November 2013

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HP’s earnings were higher than expected this quarter, but revenue was down. Contemporaneously, Silicon Valley is celebrating the smartest kids in business  (I don’t know their names) owners of Snapchat who just turned down $3B from Facebook — and they have no revenue model.

For all the expense cutting Meg Whitman has done at HP — for all the business blocking and tackling — it should be known that revenue in 5 of 6 business segment is down. Not good.

In this age of “content is king,” I’d like to go off piste and say “revenue is king.”  Business process reengineering, the cloud, social business design and the maker economy are the things of Harvard Business Review essays and B+ papers. But revenue is what business is built upon. Let me say it again, revenue is the thing upon which businesses are built. Top line dollars.

Follow the revenue in the 21st century. When someone opens their wallet, marketing has happened. When someone opens their wallet learning can take place. Metrics can take place.

Ms. Whitman needs to be chasing revenue growth. Period. Let her direct reports work the expense side. Peace.

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breguet

I had never heard of a Breguet watch until thumbing through a lovely glossy magazine published by the brand earlier this year. The booklet paid homage to the Swiss roots of the company, its longevity and amazing craftsmanship – Breguet created the world’s first wristwatch and opened for business before the U.S. declared independence. Inside and out, these timepieces are unlike any others in the world. Rolexes are elegant in their simplicity, Breguet timepieces are elegant in their overt beauty and celebration of complexity.

As the craft economy grows, so will grow the market share of companies like Beguet because they embody the movement (excuse the pun.)  The craft economy, signaled by craft beers, Etsy, workworking channels, etc., has also spawned the latest trend, the maker society.  The word “maker” is the latest pop marketing term and started with the very cool Makerbot. Maketbot is a 3D prototyping printer and was shown in a recent 60 Minutes piece creating a working hand prosthesis for a child…for a few hundred dollars. (The 3D printer is really a robot. The making of robots is cool; mass producing robots – not really craft economy stuff.)

Back to Brequet. When a person holds a “thing” in their hand made by another person and is astonished by the craftsmanship, it is an affirmation of humanness. (I encountered this feeling when as a volunteer archeologist in Maine I found a deer rib bone in the shape of a weaving shuttle, ornamented by human hand. Blown away.) Mass produced products do not astonish. Frankly they lack brand panache and brand story.

The craft economy does not delight customers, its goal is to astonish.   Peace.  

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In my blog I try to not be political.  I save that for Twitter. If my political underwear is showing today, forgive me. I have a thought about moving the Affordable Care Act forward…helping insure many of the uninsured, focusing on preventative health care, and lowering overall cost.

It was reported today that the Californian insurance Exchanges are cranking. The especially good news is that the about 1 in 4 new signees are of the age between 18-34: part of the demo that is the healthiest and that will make the economics work better for other age groups.

Here’s the marketing idea.  Target Millennials and make them early adopters. Many Americans have what I call Peter Pan Syndrome and would love to be forever young. Great grandmas on Facebook. Boomers with Fitbits. Xers drinking cold pressed juices.  We follow the younger because they are in tune with what’s next.

If we create a flow of adoption among Millennials ahead of the rest of the market, and they do so for all the right reasons, perception among other age groups will chance.  Especially if they are taking the moral high ground. (Underwear, sorry.) Millennials care more about the planet, they care more about sustainability, on average they are less xenophobic.  Should they lead the way — even at the cost of opening their own smaller pockets — the floodgates will open. They will, they shall, and whoever is marketing these plans should target them. Peace. 

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No to go all “memory lane” on you, but here’s a story with a moral. When I was an account supervisor at McCann Erickson on AT&T (the technology part, not the voice part), I developed a fact book containing all relevant and import business data — information needed to be conversant in this technical and important piece of business.  Gathering and presenting the data was a great exercise for the AE and AAEs, who were pretty much mushrooms at the time; smart, but not seeing a lot of daylight.  The book’s main purpose was to educate McCann’s president, should he be called to attend a meeting. It could easily be read in the hour it took to drive from NYC to Bridgewater, NJ.   

A story appeared in today’s NY Times suggesting that daily quizzes in college improve student learning when compared to traditional midterm and final testing. My fact book was more like a midterm than a daily quiz…but better than nothing.

Chief level executives at agencies may know their craft (see yesterday’s post), but it’s unlikely they speak the language of the client.  What my fact books did not possess was a section on key consumer and buyer insights. There was a target section, yet only am inch deep.  C-levels who cannot speak the language of the client are simply passing through.  Smart window dressing.  They need more frequent quizzes on the businesses they own, not midterms. Or worse, finals. Finals are when they have to defend and re-pitch the business.  Peace.

 

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Sales Accent.

I have long had a pet peeve about the importance of category experience when it comes to hiring.  In advertising and marketing it is very important when hiring candidates to know they have spent time working in the category. My wheelhouse, for instance, is in technology, healthcare, education and beverages. This may not be attractive to a company looking to hire someone with financial background. The logic is that the getting up-to-speed period for a newbie is longer and, perhaps, wasted time.

My view has always been that the categories in which ad and marketing people are expert, are advertising and marketing.  Selling, not manufacturing. I also believe coming to the party with preconceived ideas about a category stifles learning. Candidates may possess biases that are well-founded based upon their last assignment, but not necessarily accurate from the consumer’s point of view.

Where category experience comes in most handy, is in understanding the buying language. If you are trying to sell technology to a school teacher, it’s important to know what they care about. And the language they use when talking about what they care about.  If you use language in ads or marketing that is generic you are leaving cash on the table. You have a sales accent. Good endemic category language is like music to the ears of customers and prospects.  

How do we balance the negative that is “experience bias” with the positive that is finely-tuned “voice and language”?  Very carefully. Peace.

 

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Presenting Strategy

I was doing some pro bono brand planning work a couple of years ago in Bedford Stuyvesant on a project called LUG, which stands for Living Urban Green, and learned a valuable lesson.  LUG is a well-intended program, or subprogram, under the auspices of Bailey’s Café, a local community group. Stephanie Siegel and Kymbali Craig are the founders of Baily’s Café.

The LUG meeting was held at Paul Robeson High School and attended by the two founders and number of high schools kids.  I was there to help.  At least that was my intention. The vision for LUG, as explained by the kids was much greater than the name suggested.  Bedford Stuyvesant is a community that does not have a lot of recycling emphasis.  LUG was intended to change that. The words “living urban green” are descriptive and have a nice call-to-action. Part of the mission of LUG, however, was to clean up another element of environmental pollution: cursing, disrespect of women, disrespect of others. I loved this program. The founders loved it and the kids got the mission.

My problem was with the name. Internally we could make LUG mean anything we wanted, but externally, in fund raising, the project would seem recycling focused. I was pushing for narrowing the focus to hit recycling hard or to alter the name to reflect the bigger mission. My high schools students listened politely, but wondered about this interloper. Who is this guy who disagrees with the founders? Ms. Siegel and Craig understood my POV but were watching the kids and got caught up in their body language. (I didn’t see it. These kids were good.)

My branding observation may have been right, but I didn’t work the room very well.  My corporate was showing. Strategy is important but you can’t truly communicate (sell) if you don’t work the room. Moreover, you can’t connect well when people are protective or defensive. Lesson learned. Bad planner. Peace.

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I have a bunch of “At-A-Glance” calendars in a bag somewhere chronicling my punk and rock and roll exploits as a 20-30 something; years of attended concerts naming the act, venue and date – most all in NYC.  (Did I lose you at At-A-Glance?) My friend Frenchy took lots of black and white pictures at those shows, e.g., Joan Jett at CB’s, the Raybeats, Contortions, etc. which, someday, we will have to break out of his “bag somewhere” and review. Perhaps we can integrate my calendar with his pics for provenance.

The thing about calendars is that they are behavior-based. Proof-based.  They are not theoretical. No armchair “likes” here.  If I went to see Public Image Limited at The Ritz, that means I was a real fan and customer.  A committed customer. One of the unsung marketing databases available online today (and I suspect it’s a dirty little secret) is the calendar. Mine is private on Outlook, but MSFT is doing everything in its power to get me to synch it in the cloud. And they have been pretty successful. Google probably has a zillion records of consumer behavior in its calendars as does Apple.

The hell with parsing emails, marketers should be checking out activities. Where a woman goes and what a man does (hmm, we could call that the Goes-Does, JKJK) are better determinants of future behavior than what they say.  We’re talking Edward Snowden here. Facebook privacy. This is in-your-grill, research hack stuff.  It will soon be a battleground. Stay very tuned.  Peace.

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I often use an example of my brand planning rigor when explaining to prospects how I work and what I create. Brand plans are many things to many different people. Mine contain one claim and three support planks. The example:

For a commercial maintenance company, one that does office cleaning, building upkeep, snow removal and lawn service among other things, the claim is “the navy seals of commercial maintenance.” This is strategy remember, not a tagline or creative. The support planks are: fast, fastidious and preemptive. These are qualities buyers want. These are also things the company is good at.

navy seal

Clients, big and small, often get the outbound nature of the plan, seeing how this organizing principle can drive communications. Yet sometimes they have a hard time seeing how it can influence the company internally. For a C-level executive or a marketing person who is truly influencial in the product, the internal part of the equation is easily understood. For this level thinker it’s easy to see how one can productize and build experiences around the brand planks — that’s what they are for.

Back to the example — anyone can say they are fast, and in commercial maintenance most do. Anyone can say they are fastidious and many do, using words like “attention to detail.” But preemptive, that’s not so common. Taken together this value prop is unbeatable. And by proving these qualities every day, not just saying or printing them on a website, it is business-winning. Claim and proof…ladies and gentlemen I give you a brand plan.

Peace.

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Google Brand.

Ya gotta love Google.  These guys get branding.  (That’s why they use BBH for advertising, projects and counsel.) I’ve been blogging about the Google brand strategy — first articulated by Sergei Brin — for years.  Their clam is “The world’s information in one click.”  Today, even Motorola CEO Dennis Woodside (Moto is a Google subsidiary), was singing off the same hymn sheet.  Said Mr. Woodside in the NYT “Google’s mission is to organize all the world’s information and make it universally accessible.”   He continued “For Motorola, one of the things we’re trying to do is create a very high-quality mobile Internet experience over time for hundreds of millions of peoples.”  That’s a tight brand strategy. And scalable. Create a claim and productize the proof.

Granted, self-driving cars, one of Google’s pet projects, are not proof of the world’s information in one click.  But do they facilitate the claim? You can’t search while driving. Hee hee. Google has Labs (hey Ben Malbon) and dabbles in many things, so we can’t say for sure that it will make money the same way 100 years out, but for now they understand strategy, what people want, and what they are good at.

One thought though…right now Google searches for websites. That’s where searches resolve. But some of the cooler things these days shooting over the web are not websites — they are apps, messages, pics and vids. That’s something worth thinking about. Peace.  

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Lululemon, Liz Lemon’s yoga company (JKJK), has a wonderful almost cult-like following. First of all, it is associated with a pastime many woman adore so it’s in the right contextual neighborhood. Second the clothing very much shows women’s bodies in their best light.  And if you think that’s not a trend, walk around NYC and count the number of ladies wearing black tights/leggings.

About a year ago, Lululemon had a quality issue and the social boards lit up with talk about the sheerness of the fabric…with what the wifus might call “getting your picture took” issues.  It was Lulu’s first quality punch and one it handled just adequately. More recently, an issue with fabric pilling in the thighs has come up and the company’s response has worsened.

The Wall Street Journal reports that CEO Dennis Wilson is suggesting it is not the quality so much as it is consumer misuse.  To wit:

“Quite frankly some women’s bodies just actually don’t work for it,” Dennis “Chip” Wilson said. “It’s really about the rubbing through the thighs, how much pressure is there.”

And someone with no financial skin in the game (he typed wryly), an analyst, concurred:

“Oliver Chen, a Citigroup analyst, recently tested some Lululemon yoga pants and also found customers at fault. The “product we purchased was not defective,” he said in a note sent to clients. Mr. Chen said transparency was only an issue when “wearing a size that is too small, causing the material to stretch more than its intended amount.”

Here’s the thing, and it’s something I learned from market mover Joe Nacchio back in the day, your customer is not wrong and your customer is not a dog (don’t ask).  A customer may not use a product to spec, but s/he is never wrong. Custies may need education about usage but “wrong” they are not. They’re simply exploring and daring your product — looking for new use cases, which is commendable.

So Lululemon, chill. Get over the hump, Women will forgive you after a while. Focus on what made you great. Treat your ladies with respect and start sewing. Peace.

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