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Brand Finance 101: If you want to succeed in Marketing, get better at Finance

Anyone who does not include “profit” in their definition of brand likely has never run a brand before. To me, a product is the basic commodity you sell but a brand creates a BOND, POWER and PROFIT, beyond what the product alone could achieve. The only reason you would ever add more investment to create a brand is because you believe you can get more back from that investment. We believe that the more LOVED a brand is by consumers, the more POWERFUL and PROFITABLE that brand will be. 

If you wish to succeed in Brand Management, you have to understand Accounting and Finance. If you just like the activity of Marketing, then you won’t get promoted past Brand Manager.

Dissecting the Financial Statement

When your Finance Manager hands your brand’s Profit and Loss (P&L) statement, you want to start digging in on it to understand the basic trends.  P&L.001

  1. The first thing you should do is look at Gross Margins % by dividing the overall gross margin by the overall sales. Doing that, we can see on this P&L the gross margin % is down from 43% to 37%. We’d want to gig deeper to figure out if it’s either overall pricing has been cut or the costs are up. On the pricing, investigate whether it is an increase in trade spend, decrease in the prices across the board or a shift in the sales mix to lower priced items. On the cost of goods, there could be decisions around raw material costs, supplier charges, foreign exchange or production costs.
  2. Next, look at Contribution Margins % by dividing overall contribution income (bottom line income) by overall sales. We can see in our example above that the Contribution Margin % has fallen from 26% to 17%. Not only is there is there a problem at the top line margin, but gross margin is not covering off the increase in spend.
  3. With that change in Contribution Margin %, the next thing I would want to see is a comparison between the sales growth rate and the spend growth rate.We can see here that sales are growing at a healthy 12%, however total spend is outpacing sales growth with 22% spend increase. We are now seeing two issues with profits: Above the falling gross margin plus the high increases in below the line spend. Always remember that Marketers have limited resources……to apply against unlimited choices. The more you focus that spend, the better you will see your strong return on investment.

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The 8 ways brand leaders can drive brand profit

Jack Welch, the former CEO of General Electric was notorious for asking his employees “how do you add value?”  I would take that one step further by asking “which of the 8 ways to add profit are you currently working on”. That would be a sign of  a very focused Brand Leader. Here are  eight ways the Brand Leader can drive profits:

  1. Pricing
  2. Trading the consumer up or down
  3. Product Costs
  4. Marketing Costs
  5. Stealing other users
  6. Getting current users to use more
  7. Enter new categories
  8. Create new Uses for your brand 

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1.  Pricing

While many marketers think of price as a defensive reaction, most times to counter inflation or something happening in the trade channels, marketers should refocus and start using price as a weapon to drive Brand Value. Beloved Brands seem more capable at driving profits through pricing, but they also are careful to ensure the premium does not become excessive to create backlash.

  • Price Increase: You can do a price increase if the market or brand allows you. It likely has to be based on passing along cost increases. Factors that help are whether you are a healthy brand or it’s a healthy market as well as the power of your brand vs. competition and channel.
  • Price Decrease: Used when fighting off competitor, if you need to react to a sluggish economy or channel pressure. Another reason to decrease price is if you have a competitive advantage around cost, whether that’s manufacturing, materials or distribution.

There are watch outs for price changes. It’s difficult to execute especially if it has to go through retailers. You need to understand power relationships–how powerful are the retailers. Many times, price changes are scrutinized so badly by retailers that you must have proof of why you are doing it. It’s likely your Competitors will over-react. So your assumptions you used to go with the price increase will change right after. And finally, it’s not easy to change back.Brand Finance 2016.026

2.  Trading the consumer up or down

Aside from price increases, another strategy would to create a range of products that allows you to reach up or down to a new set of consumers.  You need to ensure that you are doing this for the right reason or it could backfire on you.  

  • Trading Up: If you have a range of products, sometimes it can be beneficial to get consumers to trade up. Can you carve out a meaningful difference to create a second tier that goes beyond your current brand? Do your brand image/ratings allow it?
  • Trading DownRisky, but you see un-served market, with minimal damage to image/reputation of the brand. In a tough economy, it might be better to create a value set of products rather than lower the price on your main products.

There are a few watch outs around trying to trade up or down: Premium skus can feel orphaned at retail world—on the shelf or missing ads or displays. Managing multiple price levels can be difficult—what to support, price differences etc. For all the effort you go to, make sure your margins stay consistently strong through the trading up or down. Be careful that you don’t lose focus on your core business. You can’t be all things to everyone. The final concern is what it does your Brand’s image, especially risky when trading downward.

3.  Product costs

Managing cost as a weapon to enhance the Brand’s Value. It can be either your cost of goods or the marketing costs.  As marketers, we sometimes think cost is someone else’s job.  But it’s an effective weapon that marketers should be utilizing.  

  • Cost of Goods Decreases: You are able to use the power of your brand to drive power over your suppliers; you find cheaper potential raw materials, process improvement or find off-shore manufacturing.
  • Cost of Goods Increases: Make sure that you manage the COGs as they increase. Watch out for suppliers trying to pass along costs. But realize that with new technology, investing in brand’s improved image, going after premium markets, offering new benefit or a format change, that cost of good increases could be a reality.

The watch outs with managing costs: with cuts, make sure the product change is not significantly noticeable. You should understand any potential impact in the eyes of your consumer on your brand’s performance and image. Can the P&L cover these costs, either increased sales or efficiency elsewhere? Managing your margin % is crucial to the long-term success of your brand.Brand Finance 2016.028

4. Marketing costs

As marketers sometimes we get protective of the amount, hoping to have as much money as we can to carry out the activities on our priority lists.  But we should be looking at marketing costs from the view-point of the CEO, with a focus on making sure every program drives profit.  

  • Marketing Cost Decrease: To counter changes in the P&L (price, volume or cost), it’s very tempting to look to short-term P&L management or look at changes in go-to-market model. Where a brand stands on the product life cycle or how loved the brand is can really impact the selling costs. Even though we think that Beloved Brands have endless spending, they actually likely have a lower investment to sales ratio.
  • Marketing Cost Increase: When you’re in Investment mode, defensive position trying to hold share against an aggressive competitor or when you see a proven payback in higher sales–with corresponding margins.

Always be in an ROI mindset: Manage your marketing costs as though every DOLLAR has to efficiently drive sales. Realize that short-term cuts can carry longer term impact. Competitive reaction can influence the impact of investment stance–like a price change, your competitor might over-react to your increases in spending.

5. Stealing other users

Externally, the Share and Volume game are traditional tools for brand. Either stealing other users or getting current users to use more.

  • Offensive Share Gains: Use it when you have a significant Competitive Advantage or you see untapped needs in the market. Or opportunistic, use first mover advantage on new technology.
  • Defensive Share Stance: Hold the fort until you can catch up on technology, maintain profitability, loyal base of followers needs protecting.

Be careful when trying to gain share. A Beloved Brand has a drawing power where it does gain share without having to use attack modes. Attacking competitors can be difficult. It could just become a spend escalation with both brands just going at it. After a share war that’s not based on a substantive reasoning (eg. technology change), there might end up with no winners, just losers. Many times, the channel will try to play one competitor against another for their own gain. Watch out what consumers you target in a competitive battle: some may just come in because of the lower price and go back to their usual brand.Brand Finance 2016.032

6. Getting users to use more

Going after frequency is a different strategy.  

  • Share of Requirements:  In many categories, even loyal consumers will work within a competitive set of favourite brands. A good strategy is to provide a reason (claim, experience, emotion) for loyal consumers to stay with your brand.  
  • Get Current Users to Use More: When there is an opportunity to turn loyal users into creating a potential routine. Changing behaviours is more difficult than enticing trial. It’s a good strategy to use, when your there’s real benefit to your consumer using more. It’s hard to just get them to use more without a real reason.

There has to be a real benefit connected to using more or it might look hollow/shallow. Driving routines is a challenge. Even with “lifesaving” medicines, the biggest issue is compliance. Find something in their current life to help either ground it or latch onto. When I worked on Listerine, people only used mouthwash 20-30 times a year compared to 700+ brushing occasions. So we focused on connecting rinsing with Listerine to the twice daily brushing routine.

7. Enter new categories  

When there is an untapped or under-served need. There could be a significant changing demographic that impacts your base. Or you are able to translate/transfer your reputation to a new user group. There should be something within your product/brand that helps fuel the brand post trial. Trial without repeat, means you’ll get the spike but then bust. Substantial investment required. Don’t let it distract from protecting the base loyal users.

8. Create new uses

Format Line Extensions that take your experience or name elsewhere. Able to leverage same benefit in convenient “on the go” offering. Make sure current brand is in order before you divert attention, funding and focus on expansion area. Investment needed, could divert from spend on base business. Be careful because the legendary stories (Arm and Hammer) don’t come along as much as we hope.

Here are lessons learned for driving more profits for your brand.

  1. Higher volume helps you exert pressure on costs. That could be supply costs, operations costs, and distribution over even media costs.
  2. Get more for less from the trade. You can begin exerting power over the sales channels to your advantage–trimming variable trade costs with retailers while demanding more display, prime real estate, coop advertising and more control over pricing. ROI on trade programs.
  3. Smarter more efficient management: manage your inventories, meet customer expectations, control pricing and drive cheaper costs. Make better choices.
  4. Growth means you start outgrowing any fixed costs. This includes start-up costs, sales force, product plants or R&D costs.
  5. Lower Cost of Capital: More certainty means lower risk and you can re-invest, knowing the ROI will be quicker and stronger.

 Love = Power + Profit

To get better at Brand Finance, here is our Workshop we run to help Brand Leaders understand Accounting.

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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How to answer “So, tell me about yourself” in 7 seconds

Brand Careers 2016.006Welcome to the job-hunting season.

In the modern economy, you should always be looking for a job, when you don’t have a job, and when you do have a job. I know  it can be draining, but at least be constantly listening. Before you contemplate phoning your head hunter list, here’s 5 questions to help frame your thinking.

  1. Within your current company, how high up do you think you can realistically go
  2. Should you stay in the same industry or look at new verticals
  3. Should you stay in pure Brand Management or venture into a subject-matter expert type roles?
  4. How long do you want to keep working?
  5. Do you stay an employee or do you take this moment to leap out on your own?

Do your homework on your brand

From what I have seen, Marketers are better at marketing their brands and products than they are at marketing themselves. It is time to start thinking of yourself as a brand and how you will want to market yourself to get the job you want.

What is your core strength? 

Brand Careers 2016.011While every Brand Leader claims to be a generalist, we normally each have a lead desire and lead strength:

  1. Do you like running the business and managing products
  2. Do you like marketing execution and being creative, either generating ideas or executing creativity?
  3. Are you a strategic thinker, enjoying the planning side of the business?
  4. Are you a leader of leaders, with a passion for leading people?

If you had to force yourself to choose one, which one would you pick?

What is it that makes you unique?

There are tons of candidates on the street, many without jobs and many others who are in jobs beneath their capability. What makes you stand out. Think like a Marketer. Your hiring Manager is the target market. Think of what they want for the role, what you bring and what potential competitors bring, in order to find your unique selling proposition. When I was at the VP level looking, I realized that I was likely replacing someone they were dissatisfied so I positioned myself as a “turnaround leader”. But not every job or every leader is the same and your goal is not just to find a job, but to find the right role. Be honest in who you are.

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Take it a step further and do up your own Benefits Ladder, where you map out what the employer is looking for, what features you bring, how those translate into rational and emotional benefits. Classic marketing that we fail to do, when we are the brand.

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So now, the dreaded question:  Tell me about yourself.

Think of this like your 7 second brand speech, where you give a summation of your brand’s big idea. Here’s the tool we have created as help that answers how you define yourself, what is the primary benefit you provide and what is the secondary benefit you provide. Then wrap it up with an expected result.

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My answer was always: “As a brand leader, I find growth where others couldn’t and I create motivated brand teams that deliver great work to drive results.”  Answering all four questions within a 7 second span. But taking that further, I then lined up proof points to each part of the 7 second speech, thus becoming my 30 minute interview. I could line up 3 situations that answer the interviewers question, but then be able to tie that back to my big idea. Brand Careers 2016.069

This 30 minute speech on one page can set up the stories you put on your resume or Linked In page. It can be something you review before the interview. If you want to get creative, one thing I do as a consultant is bring a laminated “brand placemat”. This would be a great tool to bypass the resume or a great leave behind for the hiring manager.

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So next time someone says “So, tell me about yourself”, you will know how to answer

To read more about Brand Careers, follow this presentation below. We have mapped out every skill and behavior your need to be successful as well as what it takes to thrive at each job level in Marketing.

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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How to use your brand’s core strength to win

There are four options for what CORE STRENGTH your brand can win on: product, promise, experience or price. Many brand leaders have their marketing strategy wrong, when it comes to aligning everything behind the right strength. 

  • Product: your main strategy should focus on being better. You have to invest in Innovation to stays ahead of competitors, remaining the superior choice in the category.
  • Promise: your strategy should focus on being different. To tell that story, you need to invest in emotional brand communication. You want to connect consumers on a deep emotional level with the concept.
  • Experience: your strategy and organization should focus on linking culture very closely to your brand. After all, your people are your product. As you go to market, invest in influencer and social media that can help support and spread the word of your experience.
  • Price: focus on efficiency and drive low-cost into the products you sell and high turns and high volume. You have to be better at the fundamentals around production and sourcing.

Here’s a simple little game that we play with executive teams. We provide them with 4 chips against the 4 choices of product, promise, experience or price. They have to put one at the highest competitive importance, two at the mid level and then force one to be at the low level. Try it and you will be surprised that your team struggles to agree. You may also find that you are at one strength now and figure it is time to shift your brand marketing to become focused on something else. 

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Product Brands

With Product Brands, your main strategy should focus on being better. You have to invest in Innovation to stay ahead of competitors, remaining the superior choice in the category. Here, it works to focus on rational advertising that makes sure you re-force with consumers that you are the best. However, in a crowded market, it has become increasingly difficult to win on product  alone—as many brands are operating in a parity situation. Two great product brands are Five Guys with the best burger and Ruth’s Chris Steakhouse who has a unique cooking technique that products the best steak. These brands talk mainly about the great product. In fact, looking at the Five Guys brand, they have almost completely let go of experience or pricing. The restaurants are almost run down, and the price of a 5 Guys burger is about twice the going rate. But the product is absolutely amazing and is drawing fans in droves across the world. For years, Proctor & Gamble pushed this strategy at every opportunity across Tide, Ivory, Pampers and Always. But technology gaps have closed they have been forced to switch some of their brands to focusing more on being different and less on being better. The problem for product type brands is they struggle to be emotionally engaging and while consumers might love the product, they do not necessarily love the brand. While you can run an amazing business this way, if a competitor catches up to you on product or if you wish to move your loyal base into other products, it is not as easy as being a concept or experience brand.core strength.002

Promise Brands

With Promise Brands, your strategy should focus on being different. To tell that story, you need to invest in emotional brand communication. You want to connect consumers  on a deep emotional level with the concept. Brands in this space include Apple who builds around the concept of simplicity, Virgin stands out in new categories by challenging the status quo and generally accepted ways of doing things and W Hotels combine the nightlife feel, so you never have to leave the Hotel. With these brands, they still need to make sure that the product delivers at a level expected within the concept. If it fails to deliver, there may be a sense of hollowness to the concept that brings the brand down. Instead of calling these loved brands, I call these brand lust, where our initial feelings are the same as love, only to be disappointed by the product experience.core strength.003

Experience Brands

With Experience Brands, your strategy and organization should focus on linking culture very closely to your brand. After all, your people are your product. As you go to market, invest in influencer and social media that can help support and spread the word  of your experience. Wells Fargo bank offers comfortable banking, Ritz-Carlton uses impeccable customer service to really separate itself, Emirates Airlines who take service to new heights (and prices accordingly) and Starbucks creates an escape with indie-music, cool servers, leather chairs and a touch of Europe. Each of these brands operate in high commodity type businesses, yet they each use precision based service guided by tight service values that line up to a brand purpose.core strength.004

Price Brands

With Price Brands, your strategy has to focus on efficiency and drive low-cost into the products you sell and high turns and high volume. You have to be better at the fundamentals around production and sourcing. Use call-to-action type advertising to help keep the turns very high. McDonald’s of the 1970s perfected this model, but we’ve since seen Walmart take it to the next level. You might not like all that Walmart does from an ethical point of view, but it’s on strategy and helps you get toilet paper cheaper. What consumers don’t notice at Walmart is their obsession with retail turns. On average Walmart sells through their stock within 28 days, compared to other retailers who might average 100 days. You rarely see slow-moving items and rarely see clearance items. Brands like Uber, Amazon and Netflix have combined an amazing experience at a very low-cost. These inventive brands have recently figured out ways to use technology to eliminate a lot of waste in the value chain.

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So, what is your strength you will win on?

Below is our Beloved Brands Workshop we run on Strategic Thinking:

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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The consumer has changed dramatically. Have you changed enough?

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Marketing has changed dramatically and if you are not changing with it, then you will not be able to unleash the full potential of your brand nor will you be able to unleash your own full potential as a Brand Leader. When I say that Marketing has changed, people think I am about to talk about the change in media options over the last 15 year, with the opening up of digital, social and search. Sure, that has changed the way we do things, but is really at the surface level. Starting at the turn of this century, we began witnessing a deeper underlying change happening with consumers, who have begun rewarding those brands who exceed their expectations, who have gravitated towards brands that treat them as though they are special, and who have become loyal to brands that open up and establish a higher purpose worthy of connecting with.

Consumers ended the last century tired of the crap that brands kept promising, jaded by the tricks brands used to get them to buy, leaving them feeling burned by over-promise and under-delivery. Consumers now want and expect more. Consumers want to be appreciated and they are willing to love the brand that will treat them like they are the only person that matters. Everything a brand does, should start and end with the consumer in mind. Brands are shifting from fighting for a space in the mind of the consumer to fighting for a place in the consumers heart. It is about becoming one of the favorite parts of the consumers’ day, not just pure product performance. The change in media is merely an enabler to the underlying change, but not a driver. The best brands of today are loved.The media options have had a dramatic influence on the consumers lifestyle–the number of messages, multi-tasking and being tired of being burned. The change in the consumer should drive your Media Planning more than the change in media

  1. Consumers see more brand messages than their brains can handle. 
    • In the year 2015, consumers see up to 7,000 brand messages every day. The fastest thing our brains now do is reject advertising messages. The digital ads on every website you visit, at the top, on the side, on the bottom, drop down boxes. Whenever you turn on Facebook, every google search you make. Take the subway and see hundreds or drive to work and see the same. We now surf messages quickly and only engage in a few each day. Life was much simpler in the last century when consumers saw a few billboards on the way home from work, had dinner and watched Seinfeld on TV seeing a few ads each night. But, in the current world, your consumer is being bombarded by brands. Are you doing anything to change the way you approach consumers to ensure you are gaining their attention?
  2. Consumers are constantly multi-tasking—driving, walking, talking.
    • Even with 7,000 messages a day, consumers are barely watching. FOMO (Fear of Missing Out) means people are constantly multi-tasking. I rarely watch a TV show without my laptop or phone nearby. Most people sleep beside their phone and read updates as soon as they awake. Even with laws against texting and driving, I see it every day. And walk downtown in a straight line and you are bound to walk into someone “walking and texting”. Once you gain the consumers attention, you have to find a way to engage them to stay with your brand. What are you doing to hold the attention of your consumer to avoid them being distracted away?
  3. Consumers are tired of being burned by faulty brand promises.
    • Consumer marketing is a little over 100 years now and hopefully consumers have become much more sophisticated in their decision-making. Last century, we saw too many brands over-promise and under-deliver. But brand reputations are now being made and equally dying based on the consumers ability to do their homework. They do their own research, they can ask friends or read on-line reviews. If they are burned by a brand, they quickly spread the message. Have you figured out a brand promise that you can deliver beyond the purchase moment? Have you created an experience that will get purchasers to become brand fans?
  4. Consumers now take control and action over the buying process.
    • Consumers now control what they buy. They are not sold to. Last century it was all about selling. In the current world, it’s all about buying. They are taking full control over the buying process–gaining awareness about brands from friends, only considering after doing their own research to validate what they are hearing and then they figure out the ideal pathway to the purchase moment. They read labels, read reviews and make up their own minds. They pose questions to friends for advice. Putting 100% of your budget on a 30 second TV no longer works. Have you figured out how to co-manage the path to the purchase moment along side the consumer to help them consider, search, purchase and experience your brand?
  5. Consumers connect with brands they believe in.
    • Consumers now want and expect more. They line up to brands that line up to their values and expectations. Consumers want to be appreciated and they are willing to love the brand that will treat them like they are the only person that matters. Ethics and behavior now matter. We are seeing the ethics of brands like Volkswagen and GM destroying the brand reputation. We are seeing Chipotle facing small regional safety crisis points, with the news spreading like wild-fire and the brand is dying before our eyes. Consumers have full access to information and they are not just buying what you do, but why you do it. The most loved brands are based on a big idea that consumers connect with, yet that idea has to reflect the brand’s soul. Have you figured out your brand purpose and then figured out how to build your stated brand purpose into your brand story, your product innovation and the brand experience? Have you figured out how to make the brand purpose be part of the purchase moment as a deal closer to a tie between two brands?
  6. Consumers reward amazing experiences over products alone.
    • Last century, consumers just bought products like Tide, Kodak and Pampers. Most of them we learned about on quick 30 second TV ads that followed a similar formula screaming “we are the best”, shown every half hour trying to drive awareness. But consumers are connecting at a deeper level with brands that offer an experience that over-delivers the promise. With Starbucks, it’s more about the “moments” than it is about the “coffee”. Everyone keeps pointing to the fact Starbucks coffee finishes middle of the pack in blind taste tests. But you cannot replicate the experience of nice leather chairs, cool music, great conversations, amazing culture of people. We are starting to see that the new product is becoming the experience, and while claims supported the product, it is the organization’s culture that supports the experience. Have you figured out to create an experience around your brand that brings it life beyond the product itself? 
  7. Consumers explore rationally, but stay emotionally.
    • In this 21st century economy, the winning brands are those who can create strong emotional bonds with their consumers. While brands might gain entry into the consumers mind in the first 7 seconds, consumers are now emotionally engaging with brands. Research companies like Hotspex show that over 50% of brand decisions are emotionally based. To achieve Brand Love,  brand needs a Big Idea that expresses your brand’s soul and serves to connect with consumers while shaping the internal culture of the brand. Brands need Focus in the choices a brand makes in terms of vision, strategy, positioning and execution. And brands need to show Passion in everything to drive creativity that connects with consumers and precision that helps create brand experiences that exceed expectations. The best brands build every touchpoint around the Big Idea including the promise, brand story, innovative products, ubiquitous purchase moments and brand experiences. How will you use Big Ideas, focus and passion to really create a bond with your consumers to turn them into brand fans that love your brand?

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What is it that creates a bond between the consumer and the brand? You need to be able to describe your brand to CONSUMERS in 7 seconds, 60 seconds, 30 minutes and over the lifetime of the brand, always telling the same story. 

  • In today’s crowded branded marketplace, the modern consumers see 7,000 brand messages a day. The fastest thing our brains do is reject brand messages. Brands need an entry point to gain permission to the consumer’s brain. Can you explain your brand in 7 seconds?
  • After decades of being burned by false promises, modern consumers are naturally cynical and constantly doubting brands. They test the brand by asking detailed questions. Brands need a solid story that closes off any doubts consumers may have. Can you explain your brand in 60 seconds?
  • Modern consumers like to take control over their buying process as they move from consideration to search and finally to a purchase moment. Brands need to move with consumers through to the purchase moment. Can you explain your brand in 30 minutes?
  • As the modern consumer experiences the brand, they either accept or reject the promise. Consumers are more loyal to brands they share a common purpose and shared values. Brands need to create experiences that match the brand story. Can you describe your brand over the lifetime of the brand, always telling the same story?

What are you doing to deal with the changing consumer?  

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Below is our Beloved Brands Workshop we run on Strategic Thinking:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Get better at Strategic Thinking

Strategic Thinking 2016.007The best Brand Leaders know when to be a strategic thinker and when to be an action thinker. You need to find your balance by thinking slowly with strategy and thinking quickly with your instincts. While pure strategic people would make for a great consultant, I would not want them running my brand. They would keep analyzing things to death, asking questions over and over, without ever taking action. Every day there would be more questions and in turn more strategies, without action. While the action oriented tactical people get stuff done, I am not sure I want them running my brand either. They would make great ads, great packaging and highly innovative social media executions but no one ever interrupts them to say “are we going in the right direction?” While it is really hard to come up with strategies, it is even harder to stay on strategy. I want someone running my brand who is both strategic and action-oriented, almost equally so.

Strategic Marketers can have a conflict with creative people. Creative people are typically more emotional than brand leaders and value pride more than the brand leader. These creative people want to make work they can show off, while the Marketer wants to make work that drives growth. Marketers need to find the ideal balance between science and art, acting as both “artist” and “scientist”. Too many times, I have seen Marketers who are one or the other. The “scientists” type Marketers are super analytical, who can tell a great story linked with numbers, but then when it comes time to execute they cannot get past their rational side and they miss out on using data to go to the emotional side of marketing. On the other side, the “artist” type brand manager is normally a good “do-er” who makes great packaging, advertising or promotions that entice consumers. They have great natural instincts, but they cannot always link what they are doing with the strategy and the numbers that it takes to run a business. We believe you should think slowly with strategy and go with instincts when it comes to execution.

The natural speed for strategic thinking is slow thinking, difficult in a fast paced job. The biggest conflict with strategy are those action-oriented people, who believe that doing something is better than doing nothing. Without proper focus, it just spreads resources randomly. Slowing down can help you to be more logical and effortful, providing deeper thinking that many times is hidden away from the day-to-day parts of the job. I see too many Brand Leaders who are so smart that they go too quickly through their strategic plan, choosing the obvious options because they never stop to ask the great questions that forces the deeper thinking needed for strategy. We reserve fast thinking for the execution side of Marketing, which is more instinctual, automatic, emotional, subconscious and gut reaction. On execution, going too slow might result in over-thinking.Strategic Thinking 2016.013

With strategy, slow down, take a deep breath and put your feet up on the desk. Here are 5 ways to slow down on the job:

  • Find your own thinking time. Go for walks at lunch or a drive somewhere to get away from it all. Block hour long “thinking meetings” with yourself. In my 20 years, rarely did a great idea come when I was sitting at my desk. The best ideas always seemed to come from out of no where, usually when my mind was freed up from the constant constraints of deadlines, to-do-lists and forecasts.
  • Organize your week to fit your thinking pace. For instance, maybe talk “big ideas” on a Friday morning so you can take the weekend to think, yet schedule quick updates on Monday afternoon that clears your mind for the week. Figure out your best thinking time and avoid the worst times. For me, I was clearly brighter at 9am than I was at 3pm.
  • Do the deep thinking before the decision time comes. Always be digging deep into the analytics to prepare yourself, no matter your level. Even at the VP level, I did my own monthly share report that forced me to dig in on the data so that I knew my business and I would be able to draw conclusions beneath the surface.
  • Next time in a meeting, spend your energy asking the best questions. Too many leaders try to impress everyone with the best answers—next time stump the room with the best question. If you want to demonstrate to senior management that you are strategic, instead of showing that you have the best answers, try showing them that you have the best questions. When you are with your team, instead of looking to tell them what to do at every turn, ask them great questions that make them think.
  • Proactively meet your partner team. Get to know the needs of your partners, rather than wait for a problem or conflict. Come to them proactively with possible solutions so you both win.

Strategic Thinking 2016.015When I am in a large group setting and I ask people “so, what does it mean to be strategic?”, not a lot of hands go in the air. When I press them, the common answer I get is “making choices” and “having a long term vision”. I see those as components of strategy, but equally they could easily be applied to tactics. We have mapped out 7 key elements that are essential for good strategic choices: vision, focus, opportunity, speed, early win, leverage, gateway. By mapping out these 7 elements, our hope is that it provides a challenge to the way you think and a good conversation starter to have with those on your team that you want to be more strategic.

  1. Vision: An aspirational stretch goal for future, linked to a well-defined purpose. It should push you. It should scare you a little, but excite you a lot. Challenge yourself to think of the longer term, beyond your current situation, so that you can put a stake in the ground of where you want to be.  
  2. Focus: Alignment of your limited resources to a distinct strategic point you wish to penetrate, creating positive momentum on a pathway towards your vision. Every brand is constrained by resources—financial, people, time and partnerships. Yet, every brand faces unlimited choices they could make. The best strategy has focus, that serves to limit those choices to match up to the limited resources that you will apply. From my experience, focus is one of the hardest elements for marketers to be good at. Without focus, you can never be strategic. There has to a willingness to take risks to put your resources against the choice you believe will pay back.Strategic Thinking 2016.016
  3. Opportunity: Something happening in the market, as a potential strategic opening based on trends in the market (e.g. consumer behavior, technology, competitive actions). A good strategic mind can turn data into knowledge and wisdom that allows you to see potential opportunity for you to take advantage of and help win in the market. You should always be analyzing and assessing situations in the marketplace with regular deep dives on your business to uncover opportunities.
  4. Speed: Like in sports, time and space of the opportunity matter. As soon as you see the opportunity, you must act quickly before others see the same opportunity. In this modern economy, the winners are faster, not because they take random action, but that they are able to map out the series of events in a way that takes advantage of their strengths and quickly matches those up to opportunities they discover.
  5. Early Win: Break through point where you see a shift in momentum towards your vision. It offers potential proof to everyone that this strategy will work, helping rally others–the team, agency and even your boss. This is the starting point to seeing a degree of success and smaller shifts in positional power. It may be a test market validation, a breakthrough with a smaller group of consumers, a win at a certain retailer, or seeing underlying tracking scores that show the brand is moving in the right direction.
  6. Leverage: Ability to turn the early win into creating a momentum, that leads to the tipping point where you achieve more in return than the effort put in. You must be the one to see how to transform what you have gained so far into a new pathway that allows you to go after the bigger win.
  7. Gateway: Realization point where you see a shift in positional advantage or power that allows you to believe your vision is achievable. That power may be with the consumers you have won over, competitors that you have gained against, retailers that you have shown proven success or power you see with media options that allows you to continue to exploit your early success. The goal here is to turn your smaller early win into the bigger win that resembles the original vision.

Below is our Beloved Brands Workshop we run on Strategic Thinking:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

 

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Do your own damn performance review!!!

This time of year is when you sit down with your boss and have the dreaded annual performance review. 

It’s likely dreaded for a reason. You hate getting feedback and your boss hates giving feedback. These days performance reviews feel like a bit of jockeying. When you do you self-evaluation, you avoid putting anything that can be used against you. And when your boss does your evaluation, they will avoid putting anything that will imply a promotion, raise or even maintaining your employment. Maybe it’s time that we think of the performance review as a necessity of the job, but we should stop thinking this is big defining career moment that will help you. If you have a great boss, use it to your advantage. Some of my bosses took it seriously, many did not. In my 20 years of working, half of my performance reviews were worthwhile, and considering I had one manager for 7 years who did an excellent job for me, that leaves 13 other years where the reviews did very little for me. I recommend you take control of your own career and never be at the mercy of others.

If you are managing your career, then give yourself a Performance Review

We look at Marketing Careers over 4 different levels: Assistant Brand Manager (ABM), Brand Manager (BM), Marketing Director and VP Marketing. Companies may use various titles, but the ABM is generally a do-er or contributor to strategy, while the BM is the owner of the plan and the go-to person on the brand. Usually the Director manages a broader team and the VP oversees the entire marketing team. 

We have mapped out at the 32 essential skills that a Brand Leader needs, at every level. What I have found is that marketing is about learning the fundamentals and then use your experience to continuously improve. As much as your company self-assessment is guarded and careful, when you do your own, you have to be very honest with yourself to identify what you need to work on.

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When it comes to Analytics you should be mastering this as an Assistant Brand Manager and Brand Manager, but you have to continue to use these skills throughout your career. While digging into every aspect of the business helps you learn the basic analytics, what separates great marketers on analytics are those who can transform all those numbers into an analytical story that helps set up a decision point.

Brand Planning is usually owned by the Brand Manager. But honestly it can take a few years to become competent at writing plans. If not done well, planning can get out of control. The goal of a brand plan is to get everyone on the same page, to ensure everyone is moving in the direction that is outlined in the brand plan. There are so many elements of a plan you need to get comfortable with, from creating a brand vision that motivates everyone, to purpose and values and onto strategy and tactics. To ensure action comes out of the plan, the Brand Leader should be creating specific project plans for each element of the plan.

While positioning is one of the core strategic functions of marketing, it is rare for a marketer to be involved in positioning their brand. Most are taking the positioning from the previous marketer. Positioning is really about simplifying everything on the brand, down to something that is focused and digestible for consumers. A good positioning has a focused target market, one main benefit and two reasons to believe. From that positioning, you can create a Brand Concept or even move forward to writing a Creative Brief that can help execution. Too many brand leaders lack the ability to write a brief and it’s impacting marketing execution.

Any type of advertising requires brand leaders to use judgement and make decisions. The decisions should be balanced with strategic thinking and gut feel for the creative choices and media options. While we all have natural instincts even before we get into marketing, being able to articulate those over a complex network of advertising experts and over a long project timeline are very difficult. Practice these skills early in your career on smaller projects and perfect them as you move to more complex and bigger projects. With a large advertising project, the brand leader has to work through the ad agency that would include 3 distinct groups–account team, creative team and strategic planner. Then moving towards production, you need to oversee a series of subject matter experts including producers, directors, sound technicians and actors. You have to stay true to your vision at every stage of the project. I have found that with each new project right up to the VP level, you should be continuously looking to improve. How you make decisions, how you motivate others and how you communicate will either make or break the advertising projects you are leading.

New products can vary in their degree of complexity. The simplest ones are incremental launches using the same brand name, and using the same production and distribution channels. The more complex type new products involve a new brand name, a new technology, new distribution channels, new production, government regulation, determining the projected sales, costs and support needed.

One big growing weakness is the go-to-market execution that involves the marketing and sales teams to work together. Over 20 years ago, it was very common that marketers did a stint or two in the sales department. As the roles have become more senior and specialized, it has become more difficult to move people between the roles. This has created silos between Sales and Marketing, leaving the marketer with a perception that they live in an “ivory tower”. There is a skill in learning how to influence the sales team, ensuring that your marketing and sales are working together to make the brand stronger. At any stage, you should be constantly getting into the stores and meeting with sales people. As you get more senior, you should learn how to present to buyers.

In terms of Leadership and Managing you need to hold your team to a consistently high standard of work in strategic thinking and planning. Then you need to hold your team to a consistently high standard of work in execution in the market. In terms of people management, you need to be seen as actively interested in helping your team to manage their careers. Teach, guide and direct your team members for higher performance. Training and development provides on-going skills development to make the team better.

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We have also mapped out 15 leader behaviors for you to also use as a self-evaluation, looking at the behaviors that separate great Brand Leaders from the pack. A great Brand Leader is accountable to results, strong on people leadership, a solid strategic thinker, carries broad influence and brings an authentic style. Leadership behaviors are harder for us to self-evaluate. I would recommend you have casual conversations with those you can trust to give you feedback. There is a term called “blind spots”, where people who you work with know that you have a weak, but you don’t know.

Identify your own gaps

We recommend that you go through each of the dimensions and give yourself a score in relation to your peers. A score of 5 means you are one of the best in your department in a given area, a 4 is above average, 3 means you are average and the scores of 1’s and 2’s would mean you have a gap. Force the scores so that you can clearly identify 3 skills and 3 leader behaviors as being a relative gap to your peers. Based on where you are with your career, I recommend you end up using the year to close Then as you build your own personal plan for the year, map out a plan of attack for the coming year. 

2015 brand careers.019Don’t worry, we all have gaps. At every level of my own career, I had some major gaps. Many I wasn’t even aware of and some I was even in denial. Only as I moved up to Director and VP level was I able to close some of the gaps. For example, I struggled throughout my career when dealing with the sales team, was never a great negotiator and always weak when it came to managing up. Maybe if I had one more self-evaluations along the way, I could have closed the gaps sooner.

We all have gaps. What are going to do about closing your gaps?

Below is a Powerpoint presentation of a workshop we run on Managing your Brand Career. I hope that it challenges you to think differently and identify some areas you can improve for next year.

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Without the normal Ad Agency process, two students produce an inspiring Johnnie Walker ad

johnnie-walker-dear-brother-hed-2015Not only was the work free, but it was free of the traditional Advertising process that is now broken. 

While this ad is very inspiring, it should frighten or frustrate some of you. I hope it makes you say “why can’t we make ads like that?”  What is your answer?

As people watch it, clients will be thinking “see what happens if I didn’t have an agency in the way” and agencies will be thinking “see what happens if I didn’t have a client in the way”. The real challenge should make you think “how can we get that type of work?”.

Or the bigger question: “what is wrong?”  

The ad agency world appears nearly broken. We see the world’s biggest agencies re-structuring and re-shuffling of the deck chairs. We see traditional agencies buying boutique agencies trying to gain their expertise and then failing again when they don’t listen to the people from the agency they bought. We see clients bringing creative development in-house. We see clients putting their business up for bid. Agencies show up with the best of the best, smiles on their face, win the business and we never see those people again. Then 6 months later, they still can’t deliver great work.

This ad was made by two film students. No Agency. No client. 

This spot lacked the process of constant re-writing of the creative brief, there was no endless series of creative presentations, no emails summarizing the feedback from 11 client representatives, no backroom deals between senior executives, no big quote for a big production, no focus groups or quantitative testing and no internal approvals where everyone provides their unique input.

So ask yourself one question: What is wrong with our current way of getting advertising?

Agency Model is broken for clients. Agencies need to make the brand leaders life easier, by being smarter, faster, more responsive to consumers and cost effective.

  • Disjointed work: Nothing lines up behind a big idea. Confusing. Brand Leaders used to have one “go to” agency that did everything. Now the Brand Manager has to bring agencies together, normally stressful and unsuccessful.

  • Client frustration: Agency too slow, expensive, unresponsive. Traditional agencies remain slow, expensive and political. Media world has changed and agencies must change with the changing media world.

  • Bad Execution: Lack of expert skill leads to poor marketing. Brand Leader have lost the art of being a generalist that doesn’t do anything. They have been put front and center, forced to begin making program choices, creative executional moves and media decisions.

Here’s my message for agencies:

  1. Your client needs help!!! Clients need help building every part of the marketing plan around a big idea, no matter the medium. Make them feel smarter at every stage. Don’t let your client ever feel dumb.
  2. Focus your client.  Clients need help focusing their resources on one target and focusing one message, with the right strategy for where the brand sits to tighten the bond. Don’t ask for strategic room or tear apart the brief and make various creative options when really you are making new strategic options. Help focus the brief. 
  3. Inspire your client and make them part of your team. Clients need help to bring out their passion providing better execution, with great work that is faster, more consumer responsive and cost-effective to deliver a return on investment. Don’t make your client feel like an outsider.

Here’s my message for clients:

  1. Focus focus focus!!! The smaller the strategy, the better the work. How tight is your Brief? Do you narrow the Target and add engaging insights? Do you focus on the desired consumer response before deciding what your brand should say? Do you focus on One Benefit and One Message?  Creative options are fine. Strategic options means you’re not doing your job.
  2. Be a creative leader. Meet the creative team before the first creative meeting to connect, align them with your vision and inspire them to push for great work. At creative meetings, stay big picture, avoid getting into details? When giving direction, avoid giving your own solutions and but rather try to create a “new box” for the creative team to figure out the solutions.
  3. Knock down all the resistors to great work. Challenge yourself to take creative risks, and are you willing to be different to stand out. Manage your boss at every stag by selling them on the vision what you want. Be willing to fight for great work.
  4. Have  you ever thought about being one of your Agency’s favorite clients   Do they “want to” or do they “have to” work on your business? Would this make you get better work?

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Below is a presentation of a workshop training that we run for clients on how to get better advertising:

 

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

 

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Our 7 favorite Holiday ads of 2015. Have your say.

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The UK has always led the way with story telling Holiday ads. And this year is no different. 

UK retailer John Lewis always does terrific Christmas ads and this year is one of the best. I love it. Makes me think of my daughter’s relationship with my mom. Already achieved 20 million views on youtube. 

Sainsbury’s, a UK grocery store, launched an ad this year, which appears to be a fan favorite. Cat lovers certainly will enjoy this one. Personally, I found the ending a bit too contrived. But 21 million viewers and many of my friends have said they like this one better than the John Lewis spot.

This next ad comes from Mulberry, and is a bit bizarre. Wonder how well this goes over with the deeply religious. The sarcasm of this spot treats this new red hand bag as though it is the baby jesus. Perfect for those with a slightly dark sense of humor. I’m still trying to figure out if I like it, but it sure stands out.

Staying with sarcasm comes one of my favorites this year from an electronics retailer in the UK. Curry’s PC World hired Jeff Goldblum to tell people how they should be acting. I’ve seen a handful of these spots, including one where Jeff tells people how to act when the boss gives you a secret santa gift or how to act when someone burns the turkey. And in this one, how to react when your husband gives you a jigsaw puzzle. So far, each spot

 

Another UK retailer, Harvey Nichols, has done a great job in articulating the selfishness of Christmas. While not quite as good as last year’s spot, this one is still quite good.

The spot that is generating the most interest comes from german grocery retailer, EDEKA. This spot is getting shared on many social media sites making people all over the world cry. It certainly touched a nerve with me. Right after seeing it, I called my mom to see how she was doing. Some others find the spot goes way too far to pull at the heart-strings with the older man faking his death. However, this has generated an incredible 38 million views so far.

And finally, Tesco has created a series of quirky humor ads including this spot with a young man flirting, or at least trying to flirt. 

 

Have your say in our poll: Poll Link

If you have seen other ads, we’d love you to share those in the comments section. This is one of our more lighthearted articles, given you are likely cleaning up files before year-end, getting your accrual into finance and finishing some of your key projects. Hope your year-end performance review goes well and you start getting ready for a big 2016.

Here’s our workshop we run to help Brand Leaders become better at Advertising

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911.

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How to win the Marketing War Games

Positioning 2016.013You have to find a unique selling proposition for your brand, that distinguishes you from others. Looking above at the Venn diagram, we first start by listing out everything your consumers want, then list what your brand does best and what your competitors do best. The winning zone for your brand to play in is the match up where consumers want what you do best. The losing zone is to play where consumers want it, but your competitor does it better than you. Competitive Positioning Options.001As we are maturing in the marketing, it is harder and harder to come up with a definitive win, so that is where you can win the risky zone by being different, being faster to market, winning with meaningful innovation or building a deep emotional connection. The key to be seen as unique, not just for the sake of it, but to match up what you do best with what the consumer is looking for. Sadly, I do have to always mention the dumb zone. This is where two competitors “battle it out” in the zone the consumer does not care about. I say sadly, because I keep seeing this in the market. One competitor starts saying “we are faster” and you see them so you think “well we are just as fast”. No one bothers to ask the consumer if they care about speed. Too often, Brand Leaders start with the claim, and then try to make the most of it in everything they do. The problem with that strategy is your claim might not be a benefit,  and even if it ladders up, it might not be something that is own-able for you or motivating to the consumer.

When you position your brand you want to focus on the area where you are better than your competitor and then use communication, innovation and experience to extrapolate that benefit’s importance, while then diminishing what your competitor does best.

Competitive Brands

Where you rank and what role you play within your category is a great indicator of how much power you can command in the market. In terms of Marketing War Games, we have mapped out 4 types of competitive brands: the Power Player, the Challenger, the Island brand, the Rebel Brand. If you do not fit into one of those four, by default you become the Battler Brand where you are in a constant dog-fight in, stuck in the middle of the pack, unable to command any point of difference.

The Power Player leads the way: This is reserved for the leader of the category. These brands have a power over the category and over competitors. They can defend their territory by attacking itself or even attacking back at an aggressive competitor. The Power Player is usually the market share leader but it can also be the perceived leader in the consumers’ mind. For instance, Apple is the perceived leader of the cell-phone market, even though Samsung has a significantly higher market share. The best strategy is actually to ‘attack yourself’ by identifying and close leaks in service, experience or products before others can take advantage of those leaks. Challenge the culture to step it up to  continually get better and stay ahead of the competitors. Competitive Positioning Options.002Always be launching innovation that is better than your current product. Never become complacent or you will die. Keep an eye on your competitor’s moves—and adjust your own brand to ensure you defend against their attacks. Power Players always block all offensive moves and attacks back with an even greater force than the one attacking you. You always need to demonstrate your brand power—whether that is with competitors, retailers, media or even the very consumers who love you.

Power Players own what they are best at, and manage to achieve perceived parity with competitors on their weakness to avoid opening up a new competitive advantage for anyone in the market to attack them. Where there is a tie winners of these brands win on innovation, emotional, speed or taking the product and turning it into an experience.

A great case study of a Power Brand leader facing the attack from a challenger brand, McDonald’s was able to hold their own under attack by Subway’s weight loss claims and the movie “Super Size Me”. They launched a full array of salads & sandwiches, changed their happy meal to appeal to healthy moms, and voluntarily put calorie counts on their menu. For the next 5 years after “Super Size Me” McDonalds saw double-digit growth when everyone thought it was in trouble. On the other hand, Blackberry is a great case study of a brand that forgot to defend their Castle. In 2009, Blackberry dominated the B2B executive market. But they wanted to be more like Apple than like themselves. They launched a bad touch screen phone, an undifferentiated tablet, sponsored rock concerts and launched BBI for teenie-boppers. They never attacked themselves by improving the flaws of their current product or defended their strength with corporations. Pretty soon, executives were switching to the iPhone and Blackberry was headed for a quick fall to near obscurity.   

The Challenger Brand tries to change the playing field: Challenger’s attack on the leader to exploit a weakness or build on your own strength. The best offensive attack is to actually find weakness within the leader’s strengths. Competitive Positioning Options.003One very powerful strategy is to turn a perceived strength of the leader around by making it a weakness. Attacking a weakness might be insufficient, because consumers already know it is a weakness. Be careful of the leader’s defensive moves, by anticipating a response with full force—possibly even greater than yours.  Avoid wars that drain your limited resources and end up with the same share after the war. Following Napoleonic rules, you need to attack on as narrow of a front as possible to ensure your resources are put to that area—which might be more of a force than the leader puts to that one area. When a leader is trying to be everything, those narrow attacks are effective—enabling you to slice off a part of their business before they can defend it. Where there can be product differences, invest in R&D to achieve a leapfrog strategy where technology and business models become game-changers in the category.

The best example of a Challenger Brand attacking the leader came from the Pepsi Challenge which was a direct offensive attack on Coke.  Without the strength of the Coke brand name and all that went with it, people picked Pepsi in blind taste tests, preferring the sweeter taste. Supported by “the taste of a new generation” Pepsi was able to change the playing field away from Coke’s strength of tradition and heritage over to Pepsi’s taste and youth.   

The Island Brand goes into the unknown areas: An attack in an open area where the Leader is not that well established. Island Brands go to uncontested areas, in the safety where the leader is not competing. Make sure you are the first in this area. Speed and surprise can help win the uncontested area before the Leaders take notice. Make your move quickly and stealth fully. Follow through matters, to defend the area you’ve won. Be careful that your success on this island may invite others to follow whether it is the leader trying to use their might or copycats looking for an early win. Then you become the Power Player of your island  and must defend your territory with full power you have. Island Brands normally win with new targets, price points (premium or value), distribution channels, format or positioning. In the modern world, we are seeing many brands using completely new technologies such as Netflix or Uber to completely change the playing field. The biggest issue for Island Brands is the increased risk that your concept might not work. These are different concepts in a different space, and that brings a higher risk.

Special K Challenge is an amazing example of an Island Brand. As most cereal was targeting families, facing complaints of high sugar and calories, Special K established itself as a lower calorie and weight loss option. Around 2000, Special K made a dramatic turn in the market. With all the diet-crazed consumers looking for new solutions, Special K had a stroke of brilliance when someone figured out that if you ate Special K twice a day for just two weeks, you could lose up to 6 pounds in 2 weeks. While all the other diet options felt daunting, this felt pretty easy to do. At that time, the big idea for Special K was “Empowering Women to take control of their weight”. Special K’s innovation rivaled that of Apple. It started with the launch of Berry Special K that thrust the brand into a good tasting cereal, and has since added bars, shakes and water. Most recently, they’ve now launched potato chips (only 80 calories for 20 chips) and a Breakfast Sandwich option.  it just goes to show you that it’s not about ‘out of the box’ ideas, but rather how you define the box.  All these product launches are aligned to the idea of empowering women to maintain their weight. The diversified line up beyond cereal helps off-set any sales softness on cereal.

The Rebel Brand goes against the category: Going into an area where it’s too small for the Leaders to take notice or are unable to attack back. Pick a segment small enough that it won’t be noticed and you’ll be able to defend it. Competitive Positioning Options.005Be aggressive. Put all your resources against this small area, so that you’ll have the relative force of a major  player. Be flexible and nimble. You will need to enter quickly to seize an opportunity that others aren’t noticing, but also be ready to exit if need be—whether the consumers change their minds or competitors see an opportunity to enter. Explore non-traditional marketing techniques to get your brand message out and your brand into the market quickly. Because you’re playing in a non-traditional market, you’ll be given leeway on the tools you use. For Rebel brands, it is better to be loved by the few, than liked or tolerated by the many. They are at their best when no one even notices or cares.

The Rebel Brands that comes to mind is 5 Guys Burgers. They have avoided taking on the big fast food chains directly, preferring to go into the high quality, fresh ingredients at a super premium price ($8-10 for a burger). They do not worry about calories or salads or even chicken. They are sticking to what they are good at: highest quality burgers. 5 Guys is taking their niche into a high growth situation, with 1000+ locations. The consumers are passionate about the high quality burger. They are stealing the top end of share from McDonald’s but are doing so by owning their niche. While they face other high quality burger joints like In-N-Out or Shake Shack, they are clearly following the McDonald’s real estate strategy by trying to be everywhere.

Dollar Shave has also done a great job as a rebel brand. Dollar Shave Club is a subscription based razor company, founded in 2011 by Mark Levine and Michael Dubin based on the idea that consumers are highly frustrated with the growing cost of razor blades. This is a classic case of finding a major un-addressed problem that consumers are facing in the market, and use a creative brand solution that helps to turn that problem into a consumer enemy that upsets them emotionally. We are seeing many brands use new technology options to set up the old guard as the enemy ready for attack. And this is the strategy for Dollar Shave on Gillette. With the cost of a pack of razors going for $20 at your average drug store or even $40 at Costco, there was a huge opportunity in the marketplace. Yes, we’ve seen huge technology gains in the last 20 years with way more blades than we ever though possible, flex balls and blue lines telling us when to throw it out. But for a great many of us, price still matters. At first Dollar Shave was so small ($25 Million in sales) that Gillette could not be bothered to defend. You can imagine that as Dollar Shave started out, they were up going against one of the biggest consumer goliath brands in the world. Gillette’s global sales are in the billions. For Dollar Shave, first year sales were about $30-50 million, while they likely generated a lot of noise at P&G, that sales level should not even be enough to make Gillette lose an ounce of sleep.

Competitive Positioning Options.006If you are stuck as a Cluttered Brand: Most brands are stuck in a dog-fight in a crowded category where they struggle to find any competitive points of differences they  can take advantage of. These brands battle it out using traditional tools such as distribution, price and promotion to try to win, only to discover that without a Big Idea it is just a constant drain on their resources. These Cluttered Brands act like a commodity, trying to out-effort or out-last their competitors. However, if the brand is a commodity, there will be no loyalty, no price premium and no growth. That means no funds coming back to invest back into the brand. These brands need to find an idea that is unique, own-able and motivating to consumers. The only way to get out of this vicious spiral is to become a Rebel Brand and build around a smaller motivated target by something you can build around or find a game-changing option to become an Island Brand.

Lessons for Marketing War Games

When engaged in marketing war games, here are things you need to do to win:

  • You have to realize that speed of attack matters. Surprise attacks, but sustained speed in the market is a competitive advantage.
  • Be organized and efficient in your management.  To operate at a higher degree of speed, ensure that surprise attacks work without flaw, be mobile enough.
  • Focus all your resources to appear bigger and stronger than you are. Focus on the target most likely to quickly act, focus on the messaging most likely to motivate and focus on areas you can win.
  • Drawn out dogfights slow down brand growth. Never fight two wars at once.
  • Use early wins to keep momentum going and gain quick positional power you can maintain and defend counter-attacks.
  • Execution matters. Quick breakthrough requires creativity in your approach and quality in execution. Expect the unexpected.
  • Think it through thoroughly. Map out potential responses by competitors. 

What is your competitive position for your brand and are your strategies lined up to your role?

At Beloved Brands, we run a brand strategy workshop to help brand leaders at  your company think differently, looking at consumer strategy, competitive strategy and situational strategy.

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911.

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Are you strategic?

Strategic Thinking 2016.009After 20 years of managing Marketing teams, I have seen hundreds if not thousands of marketers. It is fascinating that everyone proclaims “I’m a strategic thinker”, yet in reality most Marketers are great implementers and not that strategic. Everyone seems to proclaim they are a “strategic thinker” on their LinkedIn profile. I actually think everyone believes they are strategic or have talked themselves into it. Most people think being strategic means you are smarter.

Here are some good questions to challenge where you have been in in your career.

  1. Have you ever had a good 2-hour coaching conversation with your boss about how you could be more strategic and what you should do to be more strategic?
  2. Is your boss really strategic and can you learn how to be more strategic by observing them?
  3. Have you ever received training at work on how to be more strategic and how to specifically relate that back to your job as a Marketer?
  4. Did your company have an expressed definition of what it meant to be strategic, so that everyone could work towards being more strategic?

If you are like me, during my 20 year career at Fortune 500 companies, the answers to those questions are more likely “no” than “yes”. Yet, people get promoted because they are strategic and held back in their careers at a given level because they “are not strategic enough”. When I look back on my career, if I were honest, I would say that I was way more tactical than I was strategic. I was a great do-er. Yet, I likely believed that I was “strategic”.

I had a coffee with a person about to start their marketing career the next week. She asked me “At what level would I have to get to where my job is 100% strategy?” My answer surprised her and possibly deflated her expectations. I said “I made it to the VP level and at that point, I would guess 20% of my job was strategy, 30% was executing in a way that stayed on strategy and 50% of my job was leading and managing others”.

Strategic thinkers methodically see questions before answers. Action thinkers instinctually see answers before they know the right questions. The best minds need to be able to do both fluidly.

Strategic thinkers see “what if” questions before seeing solutions, mapping out a range of decision trees that intersect and connect by imagining how events will play out. They take time to reflect and plan before acting, helping you move in a focused efficient fashion. They think slowly, logically, always needing options, but if go too slow, you will miss the opportunity window. Action thinkers see answers before even knowing the right questions, using instincts and impulse. Any delays will frustrate them, believing that doing something is better than nothing at all. This “make it happen” mode gets things done, but if you go too fast, your great actions will be solving the wrong problem.

The best Brand Leaders know when to be a strategic thinker and when to be an action thinker. You need to find your balance by thinking slowly with strategy and thinking quickly with your instincts. While pure strategic people would make for a great consultant, I would not want them running my brand. They would keep analyzing things to death, asking questions over and over, without ever taking action. Every day there would be more questions and in turn more strategies, without action. While the action oriented tactical people get stuff done, I am not sure I want them running my brand either. They would make great ads, great packaging and highly innovative social media executions but no one ever interrupts them to say “are we going in the right direction?” While it is really hard to come up with strategies, it is even harder to stay on strategy. I want someone running my brand who is both strategic and action-oriented, almost equally so.Strategic Thinking 2016.010

When I am in a large group setting and I ask people “so, what does it mean to be strategic?”, not a lot of hands go in the air. When I press them, the common answer I get is “making choices” and “having a long-term vision”. I see those as components of strategy, but equally they could easily be applied to tactics. We have mapped out 7 key elements that are essential for good strategic choices: vision, focus, opportunity, speed, early win, leverage, gateway. 

  1. Vision: An aspirational stretch goal for future, linked to a well-defined purpose. It should push you. It should scare you a little, but excite you a lot. Challenge yourself to think of the longer term, beyond your current situation, so that you can put a stake in the ground of where you want to be.  
  2. Focus: Alignment of your limited resources to a distinct strategic point you wish to penetrate, creating positive momentum on a pathway towards your vision. Strategic Thinking 2016.041Every brand is constrained by resources—financial, people, time and partnerships. Yet, every brand faces unlimited choices they could make. The best strategy has focus, that serves to limit those choices to match up to the limited resources that you will apply. From my experience, focus is one of the hardest elements for marketers to be good at. Without focus, you can never be strategic. There has to a willingness to take risks to put your resources against the choice you believe will pay back the most.
  3. Opportunity: Something happening in the market, as a potential strategic opening based on trends in the market (e.g. consumer behavior, technology, competitive actions). A good strategic mind can turn data into knowledge and wisdom that allows you to see potential opportunity for you to take advantage of and help win in the market. Just like murder, strategy requires opportunity. You should always be analyzing and assessing situations in the marketplace with regular deep dives on your business to uncover opportunities.
  4. Speed: Like in sports, time and space of the opportunity matter. As soon as you see the opportunity, you must act quickly before others see the same opportunity. In this modern economy, the winners are faster, not because they take random action, but that they are able to map out the series of events in a way that takes advantage of their strengths and quickly matches those up to opportunities they discover.
  5. Early Win: Break through point where you see a shift in momentum towards your vision. It offers potential proof to everyone that this strategy will work, helping rally others–the team, agency and even your boss. This is the starting point to seeing a degree of success and smaller shifts in positional power. It may be a test market validation, a breakthrough with a smaller group of consumers, a win at a certain retailer, or seeing underlying tracking scores that show the brand is moving in the right direction.
  6. Leverage: Ability to turn the early win into creating a momentum, that leads to the tipping point where you achieve more in return than the effort put in. You must be the one to see how to transform what you have gained so far into a new pathway that allows you to go after the bigger win.
  7. Gateway: Realization point where you see a shift in positional advantage or power that allows you to believe your vision is achievable. That power may be with the consumers you have won over, competitors that you have gained against, retailers that you have shown proven success or power you see with media options that allows you to continue to exploit your early success. The goal here is to turn your smaller early win into the bigger win that resembles the original vision you set out to achieve.

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By mapping out these 7 elements, our hope is that it provides a challenge to the way you think and a good conversation starter to have with those on your team that you want to be more strategic.

At Beloved Brands, we run a brand strategy workshop to help brand leaders at  your company think differently, looking at consumer strategy, competitive strategy and situational strategy.

We make Brands stronger.

We make Brand Leaders smarter.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911.biz card 2016.001

 

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