In a world where digital, mobile and web technology has transformed the media landscape into a bewildering array of possible channels, and social media are being used to punish brands or force them to change everything from supply-chain policies to marketing tactics, Shaun Smith and Andy Milligan argue that it is time for a radical approach to marketing leadership
Marketers Face enormous challenges. Targeting, locating, communicating and maintaining any form of reliable relationship with customers or consumers, has never been more difficult. The problem is not one of access, but one of control. It is the marketing equivalent of trying to slake thirst from a fire hose.
The sheer volume of marketing ‘noise’ means that for many new consumers, traditional above-the-line marketing is ‘below the radar’ as more turn to viral marketing and social networks for sources of inspiration. Nobody is sure exactly how the communications and media landscape will look in ten months let alone ten years.
The nature of business models is changing – some have been turned on their head by brands such as Six Senses Resorts and AirAsia X, for example (see box on p48), and some are broken for good. The methods of distribution and exchange of products, services and information have radically shifted, and there are serious questions about the long-term viability of brands that use precious resources.
Two conflicting styles
In the midst of all this change – uncertainty or opportunity, depending on your point of view – we have observed two distinctly conflicting styles of leadership in organisations attempting to survive and succeed in this turbulent period.
The first, most obvious and – in our opinion – the most dangerous is that of companies who become internally focused on financial re-engineering and management restructuring. Balance-sheet repairs, cost-cutting, trigger-happy redundancy programmes and poorly thought through acquisitions are the corporate equivalent of rearranging the deck chairs on the Titanic. They are all the usual signs of a business with, in the words attributed to former CEO of GE Jack Welch, ‘its ass to the customers’.
But we have also seen a different breed of organisation emerging. They succeed because they have the courage, confidence or just sheer chutzpah to pursue a purpose that is beyond profit, to engage, entertain and educate their audiences.
They see their customers and employees as members of a like-minded community, who create an almost cult-like following around their brand – both within and without their organisation. These are companies that are not just different but dramatically different and who push to the extremes the consequences of their desired positioning and strategy.
Companies like this are often based on the personality and values of the people who establish and lead them, but not always. Sometimes their path has been deliberately chosen by executives to differentiate them from the sameness of companies in the sectors they share.
They eschew typical ‘faceless’ corporate behaviour and dare to put their shareholders’ concerns behind those of their customers, their employees and their obligations to the wider public.
Even during the most difficult times – such as the global financial crisis from which recovery will be long and painful for most – they are relentless in pursuit of improvement, zealous in communication and take action in accordance with what they think is best for their brand not just their bottom line.
But this is not some corporate Quixotic tilting at windmills. These organisations also happen to be incredibly commercial and in most cases outperform their sectors. In short, they are bold. Not reckless. Just bold. They stand out from others because they stand for something.
We investigated companies that we believe demonstrate boldness: how they do it and, most importantly perhaps, why they do it – their purpose. The result is a book called Bold: how to be brave in business and win. It is the story of 14 inspiring brands and their remarkable leaders. Brands such as Burberry, Virgin Galactic, Six Senses Resorts, Zappos, O2 and AirAsia X.
We believe that being bold is an attitude of mind but is evidenced by what people do and thus how any organisation acts. Anyone and, by extension, any type of company can be bold if it wants. The key is that it must be willing to behave accordingly, not just claiming it does bold things. As Gav Thompson of O2 says: ‘Don’t tell me how funny you are; tell me a joke that makes me laugh.’ We looked at how these companies actually behave and what they do differently from others.
We conducted intensive in-depth interviews with a cross-section of executives from the short-listed brands. From these we identified eight key practices and 40 behaviours that seemed to explain ‘boldness’. Finally, we conducted a quantitative survey in the US and UK to compare the bold brands against other companies on these practices.
We found that the bold brands outperformed the comparison companies by a significant degree on each of the eight practices. The bold companies scored an average of 4.3 on our five-point scales across the eight practices versus 3.4 for the comparison companies. It is a dramatic difference in our experience.
There is insufficient space in this article to report these findings in detail but what we can do is to comment on some lessons that we can learn from the way the bold companies approach marketing.
Marketing is everything, not Just an add-on function
In Market Leader Quarter 1, 2011, John Kearon argued that the adoption of ‘marketing science’ has been the enemy of innovation. We agree. In some important aspects, our bold companies are quite old-fashioned in the way they think about their business: they stay extraordinarily close to their customers and they ensure that the brand is everything they do. Marketing therefore describes a way of life rather than a function or set of processes.
Marketing, for them, is primarily a way of engaging and entertaining customers or consumers, not a way of persuading them to buy a product. They see marketing as an integral part of the customer experience – the marketing of the product and the product itself are one. From our research, the bold brands intentionally and relentlessly do the following:
1Clearly and honestly communicate the brand promise and values to customers. A key task of marketing is to get your proposition over to the market as powerfully as possible. These brands are both bold and authentic in the way they do this. They don’t use weak or watered-down promises of quality, or bizarre and incomprehensible slogans. They use dramatic language that fixes clear expectations in the customers’ minds. Whether it is Burberry’s ‘Democratising luxury’, Zappos’ ‘Powered by service’ or the Geek Squad’s slightly pithier ‘We’ll save your ass’, these brands are honest in their communication and engaging in their tone.
They dramatise this promise through the customer experience. They recognise that consumers are increasingly cynical about big brands and traditional above-the-line marketing so they use the customer experience to demonstrate the promise. For example, Umpqua, the US community bank, has one of the boldest visions in banking: ‘To make going to the bank, the best thing you’ll do today.’ It has reinvented the banking experience from a series of financial transactions conducted in a sombre and stuffy environment to something that looks more like the Gap.
And the Umpqua experience doesn’t just happen in the ‘store’, as they call the branches. Umpqua has embraced what it calls ‘handshake marketing’.
By this the company means marketing activity that is up-close, personal and in keeping with its positioning as a community bank. For example, employees are encouraged to perform what the bank calls ‘random acts of kindness’. They can pay for the bill for the customer behind them in-line at their local Starbucks so that when the customer goes to pay they are presented with a small chit that says ‘Your coffee today is on Umpqua’. It’s all part of delivering on the Umpqua promise and getting customers to talk about the brand. Contrast this with one high-street bank in the UK which broadly advertises a list of customer commitments only to fall short on even the most basic of interactions with customers.
2Actively involve customers in helping to improve the brand and products. Bold brands do not believe their products are so perfect that customers can’t improve them. Nor are they so frightened by competitors stealing their ideas that they won’t release anything until it’s fool-proof. They see the involvement of their customers in the development of their products as a key part of marketing them.
An extreme example of this user-led design is Virgin Galactic which redesigned its spacecraft following early feedback from its customers. Innocent invites its customers into its offices to suggest ideas and improvements as well as allowing them to recommend and create new recipes. Sir Anthony Bamford, the chairman of JCB, changes the smallest details on his diggers – for example, the way the petrol cap rotates – because customers tell him that it matters.
3 Use innovative viral marketing techniques to reach target customers. We found that all of the bold brands use social media to tune into the views of their customers and digital marketing to reach them. Innocent does this through the simple words it uses on its packaging that has encouraged people to spread the word about the brand.
Burberry streams 3D live broadcasts of its runway shows to five cities around the world and then publishes the show via 80 partner websites, reaching a potential audience of 100 million whereas the traditional catwalk show in Milan or London will be attended by 1,300 exclusive clients. The customers’ can view the show on their iPad, click on a product and have it delivered within a few days via Burberry’s Worldstore portal. In this way, Burberry delivers on its promise of ‘Democratising Luxury’.
4 Achieve high levels of customer advocacy or ‘fandom’ to drive referral business. Communities of fans validate these brands; they help to reinforce them, inform them and sometimes even to forgive them when they get things wrong. O2 has created a strong basis of fans by providing value that no other operator does. Access to events at the O2 Arena and Rugby at Twickenham all help to cement a strong relationship with the brand and deliver its promise of ‘Helping customers connect with the things in life that matter to them’.
At the same time the brand has stripped out the restrictive contracts and weasel words to make it easier for their customers to leave. Products such as Simplicity, a SIM-only offer, allow customers to have total control over their relationship with the brand. Ronan Dunne, CEO of O2, explains: ‘If you give your customers the freedom to leave, what you actually give them is the confidence to stay.’
5 Create a cult-like culture. One of the characteristics that we found to be significantly more evident in the bold brands was the kinds of cultures they create. They invent their own words, use unusual hiring practices and then go to enormous lengths to ensure they protect the DNA of their brands.
Tony Hsieh, CEO of US online retailer Zappos, offers new recruits $2,000 to leave at the end of the first week of training. Why? To ensure that only those people who are passionate about working for the brand stay. He says: ‘A company’s culture and a company’s brand are really just two sides of the same coin. Brand is just a lagging indicator of culture.’
Making The right connections
There has long been a belief in business that, put at its simplest, growing your reputation and revenue (usually through sales and marketing) could be separated from protecting your assets and profit (usually through operations and finance). However, the bold organisations believe that not only is there a clear causal link between what you communicate, how you operate and how you protect your earnings, they are in fact interdependent and you can’t get any one of them right unless you get them all right. As Dunne of O2 observes: ‘It only works when it all works.’
Robert Stephens of the Geek Squad, which provides computer-related services and accessories, used the expression: ‘Marketing is a tax you pay for being unremarkable.’ We believe that the point he was making, and one that is shared by these bold brands, is that if you focus your entire business on delivering a valuable, entertaining and engaging experience for your customers across multiple channels then they will do the job for you. You don’t need to waste additional marketing dollars on fancy or phony campaigns that seek to shout louder than your competitors and persuade increasingly cynical consumers that you are different or better.
Shaun Smith is founder and partner at smith+co. [email protected] Andy Milligan is an international consultant on brand and business culture. andy.milligan@thecaffeinepartnership. com You can download a free ‘Bold’ app from the Apple Store to compare your organisation with the bold brands. Bold: how to be brave in business and win is published by Kogan Page in April 2011. For more information go to www. boldthebook.com