Patience is Part of a Plan

In the panic-driven environment companies are finding themselves in, it seems that some plans are made and scrapped in a heartbeat. Managers are looking for instant results and don't have the patience to see a plan through to its conclusion. Sometimes that's ok ... if the plan is flawed, it's a good idea to "fail fast" and cut your losses. But a plan or a promotion can be killed before it has a chance to work. One thing to consider is purchase cycle - what's the relevant time frame for your customer to consider a purchase? Does the purchase cycle change seasonally? Have you factored cycle time into your plans (for timing and duration)?

The other thing to consider before killing a failing program is the question of what EXACTLY went wrong. Is it a bad strategy ... or a bad execution? Or both?? It isn't enough just to conclude that a program has failed. If you had a good strategy with a bad execution, you may be walking away from a potential gold mine.

Innovation CAN be Strategic

Peter Drucker once famously said: "since the purpose of business is to generate customers, only two functions do this: marketing and innovation. All other business functions are expenses.” That’s music to a marketer’s ears. However, I’ve seen some cases where you would think that innovation and marketing are from two different galaxies. People sometimes pursue innovation for its own sake – without remembering that it ultimately has to be connected to something that the customer values. When marketing and innovation are connected, there’s magic. When they aren’t, innovation can lead a company to make radical shifts in its branding and positioning that confuse and frustrate the customer.

The problem brings to mind a bumper sticker I once saw: Bizarre is easy; Creative is hard.

Procter & Gamble is a company that does it right. In the past few years, they’ve introduced a spate of product innovations that are really innovative but fit neatly into the brand position. By doing this, they inject product news into their plans (always a good move) while leveraging the existing strength of the brand position. Mr. Clean has extended his bald-headed cleaning power to new products such as car wash kits and dirt erasers.

Sometimes innovations are so fundamental that they can be the foundation of a new brand altogether. The Sony Walkman created a whole new idea of personal entertainment. And Apple took the concept to new heights with innovation that was branded the Apple IPod.

But many if not most innovations are assigned to existing brands. I believe it was David Ogilvy who once said: “Give me the freedom of a tightly defined strategy.” Innovating within a well defined strategy isn’t easy. You have to focus on the innovations that “fit” and discard those that don’t. But, hey, focus is a virtue in marketing.

Memo - For When Things Get Better

The Hawaii Chapter of the American Marketing Association is gathering nominees for its "Marketer of the Year Award." As I looked at likely candidates for the honor this year, something struck me. During the good times (and, boy, we had very good times in Hawaii for four years running) these companies invested in marketing. They updated their products. The refined and expanded their promotions. They sharpened their branding. And, guess what? When the bad times came (and, boy, we've had some bad times lately) these companies took less of a hit than some of their competitors. The message is almost biblical: be prepared, because you do not know when the day of reckoning will come!

Others in the market, by contrast, maximized profits in the good times by only doing the necessities for product improvement, minimizing advertising (Why advertise? Business is good), and generally falling under the unrealistic expectation that the good times would last.

Memo to self: 1. There are business cycles. 2. Don't neglect to invest when times are good.

In Tough Times - Branding or Sales Promotion?

Tough question. And the tough answer is: you need to do both. During tough economic times there is lots of pressure on marketers to dump their branding programs and focus exclusively on short term promotion. Go "on sale." Well, there's nothing wrong with being on sale as long as it's not a steady diet. When consumers have a heightened interest in value (as they do right now), you had better be in a position to deliver superior value. Bear in mind that in tough times (as they are right now) your competitors have dialed up their value messages. So, like it or not, you probably need more emphasis on sales promotions and incentives (not necessarily discounts) than you did when times were flush.

But this isn't the time to abandon branding. A strong brand is part of the value equation for the customer. It is the promise of benefit that the brand can deliver - and that's especially important in maximizing your sales price at times like this.

The thing is: you can do both. Promotions don't have to be focused solely on discounts. Find communications platforms that convey the brand promise while delivering superior value. And think creatively about how to enhance the value of your brand - without deep discounts. Sure, it's easy to run a sale. But deep discounts and constant promotions are often the slippery slope to what can become an addiction. And there aren't a lot of methadone programs out there for addicted brands.

Back to Sanity

After sitting on the cyber-sidelines, economic conditions in the world have finally convinced me to start a blog. The idea here is simple. Long term value can only be based on free market transactions where sellers and buyers both benefit from the exchange. For too long, we've seen a house of cards in which funny money, funny transactions, and funny accounting created the illusion of value. It's time to get back to basics ... and back to a sustainable reality. Let's hear it for sanity!