Beyond the Buzz with David Stanley Marketing and Management Essentials To Grow Your Business

Can your brand survive a public relations nightmare?

Toyota has enjoyed a strong brand perception even to the point of achieving near cult-like status and loyalty. Can the “Cult of Toyota” survive the current public relations debacle related to the recent recalls and U.S. Government investigations? It’s too early to tell, but they haven’t suffered the knockout blow that weaker brands would have. The power of their brand is sustaining them for now.

What are the lessons for marketers?

Don’t Just Open For Business, Build Powerful Brand

A couple of years ago my oldest son was ready to get his drivers license. What I discovered during the process of vehicle shopping revealed much about the power of brand perception. I found a GMC product and a Toyota product at a used car dealership. These two vehicles were comparable in size, mileage, and features – about as “apples to apples” as you can get. The Toyota was priced $4000 higher!

A one-time instance? Nope. Back in January prior to Toyota’s major recall and bad PR issues, I was again shopping for a used vehicle for another son getting his drivers license. While visiting with our local used car guru, the same issue came up—Toyota vehicles had higher resell value than American-made autos.

Toyota has built the perception of making quality vehicles. That perception has embedded itself in the brand image the buying public has of Toyota.

Once Established, Brand Perceptions Are Hard To Change

Now the oldest son is about to graduate from high school. I made a deal with him that if he got enough scholarships to cover the tuition to the college of his choice, I’d buy him a new car. He’s taking that deal seriously and has recently begun asking about what brands he should consider. I said Toyota and Honda, even after the Toyota recall.

We live on a ranch and have three kids so a larger SUV fits our current needs. Our family vehicle is a GMC Yukon XL. We hit 120,000 miles a few months back. My lingering perception is that you should get rid of a GM vehicle after 100,000 miles. (I had the same perception about Ford and Chrysler as well.) My trusted mechanic tells me that it’s no longer true. American made vehicles can be driven well over 100,000 miles these days. If I hadn’t spoken with a mechanic that I trust, I would have traded in the Yukon – most likely on a Toyota or Honda product. Why? My perception is they make a better quality product. The reality is also that they have enjoyed higher resale values.

Even though Toyota has issues today, I still have an overall positive perception of the brand and believe it has a realistic chance to survive the current crisis. That’s the power of a strong brand.

What are you doing to strengthen the power of your brand? Are you building solid relationships with your customers through quality products and outstanding customer service, or are you just open for business and hoping for the best?

It’s hard to see the picture when you are inside the frame.

It’s easy for us to get wrapped up in our own perspective and think that we are communicating clearly. Scott Faircloth shared an amusing story about his six year old daughter’s “promotional” signage for her fashion show. He was kind enough to let me feature the sign here on the blog. Be sure to click this link to read his post. Scott brings out some excellent lessons that all marketers can apply. Here are a couple of additional thoughts for you to consider:

The Law of Unintended Consequences

The irony is that his daughter used some very sound marketing principles; certainly attention grabbing.  She would have likely pulled in a large crowd to her fashion show…just not the audience she wanted. You may think you are communicating a very clear marketing message, but what your audience is hearing is quite another.

Get an Objective Perspective Before Going Public

The daughter used a “plus sign” for the “and” which gave her sign an entirely different meaning. Before you send out a promotional message, take the time to have someone review it who can give you an “outside the frame” perspective. That extra step can be the difference between a positive ROI and a negative ROI. Little things do make a difference.

A big “Thank You” to Scott Faircloth for allowing me to share this story. Kids can be awesome teachers.

The decades long decline for the U.S. auto industry culminated last year with a government “take over” of two of the three domestic auto companies. The Wall Street Journal recently featured an article on Sergio Marchionne, CEO of Chrysler Group LLC. Since he is also the CEO of Italy’s Fiat SpA, he is technically not an auto industry “outsider,” but he is not a part of the culture that brought Detroit down. I found two key lessons from his observations and actions that can be applied to any business.

Lesson One: Don’t resort to discounting when sales are tough

Many businesses, especially the auto industry, tends to react to a decline in sales or market share by slashing prices. Here are a few insights from the article:

• In Detroit, “there’s almost a fanatical, maniacal interest [market] share.”
• “Unprofitable volume is not volume I want. We have a very good track record for how to destroy an industry – run the [plants] just for the hell of volume, and you’re finished.”
• He was frustrated by the use of hefty rebates and other incentives to maintain sales which is an industry-wide problem.

If discounting is the only thing you can do to try and create sales, you’ve got a very weak value proposition. Ford has created a more compelling car lineup recently and has not resorted to the level of discounting that has been a core part of the auto industry playbook in recent years. To show that this works in other industries as well, consider that Apple has been creating high demand products that aren’t cheap and has not needed discounts to sell them.

Lesson Two: Culture is important.

The culture in Detroit has been insular. Marchionne has tried to shake up Chrysler’s “plodding corporate culture” by ousting several veteran industry executives and flattening the company’s bureaucracy.

Have you ever heard the saying, “you can’t read the label when you’re inside the bottle?” Sometimes a company or  an industry culture gets so insulated in its thinking and practices that it takes a real shakeup to get things moving in the right direction. I don’t know why, but companies have a tendency over time to create bureaucracies, which leads to hierarchies and inefficiencies. This does not create a competitive advantage; it diminishes it.

Ironically (or maybe not), Ford brought in an auto industry outsider as CEO in 2006. They were the only U.S. automaker that didn’t file for bankruptcy protection or accept government bailout funds. Ford has also been gaining market share and profitability. They are building autos that people want.

What are the results of Marchionne’s actions? It’s too early to tell, but Ralph Giles head of the Dodge brand, says that Marchionne “has brought a refreshing energy” to the Chrysler workforce. Mr. Giles also had this to say: “We were starting to look at the product as a commodity, which is disgusting.” He also said that he has “resumes spilling off his desk compared with a year ago when he couldn’t find someone to hire to sketch cars.”

There are a lot challenging variables at play here that will determine whether or not Chrysler succeeds. Regardless, these two lesson we’ve covered today are a good first step, and are lessons that can be applied to every business.

So, how will you apply these two lessons to your business?

Could your business go from fending off a robbery attempt by Bonnie and Clyde to out performing big box competition? Meet Dougherty’s Pharmacy, an 80-year old retail pharmacy that has not just survived, but continues to thrive utilizing old-fashioned service and modern-technology in the face of fierce, large chain store competition.

Check out these numbers:

• Last year, sales per square foot were $2,000 – double those reported for CVS or Walgreens
• This year’s sales were even better – $28 million and above industry profit
• Customers drive from over 100 miles away to do business with them

Reading about Dougherty’s in a recent Dallas Morning News article, I came away with four fundamentals you can use to grow your business.

1. Offer products and services others don’t.

Dougherty’s offers product depth and services that aren’t found at the majority of big-box pharmacies (including Walmart).

• Compound medicines which provide made-to-order medicines
• Medical equipment
• An entire wall of Jobst support hosiery
• Certified nutritionist
• Home delivery

2. Use technology to create efficiencies that improve the customer experience.

“A $200,000 robot rapidly counts, fills and labels the 200 best-selling drugs with an accuracy rate of 99.99 percent.” (Accuracy is critical in the pharmaceutical business.) Dougherty’s has invested $1 million in technology since 2004. Your business probably doesn’t need an expensive robot, but you can still look into technologies that can improve your efficiencies and service quality. Dougherty’s uses a video screen to post customer names as prescriptions are filled.

3. Decide what not to do.

Being all things to all people is not a sound business strategy. Dougherty’s doesn’t sell groceries or flip-flops. The product/service offerings are focused around health and wellness along with their personal approach to business.

4. Understand that the personal touch still wins.

Changing technology doesn’t require an abandonment of old-fashioned values. The continuing rise in social media shows that people want to connect with each other. Friendly, expert personal service remains a key differentiator for growing your business.

Bonnie and Clyde may not be threatening your business, but small and large competitors are. Take the time to consider these four fundamentals. What can you learn from Dougherty’s to grow your business?

Consumer buying habits have changed. Nobody wants to pay full price anymore.

I heard this statement by a commentator on a CNBC yesterday. Then I get a marketing research newsletter by email summarizing a new study, entitled “Marketing to the Post-Recession Consumers,” by Decitica. The article states that the study “addresses the lasting effects of the recession in the way American consumers have internalized the recession experience. It’s particularly relevant in developing ‘positioning’ and marketing/merchandising/advertising strategies.” Sounds profound.  Here are some of the findings:

• The effects of the Great Recession on consumer behavior are so profound that many of the assumptions underpinning consumer segmentation are no longer valid; and
• Marketing strategies that do not fully recognize the diversity of consumers’ recession experiences won’t have the desired potency in the post-recession world.
• Many have accepted this radical change as the “new normal,” and not just a cyclical phenomenon.
• The recession has caused a profound, deep-rooted change in consumers’ spending habits in favor a more restrained approach.

There are four distinct consumer segments emerging from the recession according to the study, identified as:

• Steadfast Frugalists,
• Involuntary Penny-Pinchers,
• Pragmatic Spenders and
• Apathetic Materialists.

Price has become the dominant consideration in the purchase of all kinds of products, concludes the study. Of considerable significance is the fact that half of Pragmatic Spenders are looking at price before other features and one-third say that brand name products are not worth the extra price, heralding what will likely be a long uphill struggle by marketers to shift the focus away from price, says the report.

Don’t Bet The Farm On The Reported Consumer Behavior Change

There have been similar studies to this one reported recently. Taken at face value, it looks like its time for a monumental shift in your marketing approach. Be careful – take a moment to get some perspective before you rush to change your marketing plan based on this type of research.

Depending on research that asks people what they think they will do in the future is very dangerous to your brand. You cannot predict what people are going to do based on what they say. You can only measure what they have done. People will give you what they believe is an honest answer about what they think they will do, but they really don’t know until they are faced with the decision. It’s just human nature.

Study What People Actually Do

I’ve been fascinated by the studies which have found that people who change their lifestyle after a major health event like a heart attack often do change their behavior for a period of time, but the majority typically go back to their old behaviors as they move farther away from the crisis event.

There is no question that the folks that have been hit hard by the recession have made changes to their buying behavior. But is this really a long-term shift?

If you have ever spent time with people who went through the Great Depression, you’ve seen a frugality that has carried through for their entire lives. While the current recession has been hard on many people, especially the 10% that are currently unemployed, it’s not any where close to the experience of the Depression of the 1930’s. When the economy recovers, can we really be sure that consumer behaviors have permanently changed? Will price truly be the deciding factor?

Be Compelling

Going back to the quote we started with that people no longer want to pay full price. Have they ever wanted to pay full price? No! It’s not about price; it’s about perceived value. In the absence of a compelling reason to buy, price will win out. It’s called commoditization. All things being equal, price is the default.

Apple recently reported an increase of 47% in quarterly profits. Why? People are buying iPhones, iPods, and Macs. Apple doesn’t advertise discounts to sell its products. They create compelling product offerings.

Radio Shack, once thought to be on the brink of irrelevance, is gaining traction in the highly competitive consumer electronics industry by selling more expensive, and more lucrative, wireless products from a broad range of suppliers.

Casual dining chains have reportedly seen a significant decrease in sales and traffic, but not Chipotle. There are only three major items on Chipotle’s menu: burritos, tacos, and salads. In a U.S. News & World report article, Chipotle’s Secret Salsa, Founder and CEO Steve Ells sums up its business model in a single sentence: “Focus on just a few things, and do them better than anybody else.”

It’s too soon to know if consumer behavior is really shifting for the long-term. But it’s not too soon to improve how you do business. Lowering prices and cutting expenses is the easy thing to do. The harder work is creating a compelling product or service offering. Are you willing to do the hard work?

It’s a rare occasion when visiting with a prospective client if they don’t bring up concerns about competing with the big boy companies. This is true in retail and service categories. Of course, the main issue always revolves around price. So is it possible for smaller companies to compete with the big boys? Short answer: YES!

Here are 3 keys for competing with the big boys:

1. Don’t Focus on Price

Competing on price makes the product or service a commodity game. Price will win if there are no other differentiators. Value is an over used word, but it simply means a customer perceiving a better solution. Changing your focus to product selection, expertise, and/or service provides big points of distinction and can represent true value. (You don’t have to have all three to compete.)

I have a client in the home improvement business. The company has to compete against big box stores like Lowe’s and Home Depot. Third-party surveys conducted at the end of each project often indicate that my client had the highest bid, yet they still got the business. Why? Because they gave the homeowners confidence with the premium product and service they provide.

Another client is a specialty shoe retailer licensee. Unfortunately for my client, the shoe manufacturer sells under the same brand name to retailers of all sizes. But, my client is winning because he offer’s a deeper selection of styles, sizes, and widths. He also has fit experts in the store. We have never advertised a sale in the 7 years he’s been open. (What retailer do you know that can say that?) The results? He has had consistent sales increases each year and has one of the highest profit margins among his peer group.

2. Recognize That Little Things Can Win The Battle

Recently, a screw came out of an expensive pair of sunglasses I own. Consequently, the lens fell out. I looked in the Yellow Pages for optical companies that mentioned frame repair. None of the chain names mentioned the service, but a local company did. I went to the local company. They fixed the glasses while I waited and didn’t charge me a dime. Guess where I’m going when I need glasses? Guess where I’m telling people to go when I hear them talking about needing eyewear or contacts?

I wrote in an earlier blog post of how a hotel employee went the extra mile and purchased a Diet Coke for my client when the catering division ran out. That simple action along with an overall customer-focused experience we had during our meeting have put them at the top of the list to host the next meeting.

3. Be A Better You

I was fortunate a few years ago to work on a consulting project with Randy Curtis, a former VP of Creative and Media at Wal-Mart. Randy’s advice to businesses that had to compete against Wal-Mart, or any big chain, was to “be a better you.”

It sounds simplistic, but the advice is right on. There are plenty of opportunities for smaller business to compete with big boys. The key is to focus on what you’re good at, find points of differentiation, and build relationships. Product depth, personalized service, and expertise are great places to start. Again, you don’t have to have all three stand out in the marketplace to compete with the big boys and grow your business.

The question becomes do you know who you are? Answer that question, stay focused on what you can control, and don’t worry about the big boys. You’ll sleep better and make more money.

It’s one thing for employees to follow policies of your brand culture. It’s another for them to understand why the policy and culture exists, and to make it an authentic part of their job.

A friend of mine called me about an experience he had at Chick-Fil-A today. When the Chick-Fil-A employee handed him his food, my friend was his polite self and said “thank you.” The employee responded, “it’s my pleasure.” He remembered the blog post I had written about this and asked the employee why they respond that way. She simply said, “you’re the customer and we’re here to serve you.”

That’s powerful. The Chick-Fil-A culture helps the employees to understand why they’re doing what they’re doing. When people get it they can do it.

Do your employees know why you do what you do?

Most businesses want loyal customers, few are willing to do what it takes to create them. Some see it as too complicated, but doing the little things can create loyal customers. On a recent business trip to Iowa for a client workshop, two companies did some little things that earned my loyalty and that of my client. Here’s a look at the power of doing little things.

Acknowledgement, Positive Attitude, and Courtesy

I needed a rental car upon arriving in Des Moines. Prices were comparable between the various offerings there. Historically, I’ve rented from Hertz, the #1 car rental company. After having a good experience with Enterprise Rental Car on some local rentals as well has hearing positive comments from others, I decided to go with Enterprise on this trip.

Enterprise Rental Car does an outstanding job of recruiting employees and creating a company culture that resonates with its customers. It really showed on this trip. Hertz had the longer line, but Enterprise was providing the better service. Here are some of the key points in my experience:

• The Enterprise employees consistently acknowledged those in line stating that they would be with us as soon as possible and offering a bottle of water while we waited
• Warm greeting when I got up to the counter with a firm handshake and introduction along with a positive attitude.
• Efficiently processed my transaction with appropriate questions, and clarity when asked for directions. They also didn’t try the hard sell when I declined their insurance coverage.
• Personal walk through of the vehicle with the same positive, courteous attitude that had started with the acknowledgement while standing in line
• Fast, efficient, positive, courteous interaction when I returned the car. They even said “Your Welcome!” when I said “Thank You.”

There are lots of car rental companies out there. The Enterprise employees made my experience very positive. I’ll be booking with them again on my next trip.

Do The Unexpected

We held the workshop at the Hilton Garden Inn located in Ames, Iowa. The marketing director made all the arrangements and was the contact person for our meeting. Everyone on the hotel’s staff was professional, courteous, and very responsive. They checked with my client frequently during the meeting to make sure we had everything we needed and that the facilities and food were what we expected.

However, it was an unexpected service that won my client over. Apparently in Iowa, Pepsi products are more popular than Coke products so Coke products aren’t as plentiful and can be in shorter supply. My client’s marketing director likes Diet Coke. They had some the day before. At breakfast on the second meeting day, the marketing director went to get a Diet Coke from our meeting room. No Diet Cokes.

When one of the hotel employees found out, she went up to a vending machine on the second floor and bought the marketing director two Diet Cokes. He was thrilled and appreciative. It didn’t stop there. She then had another employee go to the store and buy more for the meeting room. That simple, unexpected action was the icing on the cake of the whole experience. My client will be booking more events at this hotel.

It’s Not Complicated

The actions of the Enterprise and Hilton Garden Inn weren’t complicated. Simple courtesies that are lost today made all the difference in creating customer loyalty.

Does your company have a culture of doing the little things? If not, why?

Words mean something.

Words matter.

What we say has important outcomes.

The curmudgeon in me may be coming out here, but I’m seeing a sad trend in human interaction: The Not a Problem Syndrome or NAPS. It afflicts the more youthful members our society although it is creeping into the more senior members as well.

What is the Not a Problem Syndrome or NAPS? It’s the default response between two people where when one person says “thank you” the other responds with “not a problem” or “no problem.”

The beef I have with this issue comes when a representative of a business says this to a customer. I was raised to be polite. I’ll often say “thank you” to an individual from whom I’ve purchased a product or service. Nine times out of ten these days I get the NAPS response from them.

I’m the customer—of course it’s not a problem!

“Not a problem” is an appropriate response if I’ve asked someone to do something for me in a non-business/customer setting where it does require something from him or her. If I’m purchasing a product or service from a business, it’s not an inconvenience. Providing that product or service is the reason the business exits.

Create a Culture That Prohibits NAPS

Enterprise Rent-A-Car and Chick-Fil-A are examples of two companies that have created a culture that serve customers the right way. They both employ young people, but I haven’t heard any of their employees respond to a customer with NAPS.

I rented a car from Enterprise last week at the Des Moines, Iowa airport. The employees were warm, polite, and enthusiastic. They acted like they genuinely appreciated my business. When I habitually said thank you, they gave me a hearty “You’re Welcome.”

Chick-Fil-A has created a culture for customer-employee interaction that far exceeds their competition in the fast-food industry. You’re considered a guest and are treated like one. If you say “thank you” to a Chick-Fil-A employee the response you get is “It’s my pleasure!” Wow!

Do you want to stand out from your competition? Take a huge step in that direction by creating a culture that eliminates NAPS and focuses on enthusiastic, positive words that make customers feel great. Words matter. Words mean something. What words represent your business?

Marty Neumeier, author of The Brand Gap, shares some great insights with a presentation on Slideshare. One slide that really caught my eye was the “focus test” slide. I discussed the importance of focus here. These three questions provide the foundation of focus to that will allow you to establish and grow your brand.

The Focus Test

1. Who are you?

2. What do you do?

3. Why does it matter?

Three simple questions: simple, but certainly not simplistic. If you want to grow your brand, you’ve got to have unambiguous answers to these three questions.

Who are you? What are you passionate about? Why are you in business? Passion is the fuel needed to drive success. If you’re in business just to be in business, you will not build a strong brand. Without passion and the focus that comes from it, you’re not going to withstand the competitive winds of the marketplace. You stand a real chance of being blown away. Do you want to build a sustainable business? Start by asking what gets you up in the morning?

What do you do? You need to clarify your reason for being: your core purpose. In their best selling book, Built to Last, Jim Collins and Jerry Porras define “core purpose” as the fundamental reason your company exists beyond making money. What is the one thing that’s not going to change about your company? Without a core purpose, a customer has very little reason to do business with you. Think of the dot-com bust. So many businesses were created that had intriguing “fronts” but no real substance behind them. They were in business for stock options, but had no real passion behind them.

Why does it matter? This is where most businesses get tripped up, which stifles the growth of their brand. Why should a customer do business with you? “We make a great product? Yeah? That’s what every business says. “We really care about service? Prove it. You’ve got to have a compelling answer to this question to maximize your brand’s potential. Again, it’s a simple concept, but one I find most businesses struggling to answer. It’s easier to turn inward and think your brand is important. A brand is not what you say it is, a brand is what a customer says it is. You don’t own your brand, the customer does.

Are You Passing Focus Test?

If you want to maximize your brand’s potential, you’ve got to have concise answers to these three questions. Make answering these questions your top priority. If you’re struggling, ask someone you trust to help. This exercise is one of the most important steps you can take to create a lasting brand.