – a sense that it is real and linked to real people “crafting” it.

Luckily, we have never had more bandwidth to dialogue with consumers via web sites, email, text, social, experiential. Brand managers have ample opportunity to tell prospects about their brand but sometimes lack compelling, strategic content. The opportunity is to go beyond communication that pounds away, repeating the brands emotional benefit. Consider that your prospect consumer has heard you it is just that they don’t believe you. Repeating it does not make it so.

Our solution is to build a richer, more convincing portrait of the brand. Build Belief™ is a strategic approach that identifies exactly what qualities of the brand most enable prospects and current users to believe in the brand’s emotional benefit. We find these assets by looking through a framework of over twenty possible facets that may apply to a given brand. What we find out from consumers is which of the specific support point statements is most convincing in helping them believe the claimed benefits of the brand. For example, in a recent project with a craft beer brewer, we found that the brand’s historic role in promoting local culture is considerably more powerful than describing traditional, time-honored brewing techniques.

In most categories the consumer has more choice than ever before, and hollow benefit claims just rouse increasing skepticism in a downward spiral. It has never been more necessary for marketers to make the strongest possible case for their brand. At the same time, a skilled marketer now has the opportunity to deploy an informed array of brand-centric support points that build authenticity in mass as well as more targeted media channels and that is what Build Belief™ enables them to do.

Wednesday, February 14, 2018

3 Questions to ask about Trump, Nenshi and your brand to have people believe you.

 I am going to break my self-imposed rule about not talking politics because I think that there are a couple of politicians that can illustrate some important principles about how you can enhance the authenticity of your brands.  Donald Trump has shattered conventional wisdom with his high level of authenticity to a broad section of Americans (despite some fibbing and flip-flopping). Before Trump, there was a total stunner here in Canada named Naheed Nenshi the mayor of Calgary. The anti-Trump.  Nenshi could be thought of as the smartest kid in the class, who is also happy to help you with your homework. He is beloved in that city, proving that the people of Calgary don’t care if you are bookish, inexperienced and Muslim. They want good government and a mayor they can trust.

 In Build Belief™ workshops we dig through brands to uncover Belief Assets that are available to a brand but are not being used effectively. Those same queries can help us understand how politicians like Trump and Nenshi develop remarkable credibility. Having people believe you is contextual and nuanced. It comes not just from what you do, but also who you are and what your motives are - in the eyes of your prospects.

Who are you?
A natural place to start is the Creation Narrative. Trump’s narrative is of a scrappy, successful, self-made, entrepreneur.  It has been bolstered by his reality TV show; people believe what they witness for themselves. His publicized story is crafted to ignore his generational wealth and privilege and certainly his many business failures.

Nenshi’s is a story of gratitude and sacrifice. It is an archetypal immigrant story in which his parents emigrated from Tanzania while his mother was pregnant so he could be born in Canada. He has remarked, “Had my family been just on the other side of the lake in Africa we might have arrived as refugees.” He has seemingly devoted his life to public service in gratitude.  That devotion included a Master’s degree in public policy at Harvard, a stint with McKinsey and consulting for the United Nations before he decided to run for mayor as an outsider.

What is your motive?
Many brands deliberately demonstrate shared values with their prospects as a way to convince their audience that they are worthy of trust and a deeper relationship. Some are credible (Chick-fil-A is closed on Sundays), some fail (Starbucks wanted to “talk about race”), many are in the middle (Bell: “let’s talk”).  Regardless, people will consciously and unconsciously sense what the brand’s true motive is.

Trump is the “true outsider” whose motive is revolution to “make America great again”. What is critical in supporting his claim is his Belief Asset that he is “paying for his own campaign and not soliciting donations”. That is apparently how “entrepreneurs” do it and it allows him a measure of arrogance.

Nenshi’s motive is service.  His archetype is that of a humble servant leader. It is most evident in his ongoing demonstrations of respect for his citizens (and others). He oozes respect and it is irresistible. It allows him to be shockingly frank because he is not haughty.  A good example is how he spoke out on Stephen Harper’s anti-niqab election issue, “This is unbelievably dangerous stuff...this is disgusting” is how he described it to the media . Clearly not pulling punches but gaining credibility along the way.

What have you done?
We know that actions convince people but as marketers we sometimes become obsessed with copy far past its usefulness.  Instead we need to showcase demonstrations of what our brands are about rather than explanations. When you message Nenshi, he often messages you back. To which some respond “what the heck are you doing responding to messages?” To which he always quips “what is more important than responding to citizens. This IS my job.” In 2013 when council voted in a 6% pay raise, Nenshi publicly gave $20 000 to charity... and on and on.

Trump’s great demonstration was, of course, his TV show. To bolster that he points to: the plane, the hotels and the personal wealth as proof of his leadership acumen “I always win. I am very smart”. It is anti-intellectual, real world “intelligence” that he peddles. He is combative in ways rarely seen before. He will “pay your legal bills” to encourage you “take action”. He acts out his traditional common sense promise when he chants “get ‘em out!” at speeches and dissenters are manhandled and tossed out.  It all supports the belief that he is passionately committed to the mission far beyond the suave political rhetoric of most candidates.

These same queries and their extensions can be applied to brands for things and services. Frequently there are Belief Assets that have been overlooked or under-exploited. Only by asking and exploring are they uncovered, creating the opportunity to get consumer feedback and potentially be part of communication that Builds Belief™ and by extension, profitability.

Feel free to add your own insights or additions in the comments below.

Wednesday, September 6, 2017

Who the heck is the Quaker guy?

In 1901 when the Quaker Oats Co. was founded in New Jersey they used the trademark that they had previously acquired for the innovative product of packaged cereal. Notably, the company was not run by Quakers or associated with Quakers. In fact the guy who trademarked the symbol had simply read about them. I suspect he knew that people thought of Quakers as principled and honest folk - the kind of people who would put out a high-quality box of oatmeal.

It’s fair to say that in the 114 years since Mr. Quaker appeared consumers have been trying to see through the hype and manufactured imagery that brand owners have been flinging at them. The consumer’s challenge to suss out authenticity is not new. It has, however, been amped up. The first
big change is brand proliferation. The shopper has many more choices available in most categories. The second obvious influence is the information fire hose online – manufacturer sites, social, experts, consolidated ratings and reviews etc.

Until recently, there was a well-established brand strategy approach that was applied by most disciplined marketers and is still in use today. Put simply: identify the consumer need, articulate how your brand fulfills that need as a benefit and provide one or two nuggets that support your benefit claim. These “nuggets” are often called “support points” or “reasons to believe” or “proof points”.  Mass media, especially TV, only has room for one support point. A critical decision has always been what the winning support point for that benefit should be. In a classic sense it is an ingredient (Trident with Dentec) or a formulation (11 herbs and spices) and so on.
The opportunity for brand owners now is to exploit the new found dialogue with consumers to expose them to multiple support points in whatever ways are appropriate. Marketers rarely concentrate intensely enough on discovering and polishing these potentially valuable gems. They don’t always know what they are looking for and they don’t necessarily know how to look. That is why I developed a collaborative approach to doing that called Build Belief™.

Build Belief starts from a model of four key areas to uncover Belief Assets: Recognition, Observation, Intention and Action and roughly 20 specific triggers among those areas. The approach is a series of workshops and quantitative research to determine the best array of support points for a brand’s desired benefit.

 I think the Build Belief method is rigorous and valuable but if you prefer not to hire help I think that you can still make gains “going it alone”.   Get a broad array of operations, R&D and sales people who are intimate with the brand into a room with some facilitation and, chances are, you will discover assets you didn’t know were there.

Pepsico acquired Quaker in 2001. It was really Gatorade that they wanted, not so much the oatmeal.
I buy my grains, including oatmeal, from Bob’s Red Mill. There is a Bob; he wears a bolo tie. There are a lot of reasons to believe that he sells high-quality grains. You can read about them here.

On one side is Quaker with longevity but not really “heritage”. It is completely contrived. On the other is Bob’s Red Mill: founded by Bob Moore - entrepreneur, passionate about milling and its craft, single-sourced in Oregon, philanthropic and employee-owned. Back in 2010 Bob gave the business to the employees. I am sure he had offers. Maybe even from Quaker. Bob just felt better handing it over to the people who had built it. Okay, I’ll buy your quinoa.

Tuesday, May 23, 2017

How do you sell a $90 000 bed?

 I don't mean a rare and exotic antique or something that Elvis personally slept in, this is a brand. It is a bed pretty much like any other,  in the same way that a Porsche 911 Carrera  is a car and  Jimmy Choo makes shoes.  The bed is a Hästens Vividus and it does not have any special gadgets; it’s just the best bed money can buy.

Hästens is a Swedish company and they sell their beds around the world. In fact they have a retail store in Toronto and many more across the United States.  They have a wonderful marketing challenge justifying a premium price that is 100 times more expensive than competitors that are pretty much functionally equivalent. Their communication is a great example of articulating an array of substantial support points to convey the authenticity of their brand. Here is how they go about it... 

Climbing the Benefit Ladder

Of course Hästens does not try to sell you a bed. They even know better than to just sell you a good night’s sleep. They sell you all the mysterious benefits that flow from a kind of sleep that you have never experienced. They taunt you, “come discover how it feels to sleep for real”.  They offer you the success, well-being and energy that will come from spending a third of your day in a state of ultimate recharge. If you are philanthropically inclined, you can be part of enhancing the world by enhancing its sleep. 

It makes sense to move from functional to emotional benefits at that price point.
The benefit of better sleep getting you a better life is somewhat more believable at $90 000 but competitors can do the same. Simmons Beautyrest promises you “sleep that recharges” and “sleep that luxuriates”.  Kingsdown explains in its video that “your quality of sleep” is “ultimately your quality of life”.

In beds and mattresses  there is no safe haven of differentiation to be found by climbing the benefit ladder. Once upon a time taking the high road of emotional benefits could help differentiate a brand from  its functionally-oriented competitors. Nowadays though, there are too many competitors and too many “values-based brands”. There’s nothing wrong with deeply emotional benefits, provided that you can execute the strategy. The overwhelming challenge is to make prospects believe the claim.

Conveying Authenticity

Hästens does a great job offering a transformational sleep experience but to make you write that cheque for over $100K (sales tax!) they have to convince you that its true and they have to do it without a test drive.  The claims are be supported by genuine differences in the tangible and intangible attributes of the product and the company that makes it.

Here is what they convey to you in their video and website:
  • Hästens is a family company that has been making beds for 5 generations. They demonstrate it in different ways (Ownership, Creation Narrative)
  • They were founded in 1852 and have been making beds for over 150 years (Heritage)
  • Every bit of the bed is handmade by them with care. They show you beds being carefully crafted and the people who do it (Craft)
  • It comes from Sweden and the voice over sounds like a Swede (Place)
  • The bed is made entirely of natural materials: cotton, wool, flax and most notably horsehair that has near-magical properties. There is nothing synthetic.   (Ingredients)
  •  The unique layered design is proprietary and time-tested. It includes a flax layer that enables the discharge of static electricity (Design)
  • It has a 25 year warranty, but many last generations. They torture-test it. They once dragged a bed behind a car for a kilometer - it was fine. (Guarantee)
  • It’s the only bed that  meets the Oeko-Tex 100 standard  where “they often dismantle products to the molecular level” (Third-Party Endorsement)
There is more. Quite a bit more but you get the idea. In the relatively new world of always-on dialogue with consumers and prospects we have ample bandwidth to convey the authenticity of our brands.  We can go way beyond the one Support Point for the TV spot. We can demonstrate “Reasons to Believe” and “Proof Points” in a variety of powerful ways. This is an important pathway to developing authentic, engaging brands.

Opportunities to strengthen support are often overlooked. Which is why over the last few years Lighthouse has been developing and “beta-testing” an approach to improving brand strategies called Build Belief™.  It defines brands in ways  that strengthen  consumer belief in brand claims.  More about that next post.

Here is the link to the Hästens site and video. If you are desperate to try the ultimate bed but are a little short on cash, you can try one for a night  at the Ivy at Verity boutique hotel on Queen Street E.  I’m not sure what you do if you love it.

Friday, May 5, 2017

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.

Lighthouse Clients

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

Toyota Canada
Landmark Cinemas
Sleeman Breweries
Toronto Blue Jays
Cadbury Adams
Constellation Brands/Vincor
Cara Foods/Recipe - Casey's, East Side Mario's, Fionn MacCool's, Bier Markt, Kelsey's, Montana's
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
Canadian Blood Services
Red Lobster USA
Xerox Canada
Sprint Canada
Absolut (Maxxium)

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