Being Remarkable · Customer Growth Strategy · Innovation · Leadership

What does it cost me to see the next card?

When it comes to innovation, many companies approach it as an all or nothing proposition.   Without a clear road to profitability, they do nothing.   If the cost to develop the new line of business seems particularly daunting, they table further discussion.  When clarity around key assumptions seems challenging, well it’s better to delay (or worse yet, form a Task Force that meets once a week but generates no forward progress).

Innovation rarely comes in a clear glidepath to prosperity.  Rather, it’s a journey where reaching the first hill provides more direction as to how to climb the next.

Once I worked in business development for a company whose CEO was passionate about innovation.  When we brought him a new idea he never asked to see a detailed multi-year project plan with Excel spreadsheets showing ROI under various scenarios.

If the idea fundamentally held promise, he asked one powerful question:  “What does it cost me to see the next card?”

Sometimes it was a bit of consumer research.  Sometimes tumbling some high level numbers.  Sometimes working with R&D to assess basic technical feasibility.  But what the CEO knew was that like certain card games, winning in new business was about a series of antes–multiple lower cost steps that helped decide whether to make the big bet.

So instead of endless speculation (and task force meetings!) about whether there is a market for a new concept, spend a little bit of money on basic consumer research to get some guidance.  Instead of months of study about whether there is ROI in being on Facebook or Twitter, get one of your junior marketing folks to spend a few minutes each day trying stuff to see what happens.

Usually the cost to see the next card is less than you think.

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Engagement · Fashion · Loyalty Marketing · Luxury · Retail

Members only? Or “Members Only” jacket?

A powerful component of customer engagement is providing scarce, exclusive and relevant experiences that reinforce your brand positioning.

“Members Only” or “By Invitation Only” marketing programs can be compelling messages that tell your customer that you truly appreciate their business.   For years leading luxury retailers such as Bergdorf Goodman and Barney’s have feted their best customers with private lunches, exclusive parties or access to fashion designer “meet and greets.”  More accessible retailers like J. Crew and Nordstrom use their loyalty programs to reward members with unique privileges such as free alterations, early notice of new merchandise arrivals or special shopping hours.  In all cases, the customer is granted access based upon some meaningful qualification, typically spending level or loyalty.

But another kind of marketing seems to be gaining momentum, and it’s best illustrated by the flash-sales sites such as GiltGroupe, HauteLook and BeyondTheRack.  These businesses are growing dramatically–RueLaLa recently reported that their sales doubled year over year–and one of their hooks is that their low prices are for “members only.”   So what does one have to do to qualify to be a member?  Having a legitimate e-mail address is just about all it takes.

In the early 1980’s “Members Only” jackets quickly became all the rage.  If you wanted the world to know how cool you were, a “Members Only” jacket gave you quick access to an exclusive club.  But it wasn’t long before just about everybody had one and what propelled the brand soon eviscerated it.

There is ample evidence that, for a while, you can get away with hooking customers with faux exclusivity.  But just because you can, doesn’t mean you should.  Deep levels of engagement and loyalty are not built on smoke and mirrors; rather they are built on forging relationships rooted in respect and trust.

Authenticity matters.

Does your marketing look more Members Only or more “Members Only” Jacket?

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Customer Growth Strategy · Innovation · Leadership

Wired to say “yes”

When it comes to making innovation stick, my experience is that there are two types of people: those who are wired to say “yes” to new ideas and those that are wired to say “no.”

Multiple times during my career I have been responsible for the growth agenda for a major company.  That typically included helping the CEO and senior team figure out how to accelerate growth in the existing lines of  business, as well as exploring ways to grow in new areas, be that through creating new concepts or acquisitions.    It’s pretty hard to be successful in this sort of role if you aren’t wired to say “yes.”

Ironically, I did not start out in business that way, but that’s another story and you can read about it here: http://sethgodin.typepad.com/seths_blog/2010/07/insubordinate-50th-anniverary-free-ebook.html

Among those that are wired to say “no” you have folks so consumed by fear that they will never take a chance and therefore, sadly, will never create anything new.  But there is power in the “no” sometimes.  The Doubting Thomas and the Devil’s Advocate often make ideas stronger through their skepticism.

But ultimately if a company is serious about generating meaningful sources of profitable new growth it must fundamentally be looking for reasons to say “yes” to a new idea, rather than lining up all the potential “no’s.”

I once worked for a CEO who said he wanted growth, but when it came down to it, every time a new idea was presented he found myriad reasons to shoot it down or tread water.   It took me a while–too long in fact–to realize he was wired to say “no.”   He wasn’t going to change, and neither was I.  It was time to move on.

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Being Remarkable · Customer Growth Strategy · Retail

Weapons of Massive Consumption

“And I am a weapon of massive consumption. It’s not my fault it’s how I’m programmed to function.” – Lily Allen

As a society it does seem that we have been programmed to spend, spend, spend.

Spending is American.

He who dies with the most toys wins.

We MUST have the next big thing, be it the latest iPhone or the newest big screen whatever. We need to keep up with the Jones’, the Kardashians or whomever catches the fancy of People magazine.

Often, it seems, we are what we own.

Now–in what I like to call the “Hangover Market”–many of us are waking up to the consequences of our profligate ways.  For many, it is causing a good hard look not only at our budgets, but our values.   Slowly but surely it seems that consumers are starting to realize they are NOT what they own, that substance can trump superficiality, that tangible value matters.

This change creates opportunity for brands that have a real story, that deliver remarkable value for consumers.  For brands that have been living on inertia (I’m looking at you Sears!) or clever marketing, I’m afraid your days may be numbered.

Which side will you be on?

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Being Remarkable · Customer Growth Strategy · Innovation · Winning on Experience

Surgical Shopping and the Hangover Market

Last holiday season I coined the term “surgical shopping” to describe the highly precise way many consumers were purchasing.  While the panic of late 2008 and early 2009 subsided, consumers were only gradually opening their wallets, focusing primarily on needs vs. wants and often trading down to brands that gave very clear bang for the buck.  By the time the numbers were in for the 4th quarter, it was clear that business was better, but not particularly good.

As an economic recovery struggles to gain traction, this “surgical shopping” behavior remains rampant, and in my opinion is not likely to change any time soon.

This behavior is evident on the lower end of the market, as private labels (or more accurately “private brands”) gain market share.  And it’s apparent on the higher end, as accessible luxury brands such as Coach, Nordstrom and J. Crew beat their more exclusive and expensive rivals.  Even at the absolute luxury tier, brands like Louis Vuitton, Gucci and Hermes outpace the competition as they emphasize their heritage of investment quality craftsmanship to win over flash in the pan, mostly pure image brands.

This is now the Hangover Market.  Waking from the intoxication of too much marketing and societal hooch, consumers are now shaking off the cobwebs and dry mouth of excessive, superficial spending.   And while it’s always difficult to predict future consumer behavior, many consumers are not going back to their old reckless spending habits.  For some, this will be out of economic necessity.  For others, this will be values based, as they become more discerning about the quantity of what they buy and the price they pay for certain items.

So what does this mean for business leaders and brand stewards?

Tangible, obvious value wins.

Craftsmanship wins.

Authentic wins.

Experience wins.

Connectedness wins.

Being remarkable wins.

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Customer Growth Strategy · Innovation · Leadership

Fail Better

“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”

–  Samuel Beckett

It seems for many businesses it’s really “feel better.”

Don’t rock the boat.  Don’t make waves.  Don’t call attention to yourself.  And certainly don’t put yourself in a position where you might be seen as making a mistake.

That’s comfortable.  That feels good.  Until it doesn’t any more.

Until you realize you no longer understand what your customers really want.  Until you realize the competition is pulling ahead.  Until  you realize you haven’t innovated on anything meaningful in years.  Until you realize you did not even try.

Leadership requires taking chances.  Leadership requires failing.   In fact, it requires failing faster than the other guy and learning and evolving.

Don’t be afraid to fail.  Fail better.

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Customer Growth Strategy · Customer Insight · Customer-centric

Wrong Turn at Lung Fish: Critical Decisions in Strategic Evolution

Twenty years ago the brilliant Chicago-based Steppenwolf Theater Company debuted Garry Marshall and Lowell Ganz’ play Wrong Turn at Lung Fish.  This farcical piece is an inquiry into the often harmful peculiarities of human behavior.  In a pivotal scene, one of the characters wonders whether mankind may have made a profound wrong turn along the Darwinian path of evolution.  The “wrong turn at lungfish” sets humanity on a path of despair, and ultimately begs the question whether our fate is inevitable, or could pain be averted with different decisions at critical junctures?

With the benefit of hindsight, it would appear that many businesses have made profoundly wrong turns in the evolution of their business models.  Sears failing to enter (or acquire into) the big box home improvement category.  Blockbuster neglecting to launch a serious alternative to RedBox and NetFlixCircuit City’s decision to exit appliances and abandon its high service sales model.   Any number of smaller retail formats laid to waste in Walmart’s wake.

These are retail examples, but virtually every industry has multiple stories of brands that were on top, but that failed to evolve to the changing customer and competitive environment.  Before long they found themselves dropping from leadership positions to also-rans or, in some cases, filing for bankruptcy and possibly disappearing altogether.  And indeed for some their fates may have been inevitable.

Yet, in the Sears, Blockbuster and Circuit City examples, it’s clear that those companies had the opportunity to know-and the resources to act–to change their course.  Through a lack of customer insight, faulty economic analysis and a fundamental misperception of risk, they somehow failed to see what was obvious to many others.

For these brands the worst case scenario has come true, or the day of reckoning is drawing ‘nigh.  Their fates are sealed.

Chances are, however, that you still have time to act, to develop deep customer insight, to understand your vulnerabilities to competitive innovation, to realize that you should be the one to cannibalize your cash cow.   It is easy?  No.  Is it more than a little scary sometimes?  Of course.

But I always think about the guy on the way to the bankruptcy hearing and what they wish they had done differently when they had the chance.  I bet what they are about to go through seems a lot harder and a lot scarier than what they could have gone through.   Don’t be that guy.

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