Finding Consumer Insights That Lead to Strong Brands

Great brands and compelling marketing campaigns are created when marketers uncover "insights" that reveal consumers’ true needs in a product category.  

Marketers may stumble onto an insight (most do) or find one after deep observation of consumer behaviors and motivating beliefs.  Once found, the path to building a unique and competitive brand is much clearer. 

Please take a moment and watch my short video on the differences between simple observation and uncovering powerful consumer insights:

 

5 Steps to Finding Growth Opportunities

Most companies participate in mature categories,from a growth standpoint. Fighting the category trend to grow the brand is difficult in a mature category. Uncovering growth opportunities will be done so in very different ways than opportunities for brands in a growth category.  

The careful balance and application of five marketing tools can provide success for a business. The visual below applies to both B2B or B2C corporations and highlights the five steps companies must consider for planning purposes:

The Aging Consumer

Marketers and advertisers use the term “65-plus” to describe the advertising target of the older population in the U.S.  Every other demo is in ten year increments 20-30, 30-40, etc. ending with 65-plus as a sort of a wheelchair-bound non-user group.   65 years old – Really?   The face of today’s consumer may look slightly different than we marketers imagine.

As the U.S. Census comparison illustration to the left suggests(Population by Age and Sex: 2000 and 2010), the bulge, driven by the Baby Boomers is moving to older age.  Examine the slope of the 2010 curve as it climbs in years, versus the 2000 curve.  It suggests that the width of the bulge may stay almost as wide as it moves up through older ages, exaggerating the comparison closer to the top of the tower. 

Do Brands Suffer in a Recession?

Actually, no.  Recessions rarely have a direct impact on the strength of a brand. 

A brand’s strength is measured in its ability to maintain its identity in the eye of the consumer and how uniquely it delivers on its promise.  That is different than how much product gets sold. Certainly a business can suffer from slower sales due to consumers choosing not to purchase as many things, or even to purchase only at the lowest price, but a brand is measured in its strength of persuasion and loyalty.

Brands suffer when what they stand for is lost – usually to a competitor who is doing a better job of delivering on the promise. 

Here is an example.  A recent article on the beer industry shows that Coors Light beer is vying to take the #1 spot of beer sales away from Bud Light, which has seen its share decline for a couple of years.  While the market is declining –3% per year, Coors Light is seeing sales increases.  Bud Light is a well loved brand but has become somewhat interchangeable with others and has lost some its bond with its user.  Beer are measured by their consumer as to taste and how they fit in with lifestyle and friendships.  Coors Light has turned up the innovation (labels show when they are icy cold), and continued to hammer home with strong ad campaigns.

But these gains and losses in this category have little to do with a recession. A recession may cause consumers to act differently, usually by, more closely,  watching what they buy.  But the brand that stays relevant and tied to the consumer, in the end, will win.

Should You Outsource Your Marketing?

Outsourcing, for the small and mid-sized company, can be a very effective strategy to gain access to skills, and services at a fraction of the cost of hiring employees.  There is an adage that a company should outsource everything that is not a core competency.  For years, firms have taken this on in the areas of payroll, IT, distribution, and logistics.  Certain functions, such as sales, marketing, R&D, etc. have been held close within the organization as core competencies due their strategic ability to grow the firm and their intimate knowledge of the growth levers of the business. 

The time to reassess this practice may be here.  One of the largest components of any firm’s costs are in the compensation of its staff.  Even a small department of 2 – 4 people can cost the company hundreds of thousands of dollars in compensation alone, not to mention computers, phone and rented space.  This expense is also not flexible when topline sales may be temporarily weaker than normal.  What does outsourcing deliver?

1. Access to top talent
2. Latest thinking in the field
3. Methods and processes built and tested over time in other organizations
4. Ability to contract and pay only for services needed, rendered 

What About Marketing?

Marketing’s role in the organization is to first set the correct marketing strategy for growth.  Marketing will then take on any of a number of functions in the marketing mix (see insert) depending on the needs of the organization.  Marketers should understand and build the consumer insights that feed communication, and product development.  Marketing’ will also develop and execute the outbound functions of the communication with the customer.  This includes public relations, advertising, social media, market research, promotions, and provide customer and consumer direction for the company’s innovation pipeline.  Marketing staff typically handles even the tactical customer presentations, logos and letterhead, trade shows etc. Smaller organizations do not need all of these areas covered at any one time.

There is a small, but growing, field of contractors that specialize in the area of marketing and can assist management in setting strategy and developing programs typically handled by an internal marketing department.  They will develop these programs or work with outside agencies ensuring that each resource is delivering against the plan.  

Many small firms go directly to a PR, ad, or web design agency to fill the role of a marketing department.  There are drawbacks to this approach.  First, agencies tend to specialize in an area of execution.  This area may or may not align with the strategic needs of the company.  PR agencies will offer great PR programs, advertising agencies will look to advertise, web and social media will provide social media solutions.  Second, agencies still have a vested interest in you spending as much as your budget allows, where a marketer should only be interested in effective spend, flexibility and growing the bottom line of the company.

Many smaller- to medium-sized businesses must keep a keen eye on the day-to-day managing of their business.  Marketing can become a distraction taking up valuable time and energy away from the operational side of the business.  For many firms, outsourcing can be a very cost effective way to gain access to top notch skills to get the results needed.  

The Decline of the Netbook–Selling Less for Less

There was an interesting  article in the New York Times about Netbooks.    (Thanks for sharing, Larry)
Netbooks Lose Status as Tablets Like the iPad Rise 

Remember seeing that little netbook in the big box electronic store? It is the $250 laptop alternative that lets you surf the web and do some cloud computing without the size, and weight of a standard notebook (laptop) computer.  Of course the price was also great with the potential of opening up many more users to computing (think kids at school, or less affluent parts of the world, etc.).
 
This device, when introduced, really put a scare into the notebook industry with the result being a drastic reduction in the price of a notebook computer from an average of over $1,000 a couple of years ago to less than $500 today.

The manufacturers of the first netbooks picked up one very strong consumer insight.  Consumers want portable technology that is lightweight and accomplishes the basics pretty well.  But as the NY Times article states, sales slipped this past holiday by –38% versus last year.  So what happened?  The answer to this question can be found by looking at  consumer insight, marketing and competing technology. 

For consumers, electronics purchasing decisions are based on a clear priority.  First comes “cool and wow” (lots of features, applications and great product design).  Only after that does the price factor become important.   Certainly you hit the jackpot when you offer “cool and wow” for cheaper, but only after the coolness has been widely accepted.  For a while, the netbook was legitimately cool.  But it was soon seen a product of tradeoffs – sort of a “less for less”.  That, unfortunately, fights the consumer priority order and is is not workable in the fast evolving world of computing. 

From a marketing standpoint, there was no interest in dialing up any cool features with advertising buzz around these devices either.  The dilemma for the manufacturer is obvious - if you market this product to anyone, you are taking a potential notebook purchaser and downgrading them to a netbook.   Can anyone think of any cool applications (apps) for these machines?  Personally, I think that it would not have been hard to tout potential unlimited access to all your business software, gaming, file sharing, Skyping, etc on the net.  Isn’t that what an iPad is anyway? Just seemed like the industry had no interest.  

The final nail in the netbook strategy came from competing technology.  Ebooks, and Ipads and the beginning of the so called “slate” screen interface have made the netbook (and soon laptops) out of step.  These newer interfaces will soon replace the “flip open” screen technology in the years to come. And the consumer will be asked to pay top dollar for these newer interfaces.   If you understand the consumer priority of purchase decisions (wow first, price second), consumers will be happy to pay.

Writing Like You’re Smarter Than a 5th Grader

I recently read a new training procedure that was so jargon-filled and convoluted as to be completely unreadable.  I actually could not believe that the person writing it knew, himself, what it meant. 

Part of the beauty of good writing is simplicity. Some of the best journals -  The New York Times, Harvard Business Review and The Economist, for example -  write about very complicated subjects, yet simplify the content in order that you understand the true issues. 

Here are 2 statements that could be used to describe your company’s service:  

• We build CRM client interfaces for receiving verticals that contract our web-based ship-to platforms.  

Instead, try this:

• We write software that helps small companies deliver products that actually arrive on time so the owners can sleep at night.

Early in my marketing career, I learned that when writing for package or advertising, never use words that could not be understood by a 5th grader. We would agonize over wording to simplify everything to make it clear and easy to understand. I soon found that this had nothing to do with the education level of the American consumer, as much as it had to do with the fact that complicated wording is very often misunderstood and therefore loses all impact of its message.   This is not good in advertising.  This is also not good in training manuals. 

Complicated writing does not sound smart.  It is actually the symptom of cluttered thinking and/or a disregard for the person who must read it. 

So, even if you are smarter than a 5th grader, don’t write like you are.

A Simple Way to Produce Breakthrough Ideas

The human brain has the unique ability to produce creative ideas.  It creates a new idea by taking 2 or more existing ideas and seeing a new “relationship” between them that applies to an opportunity or problem it is seeking to solve.  A solution, idea, path forward, etc. is handed over to you (sometimes when you least expect it).  This is a very simple procedure for the brain to accomplish and it does this work on its own. 
New ideas are important in many, if not all disciplines, but particularly in business.   Any one of these creative ideas, once nurtured, can move you in new directions.  It would be nice to know how we can direct this activity of the brain and call on it on a consistent basis.  There is a technique.      
James Webb Young wrote the classic book “A Technique for Producing Ideas” in 1965. I am not trying to plug this book in any way, except to say, I have used it’s advice many times.  Mr. Young was an early pioneer in the advertising industry and started teaching this technique to college students at the University of Chicago in 1939. It would take you about an hour to read and it is worth every minute and every bit of its $6.00 price on Amazon.
There is a 5 step process to creating ideas, which must occur in order. 
Stage 1.  Gathering raw material – this is an important part.  You must develop a curious mind that grabs bits of information across subjects – some that are all about your business or project and others that are far afield as history art, science, etc. Without this stuff, there is not enough raw material with which to work. 
Stage 2 – Chew on the dimensions and facts regarding the solution or idea you seek.  Poke, prod, go deep where you have questions, hold it up in new lights.  Work this part to exhaustion, don’t give up.
Stage 3 – Let it all go – push away, go to the movies, a concert, or to sleep.  
Stage 4 – The idea will appear – Your mind does this part on its own; presenting you with the light bulb moment, an idea..
Stage 5 – Expand on this new idea – work it in the real world, don’t hold it too close, let others breathe life into it.  
All of this suggests that a life rich in curious wonder of the interesting things happening around you is the most useful material to creating breakthrough ideas.  The power of just one brilliant idea may just change your world.