Articles
Powerful marketing strategies that produce sales
by John GrahamThe retail harvest of Thanksgiving week 2004 was less than bountiful for
Wal-Mart. While other retailers were upbeat, Wal-Mart’s sales were
“disappointing” the last week of November and traffic was “low”
on infamous Black Friday.
Uncharacteristically candid, the company quickly acknowledged it had dropped
its deep discount strategy the day after Thanksgiving. Reacting predictably,
value-minded customers headed straight to the arms of the competition where low
pricing prevailed.
In Clued In, Lou Carbone writes, “With modern management fixated
almost solely on the bottom line, the value proposition of far too many businesses
has become increasingly one-sided; lots of emphasis on the company but little
on enhancing customer value.” And then he adds an ominous warning. “As
a consequence, I believe today’s organizations have become extraordinarily
vulnerable.”
The day after Thanksgiving 2004, consumers saw Wal-Mart in a new light: the
king of retail is vulnerable. What followed was dropping prices on a couple
of dozen bellwether items, along with an unprecedented print and TV ad blitz.
It’s almost as if the giant stumbled. They didn’t anticipate the
competition taking a page from the Wal-Mart game book. They abandoned, just for
a moment, their winning strategy of delivering the lowest prices on customer-pulling
products.
While Wal-Mart will not make that mistake again, what lingers is the unavoidable
fact that even the biggest company in the nation can stumble when it abandons,
even for a day, its customer-focused strategy.
If it can happen to Wal-Mart, it can happen to any company. To avoid the problem,
here’s a sales results marketing strategy:
1. Get the right information. Evidently, Wal-Mart assumed
that its competitors would behave the day after Thanksgiving as they had
in the past.
Most businesses make a crucial marketing mistake: they listen to themselves.
They convince themselves they’re right. Krispy Kreme is another example.
The company’s enviable success seemed unstoppable. Then sales hit a wall.
The company blamed the low-carb craze, even though the slide started at least
a year before the Atkins diet became popular.
Did Krispy Kreme believe it had an unbeatable recipe for success? Did they try
to analyze what was driving it? Did lines a block long outside their new stores
tell them everything they wanted to know? Even today, does the company understand
what customers value? Without solid information, even a hot donut cools off.
2. Always think brand. Brand has less to do with look
and logos than it does with the way a customer experiences a company, product
or service. If Fedex means one thing, it’s certainty. Disney says
it’s great to be a kid no matter how old you are.
But as Joseph Benson points out, “We all know, buy and experience brands
that have a great heritage. For some of us, it’s Mercedes, Philips or Disney.
For others, it is McDonalds, Heineken or Gucci. What makes these brands great,
what they all have in common, is that they have had the time to build a meaningful
and relevant past––a heritage.”
How much do we care about taking all the tiny, seemingly insignificant and bothersome
steps to painstakingly create a heritage that establishes value and builds customer
confidence?
3. Value identification. It’s time to put features
and benefits behind us. They’re the past. A product may appear to
be benefit rich, but what if the customer isn’t interested or doesn’t
care? Are they still benefits?
For example, a marketing research project for a large dry cleaning chain revealed
that customers at certain stores value coupons, while those in other stores don’t.
Where’s the benefit of coupons for those who don’t want them?
“Becoming the customer is different from listening to customers,” says
Michael J. Lanning in Delivering Profitable Value. All that’s important
is what happens when the customer experiences a company’s “products,
services and actions.”
4. Get service right. One visit to the service department
of Quirk Ford in Quincy, MA makes it clear they don’t ever want to
hear customer say, “You didn’t fix it right when I brought
the car in.” For the Quirk Ford team, repairs must be perfect.
That’s not all. The service department is open six days a week, starting
at 7:00 a.m. and there’s a free shuttle service. You speak to a service
counselor in an office, not a repair facility.
The result is confidence in the service and satisfaction at having a dealership
that thinks like a customer.
5. Renovate instead of innovate. Cox Communications has
embraced renovation. And it’s doing it by thinking like its customers.
Getting broadband service to a home is only half the job. Rather than leaving
it up to the customer to figure out how to connect to a computer, Cox offers
wireless network installations as one of several other computer-related services.
By building on its existing capabilities, Cox figured out how to deliver more
of what the customer wants.
Instead of innovators, Sergio Zyman says the need is for renovators, companies
that keep looking for ways to engage the customer more fully. He learned the
lesson the hard way at Coca-Cola where he was part of the management team that
introduced an ill-conceived product, “the new Coke.”
6. Plan for disaster. Wal-Mart evidently wasn’t
prepared for the Friday after Thanksgiving. No one thought of asking, “What
happens if our competitors do something different this year?” Doubters
aren’t viewed as “team players.”
Yet, look at what happened to the insurance industry in the aftermath of New
York attorney general’s charges and indictments. One of the world’s
largest––and most necessary––industries was caught off
guard––thrown on the defensive.
The worst part has nothing to do with the illegal activity or even the highly
questionable sales practices. The blow to the insurance business was the breach
of trust, the cornerstone of the industry.
Asking “what if” questions is far from an empty exercise. It may
be the most pressing issue business faces today.
7. Be helpful. “E-marketing is about substance over
show, logic over emotion, text over graphics,” writes Web site content
expert Gerry McGovern. “In fact, good Web marketers follow the Google
motto: be useful.”
The words apply to all marketing. Certainly, if you want to know how
a company sees itself, visit its Web site. If the focus is on the company and
what it sells and how proud it is of everything, you can be sure it’s totally
inward directed. It’s sending the message that it doesn’t want to
engage customers, just sell them.
Visit palmone.com and see first hand what it means when a company takes
“useful” seriously. Palm owners experience a company that thinks
their thoughts.
“Useful” should drive everything a company does including marketing,
sales and service.
8. Make everything yours. There’s one thought companies
never want entering a customer’s mind: “Why do we really need them?”
Apple Computers learned early on that manufacturing computer components wasn’t
its business. This article is being written on a Powerbook with parts from Toshiba,
Mashita, LastDash, among others. What makes it a Mac is its user-friendly operating
system.
And what makes amazon.com unique is not what it sells but how it
sells it. It’s the unique amazon.com experience that brings customers back
time after time.
We need to ask ourselves, “Are our customers just using us to buy what
they need? Or, have they made the conscious decision to want to do business with
us?” The difference is the experience.
9. Get out of your skin. The major hurdle companies face
is getting outside of themselves. Citizens Bank has risen from its humble
Rhode Island roots to its current position as one of the fastest growing
financial institutions in the nation, made possible by the enormous resources
of its parent, the Royal Bank of Scotland. Through it all, Citizens works
to position itself as a local bank.
However, the Royal Bank of Scotland decided it wanted more visibility for itself.
To help accomplish this objective, Royal Bank of Scotland’s four inward
pointing arrows are replacing the Citizens’ “C.”
The change sends an interesting, but perhaps, unnoticed message. If local means
looking at the needs of the community, an inward directed logo sends a conflicting
message.
These nine strategies are interrelated, each one leaning on the other eight.
Each is a keystone; remove any one and the strategy collapses. The power is in
their unity.
A service department that doesn’t understand the need to “get out
of your skin” undermines the entire process. A sales force that fails to
address what customers value is equally as harmful. And management that ignores
branding fashions a faulty future.
John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of The New Magnet Marketing and Break the Rules Selling, writes for a variety of business publications, and speaks on business, marketing and sales issues. Contact him at 40 Oval Road, Quincy, MA 02170; 617-328-0069; jgraham@grahamcomm.com.