The brandgym blog

"Edcuation" and "consumers" don't go together

I always get really, really worried when I read or hear the phrase "we're going to educate our consumers" about our brand. Why? Well, first because we're supposed to be solving problems and making life easier for our consumers, not asking them to go to brand school. Second, because any attempt to educate consumers is going to a) cost you a lot, b) not be very effective.

Well, here are Vodafone at it. I read in Marketing that the brand is "Planning to educate consumers to use the full range of mobile services on offer, rather than simply calls and texts". The campaign will use digital, direct mail, outdoor and TV ads. There will also be experiential activity to demonstrate that you can set up mobile email in 2 minutes. That sounds like a whole lot of education.

What Vodafone are really thinking is more like: "You stupid bloody consumers! If only you use the frigging internet on your phone, as you do in the business plan that justified blowing billions on a 3G licence! Sit down and let us tell you again what you're supposed to do". The problem they and other mobile operators face is that after years of effort and millions of marketing money, data usage on mobiles (for web surfing and email) is still very small.

Of course, there is another, much better way to get people to use more of your stuff. And that is to make your product so easy and nice to use that people want to. They don't need education. This is what has happened with the, you knew it was coming, iPhone. Check out these killer stats as reported in the FT. On the O2 network, only 1.8% of non-iPhone users get through more than 25MB of data usage a month. I guess Vodafone is not much better. Well, have a stab at what the same figure is for iPhone users on O2. What do you reckon. 10%? 20%? Maybe even 30%?

Nope. Its 60%.

This is a seismic shift in consumer behaviour. And it came about because you don't need to be educated on how to surf the web or send email on an iPhone. Its really easy, and it works. More than that. Its actually a nice experience. Check out the options below: which looks nicer to use?

And with the new Apps store of easy to download and use applications, the iPhone is set to make another leap forward. I posted on the App store here.

The other smart thing Apple did with O2 is to have unlimited data usage built into the, pretty pricey, monthly tarrifs. So, you don't even think about checking the weather, stock prices or news, you just do it. As part of their education drive, Vodafone are now following the iPhone lead and offering the same sort of inclusive data tarrifs.So, next time you hear "consumer" and "education" in the same phrase, beware. And ask if a better route is not to make the product or service nicer, easier and more affordable to use.

The REAL story of the new iPhone

There has been a huge hoopla about Apple's new 3G iPhone. As I sit here, I am waiting for the courier to deliver mine into my hot and sweaty palms.

However, the phone itself is actually NOT the biggest thing Apple launched last Friday. How do I know this? Because I downloaded the new 2.0 software onto my old phone over the weekend. And this software is going to change the way we use our mobile phones. For ever.

The hottest feature in this software is the App store. From your phone you can easily download new applications with a few touches of the screen. Some are free, and some you pay for. When you download them, they just pop up on the homescreen of your phone. Now, if you have ever tried the torture of downloading anything to your normal mobile phone, you will know this is a revolution.

So, in less then two minutes I had on my iPhone a BA application to check arrival and departure times. And another to write posts for this blog, on my phone. All these applications actually work, are simple, and share the same iPhone look and feel.

Now, the iPhone was already easy to use before this.  I was checking weather and stock prices, browsing the web, buying songs from iTunes and the like. But now, with these sorts of tools on my phone it really will become, years after it was promised, "a PC in my pocket".

And its not only me who thinks the App store is big news. Wall Street analysts Gene Munster of Piper Jaffray & Co. has said it could generate as much as $1.2 billion in revenue for Apple (revenue is split 30% for Apple, 70% for the application provider).

What can we learn from what Apple is doing with the App store?

1. Really, really, really solve a problem for consumers

Apple seem to be one of the few tech companies that have remembered that this is what marketing and business in general is all about. Identifying problems, and solving them for people. Not shoving technology at people and then trying to persuade them to use it. What Apple's iPhone does do is make things so easy, and even elegant, that you want to use them

2. Turn partners into fans

Many experts say that a key reason for Apple's puny share of PCs was a refusal to open up its operating system to 3rd parties. This is not a mistake Apple has made this time. With the iPhone they have launched a "Software Developer Kit" (SDK) that makes it easy for partner companies to create applications for the App store. And boy do these companies love the SDK. Check out what Walt Disney's head of mobile engineering had to say: "After working with hundreds of other mobile devices, developing for iPhone is a breath of fresh air. The software development tools are intuitive and represent a level of polish rarely seen."

3. Weave your brand into the fabric of life

The App store is one more step in making the iPhone an integral part of peoples' lives. Its a phone, but also a mobile device for managing your life. And this means they will use it a lot, which in turn creates loyalty and more revenue.

4. Nice and easy

Make it easy for people to use your brand. Don't ask them to think too hard, or work at it. This is why you should run a mile from anyone proposing a "consumer education programme" for your brand. If you need to educate people on how to use your brand, you're in big trouble. Spend the time and money fixing the product or service to make it easy and intuitive to use, not on sending them to brand school.

Nespresso - New generation branding

I got in the post today a magazine from Nespresso, and it got me thinking about what an amazing brand growth story this is: heading for 1 billion Euros in sales.

This subsidiary of Nestle launched just over 20 years ago, in 1986. It sells coffee in beautiful little capsules. An equally beautiful machine then uses these to produce what I have to say is a damn fine espresso or latte. In recent years growth has really taken off, with sales up 42% in 2006 to reach 727 million Euros.

It seems to me that Nespresso is a new generation of brand, that combines product "sausage", emotional sizzle and also service. Here's a few thoughts on what they have done:

1. Amazing design: check out those capsules. They're so damn pretty, its almost a shame to use the things. And the machines are perfect for today's design conscious kitchen.

2. Super premium: when you work out the cost per serving its really scary, especially if you make a double espresso. You're talking 0.4 Euros a capsule, versus, a c. 400% premium vs. using a jar of Nescafe

3. Super sausage: the coffee is very good. The Nespresso speciality is the "cremosa" topping you get on the espresso. They also have a huge range of different blends, each with its own colour of capsule.

4. Direct to the consumer: this is a biggie. Nespresso is one of the few brands who markets direct to the consumer. You order your refills by phone or internet. And this has some major advantages:
- More margin: you are seller and retailer
- No trade negotiations: want to launch a new product? Just list it. Contrast that with the other 99.9% of FMCG brands who have to negotiate the minefield of negotiation with the major retailers.
- Data is king: Nespresso know all their customers. Just think of the value of the data base of affluent customers alone... back in 2004 they already had  1,6 million active Nespresso Club members!

5. Brand palaces of desire: Nespresso pioneered the brand store, long before Apple opened up their first Apple store. It now has more than 30 "boutiques". The latest, the Paris flagship at 119 Champs Elysees is an amazing place, that I must visit next time I am in Paris. Here are some of the features described on the website of this 2-story brand palace:

- The Barista Bar: the heart of the Boutique. The Barista, an uncontestable expert, plays the star and creates succulent coffee recipes while inviting everybody to the coffee ceremony.

 

- The Machine Gallery. Presented here are the symbolic creations of the brand, the coffee machines: Le Cube, Essenza, Lattissima… displayed like jewels.

 

- The Gallery of Senses. A very special area – almost like being in a life-size capsule, dedicated to the perfect espresso. Monumental decor with olfactory columns where temporary exhibitions will take place.

 

- The Lounge, calm and refined, an isle of softness. Ideal for a light snack or to simply relax in a cozy chair, with a cup of Volluto or a Ristretto in hand, all in a contemporary electro-jazzy atmosphere.

 

- The Collection Gallery. The collection of accessories and Limited Edition or Special Club series are displayed with sophistication.

 

- The Grands Crus Gallery. The sleeves of Grands Crus display their personality proudly on the walls.

- The Concierge. An exceptional service which attends to customers’ individual needs.

New services to attract new users

I am in the process or writing my 5th book, "Grow the Core". Sucker for punishment. This one is a bit easier to write though, as it will be a shorter eBook, as part of a new digital business insight website called "Shoulders of Giants".

As the name of the book suggests, this one is all about how to grow your business by selling more of what made you famous, rather than trying to stretch into new markets. And as I was looking for good cases of core brand growth, I was reminded of More>Than's Drivetime insurance product.

Drivetime is a great example of launching a new 'version' of the core product, in this case insurance, to target a specific user group. Its a welcome and worthy bit of innovation in a market that has tended to be price-driven.

Drivetime offers drivers aged 18-25 a 40% discount if they agree not to drive between 11pm and 6am. This time-slot is when most accidents involving young drivers happen. The driving is tracked using a GPS system that is fitted for free. Clever, eh? More>Than can offer cheaper insurance, because they know there will be less claims to pay out on. Young drivers get cheaper insurance. And society as a whole benefits from fewer accidents.

So, a good example of identifying a consumer group, understanding their needs, and then how to create and market a product for them that make money for you.

Radical innovation to get your 5-a-day

Here's a radical innovation to help us, and our kids, get those elusive 5 portions of fruit & veg a day we're supposed to eat.

But before I reveal my big idea, here is another attempt at innovation in the same area. Its a new brand from Kellogg's called Fruitabu. I blogged on it before here.

I tried the Apple Crisps (with blackcurrant fruit juice) and the "Blackcurrant Boost", which is raisins and blackcurrants soaked in juice. The big issue I have is the value equation, or rather lack of it. The little tiny bags of crisps have 14g... this fits in your hand. And they cost 79p (about 1 Euro). Also, the products are really sweet... perhaps made with the sweet tooth of kids in mind?

So, now for my really radical innovation. Drum-roll please....

Its 1/3 of the price of Fruitabu...only 25p per pack...
...its just as convenient to transport...
.. its even more natural....100% natural in fact...
... even more tasty...
... nicer texture...
... even healthier.

It is.....

An apple.

Rather than pandering to kids who won't eat fruit, and so demand a sickly-sweet, bagged snack, GET THEM TO EAT SOME FRUIT! Start early. Cut them up into small pieces if you need to. But get them into good habits early.

A better use of the marketing skills and monies that went into creating Fruitabu Apple Crisps at 79p would perhaps have been working for the Apple Marketing board. More substance. And less spin.

My new product of 2008 - BBC's iPlayer

The most exciting new product launch so far in 2008 come from an unexpected source: the BBC. That's right, the UK's state owned TV company. Its called iPlayer, and allows you to watch the last 7 days' BBC programmes from your PC. It is a very cool application, which is nice and easy to use. [Its only available in the UK]
    
A few interesting points:

Creating markets in the blink of an eye
This is another example of just how quickly new markets can be created in today's virtual world. In the first 7 weeks of iPlayer's launch, 17 million programmes were downloaded or viewed according to VNUnet. That's a huge habit change, happening in under 2 months!

The results are even more impressive when compared with ITV's service which officially launched in August 2007. It attracted around 2m views of full-length TV shows and clips in January, so roughly 4m views per 7 weeks, 1/4 of that achieved by the BBC.

Innovation as a symbol of change
The BBC is a business that has had to weather a storm of biblical proportions. Long gone are the days where we had only the BBC's 2 channels plus two commercial channels. More then 2/3 of UK households now have multi-channel TV. The BBC has a whole lot more competition.

The iPlayer is a great proof that the BBC can cope in this new environment. It is a powerful symbol of change, as much as anything for the people who work for the company. Its great that they are now leading the market, not just following.

Innovation to get new users
There is an even bigger source of competition that iPlayer is fighting: the apathy of younger people to classic TV... they are less likely to sit in front of the TV and watch. And this means the BBC risks not connecting with these viewers. iPlayer allows them to watch stuff on their PC whilst using MSN, listening to music or whatever they want to multi-task.

Second or third can be better
BBC was later to market than ITV, and much later than Channel 4, with a PC player. But I find the product better, and this is perhaps why it has done so well:
- Its better designed visually. Feels much more iTunes-like
- Its easy to use. Rather than free stuff and paying stuff, like on Channel 4, its a single system: watch what's been on in the last 7 days
- The other good thing about 7 days is that it creates urgency to view

- It works on a Mac, unlike Channel 4's system. Mac users are only a minority of the PC population, but they tend to be into visual stuff and innovation, and have a bigger than average bunch of opinion formers. BBC are even working on an application to run iPlayer on the iPhone. Cool.

Nice execution
Its good to see a well crafted execution of a new product launch. This is so often what causes innovations to fail. The idea is sound, but the go-to-market execution is crap. With iPlayer, I like the black graphics. I like the end-line: "Making the unmissable unmissable". And I like some of the clever press advertising, like the one used to promote the painful idea of re-watching yet another dire performance by the England rugby team, this time against Soctland: "Not again, again".

Put a rocket up your innovation [Guest blogger: David Nichols]

Attached is the front-cover article from Market Leader about "Rocketing", a new way of looking at innovation: download by clicking here. The piece explains the fatal flaws with the "funnel" process used by most companies to manage innovation, that squeezes the energy and lifeblood out of new ideas.

In contrast, rocketing uses potent insight fuel to inspire and energize innovation. The process is described in more detail in the 4th book of the brandgym series, "Return on Ideas".

We were chuffed to bits that one of the world's leading innovation practioners, Syl Saller, read and liked the article. Syl is the Global Innovation Director of Diegeo no less. She said:

"The clarity of the ideas, and the way they are built into the right behaviours, will considerably improve the results that can be achieved from innovation"

You can download the full column from Syl by clicking here .

Innovate by jumping sideways like Simon Cowell [Guest blogger: David Nichols]

For those of you who keep, as I do, a close eye on contemporary British "culture" you will know that Leon was the surprise winner of X-Factor 2007 (the UK version of American Idol).  Simon Cowell’s marketing juggernaut just rolls on having delivered the guaranteed Christmas no.1 hit for a thoroughly average re-hashed song.  Surely this is a miracle money machine?  Not really, just a stunning piece of value chain innovation, one of those now emerging from the crumbling music industry.

Unlike many large incumbent record companies, who are trying desperately to cling on to the old music biz model of ‘record-distribute-promote-tour’, Simon Cowell has innovated "sideways". He has attacked a big market by coming from an adjacent one. So, he starts with the promotion via a TV series, building up interest in the artists and making money on phone/text voting each week. He then releases the hit single online first (more money). Then the CD. Then there is the tour with the top finalists.

The businesses best equipped to capitalise on the changes in the music market structure are those who are adjacent to it.  They know enough to see the opportunity, but are not encumbered by existing assets.  They simply step sideways and gobble up market share of the music publishing business: TV companies, internet networking sites, musicians, recording studios and more – all adjacent markets that the big record companies once looked on as potential expansion areas are turning heel and attacking back.

Who has Madonna just signed a $120 million deal with? Not a record company. Rather, Live Nation a concert promoter. Who did Paul Mc Cartney launch his latest album with? Starbucks.

It seems that one of the best ways to innovate might be to watch your neighbour and then steal a nice bit of their turf.  Look at Apple and their iPhone. And what is the biggest news in the multi-billion dollar global laxatives market – a laxative brand?  No, it’s a yoghurt from Danone – Activia.

So as Leon takes his first tentative steps into his new life as a nano-celebrity, maybe you should consider doing the same – jump sideways.

Swash: the new face of P&G

Whatever happened to the effective but rather dull old P&G where I started my career in marketing back in Victorian times?

The launch of Swash, a range of products to clean clothes without water, is another dramatic sign of a company that has transformed itself into a true marketing innovator. The new brand offers a range of products to smooth, refresh and revive clothes. UK fabric softener Comfort was into this stuff years ago with a handbag spray to refresh clothes. But the Swash launch is bigger and bolder.

Several things impress me about this launch:
1. Clever insight/targeting: cleaning products for a new generation who can't be bothered to clean their clothes... but more than ever want to look good. Recruiting a whole new group of younger people into cleaning products who normally would not have used P&G products

2. Environmentally on trend: no water! Less electricity! Water is a BIG issue, and cleaning clothes a big consumer of water.

3. Fresh, modern tone and style: in the old P&G this was not a strength. But new P&G is matching product innovation (sausage) with a lot more emotional appeal (sizzle)

4. Online store: "who wants to go to a grocery store, that's for my mum!" So you can buy the stuff online

The only thing I don't like is the pointless little Tide logo. They just couldn't resist this pointless bit of endorsement could they! Its invisible. And for those in the target who see it, the Tide branding spoils the cool, fresh feel of the brand. It takes away some of the magic.

Will be interesting to see if this is a real long term business. Or a sexy experiment that stays a niche product.

Strange bedfellows innovate in hotels

I was intrigued to read of the planned joint venture between the inventor of the "boutique hotel", Ian Schrager, and the Marriott chain. It will one of the marketing events of 2008 that I look forward to learning more about. The idea is to create a string of 100 boutique hotels in major cities across the United States, South America, Europe and Asia.

The two parties are at first sight strange bedfellows. Schrager is the design genius behind the Morgan group of hotels, that he sold in 2005, including the amazing Delano in Miami. He invented the idea of a hotel as a destination for local trendy types, where the bar and restaurant are as important as the rooms. Marriott is a global hotel behemoth with $2billion in sales and 2900 properties.

Here are a few interesting take-outs from this story:

1. The power of collaboration:
This is the latest in an increasingly large line of big brands tapping into the design flair of creative gurus (e.g. Karl Lagerfeld and H&M; Kate Moss and Top Shop). When it works, the combination of leading edge design and manufacturing muscle is very powerful. In this case, we should get great design and operational excellence. The major gripe with Schrager hotels was that they looked fab, but the rooms were small and not always comfortable.

2. The growth of "masstige"
This horrible word describes the concept of "mass premium" or "accessible aspiration". A growing group of consumers no longer what boring middle of the road stuff, they want it all: great design, a bit of flair and a reasonable price. Marriott have watched the growth of Starwood's W brand from a few US hotels into a global chain of boutique hotels, and have decided the market is now big enough for them to enter. Good design is a great way of upgrading a category, and making everyday stuff that bit more special.

3. The individual chain
Schrager's vision for the new chain is that it won't feel like a chain. Each hotel should have an individual feel, in sympathy with its surroundings. Upmarket UK restaurant chain Pizza Express did this well, with each outlet having a different look and feel, but delivering the same reliable service.

4. "I don't trust the intellect. It's the instinct"
This is a quote from Schrager himself, talking about how he bases things on his gut instinct. The Sunday Times reports that "He has not analysed the market or gone to focus groups - despite Mariott's requests". He goes on to say "I get an impulse for things", he says "And I've got an impulse for this".

This is a good example of what I believe about great marketing: it comes from having an emotional, visceral understanding of the market and consumer, and having a feel for what will work. After all, research is only a rear view mirror telling  you what has happened in the past. It cannot tell you where to drive in the future.

It will be fascinating to watch if Schrager and Marriott can stay in bed long enough to consumate their relationship.Personally, I think it will be a real feat to create one hotel, never mind 100!