Archive for August, 2010

Middle is the Wrong Concept

August 15th, 2010

A German marketing research association held a conference last month where several experts analyzed current trends in economics with regard to consumption and marketing. It’s quite interesting to look at their points of view from a different angle.

  • “The middle class still exists.” — Professor Wagner from the German Institute of Economics Research said that although the layer of middle income has diverged to either side of the edge, there are no more rich people than a few years ago. This is obvious as long as people keep spending more money the more money they earn. Who doesn’t save or invest won’t become wealthy. Still, it’s important to note that the symbols of wealth haven’t changed over the years. One generation back, when you had a Mercedes, you had to be rich. That’s not the case today, but people still assume it were. It’s important to be clear about the context you’re measuring.
  • “There is a market for middle brands.” — Dr Adlwarth from the GfK Group pointed out that in the last years the competition in consuming goods was between major brands at the pricing top end and no-brand products on the bottom end. Consumers went for either-or, and there was not a lot of middle ground. This trend, he went on, changed in 2009, when suddenly they saw a trend in rising market share of middle brands, which are characterized as regional and rich in tradition.
    Here’s a different point of view: There’s 3 kinds of stuff you can buy: Commodities, which are cheap and don’t help improve your image. Premium goods, which are expensive and for that reason they raise your image (see Mercedes example above). And then there’s stuff you care about. Things you buy because you like them regardless of cost. This is the niche category. Products that are not for everyone, the manufacturers of which have understood they can’t please everyone and they don’t have to. Vita Cola is successful in the eastern regions of Germany, but not in the west. Blackwood Forest ham sells most successfully in the southern regions but not in the north. There’s an infinite number of products with only a small market share but each of them has enough margin so the companies still make a solid profit. This has nothing to do with middle. Middle is just a convenient, yet useless wrapper because Dr Adlwarth does not seem to acknowledge the existence and power of passion and tribes.
  • “The digital middle” — This is actually a false label for the talk by the Global Director Consumer Electronics of the GfK Group. He analyzed the market for TV sets. Not quite a surprise that it turned out that when LCD and plasma TV were introduced, they were very expensive, but the more the overall market share grew, the pricing range diverged. Honestly, I have no idea why I would have anyone talk about the mechanics of the adoption curve these days. It’s not leading edge science any more.
  • “Communication for middle market brands” — I won’t comment on this talk by an advertiser because it makes me throw up. As usual, a wrong concept leads to wrong conclusions that, if presented conclusively, will appeal to an uneducated audience.

So why all this obsessing about the middle? Because it’s an easy concept. It’s less scary to think of high, middle and low instead being on a knife’s edge. It allows settling for less — if you’re not a superstar, you’re not automatically a loser, because there’s still the middle. Middle sounds good, it’s not too much in any direction.

But middle also artificially creates a new battlefield which in reality doesn’t exist. It’s easier for analysts to look at a large plane than an infinite number of small planes, because only on a large plane there can be a battle and therefore a winner. But there is no large plane and no battle for the middle. Middle is a transitional state: You’re either on your way up or the way down, no place where you can stay for long, because the winners are automatically promoted to the top end and the losers go out of business. No matter if it’s in the overall market or in a niche.

Not getting IT

August 14th, 2010

Yesterday I came across an article on heise resale, a news service for IT resellers. It was the latest feature in their series “Caution, cutomer!” that made me wonder (again). Long story short: Someone buys an HP computer from a reseller with a 3-year warranty for HP service by the next working day, machine keeps freezing, HP call center screws up, HP technician arrives 3 days later and screws up, problem is fixed one week later after heise intervened.

Now I’m not surprised that the HP people screwed up by sticking to the manual. What I’m surprised about is that the reseller missed the opportunity to be remarkable and actually help their customer. Instead of saying “You know what, we will take care of this. We’ll give you a new machine with all your data transferred, sort this thing with HP and when it’s fixed, we’ll change it back” they just passed the buck to HP. Because they could. The customer has the service agreement with HP, not them, their thinking is.

WDIFY still has a long way to go.

The Message sent

August 13th, 2010

Procter & Gamble is about to launch a new version of it’s highest turnover product, the disposable diaper, in Germany. They already introduced it to the US market in March, and what happened was that parents started complaining their toddlers were getting a rash, assuming it came from the new product. In no time, a total of 14,000 people started to ask P&G to return to the old version of the diaper.

What did P&G do? VP Jodi Allen said:

“For a number of weeks, Pampers has been a subject of growing but completely false rumors fueled by social media that its new Dry Max diaper causes rashes and other skin irritations. These rumors are being perpetuated by a small number of parents, some of whom are unhappy that we replaced our older Cruisers and Swaddlers products while others support competitive products and the use of cloth diapers. [..]” (find the full statement here)

Which means: You, the concerned parents, our customers, the people we wouldn’t be here without, are wrong. Go away.

And guess what? That’s what people do when you tell them. And they tell other parents too.

The smart thing to do is to embrace the customers and their concerns. If P&G had said: “We are very sorry. Your baby’s health and well-being is most important to us. Though we have done extensive testing, and the Consumer Product Safety Commission has confirmed that our product does not harm, it is possible that babies’ skin is irritated from time to time. The doctors we work with have said that this is not necessarily caused by the diaper. They advise to monitor the skin condition for 10 days, and if it’s not getting better, to have your doctor examine this. However, we do understand that you’re not fully satisfied with our product, that’s why we will do 2 things to improve the situation: First, we will give you a full refund for the new diapers. Just send an e-mail. Second, we kindly ask of you to stay in touch and tell us how your baby is getting better. All of your information will be kept confidential and only be used to help us improve our product. Thank you.”

Different message. Different result.

Learning from a HOPA

August 12th, 2010

You might have seen the latest hoax by TheChive that’s spreading over the Web. TechCrunch’s put up an interview with its creators. Most important quote: “We didn’t need mainstream media to make this happen. We just needed the people.” There you go.

(Sidebar: TheChive’s successfully pulled off two more hoaxes in the past that got picked up by the media, and after the second one journalists said “You’re not gonna fool us again.” They were wrong. Huffington Post, Leno, you name it. When you’re hot, you’re hot.)

Cover or Art

August 12th, 2010

This is the headline of a regional newspaper’s article today. Its diplomatic conclusion is that a cover band makes art in its own right by picking a song and making it theirs. And it might not surprise you that I don’t agree.

Here’s why: By design, a cover band exists to play songs that have been made and performed by others. It’s quite arguable if the songs themselves are to be considered art, but that’s a different (yet related) topic. The purpose of a cover band is to resemble the feeling of a song when they play it, only that it’s on stage and not at home, so you can have a good time with your friends. Musicians who play in cover bands do so because they love playing their instrument (sometimes to perfection), not because they feel the urge to create art. Because if they did, they’d spend their time creating and not mimicking.

That said, there is a huge difference between a Mariachi band covering Heavy Metal songs and a Rock/Pop ensemble (2 guitars, bass, drums, keys, brass trio, vocalists) covering songs arranged for this kind of ensemble. It’s remarkable versus predictable.

Funny enough, the article quoted the singer of the band that “it is one side of the coin to make it in today’s music market, but even harder to be accepted by endorsers and sponsors”. That’s quite obvious when you try to be everything to everyone. The marketer’s dilemma. And because there are marketers on the other side of the table too, it’s no safe bet for anyone. It makes sense for an instrument manufacturer to endorse an extreme performer because that gets them noticed, but maybe by fewer people. A middle of the road performer may find a larger audience, but they won’t give a lot about music gear. An artist doesn’t worry about this, because he has embraced that art does not depend on endorsements or sponsorships and she would never sacrifice this art for a little more comfort (only for a lot, that’s just how the lizard brain works).

A little aside: There’s an internet radio called NewcomerRadio, that says its mission is to promote newcomer bands to broadcast radio and other internet stream radio stations. Yet their stream sounds like any other radio station, because their rotation is the same. And so they pick their newcomers to fit into this rotation, and -presto!- nothing happens, because nothing stands out. Different artists that sound all the same. Wasted.

Doing the opposite would have a totally different effect. There’s thousands of bands out there, and I’d rather go to the edges instead of what used to be the centre. Brazilian Polka bands and Indian Viking Folk singers are just way cooler than yet another High School Punk band. It’s all there — if you dare. Yes, chances are you will lose your old listeners. The ones you will find instead will not only listen but also do the promotion themselves. Now that’d be helping your mission, wouldn’t it?

AEIOU

August 11th, 2010

Information itself is useless. What makes information valuable for you are the Vowel Steps:

  • Access (new) information regularly.
  • Evaluate its relevance.
  • Implement it to your routine.
  • Observe. Measure and compare.
  • Undo if it doesn’t work, learn from it and try something different.


WDIFY out-DIYs DIY

August 10th, 2010

WTF? Here’s the story: Last friday we decided to get a new cupboard for our kitchen, so we went to the Swedish furniture store. We knew we would have to go to a DIY store too, to have them cut the lower bezel board because it was too long and a bit too high (or wide, depending on which way you hold it).

So we went to Bauhaus, one of two DIY stores nearby, and asked the woman at the info counter if they’d cut our board. “No, we don’t do that.” Since we needed a plain wooden board from the DIY store too, we asked “If we get a board from you, you’d cut that?” “Yes.” “…and ours too?” “No.” “Thanks, bye.” So we grabbed our board and went to OBI, which has a reputation for being expensive (but Bauhaus isn’t cheaper). As we approached the info counter, the woman laughed, “Okay, I can already see the IKEA print on the board. You wanna go straight ahead.” Next thing you know, they sliced the board just as we wanted it, and even though there was a “Please consider that due to technical reasons cuts can’t be less than 10 cm from the board’s edge” sign, they managed to cut 1 cm off the edge, just as we needed it to be.

DIY is no future business model anymore. “We do it for you (no questions asked)” is the new standard. (Of course, if IKEA cut the boards the way you need them, it’d be even better.)

Capgras

August 9th, 2010

Chances are you’ve never heard of it, but you might have experienced in a very harmless form. That salesperson who was so nice when you spent the money to buy your new gadget — now it’s broken, you ask for an exchange and he tells you to call customer support. That customer who was the Über-geek when he came to buy his gadget has transformed to a grumpy buffoon.

It happens all the time. People are being exchanged by their evil twins. Of course they aren’t, there are only pivotal points at which the game changes, and sometimes to a non-pleasant turn. A customer converts to a pain in the neck once she has bought the item, because now she can ask for repair, exchange, or refund, even claim punitive damages and so forth. And on the other side, the salesperson does his best to shun people who need his assistance, support and, foremost, understanding.

After all, it’s a question of posture. No matter how entitled you feel to receive a certain treatment, the person on the other side needs at least one chance to take action. When you corner them straight away, they will very likely become upset and angry. This applies for every party involved. Only when we bring good to the table, good will come out, and it will spread. Ill will only causes harm and sometimes long-term damage. Which, sadly enough, spreads too.

(Find the explanation of real Capgras here.)

Outrage, for Starters

August 6th, 2010

Germany’s Federal Department for Family, Senior Citizens, Women and Youth (a.k.a. the department for everything except young men, because they’re taken care of by the department of defense, a remainder of history) has started an initiative with 5 corporations in which, for one year, applicants will not reveal their names, age, nationality, marital status and religion. This pilot project is meant to qualify if this process leads to more equal employment opportunities and the avoidance of discrimination.

And while this project has not been launched yet, conservative lobbyists are already outraged and defending the status quo. “Enterprises need information about age and gender because they are crucial decision criteria.” Which is to say, when in doubt, they don’t employ women. Another quote: “If we don’t know who the candidate is, we would have to invite everyone for an interview.” Which means they don’t invite people whose names they can’t pronounce.

Both men (no surprise here) that have been quoted above represent a mindset where employers still a looking for replacable cogs at minimum cost. The irony is, they too would profit from an application process I posted one month ago. Other than that, the good old resumée still offers enough options to say no:

  • what kind of school did they go to?
  • extra-curricular activities
  • hobbies
  • languages spoken
  • university: who can afford to study in a state where students have to pay a semester fee?

All of these will be more important, but different than expected, because employers will try to extract as much additional, yet speculative, information from the chunks that are left. This initiative is surely well-meant, but it won’t change a lot because the old system remains in place.

More equal employment opportunity does not translate to more equal employment. Doing things by half doesn’t get them halfway done.

(Gone) Before Its Time

August 5th, 2010

As bold the eulogies were when it was announced, they’re even bolder now that Google Wave‘s end as an independent service has been proclaimed. Undoubtedly it’s tool that provided the sought-after curve-jumping, paradigm-shifting innovation which by itself was hard enough for people to wrap their heads around. But I believe what really prevented the breakthrough was a lack of trust. Google still has a major trust problem, and as long as people are suspicious about what’s happening with all their data, a product that deals with such better be trustworthy.

And it’s also worth a look at the marketing startegy that went with it: Google was quite eager to announce it when Wave was still in alpha. And it was a marvel. Then they released the invitation-based beta which still had a lot of glitches and hickups and one year later it was open for public. Which was too late. It’s always easy to be clever in hindsight, but the important thing to point out here is that there was no need whatsoever for Google to tell the public about Wave, because until today there is no competitor. Why hurry? They could easily have waited one more year and make it a finished product.

One more thing. As far as I remember, they didn’t promote it heavily once it was up and running, which wouldn’t have been the worst of ideas. I’m not talking TV here, I’m about press releases for the geeks that want to use this service as  soon as they have someone to do it with. I didn’t use my account because there was no one I was having a project with that would have offered itself to be run on Wave. But if I had, it’d be comforting my sleep a lot had Google told me: “We know there’ve been some issues concerning our security in the last months, but we promise you that your Wave data is 100% safe with us. We use advanced rocket science encryption, so even we don’t know what you’ve been putting in there.” Now you’ve got something to work through the adoption curve.

The majority of users, it seems, is still in the desktop age. This is the domain of Microsoft. Make a document, save it on your hard drive or local network. One application for each purpose. Sifting through 86 emails to find out who said what and when. It’s the classic switching dilemma: As long as their pain is not big enough to see the comfort of the solution, people don’t switch. Because it requires them to take a step back and consider the whole issue. The question is not: “How do I make this work with what I got so far?” but “Looking at both solutions as a whole, which serves my needs best?” That’s the marketing challenge not only Google faces. Only more often than others.