Saturday, June 23, 2012
This video is a favorite amongst my students. Erik Qualman author of "Socialnomics: How Social Media Transforms the Way We Live and Do Business", put this video together. It's a continuation of Carl Fisch's "Did You Know" series, that I've admired for years. (I'm happy to say that Carl Fisch is a Computer Science teacher here in Colorado, and I was fortunate to have met with him in person several years ago.)
This video addresses that social media is not a fad, hype or a buzz word. It's an effective means of communications to assist organizations in their 1-to-1 dialogue with their customers. The focus is to move away from broadcasting your message to the masses, and narrowcasting to those who want to know about your brand, and will more than likely become an advocate for your brand. The video provides interesting statistics and insights. Enjoy!
Wednesday, June 20, 2012
Last January, J.C. Penney announced the roll out of its “Fair and Square Everyday Low Pricing Strategy.” Six months later, the company president, Michael Francis, exits the company after taking over the helm last October. Francis was a former Target Corp. executive.
I spent some time in the investor relations section of the J.C. Penney website to see if I could identify early warning signs for why the strategy may have gone astray. I reviewed their SEC filings, annual report and sales presentation from Q1. I could hear an optimistic rally cry that 2012 was going to be the year J.C. Penney rejuvenated it’s 110-year old brand.
It’s almost as if the company used a retailer checklist to tackle their rebrand and fresh new approach…
- New, hipper brand identity to replace the original stuffy one: Check!
- Change store layout and design, create a modern concept: Check!
- Add new recognizable brand names to the product mix: Check!
- Expand home accents and furnishings: Check!
- Convince customers that coupons and discounts are tedious: Ooops!
Although I appreciate they landed Ellen Degeneres to promote the new pricing strategy, J.C. Penney didn’t anticipate that her "Main Street America" appeal, wasn’t enough to convince consumers that the everyday low prices were truly going to save them money and provide the best deal.
Our society has been conditioned to look for the best deal possible. "Paying retail? Be sure to load up with coupons, cash in rewards, pre-pay, or find a promo code to use online."
- TV shows such as “Extreme Couponing” are educating America that you don’t have to pay more than a couple of dollars (if any at all) to get $1,500 worth of groceries, simply by clipping coupons from newspapers and mail flyers.
- Rewards points are cashed in for free coffee from Starbucks, free airline tickets, hotel rooms and car rentals, and other goods and services.
- Groupon and LivingSocial have shown us that we can get a great meal, vacation, shopping spree, or just about anything, for less than half the cost if we purchase it in advance.
- Websites such as Retailmenot.com and promotionalcodes.com provide us with promo codes to shop online and get free shipping or a percentage off your entire shopping cart.
- Retailers such as Bed, Bath and Beyond allow you to bring in a fistful of coupons to use 1 per item purchased, even if the coupon has expired.
- Finally, grocery stores show us how saving 25-35% off your entire grocery bill is easy, simply by swiping your rewards card or entering the phone number associated with your account. On top of that, your dollars spent contribute to additional discounts. If you buy gift cards, you can earn 4x the points for fuel discounts at the pump.
Everywhere we turn, we are inundated with messages to save money and get the best deal. We don’t actually believe that the price on the tag is necessarily the final price we’ll pay at the register. We want to see the savings appear at the cash register screen and then print out on the receipt. This psychological approach can actually release endorphins, giving us “buyer’s delight” rather than buyer’s remorse.
So when J.C. Penney decided to do away with what society has come to love and embrace - using coupons, rebates, rewards, pre-paid gift certificates, promo codes, etc. – they are interfering with that “feel good” sensation.
According to today’s Wall Street Journal, J.C. Penney will tweak their messaging, not their strategy. How long will it take for them to drop the strategy completely? Everyday low prices may work for Walmart; they serve different market segments. Time will tell if message “tweaks” were effective. I don’t think the decline in 2012 sales is tied to J.C. Penney’s messaging. I believe it’s tied to the pricing strategy. Convincing their target audience that what they see, is the best deal they can get, is going to be a challenge that they may not be able to overcome. Perhaps J.C. Penney is going to target different or new market segments with this new messaging. Perhaps these segments will be convinced. I believe it is unlikely that the majority of their customer base will buy it.
Saturday, June 16, 2012
When you’re looking for a job, package yourself as a product unique from all other products. Sell your personal brand to land the job.
The national unemployment rate is 8.2 percent. According to a recent Bloomberg article, the breakdown reveals that nearly half of the states in the U.S. are equal to or higher than 8.2. That means if you are looking for a job, you are up against significant competition. What can you do to stand out? Establish your personal brand. Do you articulate your value proposition as well as you could be? Is your value proposition similar to everyone else competing for the same job? Applying marketing concepts to your personal brand is a direction you can take.
You can apply these concepts when you are looking for a new job, planning to transition into another career or even climb higher in your existing career.
The book “A Brand Called You” written by Peter Montoya and Tim Vandehey is a guide that can walk you through this process and is definitely inspiring.
Another inspirational resource is Denver-based speaker, Jung Park.He’s a good friend of mine who travels across the country to educate organizations and college students about how to discover your personal brand. One of his keynote topics is “Finding Your North Star: Using Identity and Passion to Find Success.” Jung has helped many navigate their way to achieving personal goals.
Once inspired, it’s time to get introspective, which can be difficult or daunting for many. Particularly if you are stressed out from diligently submitting your resume to dozens (or hundreds) of open job requisitions and you haven’t received a response. Your resume may be getting stuck in the sea of resumes that companies receive every day.
It’s important to revisit the value that you bring to an organization. It’s more than where you’ve been and what you’ve done in the past. It’s about how you can walk into a new organization and begin to deliver value immediately. Position yourself as a better “product” and communicate effectively the value you deliver.
If we apply marketing concepts used to sell products and services to your personal brand, we can begin with the Marketing Mix, or 4 P’s. Product, Price, Place and Promotion. The “product” is you, your brand and your value proposition. Your personal brand is about your entire package, ranging from resume, cover letter, LinkedIn profile and other social media profiles, to how you physically present yourself. The “price” is the salary or consulting fees you are looking for. “Place” is where you deliver your brand. It can be within an organization as a full-time employee, or as a consultant/freelancer working from home, etc. “Promotion” is how you communicate your brand. What you say (your content strategy) and where you say it (communications vehicles).
Bottom line - figure out your strategy. Fine-tune and crystalize “you” as a product and define your value proposition. Let people know you exist. Similar to corporations building awareness of their products and services to customers, you need to build awareness of your product/services. What’s your plan? Where do you start? Begin by writing your story about delivering value.
How you present and package that value is up to you.
Saturday, June 9, 2012
A recent Harvard Business Review article “ManagingRisks: A New Framework” (June 2012) states “risk events are fatal to a company’s strategy and even to its survival.” The article categorizes risk into three categories:
- Preventable risks (internal risks that should be eliminated or avoided)
- Strategy risks (high risk/high reward; a key driver in capturing significant gains)
- External risks (macro-environmental events outside the company beyond its influence or control).
Preventable risks are managed with internal controls and operational processes. Strategic risks often leverage scenario-planning tools for measuring probabilities of various outcomes via risk management systems. External risks are not preventable but they can be identified with proper monitoring of the macro-environment. Establishing early warning indicators are key to adjusting and responding to what is happening in the marketplace. As we know “hindsight is 20/20” but prevention and avoidance of potentially fatal events because you could prepare for their impact, needs to be part of an organization’s day-to-day operations.
As the HBR article aptly points out “...people overestimate their ability to influence events that, in fact, are heavily determined by chance. We tend to be overconfident about the accuracy of our forecasts and risk assessments and far too narrow in our assessment of the range of outcomes that may occur.”
I agree that often times executive management tends to have a bias that supports their preconceived notions about the future state of their particular industry. Information that proves to be contradictory is either ignored or used to hasten their course of action down the wrong path. I’ve seen this occur throughout my entire career, and now studies have proven this risk aversion exists and companies continue to “throw good money after bad.”
I believe by hiring experts within an organization to monitor, analyze and provide insights back to management, is essential for company, marketing and product strategies. Collaboration and communication with various departments or functions within the organization is key. The insights need to be communicated in order for informed decision making to occur.
As I look back at major brands that are no longer in existence today, I wonder if they had the right people on board and processes in place to identify risk events and establish early warning indicators, so they could create a plan of attack to mitigate the risks and keep the organization on the path to profitability and sustainability. Brands such as Pam Am (1991), Wang Labs (1992) Lehman Bros. (2008), Blockbuster (2010), etc., were market leaders in their industry yet their demise came anyway. If we look at “Porter’s 5 Forces” you can see that competitive assessments need to go far beyond the cursory SWOT analysis and feature-to-feature comparisons. It’s about understanding the competitive rivalry in the industry; look at existing competitors, identify threats of new entrants or substitute products, as well as the bargaining power of suppliers and customers.
Porter’s 5 Forces uncovers just one piece of the puzzle. The other pieces of the puzzle include political, technological, sociological, environmental and economic forces, just to name a few. However, this is just the beginning to understand and view the entire picture of what is occurring within your industry, and with your direct and indirect competition. Navigating your way through the marketing environment isn’t rocket science, but it does require the right level of expertise. It also takes empowerment from the executive team to report and share insights across the entire organization for making informed decisions. Today, companies cannot afford to throw good money after bad. They need to be strategic and mitigate risk as much as possible. Otherwise, their brand may be added to the “brands that no longer exist” list.
Saturday, June 2, 2012
The development of a strategy may be daunting for most organizations. Common questions include:
“Where do we start?”
“We came up with a great idea for a product (service, app, etc.). Can’t we just build it, put it out there, and see what happens?”
That’s fine if you don’t know where you want to go or how you should get there. I wonder how many individuals randomly purchase a ticket to hop on a plane to go some where, not knowing what they’ll do when they get there, or how they will manage once they get there. Perhaps there are some fly-by-the-seat-of-your-pants types of individuals out there, but most select a destination, prepare some sort of itinerary and purchase the ticket.
I advise a lot of start-up organizations, including graduate students developing business plans for their own potential start-up. They all have one thing in common - a great idea. The idea is that they’ve come up with a “bigger/better/cheaper/faster” type of product or service than what currently exists in the marketplace. Perhaps at a cursory view of the business problem/pain point they are trying to resolve, it is better, bigger, faster, etc. However, once they take a closer look at the competitive and industry landscape, the result is that they need to go much deeper with the product development. Establishing a marketing strategy from the onset will save you a lot of development time building the wrong solution.
There are two key questions to address when developing a marketing strategy:
- Which customers will we serve? (involves segmentation and targeting)
- How will we create value for them? (involves positioning and differentiation)
“STPD” is an acronym to use to remember the main components to address.
“Segmentation” – select the market segments you will serve. It can be grouped by geographic, demographic, psychographic, behavioral, etc. Most important, the segment should be measurable and large enough to earn a profit. Understanding the size of your markets is important. Also, they need to be reachable so you can communicate how/where they can purchase your product. Once you select and understand the market segments (“target markets”) you are going to sell to, it will help you define your marketing program.
“Target Marketing” - there are four basic strategies to address target markets:
“Positioning” – create an identity, or impression, in the minds of your target market. Focus on separating your product and brand from the rest of the pack.
JackTrout first addressed the concept of positioning back in 1969 with his paper in “Industrial Marketing” - Positioning" is a game people play in today’s me-too market place."
“Differentiation” – is a source of competitive advantage. Create a product/service that separates you from the competition, and is attractive to your target markets.
A quick way to see if you truly are unique compared to your competition is to take the marketing collateral (one sheet, sales sheet, etc.), cover up your branding and read the content and ask yourself “Can our competitors say the same thing?” I’ve found that 9 out of 10 times, the answer is “yes.” Most companies believe they have done an excellent job in creating something unique, but the reality is, it’s not.
Where do you go from here? Take an unbiased look at your marketing materials as well as your products and services. What value are you truly delivering? Ask your customers why they use your product, what could be improved, etc. Listen to what they have to say and incorporate that into your product development. Take a look at what your competition is saying in the marketplace. Finally, take a look at what’s being said by the media, industry analysts, bloggers, and more. Analyze and synthesize the data to glean insights that can help your organization get to the next level. There are a lot of great ideas out there. It’s how they are executed in the marketplace that will determine how successful and profitable your organization becomes.