Creating meaning at scale

In case you haven’t noticed, there is a whole lot of bifurcation going on. And in many markets, the middle is all but collapsing.

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At one end are the Walmart’s, the Home Depot’s, the Amazon’s–the low price, vast assortment guys. Their pitch is easy to understand. We have just about everything you could possibly want, virtually anytime you want it, at the low, low price. Operationally this is incredibly difficult to scale. But from the customer’s perspective, it couldn’t be more simple to grasp. Dominance and value (defined by price) creates meaning.

At the other end of the spectrum are the brands built around market niches, product differentiation and the somewhat intangible “brand personality.” What defines meaningfulness here is built on deep customer insight, emotional connection and, more and more, the ability to treat different customers differently.

Historically, luxury brands thrived by merchandising exclusive products in spectacular settings delivered face-to-face by well-trained sales associates. To the extent companies could replicate this model as they added stores, they could continue to create meaning and deliver it at scale. Yet, as all things digital become increasingly important, the notion of what constitutes a meaningful one-to-one “luxury” relationship is being challenged.

The best specialty stores have succeeded by curating merchandise for a particular “lifestyle” and presenting it in a distinctive environment that reinforced a unique brand image. These companies created a business model that was simple to replicate and led to the ubiquity of many of these brands in affluent malls and upscale shopping areas of most major cities. Now, with product choice and availability exploding and new micro-niche brands emerging online, the concept of “specialty” is being redefined.

The hyper-growth, venture-backed “pure-play” brands that have launched over the past few years–think Gilt, Bonobos, Warby Parker–found it comparatively easy to scale at first. They exploited many of the advantages of a direct-to-consumer model and employed low-cost acquisition techniques to build an initial base of customers–what I like to call the obsessive core.

But it turns out that creating meaning at the scale that will lead to profitability isn’t so easy (or economically viable). Too many newer customers of these high-flying brands have started to equate meaning with discounts. Others, it turns out rather predictably, need the meaning that comes from a physical presence to derive theirs. Many see this hybrid-model as an exciting new area of growth. Others see it as clear evidence that most e-commerce only brands are finding it very difficult to deliver meaning at scale.

In an anything, anytime, anywhere, anyway world, it’s getting harder and harder to break through the clutter, to win the battle for share of attention, to create the all essential meaning that matters for customers.

If you seem to be stuck in a sea of sameness, selling average products to average people, relentlessly promoting just to stay even, it’s time to get off the bridge. The collapse is near.

If your customer is choosing you mostly on price, you had better be the low-cost provider. Otherwise you will lose the inevitable race to the bottom.

If you believe you have the ability to be meaningful to a well-defined set of customers who choose you over the competition for specific, sustainable reasons, good on you.

Just remember, as Bernadette reminds us, it’s not so easy to create meaning at scale, particularly if you need that scale to stay in business.

Confusing necessary with sufficient

We’re told we have to embrace all things omni-channel, yet Macy’s and Nordstrom, two of the acknowledged leaders in this arena, have yet to move the dial much on market share and profitability.

We’re told we have to digitally enable most dimensions of our business, yet Sears, which has been a pioneer in many aspects of e-commerce and digital innovation for more than a decade, looks to be in the midst of the world’s slowest liquidation sale.

The excellent and provocative work by L2 on companies “digital IQ” frequently ranks brands on the top end of the scale that are laggards on many key performance metrics.

Some will tell you that this proves that embracing a digital first strategy is over-rated or that investing heavily in omni-channel is a mistake.  They are mostly wrong.

The error comes in confusing necessary with sufficient.

There are few brands, especially in retail, that can ignore an aggressive move into frictionless commerce. The customer experience must become more unified.

More and more, mass marketing strategies are dying and it’s becoming extraordinarily difficult to break through the clutter. Letting go of one-size-fits-all strategies in favor of creating more personalized programs is becoming increasingly important.

And we can’t keep interrupting customers with largely irrelevant messages at the wrong time and out of context. Deeper customer insight, coupled with an understanding that smartphones and tablets allow the customer to be untethered and addressable at the moment of need, puts a premium on marketing that is localized.

We are entering an era where a high level of competence in the above three principles is necessary just to stay in the game, to be even marginally relevant, to have a crack at the customer’s consideration.

You can be leading edge on all of these dimensions and it’s still not enough.

What we offer the customer needs to be amplified–that is, it must be truly unique, intensely relevant and remarkable in the purest sense of the word. This is where Sears falls incredibly short and where Macy’s struggles to break out from the sea of sameness that characterizes much of the department store world.

Unfortunately too many companies vaguely embrace all things digital and start gulping down the omni-channel Kool-Aid while ignoring this last critical piece.

At the end of the day, if the dust ever settles, they’ll have spent a ton of time and money on merely keeping pace and not enough on the things that ultimately matter.

PurpleCow

A dim signal amidst the noise

We’ve all been taught that successful brands need a unique value proposition and that we must craft a distinctive positioning. And certainly most organizations spend a lot of time honing their business models and churning out sales programs and marketing campaigns designed to one-up the competition and compel the customer to choose us.

But what if hardly anyone is listening? What if only a fraction of our efforts command any sort of attention? What if despite all our strategizing, designing, testing and refining most of what we put out there evaporates in the ether like so much steam from our morning coffee?

Unfortunately, for most of us, there is no what if? There is only what is.

Consumer choices are expanding, sometimes literally exponentially. Competition is only getting greater. The information available to the average person is overwhelming. The distracted, multi-tasking consumer is the norm. We all face a tsunami of stuff.

And, more and more, much of what we do is only a dim signal amidst the noise.

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Many companies confronted with this emerging reality respond by throwing more and more out there to see what sticks. Batch, blast and hope email strategies. Greater promotions and discounts. New or revamped–but still largely undifferentiated–loyalty programs. Vague investments in “building the brand.”

Prepare to be disappointed.

If you want to boost your signal you’ll need to do a better job of customer selection. You’ll have to deploy a unified “one brand, many channels” customer experience. You’ll need to learn how to treat different customers differently.

And everything you do must be amplified by being more relevant and more remarkable than whatever commands your customer’s attention.

In the meantime I hope you enjoy your coffee.

Sorry, no carnitas

Due to a shortage of “responsibly raised” pork, many Chipotle restaurants have been out of carnitas for quite some time. In fact, at their location near me, they have a sign prominently displayed on the outside door that reads “sorry, no carnitas.”

Now in the scheme of world problems this is hardly a crisis. And because I wasn’t in fact coming for the carnitas (what can I say, I was in more of a barbacoa mood that day) this had no direct effect on me.

But I thought about all those times I’ve stood in long lines at various establishments, or waited interminably for a salesperson to free up, only to eventually learn that they didn’t have what I’d come for. Sorry, you’ll have to choose something else. Or maybe you just want to come back? We’re expecting a new shipment on Tuesday.

And we’ve all been to the restaurant that is out of the menu item you just ordered from the waiter. Yes, we ARE known for our short-ribs, but the quinoa salad IS excellent tonight.

How about those times we queue up at some government office and when we finally reach the clerk we’re told we were in the wrong line to begin with? I’m sorry sir, but the line YOU want is over there.

Or all those instances we navigate our way through multiple levels of automated customer service only to discover there is no selection for the problem we are trying to solve and it’s impossible to get to a live agent. Press 5 for just shoot me.

Customer experience leaders, the brands that matter and endure, anticipate problems and try to resolve issues upstream. They head off disappointment at the pass.

Of course, they could take the attitude of simply getting you through the door and in the queue and then try to sell you on a compromise once they’ve sucked you in. But the smart one’s build trust by treating you with respect, valuing your time, giving you options and enabling a better choice.

That doesn’t always result in making a sale today. But I’m willing to bet it results in more sales over the long haul.

On average, you’re out of business

Walk through most shopping malls today and much of what you’ll encounter looks pretty similar. Average products for average people. Undifferentiated sale banners screaming at us from storefront windows. Copy cat promotional signs atop virtually identical racks. A sea of sameness.

Go online and not much is different. Navigation and shopping carts across most websites feel quite familiar. Take the logo off the site and you’d be hard-pressed to identify the brand. In our quest to improve conversion and cart abandonment rates we most often choose what we know works–the “best in breed.”

Our physical and virtual mailboxes are chock-a-block with one-size-fits-all marketing messages employing tried and true, but mostly tired, techniques. And much of it touts discount, not relevance.

When we’re afraid to take risks, when we seek efficient rather than remarkable, when we mostly mimic known best practices, our tendency is to regress toward the mean. And slowly but surely, we shave off the interesting and polish the customer experience until it feels safe, but is often utterly boring.

When scarcity of choice and access existed–and brands were in control–it wasn’t terribly difficult to get away with being average.

But as the power continues to shift to the consumer, as she has an endless aisle of choices and access to almost anything imaginable 24/7, average is no longer safe. In fact, it’s precisely the opposite.

Imitation may be flattering, but in the battle for the share of attention that ultimately drives long-term success, well, not so much.

Confusing the facts with the story

Perhaps you believe that people are rational and that when faced with compelling data, logically presented, they will inevitably move toward your way of thinking.

Perhaps you think that facts are all that should matter, that facts magically rise above mere opinion or prevailing sentiment, that facts are morally superior to emotion.

Perhaps when your argument isn’t carrying the day, when your marketing isn’t getting the traction you want, your default is to pile on more data and shout it a bit louder–and, ideally, PowerPoint would be involved.

But as noted marketing strategist David Byrne reminds us

Facts are simple and facts are straight
Facts are lazy and facts are late
Facts all come with points of view
Facts don’t do what I want them to.

Of course it’s important to have facts, logic and integrity on our side.

But as long as we’re trying to persuade actual human beings, it’s the story that gets our attention, that trumps the details.

Ultimately, it’s the story that we remember, that evokes our feelings, that connects us and moves us toward action.

Everyone, anyone and the cluster of someones

It seems perfectly okay to hope that everyone and anyone would agree that compassion and fairness are essential values to espouse.

Just about everyone and anyone might even be a sensible target market for Amazon or Walmart.

For the rest of us, that way of thinking is certain to drive us into a ditch.

As the mass era gives way to a new era where brands must be more relevant and intensely personal–where share of attention is at a premium–there is no everyone anymore. When we’re grateful for anyone who buys our product or service that merely demonstrates desperation. not clarity of strategy and purpose.

It’s always been a good idea to identify and differentiate the key customer segments we intend to focus upon and to understand the uniqueness of our value proposition. Today, it’s not just sensible, it’s essential.

Clearly articulating “the cluster of someones” for whom we will be powerfully relevant and distinctly remarkable is the new table stakes.

Treating different customers differently must become our mantra.