Marketing strategies that produce
By John R. Graham
The retail harvest of Thanksgiving week
2004 was less than bountiful for Wal-Mart. While other
retailers were upbeat, Wal-Mart’s sales were
“disappointing” the last week of November and
traffic was “low” on infamous Black Friday.
Uncharacteristically candid, the company
quickly acknowledged it had dropped its deep discount strategy
the day after Thanksgiving. Reacting predictably, value-minded
customers headed straight to the arms of the competition where
low pricing prevailed.
In Clued In, Lou Carbone writes,
“With modern management fixated almost solely on the
bottom line, the value proposition of far too many businesses
has become increasingly one-sided; lots of emphasis on the
company but little on enhancing customer value.”
And then he adds an ominous warning.
“As a consequence, I believe today’s organizations
have become extraordinarily vulnerable.”
The day after Thanksgiving 2004, consumers
saw Wal-Mart in a new light: the king of retail is vulnerable.
What followed was dropping prices on a couple of dozen
bellwether items, along with an unprecedented print and TV ad
blitz.
It’s almost as if the giant
stumbled. They didn’t anticipate the competition taking a
page from the Wal-Mart game book. They abandoned, just for a
moment, their winning strategy of delivering the lowest prices
on customer-pulling products.
While Wal-Mart will not make that mistake
again, what lingers is the unavoidable fact that even the
biggest company in the nation can stumble when it abandons,
even for a day, its customer-focused strategy. If it can happen
to Wal-Mart, it can happen to any company. To avoid the
problem, here’s a sales results marketing strategy:
Get the right information
Evidently, Wal-Mart assumed that its
competitors would behave the day after Thanksgiving as they had
in the past.
Most businesses make a crucial marketing
mistake: they listen to themselves. They convince themselves
they’re right.
Krispy Kreme is another example. The
company’s enviable success seemed unstoppable. Then sales
hit a wall. The company blamed the low-carb craze, even though
the slide started at least a year before the Atkins diet became
popular.
Did Krispy Kreme believe it had an
unbeatable recipe for success? Did they try to analyze what was
driving it? Did lines a block long outside their new stores
tell them everything they wanted to know?
Even today, does the company understand
what customers value? Without solid information, even a hot
donut cools off.
Always think brand
Brand has less to do with look and logos
than it does with the way a customer experiences a company,
product or service. If Fedex means one thing, it’s
certainty. Disney says it’s great to be a kid no matter
how old you are.
But as Joseph Benson points out, “We
all know, buy and experience brands that have a great heritage.
For some of us, it’s Mercedes, Philips or Disney. For
others, it is McDonalds, Heineken or Gucci. What makes these
brands great, what they all have in common, is that they have
had the time to build a meaningful and relevant
past––a heritage.”
How much do we care about taking all the
tiny, seemingly insignificant and bothersome steps to
painstakingly create a heritage that establishes value and
builds customer confidence?
Value identification
It’s time to put features and
benefits behind us. They’re the past. A product may
appear to be benefit rich, but what if the customer isn’t
interested or doesn’t care? Are they still benefits?
For example, a marketing research project
for a large drycleaning chain revealed that customers at
certain stores value coupons, while those in other stores
don’t. Where’s the benefit of coupons for those who
don’t want them?
“Becoming the customer is different
from listening to customers,” says Michael J. Lanning in
Delivering Profitable Value. All that’s important is what
happens when the customer experiences a company’s
“products, services and actions.”
Get service right
One visit to the service department of
Quirk Ford in Quincy, MA, makes it clear they don’t ever
want to hear a customer say, “You didn’t fix it
right when I brought the car in.”
For the Quirk Ford team, repairs must be
perfect.
That’s not all. The service
department is open six days a week, starting at 7 a.m., and
there’s a free shuttle service. You speak to a service
counselor in an office, not a repair facility.
The result is confidence in the service
and satisfaction at having a dealership that thinks like a
customer.
Renovate instead of innovate
Cox Communications has embraced
renovation. And it’s doing it by thinking like its
customers.
Getting broadband service to a home is
only half the job. Rather than leaving it up to the customer to
figure out how to connect to a computer, Cox offers wireless
network installations as one of several other computer-related
services.
By building on its existing capabilities,
Cox figured out how to deliver more of what the customer wants.
Instead of innovators, Sergio Zyman says
the need is for renovators, companies that keep looking for
ways to engage the customer more fully. He learned the lesson
the hard way at Coca-Cola where he was part of the management
team that introduced an ill-conceived product, “the new
Coke.”
Plan for disaster
Wal-Mart evidently wasn’t prepared
for the Friday after Thanksgiving. No one thought of asking,
“What happens if our competitors do something different
this year?” Doubters aren’t viewed as team players.
Yet, look at what happened to the
insurance industry in the aftermath of New York attorney
general’s charges and indictments. One of the
world’s largest — and most necessary ––
industries was caught off guard, thrown on the defensive.
The worst part has nothing to do with the
illegal activity or even the highly questionable sales
practices. The blow to the insurance business was the breach of
trust, the cornerstone of the industry.
Asking “what if” questions is
far from an empty exercise. It may be the most pressing issue
business faces today.
Be helpful
“E-marketing is about substance over
show, logic over emotion, text over graphics,” writes web
site content expert Gerry McGovern. “In fact, good web
marketers follow the Google motto: be useful.”
The words apply to all marketing.
Certainly, if you want to know how a company sees itself, visit
its web site.
If the focus is on the company and what it
sells and how proud it is of everything, you can be sure
it’s totally inward directed. It’s sending the
message that it does not want to engage customers, just sell
them.
Visit palmone.com and see first hand what
it means when a company takes “useful” seriously.
Palm owners experience a company that thinks their thoughts.
“Useful” should drive
everything a company does, including marketing, sales and
service.
Make everything yours
There’s one thought companies never
want entering a customer’s mind: “Why do we really
need them?”
Apple Computer learned early on that
manufacturing computer components wasn’t its business.
This article is being written on a Powerbook with parts from
Toshiba, Mashita, LastDash, among others. What makes it a Mac
is its user-friendly operating system.
And what makes amazon.com unique is not
what it sells but how it sells it. It’s the unique
amazon.com experience that brings customers back time after
time.
We need to ask ourselves, “Are our
customers just using us to buy what they need? Or, have they
made the conscious decision to want to do business with
us?” The difference is the experience.
Get out of your skin
The major hurdle companies face is getting
outside of themselves. Citizens Bank has risen from its humble
Rhode Island roots to its current position as one of the
fastest growing financial institutions in the nation, made
possible by the enormous resources of its parent, the Royal
Bank of Scotland. Through it all, Citizens works to position
itself as a local bank.
However, the Royal Bank of Scotland
decided it wanted more visibility for itself. To help
accomplish this objective, Royal Bank of Scotland’s four
inward pointing arrows are replacing the Citizens’
“C.”
The change sends an interesting, but
perhaps, unnoticed message. If local means looking at the needs
of the community, an inward directed logo sends a conflicting
message.
These nine strategies are interrelated,
each one leaning on the other eight. Each is a keystone; remove
any one and the strategy collapses. The power is in their
unity.
A service department that doesn’t
understand the need to “get out of your skin”
undermines the entire process.
A sales force that fails to address what
customers value is equally as harmful.
And management that ignores branding
fashions a faulty future.
John R. Graham is president of Graham
Communications, a marketing
services and sales consulting firm. He is an author of several
books, writes for a variety of publications and speaks at
association meetings. Graham can be contacted by phone at (617)
328-0069.
