I hope you will check out my new column for Colloquy, the leading source of publications, education and research for the loyalty industry. I am proud to serve as their luxury industry contributing editor.
Is Crate & Barrel a good name for an upscale home furnishings store?
Does it bother you that Pottery Barn has no pottery for sale and that their stores look nothing like a barn?
In my experience, one of the most frustrating experiences one can have in business is to go through a naming exercise for a new product or service.
I worked on developing a new specialty store concept several years ago and during the search for its name, our CEO came into my office virtually every day to either throw out some idea he came up with the night before (“what if we call it ‘Cool Stuff’?”) or to get my reaction to some existing store name that baffled him (“what’s up with Banana Republic?”).
Of course the issue is that so often we become obsessed with the name, rather than focusing our attention on building a brand. A name without a relevant, differentiated and compelling set of experiences, delivered consistently, over time, risks becoming just a meaningless description.
Now, experts in branding will tell you that there are qualities that make for better names–things like being unique, memorable, easy to pronounce, evocative, supportive of your positioning and the like. And, I certainly recommend that you incorporate this advice into your naming process. By now it’s clear that BlackBerry was a better choice than sticking with the product’s original more literal name PocketLink.
So go spend some time on finding a “good” name. But spend far more time and effort on creating and executing a great brand.
And if you need some inspiration, go do a Google search on your Apple.
Earlier this week I needed to call Apple support to get help with my iCloud account. I was bounced to three different customer service folks over an hour or so before I finally got to Craig (who ultimately did a great job of handling my issues).
Most of the hour plus that I was on the phone I was on hold and had to listen to loud, tinny and static-filled bad 90’s music (I know that’s redundant).
I was struck by how incongruous this all was. Apple stands for an easy customer experience, yet they could not manage to come close to being “one and done” in resolving my customer service issue. Apple is the paragon of innovation, yet their hold music sound quality was an abomination. Apple stands for hip and cool, yet their music offering was anything but.
Apple is hardly alone in delivering an incongruent brand experience. As the distinctions blur between channels and touch-points, far too many brands still fail to create a seamlessly integrated experience regardless of how the customer chooses to engage and shop.
In a world of ever-expanding choices–where, increasingly, the consumer holds most of the power–your brand is only as good as your weakest link.
Incongruous may make you superfluous.
Read anything about retail, attend a conference, get pitched by a consultant, evaluate a new software product, and chances are you hear “omni-channel” mentioned early and often.
So with geniuses like me throwing the term around ad nauseam, let’s get specific about what is probably wrong with your current strategy and what you need to do to go from meaningless words to remarkable action.
- Focusing on semantics rather than strategy. I’m often asked what’s the difference between “multi-channel” and “omni-channel” and my answer is typically: “Not much and who cares.” The point is having a strategy that reflects how customers shop today. The point is designing a value proposition that fights and wins in an increasingly blurred channel world. The point is delivering a compelling customer experience day in and day out. Call it whatever the hell you want. It’s what you do that matters.
- An appalling lack of customer insight. If you are blessed with a killer offering and virtually no competition, go straight to #3. But if you don’t work at Apple or Google, chances are you need an actionable customer segmentation. Chances are you need far better insight around consumer behavior. Chances are you need to be able to differentiate your target customers by needs and value. If you don’t have the data to treat different customers differently, you are at a huge disadvantage.
- Your mileage may vary. On one side, you have pundits screaming that if you aren’t “omni-channel” today you will be out of business tomorrow. On the other side, there are those that find that sentiment preposterous; just look at Amazon, they don’t have retail stores and they are doing fine. The truth is that every brand’s situation is different. An omni-channel strategy as an abstract concept is useless. An omni-channel strategy that reflects the reality of YOUR consumers, YOUR competition and YOUR current and future capabilities is all that matters. You aren’t Amazon. You aren’t Nordstrom. You aren’t Macy’s. Take what you like from some of the leaders and leave the rest.
- Screwed up metrics. Ask a retailer about their “same store sales” and “gross margin rates” and “sales per square foot” and the growth in their brick and mortar stores compared with e-commerce sales and you are inundated with data and commentary. Ask them about growth in key customer segments, segment profitability, traffic conversion or retention rates, cross-channel browsing behavior and the like, and you are probably met with silence or meaningless babble. What gets measured gets done. But if you are focused on the wrong data you are going to do the wrong things.
- A dumb organization structure with dopey incentives. Most of the time I was at Neiman Marcus our then CEO would get on analyst calls and talk about our “compelling multi-channel strategy.” We included similar words in our annual reports and investor presentations. In reality, we were organized by channel, had no meaningful truly customer-centric efforts and all the top executives had incentives to maximize their own fiefdoms. Silos belong on farms. If are serious about “omni-channel’ you need to set a structure that reflects customers first, and channels and/or products, second. You need to pay your people on those things that truly advance key customer segment growth, engagement, loyalty and advocacy over the long-term.
- Confusing the vehicle with the destination. Yes, the web can be a sales channel, but for most retailers it is mostly a tool. Having a social media or mobile strategy is critical, but only as a means to your customer growth strategy ends. If you don’t know where you are going, any road will get you there.
- Failure to ship. The era of months of intensive market planning, controlled testing and the big reveal are over. In case you haven’t noticed, things move a lot faster today, communication channels are increasingly blurred, and customer desires are far less predictable. Trial and error works far better than spectacular planning and flawless execution. Better to ship often and fix it in the mix.
- Neglecting relevance. Retailers are great at talking to themselves. And passing to where the receiver used to be. And wallowing in me-too-ism. And going big and easy, rather than small and challenging. Treat different customers differently. Make it relevant. Extra points for remarkable.
I like Penney’s new marketing campaign.
The TV ads featuring Ellen DeGeneres are captivating and funny–and seemingly everywhere. The print campaign does a solid job of re-branding JCP as fresh and contemporary, the monthly theme is carried through each piece beautifully and the featured items look great and seem well-priced. My only criticism is that the ads look a bit too much like Target (gee, I wonder how THAT happened).
But here’s the thing. Over the long-term the work of marketing is to differentiate the brand, create strong preference and reinforce loyalty/advocacy. Penney’s won’t win without doing a much better job of attracting and retaining a new generation of consumers and increasing the trip frequency, average purchase size and/or retention rate of the current base.
In the short-term, the work of marketing is to get the target customers’ butts in the store (or drive them to the website). I suspect the new campaign IS elevating interest in JCP and starting to drive incremental traffic. Yet while Penney’s has improved their presentation markedly, the stark reality is that both the product assortments and overall experience are still pretty much the same–i.e. unremarkable in most instances. And unlike Apple and Target, Penney’s store fleet is a grab bag of some very good locations with a whole bunch of mediocre and lousy ones.
We all know that when the invitation is better than the party, we aren’t very likely to get fooled the next time around.
When was the last time you went to Macy’s or Bed, Bath & Beyond or any furniture store and paid full-price? Did you actually pay for shipping on any e-commerce purchases during the holiday?
At most retailers, regular price is the sucker price. You only pay it out of desperation or ignorance.
Walk through any mall and you are inundated with sales signs, with coupons and with triple rewards points. Buy one sports coat at regular price and get a second one at half-off? Yes, please.
One retailer–I’m looking at you Gap–even put their whole store on sales for several hours during the run up to Christmas.
It makes perfect sense that product gets marked down as the season draws to a close. It makes sense that your best customers get rewarded for concentrating their share of wallet with you. And faced with an intensely competitive market, one must certainly be mindful of maintaining market share.
But at what price comes the glory of same-store sales growth?
For years we have been teaching consumers that there is no integrity in our pricing. We have become a “discount nation”, bribing the promiscuous shopper to choose us over the competition while needlessly giving away margin to potentially loyal and profitable customers.
I don’t believe for a second that we are going to see an end to rampant discounting and blanket promotions any time soon. After all, it was just a few weeks ago that Target announced a new credit card that offers a straight 5% off all purchases.
I do believe that companies that deliver truly compelling value propositions and experiences based on a deep understanding of customers needs, wants and long-term profitability will win over the long-term. I do believe that the best brands–think Apple, Nordstrom and Coach–know how to drive their business at regular price.
Those brands do the work of customer-centricity.
Those other brands? We know what you are. All we are doing is negotiating.