Category: data driven branding

Brand communications is no longer about broadcasting a company position across multiple mass communication platforms.

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In today’s always on world, an important part of any brand strategy is the communications strategy but if Asian brands are going to be taken seriously, Asian CEOs must understand that times have changed and that we are living in a new world order. And in that new world order, the success of a brand is in the hands of the consumer not the corporation.

Today CEOs must understand that how consumers source information about brands and where they source that information from, has changed dramatically over the last 5 – 10 years. Where previously they learnt about brands from television commercials, newspaper advertisements and the recommendations of friends, today they learn about brands from Facebook communities, Twitter lists and YouTube channels.

Gartner estimates that mass marketing campaigns now have only a 2% response rate and this is declining annually. Despite this, Asian CEOs, so long in control of their brands and reluctant to lose that control, continue to try and shape brand perceptions by broadcasting positions repeatedly across traditional media via multiple and repetitive campaigns.

But Asian CEOs need to accept that in today’s noisy, crowded, dynamic, mobile market place, a brand cannot be shaped by repetitive communications campaigns that try to appeal to as many people as possible in the hope that someone will buy and communicated across traditional media. And those CEOs must understand that the success of their brands is too important to be left in the hands of marketers and advertising agencies.

According to Gartner, by 2015, at least 80% of consumers’ discretionary spending will be influenced by marketing across social and mobile platforms. And it is imperative that CEOs do not allow marketing departments to continue the mass market model of invasive campaigns that try to push a one size fits all corporate position onto consumers.

So if building a successful brand requires more than a traditional approach to marketing where reaching anyone and everyone and making them all aware of the brand with a generic message broadcast multiple times across multiple channels is not the way forward, what should Asian CEOs do if they want to challenge the global western brands?

The first thing is that this new world order is good news for Asian CEOs because it means they can stop wasting funds on expensive creative driven initiatives that require deep wallets to fund advertising campaigns repeatedly across traditional media in the hope that they will resonate with consumers and lead to a possible sale because the reality is, very few of them are noticed, let alone remembered.

Try this experiment. If you advertise in a daily newspaper or on TV, ask yourself which ads you remember from yesterday’s newspaper or on TV last night. Be honest. I doubt it is many. Personally I remember the ads from the Sunday paper because I was stunned at how many pages featured supermarkets and hypermarkets having a ‘cheap off’ on chicken wings, grapes and cases of beer.

And these are the very same newspapers that featured advertisements for Patek Philipe and Rolex watches, Lexus and Audi cars and other luxury products and services the week before!

And even if you remember newspaper ads or TV commercials, how many of the products or services advertised, have you interacted with? And of those how many have led to a purchase? And even if they have led to a purchase, what did the company do to ensure you come back again? I suspect they didn’t do anything and instead, after they spent all that money getting you into their store or to buy their product, they let you leave without getting some personal information in order for them to start to lay the foundations for a relationship!

In this era of smart phones and the half a million applications that can be used on them; In this era of social media with five hundred million Facebook users (6 million in Malaysia) of whom 50% are active every day and one hundred and forty million daily tweets on Twitter, many of them generated by Malaysia’s 1.1 million members; the proliferation of leisure time activities and abundant choice at malls and more, Asian CEOs must understand that the answer to brand building is delivering economic, experiential and emotional value to consumers and on their terms and across all touch points.

The global economic situation is a golden opportunity for Asian brands to take market share from established Western firms struggling to overcome cash flow issues and poor brand penetration. But it is up to CEOs to understand that they have to review traditional practices and take an interest, indeed responsibility for the brand and ensure brand departments understand that it is no longer enough just to advertise in traditional media and hope a brand will succeed.

CEOs must ensure too that at the heart of any new strategy must be the organization, making sure every brand touch point focuses on delivering value and communications departments must take social media seriously and understand how to deliver more engaged communications. And this will have to be done in a much more integrated, dynamic and fluid manner.

And whereas in the past, a series of the same full page ads repeated in daily newspapers or a number of prime time TVCs was generally sufficient to build brand awareness which would lead to a sale. Indeed, many consumers would actually watch a commercial and take a note of the brand and where they could purchase it. Those consumers would then go to the store, look for the brand and buy it. If the brand was unavailable they would take time out to come back again and again until they could make a purchase.

Today those same consumers don’t bother taking note of the brand names because they’re carpet bombed with messages throughout the day, every day. Many of those messages are making outrageous claims or are totally irrelevant to them. They are also too busy multi-tasking during the expensive commercial breaks. Furthermore, they’ve been let down so many times after believing those claims that they now often ignore them completely. And because consumers have so much choice and so many information channels, they don’t need to pay attention to messages broadcast via mass media any more.

Now consumers use social media and other tools where they inhabit communities that they relate to and trust, to seek information about brands. So it is in these communities where brands must learn to communicate and engage with consumers and deliver value that resonates with those consumers enough to make them want to own the brand.

Don’t get me wrong, I’m not saying don’t advertise but I am saying that if your organization is not on brand and all marketing initiatives are not integrated to allow you to deliver on the brand promise. And if your organization is unable to deliver value across all touch points and if you don’t use every opportunity to engage with consumers and collect data to help you get to know your customer and start to build a relationship with your customer, your advertising efforts will be wasted and your brand will not survive these extraordinary times.

In this crazy, always on, competitive market place it is these relationships that are going to help build a successful brand and not newspaper ads or TV commercials, no matter how cool they are and no matter how cutting edge is the technology used in the commercial.

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Branding requires you to get to know your customers

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This is the start of an ad hoc series of personal experiences I have with brands and some recommendations to help improve the experience.

Running a small retail business is tough, particularly in today’s climate. It’s even tougher in the competitive retail wine business in a small muslim country with high taxes on alcohol. Key to building a profitable business will be the relationship between the company and their customers.

Yesterday evening I walked into my local wine shop where I have shopped off and on for 5 years and was greeted with a “Hi, we haven’t seen you for a long time.” I mumbled a reply and the clerk nodded and carried on reading her magazine. This is not the first time I have gone ‘AWOL’ but the reason for my absense is the same. I haven’t been there for a while because about 3 months ago I was made an offer I couldn’t refuse and bought 5 cases of wine from another company.

Although I got a great deal on the wine there is no reason why my regular wine shop couldn’t have given me the same deal. But of course they didn’t know about it because they don’t make an effort to collect data on me. They just hope that I will come by every now and then and buy something. And if I don’t, never mind, there will be other new customers to replace me. To a certain extent this is true but wouldn’t it make more sense to look at ways to encourage those people who are already customers to come back again? And get to know those that come on a regular basis to increase share of wallet and develop brand ambassadors?

Here are 5 useful tips for any small retail business looking to be more profitable

1) You have a 15% chance of selling to a new customer and a 50% chance of selling to an existing customer. Distribute your resources accordingly.
2) Invest in database software that will allow you to store data about your customers
3) Don’t be afraid to ask for contact information from new and existing customers
4) Invest time in keying in customer data that you can use to determine buying patterns, product preferences and so on
5) Train your staff to get to know your customers.

How to sustain a family retail brand

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The picture below was taken in 1912 in Oxford, UK a city about 60 miles to the North West of London. It features Gill & Co, an ironmongers and a branch of J. Sainsbury, a food store.

Gill & Co was established in 1530 during Henry VIII’s reign. At the time it was the first ironmonger in the country. It has been in business ever since and has witnessed the English Civil War, two World Wars, a couple of global economic depressions, three recessions, the birth of the railway, the car, powered flight, electricity, the Internet and more.

Originally the firm supplied ironware and related products for Oxford residents however as times changed it tried to reinvent itself and also stocked equipment for chimney sweeps (think Mary Poppins), farming equipment, tools and gardening supplies. Although Gill & Co moved locations, it was always a one store operation in Oxford.

In 2010, after 480 years in business Gill & Co is closing down, beaten into submission by large DIY and home improvement suppliers like B&Q the 3rd largest DIY retailer in the world, largest in Europe and the largest in China and Homebase.

Sainsbury’s, at a mere 141 years old, a relatively new brand was established in 1869 in Drury Lane. Although now at the centre of the theatre district, this was once a very poor area of London.

Sainsbury has also witnessed much, including 2 world wars, 2 depressions, a couple of recessions, the automobile, manned flight, the moon landings and more. Sainsbury soon became an institution, offering high quality products at low prices. By 1882 Sainsbury was selling it’s own label brands.

Although lacking the heritage of Gill & Co, Sainsbury invested heavily in its staff, employing women as managers when it was unheard of in the early 20th century and developing its own training school to train managers.

Sainsbury also invested in new stores and although at times it has had a rough ride, today it employs more than 150,000 people, has 800 stores in the UK and there are on average more than 19 million customer transactions in Sainsbury’s stores every week and the company has a 16% market share.

It has diversified into non-food products and services and non-food is growing 3 times faster than food. It has a bank with operating profits of £19million and its Internet home delivery shopping service is responsible for 100,000 deliveries every week.

Asia has many small family businesses. In fact in Malaysia, Small Medium Sized Enterprises (SME’s) make up 99% of Malaysia’s total registered businesses. Hanoi in Vietnam has over 90,000 SMEs.

These organizations have a critical impact on the business of a country. In Japan, known for its heavy industry, approximately 70% of the Japanese work force is employed by small and medium-size enterprises (SMEs) and half the total value added in Japan is generated by SMEs.

Asian SMEs, many of them well established with years of heritage cannot sit by and hope that they will be safe from bigger, more aggressive retailers. They need to start planning for the future now before it’s too late.

Here are 5 recommendations for Asian SMEs to help them become a Sainsbury

1) Keep an eye on retail trends, especially in your space
2) Talk to your customers, not just about the weather/politics/sport. Ask them what their needs are, what they would like you to stock, when they would like you to open and so on
3) Build a database of customers and their preferences. If you do sell up, this will help you secure a better price for your business
4) Leverage what you have against the big retailers in your space. You can’t compete on price and probably can’t compete on choice but you can compete in other areas – convenience, personalization, customization, free alterations, returns, speed of delivery and more
5) Develop a brand strategy that includes succession planning. If you have sent your kids to university overseas, are they going to come back and work in your hardware store? If you don’t think so, look to create strategic relationships with other players in your space now before it is too late.

How to brand a city like Ipoh

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Senior Executive Councillor Datuk Hamidah Osman of The Perak state government in Malaysia announced on a trade and investment mission to China recently that the state government, in an effort to boost its tourism industry, intends to brand Ipoh, the capital of Perak as the “City of White Coffee”.

Datuk Hamidah was quoted by Bernama “ Perak should have its own identity and branding just like Shenzhen that is known as the “Shoe City” and Paris which has long been known as the “City of Fashion”.

In conjunction with the plan, Datuk Hamidah said, “We plan to have a food fair to be held in Ipoh this December. The idea is to promote the local foods and tourism industry. We have the best bean sprout chicken rice and chee cheong fun (rice rolls),” she added.

Faced with increased domestic and international competition for both tourists and FDI, there is no doubt that Ipoh and Perak, need to develop a destination brand. But that brand must be based on a platform of multiple tourist attractions and business potential.

Set amongst picturesque limestone scenery, a diverse selection of tourist attractions include Kellie’s Castle, Perak Museum, Ipoh railway station, Tambun hot springs, Taiping lake gardens and Zoo, and more, Ipoh and the rest of the state have a lot to offer.

Other destinations include Pangkor and Pangkor Laut, Bukit Larut and others. Perak also has a rich heritage that can be promoted, including silver and tin mining. It is historically known as an innovator, having pioneered such advances as the first rubber trees in Malaysia and was also the first state in Malaysia to go wireless.

The tagline ‘City of white coffee’ certainly differentiates Ipoh from other destinations but what else does it tell potential visitors, businesses or investors? How can stories be developed around the tagline, who are the target market? How will it be communicated? If it is a one-size-fits all approach, it’ll need significant resources to communicate the new tagline. Have budgets been agreed and so on?

Today, Destination branding is not based on a tagline. Destination branding must be based on experiences that are successfully delivered to specific segments and not based on attempts to market all places to all people.

Research and data are critical to understand tourist and other stakeholder requirements before developing strategies and not the other way around.

Stakeholder buy-in is critical for brand consistency and fulfillment of the brand promise. As an example, how can a hotel contribute to the proposed approach? How can the same hotel leverage the approach to grow it’s business?

Branding is a long term coordinated and integrated strategic exercise and not a tagline. One-size-fits-all strategies using mass media are no longer effective.

Planning is essential to coordinate initiatives, ensure accountability and avoid wasting resources. Without a plan, activities will be reactive and tactical.

What Ipoh and other cities need is a consistent and organized methodology to brand themselves as domestic and international destinations.

Here is one approach that would definitely help Ipoh:

Stage one: Carry out extensive research
Research develops data on key success factors, generates insights and what current and prospective visitors seek, and provides benchmarks to measure branding ROI. The research should consist of the following activities

1) Destination analysis: Key members of the hotel industry, government bodies, local business associations and representatives of major attractions should be confidentially interviewed. The interview will be based on an agenda designed to explore a number of issues related to the city

2) Visitor audit: Carry out interviews with current and past visitors. Other groups can also be selected, such as conference organisers. The interviews will focus on the experiences and motivations associated with Ipoh, information resources, and suggestions for increasing tourist value.

Special attention will be paid to how they researched Ipoh, what they have heard or told others about Ipoh and the channels or vehicles used to tell them. Additionally, representative travel agents in Ipoh will be interviewed about tourist experiences and requirements. Online surveys will be useful to research baseline perceptions of brand Ipoh.

3) Place audit: A place audit will identify Ipoh’s economic/ demographic characteristics, review major attractions (including strengths and weaknesses of the attractions) and outline all brand assets. The place audit will also look to identify product potential.

4) Communications audit: A comprehensive analysis of the channels, vehicles and materials, both digital and print, current and proposed that are or will be used to communicate with both consumers and businesses.

Stage 2: Ensure community buy-in and set internal branding requirements
Community and other stakeholder buy-in is important both for delivery of the brand promise, development and ongoing funding. Stakeholders must be communicated with and input from stakeholders must be incorporated so that they understand that they play an important role in initial and ongoing brand development.

Such buy-in can be accomplished through a variety of activities, including “townhall” or other community meetings, private presentations and media briefings. Initial research findings and recommendations can be discussed as a basis for soliciting input.

Additionally, community buy-in requires a group of citizens, business people, and local and regional government officials. This planning group will:

• Define and diagnose the community’s condition, major issues and potential solutions

• Develop a long-term brand vision based on a realistic assessment of the community’s values, resources and opportunities

• Work to develop a long-term plan of action involving intermediate stages of investment and transformation

Stage 3: Brand plan development
The results of the research and community buy-in will be incorporated into a comprehensive plan for Brand Ipoh. This customized brand plan serves as a strategic framework for all marketing activities, messages, metrics, timetables and proposed budgets. Special attention should be paid to digital branding and product development to get previous visitors to return again.

Stage 4: Comprehensive and segment-specific execution & measurement
Unfortunately this is where most destination begin their brand strategy. Once the brand plan is in place, execution begins. The execution operates on two overlapping fronts – general and segment-specific:

General: General branding represents the ongoing efforts to ensure visibility and provide value to prospects, agents and visitors, as well as gather data, ensure continuous performance and maintain reporting.

Segment-specific: Segment-specific branding concentrates on two areas where it is important to establish and maintain strong relationships. These include existing customers/visitors, and target-rich segments such as families, agents, previous visitors, etc. The actual segments to be targeted will have been defined in the brand plan.

I appreciate that many cities will view this as a daunting and potentially expensive task. But it will not be as expensive as numerous one size fits all communications based on a tagline that tries to speak to all but really speaks to none.

Outstanding performance by Tourism Malaysia

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Tourism Malaysia should be commended for its performance last year. A total of 23.65 million visitors in 2009, beating the target set by Putrajaya by an impressive 4 million. In fact the 2010 target of 23 million visitors was beaten by over 500,000 visitors. This generated over RM50 billion for the country despite the difficult global situation.

You may be interested to learn that FusionBrand carried out the research that addressed numerous areas and culminated in over 300 actionable recommendations, including that TM move away from a global one size fits all strategy to a geographic focussed, segment specific stategy.

To realise these recommendations, FusionBrand also wrote the 2009 Tourism Malaysia global brand plan and 12 key market brand plans that were the back bone of the Tourism Malaysia brand strategy for 2009.

FusionBrand would like to think it was responsible, at least in a small way, for part of this impressive performance by an organisation that will be, within 10 years the number one industry in Malaysia, in terms of revenue.

Does shock and awe advertising still work?

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This is a brutally graphic public service announcement from Australia’s Transport Accident Commission (TAC). Viewer discretion is advised.

This is an immensely powerful piece of work beautifully executed. And it had an emotional impact on me. All the characters resonated with me as I imagined myself as many of them at various stages of my life. At the end I was breathless and close to tears.

But the question being asked by Bill Green is “Does this stuff work? Really work?” According to Bill, TAC says yes. According to TAC, “in 1989 the first TAC commercial went to air. In that year the road toll was 776; by 2008 it had fallen to 303”. That fell again to 295 in 2009. However, despite these powerful commercials, 16 people died over the Christmas period.

Topically, I have just spent 10 days in Australia over the festive period and the only TVCs I can recall were for alcohol (beer and hard liquor) and fast food. I was stunned to see so much alcohol advertised on TV. I didn’t see this TAC commercial or if I did, it didn’t register.

Using creativity to communicate
Advertising, and in particular well executed advertising, used to be a great way to reach a great many people over a relatively short period of time. With less competition, more accepting and attentive consumers, such reach could ensure the message was received and absorbed by the right people. Not anymore. Mass media has fragmented into niches and communities. Using creativity to communicate a message is no longer effective because the message is blocked out or soon forgotten because we simply don’t have the interest or bandwidth to absorb all the messages assaulting us throughout the day, every day. Increasing frequency doesn’t help, it makes it worse as it adds to the noise. Even beautifully executed work like this is lost in the fog of products and services.

I wrote an article about a similar approach used toward smoking in the UK and Malaysia. You can read the full article here,

Chilling commercials don’t work
With smoking, the research, carried out over 10 years by the Institute for Social and Economic research found that the warnings on cigarette packets that smoking kills or maims are ineffective in reducing the number of smokers. Likewise, chilling commercials or emotionally disturbing programs are also ineffective. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

In Malaysia, despite nearly US$50 million spent on shock and awe campaigns to create awareness of the dangers of smoking, the number of smokers has practically doubled every 10 years. Whether or not there are parallels between campaigns for smokers and those who drink and drive, I don’t know.

Personally, I suspect that the reductions in fatal traffic accidents since 1989 are due to better safety features in cars, better roads, better lighting, highly visible enforcement measures, increased penalties for offences such as not wearing seatbelts and using mobiles, reductions of speed limits, more drug testing and better educated consumers.

The key then is not to add to carpet bombing of consumers via advertising, but to identify how those consumers become better educated? Was it the commercials or a reaction to the commercials or other initiatives?

Pubs legally obliged to breathalyse patrons
This can be done using qualitative research with consumers and then use that data to forge future strategies. It may be expensive and time consuming, but it will give us the answers we are looking for and determine future strategies. Of course it may be that it is not the commercials but in fact peer pressure at key times such as when consumers leave a pub, club etc. I think this may be the case and I see a time, not too far in the distant future when all bars and restaurants have to, by law, breathalyse all patrons as they leave the premises.

Personally, although this is a powerful TVC, I wouldn’t watch it again. If this commercial came on, I would change channels because if I am watching TV, I don’t want my leisure time to be challenged by issues I don’t want to address at that particular time.

Thanks to Andy Wright for the heads up on this story.

Case study – How a Malaysian Company built its brand from the inside

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Senior executives at a Malaysian technology related firm were frustrated. Sales growth was not meeting expectations, despite the firm’s 20-plus year track record, strategic partnerships with top international firms, excellent service and high profile advertising campaigns.

To boost sales, the firm had explored common alternatives – price cuts and an expensive marketing campaign. But although such actions had a short term impact in the past, there were no long term benefits and they hurt profitability. So the senior executives decided to look at another option – increase sales effectiveness by reviewing sales processes and tools, increasing the sales close rate and shortening the sales cycles.

Headquartered in Kuala Lumpur, the firm specializes in boosting supply chain and other efficiencies through both product sales and software and other integration. With offices in Singapore, Thailand and other Asian countries, the firm has a blue-chip list of customers that includes some of Malaysia’s largest companies. Sales had grown steadily over the previous decades, but the firm was now facing price-based competition from China at the same time as it was weighing opportunities to go public.

Issues
After looking at the issue, senior management determined that the sales problem was not due to a lack of leads. The firm received a steady supply of leads from word-of-mouth and customer referrals, as well as from its strategic partners. The sales staff also cold-called regularly for leads.

The main issue was converting those leads into sales. Qualified leads languished in the sales pipeline for months or even years. Too often, active senior management involvement was required to close sales, which took time away from expansion, financial and operational issues. The sales force constantly pressured management for price cuts to make sales. Even when sales were made, opportunities for sales to other divisions or branches were rarely leveraged. Too many sales were for low-margin commodities and replaceables, when the firm wanted more profitable service, maintenance and IT integration contracts.

Management had earlier tried to address these issues with automation (providing laptops to the sales force and installing a low-end CRM system), new sales compensation schemes, re-organization (creating a department just for telephone sales) and other steps. But sales still were not meeting expectations.

Traditional sales training
So the managing director decided that the best solution was to upgrade the skills of the 15-member sales force and other customer facing departments, and requested bids from multiple training companies. The most common proposal focused on sales training that emphasized lead development and closing skills. However, such training was generic to almost any industry.

Another, more expensive option, was a comprehensive approach that included revamping its sales processes and skills around the company’s offerings and requirements of its customers. After careful consideration, the company decided that an improved sales process and customized training provided the most value, and contracted with the sales development division of Malaysia’s leading customer driven brand consultancy, FusionBrand.

Sales audit
The first step was an in-depth sales audit that sought to uncover issues hampering sales as well as opportunities for improvement. FusionBrand conducted hour-long, confidential interviews with senior management, sales managers and many sales personnel. All sales material, including brochures, proposals, quotations, sales scripts, pipeline reports and other information, was reviewed and analyzed. Current as well as “lost” customers were interviewed for their critical perspective on the sales process and their reasons for buying/not buying.

The sales audit resulted in a comprehensive sales process analysis that identified strengths and weaknesses in the sales process as well as in the sales material. For example, the sales pipeline report, a key tool for sales forecasting and supplier orders, was both out of date and contained inaccurate information, making it difficult to prioritize resources and estimate future sales. The sales process analysis included numerous specific recommendations for improving sales processes, reports, collateral and proposals.

Many graduates of training courses complain that the material studied was not relevant to their industry or customer requirements. This issue did not arise because FusionBrand carried out a sales audit first. Information learned during the sales audit was then used to develop two customized sales training courses that incorporated actual customer, product and sales situations. Furthermore, the number of attendees was limited to 12 to ensure that each sales person gained maximum benefit from numerous role-plays and hands-on exercises.

The first customized, two-day course focused on sales basics, ranging from lead development, time management and closing. Special attention was paid to dealing with price-based objections. About four weeks later, the second customized course was held in 5 half-day sessions over a three-week period to minimize the impact on sales time and provide more opportunities for review and retention. This course focused on “strategic sales.”

Many training courses assume that sales can be made in a single sales call. However, only commodity, low-margin products can be sold in one call. More advanced offerings inevitably require strategic sales, characterized by longer sales cycles, multiple corporate decision-makers (ranging from finance to IT to actual users) and complex requirements. Such strategic sales require understanding differing requirements for value among various departments as well as internal political issues at the prospect. Using an existing prospect that was difficult to close, each attendee developed a focused sales strategy and delivered a PowerPoint presentation designed to win over all departmental decision-makers involved in contract approval.

Sales manual development
The final phase of the multi-month effort was a sales manual. A sales manual includes standardized information on sales processes, compensation (eg, commission schedules), reporting, requirements, resources (ranging from key telephone numbers to report and presentation templates), sales tips and more. The sales manual gives the company more consistent management by acting as teaching tool for sales managers with new staff and ensures more consistent operations and reduces training time.

Results
Results have been achieved in both sales and other departments. Ordering is based on more accurate pipeline data, which has reduced inventory, freeing up capital for expansion. Morale has improved, sales personnel are more confident and less inclined to reach for a calculator at the first objection and offer discounts. The company has made its sales and presentations more customer-centric. Most importantly, sales have accelerated and sales cycles are starting to decrease.

Other internal branding initiatives were embarked on to ensure the successes were communicated and integrated throughout the organization.

Summary
Companies invest a lot in marketing to generate leads. But even all the leads in the world mean nothing until they are converted into a sale and, ideally, a long-term customer. That is why investing in your sales organization, processes, and personnel is crucial for ensuring that customer requirements for value – whether at the MD or user level — are consistently understood and addressed by the brand. Such understanding is hard to achieve from a ‘one-size-fits-all’ sales training class.

A sales process audit, customized sales instruction and sales manual can give companies the framework and structure to close more sales more often – without having to compete just on price. This in turn will build a comprehensive, well respected and, most important of all, profitable brand.

Organisational excellence required to build global Asian brands

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Not too long ago, the Michigan (U.S.) State Business School reported that every US$1 (RM3.36) invested in marketing earned US$5 (RM16.80). By contrast, for every US$1 (RM3.36) invested in operational excellence, returned revenue was US$60 (RM201.75).

Despite such data, the majority of Asian firms have been slow to grasp the importance of everyday operational excellence that requires a continuing commitment to quality service, as well as processes that are effective from the customer’s point of view and advanced supply chain skills.

Many Asian firms prefer to spend fortunes on tactics to acquire customers yet very little on the operational and other strategic requirements needed to keep them. Sales and marketing growth based on increased awareness are fine and important but they are activities to be embarked on only after the operational foundations are in place. This is because an acquisition only approach is generally unsustainable.

Therefore, once a customer is acquired, it is critical to develop relationships to retain them. Firms cannot simply ‘hope’ they will come back time and time again because, with so much competition, so many alternatives, if you are not communicating with them – and selling to them, someone else will.

Customers build brands
And because customers have the power to make or break our brands, Asian companies must learn to do business on their terms. At the same time, they must become focused on creating PROFITABLE customers (on average, 15% of customers are unprofitable), ensuring those customers become our brand ambassadors, and consistently increasing their share of wallet.

Coca-Cola, Marlboro, Pan-Am, Ford and so on, represent mass-economy brands. These Western brands were successful because they shrewdly used the tools of the mass economy. They positioned themselves by repeatedly advertising in the mass media of one, two or three TV stations, one or two newspapers and knew where consumers were most of the time as there were few leisure time activities to take them away from the home.

Global markets
They also used mass production to achieve economies of scale, and they used distribution to penetrate mass markets. Global markets were opening up, disposable income was increasing, competition was limited. Customer retention didn’t really matter. Markets were growing so fast, and the mass-economy tools were so powerful, that it is was fairly easy to acquire a new customer for everyone that was lost. They also had a large, essentially one segment, ready made affluent domestic market.

But today, the mass economy is dead. The mass economy was killed by the fragmentation of the media, new leisure time activities, the Internet, greater competition, globalization, immigration, increasing number of and power of retailers, marketing segmentation and other forces.

In its place, we now have the “Customer Economy.” Companies no longer have the exclusivity to make the rules and control information by “positioning” products or promoting “brand equity” through advertising and PR like they did in the mass economy. Moreover, where in the past, prospects were segmented by demographics and geography, now they are part of communities. In these circumstances, can advertising and PR be effective to build brands? As part of a comprehensive brand strategy, yes. On their own, no.

For example, in the 10 year period to 2006, the computer manufacturer Acer spent US$10 billion (RM33.6 billion) trying to build a global brand via advertising. The effort failed. Acer withdrew from the retail market and has only recently reentered it with a new strategy focusing on individual segments.

Sony mass market failure
In 2000 and 2001, Sony spent an incredible US$2.5 billion (RM8.4 billion) on advertising worldwide. The result? The first three months of 2003 saw stunning losses, a 25% slide in the company’s share price in just two days and layoffs of more than 20,000 workers worldwide.

Unperturbed, Sony again tried mass economy tactics in 2008, spending an astonishing US$4.9 billion (RM16.5 billion) to position its diverse range of products including televisions, Blu-Ray players, music players, Laptops, PlayStation games, movies from Sony Pictures and new music from Sony Music. The approach failed and Sony is now exploring a more specific product focused niche approach.

Asian companies
Asian companies obsess with using traditional marketing tools such as advertising and PR to acquire new customers. But what good does it do to acquire customers if you have no idea how long they are going to stay and how profitable they will be? Also required are investments in operational excellence and accountability.

There is also a belief by many firms that they just have to ‘participate’ in an activity to get business. One local firm we’re familiar with collected 200 qualified leads from a trade show, yet months later those leads were still collecting dust! They were waiting for the prospects to contact them!

Another Asian company invested over US$50,000 (RM175,000) on a trade show, instructed 3 ‘top’ sales people to represent the company at the trade show and then failed to train the staff on how to behave and sell at the trade show. Moreover, there was zero investment in a lead management programme for leads generated. This meant the company was unable to measure the effectiveness of the trade show.

Finally, within 3 weeks of the trade show ending, two of the sales people manning the booth left the company, taking all the leads generated with them.

As we work to move up the value chain, the goal of every Asian company that wants to build a brand must be profitability, backed by measurement and accountability. Reaching solely for sales or market growth is no longer enough.

Repeat business
Not so long ago, in the US, to reach its sales goals, Ford offered $3,000 in rebates and other special deals off the cost of the Taurus car. Ford maintained its market share – but at the cost of losing money on each vehicle sold. Interestingly, Ford learned from its mistakes. Its next TV ad campaign in the US was based on the following line: “The highest proportion of repeat buyers of any car in its class.” What better testimonial is there? Little wonder then that in a report released by LeaseTrader.com in August 2009, Ford had the highest brand loyalty of any American automotive brand.

Despite the obvious need to invest heavily in retention strategies, ask a typical advertising agency about the branding issues faced by Acer, Sony, Ford and other companies, and what do you think the most common response will be?

Exactly. Recommendations for more ads, in more media across more platforms! They’ll promise a better creative team to provide greater creativity, but what’s really required is accountability for results! The usual agency attitude of “spraying and praying!” may have been the best strategy during the mass economy when there were a limited number of media conduits. But in the customer economy, the proliferation of media outlets and competitive advertisers now makes it practically impossible to build a brand solely based on ‘spraying and praying’.

Strategic approach required
What Asian companies need more than anything else is a strategic approach to branding that is aligned with the new imperatives of the customer driven global economy. Branding in the customer economy requires a fresh look at how the organisation engages with customers, as well as market and profitability requirements.

Rather than a simplistic reliance on logos and creative driven, one-size-fits-all, repetitive advertising, branding today demands research, data, measurement, supply chain effectiveness, customer intelligence, service AND accountability to both customer requirements and resources spent. Only once the company has identified who it should talk to and how, can it start to talk to those prospects.

Because acquisition is so expensive, and existing customers make the best brand ambassadors, branding also requires an emphasis on the identification and retention of PROFITABLE customers. This is especially true as the balance of power shifts from sellers to buyers.

The payoffs from such customer-economy branding can be substantial. British Airways calculates that customer retention efforts return $2 for every dollar invested. The clothing label Zara has thrived against powerhouses like Gap by moving from four collections a year to releasing new styles every two weeks.

So, as Asian firms attempt to move up the value chain, it is imperative companies monitor their retention rates (which fewer than 20% of companies do), because it is the best indicator of future profitability and brand strength.

Track RFM (Recency, Frequency, Monetary Value) because it shows which customers may be prone to defection and which are candidates for up – or cross – selling. Since it is likely 20% of customers are generating 80% of profits, segment customers according to profitability, and develop unique value propositions for the top 1%, 4% and 15%.

Calculate the lifetime value of clients. For instance, Ford calculates that a customer who buys his first car at the age of eighteen, upgrades it every three years and services it at a Ford dealership is worth a six figure sum to Ford over a lifetime. Cadillac estimates the lifetime value to be $300,000.

Revisit dormant customers. And optimize spending by developing marketing ROI based on actual customer profitability.

Other areas of organisational excellence that are key to building global Asian brands include recruitment and training. The retail sector is only realizing a fraction of its potential. This is partly due to the lack of training of staff and subsequent indifference of frontline staff when interacting with customers. If there is no attempt to build rapport with a prospect, why should the prospect return?

This is also true of manufacturing. One company in Malaysia we contacted recently listed 2 markets it wanted to develop as the UK and France. Yet when we called the office, no one spoke English.

Building Asian brands will take much more than basic advertising and PR. Core requirements include research, accountability, operational excellence, data management and customer equity (lifetime value of customers).

In Malaysia, according to research carried out by PriceWaterhouse Coopers, 86% of Malaysian CEOs and their Board of Directors say that they believe in the economic potential of effective brand building. However, almost the same number of CEO respondents admitted that they do not have a brand unit to integrate brand practices within their organisation. Sentiments are similar in Thailand, Indonesia and Vietnam

Until those C level executives take the plunge and invest in their brands by building operational excellence into their brand strategy, the concept of building global Malaysian or other Asian brands will remain just that, a concept.

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It failed once so let’s try it again

Published on by brandconsultantasia4 Comments

According to a Ministry of Health (Malaysia) survey carried out in 1996, there were 2.4 million smokers in Malaysia. This was a rise of 41% over the number of smokers in 1986. Today the country has about 5 million smokers, about double the number in 1996. One can deduce therefore that the number is doubling every 10 years or so. As of 2003, approximately 49% of all adult males and 5% of all adult females are smokers.

Of most concern is the prevalence of smoking among young Malaysians. 30% of teenage boys aged 12–18 years smoke while smoking among girls doubled from 4.8% in 1996 to 8% in 1999. The prevalence of smokers aged 15 and above has increased from 21% in 1985 to 31% in 2000. This compares with about 21% of the population in the UK who smoke in 2009, down from 45% in 1974.

No data is available on what smoking costs the country but we do know it costs the Canadian government around RM10.5 billion in direct health care and another RM38 billion in lost productivity. Meanwhile revenue from taxes on cigarettes totaled around RM9 billion. Canada is a good benchmark for Malaysia because in 2001 approximately 5.7 million Canadians smoked, about the same as Malaysia.

To combat the rising number of smokers in the country, a number of initiatives have been put into place. These include a rapid rise in the price of cigarettes and a number of health ministry driven initiatives to alert smokers to the dangers of smoking.

The first of these initiatives was an anti smoking campaign launched in 1991, in conjunction with the National Healthy Life Style Campaign. This extensive campaign that ran for over 10 years raised the level of awareness of the hazards of smoking among the general public, both smokers and non-smokers.

The “Tak Nak” campaign was initially launched in 2003 and consisted of TVCs, Radio, print and Outdoor (including school notice boards). Costing almost RM18 million (US$5 million) for the first year, and rumoured to cost in total RM100 million for the 5 year campaign, it was widely lambasted in the media.

This is because although the campaign raised the awareness of the effects of smoking, it did little to reduce the number of smokers. Even the Health Minister Datuk Dr Chua Soi Lek said in 2005 that there was no indication that the number of smokers had gone down since the campaign began.

Despite the ineffectiveness of this campaign, in August 2009, The Malaysia Ministry of Health launched the latest (and most harrowing) installment (see video) of its anti-smoking “Tak Nak” campaign via TVCs. The TVC’s feature gruesome images of mouth cancer and lost limbs due to gangrene caused by smoking.

This campaign follows the legislation, earlier this year that all cigarette packets sold in Malaysia must carry graphic images related to smoking. These include images of the results of neck cancer and a dead foetus. Displaying these graphic images on cigarette packets is a requirement of the World Health Organisation Framework Convention on Tobacco control of which Malaysia is a signatory.

It’s not clear if the latest series of graphic commercials that are obviously designed to shock, and the images on cigarette packets are part of a strategic plan or two independent tactical campaigns.

I’m not sure what the goals of the latest campaign are but I am sure they do not want to simply raise awareness of the dangerous side effects of smoking. I would imagine the goals include reducing the numbers of smokers in Malaysia and discouraging young adults of both sexes from taking up the habit.

If these are the goals then one has to question whether or not this is the best tactic. Certainly evidence from previous campaigns in Malaysia and other countries suggests that campaigns featuring shocking images and graphic descriptions of the consequences of smoking using old economy tools such as TVCs, print ads and outdoor are ineffective.

Malaysia spent RM100 million over 5 years on such a campaign that was inneffective in bringing down the number of smokers in Malaysia. In the UK, after extensive research of more than 8,500 smokers over a ten-year period, the Institute for Social and Economic research found that the warnings on cigarette packets that smoking kills or maims are ineffective in reducing the number of smokers.

Likewise, chilling commercials or emotionally disturbing programs are also ineffective. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

And even failing health may not persuade a smoker to reduce or even stop smoking because smoking is linked to a lack of psychological wellbeing and often failing health results in psychological decline.

I have a hunch that this campaign will not reduce the number of smokers in Malaysia. Data shows that traditional marketing tools are even less effective today than they were 10 years ago.

What is required is a data driven approach to the issue. Specific and comprehensive qualitative research with relevant targeted questions related to each segment (and each segment will be specific and targetted) that are designed to deliver actionable data. It is imperative that the audience is identified and then communicated with using content that resonates with them. It will be a long term effort. That doesn’t mean repeating the same one size fits all commercials or messages, this means developing a relationship with these partners through engagement.

Also critical to the development of the strategy will be the buy in from stakeholders such as doctors, educators, retailers and others. Discussions must be held with these key elements to determine strategies. Once research is completed and analysed, a comprehensive strategy must be developed featuring a fully integrated program to communicate with all stakeholders with specific emphasis on education at kampung level and dynamic, preventative programmes for schools. Existing smokers will be targetted individually through interviews with doctors, rather than one-size-fits all shock and awe campaigns.

Only once the strategic blueprint is ready can the implementation begin. There is no easy way to reduce the number of smokers in Malaysia. It’s going to take a long term investment in time, effort and money. Wasting money on creative driven campaigns that have not worked in the past is not the way forward.

Warning: Viewer discretion advised.

Pitching for a bank name change in Malaysia

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Last Friday we were pitching against 4 advertising agencies to a Malaysian bank. Essentially, the brief was for a name change and to create awareness of the name change in Malaysia. We were invited to pitch despite being a data driven brand consultancy. In fact I had personally discussed this fact with one of the corporate communications representatives at the bank.

He told me that if we went into the traditional FusionBrand pitch (We had presented to them 12 months ago) we would not get very far however, if we presented a ‘traditional re-brand’ pitch and suggest the FusionBrand approach for after the name change then we might generate some interest.

So, much to my chagrin, we pitched in the traditional way and suggested that this was only half the battle and what the bank also needed once the population was aware of the new name was a strategy to get prospects and customers into the branches and to buy product(s) and so on.

As my colleagues presented, I was imagining how the other agencies would make promises based on their new “positioning” of the bank.

I found myself thinking that what sort of a position could an agency offer the bank that would make them stand out from all the other banks? What position would make consumers cast aside their ingrained perceptions (not very good) of the bank? How would a new positioning strategy encourage prospects to walk into branches? And once they had walked into those branches, how well preparred would the staff be to sell to them?

I already knew that one of our competitors was a global agency but because they are very busy they were outsourcing the creative element so it was unlikely (though not impossible) that they would have the best talent in the market working on the creative.

And then I thought how could the bank make inroads into existing markets using the same type of ‘positioning strategy’ that all the other banks are using? Sure, the tactics might be different, then again perhaps not, but the positioning strategy, of finding a space in the consumers mind would be the same.

I also thought of how tumultuous the world is at the moment and how any positioning ‘strategy’ that had been implemented before the global economic crisis would be a worthless (and expensive) waste of money now because the world is a different place compared to even a year ago. What if something similar were to happen in the next 6 months, as this bank’s positioning ‘strategy’ was implemented? Would they too waste their valuable resources?

I also thought about my own issues with my bank and how, despite numerous negative experiences over the last 10 years, I was still with them. And yet during that time, I’ve seen so many ‘re-brands’ of banks or financial institutions, RHB, CIMB, Bank Islam, etc, all of them used positioning to influence me and hope that I would become a client (I didn’t and I wonder how many did. I certainly don’t know anyone who has changed their bank in the last 5 years).

It made me realize that the FusionBrand approach, where we use customised research to deliver actionable data, operational excellence as the foundations for the brand strategy, brand planning to eradicate the hope mentality, and segment specific communications that resonate with those segments alone and meet the economic, experiential and emotional needs of customers and prospects in those segments. Metrics and measurement that ensures valuable marketing resources are not wasted are what is required to build a brand in the customer economy of today.

The issue of course, is whether the bank knows this! I will let you know how we get on!