Contemporary Sales Approach: The consultative salesperson as the ally

Today’s approach to marketing & sales must be smooth and sophisticated. Pressuring people and the “hard’ sale are relics of a bygone era. The films, ‘Boiler Room’ and ‘Glengarry Glen Ross’ highlight the former pushy tactics.

Although I realize that a more suave sales technique is needed to woo the customer, the stereotypes of brash sales forces persist on a small scale. Think of cultures where the words “Hello my friend…” are still considered coins of the realm. Culture is partly responsible for the nature of this marketing style, and the other reason is a lack of regulatory procedures.

Let’s face facts. Business is about sales. No sales revenue, no business. You can have the greatest products or the finest service. If no one recognizes this and the offerings do not convert into receipts, there is only a limited time you will be allowed to remain open unless you are running an NGO. Speaking of NGOs, even they need to raise money. Their sales pitch might be different owing to the nature of their organization’s activities, but it is still a sales pitch.

The Sales Function

What makes sales an interesting subject is the nature of how the sale is conducted. When client need and desire are matched to the offering, the products or services sell themselves. The sales force become the bridge; provide information or even counsel. They should in theory also become part of a positive experience. This principle should hold true in any organization, public or private, large or small.

A contemporary salesperson should be a listener more than a talker. The offering must be tailored to fit the customer’s needs. When it is handled in this manner, the customer makes an “intelligent” buyer behavioral decision.

A smart and well-trained sales team recognizes that understanding human psychology and diplomacy acts as a form of persuasion.

Liked v. Valued

As in any profession, most sales people appreciate being liked and trusted by their clientele. The key I have found is the concept of value. When clients sense that you value their needs, you understand the principle of caring. Do not make any client feel that they are just part of “turnover”. Authenticity must be genuine. Anyone can tell a fake from the real McCoy.

Bought vs. Sold

Marketing strategist Seth Godin states in his blog that there are products that are “bought”, and there are products that are “sold”. “Some things are bought – such as bottled water, airplane tickets and chewing gum. The vendor sets up shop and then waits, patiently, for someone to come along and decide to buy.

Other things are sold – such as cars, placement of advertising in magazines and life insurance. If no salesperson is present, if no pitch is made, nothing happens.”

Seth goes-on to stress: “Both are important. Both require a budget and a schedule and a commitment. Confusion sets in when you’re not sure if your product or service is bought or sold, or worse, if you are a salesperson just waiting for people to buy.”

If a company’s products or services need to be “sold”, there are different sets of challenges to overcome. These include:

- Clarifying how the products or services can make prospective clients’ lives better;

- Creating and expressing an emotional connection to your niche audience/prospects – whether it’s cool, innovative, or rebel etc.

- Indicating to your audience/prospects what they get to lose by not acquiring the products or services.

When it comes to a product or service being “bought”, not much effort is required in convincing prospective clients that they should purchase, but that they should buy yours. Even perceived necessities need to be marketed and sold – It’s just that they have a different focus.

Sales Online

The Internet and social media have had an effect and changed the way customers are buying. Their selling process has been reduced to a mere buying process; although the consumer continues to seek guidance in their purchases.

This is where the “value’ factor plays a role. Sales staff should always look for ways to offer solutions to keep their customers satisfied. It is thought that a quarter of all Online shopping is made by frequent “shopping lovers” whose influence spread the word to others about joys of online shopping whenever they have the opportunity. They represent an ideal target for retailers who should not be taken for granted.

Think Zappos!

Pull vs. Push

Push marketing and pull marketing are different yet complementary marketing methods for promoting a business – most notably online.

Push marketing is more traditional methods of advertising – essentially, you are pushing your message to your audience, regardless of whether they want to receive your message or not. Push marketing focuses on product features and awaits the audience to respond. Examples of push marketing include email marketing, website advertising, and cold calling.

Pull marketing is more proactive, pulling the customers toward your brand/product with targeted messages they care about. Pull marketing is all about brand building. Examples of pull marketing include media interviews, public speaking, and word of mouth advertising.

Consultative Sales = CRM

What differentiates a consultative sales process from a traditional presentation of features and benefits is the relationship that is established between the prospect and the salesperson at the beginning stages of the sales cycle. Traditional product salespeople rely mainly on their product and service expertise and may not pay enough attention to the relationship aspect. For an effective consultative sales conversation to develop, a prospect must believe that the sales consultant has practical and credible expertise and someone that the client wants to work with.

The contemporary approach to selling is when the sales person guides the prospective customer in making sound purchase decisions – someone seen as an ally and adviser. This can be accomplished by keeping the following in consideration:

- Clearly identify the prospect’s needs – does the product or service proposed fill-it?

- Is the price offered deemed value for the money?

Ensure a long-term relationship by achieving customer satisfaction.
To do this requires some skills – either instinctively or acquired through training and practice. This includes:

- The capability to understand what the prospect wants;

- The knack to recognize, through ample product knowledge including features, which of the products and services are deemed most appropriate for the prospect;

- The ability to convey the specific benefits gained by using specific products and/or services that are meaningful to this customer;

- The capacity to deliver the “package” (products or services). Focus on the desired results expected by the prospective client.

Luxury Brand Management: Selling the Intangible

Selling luxury products or services in a sluggish economy is no easy task. Focus on the affluent. Simply put, such consumers buy no matter what the state of the economy.
Next step is not to sell them on the product or service per-se but rather on what the true meaning of luxury represents:

• Self-expression
• An exceptional experience
• Made/formed with authenticity
• Craftsmanship & quality
• Created/produced in small numbers – rarity factor
• Emotional bonding
• Upscale mystique
• Status and prestige

This is what affluent buyers are looking for. All high-end purchases must have a storyline, pedigree or heritage. Pressure of any kind is pointless here. Think Ralph Lauren. RL sales teams never pressure clients. Ralph’s “dream” has either made the sale or it hasn’t. The sales team is just there to advise and be of assistance. Shared beliefs, attitudes, and values between sales team and client can push the sale forward because it is one of bonding and mutual recognition of being part of the “club”.

Any one who understands the points of being an “brand ambassador” knows what I am taking about here.

The Bottom Line

As in all professions, sales techniques continue to evolve and adapt to the nature of the times in which we live. Great service, good pricing and loyal relationships have become yesterday’s sales standards. Using the consultative sales approach and providing clients with value-added solutions is compulsory in today’s business arena.

Salespeople should evolve as businesses do. Today’s clients demand a partnership arrangement. Since all of us are also clients is it any wonder?

Customer Devotion: Sweep them off their feet – indefinitely

We constantly hear remarks and stories of deplorable customer service. I would think that brands would be more attentive and proactive. Unfortunately, this is not the case. You would have thought that they would make “devotion” a coherent strategy.

It should begin with the “trust” factor. Seth Godin, the much regarded marketer, asserts, “Institutions and relationships don’t work without trust. It’s not an accident that a gold standard in business is being able to do business on a handshake. Today, though, it’s easier than ever to build a facade of trust but not actually deliver. “Read the fine print,” the financial institutions, cruise ship operators and business partners tell us after they’ve failed to honor what we thought they promised.”

“Devotion” on the other hand, is instinctive – an emotional connection to you, your brand, your company, and your products. It’s what your customers (new, existing or former) are saying about you on Twitter, Facebook and other online social networks.

Customer experience as the key competitive differentiator

Your best defense and your competitive differentiator is your ability to create great experiences for your customers. It goes without much thought that loyal customers come back and purchase more because they get their needs served and/or problems solved.

Marty Neumeier puts it clearly in his book, “The Brand Gap: The brand is not what you say it is. It’s what they say it is.” Talking to prospects and customers is paramount to get a sense of what they’re thinking. What values are your customers receiving from your business along with its products or services? How does that experience compare with what other similar providers you may know deliver? Then how does what the consumers have said about the brand experience line up with what the company believes it delivers?

If we compare the customer experiences of say, Best Buy vs. Amazon, the differences are quite evident as to who is doing a proper job making their customers content and devoted. When a client mistakenly purchases the wrong DVD at Best Buy – one he already had and returns the next day to exchange it for the correct one and all he hears from the customer service staff member is, “Sorry, DVDs are “software” and can’t be returned or exchanged once sold – no exceptions!”, it makes you think how aggravating it is to do business with that big box retailer. Amazon, on the other hand, not only allows easy return or exchange for DVDs without restrictions; the company will even buy back ones you’re finished with. Moreover, even if the customer is outside the return window or is otherwise technically not entitled to do what he’s/she’s asking to do, the company will go out of its way to bend its policies in the interest of happy customers and the enduring customer relationship. The difference? Amazon does what customers want – it completely crafts its business practices, its systems, and its people to support it, whereas, Best Buy does what would be most convenient for the company for consumers to want but don’t, then hope for the best. That’s not a consumer driven strategy by any stretch of the imagination.

Customer loyalty in the luxury domain

Over in the luxury sector, sought after by discerning clientele, the product itself does not suffice. Hermès has impeccable products, the top-tier of luxury goods,” said Milton Pedraza, CEO of the Luxury Institute, New York. “In terms of what customers want, they have the top design, quality and craftsmanship. What Hermès may need, however, is a refresher course in customer experience.”

“Consumers tell us in research and anecdotally Hermès is the pinnacle of product delivery, but they could become far better in customer experience,” Mr. Pedraza said.

Automobile manufacturer Audi focuses relentlessly on being the number one premium car brand, and number one for customer satisfaction among competing brands. This approach is firmly rooted in building satisfaction and loyalty among existing customers so when it’s time to replace their car they buy another Audi. In developing a clear differentiation from its competitors, they don’t solely emphasize the quality of their cars – they add the pizzazz of customer experience and service. Achieving this relies in part on two key factors defined by the executives at Audi: delivering excellent customer satisfaction, and making Audi the best place to work in order to attract the best quality people, who will deliver that customer experience.

What can those on the front lines do to enhance the customer experience?

There are companies which spend a significant amount of money in marketing to entice prospects into a paying customer. However, once the prospect is at the stage of dealing with a company’s staff, the outcome lies in the hands of those employees who many are not adequately trained, if at all, to offer a positive experience. This type of “human marketing” undoubtedly moves beyond the marketing department. It’s about every employee and manager in the company delivering on the promise made to the new customer and giving them additional reasons to purchase repeatedly from the same outfit and receive recommendations too. In essence, this requires all employees and managers to be on the same page and understand that their job is to retain happy customers. The name of the game is to build a lasting, profitable relationship with them, and turn them loyal and devoted, thus, repeat customers who become passionate and recommend/refer your company to their friends, family and business associates.

Whether it’s B2C or B2B, sales and marketing people should co-exist, as well as the people in finance who are normally not considered marketing oriented but rather analytical. Equally trained to be customer centric is the receptionist, delivery people, and in the manufacturing industry, the product development division should be well versed with their target consumers’ requirements.

Founded in 1997 in the UK, YO! Sushi brought the concept of a Japanese “kaiten” sushi bar that delivers food to customers via a conveyor belt traveling 8cm (about 3 inches) per second. It has become the original and most famous sushi brand in the UK. The experience is fun and exciting, whilst the food is considered, by many of its patrons, revolutionary and made lovingly. Simon Woodroffe, its visionary entrepreneur and founder, built his business beyond the “buy”. For him the profit is in the “buy again.” He doesn’t want you to just come and eat at his restaurant once, he wants you to become a customer for life and repeat buy from his establishment, so that his marketing spend on initially attracting you to his restaurant in the first place can be recovered. By the time you are on your second and third visit, he has recovered his marketing investment in getting you as a customer, and you are now becoming a profitable, loyal and devoted repeat customer.

All employees should be considered as an entire marketing team. As such, they must be placed at the center of the business and continually developed, inspired, trained and given the tools to perform at the highest level. There is no such thing as an ideal time to do so – regardless of the economic downturn as all companies must work harder to attract and retain customers.

Take into account that:
- In a progressive customer driven entity, training and developing the human assets should be an ongoing process;
- Companies should be an enemy of the “status quo”;
- Mystery shopping (in person and/or by phone, as well as online) should be frequently conducted to get a sense of what an actual customer experiences – then taking action to rectify and improve the experience.

Case Study: Zappos

The following is the Zappos business mantra which should serve as inspiration for customer driven enterprises.

What customers get to see displayed prominently on the web site:
o 24/7 1-800 number on every page
o Free shipping
o Free return shipping
o 365-day return policy
What customers will experience:
o Fast, accurate fulfillment
o Most customers are “surprise”-upgraded to overnight shipping
o Creating a “WOW” factor
o Friendly, helpful “above and beyond” customer service
o Occasionally direct customers to competitors’ web sites
What’s done behind the scenes?
o No call times, no sales-based performance goals for representatives
o The telephone is considered for them one of the best branding devices available.
o Run warehouse 24/7. Inventory all products (no drop-shipping).
o 5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas office.
o A Culture Book
o Interviews & performance reviews are 50% based on core values and culture fit.

All employees should be marketers

• What are you and your team presently doing to make certain that your active customers don’t belong to your competitors tomorrow?

• How is the present customer experience perceived with your organization, product and/or service? How would you describe your internal culture, core values, and customer service policies/procedures?

• Finally: Are your customers devoted, loyal, or simply bored doing business with your organization?

Devotion should be considered a walking and talking advertisement – a potent word-of-mouth. Consequently, customer devotion should be the ultimate goal of every business leader and sales professional.

Perceived Quality: Why Brands Are Intangible

James D. Roumeliotis and Violetta Ihalainen

A study of 33 publicly traded firms over a 4-year period, as measured by the EquiTrend method, illustrated that perceived quality had an impact on stock yields ─ a key business performance measure.

The study looked at American Express, AT&T, Avon, Citicorp, Coke, Kodak, Ford, Goodyear, IBM, Kellogg’s, and 23 other firms for which the corporate brand drove a substantial amount of sales and profits. Not surprisingly, the influence of perceived quality was nearly as great as that of Return On Investment (ROI).

“Perceived Quality” is considered the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose and compared to its alternatives/competition.

“Quality” Is Subjective

According to academics Scott Maynes and Valarie Zeithaml, as there is no general agreement on standards for the skewed term “quality”, a consumer’s judgment about a product’s excellence and superiority is an intangible aspect of a brand. As a result, objective quality is moot, and all quality evaluations are considered to be subjective.

This argument supports the premise that quality is determined by customers’ perceptions, based on individual values. Consequently, perceived quality is defined as a measure of belief.

Branding Activities Impact Consumer Perceptions

Branding activities are all a brand does that impacts consumer perceptions of the brand including product improvements, customer service, user manuals/quick-start guides, and discounts amongst others.

A notable example is with the branding activities Hyundai performed in the automobile industry that raised the product quality perception with both its dealers and consumers. The South Korean automobile manufacturer offered an extended warranty on all its vehicle models to encourage confidence. It worked superbly as demonstrated by their sales which peaked over the last few years.

Great advertising, great packaging and price are also key components. With consumer electronics and software, usability is the main component.

What Influences Perceived Quality in a Product and a Service Provider?

According to David Aaker, a brand strategist and author on the subject matter, perceived quality generates value. As for measurements in the product context, he identifies the following elements:

1. Performance: How well does a washing machine clean clothes?

2. Features: Does toothpaste have a convenient dispenser?

3. Conformance with specifications: What is the incidence of defects?

4. Reliability: Will the lawn mower work properly each time it is used?

5. Durability: How long will the lawn mower last?

6. Serviceability: Is the service system efficient, competent, and convenient?

7. Fit and finish: Does the product look and feel like a quality product?

Within the service context, he considers:

1. Tangibles:
Do the physical facilities, equipment, and appearance of personnel imply quality?

2. Reliability:
Will the accounting work be performed dependably and accurately?

3. Competence:
Does the repair shop staff have the knowledge and skill to get the job done right? Do they convey trust and confidence?

4. Responsiveness: Is the sales staff willing to help customers and provide prompt service?

5. Empathy: Does the bank provide caring, individualized attention to its customers?

Perceived Quality in the Luxury Domain

Although there are no extensive studies on perceived quality in the luxury market, marketing and branding experts, with emphasis in the luxury domain, contend that in the business of luxury, customers perceive quality in a product when they experience high-quality materials and service, when a product performs its function, as well as when it has desirable features, reliability, durability and design.

Luxury consumers also perceive quality based on service received prior to purchase, at the point of purchase and following their purchase. Superior service during the purchasing experience positively affects attitudes and future behavior towards the brand. Customers with little experience of luxury products are especially influenced by service factors.

A shopping atmosphere which exploits the five senses with the presence of sophisticated music, luxurious fixtures and exceptional service creates a mystique that is key to the luxury experience. Such an atmosphere can help persuade shoppers to make purchases that do not necessarily seem sensible in economic terms.

Similarly, exquisite packaging, such as perfume in a beautiful bottle, helps satisfy the ‘need for beauty’ and creates a link between the consumer and the aesthetic values of a luxury brand.

The same experts above, argue that premium prices are associated with prestige ─ the major indication of superior quality.

Making Perceived Quality Equate Actual Quality

Marketing and brand managers shouldn’t overlook the perceived quality concept. They must make consumer perceptions of quality match actual quality by following three recommendations along these lines:

1) Communicate the information about product quality to their customers continuously by utilizing integrated marketing communications tools such as public relations, advertising, sales promotion, personal selling etc.

2) Avoid boasting about product/service quality excessively despite the presence of high-level quality, otherwise, it can make customers feel as if the products and/or services can’t satisfy them as they greatly anticipated previously.

3) Pay attention to the factors affecting the quality of products/services such as pricing, advertising, warranty issues, and brand image etc. These can influence perceived quality directly. For example, using a low pricing strategy excessively can make the perceived product quality decrease because most consumers often equate cheap products with a low-end consumer sector. Consequently, brand image will lose its luster.

Conclusion

Financial performance is deemed to be linked to a brand’s perceived quality – a distinct relationship between them.

Perceived quality is an intangible and overall feeling about a brand and can’t essentially be objectively determined, partly because it is a perception and also because judgments about what is important to customers differ sharply in their personalities, needs, and preferences. However, perceived quality is based on essential factors which include characteristics of the products to which the brand is attached to such as performance and reliability.

In the luxury sector, customers expect luxury brands to be expensive; to satisfy them, luxury products should be in a higher price range. The scarcity of a product also affects the perception of quality during the purchasing experience.

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References

Maynes (1976)
Zeithaml (1988)
Chevalier and Mazzalovo (2008)
Dubois and Laurent (1999)

The Anatomy of Brand Loyalty

It’s no secret that there is a strong relationship between customer experience and brand loyalty. A recent Forrester Research report revealed that customer experience leaders have a 14 percentage point advantage in encouraging their customers’ “willingness to buy more, reluctance to switch, and likelihood to recommend.”

Function, features and benefits are an integral part of a product. However, they don’t matter as much as the perception of use value inherent in the brand’s promise.

Today, even online retailers have undertaken to create customer-centric strategies that drive brand loyalty. With a plethora of competition and better educated consumers, this has become more critical than ever before. However, how does one create and execute engaging customer experiences online or offline that will maximize brand loyalty?

Negligent Brands

Many brands are myopic to the point that they unintentionally and unknowingly allow their dissatisfied customers to go away without a thought. Front-line staff is either not trained properly and/or lacks the proper attitude to handle clientele appropriately.

During the industrial era, consumers would simply purchase what was produced, shopping where that product was available and paying the price the retailer demanded. In essence, the manufacturer and the store were in position of strength.

As products and consumers have changed over the years, the concept of ‘brand loyalty’ and ‘consumer insight’ came about. As we progressed into the new millennium, the transparency and unrestricted information available on the internet has changed all of that. Today consumers are not only better informed but they are also in control. They can make or break a brand through their actions.
So what does this say about listening?

Consumers will no longer refrain from informing companies on what may have gone wrong ─ whether it’s a particular brand or a competitor’s. With the numerous platforms for consumers to make their voices heard online, brands have to be very reactive and not allow anything to chance. In an age when the consumer’s outcries and influences spread quickly, the results can signify lost sales and a deterioration of brand loyalty.

By listening attentively – especially through the various online social venues, should keep a brand from becoming the next Netflix, Tropicana or Gap ─ each one with their costly blunders.

As for low prices, though they may seem attractive to shoppers, prices can only go so low. Retailers, whether in bricks & mortar or not, need to look beyond the quick sale and start to focus on building brand loyalty. Commodities find it hard to maintain loyal customers.

What contributes to Brand loyalty?

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. The most ideal example is when thousands of people line-up, regardless of weather conditions, to get their hands on the latest iPhone or iPad. This happens because Apple has built an emotional attachment to their products by creating a lifestyle choice rather than a product purchase.

It’s about how it makes you feel. Same goes for baby boomers, whether accountants or attorneys or business executives who purchase a Harley Davidson motorcycle and ride them for about four or five hours every Sunday afternoon. The bike makes them feel like a rebel – sort of an escape.

A study (2004) conducted by brand expert J. N. Kapferer reported that brand loyalty contributes to successful marketing programs, sales initiatives and product development.

The key aspect of brand loyalty is the consumer decision — which can be made both consciously and unconsciously to repurchase a brand continually. A consumer makes this decision that the brand is perceived the one that offers the right product features, identity or level of quality at the right price, thus establishing a positive image of the brand. Since brand loyalty leads to future purchases, it can be considered a valuable strategic asset for companies.

Brand loyalty requires trust as it’s a key factor in the development of brand loyalty. An additional and often overlooked principle in brand management is this: When a brand is successful, it’s because customers value an emotional experience more than a functional benefit. When the brand delivers on client expectations – and beyond, trust is earned, strong connections are made and ultimately, brand value grows.

As 2011 began, the top three U.S. coffee brands, when it comes to their own customer’s report of their degree of brand loyalty and engagement, are:

1. Dunkin Donuts;
2. Starbucks;
3. McDonalds (McCafe)

In Mr. Schultz’s new book, “Pour Your Heart into It,” he describes how the brand was built “one cup at a time.” This could not have been further than the truth as every brand thrives through a constant repeat of individual positive transactions. Unfortunately, many brands take consumers for granted once a business or new retail location is up-and-running.

Branding in the Luxury Sector – the Differentiators

Luxury brands rely on committed customers, who often provide “walking advertisements”/brand ambassadors ─ also known as indirect marketing. Evidence from academics suggests that this phenomenon has a strong presence in the luxury sector and may have a double positive effect on enhancing a brand’s overall image and status.

Consumers who trust a brand and its name are more likely to trust the quality of new and existing products. This leads to faithfulness, repeat business and positive word-of-mouth.

With luxury retailers, emphasis should be placed on providing a service or an experience that causes the luxury shopper to shift his/her spending from one brand to another. Giving your customer prestige or special recognition for buying your product or service should be a standard offering.

Simply thanking him/her who just spent $1 million at your luxury boutique isn’t adequate. A generous and memorable offering should be made rather than something that can be duplicated and repackaged by a competitor – whether online or offline.

Rewarding points, for example, will no longer make a large impact in demonstrating appreciation as it has become quite ubiquitous. It may be utilized toward buying an item he/she would have gotten anyway. But an “invitation-only” evening, for example, with a top designer can have much more of a positive impact.

Brand Loyalty: B2B Sector v, B2C

Brand loyalty in the B2B sector is higher than in consumer goods markets because companies in the commercial and industrial segments seek long term relationships as any experiment with a different brand will have impacts on the entire business. Therefore, it’s wrong to assume that marketing solely applies to consumer goods brands.

Among Interbrand’s 10 most valuable global brands, Microsoft, Intel, IBM and GE all generate far more B2B revenues than sales to end consumers. Consider, for example, that GE and Microsoft are hybrid brands with some direct-to-consumer sales that have helped to build the reputations of what are primarily B2B firms.

Although enterprises are selling to businesses, they want to be in touch with end consumers, with their aspirations and their needs. That is a source of competitive advantage in driving their innovation agendas can capture a larger share of channel margins and as a result, build loyalty.

The Impact of Social Marketing

Social media is proving a fertile ground for breeding brand loyalty. Recent research by eMarketer has shown that social media sites like Facebook are where consumers go to keep abreast of a brand’s products and promotions.

This is where consumers are converging and where online retailers should engage. Building a community around a brand not only increases exposure and traffic to a website, but also a very effective means of creating brand evangelists who will spread the brand’s message to a wider audience.

Starbucks has made effective use of social networking and micro-blogging such as Twitter and Facebook in interacting with their customers and measuring their interests and opinions on new branding activities. As of the beginning of 2011, the company had 1,237,169 followers on Twitter and more than 19.4 Million on Facebook.

Conclusion

When consumers are delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation.

Consumers will often purchase a brand for the first time due to its reputation. The brand, therefore, adds value and certainty to an otherwise unknown product. The stronger a brand’s reputation, the higher the value of the brand and the greater revenue it will drive for the business.

Brand loyalty has a strong presence in the luxury segment because luxury goods consumers identify with the personality of the luxury brand and see no need to search for alternatives.

B2B marketers are realizing that developing brand awareness among their customers’ customers can capture a larger share of channel margins and build loyalty that can protect them against lower-priced competitors.

Using social media to build brand loyalty to a brand’s long-term success as it creates a digital holistic platform where loyal customers converge and whose voices are heard and spread beyond.

Those merchants winning the race are delivering the kinds of recognition that make these shoppers feel truly remarkable, even in their privileged surroundings.
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Footnotes:

Article based on extensive research that has been conducted for an MBA dissertation based on the topic ‘The Influence of Brand Identity on Brand Equity in Luxury Segment’ by Violetta Ihailanen who has over 15 years of practical retail luxury experience with renowned fashion brands including Burberry amongst others along with an entrepreneurial stint.

Sources:
Chaudhuri (1995)
Jacoby and Chestnut (1978)
Kapferer (2004)
Phau and Cheong (2009)

Brand Awareness: the influence in consumers’ purchasing decisions

Viewpoint by James D. Roumeliotis and Violetta Ihailanen, (who appears as a special guest columnist)

When the American company, Farmers Insurance decided to exploit the benefits of social media to build additional brand awareness, it created a new campaign that would put their virtual airship on the screens of everyone playing the popular social game Farmville on Facebook. Earlier this year, it was reported that Farmville had 80 million users – and growing.

The raison d’etre of any for profit business is to increase sales and income. For this to occur, a company’s goal and objective is to attract new customers and encourage repeat purchases. Brand awareness signifies how aware existing, as well as potential customers are of your business and its products or services. Ultimately, to achieve successful brand awareness requires that your brand is very familiar and is easily recognizable. Brand awareness is crucial to differentiating your product/service from other similar products/services and competitors.

What does it take to build effective brand awareness?

Brand awareness affects perceptions and attitudes, which drive brand choice and even brand loyalty, which means that without brand awareness there is no brand equity. The latter signifies the value premium that a company achieves from a product/service with an identifiable name as compared to its generic counterpart. Moreover, solid brand equity is an asset that can be sold or leased.

The first dimension distinguishing brand equity is brand awareness. It is influential in consumers’ purchasing decisions and loyalty. This affects customers’ perceptions and attitudes (liking or disliking) and how they build brand preferences.

David Aaker, an authority on marketing & branding, in his various publications defines brand awareness as “a consumer’s ability to recognize or recall a brand in a certain product category”; in other words, the brand is called to mind when a consumer thinks about the category. Greater awareness of a brand increases the likelihood that a consumer will consider it.

Brand awareness has three levels, which is depicted by experts in a pyramid. It ranges from the pyramid’s base as uncertain feelings that begin the moment the brand comes to the consumer’s mind through a name, followed by a belief that the brand is the only one in a particular product category.

Brand Recognition:

This is the lowest level of brand awareness. It refers to consumers’ ability to discriminate between a previously encountered brand and new brands based on prior exposure to the brand. The choice of the brand may not have been supported by the information a customer retrieves from memory.

Thus, brand recognition creates positive feelings toward a brand, and more exposure to a brand name ─ while supported by the company’s image and products, strengthens consumer memory. In a luxury window display, executed by professional merchandisers, the name of the brand will be supported by the ultimate look of the collection.

Brand Recall:

The next level of brand awareness refers to consumers’ ability to recall the name of the brand when provided only with the product category as a cue. It usually takes place in a store, when a consumer compares a brand he/she can recall from memory in the presence of other brands. For example, a product-category cue may be signaled in a department store that has collections from several luxury brands. The significance of brand recognition depends on where a purchasing decision is made: in the store or outside the store. Brand recognition is generally more effective when the product decision is made in a store.

The Purpose of Brand Names & Symbols

Brand names and symbols are the facets of brand awareness that provide basic information for classifying brands as members of product categories. These affect inferences made about brand attributes and benefits.

Jean-Noel Kapferer and Vincent Bastien, authors of the venerable book “The Luxury Strategy”, which includes the notion of ‘Break the Rules of Marketing to Build Luxury Brands”, note that in the luxury domain, because of the complexity of the luxury concept, a “label” reveals the identity, class, knowledge and culture of the brand. It creates, for example, immediate recognition of the unique touch of Chanel, with the particular look of a garment anywhere in the world. In luxury, a name, logo, symbol or color, shapes distinct consumer perceptions ─ forming emotional links to the brand, as well as secondary links to product quality.

Brand name awareness is the basic step in the communication process between brand and consumer that supports the creation of brand identity. To be effective, the name should be easy to remember and have an emotional component. In luxury, a brand name usually belongs to its original creator and founder, as in Yves Saint Laurent, Christian Dior, Louis Vuitton and Coco Chanel.

A prominent brand name that’s different and distinctive enhances recognition. Distinctiveness is achieved through pictorial depiction of the brand name, which facilitates recognition of the symbol. Luxury brands that bear the names of their founders, such as Christian Dior, are already distinctive, whereas less-mature luxury brands could benefit from a pictorial approach, thus enhancing the brand awareness.

Brand symbol is a representation of the brand name and its product category. Companies that want to communicate their product or service effectively should depict their brand name as a symbol. In luxury brands, a symbol usually combines a brand name and a logo.

In this instance, the latter begins to communicate with a customer before a purchase, helping to maintain consistent memories of the brand. A logo provides a great deal of information through a small number of signs that translate the values and vision of the brand.

Other signs of brand recognition

Packaging and colour are also important associative characteristics in identifying the essence of a brand. Such unique appeal helps potential customers easily remember and quickly identify a brand from a distance. A brand’s name and packaging strongly influence quality perceptions and shape a brand’s reputation through purchasing behaviour that leads to brand loyalty Tiffany’s aqua blue colour reflects a relaxing and refreshing state because it resembles the colour of water.

A coordinated color that is used in signs, packaging, web pages and all advertising shows the character of a particular business, which influences customer satisfaction and loyalty. FMRI research (Columbia University’s Medical Center Program for Imaging and Cognitive Sciences) has shown a significant impact of differentiated packages on consumer choice, which can affect a customer’s emotions and increase sales. For example, perfumes presented in distinctively designed bottles linked to the brand name help create a distinctive brand identity.

Brand Awareness Via Social Media

Social media had become an important venue for companies of all sizes in building trust amongst their so-called “fans” or “followers’ who in essence are their consumers. Social media offers an array of functions, which can benefit a company’s reach and objectives. The Harvard Business review recently featured an article on how soft drink brands like Coke and Pepsi use social media to build trust with their consumers. Facebook and Twitter, amongst others, are effective tools for these brands to reinforce and expand their identities ─ as well as enhance customer relationships.

All Things Considered: Strategy & Implementation

A brand can offer the best products in its category, comes backed by the best service and deliver the best overall value; however, it’s meaningless if no one has heard of the brand.

To start with, consumers must be aware that there are different brands in the product/service categories in which the brands operate. Subsequently, they must be aware of the brands ─ ideally, the brands should be the first ones that come to their minds within specific product categories and associated with a USP (unique selling proposition). Consumers should also be able to identify which benefits are associated with the brand. Finally, they should have an idea where the brands are sold.

For companies to succeed in creating effective brand awareness, they should develop and execute a strategy that they can continue to update throughout the development of their brand. Successful brand awareness normally takes time to develop with regards to an effective awareness effort. Furthermore, it takes time for an effective communication to reach potential customers.

A few customers can respond early, while most will take time to hear about the products/services, make a decision to try them, as well as return for more at a later time. Establishing customer loyalty takes even more time as it requires extended experience with any company and its products/services. As a result of the aforementioned actions, positive brand awareness will increase. Brand awareness is essentially the impression people have of a brand.

In the soft drink industry, there is not much, which separates a private/white label soda from a brand name counterpart in terms of taste. However, consumers are very aware of the brands Coca Cola and Pepsi, in terms of their images and names. This higher rate of brand awareness equates to higher sales and further serves as a superior competitive advantage that prevents competitors from gaining additional market share.

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Footnotes
Article based on extensive research that has been conducted for an MBA dissertation based on the topic ‘The Influence of Brand Identity on Brand Equity in Luxury Segment’ by Violetta Ihailanen who has over 15 years of practical retail luxury experience with renowned fashion brands including Burberry amongst others along with an entrepreneurial stint.

Sources

Aaker (1991; 1996)
Bettman (1979)
Farquhar (et al, 1990)
Hoyer and Brown (1990)
Kapferer and Bastien (2009)
Keller (1993)
MacInnis (1999; 2008)
Rossiter and Percy (1987)
Zaichkowsky (2010)
Wilcox and Laverie (2008)

Your comments are welcome

Branding Bottled Water: Differentiating a commodity through various tactics

Make no mistake bottled water is a billion dollar business. All the major food & drinks groups are involved. Branding drives this market whether it is Poland Springs, Fiji water, and that trendy water of choice on the Left Bank of Paris, St. George from Corsica with its striking design bottle by the French designer, Philippe Starck.

The reasons driving the market are changes in lifestyle, attitudes towards drinks in general, and the simple fact that water is the proverbial “elixir” of life. Remember the simple fact that our bodies are made-up of 60-70% water.

Doctors recommend an average daily intake of H2O should be 8-12 eight-ounce glasses, daily. As a “commodity”, 7.56 liters/256 U.S. fluid ounces are consumed daily by an “average” household. Although prices vary according to brand, the average liter/fl. oz. price tag is equivalent to a liter/fl. oz. of petrol in Canada.

Another remarkable fact is that in the 1990s, Perrier through its clever and witty advertising campaigns worldwide made water the chic and socially acceptable drink of preference at parties and social occasions. You were now no longer forced to imbibe alcohol at a “business” lunch is meeting to seal a deal unless you wanted to.

Features of the American market

Although many Americans drink tap water, the projected consumption of bottled water will rise in 2010 to about 9.4 million gallons (35.5m liters). This is the rough equivalent of $16.8 billion in turnover of bottled water sales.

These astonishing figures demonstrate the value of water in monetary terms and show why over the last 10 years food & drinks groups how pursued an aggressive acquisition strategy in snatching up once independent brands. Although their are many global players, the market has also seen the emergence of a core of key groups with their ever-growing portfolios of brands, each distinct and recognizable in the marketplace. Brands are for both the sparkling and still/ spring water segments.

If you combine the fact that branding can be executed with vending machines a la Coca-Cola at the entry price of $150k, you can understand the attractiveness.

Walk down the drinks aisle in any American supermarket for example and you will be simply amazed by the vast choices confronting customers.

Top players

Examining this market more closely, you will discover two principal firms dominate the branded water market in developed markets. I will not address the interests of Coca-Cola and the Pepsico group here nor their activities in Asia, particularly India. This is another although fascinating study on branding and bottled purified water market.

Looking more closely, the 2 firms, which stand out are Groupe Danone (Paris) and Nestle (Vaud). The Danone portfolio consists of many recognizable names such as Evian, Volvic, Badoit and in North America, Dannon Spring Water.

Nestle on the other hand, holds Vittel, Poland Springs, Deer Park and the sparkling category, Perrier and San Pellegrino.

Currently, the number one selling premium brand of still water in terms of volume is Evian; the brand is recognized for its pedigree, coming from the Alps and its purity.

Water categories

Experts break the bottled water market into 2 constituent groups: non-carbonated water and carbonated water. Non-carbonated water is often called “mineral” water and can be designated be distilled, filtered, spring or well.

Sparkling water is identified by naturally occurring carbonation or water, which has been injected with carbonization.

A third category of water is “fancy” or value-added water. Two brands, which stick out are “Clearly Canadian” and Vitamin Water”. Both lines propose enhance products that can include flavouring and/or vitamins. The last few years has seen an explosion of vitamin water. Certain critics see vitamin water as mere marketing hype. Others believe that it has carved out a vital and important niche by adding a new product range to a market concerned with “health” attributes.

How can one differentiate and command a premium price for water?

Drinks groups have successfully proved that with creativity and a compelling storyline, just about anything can be branded successfully, including commodities. Since selling water is not about technological dominance, the key discriminator is “brand” and “brand identity”. The other key factor in the mix is logistics and distribution. Both are essential elements to high sales figures.

“If there weren’t any branding in the water category, the business would eventually go 100% to price and to private label”, says Robert Lynn, executive vice president of sales and marketing for Global Beverage Systems, marketers of Le Nature’s Beverages.

For the moment, he is convinced that brand is more important than price.

Approaches to product differentiation

The most common approaches to differentiating water that the marketing professionals apply are:

• Fancy bottle and label packaging: the bottle shape, color/ codes and functionality really do matter
• The actual “Source” and promotional “story”, highlighting uniqueness
• Health qualities that promote fitness and well-being
• Flavor enhancements: This can include orange, lemon and lime. It is also an excellent and healthy soda substitute
• Lifestyle
• Adding unusual and compact/practical sizes: think bicycle bottles with nozzle
• Limited price offers or bundling with other products
• Solid and extensive distribution channel with retailers and institutional clients
• Sponsorships for additional exposure and significant opportunities for distinct marketing

The bottled water myth

Many people perceive bottled water as the “picture” of purity. Think of the label used by Evian and its snow capped Alps. However, tap water is actually subject to stricter (U.S., Canadian and European) government standards throughout most municipalities, especially large cities. Bacteria testing are stricter than is required for bottled water

“There’s no guarantee that bottled water is any safer than the water that comes out of your tap,” says Wendy Gordon of the non-profit Natural Resources Defence Council. In fact, 25% of bottled water comes from municipalities own water source. Research into 28 mineral and spring waters published in 1995 found that all had what the regulations defined as a low mineral content. You really cannot rely on these waters to make a significant contribution to your mineral intake, the report concluded.

Environmentalists scorn bottled water, embrace refillable containers

What makes the bottle water labels marketing more challenging these days is the bad press and pressure they’re getting from the Green movement.

“It’s a ridiculous waste,” said Eric Yverbaum, co-founder of the Tappening.com campaign he started with his friend Mark Di Massimo to educate the public about what it takes to produce plastic containers that take hundreds of years to break down in landfills. Because of this, environmental activists and a growing number of restaurants are propagating a pro-tap water movement.

That’s good news for Brita, the world’s leading manufacturer of filter systems for tap water. Its products come in two forms: faucet mounts or pitchers. On their website, they claim to transform your regular tap water into a source that makes you feel more alive. Is it any wonder, then, that this company is becoming a noteworthy competitor to the water bottling companies?

Today, only about 20% of plastic water bottles are being recycled, which is startling when you consider that over 35 billion plastic bottles of water are sold in the U.S. alone each year. As a result, municipalities such as Toronto, is one of the biggest cities in the world to have banned bottled water. Montreal’s ban will go into effect in 2015. Watch for other cities worldwide to follow suit. Innovative individuals/companies have found a solution to this. Thanks to them, the next disposable alternative to bottled water has already hit our shelves in the form of boxed water. As of this writing, there are five such companies (H2O Pure Spring Water, O.N.E. Water, Aqua2Go, Boxed Water Is Better and ICEBOX) producing and selling boxed water – mainly through the use of Sweden’s well known milk and juice carton packaging manufacturer, TetraPak.

The 360 Paper Bottle is the first of its kind in the world, and an eco-friendly solution to the problem of plastic water bottles. About 90% of the boxed water container is made from a renewable resource. H2O Natural Spring Water, which gets its source from the underground aquifer at the renowned Niagara Falls region in Canada, is a sustainable option for “water on the go”. Those bottles are made mainly of paper, a sustainable and renewable resource, from responsibly sourced, well managed forests where new trees replace harvested ones. So far, these companies have been well received by eco-concerned consumers/devotees.

Water as the ultimate luxury

How about branding water and putting the world’s most expensive price tag on it?

That’s just what its founder and president, Kevin G. Boyd, did for Bling H2O, which he labels as a “luxury” product. He charges on average $44 per bottle. This has been accomplished through a clever marketing strategy, emphasizing:

1) Focusing on the distribution of limited editions
2) Creating a fancy glass water bottle to add a “chic” cachet
3) Conveying a glamorous storyline with a special focus on celebrity status, using personalities to represent the brand

For example, Kevin Boyd recently introduced the Dubai Collection’s “The Ten Thousand” with a price tag of $2,600 per bottle. This bottle has over 10,000 hand-applied Swarovski Crystals with each bottle custom made to order, numbered and comes with a pair of white handling gloves and an attractive case.

I cannot imagine anyone paying for this. However, he has proved there is a market, although a microscopic niche.

Market evolution

It is clear that the bottled water market will continue to expand. At the global level sales already top $35bn. The key for the firms involved will be differentiation, added or perceived added value, packaging and innovation. Grabbing the customers’ attention is the name of the game.

What you can conclude is that this humble commodity most of us take for granted is no longer so humble.

The Inept Organizations: Weak leadership as the culprit

Viewpoint by James D. Roumeliotis

How often do you come across a company, either as a consumer or at a business relationship level, and realize how frustrating it is to deal with?

To understand and penetrate the corporate governing structure and “culture”, you need look no further than the upper echelon of the hierarchical tree. It is here that procedural decisions are shaped and executed. An entity’s leadership is expected to head the enterprise by governing its long-term growth and sustained wealth.

Moreover, there is a constant search for the “right” human resources. Recruited and fresh talent must resemble the leadership in tone and style. Call it the organization’s DNA. Exceptional organizations are good at these types of corporate games, thus strengthening performance effectively.

I have noticed that in certain types of B2B transactions, there can be scope for unscrupulous behavior. One or both parties are tempted by “disservice” during their business exchange. Shortsightedness might lend itself to make this underhanded approach appear “profitable” on paper. Such relationships inevitably end badly because they are not conceived with trust or respect.

Success Breeds Success

Companies that foster the right attitudes and strategies put the firm on track for success. Examining their corporate histories you can witness a trajectory of growth. They have a tendency to dominate their markets and “win” through competent talent, Innovation, and an entrepreneurial mindset within the leadership at the executive level. These choices underscore the prosperity and rapid growth of the instituion. An examination of Google or Facebook shows this quite nicely. They are not built like “traditional” corporations nor do they act like them.

Organizational leadership is accountable for creating value for customers, employees and its owners/investors. When Bill Gates conceived Microsoft, he put the firm on track for providing constituent audiences with what nobody else could provide. Understanding “asset” management in an expanded meaning of the term guaranteed that Microsoft would succeed under Gates stewardship.

The opposite is equally true. When top executives lack knowledge or experience for board positions, they should not be promoted to leadership roles. Some family-owned firms run afoul here and this brings up the issues of sustainability and corporate governance. Another weakness in running an organization, in my view, is pushing for short-term profitability at the expense of solid planning. For example, with large organizations, competence is not the primary value but rather connections, politics, and clever tactics. Such “benefits” can usually compensate for incompetence.

No firm can continue to prosper unless it attracts fresh and eager talent. Despite the dilemmas within the financial world, top organizations consistently lure new talent with lucrative compensation packages. It is easier for a firm such as Goldman to tap the “best” because of its reputation, size and success than a small local financial player.

When Goldman recruits they know where to look whether it be Harvard or London Business School. Prospects will already contain the seeds of the corporate culture in their past. Given the “right” conditions, new talent blossoms. Qualifications are never enough. They are a starting point reinforced by attitude and values. The selection and screening process is designed by HR to weed out inappropriate candidates.

Take the case of Michael Page, the global recruitment firm. Every wonder when you pass one of their buildings on Friday evening that the staff at the pub all seem to resemble one another whether men or women? They were intentionally selected to match a model.

To give you another example, Microsoft’s interview process includes quizzing candidates with challenging technical questions. This practice not only assesses problem-solving and knowledge ability, but also explores the ability to perform under pressure, which is a key skill required to succeed in Microsoft’s intense work environment.

One thing is dead certain. The best-managed companies have “one” factor in common:

They are constant achievers in their respective industries. These companies exude managerial excellence. Financial performance is the result of this style of management. Take the case of the Westinghouse Air Brake Company, a 19th-century business that still thrives because it is one of the companies with the “best management” in the USA.

Deeds Not Slogans

Companies with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team. Research by the U.S. Bureau of Labor Statistics demonstrates that nearly 6/10 businesses shut down within the first 4 years of operation.

To be a successful entrepreneur is not an effortless task. It takes plenty of sacrifice. A new generation of young entrepreneurs think the road is smooth and a fast track to easy wealth. Not everyone will become Mark Zuckerberg. Obstacles and sacrifice are part of the deal. Harnessing opportunity and overcoming challenges on a daily basis to top the competition is constant work. These conditions are true no matter what the sector of business engagement or company size.

Telltale signs of weak organizations can be traced to inept leadership. The following points highlight the deficiencies:

• Poor customer service – slow or no customer inquiry replies – abysmal handling of sales and service complaints. Service is portrayed as a reward, not a right or benefit

• No Unique Selling/Value Proposition – Companies need to define and articulate their unique value proposition and deliver on it consistently – Create the platform for sustainable and competitive advantage

• Operational deficiencies – various ailments and no structure

• Absence of or very little communication amongst staff and management – Divisions aren’t well coordinated and do not function as a team

• No transparency – there is hardly any openness from management

• Unethical practices – short-term selfish objectives in search of market share – top executives should promote social norms and principals as moral agents

• Lack of proper execution of decisions and with new products/services

• Productivity incentives should be implemented to boost results and employee moral. People must be given a reason to work hard and be efficient

• Creativity is practically non-existent – an absence of innovation and employee empowerment will hurt progress and stifle new ideas

• No clear vision/strategy – there needs to be a strategic vision that reflects a true unmet need and has the commitment of a dedicated CEO. That means that there is a well-defined target audience with a distinct value position that is differentiated, meaningful, and deliverable.

• A weak sales force along with an unattractive compensation plan

• Favoring nepotism and bias – promoting family members over other qualified employees often leads to resentment or, worse, prompts valuable non-family employees to leave the company.

• Poor hiring practices – should hire for attitude and train for skills

• Slow/delayed decision-making process – too many layers – overwhelming bureaucratic structure
• High turnover which leads to poor employee morale, reduced intellectual capital, lower service levels, higher operational costs and decreased productivity

• Management in a state of denial about their organization’s shortcomings – remaining with the dysfunctional status quo

• No channel strategy – Some companies focus on building a product, but don’t think through how to get it into the hands of customers. Even if your product is great, unless you can sell directly, you may be dead in the water without strong channel partners.1

• The hidden game – corporate politics – power plays by a handful of individuals for their own benefit to the detriment of their colleagues and the company

• Misrepresentation of brand(s) – too much hype – empty promises – not delivering on expectations – leads to dissatisfied clients who will alienate the brand

• Weak financial controls – cash flow dilemmas – over leveraged/undercapitalized (high debt-to-capital ratio) – not reinvesting a certain percentage of profits for future growth

• Absence of sound marketing program(s) and/or brand strategy – A brand is defined by how it behaves, from the products it builds to how it treats its customers, to the suppliers with whom it works

• Growing too fast and not staying on course as the company grows;
• Lack or very little employee training & development
• Deficient in control systems – reactive rather than pro-active

• Lack of continuous improvements or complacent

Top executives need to be accountable to the ownership or Board of Directors – whichever applies, or at least to an outside arm’s length and neutral party such as an adviser who can also play “devil’s advocate” when necessary.

Good Organizations Matter

The way to solve an organizational problem is to confront the structural issues with a moral sense of purpose and ethics.

For its clients to receive stellar service, the firm must have its house in order. Besides structure and an efficient operation, employees should be trained and empowered to do their jobs efficiently.

Seth Godin, a renowned marketing strategist stated succinctly: “If you want to build a caring organization, you need to fill it with caring people and then get out of their way. When your organization punishes people for caring, don’t be surprised when people stop caring. When you free your employees to act like people (as opposed to cogs in a profit-maximizing efficient machine) then the caring can’t help but happen.”

Companies that disrespect their employees and shut-out clients get willfully isolated and have a short life span through an erosion of market share and significant loss of revenue. A company’s goal should place emphasis on serving its people properly and fairly. Higher morale generates higher profits – though occasionally other priorities hinder that objective which is self-serving by certain executives.

Enterprises spanning a wide array of industries, have earned distinction as “well” or “best” managed” by demonstrating business excellence through a meticulous and independent process that evaluates their management abilities and practices – by focusing on innovation, continuous training, brainstorming and caring for their employees well being – as well as investing in meeting the needs of their clients.

Well run companies thrive no matter what and learn from their mistakes.

YOUR VIEWS ARE WELCOME

Lifestyle Branding: Engagement and the Total Experience

When you visit your local Porsche dealership be prepared to engage. Staff will talk to you about the total experience. This will invariably include discussing the firm’s racing pedigree and performance. In your mind, you will be able to feel the steering wheel, smell the leather seats, and hear the roar of the engine. This car represents to you an exclusive club and you desire to be part of the privileged few. Clearly, one does not buy a Porsche simply to go from point A to point B. In practice, you might use this care to commute to work, but this is not the incentive to purchase a piece of automobile and racing history.

Porsche is clearly a brand with authenticity and heritage. The principals shaping the consumer’s buyer behavior go beyond intention. There is a sense of engagement in fulfilling a dream. It can be to make a social status statement or a personal style choice. Whatever it is, it is not an unconscious choice. The codifiers are clear: This is who I am, and what I believe in. Ultimately, it can also articulate your sense of self-worth and your emotional aspirations.
The most important emotional benefit in my view is that a product of this caliber and class expresses itself when the consumer can declare: It suits my lifestyle”.

Lifestyle brands matter
Not every brand is a lifestyle brand regardless of whether it strives to portray itself as such. A company can define itself as a lifestyle brand when its products promote a more than a product with key benefits and attributes. Note however that lifestyle branding is more than just promoting “a way of life”. It is a product or service that provides consumers with an emotional attachment to the lifestyle of the brand. Think of Ralph Lauren, and you can readily see it is not about the clothes. It becomes an attachment like Porsche to an exclusive club in which you can be a member through emotional identification through use of the products in question.

Smart companies understand these principles and look to keep the customer engaged. By doing so, they clearly forge the sort of long term relationships, which become the envy of their designated sector. Financial benefits clearly follow, but the raison d’être of the firm must back up its promotion for this to work effectively. One reason so many firms want to enter the lifestyle arena is profitability and high profit margins. Established brands can tap economies of scale when they launch new products at a cheaper cost to the firm. Surplus revenue can then be channeled into extensive advertising and promotion costs.

Building a lifestyle brand
Generally speaking, a brand that is designed for the lifestyle segment should have more emotional value to consumers. Features, cost, and benefits do play a role but by themselves they would be insignificant.
There are companies that become a lifestyle brand by tying their product ranges to a distinctive culture or group. Marketing guru, Seth Godin labels this with the key word as a “tribe”. A classic case is Harley Davidson, who sells branded merchandise to customers whether or not they own one of the firm’s motorcycles. Calvin Klein has also done this by licensing its name to the perfume line called EUPHORIA. Other key lifestyle brands include Hackett, Hermes, Louis Vuitton and the Abercrombie & Fitch phenomena.

In the electronics and computer industries, it is uncommon to have lifestyle products. However, Apple has broken this “glass ceiling” by its unconventionality with iPod, iPhone and its online music store. Even its ubiquitous white headphones have became a fashion accessory and, some would even argue, a status symbol. The people who follow Apple and its “lifestyle” are clearly all obsessed in a way that the firm intended when it embarked on this well thought through strategy.

Lifestyle brands have clearly impacted on luxury brand management. The usual suspects such as BMW, Armani, W Hotels, and Rolex – just to name a few, have fostered commitment and loyalty with their promotional campaigns. These have given consumers an “associate” status with all that is glamorous. Just think of Daniel Craig and James Bond. Sales at Omega thrive on this “bond engagement”.
The methods to reach a target audience require an integrated marketing/communication strategy. They clearly require taking into consideration and harmonizing the following points:
• Experiential Marketing
• Grassroots marketing
• Promotional tours
• Sponsorship of lifestyle events
• Lifestyle marketing on the Web: think Facebook
• Viral video marketing
• Social media/networking (blogs, chat rooms & message boards)
• “Interactive” is key
• Mobile phone media, text messaging & applications
Not every brand can be a “lifestyle”

New research from Kellogg at Northwestern finds that the strategy of traditional brands to reposition themselves as a “lifestyle” brand may fail. The reason is not rocket science: they simply fail to “bond” with their customer base.
“The open vistas of lifestyle branding are an illusion,” said Alexander Chernev, lead author of the study and associate professor of marketing at Kellogg. “By switching to lifestyle positioning, brands might be trading the traditional in-category competition for even fiercer cross-category competition. Now they have to compete not only with their direct rivals but also with brands from unrelated categories. Focusing on lifestyle puts brands like Gillette, Abercrombie & Fitch, Harley-Davidson, Starbucks, Apple, and Facebook in direct competition with one another.” The study reveals how brands serve as a means of self-expression along with the limitations of expressing a consumer’s identity through brands. Moreover, the study uncovers customers’ desire for self-expression through brands is finite.

In perspective
Forward-thinking brands are those which will continue to develop creative ideas and solutions that will allow people to interact with each other and explore, as well as share creative opportunities. Moreover, those same brands will make it a strategic priority to add pleasure into the lives of their consumers.

To be sure, there are many excellent examples of lifestyle branding. Just examine the “hotel as lifestyle” creator, Ian Schrager. Since the 1970’s, as an entrepreneur, Chairman and Chief Executive Officer of Ian Schrager Company, he has achieved international recognition for concepts that have revolutionized both the entertainment and hospitality industries. His passionate commitment to the modern lifestyle has been expressed through a series of pioneering concepts: The hotel is no longer just a place to sleep. It is portrayed as your home away from home. This allows hotels to act like theater. Think of the boutique hotel or “cheap chic”, “lobby socializing”, the resort, or the spa.
His keen instincts for the mood and feel of popular culture were honed during the 1970s and 1980s, when he and his late business partner, Steve Rubell, created Studio 54 and Palladium. In 1984, they turned their attention to Morgan’s Hotel and introduced the concept of “boutique hotel” to the world, and is today one the hottest segments in hospitality.

The goal of a lifestyle brand is to get people to relate to one another through a “concept brand”. These brands successfully sell identity, image and status rather than a “product-service” in the traditionally meaning of the term.
If they are successful in capturing their audience, then they become legends in their own right. If you examine the recently published photographic testament to “Il Pelicano” in Tuscany you will understand perfectly the meaning of the lifestyle branding spirit.

YOUR VIEWS ARE ENCOURAGED

Plotting Sales Structure Strategy

Viewpoint by James D. Roumeliotis

Structuring your sales organization has an enormous impact. This key and elemental issue in marketing poses several key questions for any marketing strategist. Let’s start with some of the elemental questions:

How do you sell to your end-users?

Do you use a direct sales team, resellers, a website, or a combination thereof?

A sales force organization consists of a sales force which is structured in a way which will benefit the company and ultimately, the end-user. Some sales forces are highly structured while others are not. The best path depends on the organization, the context of your market -whether products or services- and how you see your organization meeting its objectives.

Product or service distribution constitutes one of the 4 P’s in the marketing mix. In this case, it’s the “place” or “placement” (aka distribution). It’s a crucial factor in your entire marketing strategy as it helps you expand your reach and grow revenue in the most efficient manner. Deciding upon and plotting such a structure can be a daunting task in a company’s strategic plan as there are several factors to consider – amongst them the geographical territory and type of customer.

Structuring Your Sales Organization

The sales structure should reflect strategy. A company’s initial decision is what channels are most efficient for reaching and serving the target customers and either:

• Your own direct salespeople

• Some combination of indirect sales organizations/channel partners.

Will you use a combination of distributors, brokers, sales representative organizations, telemarketing, e-commerce/Internet, home-shopping TV channel(s) and distributors – retailers – or resellers?

Once you have chosen the appropriate combination of sales channels, the second decision is how to organize these channels by product line, major customer or market segment, function, geography, or no restrictions. This is referred to as sales force architecture.

Moving from the more general to the more specific, next decide how many salespeople you need and the boundaries of each person’s territory. This is referred to as deployment & sizing.

Last and most tactical, a sales manager must assist salespeople in time and territory management. How can a salesperson best allocate his/her time in the territory between prospecting for new customers and further penetration of existing accounts? How frequently should top accounts be visited versus less important customers?

What about product merchandising – should the salesperson also look after that task to assist the retailer with a higher sell-through? How can a salesperson most efficiently travel the territory?

Channel Choice Suitability

Choosing the proper distribution channels depends on several options.

Types of customers:
Certain customer characteristics lend themselves more to company direct salespeople, others to an independent sales organization. A large number of widely dispersed customers, frequently ordering small quantities, may be more efficiently reached by several outside indirect sales organizations than by your own company-employed direct sales force.

Based on certain metrics, present and potential accounts become designated A, B, or C. An A account requires more frequent calls than a C account and may require a different channel choice. You may use telesales people or e-commerce for C accounts and account representatives for B accounts.

Types of selling:
Certain types of selling should consider company direct salespeople, others to an indirect sales organization or a channel partner. Long sales cycles with a great deal of consultative selling to first-time or one-time systems buyers afford themselves to a direct sales organization. A channel partner may not have the patience for a long complex sale. The more influence a salesperson has on the sale, the more important is a company direct sales force.

Team selling and partnership selling lend themselves to the company direct model. In contrast, relationship selling to repeat customers modified repeat buyers, display, commodity and order taking should consider using channel partners.

Types Of Products Or Services:
Certain types of products or services lend themselves to company direct salespeople, while others to indirect channel partners.

Heterogeneous products that can be more easily differentiated, such as bio-tech or consulting services or semiconductor fabricating equipment can utilize a direct company sales force. Homogeneous products or services that are more difficult to differentiate, such as injection molding, can utilize channel partners.

In reaching customers, higher gross margin products or services generally use a direct company sales force, while lower gross margin products or services generally use channel partners since their costs are lower and less fixed.

New products or services, where the salesperson has a strong influence on the sale, do best with a company direct sales force, while products or services toward the end of their life cycle are more efficiently handled by channel partners, telemarketing, e-commerce or consumer service people.

Efficiency & Incentives Drive Productivity

No matter how well you hire, train and compensate salespeople, inefficient distribution channels, architecture, deployment and territory management will prevent a sales force from reaching full productivity. Salespeople represent an expensive and important human resource, just as plant and equipment represent expensive and important capital expenditures. Both require full productivity to be competitive.

With the sales force and distributors alike, keeping them stimulated is important. Positive motivators such as with sales contests are favored over low performance penalties such as reduced discounts and the threat of terminating the relationship.

Moreover, proper communication, mutually agreed sales goals, scheduled performance review meetings, reporting procedures (utilizing the CRM system), as well as collaborative marketing strategy, on-going training, market intelligence information and being receptive to suggestions from the field for improvements all help.

There are also non-financial incentives which provide a form of intuitive type of income as opposed to financial income. Competitions, dinners, thank you letters and congratulatory awards all facilitate to keep everyone motivated and working closely together.

Sales Outsourcing: The Flexible Alternative

Given the competitive environment and emphasis on cost cutting at many firms, some organizations prefer to utilize sales outsourcing as a flexible and cost effective alternative.

A recent study has highlighted flexibility as an important driver for outsourcing sales (source: Rogers B., 2009 – “Contract sales organizations: making the transition from tactical resource to strategic partnering”).

Outsourcing the sales task does away with sales processes, targeting clients, hiring, as well as deploying a sales team – which is quite demanding and time consuming. This can help the company focus on their core products or services. Another attractive use for outsourcing is to test new markets, or to expand into distant markets without having to undergo an expensive geographic expansion.

This can lead to substantially increased sales through a multiple market presence. Companies may also choose sales outsourcing as a way to access the best sales skills.

In essence, the outsourcing firm know professionally as CSO (Contract Sales Organisation) is an extension of their client but is responsible for all activities connected with direct sales activities, often receiving product/service knowledge training support from the client.

A prominent American outfit which offers such services boasts that by bringing together people, process and technology, it can help sales organizations:

• Design and deploy fully managed, highly skilled sales teams in weeks
• Stimulate revenue streams, channel performance and business growth
• Improve sales insight and reporting
• Refine sales planning and strategies
• Boost ROI and performance-to-budget

Outsourcing isn’t a good fit for ever business, however, if you have more opportunities to sell your product than you can take advantage of, outsourcing can offer impressive growth, otherwise, its drawbacks can include a lack of control over execution and commission structure can be problematic. In addition, while sales outsourcing firms are hired by your company, they also represent numerous other companies and as such, may not be fully committed to you.

Channel Conflicts

Be prepared for channel conflicts and have a plan for dealing with them. Today, e-commerce has become a more important distribution channel creating a new set of channel conflicts. Use e-commerce/Internet to enable your sales force and channel partners to embrace and benefit from it rather than compete with it.

When it comes to product/service pricing, by using multiple channels, make certain that a fair profit for each type of partner is included in the pricing. Compare the price that the end-user will pay. If a customer can buy from one channel at a lower price than another, your partners will have legitimate concerns. Pricing conflict is common but it can jeopardize an entire strategy.

In The Finale

Whether you create an in-house sales force, go with independent reps, or utilize a sales brokerage, each method has its key factors to consider.

As with in-house sales reps, channel partners require performance pay that rewards positive action and superior results important for the success of your firm. Use proper training and compensation to prevent your channel partners from becoming adversaries.

Channel choices should be reviewed annually to see what has changed and if these changes require an adjustment in your choice of distribution channels. To make the proper channel choice, you must prioritize or rank the important issues relating to your organization.

Based on each issue’s importance does this suggest a direct or indirect sales force – your own salespeople or a channel partner?

Essentially, to create an efficient distribution program, focus on the needs of your end-users while doing so in concert with your cost of sales, margin, and cash flow calculations. After all, you’re in a for-profit business. Once you’ve chosen and created an “ideal” sales channel for your organization, you will need a sales process and a pricing strategy. Subsequently, you can begin launching marketing campaigns to channel partners and end-users.

YOUR COMMENTS ARE WELCOME.

The Essence of Creative Consumer Product and Packaging Design

Viewpoint by James D. Roumeliotis and special guest,
Thomas C. Mylonas, Creative Entrepreneur & CEO of Dot Kite Design-Branding

When you head to the grocery store to pick up a product such as cereal, do you purchase the same one each and every time or, like many consumers, are you comparing and contemplating about which one to grab?

When presented with a large range of choices to fulfill a need, it is in human nature to become confused, thus the inability to quickly make a choice. When we spend too much time comparing the plethora of options we are presented with, the functional differences between each of them soon become blurry. Once the functional differences lose importance, the peripheral aspects take precedence. This means that whichever product’s ad, spokesperson, or packaging color stands out favorably in our minds will most likely influence our product purchase.

What does this signify for those responsible for branding and communications for such low-involvement products?

The peripheral aspects must stand out for products in categories where the number of substitutes is vast enough to cause customer confusion close to the point of purchase. Axe, a brand of male grooming products owned by the British/Dutch company Unilever is a good example of this.

Their marketing messages are well known and hold a great amount of recall. They are likely to be quite popular in the deodorant and body spray isle where men are faced with more brands than they can count. The functional superiority or inferiority takes a back seat in such a situation.

Those factors differ for high-involvement goods, such as in cars, watches and so on, where the customer is not likely to make a grab-and-go purchase. In these cases, functionality, brand values and associations begin to play a key role.

Connecting Industry With Consumers

Product designers’ work on new products with two aspects in mind: functionality and aesthetics. Through their work, designers connect the industry with consumers by translating a concept into something that adds extra value to consumers.

A competent design team should have an excellent understanding of people, culture, and societies. This knowledge is applied to its deep knowledge about design and includes, but is not limited to:

· Materials
· Components
· Production Techniques
· Practical Experience
· Financial Insight

In this way, products are developed that not only have an appealing design and bring out emotion, but are also practical and of high quality. The products will have the right combination of feel, detailing and ease of usage. Pricing will then determine the value equation.

Creative Packaging Boosts Sales

Packaging is as important as product itself. The main objective of packaging design is attracting a buyer’s attention to the product. Along with making the product look amazing, it should prompt and influence the customer into buying the actual product as looks do matter.

No matter how good the product is, if the packaging is dull and inferior looking it may compromise sales of its contents. Consequently, modern, creative and clever packaging design plays a major role in inspiring and selling any product. Packaging design should include labeling which expresses and communicates key information to the end-user such as benefits, product information, usage directions and perhaps a story.

Some consumer product companies are using a more educated market approach. For instance, to stand-out on the crowded supermarket shelves they introduce art in the printing of their packages and/or labels inviting the consumer to reach-out for the product to learn more about it.

A case in point, after more than two decades in the limelight, California’s Kenwood Vineyards‘ highly acclaimed Artist Series Cabernet Sauvignon reigns as a premier marriage of fine art and fine wine. The combination of the fine art of wine making with the work of contemporary artists creates an elegant, easily identifiable package, while promoting beautiful artwork at the same time.

Stylish & Eco-Friendly

Many modern companies these days make every effort to produce both “green” products and packaging that meet with modern environmental standards so as to reduce their carbon footprint – which includes the reduction of the size of its packaging. This demonstrates eco-friendliness which can bolster their image and attract additional new clients – especially those who are environmentally sensitive.

Design Instigates Sustainable Competitive Advantage

The approach to creativity is the way an artist might stand before a new canvas, on which a beautiful painting can be crafted. Staffs who work in a creative environment should be given plenty of leeway to utilize their full potential – the freedom to flourish. Not doing so limits their artistic talent and deprives the company from taking a leap at the competition.

By having a good understanding about materials, production techniques and manufacturers, striking designs can be created that assure loyal partnerships between consumers and manufacturers. This saves marketing costs in the short term and creates more stability in the long term.

The primary goal of packaging design is to entice customers’ attention. For this purpose, package designs cannot simply inform the customers, but also provoke feelings and communicate emotions. An effective packaging looks attractive, impresses with its creativity and not simply appealing to have on the shelf. As a result, it stands out in an increasingly competitive marketplace.

Amongst other impressive statistics, stocks of design-led firms outperformed the FTSE 100 by 200%!
That should be compelling evidence enough to make product designs consumer appealing.

If a manufacturer is to create and produce new products, as well as re-design existing ones, why not bulk up with creativity as proved by the French industrial designer Philippe Starck. His “Juicy Lucy” manufactured by Alessi is a perfect example of how you can take a “mundane” orange juice squeezer and turn it into a n iconic design “must have”.

To get the “wow” factor of emotional branding play back Apple’s advert campaigns to yourself for inspiration, and witness the genius of style, design, and function harmonized to capture the imagination of an entire planet.

YOUR VIEWS ARE WELCOME

Defining the Luxury Brand

Open any quality fashion or lifestyle magazine, and you will see how brands conceptualize and package luxury. The hype is deafening, and in reality can be quite confusing. Everyone wants “luxury” brands, and from a marketing point of view defy sales trends and seem recession proof.

As consumers, we want to be made to feel special. Definitions of “luxury” can vary enormously and depend on who you ask and in what context. The term “Luxury” has never been something easy to define. It is in my view, a mysterious and elusive concept. Studies highlight that no one is immune and when properly executed makes products and services highly desirable by broad market segments.

To put things into perspective, I will discuss the nature of luxury, and how luxury and premium brands differ in the marketplace although both types of products and services can be targeted to similar audiences.

Why Luxury Brands?

The first key point to understand is that people buy luxury brands for a multitude of reasons. In general these brands are expensive and are targeted to high net worth individuals and people who have high levels of DPI. The desirability to possess is based on the consumers need for high quality, exclusivity, craftsmanship, precision and innovation. They involve issues of self perception and self worth. These underlying reasons lie at the subconscious level of the individual and include points such as peer recognition and approval, status, and the envy one’s inner circle.

In the services sector such as in tourism and business travel think 5-star hotels and resorts. We all appreciate the ambiance and “feel good” experience. In medicine, plastic surgery can offer illusions of “eternal youth” and enhanced aesthetics.

Luxury products can be broken down into three categories:
Prestige brands such as Louis Vuitton, Rolex, Mercedes-Benz and Cartier represent a highest form of craftsmanship and command a loyal consumer following that is not affected by trends. Due to their pedigree, they are well established as status symbols. For example, If Daniel Craig or George Clooney wear an Omega watch in an advert or film, sales immediately spike.

Premium brands are those brands like Polo Ralph Lauren, Calvin Klein and Tommy Hilfiger that aspire to be luxury and prestige brands but their marketing is geared more to, as a term, an affluent mass market or mass-luxury brands.

Fashion brands on the other hand are those that address the masses and whose designs can be seasonal. Call them the “hot trends” or “fads” of the immediate moment.

It’s foolish for a company to think that by simply launching a product with a “luxury” label attached will make their targeted market flock to it. It takes diligent planning, execution, clever strategic marketing and PR buzz alongside ambiance and finesse. To be perceived as unique, luxury products and services should have an aura of mystery surrounding them. Oddly enough, the more ubiquitous the product and the more acessible, the less the “mystery” concept holds true.

The Dazzle Factor

A brand that is committed to be a player in the luxury domain should endeavor to build long-lasting loyalty by creating products that resonate with customers on an emotional level. It’s what we call the “Dazzle” factor.

Glamour is another important ingredient. It is the impression of attraction or fascination that a particularly luxurious or elegant appearance creates – an impression which is better than reality.

Today, consumer purchase decisions are increasingly driven by consumers’ hearts. With ambiance marketing, a custom designed attractive setting – yet alluring with captivating style, invites customers to truly feel the brand experience by adding character. This is accomplished by connecting the emotions to a product or service, and infusing it with a tangible and intangible essence that remain in the customers’ minds.

The ambiance you create is one of your best marketing tools. The aesthetic appeal to human senses, the feel of your business and the brand you create is your image. Along with great service, it is one of the most important reasons customers will choose to do business with you on frequent basis.

It’s natural to expect luxury brand purchasers accustomed to being pampered. VIPs as they’re known to be labeled, they’re also used to having access to the hottest entertainment events, parties and sports venues. A brand known to deliver on those type of unique experiences is quintessentially, a world leading private members’ club, which has a global concierge network that provides such a service 24 hours a day, 365 days a year including specialist advice, insider access and benefits to absolutely anything you can think of, from property, art, bespoke fashion and fine wine, through to luxury travel, security, event production and publishing.

Luxury vs. Premium

Luxury is self expression, an exceptional experience and a feeling of sense of emotion. There is also a difference between a “luxury” and a “premium” product but they can be both – as in a tailored made fine wool suit for example by Camps de Luca in Paris.

Luxury product pricing is related to scarcity, brand and storytelling. Premium goods, on the other hand, are expensive variants of commodity goods – pay more, get more. It’s the craftsmanship and quality along with the pedigree of the product. Plenty of brands get in trouble because they can’t figure-out which one they represent.

The Impact Of Niche & Lifestyle

What distinguishes luxury automobiles from others are the so-called “bells & whistles, comfort, additional safety features, leather heated seats, ergonomics, styling and performance to name a few. Besides the car itself, the overall awe-inspiring experience is crucial. From the moment one purchases the vehicle and during time of servicing.

One of the most respected brands in the world is BMW. This ever-growing brand has been successful in creating a cult, a body of owners that are extremely faithful, devoted and committed to their brand. BMW stands for fine engineering and “The Ultimate Driving Machine”. Those principals have maintained consistency over time and across its entire range, which guarantees its authenticity, its attraction, its mystique, as well as its spark.

With women’s designer handbags, it’s the craftsmanship including a confidence booster to its owner as the bag screams to the world, you are unique. The Sophia Coppola collection at Louis Vuitton and the “Birkin” bag at Hermes are notable examples with the latter design house producing limited quantities to generate and guarantee exclusivity through scarcity, i.e. limited editions.

As for high-end condominiums, it’s the sought after location, the trendy architecture/design, its facilities and overall experience. It’s the impression that it’s irreplaceable. Selling only “the” amenities is kind of outdated.

People want more than that. They want to feel they own something that has a personality and a story. That means more than just the usual appliance upgrades or adding a health club. That said, people are looking for self-definition and a sense of belonging when choosing to live in a certain property. The “Trump” name is renowned for its cachet with its properties as they redefine luxury. From the elegant design of the residential units and spectacular lobbies, to the distinguished quality of services and amenities that are available around the clock for its residents, the organization has a reputation for detail.

Differentiating “Nouveau-Riche” from “Old Money”

“Old Money”, with persons from families who have been wealthy for multiple generations, has its established habits and favored brands. It’s deep-rooted and less concerned with peer pressure or living up to the Jones’s.

Unfortunately, research is showing that “old money” is not only becoming scarce but also buying less. For this reason, to survive and grow, luxury brands should be focusing their marketing efforts on the “Nouveau-Riche”. This term is used to identify people who have acquired considerable wealth within their generation. The newly rich spend money to assert their freedom and self-expression and while doing so, enjoy flaunting their success, whereas “Old Money” behaves more conservatively.

Its More Than “Packaging & Presentation”

It’s not enough to simply introduce and sell a luxury brand surrounded by a fancy store with design inspired display cases. The attitude, product knowledge and overall delivery/presentation of the product by the sales consultant/brand ambassador all play an equally important role.

A study by The Luxury Institute finds that Burberry and Bottega Veneta excel far better than other companies at having enthusiastic brand ambassadors in their stores who are interested in helping customers. This was one of the key findings of the report titled, “Leading edge insights into the world of the wealthy.”

Mystery shoppers commissioned by The Luxury Institute said that the layout, location and atmospheres of the Burberry and Bottega Veneta stores were what clients appreciated most.

“A customer-centric culture is something that is a self-reinforcing system that creates consistently extraordinary customer experience,” said Milton Pedraza, CEO of The Luxury Institute, New York.

“Service values, service standards and education on operational and cultural functions need to be in place.” He further added, “Luxury brands should have a set of service values. They need to educate and hire the right people. Whenever a new store opens, brands need to make sure they test employees for personality. They need to be educated in the customer experience and the culture of the brand, not just how to work a register,”
Furthermore, he stated, “We know every luxury brands CEO gets luxury brand customer service”.

Exclusivity is Key To Branding

Classic brands such as Coca-Cola and Pepsi-Cola put emphasis on their differentiation with their competitors. They specify its positioning then convey it through its products, its services, its price, its distribution and finally through its communication.

With genuine luxury brands, it’s not the same approach. Being unique is what counts, not any comparison with a competitor. JN Kapferer and V. Bastien, authors of the book, “The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands”, succinctly state that “Luxury is the expression of a taste, of a creative identity, of the intrinsic passion of a creator; luxury makes the bald statement ‘this is what I am’, not ‘that depends’ – which is what positioning implies.

What made the Christian Lacroix brand is its image of bright sunshine, full of this designer’s bright, vivid colors’, suffused with the culture of the Mediterranean; it certainly is not concerned with its positioning with respect to this or that established designer.”

The role of advertising a luxury product or service is not to sell at all. Unlike traditional ads where the text makes the sales pitch, with luxury adverts, it’s about refinement. A large photo of the product in a lifestyle setting is displayed along with a brief story line with some mystery.

When you visit a Porsche dealer, the sales consultant will talk to you about racetracks, describe road-holding capabilities, build-up a fascinating story – after which time he/she will tell you about reliability, and the “technical” details.

To be successful in luxury marketing today, marketers should target and combine experiential marketing to attract and retain customers with emphasis on the individual lifestyle.

The Polo Ralph Lauren corporation, which was named Luxury Marketer of the Year for 2010, knows a thing or two about successful luxury marketing. The runner-up was Louis Vuitton, and third-place was awarded to Burberry.

The accolade was won on the strength of an integrated strategy which included interactive marketing while continuing its rich and distinct brand story in print and beyond – all leading to double-digit growth in 2010.

“Creating a luxury brand is one thing, but maintaining its marketing aura across good times and bad, traditional media and new, takes genius and Ralph Lauren,” said Mickey Alam Khan, editor in chief of Luxury Daily, New York. “Ralph Lauren’s marketing has become a byword for excellence with consistent creative messaging and effective call to action in an era where luxury brands struggle to retain their mystique,” he said.

Experience Is Fundamental

Luxury isn’t about price anymore. It’s about spending on brands that are authentic and meaningful through function, design, intrinsic value received versus others in the category.

Luxury products must provide the right experience. Sophisticated customers want products that dazzle their senses, touch their hearts and stimulate their minds – which they can relate to and can incorporate into their lifestyles. The degree to which a company is able to deliver a desirable customer experience is vital.

While public relations and advertising in selected media has been the mainstay, astute marketers have also adopted prestige event sponsorship which offers exposure to the right targeted audience. Mercedes-Benz with its New York Fashion Week is one such example.

Craftsmanship is making a comeback too, as people look for better, longer-lasting things. In the past years it was about “collecting” quantities of things, but now, its about exclusivity and quality things, which please. Design must be timeless for longer visual enjoyment.

At this crossroads, “luxury” and “premium” meet at the junction in unity of purpose.

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The Customer Experience: Building a Customer-Centric Organization

It doesn’t take a genius to realize how few companies these days actually “Walk the talk”. What does this mean, you ask? I refer to “the total customer experience”.

Richard Owen, vice president of Dell online worldwide, says: “It’s the sum total of the interactions that a customer has with a company’s products, people, and processes. It goes from the moment when customers see an advert to the moment when they accept delivery of a product and beyond.

Sure, we want people to think that our computers are great. However, what matters is the totality of customers’ experiences with us: talking with our call-center representatives, visiting our Web site, buying a PC, and owning a PC. The customer experience reflects all of those interactions.”

You can claim that Richard Owen would say this considering the customer centric position of Dell and the nature of their business. However, his poignant statement is applicable to any business of any size. Having a vitally active and dynamic Customer Relations Policy is should be crucial to your business.

If your staff is inadequately trained, this lack of insight into CRM only aggravates the problem. When we act as clients ourselves, we can clearly see this process in action. Just pick up the telephone and call a company, which does not value CRM. It can be an exasperating experience.

People love to hate the phone tree where you have to go through a maze of menus until you eventually get to speak to a human. To make matters worse, there are companies that outsource their call center offshore to a country where employees have a peculiar accent and pronunciation not well understood by the average North American or European – and who simply follow a script they can’t deviate from.

Common intelligence tells us that it shouldn’t be this way. How a customer is dealt with reflects on the integrity of the brand, and the image of the company in the mind of the consumer.

Out of 362 leading companies surveyed, 80% believe they deliver a superior customer experience, but only 8% of their customers agree, states Bain & Company, a leading management consultancy firm. Moreover, the larger the market share of the firm in question, the greater the risk that this firm will take its customer base for granted.

Remarkable Companies Deliver Remarkable CRM

Dedicated firms deliver outstanding customer service, and this policy distinguishes the best companies from the pack. Consumer products can suffer from becoming mere commodities, with price used as the sole competitive advantage. Today, it is quick and easy to check the prices of competitors with your cell phone and price comparison apps.

As more people buy online, it is important to remember that your competitor is only one mouse click away. One way to overcome the price only differentiator, which eats away at the profits and does not generate brand loyalty, is for a company to consider building a lifelong relationship with each customer. To do so, requires that customers enjoy a positive and hassle-free transaction with each touch point. Take L.L. Bean, the outdoors outfitter and equipment supplier based in Freeport, Maine. If you buy any product and desire to return it for whatever reason, the firm will either refund or exchange the item. No questions asked and always with a smile. Now that’s CRM.

The corporate goal should be to reduce or eliminate customer problems altogether. This tactic should begin prior to and during the first contact with the customer. All problems should be documented, reviewed and corrected without delay. Hiring the right people is vital, so is proper staff training, empowering staff to deliver a remarkable customer experience.

Top-performing companies also create processes that seek direct, immediate customer feedback. EBay employees known as “pinks” monitor the company’s message boards, quickly learning which issues, complaints, and concerns may need attention. American Express calls customers who don’t quickly activate their new cards to find out if they’re having problems.

Customer Engagement Builds Emotional Bonds

Engagement means creating involvement. Customer engagement is the effort taken by the company to involve their customers and the brand beyond regular purchase and use. Traditional marketing practices rarely encourage active participation of customers. Marketers are often quite content with the regular purchase of the product by the customers and the level of engagement with those customers is limited to handling inquiries, complaints and if any, loyalty programs.

Customer satisfaction is just the start. A business should aspire to engage its customers. Engaged customers ensure a sustained and profitable growth. Customer engagement is when a significant number of satisfied clients are proactively promoting the company to others with similar desires. It is not enough that they declare that they are willing to promote your business. Only when they go out to spread the word and encourage others to try your product or service do they prove that they have become engaged.

By listening to its customers, a business can learn a great deal. However, many struggle to convert these conversations into something that can really impact marketing, branding, and advertising in a meaningful way.

One valuable tactic is “Customer Collaboration” – private online communities made up of selected customers passionate about a company’s products or services. Consider this strategy a customer advisory board by those who understand the brand and whose input can help the company make the most effective marketing decisions.

GALLOP studies reveal that customers who are fully engaged represent an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth than the average customer. Actively disengaged customers represent a 13% discount in those same measures.

Simply put, engaged customers help you build your business.

There is much misunderstanding about the use of networking and social media such as LinkedIn, Viadeo, Facebook and Twitter. SM is not about marketing; it’s about building meaningful relationships with your customers.

It acts as a complement to your marketing activities, and should be integrated according as a strategic position. Facebook has +320 million active users. Twitter has +3 million. Both networks have become the world’s largest commercial channels and should be harnessed in order to influence prospects and to reinforce brand loyalty for existing customers.

If you do not use these networks or are unsure how to maximize their potential for your business, my advice is to learn. It is easy, but it takes time, patience, and a targeted strategic approach.

An excellent case-in-point for how older, established companies can put social media to work, consider Samsung Electronics from South Korea. It’s not enough for a company to simply add Facebook and Twitter buttons, expecting users will flock to “click”.

The reason that it appears to work for Samsung is that the company is using social media by the methods that we, as consumers, want it to be used. The Samsung Tweets account on Twitter is not simply utilized for public relations pitches – it’s a real tool being used for dialogue.

Samsung employees read reviews with comments left in a timely manner. As a result, the company appears to be learning from constant customer feedback. This in turn has deepened Samsung’s consumer relationships. Social media is not a separate and distinct entity. Various departments work together online and offline to develop and implement plans devised to fully engage the community. In a nutshell, there are three activities to bring to mind:

Follow – Share – Engage.

Exceeding Customer Expectations

As part of their shopping experience, when a customer walks into a prestigious boutique, his/her service expectations and shopping experience are quite high. Disappointment is not an option but rather excellence in store service plays an integral role in communicating the culture of the brand.

The salespeople in the boutique play the role of “brand ambassadors”. They stand in the forefront of the client relationship. It all starts with training, occasional re-training, including the necessity of staying informed of industry trends/evolution and thorough product knowledge. Moreover, it goes without saying that a positive attitude, grooming, pleasant gestures and apparel worn all reflect the essence of the brand. These criteria should be standardized but often overlooked. Listening to the client and personalizing each relationship is crucial. Need a good example? Go to any Ralph Lauren store and you will see this strategy put into play to perfection.

Post sales should include building loyalty, continuous customer engagement and staying in touch with the patrons via newsletters, birthday cards, and special invitations to “Previews, Promotional or Themed events.

Milton Pedraza, CEO of the Luxury Institute in New York states that “Luxury brands need to start focusing on what customer service means. They need to start to out-behave – not just outperform – the competition.”

He further adds, “The customer experience at the store and Web site has to be extraordinary, and consistently so, in order for luxury consumers to develop long-term relationships.”

It is clear that any innovative luxury brand building relationship strategy needs to engage their most committed customers by matching exclusivity and lifestyle. When this is achieved the brand has achieved engagement.

Measuring The Customer Experience

Customer metrics allow companies to make certain their delivery continues to meet the needs of the target segments. Customer Engagement may be used to pursue customer loyalty as fully engaged customers feel an emotional bond with the brand and its employees. Compared to customer satisfaction, customer engagement offers a better measurement tool for increasing retention and other business results such as profits and return-on-investment.

“PeopleMetrics’ Most Engaged Customer Study” whose results indicate that businesses with higher engagement levels do enjoy higher profits, a return-on-investment and market share has actually showed this. Companies, which are pursuing the love of their customers’, will be more likely to recommend, visit and return for additional purchases in the future.

Empower Your Employees & Customers

World leading organizations create potential for growth by relentlessly improving their customer relationships. Such organizations have outperformed their competitors by 26% in gross margin and 85% in sales growth. Their customers spend more, return more often and stay longer.

Dealing with a company’s customer service center should be an efficient and pleasant experience. Companies should place toll-free numbers on their packaging to encourage engagement. Calls should be answered on the first or second ring and no phone tree. The trained person who handles the calls should be congenial, apologetic and non-argumentative. Customer relationships are the result of all interactions, operational as well as marketing. Consumers will definitely share experiences with friends and family, so having a reputation for horrible customer service could kill the chance to build a relationship with consumers who have heard bad things through word-of-mouth.

Engaging with customers is a two-way conversation. Connecting online and offline utilizing an analytic structure and acknowledging the value of each customer is the way moving forward.

Social networking sites are an ideal venue for brands to monitor what is being said about them. Those sites offer places for consumers to comment, praise, and criticize, as well as a way for them to follow brand promotions, events and a way to forward information to friends. While marketers seem to think about brands mainly in terms of whom their competitors are consumers tend to prefer brands that do something that plays a role in their lives.

Finding the right metric is an important step in a company’s journey toward increasing customer engagement. However, measurement without action is pointless.

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YOUR VIEWS ARE WELCOME.

Professional Branding Up Close & Personal: Advice for the Private Practice

For a professional in private practice, the notion of marketing and branding is unfamiliar territory. This is in a similar situation as within any small entrepreneurial company. Yet, this is truly a fundamental aspect of any business. To develop a following requires a brand, and it doesn’t matter if you are a doctor, dentist, an accountant, or an attorney. Your personal “brand” is what comes to mind when your “clients” are deciding whether to see you for the first or not.

Now is the time to get real. Branding is about image and perception. Do not claim to not understand the social networks. Muck right in, however with a special eye to product awareness. Hear yourself scream out, Facebook, LinkedIn, Twitter and Google Trends, here I come.

In principal, a brand is a promise of something that will be delivered by you and your practice. This promise comes in a form of quality, an experience, as well as with a certain expectation in mind. Brands that stand for something connect with customers.

Just as you use brands personify your position, status, and identity when you make decisions about which detergent or automobile to buy so do your clients. Give them something to rely on, something they can sink their teeth into, something which enhances their identity with a positive vibe.

Your credentials have much to do with your image in the consumer’s mind, so does your office ambiance and the courtesy (or lack of) offered the minute your staff greet the patient/client at the front desk. You may also be the doctor with bad breath or architect who is frequently late for appointments.

Conceptual Personal Branding

Branding is similar to the development of our own personal traits. Our looks, the clothes we wear, our personality, achievements, contacts, experiences and anything else that adds to, or even detracts from, our appeal to others encompasses our own “personal brand.”

When branding your own private practice, you have the ability to carefully create a brand position that will appeal to your market and make your profession more successful through broader, or in some cases, very specific appeal. However, brand development requires time, energy, as well as a reasonable budget.

Personal brand positioning is the activity of creating an identity with a distinctive value in the target customer’s mind. For instance, when we think of an accomplished defense attorney, the first ones that spring to mind are those who have a reputation for having a high rate of litigation success – or cardiologists who are identified as utterly competent in curing most heart diseases and extending their patients’ life span. Essentially that is the position they occupy in your mind whenever you think of them.

Package Yourself As “The” Entity

A sound marketing and branding plan can help make your clients/patients feel confident about your practice. In addition, a sound sustained campaign will help get new ones grow your practice. Doing so requires the following action plan which will help build your name in a professional and unique way that enhances your recognition, trust and confidence in you as a physician, attorney, architect or other licensed professional.

There are several benefits to creating an effective personal brand. These include:

• Enhance Your Competitive Edge

By building a strong personal brand you are creating a sense of individuality and “distinctiveness” in the marketplace so that your clients are able to easily differentiate your practice from your competitors.

• Make The Big Leap

Your professional brand becomes your authentic personal identity. The goal of personal branding is to create and portray a consistent image of which you are as a person and what you stand for. It’s a reflection of you which includes your values, opinions, and beliefs that are determined by what you say do, and how you do it.

• Create Awareness

Due to the plethora of similar products and services offered in the marketplace, consumers are now placing more emphasis on brand differentiation when it comes to distinguishing comparable products and services. As a services professional, you have the ability to take control of your identity and influence the perception others will have about you and the services you offer.

• Create The Buzz

Effortless business growth can be achieved by exploiting word-of-mouth advertising through clients/patients, as well as various networks that the buzz spreads through. The latter will be produced when your personal brand will connect you with your spheres of influence who will send you referrals and give you testimonials.

The idea is to give people a reason to talk about you in a flattering way which is considered customer-to-customer selling. Your personal brand should be communicated consistently through many channels which will begin to generate the hype and create excitement for your practice.

A case in point: A dentist in an affluent suburb of Montreal has distinguished himself and his practice from other dental offices in the area by having instilled a mission statement that he and his staff abide by vigorously. This includes guests welcomed in a friendly and state-of-the-art facility with a Zen ambiance to guarantee that each patient visit to the office is both relaxing and enjoyable with the most extraordinary care in the dental field.

The attractive Website even includes a 360 degree tour of the premises which is quite impressive. The dentist is renowned for perpetually honing his skills through continuing education and latest techniques, as well as for his high level of patient satisfaction. As a result, it is believed that the majority of new patients come through word-of-mouth.

• Generate Profitability In less Time

A highly regarded personal brand offers the advantage of attracting clients/patients in a timely and effortless manner. You will be able to position yourself in the mind of your typical client or patient as the expert of choice. In doing so, you begin to dominate your local market and command higher fees which, consequently, translate to less work and more money – work smarter as opposed to harder.

• Establish Celebrity Status

Gain name recognition in your area of expertise in your “customer’s” mind. By making a lasting impression you will be well rewarded for your distinctiveness. Trust, respect, and admiration will follow and you will be perceived as an expert the more visible you are to your target audience. As a result, your brand will propel you to the top in your domain.

A specialist physician who has succeeded in becoming a celebrity in his own right is, undoubtedly, the well publicized American Plastic Surgeon Dr. Robert M. Rey. His media appearances, starring role in the reality show Dr. 90210, his public relations savvy, VIP patient testimonials, as well as his exceptionally resourceful Website all speak volumes of his strong personal brand – the ultimate self promoter.

Create & Sustain Brand Online

Begin by crafting a marketing, advertising and publicity campaign that focuses on helping you achieve your vision. Your consistent message should include your credentials, areas of specialization, as well as the ambiance and experience you desire to achieve for each and every client/patient. It is important to note that your local professional practice code of ethics in advertising may have some restrictions in place with regards to the content of your marketing and PR campaign.

The following greatly enhances your personal brand through the image you want to portray.

• Marketing Collateral

Design an attractive yet professional looking logo and develop graphic standards for fonts and branding colors. Design consistent and matching corporate material which comprises your business card, letterhead, envelope, signage, brochures, note pads, newsletters, etc.

• Waiting Room Ambiance

First impressions count and so does comfort and the entire “customer” experience. Avoid being frugal with your image and invest in designing your office and the waiting room in particular to higher standards. This area speaks volumes of you and this includes clean premises.

• Website & Social Networking

Your Website is essentially your online office and marketing presentation. It too conveys a strong message about your brand image. Make certain it is done professionally, free of any clutter, and include the right amount of information and make it effortless to navigate.

As for social networking profiles such as LinkedIn, have a presence, don’t mix any personal information or photos and keep them current.

• Trained & Courteous Staff

Branding goes beyond design, it also applies to your support staff. Since it’s a given that your clients/patients are the lifeblood of your practice, it’s not enough to simply take care of them with expert care and advice but also through excellent and courteous office and billing support. You and your staff are part of your brand, therefore choose them carefully, train them as often as possible and keep them motivated to excel.

Be Multidimensional

You’ve spent years studying to earn your credentials whilst you learned about your specialization. Once you’re ready to apply the knowledge as a self-employed professional, you discover that growing your practice requires you to compete with other offices to get new clients/patients and referrals.

Just as you are prepared to serve them you also have the extra burden of having to deal with self branding and marketing issues – as any competent sole proprietorship should. A sound marketing and branding plan can help you grow your practice by attracting, as well as retaining clients/patients by making them feel confident about you.

Personal brand positioning should convey to your audience about your unique/distinctive advantages over the competition, and while you are serving them, you are keeping your promise of delivering constantly across all points of contact. That’s how trustworthy brands are built.

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Exploiting The Benefits Of Niche Marketing: Strategic Marketing

by James D. Roumeliotis

In strategic marketing “speak”, who earns more money – a general practitioner or a specialist physician such as an Ophthalmologist? The latter has spent additional years studying with emphasis in one particular area of practice which makes him/her both scarce and sought after in his/her profession. Same goes for an organization which has spent years studying the market with emphasis on doing one thing, but one thing extremely well. This automatically justifies higher fees translating to improved earnings. How does a saddle maker to the horse and carriage trade reposition itself to maximize its know-how in leather goods to now ask US$4,500 for a simple briefcase? Or even hawk silk scarves at US$400? Think of Hermes.

The answer lies in specialization, craftsmanship, and branding.

As with all other specialized professions, a business, which chooses to concentrate on a particular market segment should earn simply be generating higher revenues.

Alternatively, if you join the herd of the mainstream, there is always a vast consumer audience to tap. Profit is driven by volumes. It is harder to compete on price to the point of being perceived as offering a commodity with little or no differentiation – otherwise known as a “unique selling proposition” (USP). The only exception to that rule is when an enterprise keeps churning out innovative, “must have” items ahead of its competition. Yet, that requires constant creativity; refinements and a considerable amount of R&D. Apple is an example of a firm which has managed to hit both objectives. Not bad for an enterprise, which started life in a garage.

Defining The “Niche”

Strategically, niche marketing is the way to go forward. However, you must be on top of game. Recently, the firm Kusmi Tea has managed to put all the right elements together in an unbeatable combination. It personifies mass marketing and branding. If you have specific group of people interested in “organic tea”, you have your proverbial niche. Whether promoting niche products, in focused markets, such as those for vegans, cruises exclusively for “cougars & cubs” or geared for the ultra high net worth individuals, the activities applied to attract those refined target undoubtedly call for creative strategic thinking.

Targeted Audiences

The best way to start is to define your target audience. An 18-year old girl who wants to lose weight to fit into her dress is interested in weight loss diets. Hit her at her waist line, and the target is captured with simplicity.

The family who just purchased a puppy wants it trained and therefore requires the appropriate service. Show you can make a dog shake, rattle, and roll and still act well-behaved in the company of others and you will no longer need to flog dog whistles.

Every notice how a 50-year old lady wants to hide her wrinkles and is always searching for a miracle formula to make her wrinkles disappear in minutes? Open Vogue and see how this “class act” can be achieved. These cited groups above represent finely honed targeted audiences. Marketing to such audiences and building an emotional bridge from the intention to purchase decision always attracts higher conversions. You don’t need to recreate the wheel. All you need to do is to find a suitable product that your target audience is looking for and present it on a silver platter. All target audiences liked to be addressed with intimacy and personal contact.

Driving The Niche

Common sense tells you that driving a selected audience is efficient and lucrative.

The following key index shows how niche marketing should be your chosen business strategy:

1 – When entering new niche market, you generally will not have much competition to deal with. This is justification alone for choosing a specific market in the first place. It also makes your SEO (Search Engine Optimization) Internet marketing strategy focused and cost effective.

2 – Niche markets appeal to target customers, and they are generally much more willing to spend money when their specific needs are met. This means that by catering to a specific target market, you can generally earn a better profit margin.

3 – Some niche markets contain sub-group of the main niche. For example, acai berry weight loss pills or natural weight loss diets are sub niches from the weight loss niche. Despite their relatively small size, they are actually quite sought after. Identifying this need spares you from having to compete for the similar business. People who fit this profile will seriously consider your product – especially if it offers them a genuine solution.

4 – Niche marketing makes it possible to focus on becoming a true expert within a particular realm while building a reputable brand name. Strategically, it is also more focused and easier to segment and attack.

Case Study: novero

Innovation creates new refined markets. A case in point is a German company. novero (its name and logo are intentionally written in lower case). Along with supplying Bluetooth/wireless solutions to automotive manufacturers such as Jaguar, Land Rover and BMW, its mission is to cater to a niche consumer market by creating lifestyle accessories that build unique levels of loyalty among sophisticated end-users rather than simply create an affordable line of “me-too”/traditional wireless phone headsets.

To that end, the company launched exquisite Bluetooth communication pieces, for use with mobile phones, which are worn around the neck when not in use. Designs include a necklace with Lapis set with sterling silver and another with genuine pearls and gold. As expected, they are available only at select retailers in North America, Europe and Asia.

Novero knew from the outset that its unique and pricey jewelry would not be for everyone but it suits them well. Their niche products fall under the premium/luxury sector, which is intended for the gadget-admiring “Fashionistas” and discerning consumers who also own fine watches and possibly a top luxury mobile phone such as “Vertu” and “Tag Heur”.

The “Ideal” Niche Player

A niche market player is very effective at working closely with customers to build and maintain long term relationships by innovating and challenging the existing norms in the industry, thus adding value to the project, program, and organizational level. If one is considered an expert in what one does by focusing in one area, then great success shall follow. The value proposition must be relevant to the target market. This means a target market must be clearly defined. Focusing on a specific market requires knowing it inside and out. This includes conducting a market analysis, stating a precise target market description and goal, as well as being clear about the type of relationship one would like to achieve with his/her market.

By definition, then, a business which focuses on a niche market is supplying a need for a product or service that is not being dealt with by mainstream providers. As such, one can think of a niche market as a narrowly defined group of potential clients offering them the best of what you have. In return, their vendors will profit from higher margins and customer loyalty. As for targeting smaller “sub” niches, you will find them much easier to dominate.

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The Anathema of Bureaucracy: Dealing with its Fate & Embracing its Inverse

According to Wikipedia, the word “bureaucracy” is clearly defined as “The collective organizational structure, procedures, protocols and set of regulations in place to manage activity, usually in large organizations and government.” In other words, it’s a frustrating, rigid, process driven, and a snail paced institution. This shouldn’t exist in democratic countries and ought to be controlled by developing nations if they are to effortlessly succeed. Not doing so, bureaucracy will become increasingly self-serving, complacent and breed corruption, rather than properly serve society as its intention.

In the private sector, if people don’t work productively, their businesses will go bankrupt. But, in the public sector, seniority trumps performance regardless of employee efficiency or lack thereof. Competence in an organization is directly linked with its organizational system. In bureaucracy the hierarchy is typically very complex with many levels providing a highly differentiated structure of authority.

The faceless bureaucracy also exists in the private sector. Employees there get frustrated when they can’t perform their work in a wholesome way because of restrictive yet superfluous rules set by their organization. Add to that corporate politics and it’s not hard to see why there are high levels of employee exodus/turnover due to their malcontent. There are organizations which thrive on their ability to allow individuals to remain faceless. It permits them to act badly which is not in the best interest of their customers.

Bureaucracy in action – or rather inaction

When t comes to shipping packages, I despise doing so at the post office because every time I go, their employees look for a reason not to ship it. Either “Too much tape!” or “Not enough tape!”. On the other hand, I really enjoy bring my packages to Fedex or The UPS store. The folks there have a totally different approach as they’re not looking for a reason to say no but rather for an opportunity to say yes. “Here’s some tape, we’ll just add it right here…”. The obvious reason is that the person at the post office has no incentive to make a sale. He/she knows that whether I’m well served or not this person will still collect his/her paycheck, benefits and keep their job, in all probability, until retirement age.

If a company or government institution is in the service domain, then its people should look for ways to say “yes” at every interaction, provided they are not doing anything illegal or losing substantial amounts of money for their employer.

Embrace change, not be paralyzed by it

Organizations with a large bureaucracy struggle making fast decisions. Bureaucracy creates a climate in which the customer is not as important as the management and the company’s other employees. It also kills the organization’s competitive spirit. As Jack Welch, former CEO of the industrial powerhouse, GE, has stated, “Bureaucracy is the enemy – it means waste, slow decision making and unnecessary approvals.” Welch felt that ridding the company of wasteful bureaucracy was everyone’s job. He urged all his employees to fight it. “Disdaining bureaucracy” became an important part of GE’s shared values, At Google, the role of the manager is that of an aggregator of viewpoints, not the dictator of decisions.

For an organization to avoid the complacency and bureaucratic trap, it should encourage creative thinking, consider making innovation its foundation, as well as cut-out layers of the its bloated management structure for a leaner decision making process. Innovation is what a business should be carrying-out as often as it’s required for its long-term existence. The term “innovation” is widely described as: “Leading to significant organizational improvements in relation to enhanced or new business products, services, or internal processes.” This involves acting on creative ideas to make some specific and tangible difference in the domain in which the innovation occurs. The old adage that goes something along the lines of “If it isn’t broken, don’t fix it” is a paradigm which doesn’t sit well today with forward thinking companies that thrive on practical improvements. Nothing wrong with change if done to enhance or replace the status quo. It’s part of collective progress. For this to work everyone, from the top brass down to the low labor employee, must embrace continuous change, rather than resist it. That may be easier said than done due to typical resistance emerging from people due to fear of the unknown. It should be up to management to persuade their subordinates of the mutual benefits of change.

The following are five recommendations for managing creative employees.

1. Accommodate: Have an open door policy and offer an element of flexibility with employee schedules;
2. Stimulate: Encourage creative thinking not simply with words but also with rewards;
3. Recognize: Reward with greater autonomy and praise in front of peers;
4. Direct lightly: Avoid micromanaging and offer feedback;
5. Progressive environment: Avert unnecessarily restrictive rules and bureaucracy within the organization.

Adhocracy as the accepted wisdom for organizations to flourish

Author and expert on management issues, Robert H. Waterman, Jr., defines adhocracy as “any form of organization that cuts across normal bureaucratic lines to capture opportunities, solve problems, and get results.” For Henry Mintzberg, a management guru, an adhocracy is a complex and dynamic organizational form. It is different from bureaucracy and considers bureaucracy a thing of the past, and adhocracy one of the future since it’s very good at problem solving and innovations and thrives in a changing environment.

That said, a company that works under a bureaucracy is very structured in its rules and hierarchy with mediocrity prevailing. Everyone knows their specific role, they specialize in that role, and know nothing, or very little, about the roles of their co-workers. On the other hand, a company that functions as an adhocracy experiences an organic structure and hierarchy barely exists. As a result, all members of such an organization have the authority to make decisions and to take actions affecting its future.

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Post Recession Marketing: Adapting the message to a changing consumer

To say the global recession was a wake-up call for the most consumers would be quite an understatement. It is just one of many events that have weakened people’s sense of security in the past decade along with political instability, terrorism and environmental issues such as global warming where already significant even before financial markets collapsed. As a result, there has been a mood of mistrust and anxiety that developed among many people around the world, which has produced a reexamination of priorities and values.

A recent study from Ogilvy & Mather in the U.S. identified new consumer priorities with quality of life and peace of mind at the top – and a focus on living life in a more sustainable way from both an environmental and financial point of view.

Marketers to respond to shift in consumer behavior

A paradigm shift is required to deal with a new, more conscious consumer and to design strategies that will pertain to such a shift in behavior and thinking. People are no longer finding indulging in excessive consumption as consumers are buying fewer products, fewer brands, and being more careful in their choices. In general, people are relying less on brands for fulfillment or status and are now considering other values and priorities into their choices.

Some experts think that when the recession is over, consumers will return to their spendthrift ways. However, this time that behavior may not hold true. Predictions and surveys abound that the post-recession consumer will be different. Although he/she may have been forced by circumstances to reassess their spending habits, many consumers have found that spending prudently equates to good value and more for the money.

Data from a variety of sources support this view. A recently released survey by the Pew Research Center in the United States reported that 71 percent of Americans said they have switched to less expensive brands as a result of the recession. Also in the United States, a study by Deloitte found that 84 percent of shoppers were examining their grocery purchases, looking for ways to save money. Seventy-nine percent said that they were “smarter” shoppers than they were two years earlier, and nearly the same proportion (75 percent) said that the need to reduce spending had made them understand which brands were really important to them. A Sanford C. Bernstein survey conducted in December 2009 found that half of consumers had not only traded down to less expensive products but found them to be “as good or better than” the costlier brands they replaced.

What does this signify for the new approaches to marketing?

Uncertainty equals opportunity. This is a time of great opportunity for businesses if they take the long view – especially their marketing activities. While consumer priorities have changed, the basic challenge for advertisers is the same – to deliver a pertinent message in creative ways. This can be accomplished by utilizing new approaches and making their communications relevant to the current concerns of the “new” consumers, who are now selecting brands for different purposes compared to pre-recessionary times. Today, brands need to create strategies to address consumer transformations. They should position themselves against contemporary consumer needs, as well as against their competing brands. The approaches will differ according to the product category and the market segment within that category, but a few highly successful global brands are already showing the way. Marketers should take notice from these examples.

A premium brand that is thriving in the new age of consumerism is Nespresso. The company has succeeded in defining itself as a “new luxury brand”. Even during a period of relative modesty in spending, people are not willing to live without a few luxuries. Nespresso has tapped into people’s desire to indulge themselves by offering them the same high-quality drink brewed at home. Plenty of marketing spending was accomplished a few years back to support the premium positioning of the brand. To demonstrate the attraction of Nespresso coffee, its ad agency created stories in which the actor George Clooney goes unrecognized and unnoticed in Nespresso stores. Clearly, the message that was conveyed was that the coffee is what is important to the clientele, rather than the endorsement of a celebrity.

In the personal care category, Unilever’s Dove brand has been taking aim at traditional standards of beauty, by means of the “Campaign for Real Beauty”, as well as viral videos such as “Onslaught”. By having focused on this creative direction, Dove has redirected the debate on beauty and scored a unique category for itself.

Another example of a brand that has benefited on people’s need to seek new and less costly ways to achieve satisfaction is McDonald’s. The recent campaign in France, called, “Come as You Are”, is based on the idea that there are not enough places where we can go to truly relax and be ourselves. This campaign, which generated a great deal of attention, showed the different personalities of McDonald’s customers. The message: “You not only get good food at a reasonable price, but you can eat what you like, stay as long as you wish, and simply be yourself.”

The conscious post-recession consumer and new marketing tactics

Conscious and mindful consumption does not always translate to purchasing less. It means that consumers will reconsider and focus their spending money on the most psychologically rewarding purchases. During the recession, such purchases will almost certainly offer the benefit of security, whereas in post-recession, they’re more likely to be focused on products that bring vitality and sensation to life, offer opportunities for self-expression and personal development and are environmentally friendly.

How companies reshape their marketing strategy going forward will depend a lot on who their customers are. However, what all consumers will have in common is a strong focus on price. Another suggestion is to be visible when customers are ready to purchase what you offer both offline and online. Regardless of gender and across almost every income level, one thing is clear, the recession has shaken the status quo for consumers and it seems as if the trend will be irreversible.
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YOUR VIEWS ARE ENCOURAGED.

How to Become a CEO – Why some people have power over companies and others don’t

http://www.economist.com/node/16990691?story_id=16990691&fsrc=nlw|hig|09-09-2010|editors_highlights.

Optimizing The Decision Making Process: Executive Leadership

Face it! Like it or not you are defined by the decisions you make. Think of successful organizations and the people responsible for guiding their authority and well-being. Often, high performance is the result of an executive choosing the right move at the right time. It’s not purely a lucky streak. Corporate strategy is “Black Jack” nor 5-card stud poker.

Decision-making is a complex activity and at times a long process. Your ability to identify and excel in your decision-making tasks will greatly increase the chances that the choices you make will have a strong and positive impact on your organization. Why take any additional risks when you know instinctively that this is the case to sound growth and prosperity?

How To Get Started

Your first step is to understand the external and internal factors that affect decision-making, from aspects of the organizational environment to your personal decision-making preferences. While you aren’t always able to control these influences, recognizing and identifying these factors will enable you to take them into consideration as you strive to achieve the best decision outcome.

Reality Check

Every day you make sense of what goes on around you by interpreting what you see and hear, taking into account your past experiences, values, needs, attitudes, and goals. Even your understanding of what another person says is only an estimate, as you can never completely share the viewpoint of someone else concerning the world.

Given the increasing complexity of organizational life, along with the quantity of information that must be processed, it is no wonder executives too often experience stress as they strive to balance agendas and please many of their people.

It can happen that you put a lot of time and effort into a decision study or a formal analysis, only to be disappointed in the results. When this happens, you need to re-evaluate both the information that went into the analysis including your expectations.

On one hand, no process is any better than the information that goes into it and when you get a result that your experience suggests may be flawed or biased, this is a strong indication to probe.

On the other hand, it’s extremely tempting to tinker with the data until you receive a result that you’re happier with – but this is a form of deception that can lead to an adverse outcome. In this case, it helps to remind yourself to maintain a high standard of accuracy and objectivity and to seek a reality check from someone whose judgment you respect and who’s not personally involved in the decision.

The decisions you make are only as good as the process you use to make them. Asking yourself the following questions will help you to assess whether or not you are on the right track:

1. Have I done adequate research and gathered all of the appropriate information for the subject matter at hand?

2. Have I considered all of the stakeholders and their probable responses to various decision outcomes?

3. Have I been honest in assessing my own decision making style and taken that into account?

4. Have I recognized and acknowledged my personal agendas and bias?

5. Have I considered the various options available to me in selecting the most appropriate decision making method?

6. Have I solicited the advice and assistance that was required?

7. Am I prepared to be accountable for the consequences of the decisions I make?

You have the responsibility for making decisions that deeply affect your employees’ performance, morale and your organization’s future. You cannot afford to rely on personal preferences or hunches alone.

Now that you are familiar with some practical, yet highly effective approaches offered herein, your challenge is to develop a positive future possible through the decisions that you make today.

When it’s all said and done

Your decisions are only as good as the information you use to make them. The cliché “Garbage in, garbage out” applies here. Your ability to recognize bias and evaluate the reliability and validity of the information you gather can make a tremendous difference in the effectiveness of your decisions.

YOUR VIEWS ARE WELCOME!

Branding: Creating Exclusive Food Design

by Thomas Mylonas – Creative Entrepreneur of www.dotkite.eu

Fast moving consumer goods can be branded, but how do you make one exclusive? I’m not talking about your grade A brand of butter, but something beyond this standard. I mean something that is not a part of a multinational such as Unilever, but something so exclusive that it can only be hand crafted.

In that case, would there have to be a new name? Handicraft is not necessarily fast. It takes time to do things right with the utmost care for quality. At any rate, we would like to attest to the total control over quality, design, and branding that can create not a grade A brand, but something exclusive.

The value added in design, craftsmanship, branding and overall quality can elevate an ordinary product into something special. Take the case of acorn-fed Iberian ham, for example. If you go to the stores that offer such ham, you will find yourself paying as much for a leg of ham as an intercontinental flight.

You can also look at certain brands of cheese, pesto, and wine, for example. Of course you can come up with some brands In these, and many other cases, it is possible to create a world famous brand using skilled craftsmanship, quality design, and the right brand identity. A few examples of exclusive (as opposed to top) brands are:

* Jamón Gran Reserva Joselito Premium
* Prosecco Spumante Cirotto DOCG – Extra Dry
* Château Mouton Rothschild
* Olive Country

So, are you in the food industry? Do you think you can add extra value and create an exclusive brand? Of course you can. It just requires the right ingredients, craftsmanship, and branding so that you will have customers flocking to you to taste the glorious gastronomical quality food that you created.

Demonstrate Rather than Tell: How experiential marketing is creating a sea-change in the world of branding and advertising

Ask any consumer what they think of all the advertising messages they are exposed to on a daily basis and chances are the majority, as most surveys have revealed, believe there is far too much advertising noise – whether offline or online. A sizable percentage of consumers have also admitted that they avoid purchasing products that over-advertise.

Several months ago, I attended a local conference organized by a Canadian marketing group. I was drawn to one of the key note speakers, in particular, who made a compelling presentation on the benefits of “experiential marketing”. To me this clever approach was the antithesis to traditional advertising which is generally a monologue. Rather than sell the features of products or services, you apply innovation to draw your ad audience’s full attention to your wares. What’s more, this tactic builds brand awareness which settles longer in the mind of the consumer – allowing people to experience the benefits for themselves. As consumers are bombarded with multiple messages daily, companies ought to find a way to keep their brands top of mind and earn loyalty.

The speaker I was referring to here is Max Lenderman – a pioneer in the field of experiential marketing who is also an award winning published author, a sought after speaker and media commentator on this subject. Lenderman encourages businesses to look beyond traditional communication to get customers interacting with and living their brands. His frequently utilizes the expression/slogan, “Experience the message”.

Experiential branding vs. experiential marketing

Experiential branding refers to differentiating a product or service in the consumers’ mind by focusing on the total experience, rather than focusing on the features, benefits or attributes of the product, whereas, experiential marketing signifies integrating brand or product messages into consumers’ lives in the form of interactive experiences, rather than delivering them through traditional static media such as television or in print.

In today’s economy: buying experiences and conversations

Experience based marketing tactics which fall under the category of “guerilla marketing”, are consumer centric. The approach gives customers an opportunity to engage and interact with products and services in creative and compelling ways. The goal is to establish the connection in a way that the consumer responds to a product offering built upon emotional and rational response levels. The unique experience can turn viral as word will spread quickly to others. Therefore, the aim of the experiential marketer is to add excitement with a dose of entertainment to what otherwise might pass as lackluster.

Marketing guru Philip Kotler, in his book “Marketing insights from A to Z: 80 concepts every manager needs to know”, states that marketing experiences or designing experiences around goods and services have many illustrations. For example, great restaurants are known for their experience as much as their food. Starbucks charges $2 or more to experience coffee at its finest. A restaurant such as Planet Hollywood and Hard Rock Café is specifically set up as an experience. Las Vegas hotels, anxious to distinguish themselves, take on the character of ancient Rome or New York City. But the master is Walt Disney, who created the opportunity to experience the cowboy West, fairyland castles, pirate ships, and the like.

Those who follow Apple are familiar that their Genius Bar is a huge success. The concept offers its customers:

• Free advice,
• A well designed ambiance,
• Well-trained & friendly staff,
• Appointments can be set to avoid long waiting periods.

With the Genius Bar, Apple created a conversation. When you enter their stores, you experience a two way conversation along with meeting or exceeding your expectations.

Loyalty Lessons: Case studies of effective experiential campaigns

P&G’s Tide – CleanStart mobile free laundry service

Tide CleanStart first launched in the wake of Hurricane Katrina in 2005 to provide clean clothes for affected families in New Orleans. The resilience and spirit of the people of New Orleans inspired Tide to expand the program and bring laundry service to Southern California, helping families affected by the wildfires of October 2007. Collectively, Tide has washed more than 30,000 loads of laundry for New Orleans and Southern California families. The Tide CleanStart truck is now prepared to help displaced residents, people in shelters and other people whose homes and personal items have been impacted by the Iowa flood.

Times Square and Toilet Paper

As posted by Jill Griffin in customerthink.com (Jan 23, 2008).

Toilet Paper. How do you successfully build an engaging, loyalty-building brand story around that product? Just ask the ace marketers at Proctor & Gamble and they’ll likely tell you about the 20 free, deluxe Charmin restrooms opened in New York’s Time Square for the 2007 holiday season. At the same location in 2006, the Charmin Holiday rest rooms served more than 420,000 people from 100 countries and all 50 states, so a 2007 encore was in order.

But free, family-friendly restrooms and ample toilet tissue were just one part of the unique, memorable brand story crafted by the Charmin team. First, friendly folks dressed as dancing toilets greeted passersby on the street, inviting them to visit the Charmin Holiday Restrooms nearby. Visitors then took escalators up and wove through a rope line while a legion of smiling hosts wearing Charmin apparel greeted them and upbeat holiday music played in the background. Inside the stalls (serviced by staff after every use), Ultra Strong and Ultra Soft tissue were available and afterwards, guests were asked to vote for their favorite.

Making it work

Experiential marketing should strive to:

• Deliver a meaningful benefit to the consumer;
• Engage people in a memorable ways;
• Be authentic;
• Deliver relevant communication to consumers only where and when they are most responsive to them;
• Succeed using innovation to reach consumers in creative and compelling ways.

Today’s actionable insight:

Whether it’s online or in the field, you should start a conversation with your customers. All merchants offer products and/or services, however, don’t simply view a transaction as a transaction and time to move on to the next. That is getting rarer. The challenge is to usher your customer through a memorable experience that will yield long-term benefits for the client and your business.

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