Note to CMO: Killing Giants, Part 2 (courtesy of the Fix)

Dear CMO:

I won't re-hash the full story posted up on The Daily Fix -- take a look at the full story on Killing Giants, Part 2 up there. But a quick recap is worth the "Post-It to CMO" size retelling.

In Killing Giants, Part 1, we reviewed the following lessons:

Lesson #1: Aikido -- use their popularity against them. Be a populist in an age of fluff.

Lesson #2: Thin Ice -- lead the giant out over the thin ice of your own creation.

Lesson #3: Inconvenient Truths -- make the math work to your advantage.

Lesson #4: The War of the Flea -- win at the point of influence. They spend millions? We spent thousands.


Again, as I've mentioned before, I’ve had the chance to be on both sides of this conflict in my career so far -- these lessons are therefore either first hand experience or, at very least, first hand knowledge gained by talking to others who've been down interesting paths.

This isn't a 'be-all' or 'end-all' list. Given the highbrow level of conversation in the comments section, I really try to stay as humble as possible. It presents a small target. So, consider this a good discussion starting point. Back to our story, though:

Up on The Daily Fix, you can take a closer look at the next three lessons:


Lesson #5: Zag -- polarize your market for a good reason.

Lesson #6: Show Your Teeth -- force a comparison. If you’re better, make sure everybody knows it. But make sure you’re better before you go down this path (right, Valeria?).

Lesson #7: Speed Kills -- you are smaller, faster, and hold less baggage than giants. Take advantage of your lighter weight.


Now, it's your turn. Give me the lessons you've learned over the years. Feel free to comment on the seven you see above, of course, but also give me the benefit of your wisdom. Show me your scars. Tell me your stories.

Don't make me come after you.

Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: Greek Fire and How to Fight Unfairly

Dear CMO:

Two stories, both telling the same tale. Both consider the art and practice of fighting unfairly.

First, a bit of classical history. The first discusses the use of Greek Fire, a secret weapon whose employment razed the siege of Constantinople in 674AD by destroying the attacking Muslim fleet. Greek Fire was the X Factor of Byzantine medieval warfare. Here was a trade secret beyond the pale of Coca Cola's formula, the composition of which was passed down orally -- never written down for fear of it falling into the wrong hands -- from emperor to emperor. So demoralizing and effective was the use of this weapon that a contemporary witness described its effect in these visceral terms: "... every time they hurl the fire at us, we go down on our elbows and knees, and beseech Our Lord to save us from this danger."

My second story is about the greatest promotion I never did. Back in my Sony days, I stumbled upon our own mysterious Greek Fire, a promotion that could not have been copied by our competitors, that would have hit home to the very soul of our users' needs, and would have tied us closer to our channel partners and sister divisions than blood. It was a game-ender. Which is probably why it never happened.

It looked like this: a consumer walked into a "rekkid" store (think Tower Records back in the mid-1990's) and in the process of picking up a "brick" (industry speak -- a 10-pack -- bear with me) of Maxell XLII audio tape caught sight of a comparable Sony SKU. But this one offered a free CD -- any CD -- with purchase. Eyebrows go up. A switch is made, uneasily, because Maxell users bought Maxell, not Sony. The product comes home, the certificate is removed, maybe mailed in (a little slippage won't kill anyone), and the consumer then walks back in to Tower waiving the certificate, shortly thereafter walking out with the CD of their choice. Cost of the brick: about $19. Cost of a CD: about $12. Impossible. What a deal.

Sony's consumer media group (about $250 million in revenue) was related to Sony Music, who controlled the distribution of all Sony artists' music to the US market. We were also related to Digital Audio Disc Corp., or DADC -- the company that, at the time, physically produced the lion's share of all music CD's sold in the country. So follow the money. We pay the music retailer back for the free CD given away in free goods -- CD's from Sony Music. We pay Sony Music back for the free goods they give to the music retailers in free goods, too -- they get their own CD's, paid for by recording media, at the cost of goods (plus royalties) basis. The retail price of the promotion is $12, but only costs us about $3.50 at 100% face value. Assume half lose it and half don't redeem. Our promotional cost burdening our $19 brick -- a $13 trade price item, for which we clear about $5 -- is less than a buck. We need a break-even of about 20% when the usual lift is around 80% when on end-cap. Who knows what the lift will be with this promotion riding on it. And we'll own every end cap in the western world. Because we have friends and relatives in high places. Amen.

Alas, much like the expression, "there is no 'I' in 'TEAM'", there was no 'synergy' in 'Sony', so Greek Fire never saw the light of day. We, in the recording media world, were seen as the physical embodiment of both satan and home piracy by our distant relations at Sony Music. I guess I can relate to how they must have felt.

* * *
Key Takeaways:

> There is something unique about your company and its structure. Something. Look at it in a novel way. Disassemble it, reassemble it, see how the different pieces fit back together, and figure out how you can bring something to market that the other guys structurally, financially, or profitably can't.

> Encourage your competitors to follow you onto the new thin ice of your own making! Ask your channel why your competitors aren't offering them the same value, and then let your competitors bleed themselves dry. Really, it's fun.

* * *

Go forth and find your Greek Fire. Think about your structure, your suppliers, your sister divisions, and how you can create unfair advantages. I think Microsoft might have used this idea once or twice.

Then go out and fight unfairly.



Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: The Consumer as Art Critic (Not as Artist)

Dear CMO:

I must have missed the memo. Can you tell me why everyone is asking their consumers to do their ads for them? Is this the new thing? Even Katie Couric is earnestly soliciting viewer input, sounding like a cross between one of those Sally Struthers infomercials and a Jerry Lewis telethon. Thank goodness her ratings are so healthy. Anyway.

I'm not sure what happened. Did we all just take one collective look at blogging, YouTube and social media and decide that not only are we "not in charge" anymore but that we're also "not even in the conversation anymore"? When did we decide that ceding complete control to others was smart?

It's not smart. It's foolish. And we'll look back on this in a year and wince. This will be the e-Nehru Jacket of the next evolution of whatever comes next.

We -- as in, "we marketers, we brand champions, we people who are producing the products and services that people, people out there, beyond the footlights, are consuming" -- are still in charge. We're in charge of our values, our branding and our products.

"They" -- our consumers and customers, hopefully engage in our values and branding to the extent that they feel compelled to create something with it, or of it, or from it. If we're really lucky, our users immerse themselves in the world we've created and, like jazz or mash-ups, create new variations on the basic tracks of our branding. If we're smart, we adapt to what our customers want.

* * *
Key Takeaways:

> Marketers, you may relax. You're still important. You are in control of your values, your branding, and your products. Listen, provide the means for your users to deeply engage, and then adapt. All is well.

> Consumers are very good art critics and lousy artists. They will react to what you give them and will provide you with great insight, if you're listening. They rarely, if ever, come out of the blue with something they want. Because they just don't know what they want more often than not. So help them along. That's your job.

* * *

This is why permission-based advertising is doomed to fail. Why? Because we just don't know what we want. We can tell you what we want right now, plus or minus about 30%, but we're usually wrong.

I've said this before and it bears repeating: customers are better art critics than artists. They react to what they're given very accurately. They don't do a good job of telling us exactly what they want out of thin air.


Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: Ford and Basics

Dear CMO:


You probably saw the news about Ford. Must be good to know that you can always point to GM and laugh about how much they usually lose. But still. Losing $12.7 billion in a quarter takes some effort. Someone certainly needs a multi-million dollar severance check here.

Seriously, though, as I don't know the inside story on the Ford situation, I can only wince at this news. I'd like to see a viable American car manufacturer and Ford was, and hopefully is, the best worst choice. During my days at General Motors, I recall being a bit confused as to how the company had managed to wedge itself between the twin opposing forces of the unions on one side and the dealers on the other. But I was coming from Sony, where the culture was, ah, a bit more results oriented. So I was biased.

Here's an interesting comparison between two old American icon companies -- Ford and McDonalds. As John Moore wrote over at Brand Autopsy, McD's CEO Jim Skinner has boosted the stock 44% by... doing what? Focusing on basics? Making the experience in the restaurants ... better? You mean it wasn't some new organic product line extension with a new TV campaign and a Justin Timberlake jingle? You just put your head down, did the heavy lifting, managed all the un-sexy(back) work necessary to drive the bottom line? Wow, I need to sit down.

What would Ford need to do to do the same? CEO Alan Mulally is a cost guy, so let's assume he's focused on this pretty closely. If his situation is in any way similar to the GM situation, he's surely got these problems:

• A labor force that costs too much,
• A channel that dictates far more than they should,
• A vehicle platform problem that's created a product mix problem that's costing them, literally, billions. (If you make SUV's and you can't sell them, they don't get more valuable over time).
• A quality problem relative to his real competition -- Toyota. Unless things have changed dramatically since back in the day, Toyota produces a car with roughly 10% of the defects, on average, that Ford does. And they make them here, in the US, too.
• And all this against a backdrop of alternative energy consciousness that is demanding something more meaningful than an occasional hybrid.

I'm rooting for them, of course, just like I root for Harley and Indian. But I'm keeping my money on the sidelines for now.

If you had this guy's ear for an hour, what would you tell him? Send him a memo already -- just staple it to the back of this note.

Regards.

Copyright (c) 2007 Stephen Denny




PS: The painting above is "Entre Scylla y Charybdis" -- I included it not only because the metaphor works for the car industry's woes, but because I really like the painting -- you can find it here.

Note to CMO: The Last Word on the iPhone. Really.

Dear CMO:

I think there's more anticipation regarding exactly what happens when the iPhone ships than the buzz surrounding the product itself. I've weighed in, heavily at times (in comments), on where I think Apple is reaching a bit farther than the hype suggests it should on this product.

Today, I got some like-minded moral support from my old friend and professor, Pete Fader at Wharton. Pete and I share a certain skepticism on the vintage of this particular kool-aid that others, particularly out here in Silicon Valley, don't always share.

* * *

Knowledge@Wharton: Many are comparing Apple's entry into the cellular phone business to the introduction of the iPod. But is the situation similar, or is Apple facing a very different market?

Fader: Apple is facing a very different market. It's a market that's far more mature than the MP3 Player market was at the time. It's a far more sophisticated customer base. Apple had the opportunity to go into the MP3 market and basically reshape that market and create the standard for customers' tastes and preferences.

Those things have already been done by the myriad players in the cell phone market. Apple can do a very limited amount of reshaping. I think that when this phone actually hits the market, some of the grand visions that Steve Jobs has as well as some of the Apple zealots are going to be rather disappointed.

Knowledge@Wharton: The iPhone has a lot of cool features. Are there too many, and is the price -- starting at $500 -- too high?

Fader: Well it's not going to be too high for the first few hundred thousand people who just have to have it. You can charge them anything and they'll pay anything. But for the mass market, if they really want to create something that is anywhere close to what the iPod did, it is very expensive.

And, I think on the feature side, it doesn't really have that many features. In fact, it's missing some really, really important features. What it has [going] for it is just a really cool design factor and that's not enough. It's going to help them to differentiate themselves from the other phones out there, but it's not going to be enough to really be a winning entry.

* * *

I think Pete is correct on three important points. The iPhone will sell briskly to those in the market that are sold already (do we call them "pomiphiles"?), sort of like how every movie-goer in the world who really likes to see movies about snakes on a plane all went to see "Snakes on a Plane."

He's right that the iPod and the iPhone are two completely different animals. One is definitely a Peyton and the other is more likely to turn out sort of like an Eli. One's a killer, both are fine.

He's also right that this will not take a point of share from RIM or Palm in the enterprise smart phone market.

I don't think this will make the decision makers at Apple lose much sleep, either, because no one over there said they would. Everyone's going to be happy after all.


Regards.



Copyright (c) 2007 Stephen Denny




PS: If you don't get the Knowledge@Wharton newsletter, go get it at (http://knowledge.wharton.upenn.edu/index.cfm?CFID=7811816&CFTOKEN=64288228).

Note to CMO: Killing Giants, Part 1

Dear CMO:

Giants exude a smug arrogance. They may have earned their way to the top but often they forget that a one time masterpiece does not a dynasty make. They start believing their press. They’re clinging to the back-end of a rocket and convincing themselves that they’re steering. It’s our job to bring them down. It’s a new year. The War of the Flea has begun.

How do you kill a giant? I’ve been on both sides of this in my career, so far, so between what I’ve lived through and what I’ve learned from others, here’s a good discussion starting point. Classroom participation is mandatory, so I’m counting on my loyal ten readers to add their words of wisdom here. Don’t make me cold call you. I will.


Killing Giants:

Lesson #1: Aikido

Familiarity breeds contempt. Use this, their size and their popularity against them. If I was competing against the iPod, this is where I would begin. They have 80% share and therefore are by definition a “mass market” product – they did iTunes right, have a nice MP3 player (not without problems) but they charge double. "We" have performance for a fraction of the cost.

Consumers are smart. They know when they're paying too much. Remind them. Performance is everything. And image is nothing.

And by relying on this ‘performance is everything’ platform – which you can back up – you’ve just carved out an image of your own. You’re a populist in an age of fluff. Now animate this in a dozen smart, positive ways and start carving out share. The iDont campaign was well-aimed by a smart company with an excellent agency, but they missed the mark and received a bit of deserved backlash because the campaign went negative. So say the blogs. You don’t have to go negative.


Lesson #2: Thin Ice

Go where they can’t go because of their size, their capabilities, or their structure. Lead them out over the thin ice of your own creation. At Plantronics, we positioned our own specific technical capability – making boom-style headsets – against the bigger guys who also sold phones. The sound transmit of a boom is better because the mic is next to your mouth, not dangling around your collar. We quantified the impact of the distance on transmit quality in the lab and then trained our retailers that the difference between a boom and an ear bud was the same as walking down the street and then passing a jackhammer.

We also launched a series of enterprise campaigns to drive headset adoption in the enterprise with a heavy dose of PR talking about how our field salespeople helped office workers pick which headset style worked best for them in their offices. Our competition didn’t have a field sales organization. We won by default.


Lesson #3: Inconvenient truths and ROII

Back in the 90’s, we launched Sony batteries in the US. We got a foothold in the US market just as I left the company. This was an ill-fated product launch, but it proved an interesting point. By measuring the return on inventory investment (ROII), calculated as [turns] x [margin], we financially proved our case to several key US retailers that they made a better financial return on every dollar invested in Sony inventory than they did with Duracell and Everready. It warranted a test. And we got on the planogram.

This same strategy worked with our other blank media products. We took VHS tape from a #4 position to a #1 position, with a market size twice that of our nearest competitor, in a pure commodity market – a 10% drop in retail price caused a jump of 1,800% in unit volume in mass merchants -- using ROII data. Our products turned faster because we promoted very effectively, even at a slight premium to the market price.

Figure out the mathematical scenario where you make them more money: if you don’t turn as fast, give them a higher margin and figure out how to increase your turns until your ROII is better. Show them the math and start carving out share.


Lesson #4: The War of the Flea

Can’t outspend them? Win at the point of influence. Winning the channel’s hearts and minds can work where brute force, which giants are known for, can’t. They run national advertising? I run a channel spiff. They drive traffic. I get the sale. They spend millions? I spend thousands.

Does your competitor lose focus, even for a moment? Take advantage of it immediately. A competitor discontinues a particular product in the enterprise market that has an installed base – you launch a guerilla campaign at their installed base showing how your competitor has just orphaned the product they just bought and offer a trade-in to your product. Another Plantronics tactical move that absolutely confounded our competition and left them churning for a quarter.

Does a competitor’s senior marketer leave with no heir in place? Now is the time to launch a sticky, difficult to counter program (like the PLT example, above), just in time to wrong-foot them with no one in charge. How RIM missed this opportunity recently I’ll never understand.

* * *
Key Takeaways:

> Aikido: use their popularity against them. Be a populist in an age of fluff.

> Thin Ice: lead the giant out over the thin ice of your own creation.

> Inconvenient Truths: make the math work to your advantage.

> The War of the Flea: win at the point of influence. They spend millions? We spent thousands.

* * *


This is the year of killing giants. I said so in my resolutions. How are you going to kill the giant in your industry this year?


Regards.


Copyright © 2007 Stephen Denny

Note to CMO: The Manifesto, So Far

John Moore over at Brand Autopsy occasionally gives me a real figurative kick in the pants. His post on Google Truths made me stop and think, which I usually try to avoid. But after reading it, I had mixed feelings. I like the fact that they have a list of “truths”. And I had real problems with more than one of their “truths” which I’ve found in life not to be so “true”. But Google’s market cap is higher than mine and they’ve managed to get through these tough times regardless.

In the spirit of answering John’s question – this is the meme he didn’t actually ask for – here is Steve’s Manifesto, So Far: A Collection of Wisdom Handed Down by Smart Companies, Smart Managers, and Many Trips Around the Block:

1. Facts not feelings
2. Right is better than fast
3. Accountability means letting smart people do great work
4. The devil is in the details
5. Your customer is your end user, your channel is your ally
6. Everything you do aims at increasing sell-through
7. Make decisions
8. Do the math
9. Consumers are better art critics than artists
10. Systems always beat one-off masterpieces

Facts not feelings was handed down by my first big boss, as well as friend and the only mentor I’ve had in my career, Bob Striano. This was and is a mantra and a touchstone that’s lasted for over a decade.

Right is better than fast. Doing things fast is lovely unless you’re wrong. Doing them right is what we’re paid to do.

Accountability means we all don’t have to do the same job. You do yours, I’ll do mine, we’ll do great.

The devil is in the details. The more engineering you do on a program, the more attention you pay to the finest of details, the better your results.

Your customer is your end user, your channel is your ally. Don’t get this mixed up. The buyer at Best Buy isn’t your customer. He’s your channel. Get him on your side by showing him exactly how well you know your – and his – end user. Win hearts and minds.

Everything you do is aimed at increasing sell through. This is what marketing is for and what marketers do, all day, every day.

Make decisions. Sooner or later, judgment comes into the picture. You won’t have all the data in front of you like a Harvard case study. And you won’t have time to figure it out.

Do the math. Discipline. Show the ROI. Calculate the incremental lift over baseline. Show your account the break even. It sounds so simple, and the other guys don’t do it.

Customers are better art critics than artists. Give them something to react to. Don’t ask them to do your job for you. Then, listen, retool, and re-launch.

Systems always beat one-off masterpieces. Flavius Josephus, the Jewish historian of antiquity who wrote most of the first person accounts of the first century we now have, wrote of Vespasian’s legions, “their drills were bloodless battles, their battles bloody drills.” This could have described the Sony Recording Media Consumer Tape Division’s retail business in the late ‘90’s.

* * *

I left off personal favorites like, “never let a stupid comment go unpunished.”

These ten took a surprisingly short period of time to write. This may mean that because they’ve been so deeply embedded in my head at this point, they didn’t need much digging to find. This also may mean that I’ll add to the list, re-prioritize, and re-order, which is fine, too.

Feel free to give this some thought – this isn’t a meme, you’re off the hook – but it’s a good use of your time to write down what’s important to you, from time to time.

What guides you?

Regards.

Copyright (c) 2007 Stephen Denny

Note to CMO: The Quantitative Analysis and Statistical Extrapolation of Complete Nonsense

Dear CMO:

Robert Ardrey provides a brief mention of Sir Solly Zuckerman who, at the time of Ardrey's African Genesis, was the head of anatomy at Birmingham University. The Social Life of Monkeys and Apes was his great work. The book was at the time a masterpiece of observational research on the social interactions of primates. One problem. All the observations were made in the London Zoo. Where all interactions are, by definition, contrived.

Is this any different from sales forecasting data compiled by sophisticated quantitative techniques, all based on a sales guy's back-of-the-napkin guestimate at the airport?

How about the packaging that gets approved and launched because 62% of respondants ranked it first out of four choices; but the 62% corresponded to five people in a focus group, where quantitative data can't be extrapolated.

Highly stylized, quantitatively robust statistical analysis produced by earnest, morally superior people with MBA's is only as good as the stuff that goes in the front end. The forecast. The market sizing. The volume ramp. The easy stuff is all the data crunching. It's mechanical. The hard stuff is coming up with the robust, defendable insights that drive the inputs to the Rube Goldberg factory planning ERP software that IT installed at more money than a regional TV ad campaign would have cost. Coming up with the inputs requires judgment. Sometimes it even requires making decisions. Hard stuff. So much easier to do that Generalized Bass Diffusion Model.

* * *
Key Takeaways:

> It's seductive to rely on highly sophisticated data manipulation. Pay more attention to the inputs than the gyrations you put them through. Otherwise, you end up with sophisticated analysis on purely subjective fluff.

> Standing up and defending your data crunching is easy. We can all do four funtion math. Standing up and defending how you came up with something that no one has done before -- and that no data currently exists to support -- is a bit harder. Case studies, similar products from you and elsewhere, analogies, and sometimes a lot of opinions from smart people with stakes in the outcome are where you go for inspiration. But you'll be standing alone when you present. Some people like this and others don't.

* * *

Pay attention to the hard stuff. It's usually the squishiest data you work with.


Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: The Anthropology of Blogging

Man is a fraction of the animal world. Our history is an afterthought, no more, tacked to an infinite calendar. We are not so unique as we should like to believe. And if man in a time of need seeks keeper knowledge concerning himself, then he must explore those animal horizons from which we have made our quick little march.



Dear CMO:

For all our smart phones, digital music players and social networking sites, we’re still just primates in suits. We’re animals. We run with the pack, go with the herd, and jump lemming-like into whatever our collective mob jumps into. Monkey see, monkey do.

We often decide what is good by observing what others think is good. Robert Cialdini talks extensively about social proof in his work on the science of influence -- case studies, recommendations, lines out in front of restaurants, etc.

I'd venture to say that end caps at retail stores are examples of social proof. We see more stuff on display, infer that it's there because lots of people like it, and poof! our individualism disappears in an anthropological ball of smoke.

Have you noticed that the vast majority of positive reviews are judged "helpful" on Amazon? The vast majority of negative reviews are judged "unhelpful". If you are critical, you are criticized.

* * *

I'm re-reading Robert Ardrey again after many years -- African Genesis and The Territorial Imperative. His thesis is simple. Our primary drive, older than procreation, is the acquisition and control of territory. Our social grouping -- still the source of all ethnic tension, religious intolerance, and racial hatred -- has evolved to support our innate need. Social harmony -- the rule of law, social breeding, cultural mores -- has evolved to best manage territory control and defense. Thus, we reward those who agree with us and shun those who don't.

What does this have to do with blogging? I have a pet theory that all things being equal, more posts – which manifest themselves as more lines in an RSS feed aggregator – create more readership. Like lines out front of a club or products on an end cap, more is better. An even more important trigger is the number of comments. We comment on blogs -- all things being equal -- that already have comments on them. We pause -- all things being equal -- when we don't see enough posts frequently enough. An unhealthy gene pool?

What's the right frequency? Do you find yourself holding back when commenting on a blog that never has any comments? Is is phenomenon good, bad, or utterly irrelevant?

Or is it just your suppressed animal instinct pushing you away?


Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: The Ladder of Inference, or, The Art of Not Listening

Dear CMO:

An exchange with Valeria Maltoni at Conversation Agent reminded me of another great conversation agent, Dr. Steven Feinberg at ROI Dynamics, with whom I had the great opportunity of working some years back. We talked about corporate culture, specifically the art of listening. What an unpracticed art. Being a listener has become something like being a blacksmith at this point. You may know someone who can do it, but heck, nobody does that kind of thing anymore... we've advanced beyond the need for this ... too damn busy... sorry, have to take this call... and answer these emails...

Steve's point was animated by what he called The Ladder of Inference. An excellent metaphor. And I'm a metaphor guy. So this really worked. The Ladder of Inference, as Steve described it, goes like this:

You and the person you're talking to quickly climb your respective ladders of inference, not really listening to what the other is saying, and hurl conclusions at each other.

In a better world, where people listen, it goes like this:

You and the person you're talking to stay low on the Ladder of Inference, infer more, listen more, keep your respective ego's in check, and have what used to be refered to as "a conversation."

Learning organizations have conversations. Organizations that don't learn quickly scale their ladders and hurl their conclusions at each other. Per Mike Wagner's and Roger von Oech's recent "thin slice" meme, you know this is happening when the person you're talking to doesn't actually make eye contact with you while you're talking but, rather, is mentally rehearsing their next speech, only becoming re-engaged in the conversation when they realize they can butt back in.

Think about this the next time you're in the board room debating a contentious topic. Watch those of both sides. Are they listening or are they preparing to hurl their next conclusion at you? Are you?


Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: Cingular, AT&T, and Brand Equity

Dear CMO:

No time for a serious download right now, but I wanted to double check something with you. Did you see the Saints squeak past the Eagles tonight? Did you, as I did, look seriously at your eight year old son and say, "son, when you're up by 3 points with 3:40 left in the game, what don't you do? Right! You don't pitch the ball. You run the ball." Anyway.

In all the excitement, did I hear that Cingular is folding itself into the AT&T brand? What?

I understand that a lot of people know what AT&T is. That's like asking if people know who George Washington is. Sure, he's on the one dollar bill. And the quarter. How much did Cingular spend on building up "Jack", the logo and name?

"We did not enter that decision lightly," Wendy Clark, vice president of advertising at AT&T, said in an interview. "We came to understand that consumer customers and business customers alike are looking for a single provider. We heard it so consistently across the marketplace."

Here's a guess on my part, and I'm willing to debate this, but I seriously doubt that the mobile phone users of the world all see AT&T as a brand they aspire to. AT&T is a dinosaur. It's like GM without the sexiness. That was a joke, by the way.

But with its long and complicated history, AT&T may face customer confusion over its name, marketing experts said. Also, Cingular built up a reputation among younger customers who may not easily associate with the AT&T brand.

Brand awareness and brand equity are not the same thing. I can't believe AT&T is a brand your mobile phone core user would aspire to. This is a strange decision.

Regards.

Copyright (c) 2006 Stephen Denny

Note to CMO: Thin Slicing

Dear CMO:

You've read Macolm Gladwell's "Blink", I'm sure. The concept we're talking about here is 'thin slicing.' You look at a person, a situation or a brand and that flash of data you take in is referenced against a lifetime of correllary references somewhere in your cerebral cortex, telling you everything you need to know about what you're going to do next. You may call it a hunch, or your gut level reaction. Malcolm calls it "thin slicing."

Roger von Oech over at Creative Think (who authored the great graphic to the right) asked me to comment on this idea, specifically on how I would thin slice whether a brand is hot or not. Here's what I said on his excellent blog:

* * *

Thin slicing hot (and not very hot) brands? There are a lot of thin slices you can take on a brand – how you react to a brand presentation at a boardroom level, how you react as a consumer, etc. So here's a very thin slice – your potential customer’s first second of recognition when exposed to your new brand, hot or not:

Hot brands evoke one of two visceral reactions. First is The Eyebrow Arch, accompanied by the ‘ooh’. This is the “that’s very cool” reaction you want with anything you just launched at the show in Vegas. The second is The Buddha Nod and the “aah”. This is the “I’m so glad you came along and fixed this mess” reaction you want with the service you just launched.

The “not very hot” brands also prompt visceral reactions. Just different ones. You remember Nipper, the RCA dog who cocks his head to one side, hearing his master’s voice – or, perhaps he’s saying, “You do – what – exactly? And why do I want this?” The other is The Hanging “And”, so identified by the listener’s continuing rapt attention to a statement that has long since finished, whose unfulfilled expectation is that an “and” would come along to make it all finally makes sense. This is the proverbial “6 Minute Abs” video.

People can’t help being interested when they are and can’t fake it very well when they’re not.

* * *

You know, my comment above may sound a bit flip, but it's not meant to be. I try to bring a bit of levity to the subjects I cover because that's how I communicate serious stuff. But the underlying truth here is that the observational, behavioral side of customer insight is more powerful than a handfull of questionnaires filled out by bored shoppers. You have to get this feedback when people are willing to be engaged in the experience you're selling, which is why intrusive advertising (let alone research) is so appallingly bad. But watch people and they'll tell you what you need to know. That's my point.

I want more input on this. Here's who gets tagged next:


Ann Handley at The Fix: Tell us about the "thin slice" data points that guide you as you balance the personal with the professional in building The Fix community. You are walking an edge -- what are the "thin slices" that help you keep your balance?

John Moore at Brand Autopsy: What are the "thin slice" images that come to you when you see a company that may have just stumbled upon that intangible that turns them into a unique, transformational customer experience? What are the triggers you see when you think you might see something terriffic emerging?

Spike Jones and Team at Brains on Fire: What are the "thin slice" images that come to you when you're looking at a group of people and determining whether you're successfully moving them out of their comfort zones and into brave new worlds? I don't care whether this is a team meeting, a community retreat, or getting the boardroom to understand that it's not just about Super Bowl spots.

Cam Beck at Chaos Scenario: Clearly, let's talk about the important stuff here. What's the "thin slice" on life priorities right now, given your newly honed skills at diaper management? (Get the Diaper Genie, by the way).

Willow Baum at Small Planet Partners, whose blog we are anxiously awaiting: What 'thin slice' data are the triggers that tell you how to spot, smell, and dig a buzz generating opportunity out of the ground?


If I didn't tag you, just chime in anyway. And if I did tag you and there's something more important on your mind, go ahead and answer the question you want to answer. That's what they teach us in media training, isn't it?

What are the triggers that drive you forwards? Which ones drive you away? What tells you at the gut level, "there is something here... let's dig further..." and what tells you (before others catch on) that "there is no 'there' there..."?



Regards.


Copyright (c) 2007 Stephen Denny

Note to CMO: How I Fell Into, Then Out Of Love with The Z List

Dear CMO:

Now that it's over, I guess I should have seen the signs. It seemed so good at first. A genuine, honest gesture -- a glance, a smile, the budding of new possibilities. A collection of blogs, written by people who aren't selling me their book or pushing me to their agent or who haven't yet made their own faces into logo's of sorts, introduced like blind dates by good friends in the blogosphere to other good friends. How could this have gone wrong?

I looked around and saw a lot of familiar faces -- CK, Mack, David, Ann, Roger -- and a lot of new ones. Everything was great.

Then Squidoo happened. The Kraken "plexo'ed" the Black Pearl in the movie pretty much like Squidoo did our list. "Z" got "packaged." Every yahoo in Los Angeles showed up at your house and headed straight for your fridge. The list got gamed, we were told. A lot of blogs showed up that frankly had nothing to do with anything. It started as a party and it became a home invasion.

I spent a few minutes today seeing what I could see on the "lens". I made it to somewhere in the mid-thirties. In fairness, there were several that simply didn't write about what I read and these I can't comment on. One or two were interesting on a specific point -- Presentation Zen, for example, is a very wabi sabi blog I'll keep on the radar. I was ambivalent about three or four. On the rest -- the vast majority -- I have no comment.

In the aftermath of my relationship with "Z", I've learned a lesson. It's something I should have known all along, really. "Social" is the operative word in "social media" -- you learn about great new blogs from the great blogs you already know. You trust the links that come from the blogs you trust. A blinding insight, I know, but coming from The Seth, you would have thought our beautiful list could have been an interesting lens, with new comments and additions made by the community, and not a prostituted, poxed plexo.

* * *
Key Takeaways:

> Social media is about person to person communication, about authenticity, and about trust. When this stuff gets packaged, faked or prostituted, it loses it's credibility.


* * *

Listen, I'm always looking for new stuff to read. Here's what's on my RSS right now:

Brains on Fire
Brand Autopsy
Change This
Chaos Scenario
ck's Blog
Cool Hunting
Creative Think
Instapundit
Logic + Emotion
MP Daily Fix
Noah Brier
Reveries
Seth's Blog
Tom Peters
Viral Garden

Do you like these blogs? I do. Do you read something I should read? Tell me. Just don't ask me to plexo it. It's just too soon. I'm still hurt by the whole thing.

Regards.

Copyright (c) 2007 Stephen Denny

PS: You know, what prompted me to write this post was that the Squidoo fiasco became the absolute antithesis of what blogs and social media were supposed to be about. And it came from a highly considered thought leader in the social media world, too. And it stands today as the #1 lens on his site. Must be like knowing you have a huge pimple on your nose just before your prom, and your prom is every day.

Mack's Top 25 is a much better hunting ground for good reading, if you're a marketer looking for good marketing reading. But you already knew that.

Note to CMO: Jamil Hussein is My Spokesperson

Dear CMO:

Sony and Zipatoni flauxg the PSP. Walmart fakes it, as well. Sony Pictures (again with Sony?) writes their own movie reviews. The Associated Press, for whom a picture is apparently worth far more than a thousand (truthful) words, creates Jamil Hussein, a guy who apparently shows up more often in the credits than Mel Blanc's voice on The Cartoon Channel.

In our never ending quest for the Fountain of Authenticity, why have we decided to take the short cut? "Hey," we say, slyly, "let's just make it all up," and the hairs on our heads twirl up like the Grinch lying to Betty Sue Whoo.

Isn't authenticity about truthfulness? Sorry if that was hokey. I'll try it another way. Isn't authenticity about creating a compelling story that slowly reveals compelling truths about your brand so that a deeper and more personally relevant connection is made between maker and user? Isn't it about honesty in exchange for loyalty? Are we just too busy to do it right? Or are we just too lazy? I think it's the latter.

* * *

Key Takeaways:

> Do you have absolutely nothing to say about your brand? Are you just standing in the corner holding a warm beer? Then be remarkable about how you're not doing the macarena, not telling the story about how you slept with two supermodels at Cannes, and how you don't shoot your ads in two dimensional monochrome. Be authentic. Is performance more important than image? Say so. And deliver. That's authenticity.

> Never, ever, ever attempt the stunts described above at home. These were performed by extraordinarily lazy professionals with poor judgement. On closed courses. And no animals were hurt. But their brands got run over.

* * *

If there's nothing authentic about your brand, (really, actually) create something authentic.

"Fake But Accurate" isn't good enough.

Regards.

Copyright (c) 2007 Stephen Denny

Note to CMO: The Clamshell, Defended (With Reservations)

Dear CMO:

The holidays are over. Time to end the fiscal year, hopefully with a sprint to the finish, and then move on to planning for next year. And, as I can see the Band Aids peeking through your French cuffs, you'll no doubt resolve to do your part in the coming budget cycle to Solve World Packaging. Namely, banning the clamshell.

The clamshell is the landmine of packaging. It maims non-combatants while failing to deter "evil doers".

Unfortunately, the clamshell exists for a reason. It prevents theft in self-service retail environments. People steal stuff out there. Retailers "request" that suppliers figure out how to deal with "slippage". Thus, the clamshell.

Cuban wrote in his blog many months back about his rage at a Seagate 5GB puck in an impenetrable clam. Let's face it -- a hundred dollar storage device designed to fit in your pocket sold at Target? Think that might find it's way out of a store? Maybe.

When I think of clamshells, not much compares to the Bunker Buster, below -- my son's new airsoft gun, as you see, has a half-inch wide heat seal running the entire perimeter of this three foot long behemoth. Behold the monster:

After ten minutes, several well delivered expletives, and a near miss that would have sent me to the Intensive Care Unit at Dominican Hospital, we had it open. I almost gave up twice.

A question -- was someone going to walk out of the store with this? It's three feet long. It's merchandised behind a counter. A locked counter. With an alarm.

Church of the Customer relates what they describe as a "good" clamshell story here. This shows a Sennheiser headphone in a state of semi-unpack. For the record, your honor, this is fine at a retailer like The Good Guys, where helpful store personnel outnumber customers on a good day, but it doesn't play at Walmart. (Neither does Sennheiser, to be honest, so it's OK).

* * *

Key Takeaways:

> Yes, clamshells are a necessary evil. But they don't have to be packages of mass destruction. Spot sealing every six inches would have not only secured the product, but it would have made it more exciting than a Chinese New Year to open in the store.

> Packaging should present your product as king in the most aspirational, informational way possible. That and it needs to keep evil doers from stealing it in the stores. Part of this is your responsibility and part is the retailer's. RF and magnetic chicklets work in chain drug, mass merchants and many consumer electronics outlets. You want a good customer experience, they want to eliminate slippage. Work it out with your retailer.

> Remember that these blog things might just stick around and lots of angry opinion leaders complaining about your packaging might (just might) begin to find their way to the inbox of the guy who your manager's boss works for. Memos like these travel at near terminal velocity on their way to your "to do" list, just so you know.

* * *

New budgets are times of hope and renewal. All things are possible. New programs, new products, new campaigns, and new packaging all spring to life in your budget deck. It's like Springtime in Paris for finance people.

So please fix your clamshell packaging next year. Do it for the kids.

Regards.

Copyright (c) 2007 Stephen Denny