Revolution Not Required
Articles April 8, 2024 Chuck Wall “You say you want a revolution Well, you know We all want to change the world.” —The Beatles In 1968 The Beatles challenged a generation with their rallying cry to become revolutionaries. And change it, we did. The best and brightest created breakthrough technologies to extend human life, increased mobility and connected every corner of the planet. Some might question whether this progress is all it’s cracked up to be. Technology hasn’t eliminated war, hunger, corruption, and many other kinds of human suffering. But, even if you wanted to escape back to the good old days, you cannot. And for those of us who selected the path of business for careers, we must manage—and grow–in this perfect storm of disruption. The velocity of business change can be mind-numbing as we try to keep our feet firmly planted while effectively competing in a global marketplace. During the forty plus year period since “Revolution” was released, we have also witnessed the rise of the management consulting and business school guru world. These experts have also told us all that we must adopt revolutionary strategies and tactics to succeed and profitably grow. From Total Quality Management to Six Sigma, the best and brightest our B-schools have churned out assured us that if we radically shifted our thinking, our leadership styles and adopted revolutionary best practices to wring every drop of cost out of our companies that we would cut our way to success. Now, the gurus continue to build a Tower of Business Babble filled with acronyms, metaphors, and black boxes to create new language and layers of complexity around the subject of how to grow a business. (Mainly they seem to have grown their own.) How many times have you asked yourself, “they don’t really believe all that BS do they?” After 38 years of day-to-day marketplace experience, I now believe we have been wrong about a lot of this, particularly the idea that we need to launch a revolution to win. What are my qualifications to differ with so many esteemed experts? I am neither a guru nor an academic. I am a businessman who has had the privilege of launching six companies of my own, while advising countless other entrepreneurs along the way. In my career, my clients have been companies of every size, from start-ups to Fortune 500’s. I have also studied and practiced Blue Ocean Strategy since it’s early appearance in the late 1990s. Most importantly, I have interviewed well thousands of real-world customers across twenty plus industries to understand what makes them tick. What do they think is missing in current products, services, and experiences? Plenty. Is there room for improvement? Absolutely. Based upon my collective experience, I strongly believe that starting a revolution is not required to succeed in today’s business climate. Revolutions are bloody, risky and can be disruptive to the enterprise. There is a much better way. Let me tell you about it. The battle between what is and what if Your most important job is to create and multiply customers every day. This cannot be subbed out to the marketing department or an ad agency. Profitable growth, one customer at a time, must be championed from the top. So, why is growth so hard to come by? Every company really operates in parallel universes: the “what is company” and the “what if company”. Running the “what is” side has never been more complicated and stressful given the market conditions today. The global economy now affects virtually every area of business. All of us realize we put our enterprises at tremendous peril if we ignore this truth. Inevitably, the “what is” company drains our resources, intellectual capacity and saps our strength. Truth is, many of us are just plain tired of “what is.” On the other hand, the “what if” company represents the future state of the enterprise. This is the proverbial “Blue Ocean”, where innovation thrives creating new products, services and experiences that create measurable market power and boatloads of profit. The “what if” company is energizing, fun and a great place to work. It is also rare. “What if” gets short shrift because most of our efforts are marshaled against “what is”. The result is that the possibilities of a brighter future are left to chance and the vagaries of the market. Or if you have stuck your toe into innovation, you were not prepared for how to balance the what is and what if worlds. This battle between what is and what if goes on in every organization. In his book, “The Game Changer”, A.G. Lafley, former CEO of Procter, and Gamble, clearly described the situation he inherited in 2000 when he took over the company. “Stretch, innovation and speed were the orders of the day. Stretch for higher goals. Innovate in all we do. Go fast. Take more risk. All of these are good things in and among themselves. In hindsight, though, we were trying to change too much, too fast. Many of our businesses were in no shape to stretch. Too many new products, businesses and organization initiatives were being pushed into the market before they were ready. Execution suffered, as we too often fired before aiming. We had to come to grips with reality, to see things as they were, not as we wanted them to be.” There was good reason for P&G’s headfirst plunge into innovation: they must produce the equivalent of a new Fortune 500 company every year…just to stay even. Think you’ve got problems now? Just imagine if you had to grow at a rate of $4 billion a year. But just because you are big, doesn’t necessarily mean you will succeed. Lafley teaches us an invaluable lesson when he explains that job #1 was putting the customer at the center of “everything we do”. In a Harris study of over 300 companies, 95% said innovation is “extremely or
Advertising Still Works. Consistent Advertising Still Works Better.
Articles April 8, 2024 Chuck Wall A fair amount of my career has been spent practicing the dark arts of advertising. These are the supernatural laws of persuasion designed a very long time ago by some suave and mysterious wizard in a cave with a name like Merlin McCann, Gandalf Olgivy or Dumbledore Draper. Legend has it that with the right mixture of a few secret ingredients, new customers will pop out of thin air and will live happily ever after. Back in the 1990’s it became more fashionable to describe advertising as marketing because it sounded more sophisticated. Of course, most creative types weren’t particularly well schooled in the other functions of marketing except making ads. Academics more eagerly embraced it and fit it into frameworks, strategies and methodologies. As we entered the 21st century, marketing as a term of art became passé and we became brand masters. The word brand was sticky, meaning it stuck to everything like gum to a shoe. I still cringe whenever I hear politicians using the word to attack their opponents as in “The Republican brand is tarnished.” Now, we live in the digital age. With the infusion of technology and the Internet, the old Draper magic has definitely evolved into something new. Or has it? The secret to growing your business (or brand if you prefer), is to connect with the potential customer at a deeper, emotional level. And the easiest way to do that is for them to like you. (Now you can fire your agency if you like because that’s the simple truth.) In dealing with many advertisers over the years, there is usually one overriding area of conflict when attempting to sell a client on a new, creative campaign. Generally the client will say, “Now I’m not an advertising expert but,” and then they start to lay out a rational set of factoids they believe the customer only needs to hear a few times to win them over forever. The conflict arises when the ad-marketing-brand-digital guy tries to explain another simple truth: people are practical creatures, but most often buy out of emotion. I know of what I speak, because I have had many of those client conversations and talked to thousands of the Edwards of the world. I have worked with insurance clients for many years. In one case, I was testing a variety of insurance television commercials with customers throughout the country. My research director had added a new spot on the test reel from Geico that featured the now famous talking gecko. Geico’s agency, The Martin Agency, had created the little animated character out of necessity; there was a Screen Actors Guild strike. It was supposed to name associate Geico and gecko. Martin Agency creative wizard Steve Bassett found that many customers mispronounced the brand name as “gecko.” The agency and the client hoped they would strike gold with visual/verbal mnemonic that would be a lot less expensive than paying an actor. As I saw it, the problem was, no one in my focus groups even knew the word gecko so the connection was lost on them. I only found two people out of forty who knew the word gecko. They thought the character was as one person put it “a limey lizard.” My report to my client (who competed against Geico) simply said that the gecko was no threat and that I hoped the agency would keep using “the little green character no one even understand.” Big mistake. What I had missed in the deeply conservative category of insurance was a break-out moment. Martin’s client got it while the entire industry, including my own, didn’t. The agency rejected what I like to call “ FF and L” (facts, figures and legacy) advertising usually preferred by financial services advertisers. Think of the typical “eighty billion strong and serving drivers since 1932” message. Geico was not focused on the sort term. Since Warren Buffet had bought the remaining shares in 1995 (Berkshire-Hathaway had owned a minority interest since 1975), the company was playing for keeps. Auto insurance is a very low interest category. People are mandated to buy by the state and their bank if they owe money on their car. The only time you see any value to paying your monthly premium check if an inherently negative experience: an accident or loss of some type. They see auto insurance carriers as commodities with little difference between the brands. They often worry that switching to another carrier may cause them to lose valuable discounts. In the end, there has traditionally been a very low emotional connection to insurance companies. Geico decided to compete on one benefit only – low price. But it is hard to win people’s hearts with only a rational benefit like savings. To win at this game they decided it was critical to entertain their prospects while always embedding a simple price message of saving 15% in 15 minutes. That basic tagline has been used continuously since 1994 in one way or another. The emotional connection Geico has made with their customers has worked. The combined campaigns have increased Geico’s market share from in the late 1990’s 2% to 14% today. They have become the third largest auto insurer in the country. Brands reach a cult like status when their advertising enters the popular culture. A few years ago, on a very delayed flight out of Atlanta, my pilot tried to make us smile when he announced, “Folks, we’re now 20th in line for takeoff. But I have some good news. I just saved a bunch of money on my car insurance by switching to GEICO!” Another widely quoted line was “So easy a caveman could do it”. Geico has stuck with this winning formula. Often called “The Ultimate Client”, every ad agency is envious of the budget and the freedom Martin has been given to stay with a direction long enough to see dramatic results. Over the past twenty
Breaking the Rules Can Be Very Profitable
Newsletters April 8, 2024 Chuck Wall Imagine a business in the where customers pay for the privilege of having someone purposely turn his or her back to you. That only begins to describe the problems that symphonies around the world have faced over the past thirty years. Classical music has been a victim of a generational split around the world. As other music genres from rock to rap have captivated younger fans, the allure of the symphony has faded. To put it bluntly: what do you do when your audience is gradually dying off? In Europe, where the symphony was born, it’s been a tough sell to entice younger people to purchase a ticket. Look at the obstacles. If you were to consider going, you must pick a performance from obscurely named symphonies from composers deceased for hundreds of years. Even if you know of a particular symphony you would like to attend, there’s little chance that your local symphony will be playing it when you would like to go, as they often develop their programs a year or more in advance. In the event you decide to attend a performance a series of obstacles face you. You’ll need to proper attire because that’s the tradition. That can mean renting a gown or a tuxedo. Since most European halls are in the center of the city, you will need to hire a car because parking is very difficult. Once there, you will have little familiarity with the music, the composer, the conductor, or any of the members of the symphony. This situation is in sharp contrast to attending a rock concert where you probably know intimate details about every member of the band. At intermission, you will often be surrounded by much older ‘symphony snobs’ who speak in hushed tones about various details of the performance. Worst of all, the overall performance is usually long and boring. This is not a winning formula; going to the symphony is expensive, unfamiliar, and boring. As the entire classical music industry saw despair, one man saw an opportunity. Dutch classical violinist Andre Rieu has built what he calls his Johann Strauss Orchestra into a multi-million-dollar global empire including sold out stadium performances, CD’s, videos, and television. Rieu is so popular that he is ranked as the number one male touring artist in the world of all music genres. The odds are that you have never heard of him. In fact, his own staff refers to him as “the most popular unknown artist in the world.” Instead of rock star, Rieu is a waltz star. With a warm smile, magnetic stage presence and flowing long hair he has disrupted an entire industry by letting people break all the rules of the symphony. He performs at outdoor stadiums to sellout crowds up to 40,000 per concert. That’s a long way from a typical symphony hall that might seat a maximum of 2,000. Instead of the boring symphony atmosphere, Rieu has created a spectacle full of thousands of falling balloons and beautiful flowers. His concerts often feature the unorthodox: a hundred bagpipers outfitted in kilts playing Amazing Grace, horse drawn Cinderella style coaches, skating rinks and sets that look like genuine castles. A typical Andre Rieu performance features over 250 total performers including a 50-member orchestra. The production requires 250 support staff, 80 truckloads of sets and 12 tons of sound equipment. This is not your grandfather’s symphony. Imagine taking a virtually dead genre and reinventing it into something entertaining and fun. That’s what people come for: to be part of an epic experience, where thousands of strangers can share a joy filled evening of music, color, humor, and entertainment. From a business point of view, Rieu carefully crafts his offering. He features much more familiar—and shorter—musical pieces, mixing well-known waltzes, pop, and movie themes or as he says, anything that touches the heart. His audiences are very casually dressed which removes the stuffy symphony environment. The large venues are an opportunity for audience participation with sing-alongs, swaying and dancing. Rieu said, “I want to give classical music back to the people, where it belongs. Mozart composed his music not for the elite, but for everybody. He was a fantastic, lively guy; he was drinking and having fun in life and being a genius at the same time. But now you see people playing Mozart with faces as if they are already dead. Why?” But why the waltz? Rieu said, “The waltz is a very important part of my life. It’s a very important way for me to express my positiveness, bringing humor to the world. The waltz can be sad and at the same time uplifting. You must see life from both sides, and the waltz encapsulates that. If you’re in my audience, you give yourself to me and the waltz will grab you.” Rieu is also the consummate showman who connects with his audience on a one-to-one basis. “That’s what I do every single night on stage: I communicate.” Many classical music purists and critics are not big fans of Rieu’s formula. I have used his story as a case study in workshops for several years showing how even obscure industries can be turned around by gaining fresh insight from potential customers. Numerous people have complained that he doesn’t understand the authentic classical music experience and that he is ruining the industry. Rieu’s response is to just smile and cry all the way to the bank. It is estimated that the Rieu enterprise sells over one million tickets a year, grossing over $100 million in the process. He sells hundreds of thousands of concert CD’s and DVDs on top of that, plus merchandise. It seems that giving people a way to break the rules can be extremely profitable. 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The Power of Me
Newsletters April 8, 2024 Chuck Wall Seinfeld was revolutionary in television entertainment because there were no happy endings each week. The producers held a fast rule of “no hugging, no learning”. From the beginning of the sitcom genre in the late 1940’s with shows like I Love Lucy, it was mandatory that there was always a happy ending. Every character conflict was neatly wrapped up in a bow by the end of the half hour episode. But Seinfeld and his co-creator Larry David decided to go a different way. They portrayed people much more like they really were. And the audience loved it because every week they got a small glimpse of themselves. Seinfeld brilliantly captured the essence of the Power of Me. It’s all about moi. What matters the most is what I think. My opinion matters more than yours. My self-interest is at the root of my daily decisions in virtually every area of life. I’m in charge. I worship myself and I expect you to do it, too. If you want my business, you will listen to me. The Power of Me is rooted in the simple fact that these customers have the need to exert control over some aspect of their lives. Who to better want to boss around than companies they choose to give their money to? This sense of control can quickly grow out of control and become dictatorial. No doubt, an entitlement mentality drives some of this phenomenon. But here’s the thing: these self-obsessed people also can broadcast their opinions about the companies with which they deal. The Customer CEO owns devices loaded with social media tools that give them the ability to amplify their individual voice into a movement overnight. They can and will do it when you least expect it. Social media uprisings are now common when organizations lose their way. Crazy Customers How should a company think about this Power of Me? Unfortunately, far too often, I see an attitude of “our customers are crazy”. Recently, a Chief Marketing Officer of a large insurance company told me that their “consumers” were “certifiably insane.” He based his conclusions upon a recent customer satisfaction survey in which his company had performed quite poorly. He meant it. “They don’t even understand how their policies work,” he sniffed. Since his company distributes their products through independent agents, he only sees the sales force as his real customers. Those pesky drivers, horrible homeowners and lousy life insurance policyholders just consume. They pay their little premiums and file their petty claims. Sadly, his attitude is not that unusual. It reflects the attitude often held in the c-suite of every size of enterprise. Rather than see it as an opportunity to teach their customers, it was just easier to dismiss them. Of course, they have no problem cashing their premium checks every month. I believe the word “consumer” demeans the people who choose to do business with your brand or anyone representing your brand like an agent. Consumer in its original meaning was someone who squandered or wasted, hardly a respectful way to describe a mutually beneficial relationship. Customer is the more honorable word, acknowledging that the person had a choice of which company to deal with. In today’s world, choice is an understatement. If you think of your customers like the insurance guy, you are making a big mistake. Simply put, a customer is the person who writes the check, debits an account, or barters a chicken. They are the me. Let’s return to George Costanza. In one memorable episode, he needed to read “Breakfast at Tiffany’s” for a book club he joined. But in typical George fashion, reading the book required too much effort. He decided to watch the movie version but learned the video store’s only copy had been checked out. He invited himself to the people’s home and convinced them to let him watch the movie with them. As an uninvited guest, George felt he was entitled to something to “nosh”, like popcorn. George Costanza was, no doubt, everyone’s customer from hell. He attempted to cheat at every opportunity. I lost count of the number of restaurants and stores George was thrown out of over the entirety of the series. Do customers like George deserve our respect or our wrath? Here’s the interactive part of the newsletter. Let’s do a quick exercise I call The George Quiz. Get two pieces of paper. I want you to write down on the first page what you really think of your customers. No, I mean really think of them. Picture George (or whomever comes to mind) and list everything you despise about him (or her). Feel free to take a few minutes to get this off your chest. Completely. Go ahead and vent. Write down every adjective and phrase that comes to mind. Feel better? Okay, now that you have done that, I want you to set that aside and write down what you think your customers really think of you on the other page. On your worst days. What poisonous things have they texted, tweeted, or reviewed? I bet that was a much shorter list. That’s because we are programmed to not hear genuinely negative feedback. I understand how easy it can be to fall into the trap of blaming the customer. The increased stress most executives feel is daunting. Between unrelenting technology, increased competition, and more pressure than ever for positive financial performance, someone is bound to get the blame. The easiest target is George Costanza, the demanding, unreasonable customer hardly worthy of our valuable time. Wisdom tells us that they are the customer, they have the money, and we probably need to look in the mirror about our own performance before we point fingers back at them. Subscribe × Submit your email to sign up for our newsletter: Business Wiser Close
Things either work or they don’t.
Newsletters April 8, 2024 Chuck Wall For customers there really is no middle ground. The question is why there are so many products that don’t. In theory, it seems simple enough. The Balridge Performance Excellence Program is dedicated to improving the competitiveness and performance of U.S. organizations. They define product performance as “performance relative to measures and indicators of product and service characteristics important to customers. Examples include product reliability, on-time delivery, customer-experienced defect levels, and service response time.” Yet, most experts agree that over 90% of most new products fail. Sometimes the product is poorly marketed. Other times, it is a brand extension that is so far afield of the root brand that potential buyers are confused. But usually, it is just because the product doesn’t do what the customer needed it to do in the first place. Fail There’s a place where products that just didn’t perform end up. It’s kind of the graveyard for product flops. Aptly called The Museum of Failed Products in Ann Arbor, Michigan, the museum houses thousands of losers, many from some of the biggest enterprises in the world. In his book, The Antidote: Happiness For People Who Can’t Stand Positive Thinking, Oliver Burkeman explains why he believes so many failed products line the shelves at the museum. “Each one must have made it through a series of meetings at which nobody realized that the product was doomed. Perhaps nobody wanted to contemplate the prospect of failure; perhaps someone did but didn’t want to bring it up for discussion. Even if they realize where things are headed, there’s a perverse incentive for marketers to plough more money into a lemon: that way, they can force some sales and preserve their dignity. By the time the truth becomes obvious, the original developers will have moved to other products, or other firms. Little energy will have been invested in discovering what went wrong; everyone involved will have conspired, perhaps without realizing what they’re doing, never to speak of it again.” It seems that many of these products made it through their company R&D pipeline with little thought, much less consultation with actual potential customers. Who could forget classic brand mash ups like Ben Gay Aspirin? Clairol’s Touch of Yogurt Shampoo? Coors Rocky Mountain Spring Water? Bic Underwear? In hindsight, these are colossally bad, even foolish ideas for products. Is the idea of shampooing with yogurt any better than if we had something called Shell Oil Cologne? (To my knowledge, no such product exists.) Thankfully, the marketplace put these pathetic products out of their misery without much fanfare. I’ve studied many of these dud’s overs the years. My favorite failure is still Colgate Kitchen Entrees. Yes, what a perfectly delightful combination; toothpaste and dinner! Some geniuses at Colgate Palmolive decided the world needed yet another line of frozen meals. Kitchen Entrees set a new low for brand extensions. The product was a complete disaster because customers could see no valid connection. How Does This Happen? What drove management forward on these incredibly bad product ideas? Were they dreamed up in some kind of stream of consciousness brainstorming session? Someone in authority had to approve the idea, fork out the money for testing, prototyping, production, and marketing. How does this happen? “Hardly a day goes by that we don’t see an announcement for some new product or technology that is going to make our lives easier, solve some or all of our problems, or simply make the world a better place,” designer Bill Buxton writes in his book, Sketching User Experience. “Few of these products survive, much less deliver on their typically over-hyped promise.” Buxton, and great designers like him, believe that there is no design context. “To design a tool, we must understand the larger physical, social, and psychological context in which it will be used. And that’s something designers are trained to do,” he says. This means simply that when companies ignore the human side of product performance, they are setting themselves up for failure. Customer focused design is the key to performance. What’s the point of creating bizarre new product combinations or adding meaningless bells and whistles if the ultimate buyer could care less? If they are happy with the products they are currently using, it’s doubtful they will suddenly be struck by lightning to switch to a new product. In fact, most companies, even conservative ones, wildly overestimate the success their new offering will have in the market. It’s clear that companies need to have a clearer path to understand what performance criteria their customers expect. Better design must be present in products, services, and experiences. Subscribe × Submit your email to sign up for our newsletter: Business Wiser Close
