Tag Archives: Strategy

Uber As Verb? Or, Guide To Smart Diversification?

Yesterday, Uber launched a completely separate app utilizing their infrastructure in a super smart way – delivering food. They had been testing a version where drivers had a pre-selected set of food items for quick delivery in limited markets. They launched a menu every day, and if you wanted any items, they were meant to arrive in 10 minutes. With this new app that’s launching only in LA for right now, they’re making any item off of multiple menus available quick and conveniently – though they’re not promising it in 15 minutes. Beyond food, what they are delivering is a great example of how a company can diversify services without taking away from the core.

UberEats

Far too often, tech companies (and start-ups in general) are far too quick to change direction due to a perceived shift in the market, a side comment made by an advisor, or an investor who is looking only for a certain type of product to invest in. When they do that, the original sight and what the entire team was moving toward often lost in the jumble – without nearly spending the same time spent on SWOT testing the initial idea.

Don’t get me wrong, if the market is shifting or the original idea needs to be refined, you’ve got to address it – you just need to do so with the care and clarity of the original direction. Alternatively, you can smartly make the shift keeping your product at its core and effectively diversifying your offerings.

Sometimes those offshoots/mutated products are happy discoveries or accidents. You might have taken a cost-effective left-turn to see where you might end up and then found a pot of gold. Uber’s find might be exactly that. They’ve always been in the business of having drivers all over the place picking up products (people) from one place and bringing them to another place. Transfer the product to food instead of people and you’ve got Uber Eats – and an entirely new vertical (food delivery) shaking in their boots like the taxi industry before them.

If you want to have that agility in the future, perhaps the correct time should be taken to create a core product that can allow flexibility and the right attitude to try things and move your business smartly.

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Sound Strategy Can Leverage Fumbles Into Wins For Smart Companies

Fumble Recovery

Too often, sports fans get upset when their opponent wins by way of a fumble recovery or one good play that enables a close victory. They exhort, “they were lucky!’ Or, “it was just a lucky bounce.” But the real truth is that the opposing team was just well prepared.  How many times are there balls up in the air for people to pounce on – only to see the ball fumbled out of play? How many times have people been faced with an opportunity, but aren’t prepared to walk through the door and take it? How many times have companies had a chance to gain a huge client, but aren’t prepared to deliver the right proposal in the allotted time? Just like the fumble recovery, preparation and strategy are much stronger determinants of wins than luck.  Gord Hotchkiss nails this ideal directly in his post about strategy on MediaPost. The thing is, he still attributes the element of luck in relation to success when the real truth is that sound strategy allows companies to create the element of “luck” by acting quickly and decisively due to preparation.

The truth is, strategy has been prepared and looked at in the wrong way for quite a long time. They are often set in absolutes with no room for flexibility or agility. They are often created by people who are too close to the product or don’t have the time to take a step back and evaluate their place in the market appropriately. And, perhaps most importantly, they don’t place the intended audience at the core of their considerations.

Creating a strategy with an eye toward what the audience is looking for and allowing for flexibility provides a key foundation that enables all members of the team to fluidly evaluate what’s going on in the environment and make moves or decisions that are based on the strategic core. It also provides the insights for the correct questions to ask when trying to determine whether that bright shiny object is the right direction or a complete waste of resources.

Once a proper strategy has been set in place, the fun’s not over. The team has to be fully educated on the thoughts and ideology behind it so that they may act on it without hesitation. There needs to be a clear understanding how it fits within the company’s ideals and mission – for if it’s not clear, maybe you need to dig back into building the strategy. All of this leads into strong leadership that enables the team to best capitalize on opportunity.

Hotchkiss provides an extremely gratifying illustration of the ROI value in the following:

Let’s imagine that two companies, A & B, both launched this year with $10 million in sales. Over the next 20 years, both companies were subject to the same rhythms — positive and negative — of the marketplace. But, because of superior leadership and management, Company A was able to more effectively capitalize on opportunity, giving it a 14% advantage over Company B. In 2035, what would be the impact of that 14% edge?  It’s not insignificant. Company B would have grown in sales to $21 million, with growth of just over 100%. But Company A would have sales of almost $290 million. It would be almost 14 times the size of Company B!

Smart strategy (and strong leadership) doesn’t dissolve the need for luck, but it does provide that preparation and foundation for the leveraging of whatever comes your way to turn a possible fumble into a win.

Transcending The Pitch And Becoming The Lifestyle

The delineation of Lifestyle Brands as a separate vertical is odd to me.  Its hard to think of “lifestyle brands” that don’t retain a product at its core. Some examples of lifestyle brands – to me – are: Nike, Gatorade, Coca-Cola/Pepsi, and some could argue Apple or Facebook. You could arguably suggest that Livestrong at its height was a lifestyle brand, but its core product was funding and awareness for Cancer research. Perhaps one of the more recent strong transitions to Lifestyle is Dove. Though the Dove brand has been around for a long time with numerous strong campaigns, it has been over the past decade that they have been able to transcend the pitch and become the lifestyle.

What started in 2004 as a way to establish itself in a new market, Brazil, utilizing creative from London, Ogilvy & Mather Brazil’s “Dove Campaign for Real Beauty” had a lasting effect that has enabled the brand to create content and community without constantly pitching its products. Perhaps the best part is the fact that the Brazil team launched what seemed to be a local campaign leveraging existing materials that then went on to drive strategy for the brand globally.

RealBeauty

A recent example is their “Dove Real Beauty Sketches” program that has garnered phenomenal viewing metrics.  Rather than describe it, you can check them out yourself, but keep in mind that there is absolutely NO product description. The US 3 minute documentary has garnered over 54 million views on YouTube in just under a month and a half.  The longer 6+ minute version has had 2.6 million US views.  Just the sampling of other markets shows Brazil with another 5.3 million views of the short and 1.6 million views of the longer on YouTube.

Needless to say, the amount of views is of incredible value, but we can’t forget how they got there.  This was certainly not a matter of posting a cool video and just seeing the video completes jump. It was about an almost decade-long investment to build the community with content and programming that helped Dove to become a Lifestyle Brand.

So, with that in mind, the way to think in this technology and media age is how can your brand become “a lifestyle.” It becomes a matter of content strategy, release strategy, Social Media, messaging and campaign strategy. And it could take quite a while.

If done right, it can effectively allow the brand to not even deal with the concerns about brand loyalty. While consumers are becoming more fickle about brands, they are becoming less so about their lifestyles. Red Bull was able to achieve Lifestyle status through their media content and Dove was able to do the same – in large part through their Real Beauty campaign.

So, if marketing product properly and thoughtfully could enable it to transcend product placement and pitching to become a part of life – or lifestyle -, then what constitutes a purely lifestyle brand?

Tragedy And The Brand Collateral Damage

Upon seeing the horrible replays of the horrible event during last week’s bombing of the Boston Marathon, I couldn’t help but notice the surrounding banners and logos that seared themselves into my memory.  Though neither John Hancock Financial nor Adidas had absolutely anything to do with the disastrous events, those images of banners and apparel logos are forever connected.  Of course, the idea of this happening at a sponsored event never crossed the marketers minds – and hopefully it never will – to dictate whether they should participate. But, what if it did?  Would brands evaluate terror risk before sponsoring an event for fear of the collateral damage of repeated impressions shrouded in tragedy?

BostonLogos

I realize that, in the larger scheme of things surrounding tragic events, this topic is irrelevant and possibly tasteless, but it is absolutely real. The question is whether the represented brands do anything in response specifically because of the connection, or do they shy away from continuing the connection for fear of getting into a no-win situation.

To illustrate that thin line between good and opportunistic – what if Adidas were to do a campaign to raise funds for the survivors or even promote the fact that they might provide funding toward prosthesis for those who lost limbs? Either one is worthy at its core ( Adidas is already doing a fundraising campaign and John Hancock seeded One Fund with $1Million) but it becomes a matter of how one chooses to promote either one. Again, is the goal to place your brand in a positive light, in light of the fact that it was so connected to negative?  Or, is the goal to do good and the positive light will be a byproduct and not the goal… It really comes down to intention and messaging.

In a little side note, beyond what Adidas is doing in response, Nike actually had to remove Boston Massacre products that they had already created in celebration of the storied NY Yankees/Boston Red Sox rivalry. In Nike’s case, they weren’t even involved in the marathon, but were still affected by a branding and taste issue.

My hope is that Adidas, John Hancock and even New Balance can afford to do even more to help those most deeply affected by the bombing.  Of course, it can’t be expected.  But, if Adidas provided apparel or prosthesis for the injured; NB provided apparel or prosthesis for the injured and Hancock provided financial resources for the injured and the families of the deceased that would be very cool.

In this case, who knows if it will be more financial support to the grieving and the survivors beyond what we’re already seeing. In the spirit of the event, the city and the aftermath, all of the sponsors will most likely come out even stronger next year. And, hopefully, nobody will make the wrong move and be conveyed as opportunistic or scared.

And even more hopefully, this kind of tragedy will never happen again and the question will not arise for brands in considering their sponsorship of events and whether there might ever be a negative connection with their brand.

Tesco’s American Invasion Was DOA

UK grocery company, Tesco, has decided to pull out of their American Invasion and take a $1.8 Billion write-off (with the favorable UK exchange rate – only 1.2 Billion Pounds – it still doesn’t soften the blow of the astounding loss.) Tiffany Hsu’s LA Times article points to Tesco’s misunderstanding of what the public wants and the dire consequences of trying to compete with the Wal-Marts, Costcos, Trader Joes and the like. If Tesco believed those were their competition, their analysis was very off – regardless of recession or not. Tesco saw themselves as something they were not – and in America, it’s foolish to think that customers will save bad branding by finding the hidden gems behind whatever facade is presented. Any way you slice it, its unfortunate that Tesco’s invasion of the American market was dead on arrival.

Courtesy: Freshneasybuzz

Courtesy: Freshneasybuzz

It had a lot more to do with branding, design and store locations than what Americans do or do not want. Admittedly, my exposure is limited to their locations in the Los Angeles market, but it quickly became very clear how Fresh & Easy was positioned counter-intuitively and ineffectively.

The first store I visited was a huge space on heavily trafficked tourist destination Hollywood Boulevard. It was large, dark and depressing. Another location was also in midtown on a heavily trafficked car artery with no abundance of parking spaces. And the last one I was in a week ago was probably the best model of what they should have been doing all along – a small, bright and colorful store in a heavy pedestrian area near USC.

Beyond their questionable locations and early dreary decor, they should have positioned themselves as the perfect last minute spot to pick up quality prepared meals and sundry items on the way to work or on the way home for dinner. They couldn’t/shouldn’t have felt they could compete with the established big markets.

The article compares them to a Wal-Mart, but Tesco should have positioned Fresh & Healthy as more akin to a refined and healthier 7-11 – like their own Tesco Metros back in the UK. That healthy option would have been the right aspirational touch – especially in Southern California.

Fresh & Easy might have worked if they had stronger positioning. It seems they were even unclear on who they were meant to be. Because of that, their marketing never worked. It’s a shame, because if you look at their location near USC, they could have focused on smaller spaces in higher foot-traffic (or more easily accessible) areas to create something akin to the Marks & Spencer Simply Food product in the UK. Another similarity to M&S in the USC location was the automated tellers that allowed staff to be focused around the store to help out in ways you certainly don’t see in a 7-11.

The promise of getting in and out of a market in five minutes with inexpensive essentials and healthy prepared meals would have been something that might have made it a success.

Short of that, its another example of a move that a company should have never ventured in the first place. Or, its an example of a good thing that never had the required clarity and forethought to drive success. Fresh & Easy is Dead. Long Live Fresh & Easy.

The Growing Pains Of Vision

Last week, NPR ran a piece on the challenges that JC Penney is facing while they shift the way they do business under (relatively) new CEO, Ron Johnson. While listening, it brought to mind some of the factors we often deal with when working with clients, management, and teams to institute new programs, processes and functions. Regardless of vision or how great we believe that change will be in the name of growth or optimization, those growing pains cannot be overlooked in either the planning or the execution.

city_veins

Regardless of how strong your vision is, the ability to convey that vision to all participants is paramount. In some cases, it even requires that solutions for bypassing participant buy-in should they can not see what the company is trying to do. But, you’ve got to make sure the vision is realistic – and without taking a moment to consider any move from most sides is a recipe for disaster.

In the case of JC Penney, we don’t know how things will play out in the end.  But, the NPR report highlights how the regular JC Penney customers were less than thrilled.  The environment that was created for those consumers was one that they connected with emotionally – to the point you would think they’ve lost a loved one when talking about how it used to be. Though sales were down 30% in Q4 ’12 from ’11, could that be tied to disgruntled regulars?  Or, is it tied to the pains of shifting from one client type to another? By reading the comments below the NPR report, you can see there are enough counter examples pointing to the change being positive for JC Penney.

Recent work with one of my clients has brought the same challenge to light.  How do you bring vision, instill new processes and get buy-in from the people who are key to turning those changes into company success.  Interestingly, the most important people to get buy-in from are not the C-Levels (though they do give the approval on the spend) – it is the people who will be carrying out these new processes. A broken record comes to mind when thinking about how much communication is required to convey what you are intending to do.

Sometimes the illustration of the new versus the old can offend those who are fine with the way that might not be truly effective – so you can’t just rely on illustrating the benefits in light of the situation they are now in. The element of democracy that is prevalent in the workforce these days requires something akin to a PR campaign just to put those new processes in place. Again, you can have the strongest vision and product in place, but if there’s no buy-in, you’ve wasted time and resources. Even with the installation of automated processes, if there’s a human that needs to interact with that process, you need to negotiate and guide them through those growing pains.

Hopefully, JC Penney and Johnson’s team will be given the leeway to work this transition through. Far too many changes are abandoned at the first glimmer of failure. But as with any challenge, there is a sliver of failure, you’ve just got to push through smartly. Because, ultimately, a smart vision and strategic growth always has growing pains as a byproduct. You’ve just got to guide that pain into profit and not breakage.

Automakers Raise The Platform Of Inspiration

Ahhh, Automakers.  I see you did get that email.  You know? The one where it is agreed that the focus in this first quarter of the year should be on inspiration in the commercials. Honda set things off right with the Civic commercial showcasing new innovations and emoting the feeling that things can always be better. Then, during the Super Bowl, we were treated to extremely long spots focusing more on the members of the military and cowboys than on the Jeep and Dodge trucks they were marketing. The fact that many count the Dodge commercial as their favorite says something – but what that is, we don’t yet know. It seems we’ve reached a trend where inspiration becomes the platform for awareness and connection with cars – and association is almost as strong as what’s under the hood.

HondaBetter

For those who remember Paul Harvey and loved listening to his radio broadcasts, the subject of his talk could have been about toothpicks and he would have made it inspirational. Play him talking about God making a farmer over beautiful images, and there might not have been a better connecting inspirational moment for its intended audience. The fact that it was effectively a two-minute slide show with voice over takes it to another level with its simplicity amid the pandemonium of the big bowl game.

Going directly for the heart-strings, Jeep clocked in at 120 seconds with Oprah guiding us through our wait for our armed forces to return home. And, there were a couple of compulsory shots of the actual car they are selling. It seemed the seed was planted by Chrysler’s spot in last year’s super bowl stating that Detroit (and America) was back.

Other than the Millions of views those two longform spots have received on YouTube in the two days since the Super Bowl, it remains to be seen what will be done to build on them.  But the onslaught of inspiration has been taken to the next level by Honda and its Civic model.

Tying into every big social media platform, Honda is leveraging its inspiration into a content play surrounding innovation.  The social media program is called the #HondaInnovator Series and it sets off to provide more information about the innovators in its spot.  With a slew of programming across Facebook, Instagram, Pinterest, Twitter and YouTube to distribute content and enable interaction, they’re hoping to also generate buzz around the 2013 Honda Civic.

Though it’s not clear how many people will show up for the hour-long Tweet chats with the innovators featured in the spots, Honda will end up with a bunch of content that indirectly touches on their product. To a certain extent, the sky is the limit on where they could take this new-found content stream. Though I don’t believe its the same, it feels sort of like the moment that ESPN decided to create the X Games – but that had sports at is core. Maybe a better example was when MTV decided to air a reality TV show about kids living together – perhaps they all liked music.

Regardless, the opening up of a single commercial concept to create more content and enable more touch points with consumers is a strong one.  Honda’s tie to innovation is as strong – if not stronger – to its product than Jeep’s tie to our military and veterans or Dodge to God, cowboys and Paul Harvey. Let’s now take a moment to reflect on the proliferation of content converting to market share…