October 13th, 2008
We’re pleased to announce that B2B International’s latest newsletter, Insight, is available now to download.
Chock-full of the latest market research news and views from B2B International’s three offices, we also use this issue to make some timely suggestions of marketing/market research strategies and actions which you might find appropriate in these more challenging times.
Please click here to read our Autumn 2008 Insight. To view previous issues of our newsletter, click here.
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October 10th, 2008
Paul Hague looks back at his personal experiences – both good and bad – with the banking sector to highlight the importance of building and maintaining relationships with your customers, whatever the industry you operate in.
As a penniless student in Durham, I needed a bank. I had no conceptions or experience of banking and my choice was made entirely on convenience. Walking down the Bailey in the centre of the town, I was attracted by the swinging sign of a grasshopper. The bank was called Martins.
Half an hour later as I left the bank, clutching my initiation pack and a cheque book, I felt that I was somebody and going somewhere. Martin’s didn’t remain independent for long, however; it was shortly swallowed up by Barclay’s, with whom I did business for over 20 years.
In the first few years of this relationship they fulfilled all that I needed from a bank in both my business and private banking capacity. And then, things began to change.
The bank manager who I had got to know was abandoned as the bank rationalised and began its drive to greater efficiency and profitability. It wasn’t long before I was just a number.
One day this number received a letter through the post saying that a stamp collection that I had in their safe deposit would now be subject to a charge. This was not especially unreasonable but, in the context of the amount of business I was doing with the bank, I thought it merited a phone call to tell me this rather than a snotty letter. And it followed on from a constant series of initiatives to reduce services or find opportunities to charge for them. At the time, my business and personal wealth should have been sufficient for the bank to have some slight concerns about losing me.
Since my patience had by this point snapped, I dialled the bank, was answered by an automatic answering machine, and was ultimately directed by a series of numbers to someone I could speak to. If, at this time, I had been offered an apology or indeed if any interest had been shown in retaining me as a customer, I am sure I would have still been doing business with Barclays. But it was clear that they were indifferent; I really was just a number.
After much tedious changing of standing orders, I moved to NatWest Bank. It wasn’t long after joining that bank that I received a phone call that invited me to move to a private banking facility within their banking group. There I was introduced to real people who knew my name and who gave me their business cards, inviting me to contact them if ever I needed their financial services. And I have to say that they haven’t let me down.
As I look back over this experience I cannot believe the stupidity of Barclay’s to give up the loyalty I had shown them over the years. As a lifetime customer, my business was worth millions and yet to them I was still just a number.
I am reminded of this story following a recent survey that B2B International carried out into banking services among SMEs. Less than a third of SMEs believed that Barclays fulfilled the role of being an important business partner. This compared with the Royal Bank of Scotland (which headed the league table), where over three quarters of respondents thought that it fulfilled the status of being an important business partner.
Banks get kidded into believing that they have loyal customers because they have a relatively low churn. It is not because they are satisfying their customers, rather it is due to the considerable difficulty a customer faces when switching banks. Customers are effectively hostages.
So what is it that creates a relationship with a bank or indeed with any other supplier? Relationships are nearly always between people rather than inanimate objects. Getting rid of the bank manager and having a constant stream of different people supplying services destroys any opportunity to create a relationship. People value someone to talk to; someone who will actually listen and who will genuinely want to help.
The second point to make is that relationships are built up over time. A relationship that has satisfactorily endured a number of years is capable of withstanding problems – and problems are inevitable in any business service.
As we watch the financial services sector move into meltdown, we know that the greed of bankers has played a big part. But in the High Street, and particularly with business customers, it has been the banks’ lack of understanding and unwillingness to listen that has been the cause of their demise.
The moral that I draw from this blog today is that understanding customers and building relationships are the two most important elements of the marketing task. This is not difficult; it is not rocket science. In fact it is blindingly obvious and yet it is so often ignored.
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October 8th, 2008
A recent article appearing in The Wall Street Journal, entitled In Chaos Lies Opportunity, used a racing analogy to illustrate how different companies become the winners and losers in times of economic instability:
Like dangerous curves on a racetrack, economic downturns create more opportunities for companies to move from the middle of the pack into leadership positions than any other time in business.
Unlike straight-aways where leaders can thrive on raw power alone, steep curves require strategic finesse. That often results in dramatic differences in performance as leaders steer out of the curve.
The article goes on to highlight the example of Southwest Airlines, which surged ahead from its competitors during the recession of 2001. As other rivals struggled and fell by the wayside, Southwest adopted a strategy of lowering its fares to gain market share. Promoting its price advantage by boosting its advertising accordingly, it also built solid relations with its workforce by avoiding layoffs when others in the airline industry were cutting jobs.
Yet Southwest is not unique in its remarkable success in the face of seeming adversity:
About 24 percent more firms moved from the back of the pack to the front in the 2001 downturn compared with the subsequent period of economic calm, according to an eight-year study by Bain & Company that analyzed the net profit margins and sales growth of more than 2,500 companies. Meanwhile, about one-fifth of all leadership companies – those in the top quartile of financial performance in their industry – fell to the bottom quartile. By comparison only three-quarters as many companies made such dramatic gains or losses after the recession.
Obviously recessions affect different industries and different geographies in various ways and to different degrees. But this itself presents opportunities for the outward-looking and forward-thinking organization. Johnson & Johnson, GE and IBM are three companies said to have benefited from shifting their focus to economically healthier regions across the globe; in the second quarter of 2008, all have reported solid performance outside the U.S.
- More information on entering new markets is available on our main website.
- Many of our white papers discuss various ways in which you may be able to gain competitive advantage in difficult times.
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October 6th, 2008
For the eighth successive year, Coca-Cola has been named the most valuable global brand. In the annual survey conducted by BusinessWeek and Interbrand, which evaluates brand value on the basis of how much it is likely to earn for the company in the future, IBM has this year climbed one spot to No. 2, pushing Microsoft down to No. 3.
Other notable climbers in the 2008 poll include Google (climbing to No. 10 from No. 20 last year), Apple, Amazon.com, Zara and Nintendo. Newcomers to this year’s list include H&M, Thomson Reuters and the ubiquitous BlackBerry.
Several financial services giants – among them Merrill Lynch, Citi and Morgan Stanley – have fallen way down the rankings, a undoubted reflection of the difficulties facing financial markets presently. In spite of this, HSBC and Visa have managed to buck the trend.
According to Interbrand’s Global CEO, the rise and fall of many brands is certainly linked to the state of the global economy. In addition to the current credit crisis, influencing factors have included the growth of emerging markets, and an increased emphasis on sustainability worldwide.
Customers in many emerging markets are experiencing new-found wealth, and luxury brands in these countries are reaping the rewards. Porsche, Prada, Ferrari and Giorgio Armani all feature in the top 100 global brands, and have seen great success in emerging markets during the past year.
Sustainability and better environmental credentials are also gaining importance, and are not restricted to any one industry or sector. From automotive manufacturers improving fuel efficiency, to energy companies investing in cleaner, greener, renewable energy sources, sustainable business practices are a real ‘hot topic’. Brands that are benefiting from greater sustainability on this year’s chart include GE, Mercedes, Honda and BP.
In times of uncertainty, it is more important than ever to focus on your brand. Your brand is central to everything you do, and its value should never be underestimated.
To find out more about branding, please follow one of the links below:
- Or, to see the BusinessWeek/Interbrand’s 100 most valuable brands worldwide, click here.
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October 3rd, 2008
Companies try many different marketing tools and techniques in their quest to increase sales. Caroline Harrison has recently noticed a particularly unusual promotion offered by one of America’s leading toothpaste brands.
I’d like to make it clear from the start that there is more to my life than watching TV. Please don’t read too much into the fact that, for the second time in a month, I am writing a Thursday Night Insight article about a commercial I have seen on TV! However, once again a television advertisement caught my attention.
The commercial in question was for Crest’s Whitening Expressions toothpaste. In it, Celebrity Chef Emeril Lagasse is seen filming a commercial to promote the fourth and newest product in this toothpaste range. Whilst cleaning his teeth, he is so impressed by the bold flavor that he feels obliged to repeat his favorite catch phrase bam!” At this point, I have to say I was fairly unimpressed by the advert, not finding it the slightest bit amusing.
Lagasse, however, was clearly struggling with the exclamation bam!” It just wouldn’t suffice; it simply wasn’t powerful enough to convey what he was feeling as he brushed his teeth with Whitening Expressions. When the director shouts cut” and they begin to discuss how the shoot is progressing, Lagasse explains his conundrum: This new product might be bigger than bam!”
What could be bigger than bam?” asks an astonished assistant.
Lagasse’s response: I dunno. Let’s ask America”
And here we come to the part where I really started to pay attention. Because the advert ends with an invitation for the Great American Public to submit its own suggestions for a brand tagline.
From September 15 through October 17, consumers can upload their suggestion on video to the YouTube website, capturing, in 10 words or less, what they feel to be the essence of this brand.
Clever, huh?
From the public’s point of view, there’s a real incentive to take part. An incentive in the shape of $5,000, a trip to New York City, and the chance to see your winning idea become a reality in a TV commercial.
And those lazy Crest marketing executives? Well, they can just sit back, relax, and wait for the good ideas to come flooding in. America will come up with an ingenious, inspired, and creative strapline, and they won’t have to tax their brains or lift a finger.
Of course, I realize that it’s not really as simple as that. Obviously a great deal of thought, discussion, hard work, and money has already gone into this campaign.
What’s more, those cunning folk at Crest are actually employing some of the golden rules of marketing:
- They’re opening a dialogue with their customers;
- They’re actively engaging them with their product;
- They’re incentivizing and encouraging new people to try their brand (sure, you’re not obliged to buy the product if you want to enter the competition, but you must stand a better chance of submitting that winning slogan if you’ve truly experienced the product and understand all the benefits it brings);
- They are, in a manner of speaking, getting feedback on what the public thinks of their product, which will no doubt help to shape future branding, advertising, and marketing decisions; and
- Through the unusual execution of this campaign they’re showing themselves to be innovative and somewhat cutting edge.
By using the YouTube website, the marketing team behind Crest is potentially appealing to a whole new group of purchasers. But by doing this, will they alienate their older, more established, or less technology-savvy customers?
Maybe they will a little, but I doubt it will have much of a negative effect. Whilst the campaign may not be to everyone’s taste, I think those consumers who buy this brand of toothpaste week-in, week-out would be unlikely to stop because of this commercial.
Any who do cease, will, I suspect, be far outnumbered by those who decide to give it a try for a once.
As for those toothpaste purchasers who are not brand loyal and who switch between a number of different products depending on special offers, current promotions and the like – well I would hazard a guess that some may be tempted to buy Crest this week on the back of the hype and publicity surrounding this campaign.
Of course, Procter & Gamble who manufactures Crest is not the first corporation to use the idea of a competition as a promotional tool, but it is still a fairly unusual and unique concept. What’s more, as technology advances and companies seek more creative and innovative ways to market their offerings, I feel pretty sure we’re only going to see more of this type of campaign.
If you want to stand a chance of winning, click here to check the competition rules and find out how to submit your entry. Good luck!
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