Dick Martin Blogs

AT&T: the globe turns slowly

I don't normally post personal grievances, but I'm making a one-time exception for a recent experience that demonstrates why AT&T (my former employer) will probably not make it in the new world. 

(Disclosure: I still have options in the company -- some with a strike price of $105 -- but I sold all my stock some time ago.)

No, I'm not posting about AT&T's notorious problems with iPhone coverage.  More alarmingly, I'm talking about its own internal billing systems, which by my count it has been working on for three decades. 

Here's the story.  One of my daughters has insurance coverage through COBRA, which means I make a hefty $500+ payment every month to get her the same coverage I get as a retired employee. (She aged out at 23 even though she's still a full-time student, but that's another story.) 

This morning she tried to fill a prescription for antibiotics at the local CVS pharmacy and was told that her coverage had "expired." That occasioned a call to Dad and several subsequent calls to CVS and the AT&T benefit department. It seems that AT&T handles COBRA coverage on a month-to-month basis.  I get that. 

But here's where its billing systems come into play.  If I pay the bill on the first of the month, it takes AT&T seven to ten days after they get my check to notify CVS that the coverage is good for another month.  That means that my daughter can't get a prescription filled (under her insurance) until the second or third week of every month. 

That seems incredible for a company that thinks of itself as a leader in data-networking. How hard can it be tie these systems together? Fandango seems to have no problem knitting theater box offices to the web.  Domino's Pizza will let you design and order a pie over the Internet. But AT&T can't link its accounts receivable with one of its biggest suppliers in real time? 

Apparently, it will be easier for my daughter to make sure she doesn't get sick at the beginning of the month.

Moving the ball on Social Media

Carl Bernstein, of "Deep Throat" fame, defined journalism as "the best available version of the truth." Allan Murray, deputy managing editor of the Wall Street Journal, defines a journalist as "someone who is paid to find the truth under a brand that people trust."  That expands the circle to include bloggers and social media, which makes sense to me. 

But judging by all the invitations I'm getting to seminars on "how to handle social media," I worry that PR people are obsessing about the mechanics of dealing with bloggers and such rather than on media relation's core task of telling the truth.

When I was in PR, my biggest problem wasn't telling the truth, it was figuring out what the truth is. Sometimes, the senior executives I worked with lied to my face (e.g., Dave Dorman, Leo Hindery). Often, even they didn't know the real truth. My job was often helping them find it in a complex organization with thousands of self-serving agendas. It helps if you share a working definition of the "truth." 

Philosophers have been debating the definition of "truth" for millennia, and I'm not going to resolve the issue in one posting. But this definition helped me: truth is what a company's stakeholders need to know to make intelligent, informed decisions. It's what employees need to know to do their jobs and flourish in their careers. What investors need to know to make intelligent investment decisions. What customers need to know to make informed purchasing decisions. And so forth. 

Social media add a new dynamic to the task, which I don't mean to minimize, but the goal is still the same. Tell the truth.

Tuning a Tin Ear

Someone is finally giving Goldman Sachs good advice. The Wall Street firm with a tin ear for public relations may be taking the first baby steps toward restoring its reputation.  (That may overstate things -- it's reputation on Main Street has never been very good. If it stood for anything, it was mindless devotion to the "greed is good" school of economics.) 

Ironically, the company has always required its senior executives to donate a portion of their  huge bonuses to charity, but to many of us, that smacked of John D. Rockefeller handing out dimes to street urchins.  

Now, Goldman appears to be re-tuning its tin ear. First, the company's CEO, Lloyd Blankfein, actually apologized for his firm's role in the financial crisis. "We participated in things that were clearly wrong and have reason to regret," he said. "We apologize."  That's orders of magnitude better than his last word on the subject, that "we're doing God's work." 

Even better, someone convinced Goldman to back up its apology by giving something back to the people it wronged. But instead of throwing money off the roof of their Manhattan headquarters, Goldman is focusing its reputation-building efforts at the intersection of society's needs and its own core competencies.  

Yesterday, Goldman launched a $500 million dollar program to provide training, mentoring and loans for small businesses.  Skeptics are already pointing out that $500 million is a drop in the bucket when compared to the $16 billion Goldman has set aside for bonuses. And today's Wall Street Journal already has a story expressing mild dismay that a small manufacturer in Tennessee hasn't been able to get any help (or information on the program) yet. 

But it's a step in the right direction. We should all stay tuned.  

  

   

Macho PR

Every now and then, senior executives let their testosterone get the better of them. (Both men and women secrete testosterone by the way. Women are actually even more sensitive to it than men.)  

Anyway, when the testosterone flows, people do dumb things. Exhibit A is AT&T's suit against Verizon over the latter's claim that it has broader high-speed cellular coverage.  See the map to the left appears in the company's commercials, which one observer termed "a bitch slap" at AT&T. 

As a senior executive at the old, "new AT&T," I have been in many meetings where one business unit head or another got so exasperated with a competitor's actions (or advertising claims) that he or she pounded the table, fixed the General Counsel with an icy stare and shouted "let's sue the bastards!"  

In almost every case, the General Counsel let the senior team vent and then quietly did nothing.  In fact, at the height of the long distance wars, we set up a private arbitration process supervised by the Federal Trade Commission to resolve complaints about our respective advertising campaigns without going to court.  

One big lesson we learned in the telecom wars is that, when competitors throw mud at each other, customers give up on both of them.  We also learned that it seldom pays to draw attention to a competitor's claims (as AT&T's suit managed to do). They might as well have made million dollar deposits in Verizon's ad budget. 

Now Verizon has added a new lesson in its response to AT&T's suit -- match your competitor's phony outrage with a big dose of sarcasm and ridicule.  

Verizon's 53-page response to AT&T's suit begins "AT&T did not file this lawsuit because Verizon's 'There's A Map For That' advertisements are untrue; AT&T sued because Verizon's ads are true and the truth hurts." 

The rest of the filing is just as brutal and written in eminently quotable language. The jury may still be out on the comparable breadth of the two companies' networks, but Verizon is the clear winner in the PR battle. 

As Saul Alinsky noted in Rules for Radicals, more than thirty years ago, ridicule is one of the most potent weapons in responding to an attack. It's almost impossible to contradict and it infuriates your opponent, which gets that testosterone flowing all over again.  

Land of Opportunity?

I have always thought of myself as living evidence that America is a land of opportunity.  I was born into poverty. I was not only the first member of my family to graduate from college, but from high school. And when I left grad school, my financial statement showed no real assets except for a student loan that was coming due.  

But now an op ed in the Washington Post by two researchers at the Brookings Institution suggests that my experience may be more of an exception than a general rule.  In "Five Myths About Our Land Of Opportunity," Isabel Sawhill and Ron Hawkins demonstrate that the reality of social and economic mobility in the U.S. is much more complex than the myths might suggest. 

For example, recent research demonstrates that people born into poverty in the Nordic countries and in the United Kingdom have a greater chance of forming a higher income family by the time they're adults than people born poor in the U.S. Furthermore, it is no longer certain that each generation does better than the last.  In the U.S. today, men in their 30s earn 12 percent less than their fathers did at the same age. 

Those are just two of examples of the myths Sawhill and Hawkins debunk.  But they are not just myth-busters.  They also suggest ways to bring the reality of American economic life into line with our ideals of equal opportunity. And perhaps surprisingly for two research fellows at a left-leaning think tank, it is less about income redistribution than about restoring the vitality of American families.  It's a "family values" proposition that every American can embrace. Thanks to my friend Morry Tanenbaum for drawing it to my attention.

Did You Know?

Sony played the video below at their annual meeting.

I recognize some of these facts because I've used them in various speeches to demonstrate how fast the world is changing.  

After all, when I started my career at AT&T, there were no cell phones, no personal computers, and no email. Fax machines were smelly devices off in a room with the photocopiers, which were about as big as Volkswagens but not nearly as reliable. 

As this video demonstrates, things are changing even faster today and more dramatically today.

via www.youtube.com

Brand Lobes

Here's a book that will definitely be on my wishlist for Christmas: Mindfield by science writer Lone Frank.  It purports to explain "how brain science is changing our world."  I don't know about that, but based on the excerpt in the Scientific American Mind blog, she certainly does a good job of explaining how brain science should influence marketing. 

Frank (what's the story behind her first name "Lone"?) retells the now familiar story of Baylor University's "Pepsi Challenge" fMRI studies, but her background as a neuroscientist allows her to explain its full significance.  Something I wish I had done better in my last two books.  "The medial prefrontal cortex," she explains, "is not just any old brain region."  It's where our very sense of identity resides.  If strong brands light it up, it's only because we identify with them, they fit into the picture we have of ourself. 

She didn't use the term, but I will -- what those fMRI scanners have discovered is our brand lobe.

 

Blame It On Rio

As anticipated, pundits on all sides of the political spectrum are interpreting Chicago's Olympic snub as evidence of continuing anti-Americanism.  

Even President Obama's popularity in the left-leaning quarters of the world, they sniff, couldn't rub off on his adopted home town.  John R. Miller, a former Republican pol and State Department ambassador-at-large opined in the New York Times that "public opinion, it seems, is driven less by current events or decisions than by a deep resentment of America's powerful status."  

The lesson he drew from all this? "Pay less attention to foreign opinion surveys and more to our own ideals and interests."  Unfortunately, I think Miller is wrong on both his analysis of Chicago's failure and the lessons he draws from it.  

As the Times' sports section makes clear, Chicago's loss has less to do with the quality of its proposal than with an intramural fracas within the International Olympic Committee itself.  The U.S. Olympic Committee has had a rocky relationship with other IOC members ever since the Salt Lake City Games were tainted by a bidding scandal.  And many were irritated by its recent efforts to undercut the IOC's biggest funding source by establishing its own Olympic TV network. Finally, the eventual winner, Rio de Janeiro, offered the opportunity to hold the Olympics in South America for the first time. Anti-Americanism may not have played much, if any, of a role.  Sometimes a cigar is just a cigar.  

But even assuming the problem was that "nobody likes us," as Miller's column headline suggested, the solution is not to adopt a "who cares" attitude.  That might have worked in the 19th century -- or even in the first two-thirds of the 20th -- but it won't fly in the 21st.  

Think of the biggest issues America faces -- nuclear proliferation, terrorism, pandemics, the economy, etc.  None of them can be addressed unilaterally. Even a country as powerful as the U.S. needs the cooperation of other countries in dealing with them.  And the latitude foreign leaders have to work with a U.S. president is a function the trust their own people have in us. One example: would Sarkozy and Brown have stood with George W. Bush to challenge Iran's hidden nuclear site? 

Darwinian Branding

There's an interesting discussion about Maslow's Hierarchy going on at Nigel Hollis' blog.  Hollis is chief global analyst for the Millard Brown research firm, and he always has something interesting to say about brands and social trends. 

In his latest post, he kicked off a discussion about the branding implications of Maslow's insight.  In short (and this doesn't do his argument justice), Hollis thinks the future of brands may lie in moving up Maslow's Hierarchy from physiological needs (e.g., food and sleep) to the more transcendent (e.g., self-actualization).  

As my contribution to the discussion, I pointed out that Maslow, who posited his theory in 1943, might have taken a different approach had he had the benefit of recent discoveries in evolutionary psychology.  It seems that the so-called "hierarchy of needs" is not as linear as it first appears. For example, it may be that the need to create shared meaning (which branding trades on) lies not in the upper levels of the hierarchy, but at its base.  It could be as basic and necessary as food and shelter.  

I suggested that every brand would benefit by finding the Darwinian roots of its promise -- i.e., how it contributes to survival, reproduction and kinship. Nigel generously expanded on the point by suggesting that, whatever needs a brand addresses, the key is to differentiate itself. "Higher order needs are simply an additional means of differentiation," he observes.   

CEOs Beware Failing Business Media

Portfolio magazine is history.  The Wall Street Journal is turning into a general interest newspaper. The New York Times business section shares space with the sports columns on most days (and is almost always less insightful). CNBC is business reporting with a roller derby attitude.  BusinessWeek, Fortune and Forbes could show up on ebay any day.

Should CEOs care?  Bill Holstein thinks so.

Holstein is a business writer who has covered the waterfront. His book, Managing the Media (Don't Let the Media Manage You), should be on every CEO's bedside table.  It's small enough to fit next to the clock radio and short enough for most titans of industry to read before Letterman gets to his musical guest.  

Holstein's astute observations on how the decline in business journalism will impact CEOs are not in the book.  For that, turn to the latest issue of Strategy + Business, published by Booz & Company.

According to Holstein, cost-cutting in business media means most CEOs will be dealing with younger, less knowledgeable reporters. Believe it or not, that's bad news -- very bad news. Inexperienced reporters are more easily manipulated by a company's competitors and third-party opponents.  (What large company doesn't have third-party opponents?)  

Furthermore, it means there are fewer credible platforms for telling a company's story.  And therefore, fewer places a CEO can find stories from which he or she can learn something. And finally, the decline in the quality of business media makes it less likely that the really serious policy questions will get much coverage -- like whether globalization is a net positive force in the world, what government constraints on business are legitimate, etc. 

Holstein also gives some generally solid advice on what a CEO can do differently in this environment.  I say "generally" because one piece of advice he quotes -- "seek out the smartest and most experiences journalists ... to do serious and in-depth reporting about (the) company" -- may be on the naive side. 

But who can argue with one of his central recommendations?  "It falls to PR professionals to spend more time explaining how a company fits into a broader social or economic trend -- articulating their company's stories in a way that the reporters can understand and appreciate."  

Ironically, Holstein himself would have argued with that advice three years ago when he was editor of Chief Executive magazine. In those days, he didn't think too much of PR people.  "PR people don't understand your business," he warned his readers in an unusual editorial rant.  "If they did, they wouldn't be PR people."

We all learn.  Must have been the lunch we shared at the Overseas Press Club when he was researching his book.  (He paid.)

Real Service Is Personal

If I were rewriting Secrets of the Marketing Masters, I would definitely include the chief marketing officers of nonprofits.  And at the top of my list would be Catrina Boisson who does marketing for the New Jersey Performing Arts Center.  (Full disclosure: I used to be on NJPAC's board.)   

All nonprofits face unusual challenges these days, including the weak economy, slim resources, and stiff competition from equally compelling good causes. In NJPAC's case, add proximity to the cultural offerings of Manhattan, which is a short train ride away, and the less-than-inviting-if-largely-undeserved reputation of its location in downtown Newark. 

Nevertheless, NJPAC recently completed one of its most successful seasons. One of the reasons -- unusually sophisticated Customer Relationship Management.  CRM is one of those acronyms that consultants like to throw around, but Boisson and her colleagues have turned it into the way they do business.

Thanks to a ticketing system that captures information such as the number of events a household attends, the number of tickets they buy, and how much they pay, Boisson's team was able to score all NJPAC patrons by their lifetime value.  That led to a unique customer loyalty program for the 4000 households that were most critical to the center's success.  Interestingly, not all of the most valuable households bought subscription tickets and not all were "members" or donors.  Some, in fact, had not been to the center for two seasons.

Boisson's team assigned a personal representative to each of the 4,000 households. The idea was to give them personalized end-to-end service for everything from ticket purchases, to parking, restaurant reservations, and gift-buying from the center shop. Armed with information such as the last performance their client attended, how long it had been since their last visit and their entertainment preferences, their personal representative could even call to let them know of upcoming shows.

The results?  Customer churn is down.  Attendance has stabilized. Ticket sales are up. And a whopping 97 percent of the households with personal representatives say they would recommend NJPAC to others?

Here's the kicker -- serving all 4,000 households took a total of four personal representatives. You can read more about NJPAC's customer loyalty program here. 

Jon Fine, who writes about the media for BusinessWeek, has discovered one of the Marketing Masters' secrets:  "intensive research that aims at wreathing a kind of grandiosity of purpose around everyday products to a degree that may seem somewhat silly to outsiders."  

Forgive me for assuming that Fine is one of the outsiders, but he has enough common sense to recognize a strategy that works.  He quotes the chief marketing officer of General Mills who poses the key question: "What is the bigger job this brand does in a consumer's life?"  But then he reduces it to the brand's "story line." 

"Marketing," he tells us, "is a business in which the best story that's most aggressively  deployed wins."   But that's only part of the secret.  The real trick is designing products that serve a higher purpose and then making sure that everything that follows is aligned with it.  That's something General Mills has mastered across its product line, from its iconic cereal brands to its yogurt and baked goods.  Maybe that's why its revenue is up 8 percent and its operating profit rose 4 percent.

Demon to Darling

Today’s Wall Street Journal (subscription required) marvels at Wal-Mart’s recent transformation “from Demon to Darling.”  It credits the company’s transformation to communications czar Leslie Dach, a former Democratic operative and executive at Edelman PR.  Dach deserves a lot of credit, but the roots of the company’s makeover is more than skin deep and it’s not the product of wordsmithing or sharp elbowed “truth squads.” 

Wal-Mart tried that early in Dach’s tenure when it began punching back at critics out of a political campaign-like “war room” and built its own front groups.  Nothing seemed to work.  In fact, some of the stealth campaigns backfired when the media tumbled to them. 

Ironically, it took a hurricane to help the company realize that actions spoke louder than words. When Wal-Mart was quicker than the government and many charitable organizations to get relief supplies to Hurricane Katrina’s victims along the Gulf Coast, CEO Lee Scott realized that it had the power to positively influence communities. 

He decided to rebuild the company’s reputation by taking credible action on two burning issues – sustainability and health care.  The retailer offered lower cost health insurance to its own employees, started selling generic drugs for $4, and opened in-store health clinics, which offer low-priced services from vaccinations to cholesterol screening.  It set aggressive targets for energy conservation and reduced waste, became the world’s largest buyer of organic cotton, sold more organic milk and produce than any other retailer, sold more green-friendly products like energy-saving fluorescent bulbs, and made selling local produce a priority. 

Jim Prevor, a long-time Wal-Mart observer, who publishes a newsletter called The Perishable Pundit, found the secret behind the company’s greening.  "Helping the environment is an area where Wal-Mart felt culturally comfortable,” he said. “It could maintain its core values of eliminating waste and driving costs down while reducing packaging and creating energy-efficient stores."  Plus, he might have added, it was good for the bottom line. 

Wal-Mart’s actions were not a cynical attempt to distract its critics.  They were the product of a new understanding of a company’s place in society.  The company isn’t perfect, but it deserves credit for its efforts.

The Hardwired Life

Lisa Belkin explores our fascination with the sexual wanderings of public officials in this week’s New York Times Sunday Magazine. 

My interest was piqued, not for the obvious voyeuristic reasons, but because she ties it all to evolution, with appropriate skepticism.   I’m studying the evolutionary basis of human behavior for a possible new book. Knowing what’s hard-wired might help people manage large organizations, get along with their bosses, figure out their customers, etc.

Belkin points out that scientific studies say women are more threatened by a man falling emotionally for another woman than if they simply bought sex from a prostitute.  Some scientists suggest that’s part of evolution. A man straying emotionally increases the likelihood that he will take his support and protection elsewhere.  

By the logic of evolution, Silda Spitzer should not have been as pissed off as Jenny Sanford.  All NY’s governor wanted was to pay for mindless sex with his socks on.  South Carolina’s governor wanted to dance under an Argentine moon with his new “soul mate.”

My tentative conclusion is that our hardwiring is constantly being reknit.  Evolution didn’t stop when we got off all fours.  For example, my wife asked her book club members what they would find more threatening – if their husband had sex with a prostitute or with a close friend.  

That particular question had something to do with the book they were discussing, but what’s really interesting to me were the responses.  They were nearly unanimous in saying sex with a prostitute would be more threatening.  That's not what the evolutionary scientists would have predicted.  It seems that concerns about AIDS and other sexually transmitted diseases trumped whatever primitive survival instincts were still knocking around in their unconscious. And hubby played a lesser role in their own concept of what it takes to survive.  

By the way, I posed the same question to my book club.  The men were almost unanimous in claiming they would be more threatened if their wife had sex with a close friend than with some nameless gigolo.  My guess is that modern contraceptives and DNA testing have diminished the evolutionary threat of investing in the care of a child who might be someone else’s.  The nature of the marriage relationship itself has evolved beyond a focus on popping out babies -- paradoxically, even more for men than women.

Newsy

In Rebuilding Brand America, I cited research showing that media tended to follow the political and social views of their target audience.  Conservatives don't watch Fox News because it's conservative; Roger Aisles made it conservative to attract conservative viewers.  Al Jazeera reports the news from an Arab perspective because that's the environment in which it was founded and operates.

To find what Carl Bernstein called the "best available version of the truth," readers and viewers need to seek out journalism told from multiple perspectives.  The Internet has made that easier than ever.  One site currently in beta, Newsy, analyzes and synthesizes news coverage of important global issues from multiple sources.  Its unique method of presenting how different media outlets around the world are covering a story provides context to help viewers understand complex global issues.

Iran's Youth Movement

Back in the 1970s, Daniel Patrick Moynihan wrote an article that helped explain why the Vietnam War protests represented a sea-change in American society.  The key, he said, was demography -- the Baby Boom generation, which was then of draft age and personally affected by conflict, had sufficient critical mass to dominate public discourse and change the course of history.  

However the Iranian election turns out, the country's supreme Ayatollah would be wise to dig up a copy of Moynihan's article. About 65 percent of Iran's population is under 30, well-educated, and eager to end the country's isolation from the West.  While the ayatollahs control the country's mainstream media, they have little sway over the media that its young people actually use -- blogs, instant messaging, Twitter, Facebook and the like.

That's how they organized the mass protests that evaporated President Ahmadinejad's lead in less than a month.  Taking a cue from the last U.S. presidential election, the poster in the photo above reads "Change for Iran."

Whether Ahmadinejad loses or wins, Iranian politics -- and society -- may be changing in ways no one expected.

PR Is Dead

  Even the Oxford English Dictionary has to bend to popular usage now and then.  On that basis, PR is not dying, it's dead. All that's left is to bury the body. 

Meanwhile, it's no wonder many people are beginning to ask, "what's that smell?"  

The popular definition of PR has two parts -- (1) keep people happy and (2) failing that, keep them oblivious.  Easy access to real-time information and the rise of the social media to spread it have made both tasks much more difficult, if not impossible.  

Of course, as someone who spent his entire 32-year career in public relations, I know that the popular definition of the function is a crude caricature.  But when push comes to shove -- which describes the current environment quite nicely -- you'd be surprised how quickly corporate bean counters adopt it as their own definition of the function. "Who needs an entire department dedicated to keeping people happy when we're bleeding cash from every pore?" they ask.  "Let's fold most of it into marketing or HR and dump the rest."  

So no matter how you define it, I fear that PR as a function is doomed.  But there is hope.  

One of the most significant trends I uncovered in researching Secrets of the Marketing Masters is counter-intuitive -- four leading companies have put PR people in charge of marketing:  Jon Iwata at IBM, Beth Comstock at GE, Mich Mathews at Microsoft and Robert Mead at Aetna.  

I'm convinced it isn't a coincidence.  All four companies are icons within their respective industries. They have discovered that they need to sell their values, as well as their value, to win the trust of customers and all the other stakeholders who influence their operations.  That requires more than endless pitching, word-smithing, political correctness or knee-jerk do-gooding.  It requires the peripheral vision to see where the public's needs and values intersect with the company's competencies and interests.  And the business savvy to capitalize on it. 

PR hasn't taken over marketing at those companies; nor has marketing subsumed PR.  They've created something new that doesn't have a formal name yet, though they all call it something like "marketing and communications."  In that sense, PR as a stand-alone function, fighting for a seat at the table, is dead.  It is being replaced by a management philosophy focused on building enduring relationships.  The best of the old PR function's leaders -- those who already broke free of PR's popular caricature -- are taking those seats.

Buckle Up

Jim Stewart writes the Wall Street Journal's "Common Sense" investing column.  It's not the first place you'd look for marketing tips, but the folks at Gap should read today's column, assuming they have a subscription. Stewart discusses the stock of a retailer headquartered in Kearney, Nebraska, of all places.  Called "Buckle," it serves the notoriously fickle teenage market through 390 stores in 40 states. 

Since competitors like Abercrombie, American Eagle and The Gap are sucking wind, Stewart was initially skeptical that Buckle would be a good investment.  So he drafted his college-age niece and her sorority sisters to check out its stores.  

Their verdict: "The salespeople] are always really attentive and friendly and they always end up bringing you so many other cute jeans and shirts to try on ... and then you end up buying more than you planned on." "I shop there to buy Silver jeans. They are the only brand that fits me, and last many years. I also like the type of clothing they have, which is different from other places like AE [American Eagle Outfitters], Hollister, A&F [Abercrombie & Fitch]. ... I feel the clothes they sell are definitely worth the price."

From feedback like that, Stewart deduced Buckle's marketing strategy: fit, selection, and service make "medium to better-priced merchandise" a good value.  That may be why, in a market roiled by quirky fashion trends and reeling from the Great Recession, Buckle has racked up 21 consecutive months of double-digit sales gains.  It's stock is up and it's planning to expand into the Northeast.  Gap, are you listening?

Recession Marketing

Today's New York Times has an interesting article about all the food brands that are using a "value" message to attract consumers during the Great Recession.  It offers the May 18 issue of People magazine as Exhibit A.  In that issue, Oscar Meyer wieners claim to be “deli fresh, but without the deli counter price.” Lean Cuisine claims to be "good for you and good for your wallet." Chips Ahoy cookies team with Capri Sun juice drinks to assure consumers they needn't "snackrifice."  Elsewhere, Frito-Lay is adding 20 percent more chips to selected bags of Chitoos, Fritos and Tostitos, without raising the price.  Del Monte shows how canned fruits and vegetables can "stretch" food budgets.  And French's is offering larger jars of mustard at lower prices. Stretching dollars is a timeless message, but I wonder if it doesn't put brands on the wrong battlefield.  "Value" messages have a way of devolving into "price" claims. 

Frog Design's Tim Leberecht suggests marketers should create a deeper meaning for their brands.  His argument in a nutshell: "As brands face an unprecedented level of competition, transparency, and consumer empowerment on the social web, 'meaning' is becoming the new powerful currency that connects brands with their brandholders in the 'share economy.' "Lots of buzzwords there, but I think what he means is that marketing leaders need to reconnect their brands with their original purpose, i.e. how they help improve people's lives.  He expands on the idea in a provocative slideshow, which is available at  SlideShare.  His blog, iPlot, expands on the topic.

Flattened Expectations

Many marketers have been flattened by the Great Recession.  The leaders are already considering what the post-Recession world will be like.  

Both The Economist and the New York Times suggest that consumers are giving up their spendthrift ways in what augurs a permanent change.  It will take years for consumers to rebuild their nest eggs.  Banks will be stingier with credit for big purchases. Sociologists also detect changes in values and behavior.  “Many people no longer seem consumed by the desire to consumer,” says The Economist.  “Instead, they are planning to live within their means, and there has been a backlash against bling.” 

The Times suggests that people are squirreling away more of their paychecks because they’re “fearful of job losses and anxious over housing and stock declines.” In addition, The Economist says a soon-to-be-released Boston Consulting Group survey indicates the economic crisis has intensified consumers’ distrust of Big Business. 

 Bummer. What’s a marketer to do?

Here are five ideas, drawn from Secrets of the Marketing Masters: 

1. Develop products that fulfill people’s needs and appeal to their higher values. 
2. Anticipate how forces outside people’s perspective will shape their needs and values. 
3. Create consistent meaning along the full product experience. 
4. Build enduring relationships, not a stream of transactions.  
5. Demonstrate that you share your customers’ cares, aspirations and values. 

Canned

 Pepsi kicked off 2009 by introducing a new logo for its flagship soft drink to what can only charitably be called mixed reviews.   The new design was supposed to suggest a smile, but most people saw it as a rip-off of the logo Obama used in his presidential campaign. 

Then the company redesigned the packaging for its Tropicana orange juice, putting it into a carton that looked so generic consumers couldn't find it in the dairy case.   That was such a disaster, the new design had to be pulled. 

Shades of New Coke. 

The folks at Coca-Cola, on the other hand, are introducing a series of specially-designed cans to celebrate summer. Maybe they learned something back in 1985 because the new designs manage to be arresting and contemporary, yet classic and "real Coke," at the same time. Watch them fly off your grocer's shelves. 

The difference? 

Understanding your brand values and knowing how to communicate them viscerally.

 

Mo' Magination

GE (does anyone call it "General Electric" anymore?) has put its imagination to work on another hot button issue.  Having demonstrated how its interests intersect nicely with the environment's ("Green is green"), it is now targeting the cost, quality and availability of healthcare in a campaign -- dubbed "healthymagination" -- being announced via ads and webcast today. 

In researching Secrets of the Marketing Masters, I was struck that CMOs at three of the largest companies -- GE, Microsoft and IBM -- had backgrounds in public relations. None of the three people involved thought it was a coincidence.  Large, global companies have discovered that they need to sell their values, as well as their value, to win the trust of customers and all the other stakeholders who influence their operations.  It's more than political correctness or knee-jerk do-gooding.  It's developing the peripheral vision to see where the public's needs and values intersect with those of the company.  And the business savvy to capitalize on it.

That's what GE did with "ecomagination" and what it proposes to do with "healhtymagination."  If it backs up its new effort with the same aggressive goals, hard metrics, and concrete budgets, it could further define GE as a company that is redefining the meaning of the corporation.  

Nice or necessary?

What stuff do you really need?  That's the question the Pew Research Center asked a bunch of Americans and here's how they answered this year compared to 2006. As you might expect in the middle of the Great Recession, many people think they can do without the dishwasher or the microwave if push comes to shove. But two findings are a little surprising.

First, I'm amazed that people seem to value their landline telephone more than their cell phone (though Pew only asked about landline phones this year).  Watch for those numbers to reverse over time, as AT&T and Verizon have already realized. 

Second, note that cable and satellite TV are considered less necessary, i.e., more of a luxury, than high-speed Internet service.  Watch that gap grow over time. Young people, in particular, are getting used to watching their favorite TV shows online. But marketers shouldn't cope by throwing TV-like ads online.  People aren't as forgiving about interruptions online as they are on broadcast media.  Online is all about communities. Marketers need to earn the permission to join online communities by offering something of value.

Higher Purpose

Seth Godin has one of the sharpest minds in marketing.  His blog is an endless source of insight and practical advice.  I often wonder how he can churn out such a steady stream of pointed observations, while simultaneously writing a best-seller nearly every year. Not to mention regularly speaking to enthusiastic audiences.  

But then not every posting can be a home run.  Recently, he opined on "business models," a subject that became topical when Internet pioneers realized they didn't have one, as in how to turn eyeballs into money (or in business lingo, "monetize their traffic).  Step one, Godin advises, is figure out "what compelling reason exists for people to give you money? (or votes or donations)."  The other steps he lists are equally focused on a transaction, whether fending off competitors or acquiring prospects. All of which is well and good, as far as it goes.

But my own research with marketing leaders suggests they think more broadly than maximizing transactions.  They focus on building relationships, and that requires a different kind of thinking.   P&G's Jim Stengel, for example, encourages marketers to find their "higher purpose" -- that is, how they can improve people's lives.  Sounds high-falutin', but he says it was the secret behind P&G's success in everything from Pampers diapers to Pringle's potato chips. And it will be the topic of a book he's writing, titled Packaged Good, based on world-wide research he's conducting.  Based on the preview he gave me in the research for own book, Secrets of the Marketing Masters, I can't wait to read it.  Stengel says he wants to start a movement. Count me in.

  

Interactive

One way Estee Lauder has decided to deal with the recession is by posting prices at the cosmetic counter, according to the Wall Street Journal (subscription required). Potential customers looking for "affordable luxuries" are apparently too intimidated to ask how much they would have to shell out for that tube of lipstick.  

Meanwhile, Forrester Research reports that advertisers are moving money by the cartload from "traditional" channels into interactive media.  Analyst Shar VanBoskirk says the switch "is due to marketers seeking lower cost, more accountable channels which are also widely used by their customers."  But before marketers pour money into interactive media, they would be wise to take a cue from Estee Lauder.  Even a busy cosmetic counter isn't really interactive until you take the time to figure out what's going on in a customer's mind when she's standing in front of it.