Technology is disrupting entire industries, from hotels (look at Airbnb) to tobacco (e-cigarette, anyone?) to taxis (watch out, Uber is coming). Social media are making consumers better informed and less predictable. And the global economic outlook remains highly uncertain, not helped by a possible Chinese economic slowdown and rising tensions in Ukraine.
Faced with this new "VUCA" world (as in volatile, uncertain, complex and ambiguous), many marketers are tempted to look for easy solutions and quick wins. But these temptations can seriously damage your brand!
Investment in innovation does not just require dollars, but genuine relationships within the serviced communities. Trying to satisfy the mass market, trying to compete on low price is an endless sinkhole and a losing proposition.
==> Warning! Three Temptations That Can Seriously Damage Your Brand by Dominique Turpin*
Here are three that are especially bad for your brand's health:
==> Fighting on price.
For many companies, lowering their price can seem like the only way to deal with rising competition, shorter product life-cycles, declining product differentiation, smarter buyers, more private labels and an increasing value-for-money segment.
But this apparently quick and reversible short-term option can have devastating long-term effects: lowering the perceived value of your products and services, depreciating the brand, or even triggering a price war. That's why cutting your price is like firing a nuclear weapon; once you push the button there is no going back. For me, this should be the very last strategic marketing option.
==> Cutting back on innovation.
Return on innovation investment is often uncertain and relatively long term. It can also be hard to measure, even with mobile, social and digital communications and new analytical tools. So it's tempting to cut innovation spending in tough times.
But this is counter-intuitive, because innovation is what keeps a brand alive. Like price cuts, lower innovation spending can hurt your brand and create a downward spiral. Take the case of Li-Ning, the first Chinese company to make western-style sportswear, which has struggled to develop a global brand partly because it did not invest enough in product innovation.
==> Falling into the commodity trap.
If your company has already lowered its prices and cut back on innovation, then it's surely heading for the commodity trap. Perhaps some companies think that having a simple product and a low-cost, low-price model will differentiate them in the market.
But companies that just sell commoditized products will end up having a worthless brand-because they haven't invested any of the emotion that differentiates a brand from a simple product. This doesn't have to happen! Commodity is not fatality-just look at the great brands that companies such as Geox, Starbucks, IKEA and Swatch have built in old and sometimes highly commoditized sectors.
Instead of falling for these three temptations, try the following three things to strengthen your brand and add value in turbulent times:
==> Invest in innovation.
In difficult times, fresh ideas are more important than ever. Think counter-intuitively: When competitors cut their budgets, increase yours!
As advertising guru David Ogilvy once said: "When times are good you advertise; when times are bad, you must advertise." And I'm not just talking about product innovation. Always look at innovation along many dimensions: segmentation, channels, communications, customer experience, processes etc. Look for example at Red Bull, Alibaba, Zara, Havaianas, Nespresso, Rakuten, and the entirely new business models behind these brands.
==> Relentlessly collect customer insights.
As I said in a previous post, spend a day in your customers' lives and focus on their headaches rather than their needs and wants. Make their lives easier, better and/or cheaper! Give your customers more instead of cheapening the offer. And don't just focus on customer satisfaction-build retention and loyalty.
==> Work on a portfolio of brands.
Doing this will broaden your appeal, because one product and one offer cannot please everybody. Michelin, for example, has a portfolio including premium B.F. Goodrich tires for sports cars but also Kleber, Uniroyal, Taurus, Riken, Kormoran, Euromaster and retailer brands for price-sensitive consumers. Similarly, Singapore Airlines Group has its premium Singapore Airlines brand and also Tiger Airways and Scoot, its new low-cost airline for the medium- to long-haul category.
Marketers should not be scared of turbulence. It presents exciting opportunities to build and grow a brand, as long as you can resist dangerous temptations! Let's never forget that in bad or good times, success is only determined by how much value we bring to customers.
Only they define what "meaningful value" is all about. Let's also be humble enough to recognize that the perception of value can be quite different from one day to the other, from one market to another and from one customer to the other.
Quality comes at a premium price and your loyal customers will respect this if you go the extra mile for them, so be unique. I think too many companies fall into the "cheap as chips" the cheapest quote will win approach. It should be value added, Yes, cheapest quote wins, No.
And don't forget....if you want an innovative and strong brand...Hire innovative and strong peole! Duuuh! And then let them do what they are good at! Innovate! Knock down the walls of the cube farm, open the windows, offer good compensation packages, give them their weekends off so they can let their thoughts stew and then stand back and get ready to keep up with orders for your latest product.
Thanks to Dominique (a man) for today's share ...and most of all to you for listening.
HAVE A GREAT Day!
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"Stop selling. Start helping"
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==> Warning! Three Temptations That Can Seriously Damage Your Brand