Category: Uncategorized
Even iconic brands need to do the basics
Since the first iMac came out back in the 1990’s, I have been a loyal mac user. I’m now on my third generation of iMacs, and currently have 7 macs in my office as well as 2 iPhones. At home my family uses 3 mac laptops, 1 iMac, 3 iPods and 2 iPod touch. We also have 3 airports at home and one in the office.
Last year I convinced my technologically challenged wife to buy a mac and she now has 8 top end iMacs, three laptops and two iPhones and an airport in her office. About a year ago I referred a friend to my mac representative who sold him six iMacs and a couple of iPhones.
Service not a priority in Malaysia
Service and looking after existing customers are not a priority for Malaysian firms. But my mac representative was a diamond in the service rough of Malaysia. He would come out to my house at 10pm to replace an airport fried by one of the 250 thunderstorms we get annually in this tropical paradise.
He would bring a replacement airport, install it, reconfigure all my kit and sheepishly give me an invoice. Of course the next morning I would take the invoice straight to my accounts dept and stress that it must be paid immediately.
Unfortunately he has moved on to pastures new. It’s a massive loss to me because his service was exceptional and could not be faulted or replicated. In fact he was brilliant.
So until I find a replacement and I expect that to take some time because he truly was unique, I have to suffer the ignominy of taking my computers to the Apple store.
I did this recently after dropping a laptop. Because one of the key components of building a brand is experience, I thought it would be a good opportunity to see if local resellers were on brand.
As far as I can tell, for such a small country, the mac landscape in Malaysia is a competitive one. There are a number of stores around the Klang Valley.
Machines is probably the largest premium reseller with 6 stores across the Klang Valley and one in Johor. Their flagship store is at KLCC. You can find their neat website here
Another company is Smack. Smack is an authorised reseller. You can find their price driven site here
In fact, according to ‘where to buy’ on the mac site there are 83 resellers, in Malaysia. This includes those authorised to sell iPods. That’s a lot for a company that only has about 10% of the PC market.
So it’s a very competitive environment. One in which you would expect resellers to do what it takes to hang on to clients for as long as possible. An environment in which you would expect resellers to do what they can to take business away from other resellers.
Walkins are potential customers
I took my laptop to a mac store in a nearby mall. Now think about this, here is a relatively new store, less than a year old. In walks a foreigner with an old laptop that has a problem. He has never been to that store before. If FusionBrand were working with this retailer, he would understand that this guy represented an opportunity to gain a customer. And as he was unfamiliar and did not register when his name was entered into the database yet was a mac user, he was obviously a customer of a competitor.
I went to the counter where there were 3 or 4 guys standing around not doing much. None of them smiled so I said good morning and explained the problem. After a brief discussion the sales person asked if I could come back the next day because the technician was off that day.
I didn’t bother to ask why a technician would be off mid week. I said that as I didn’t really want to make another trip could I leave the laptop with him? Reluctantly, after discussion with his colleague he said yes but that it was company policy to charge RM100 (US$30) to carry out a diagnostic.
This isn’t much money but the salesman in me says this is the wrong way to do business. Here is a potential new customer with a long record of buying macs (they don’t know this of course because no attempt has been made to build rapport with me). Surely it would be a great idea to score some PR points by sitting down with me and getting to know me before charging an irrelevant diagnostic fee?
Anyway, long story short, I was bored by now but to put the boot in, I said I would go to the other store nearby. He shrugged and handed me the laptop.
I went to the other store in a mall nearby (next to a Starbucks with wifi, neat). Now I have been to this store before and it was where my super salesman worked but the turnover is high and I didn’t recognise the guy working there. Nevertheless, when I walked in I was greeted with a cheerful hi. I explained the problem and the guy told me to leave it with him and he would call me when he found out the problem. That was on Friday. On Monday, I got a call from him with some bad news. It’ll be interesting to see if he attempts to sell me a replacement when I go to collect the laptop.
Poor service
Now this is not a rant about poor service, I’ll leave that to others much better qualified than I. This is an attempt to show companies that branding is more than advertising, logos and so on. Building rapport, gathering data, qualifying prospects, engaging them and building towards a sale are all critical components of branding. Because many brands, especially Asian ones, won’t have the resources that Apple has.
Here are 5 things to do that will help to build your retail brand
1) Every walkin is not only a potential customer, but possibly a customer who is currently with a competitor. Be nice to them.
2) Develop 5 or 6 conversational fact finding questions that will give you the data you need to make informed decisions on how you want to proceed with the prospect.
3) The 1980s are gone and with it the concept of ‘company policy’.
4) Going the extra mile will ensure loyalty and loyalty is critical to profitable branding
5) Train sales personnel to sell because a lot of people want to buy but don’t know how to and so need a little help.
Case study: Use research to form the foundations of a tourism brand strategy
A powerful country brand developed from a meticulously planned strategy that has at its heart the concept of providing specific value to specific identified segments and meticulously executed and measured can yield massive benefits for investment, domestic industries and culture.
And for most South East Asian countries, tourism will have a prominent role to play in their country brand strategies. And so it should be as most governments recognize the contribution of tourism to stimulating economic growth across all sectors of society.
It also helps that tourism is also considered to be the world’s largest industry with revenue of over US$500 billion. The World Tourism Organisation (UNWTO) estimates International tourist arrivals for 2009 to be at 880 million. Although this was a 4% drop over the previous year, Asia and the pacific saw the first signs of recovery with positive growth in the last 2 quarters.
Going forward, the UNWTO expects international arrivals to reach 1.56 billion by 2020. Of these, almost 400 million are expected to head for Asia and the pacific.
But because of the tendency of politicians to seek a quick fix, most Asian tourism brand strategies look no further than creative advertising campaigns that look the same as many other destinations and are soon lost in the muddle of messages currently carpet bombing consumers.
One country in South East Asia has recognized the futility of this approach and commissioned us to develop a brand strategy based on trade and consumer requirements for value. Client confidentiality doesn’t allow me to reveal the country involved however I am able to share the methodology and some of the results and findings.
The project took just almost 2 years from appointment to implementation of the strategy however some urgent recommendations were implemented earlier.
The tourism office is tasked with marketing the country both domestically and internationally. Our focus was internationally. They were facing a number of challenges including:
Challenges
1) The increased effectiveness of competitor marketing strategies. All regional competitors are investing heavily in tourism products and developing segment focused branding campaigns.
2) Growing ineffectiveness of mass marketing, especially generic print & TV advertising. Increasingly fragmented media and an increase in leisure time activities are making it harder to reach consumers via traditional channels.
3) The increase in the influence of the Internet on the destination decision-making process, especially the increased influence of peer-to-peer networks. Figures released by The Association of British Travel Agents (ABTA) in November 2004 showed that 19% of holidaymakers booked their holiday online – six times more than in 2000. By 2008, this figure had grown to 67% (Online shopping survey). Only about 13% of those surveyed said they would use a travel agent. The Internet is also growing in importance as a communications medium through P2P networks with 34% of respondents to a Mintel survey choosing their destination on the basis of a face-to-face recommendation
4) Poor repeat visitor rates. Repeat visitors not only represent an increased return on the initial marketing investment but also tend to stay longer and spend more. Additionally, they represent a low-cost source of referrals and other word-of mouth advantages. Currently, the country has a below average number of repeat visitors compared to two main competitors which represents a threat to future growth.
5) Lack of awareness and knowledge of the country worldwide. What has been the impact of the country advertising? Has it been effective in improving the perception of the country? How much is it contributing to tourism in the country?
Our research showed that there were about 600,000 competing communities in Asia and more than 1,000 regional and national economic development agencies, all competing for visitors. This made it easy for even the most compelling messages to get lost amid all the destination claims.
We recommended to the client that in this cluttered environment, effective branding depends on data and knowledge about current and prospective visitors and not simply trendy creative campaigns featuring mass marketing tactics across all major channels.
Moreover, choosing the most effective branding strategy depended on sound market & customer research to determine current attitudes and perceptions toward the country among travel agents, previous visitors to the country and those that had never visited the country.
Measurement
By understanding the sources of those perceptions and attitudes, the client would be better able to evaluate current branding efforts, develop strategies to target high-impact segments with the most potential more effectively, drive internal education and other program development, leverage the emerging medium of Web 2.0, develop benchmarks to measure branding progress and ensure that resources were used cost-effectively.
The research could also be used to pinpoint, prioritise and drive online community-based branding. A core requirement as consumers spend more time in those communities.
Other key requirements included communicating knowledge of current branding and target market imperatives among personnel, as well as ensuring knowledge and data transfer.
After extensive discussions with the research division and others and to provide a 360-degree approach to understanding the brand, FusionBrand developed and conducted a multi-phase, six-month international research project that incorporated multiple research methodologies.
These methodologies included:
• 39 focus groups (FG) in thirteen locations in twelve countries comprised of 3 segments:
o Travel Agents
o Travelers who have visited the country in previous 3 years
o Travelers who have not visited the country but have traveled long haul in last 3 years
• Online surveys
o 12 countries
o Worldwide via client website
• Mystery shops in specific countries plus home country
• Internet CGM (consumer-generated media) monitoring & analysis
o 22 million blogs
o 60,000 usenet forums
o 6,000 discussion forums
o Plus podcasts, web sites etc.
• Internal brand audit in HQ and at tourism offices worldwide
o One-on-one, in-depth interviews with domestic & international staff
• External brand audit
o In depth interviews in specific countries
o 3 segments
o Tourist operators & agencies
o Media representatives
o Local tourism associations
• Communications audit (print)
o Brand analysis of print materials
o Comparative analysis of 11 regional competitor materials
o Framework for evaluation, scoring & future design developed
• Communications audit digital
o Own sites
o Brand evaluation based on Internet & customer relationship best practices
o Social Media initiatives
The countries were located in the following regions:
• Asia
• North America
• Europe
• Middle East
• Australia
The research project completely designed by FusionBrand was not only comprehensive, but innovative as well. For example, the Internet monitoring had yet to be accomplished by any destination, while the digital communications audit looked at what is necessary to advance into the emerging era of Internet 2.0.
Output was comprehensive and extensive and included:
• Recording and analysis of relevant input in complete reports
• County-by-country reports concerning perceptions and experiences with the country, including key influencers on travel destination selection
• Brand workshops for client personnel incorporating research results to ensure a corporate-wide understanding of the country brand strategy
• Analysis of Internet and marketing collateral relevance and effectiveness in segment-based branding
• Review of social media initiatives
• Quantitative benchmarks concerning experiences, perceptions, influencers and preferences of target segments
• Detailed insights concerning five key target segments identified in conjunction with the client
Each report not only included the findings from the research, but also prioritised recommendations for addressing the issues raised by the research.
Over 300 actionable recommendations
More than 300 actionable recommendations were made. These recommendations were incorporated into a comprehensive, segment-based brand plan that was developed over six months. The brand plan had a strong emphasis on the internet and social marketing and included strategic planning for marketing, advertising, both online and traditional, public relations, direct marketing, web and other programmes and outlined goals, messages, target markets, measurements, activities, timelines, responsibilities and budgets.
The benefits include consistent messaging and images among target markets, synergy among multiple programs, and elimination of uncoordinated activities that were wasting resources. Crucially, the brand plan also provides tools to evaluate program results.
In addition, in conjunction with representatives in country, country specific brand plans were developed. The Country Brand Plans are primarily focused on specific marketing activities within those countries. These activities include, but are not limited to, PR, local trade shows, agent recruitment and communications, cultural events, advertising, segment specific publications, promotional events, etc.
Although the brand strategy was for 2009, urgent recommendations such as consolidation and improvements to web sites and the appointment of regional PR companies were implemented immediately.
A key element of branding is consistency and yet, during the communications audit, the lack of consistency was evident. A strong recommendation was made for a corporate identity brand manual to be developed immediately. The manual was conceptualized and completed by FusionBrand in 4 months, during the writing of the 2009 brand plan.
Throughout the research and planning process, workshops were designed and presented to client personnel to keep them abreast of the process and educate them.
The project has been deemed a success with many targets met ahead of or on schedule. Furthermore significant savings have been made in a number of areas such as a reduction in collateral printing and a move to print on demand. Finally the destination has appeared on more than one ‘must visit’ destination for 2010 for the first time in its history.
More effective brand communications required to build the Volvo brand in Malaysia
Building a brand in any country requires more than a series of tactical initiatives to create awareness and ‘get the name out there’. It takes a meticulously planned and integrated strategy that incorporates the participation of numerous stakeholders and initiatives, both internal and external. Internally to ensure the whole organisation is on brand and externally to ensure communications and content resonates with target markets and are communicated via relevant channels. There’s more but for the purpose of this article that’s enough for now.
And what if the brand is to penetrate other markets? There was a time when all it took to do this was a continuation of the positioning tactics carried out in the home country, perhaps with a few language changes in print media and perhaps some dubbing of TV commercials (TVCs). An over simplification perhaps, but essentially correct.
But as we all know, the world is very different today.
Building western brands in Asia
To build a Western brand in Asia today, as many international brands are finding out the hard way, takes an even more robust and integrated brand strategy that has at its core organisational excellence. Only once has that strategy been developed can the brand strategy be executed. And part of the brand strategy, a small but critical part, is the communications campaign.
This is particularly true of the automotive industry that has seen a number of well known European and other Western brands find it hard to repeat the successes at home in new Asian markets. There are other issues such as high duties etc but many European brands perform below expectations, despite large marketing budgets.
One of those is Volvo. Despite an extensive presence across most media, in 2009, out of a total industry volume (TIV) of just under 537,000 units, Volvo only sold 600 cars in Malaysia, South East Asia’s largest passenger market. This gives Volvo about 0.15% of the market. Although this is a slight increase over 2008 when Volvo sold 524 cars, it is way below the 2007 total of 752 units. Interestingly, in 1999 Volvo sold 839 cars, giving it 0.3% of the market. So Volvo’s market share of the Malaysian passenger car market has halved in 10 years. I think I know why.
Last Thursday, 28th January 2010, a half page full colour ad in the New Straits Times, (NST) Malaysia’s ‘premium’ newspaper caught my eye. The ad features the Volvo V50 and a headline “There’s more to life with Volvo.” The ad goes on to sell space and luxury using images of a kayak, a windsurfer and a mountain bike. The ad lists, in really small print, a number of dealers in key cities. There is no website address.
Last Friday 29th January 2010, Volvo ran another half page ad in the same publication, this time a spot colour ad. This ad features a Volvo XC60 parked on a snow covered road with the occupants, a man and a woman in warm fur collared winter parkas sitting in a pile of snow staring out at a snow covered landscape. This time the headline is “Volvo owners get more out of life!”
If I’m not mistaken, the traditional rule of thumb has it that you have approximately 3 seconds to grab a readers attention with a print ad headline, perhaps less in today’s noisy, cluttered world. I don’t know how effective the Volvo ads have been but I did notice that the offer in the second ad has been extended, rarely a good sign. I also noticed that there is no tracking mechanism in the copy. And, in case you can’t read it, the tagline in the print ad reads “Volvo owners get more out of life!” So the ad is targetting both existing and potential customers.
Coincidentally, there is a Volvo billboard outside my office, at the busy intersection of a very busy highway. The billboard ad features the Volvo XC90 Diesel. This time the headline is “Winner of fuel efficiency award.”
Sitting in my office in the Malaysian capital of Kuala Lumpur where the recent hot spell has seen the temperature top 40 degrees centigrade on more than one occassion and the humidity is often around 90%, I tried to figure out a couple of things.
1) What was the relevance of these communications to potential and existing Volvo owners in Malaysia?
2) Why are they using images featuring snow to sell a service in the tropics?
3) Why is an ad targetted at existing Volvo owners also trying to get the attention of non Volvo owners?
4) Where is the consistency?
5) Is this part of a planned out, integrated strategy or a series of one off tactics?
6) Why would anyone get out of a nice warm car and sit on wet cold snow to admire the view?
OK, ignore the last one.
Hemorrhoids and Frost bite
Well as far as I can tell, more out of life for the couple featured in the second ad is likely to be hemorrhoids and frost bite. I don’t mean to be fecetious, but what is the relevance to the Malaysian market? There are some marketers who insist that to build a brand you need to be first in a category and perhaps Volvo wants to be first in the frost bite category but I think not.
More confusing is the content. The main copy of the ad is encouraging existing Volvo owners to bring their cars in for servicing, repairs or to buy accessories and be entered into a competition to win vouchers that can be redeemed for more accessories and parts. Shooting off on a brief tangent, the takeaways I get from that copy, as a non Volvo owner are, in roughly equal amounts:
1) you are going to be spending a lot on parts and accessories so here’s a little help or
2) these cars are built so well that you will never actually win anything because nothing needs to be repaired but the model sold is so basic you’ll be spending a lot on accessories. Interestingly Volvo also offers a 3 year warranty/100,000km for cars sold in Malaysia so if you’ve got a new car you may have to wait 3 years to receive your prize!
Seriously though, The Volvo communications are confusing. Furthermore, according to the Star newspaper, 86% of Malaysians don’t trust advertising. So that means the print ads mentioned earlier are targetted at only 14% of Malaysians. Moreover, with an entry level Volvo S40 at around RM170,000 (US$48,000) it is off the radar of the average Malaysian so a mass media approach is a waste of valuable funds.
There are a number of other things Volvo can do to halt the slide in its market share and build a profitable brand in Malaysia.
1) Separate the acquisition strategy from that of the retention strategy.
2) An indifference to retention branding is short-sighted. Michigan State University estimated that US$1 spent on acquisition generates US$5 in revenue, while every dollar spent on retention creates US$60 in revenue. Bain and Co has estimated that increasing retention by 5% can increase profits by 25%. Companies have a 5 – 15% of selling something to a new customer, but a 50% chance when selling to an existing customer. But retention branding requires a completely different strategy to acquisition branding.
3) In the mass economy the brand communications goal was to increase awareness. This evolved into persuasion but the ultimate goal today is adoption. Adoption ensures the brand is seen as the best or, better still, the only choice. But adoption of a brand is not an event it is a process built on the back of organisational excellence and reinforced by the ability to deliver relevant solutions on customer terms.
4) Volvo cannot expect adoption if messaging is inconsistent and fragmented. If print campaigns and billboards are to be part of the brand communications, keep them consistent. Announcing fuel efficiency awards is not going to drive traffic to showrooms.
5) Review communication tools and explore social media options. I believe there is no benefit at all for a luxury product like Volvo to advertise in a daily newspaper in Asia.
6) Understand social media is for communities and those communities must be relevant. The only opportunity for interaction on the Volvo website leads the viewer to an international site. Volvo owners in Malaysia will want to be part of a community here, and learn about issues and opportunities in Malaysia, not in Istanbul.
The purpose of this article is not to embarrass Volvo. So if anyone from Volvo reads this article, please view my comments as feedback, not criticism. There are a number of automotive manufacturers making similar mistakes but Volvo caught my eye!
Retention is key. Low cost carriers must learn from the mistakes of legacy carriers
The legendary Peter Drucker said it best: “The purpose of business is not to make a sale but to make and keep a customer”. This is what branding is about. It’s not about aquisition, it’s about retention. And the airline industry, and in particular, Low Cost Carriers (LCCs) need to realise this soon otherwise they will find it tough to build brands that can compete, long term with the mighty legacy carriers with their frequent flyer programmes, multiple classes, business lounges, inflight entertainment and gourmet food (well some of them).
Most of the LCCs have a price based offering. Being small, they are nimble and more efficient than their lumbering competitors. These young, brash and determined airlines, often helmed by charismatic individuals with little industry experience have ripped up the industry manuals and replaced them with revolutionary business models that charge consumers for peanuts, coffee, noodles, seats, luggage and most recently in the case of Air Asia, a ‘convenience fee’.
According to an official response from the airline to an indignant passenger, this ‘convenience fee’ is “meant to recover costs in implementing, upgrading and maintaining our online payment systems. It is also to enhance security features for credit card payments to give guests a comfortable and safe booking environment.”
You’d be forgiven for thinking that this response, available here in full on malaysiakini.com came from one of those stuffy legacy carriers mentioned earlier. You’d be forgiven too for scoffing at the line, “give guests a comfortable booking environment”. How does charging me more make me more comfortable? You’d also be forgiven for thinking that perhaps the online payment system wasn’t good in the first place and wondering what the implications of that might be.
In the past most airlines, including Air Asia, would have absorbed these costs. I quote again, “However, now that AirAsia is experiencing a rapidly growing number of online transactions, these costs have significantly increased.”
The official response to the complaint goes on to say, “This convenience fee is charged on a per way per guest basis because the costs of these systems are driven by the value of the transaction rather than by the number of transactions. As costs vary per country, the convenience fee also varies.”
The whole process has been dealt with in a manner more suited to one of the aging behemoths than such a young, aggressive and savvy carrier. To me it says that because you, the customer have helped us grow so fast, we’d like to reward you by charging you to use our online booking service. Even though it is automated and therefore doesn’t require the ongoing investment in real estate and talent that a booking office requires, we’re going to make you, the customer pay for it.
The danger here is that Air Asia is making a common legacy carrier, or perhaps I can call it legacy branding, mistake. It is treating passengers as if they are insignificant seat fillers and it is assuming that all passengers are the same, don’t have options and will put up with being treated badly. Irrespective of whether it is the first or fifty first time the passenger is using the airline.
Surely, if a passenger is a long time user of the airline, there will be significant personal data available (and Air Asia offers customers the opportunity to submit a lot of personal, travel and other information) and multiple transactions with that customer mean that the liklihood of fraud is low, should that passenger be treated, and charged, the same as a new customer? And anyway, the burden of fraud is with the Credit Card company and not the carrier, which is why it is the Credit Card company that sometimes calls after you use the card to make a booking.
Unfortunately, because the prevaling attitude in most agencies (and companies) is that acquisition is key, the typical response is yes. And it would seem, based on this episode, that Air Asia agrees with this attitude.
However, FusionBrand has long argued that retention is key to brand building. Although LCC’s have thrown some traditional branding theories out the window with their price driven strategies, you cannot build a long term profitable brand, on acquisition alone. Indeed, a low price strategy that aims to ‘buy’ loyalty can often encourage only disloyalty. That’s because a price driven customer is always looking for a cheaper alternative. And, in the LCC space, will often find it.
This is substantiated in a survey carried out by Sabre Airline Solutions, which found that 86% of airlines believe that customer loyalty and retention will have the most positive impact on their business in 2010.
So my advice to Air Asia and other LCCs is that if you want to become a brand, you must start treating customers with more respect, understand that a low price alone will not build relationships, think carefully about how you communicate with your passengers and remember that the purpose of business is not to make a sale but to make and keep a customer.
In a social media world, are Billboards a necessity or expensive exercise in vanity?
We all accept that the way consumers source and absorb data has changed dramatically in the last 10 years. Instead of listening to brands and what they have to say about themselves, consumers now listen to other consumers and buy brands based on data sourced from those other consumers.
The way consumers partition their worlds is also changing and nowadays, consumers segment themselves into communities. For companies, this should be seen as an exciting development because it gives them the opportunity to communicate directly with consumers in pre identified commuities using content that resonates with those communities in a more personalised and dynamic manner and using tools that are widely available and relatively inexpensive.
But when we meet with prospects, they only seem to be interested in traditional tools such as print ads, TV commercials and billboards. And they soon lapse back into semi indifference as we suggest the future is not about these expensive, outdated tools that are increasingly closed out by consumers.
All prospects seem to want is reach, awareness and creativity to build a brand. The high profile, mass economy tools and creative stuff that looks good, reaches the most consumers, irrespective of whether or not the product or service is relevant to those consumers and wins agencies awards.
Even if it means spending millions of Ringgit on immeasurable campaigns that are lost in the fog of messages consumers are bombarded with every day. Even if it means they cannot measure the effectiveness of the campaign with real, actionable data that they can use to save money and improve the effectiveness of future campaigns. Even if the messages within the campaign make claims the company simply cannot live up to, they still prefer this route to less expensive, targeted messages with relevant content to specific communities based on the requirements for value of that community.
It’s as if they are reassured that they are getting value for money because they can see the print ads, the billboards, the TV Commercials and therefore, so can lots of other people. Sure, billboards can be an inexpensive medium to pass on a message to a large audience. Indeed one company BPS states in their marketing collateral, …”Perhaps it’s because they (billboards) reach more people for cheaper prices than any other type of media.” But is reaching more people for cheaper prices a sound strategy for a social media world? From this we deduce that if lots of people see the product or service on TV or on a billboard, then many of them will seek out the product or remember it and buy it when they encounter it in the ‘flesh’. This may have been acceptable in a more sedate world, with limited competition etc. But we all know that in today’s marketplace, this approach is no longer effective.
Is this an Asian thing? Or is it universal? Here in Malaysia, one mass economy tool that is really popular is the billboard. Billboards, and in particular getting a company on one, is fast becoming a national obsession. One prospect recently interupted our strategic proposal and asked us to find a number of billboards at strategic locations across the capital to raise awareness of the company (The company is almost 100 years old).
The belief is that if enough consumers see the product on a billboard, preferably a really big billboard alongside a really busy highway, then the success of the brand is all but guaranteed. This obsession is growing fast. Currently, out of home accounts for only 2% of ad spend in Malaysia, but it is growing at over 35% per annum and is now worth in excess of RM100,000,000 (US$30million).
But I fail to understand the logic in this. Because think about your behaviour when you are driving. Unless you spend your days splitting molecules or working on a vaccine for AIDS, driving is probably the most complicated daily activity you will do. Not only is it a complicated activity that requires great skill, but according to research, it is a skill that consists of more than 1500 ”sub skills”.
When we’re driving, there is no opportunity to relax (This is where a wry grin appears on the faces of Malaysians). Throughout the journey, we are navigating badly signposted and unforgiving roads and terrain that changes on an almost daily basis. We’re constantly scanning the environment (well some of us are) for cars that don’t signal, pedestrians who take their time crossing the road, despite the obvious implications of being hit by a ton of steel at 50km, motor bikes driving the wrong way and debris from a recent lorry puncture. Plus, we’re constantly seeking information that can help us.
At the same time, we’re trying to maintain our position on the road. We’re also constantly checking our speed and mirrors (well some of us are), making decisions (apparently, about twenty per mile), evaluating risk and reward, looking at instruments and, despite the obvious futility, trying to anticipate the actions of the white wira with a black door and five girls in the back.
Whilst doing all this, many of us, and you know who you are, are sending an sms, talking on the phone, sipping from a water bottle or thinking about ___________________(insert name of premier league team). Others are trying to stop yet another fight between irritable kids or starting one with a spouse.
Research from the USA carried out a survey on one stretch of road in Maryland and, “found that a piece of information was presented every two feet, which at 30 miles per hour, the study reasoned, meant the driver was exposed to 1,320 “items of information”, or roughly 440 words, per minute. This is akin to reading three paragraphs like this one while also looking at lots of pretty pictures, not to mention doing all the other things mentioned above – and then repeating the cycle, every minute you drive.” (source Traffic: Why We Drive the Way We Do (and What it Says About Us) by Tom Vanderbilt). With all that going on, do billboards engage consumers effectively?
And billboards are not cheap. In Kuala Lumpur, the most expensive billboard in the country is on the federal highway, costs RM900,000 a year and reaches 252,000 cars daily. Less high profile billboards cost are around RM250,000 – RM500,000 per annum, depending on traffic. But branding requires so much more than reach today. Whilst reaching hundreds of thousands of consumers and creating awareness, especially for a new product may be an important step in the branding process of some products and services, it isn’t a goal, for any product of service.
Now I’m not suggesting for one minute that billboards are a waste of money. However, I am suggesting that you should get independent advice on whether or not it is the right tool for your brand. I’ve seen a number of billboards for B2B companies, one recently was selling shock absorbers. The major investment in that billboard and the production costs, would have been better spent on sales and marketing material to engage the automotive manufacturers and repair shops that purchase shock absorbers.
You also need to be careful how you chose the location. Just because 500,000 cars pass the billboard, doesn’t mean it is a good location. Equally important is the content of the billboard. Writing an essay will defeat the object of the billboard.
Some other questions you need to ask yourself include:
What role do billboards have to play in our brand strategy?
How can we measure the effectiveness of the campaign?
If we can’t measure it, should we do it?
What happens once we take the billboard down? How do we maintain momentum?
How can we leverage the impact of the billboard?
How can we make the billboard stand out?
It may be that a billboard will become a neccessary part of your brand strategy. But it is worth asking yourselves these questions first. Otherwise, your billboard will waste a lot of money that few companies can afford.
If having asked yourself these questions, you still believe billboards are part of your communications campaign, try to make them original. 3 dimensional billboards will definately get attention and so will digital boards. It amazes me when I see a photo of a watch on a billboard. We recently had a huge watch billboard outside our office. It was there for at least a month. No one in the office had ever heard of the brand so we decided to investigate it further to see what other communications were part of the campaign.
We couldn’t find anything so we can only assume that billboard was the extent of the communications campaign. As I write this, two months later, I have asked if anyone remembers the name. Nobody does. That’s probably RM200,000 wasted.
However, if that billboard had been digital and the watch actually worked, then we would probably remember the brand. Of course this doesn’t necessarily mean we would buy the product, but at least awareness levels would have increased.
This article has some great ideas for 3D billboards. A simple search of the Internet will uncover plenty more.
Does Air Asia need to be a brand?
Whenever I find a brand that matches its offerings to my requirements for value, I become not only a brand loyalist but also a brand ambassador. For years I was a Marco Polo member and sang the praises of Cathay Pacific to anyone who would listen. Then about 15 years ago I moved to Malaysia. Initially I flew Cathay, even though it meant going in the completely opposite direction to Hong Kong to pick up a connecting flight to Europe. But after a while, probably around the same time as I had run out of miles and therefore could no longer get an upgrade, I looked around for someone else to build a relationship with. The obvious choice was Singapore Airlines and I dabbled for a while but the hassle of changing flights in Changi and the extra 3 – 8 hours that added to my return trip meant this wasn’t really an option.
Next I tried BA for a while but they were in the process of pulling out of Malaysia so the only other option was Malaysian Airlines. I was reluctant, really reluctant for a number of reasons. MAS was horribly managed or rather mismanaged at the time. Safety was an issue, coffee shop talk was negative, morale was at an all time low, rumours of imminent sabotage were rife and the numbers suggested a severe crisis was due. But by then I had no choice as MAS was the only airline flying directly to London.
It was a gradual process but in the first year I flew a lot of domestic and international miles. I learnt the system and was able to get the best out of the airline which allowed me to experience all classes. It wasn’t so bad and by the end of the year, I was a Malaysia Airlines loyalist.
When AirAsia arrived I dismissed it as a little upstart, out of it’s league and destined to go the way of Pelangi Air and many others. The LCC model wasn’t something I believed in. Since when was travel no more than stuffing as many bodies as possible into the smallest plane that could fly the distance required? But a couple of years later I had to fly to Macau and the only flight that matched my schedule was an AirAsia flight. I swallowed my pride, apologised under my breath to the MAS 747 taxiing past the terminal and boarded the brand new Airbus, so crisp, clean and shiny compared to the 25 year old MAS Boeings and their tired interiors.
As I boarded, I was greeted by a smiling face and enthusiastic personalities that was contagious and impossible not to like, especially compared to the glum and tired looking MAS crews. Since that December day in 2007, I’ve become a regular AirAsia customer but every time I chose AirAsia, my choices are made based on price – RM680 for my wife and I to fly to Singapore and back compared to RM1710 on MAS and so on. I justify delays by reminding myself of the price and the savings. I reluctantly accept the fact that I have to pay (more and more) to check in a suitcase. I bite my tongue at the instructions that say I cannot take my own drinks on board. And this is key, I don’t have a relationship with AirAsia. And with the exception of 2 trips where I flew the night before a meeting, none of the trips have been time sensitive. To me it’s simply buying a commodity. Perhaps this is the way the business of flying is headed. Perhaps LCCs are the new legacy carriers and this is how all flying will be.
If this is the case, then fine. But how does a LCC like AirAsia build brand loyalty and the far more profitable repeat business critical to brand building? I’m fortunate in that I’ve not been subjected to one of the delays just about everyone I know has been subjected to when flying AirAsia. But when I do, I’ll immediately look at the other LCCs plying the same routes and I will switch in a heartbeat. As far as I am concerned, there is no brand loyalty with AirAsia. So essentially, the company model is based on the hope that there will be enough demand enough of the time on enough of the routes. If this is the case, then AirAsia doesn’t need to be a brand.
Perhaps this is enough for the aviation business to survive, and perhaps thrive. But judging by the LCCs in the US, I doubt it. What do you think?
The organization is the brand
This is a classic example of how a brand that spends millions on external branding, needs to also look at internal branding.
BMW has a number of dealers in Malaysia however, as far as I can determine, there are only 2 main dealers in the Klang Valley. We bought a BMW 3 series new from one of the 2 main dealers in Kuala Lumpur about seven years ago.
The dealer also has an impressive work shop and so we serviced it at the same dealer for the first six years. There is also a bodyshop and as my wife is the main user of the car, we’ve visited the body shop more often than most car owners. We own three cars but only one BMW so I consider us an ideal customer as there is obviously plenty of opportunity to cross and up sell us.
Indeed we’re intending to sell the 3 series and buy a new car in the next 3 months. However before we do so, the car require needs some attention.
Although we get plenty of generic direct mail and the occasional and predictable after service call asking if we are happy from the original dealer, the original sales person moved on a long time ago and we haven’t got a call from anyone else on the sales floor. Even when the car was 5 years old, an ideal time to sell and buy a new car, we didn’t get a call inviting us in for a test drive.
The original dealer hasn’t tried to build a relationship with us and therefore we don’t have any loyalty to them. So we sent the car to the original dealers main competition in the Klang Valley and asked them to look at the car and quote for the repairs.
Now in my business, if a client who has been with my competition for 7 years, were to knock on my door and offer me the chance of getting his business I would be all over him like the proverbial white on rice! Customers are the source of profits. Without them, brands would not exist. Existing customers are the most reliable source of future revenue. The thought of taking one of those nice profitable customers away from the opposition is, I have to say, a pleasant thought.
After all, we’re in the midst of a global recession that has seen marketing and other costs slashed. Passenger car sales are predicted to be down over 15% this year. In this environment, new customer acquisition is a massive drain on dwindling resources and any prospect is valuable, especially one that walks in the door and has “I’m a genuine prospect’ written all over him.
But no, instead of looking at us as an opportunity. An opportunity to acquire a new customer from the competition, we were viewed as another expense and the mechanic told us that they would carry out the inspection but would charge in the region of RM250 (US60)!
As you can imagine, this riled me. Sure I’m going to compare the quote with a quote from somewhere else but so what. That is a cost of doing business. But surely it is important to look past the issue at hand and the opportunity for future business?
With the right internal brand that includes standard processes for new prospects that are essentially a number of simple questions that lay the foundations for rapport. A dealer, who in this case represents the BMW brand, will be well positioned to acquire a new customer for a minor investment of RM250.
In this instance, I have a negative impression of the dealer and BMW that will require a lot of work and a much greater investment, to undo.
Doing business on customer terms is critical to brand success in the customer economy
Fascinating statistic
Wal-Mart took 25 years to reach the $10 billion mark in gross merchandise sales and Microsoft took 16 years. Using technology, modern marketing based on a significant investment in branding, eBay did it in just seven.
brandconsultantasia.com 