“DON’T I KNOW YOU?”

My wife needed to buy a present for a christening a couple of weeks ago.

She wanted good quality and reliability and thought of a shop called Halfhide in Wimbledon which her mother used to visit.

She walked in and an assistant politely asked her if she could help and began to help her choose. It was up to this point a good, generic retail experience.

Then the owner walked in. He looked at my wife and said, “Now don’t I know you?”

“Don’t you have two sisters?

That’s right, you went to Wimbledon High School,

didn’t you marry a guy from Wimbledon College?

and haven’t you got children now?

And Judy – she has moved to Australia right?

Now when was the last time I saw you?”

My wife replied, “….about 20 years ago.”

“Well give my best to your mother and family, now how can we help you?”

This feat of mental CRM was so impressive my wife has told many people. This small business owners interest in and care for his customers has delivered loyalty through generations of families.

Now why can’t big businesses replicate this experience? Because they are big, aren’t interested and don’t care. They throw money at the problem and spend millions on complex CRM systems but it’s not just the knowledge that matters, it’s the attitude that goes with it.

The CRM relational database might be easier to manage, develop and measure, but it’s the relationship quality that makes the difference. Where is the balance of effort and expense in your business – on the system or the people?

If you have a great or poor customer services story please leave a comment below.

Thanks

Justin

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A TALE OF THREE LAMPS

This lamp is cheap at £7.99 and feels cheap

 

 

 

 

 

This lamp is expensive at £49.99 and feels expensive

 

 

 

 

 

This lamp is quite cheap at £12.99 but feels expensive

Why does it feel so expensive? Chrome styling helps but mainly it’s because of the addition of a VERY heavy base which makes it weigh alot. This makes it feel more luxurious and akin to the very expensive lamp. You feel like you are getting alot for your money as you lug the heavy box out of the shop.

It’s often the subtle, cheap to implement signals that you build into a product which break the price-value equation for the consumer giving your product an advantage in the competitive marketplace.

What subtle signals of product and brand quality are you building into your product?

If you liked this blog why not sign up to the Re:Thinking Marketing & Brands feed ? Got a view – leave a comment below.

Thanks for reading,

Justin

HOT AIR OR REAL DELIVERY? THE NATWEST/RBS CUSTOMER CHARTER

This week Natwest and Royal Bank of Scotland rolled out their Customer Charter and lots of marketing in support. Full page ads in papers up and down the country. According to these adverts they are now making 14 commitments to help them become "Britain's most helpful bank". If you haven't seen the adverts (and before you click on the links in this blog) guess what these commitments are?

In the main it is the typical shopping list of customer friendly platitudes – we will be helpful, we will help you make the right choices, we are a responsible lender, we will resolve customer complaints fairly etc. Much of it is complete table-stakes – we will keep you safe online, we will provide a 24/7 telephone banking service, for example. Some of it is complete marketing spin such as "we intend" to have 600 branches open on Saturday by end of 2010 – for perspective Natwest/RBS have over 2,200 branches; and that 9 out 10 customers will rate our service as "helpful" (whatever that means).

Without being too cynical there are one or two interesting new ideas such as the community commitments which include staying open if they have "the last branch in town" (although this might create a perverse incentive for them to close down struggling branches sooner rather than later) and 25,000 financial education lessons (which again for perspective is only 0.0026 per child given there are 9.5m school children in the UK). More interesting is what has been left out.

Given that RBS/Natwest collapsed and was forcibly nationalised with taxpayers money by the UK Government in 2008 then wouldn't a commitment to financial stability and prudence have been appropriate? Given that the business failed because the money that was deposited by normal retail customers was used to build a balance sheet of around £1trn that funded risky investment banking wouldn't a commitment to managing risk more tightly been right?

And given the massive resources of this nationalised bank are the commitments to financial education really big enough? However, as I have argued on this blog before, the focus on banks at the moment should be on delivering a good, reliable service well rather than marketing and innovation (see Just How Special and Different are Financial Services Brands), in the end that is how trust will be re-established. Therefore many of the commitments are well made if they can be delivered.

So I decided to visit a few Natwest branches and talk to staff about the Charter and what it means to them. Of the three central London branches I visited none had any literature about the Charter even though all the adverts say that you can pick up a leaflet in branch. Chatting with staff I was greeted with the following comments:

"Yeah they told us about this last week, it's how they will improve the service"

"It's about serving people in 5 minutes"

and

"Dunno about that"

Searching the Twitter-verse this morning revealed an interesting series of #fail tweets from frustrated Natwest customers which might indicate that Natwest have a significant way to go on delivering their commitments.

This doesn't bode well and perhaps indicates that the timings of the marketing calendar trumped the roll out internally. This is a classic financial services marketing mistake.

Financial brands are built through experience and people. An employee that completely understands the experience they are supposed to deliver, and is supported by management and aligned incentives, is how these commitments will reach you and me. This is the really hard work of re-orienting and aligning people – this is where the focus should be rather than working with the ad agency. Without this the millions of pounds being spent on advertising this charter (and remember it is our money!) is mis-spent and will be more marketing spin that will make the lack of trust worse.

I wish Natwest/RBS luck with their commitments if they are one of the very few financial services brands and businesses that realise that the way they will win the loyalty, respect, trust and share of wallet of their customers is through creating employee advocates and excellence in actually delivering on their commitments rather than by advertising and marketing the hot air of what they intend to deliver in the future.

What do you think? Do you think this is a good initiative by Natwest and RBS? Do you trust them more given the 14 commitments? Are you a Natwest or RBS employee – what's your view of this campaign and the commitments? Any view – please leave a comment below.

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Justin

Mail me: justin@basini.com

My website and blog: http://www.basini.com/

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2 min Video book review: Cradle to Cradle

Last week I read a fantastic book called Cradle to Cradle about eco-effective product design. Really easy to read and really mind expanding. Definitely a read for all those involved in designing and delivering products.

Here is a link to it on Amazon (its an affiliate link so you know!) and my two minute video review.

I am thinking of doing a series of these video book reviews. Please give me feedback on whether you think they work and what I should include.

Here is also a TED talk by William Mcdonough on the key concepts.

What do you think? Leave a comment below and share these important concepts.

Thanks

Justin

Mail me: justin@basini.com
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JUST HOW SPECIAL AND DIFFERENT ARE FINANCIAL SERVICES BRANDS?

This morning I took part in a lively debate organised by the Financial Services Forum and their newly formed Brand Strategy group chaired by the inestimable Lucian Camp.

I shared the floor with Tim Pile who is CEO of Cogent Elliott and has a long and distinguished career in marketing including being CEO of Sainsburys Bank and the insightful Mike Hoban who is now running marketing for DirectGov and has had successful stints at Scottish Widows and Barclaycard.

We were each asked by Lucian to describe the essence of brand building in either Packaged goods (Tim took this on), Services (excluding financial services – Mike took this one) and Financial Services (this was mine).

My key point was that I believe many of the principles of brand building are common irrespective of category because essentially we are dealing with human psychology but that the context of these principles within financial services does make it "special and different".

Three context differences in financial services:

1. Financial services companies are hard wired around product and P&L analysis rather than brand and customer.

This means that the power within financial services companies almost always resides within commercial product owners rather than marketing. These leaders are trained in P&L, balance sheet risk, regulatory compliance, operational effectiveness not marketing, brand, experience and customer.

The very logic of brand building, positioning for strategic competitive advantage, customer segmentation, product development based on consumer need are all more difficult concepts in a financial services organisation. The result is an industry that in general creates me-too products which are overly complex, often game the consumer, provide a poor overall experience and are communicated in complex jargon.

2. Financial services are delivered through people. And people are much harder to manage than a shampoo formulation.

Certainly in most product categories especially the FMCG companies, brands are entities created to effectively penetrate the customer mind and form associations with product performance rather than being a set of associations about a group of people doing something. In most cases in FMCG companies the brand you are marketing is not the brand you work for. Given most financial services organisations have one or only a few brand the internal service and brand alignment challenge in these brands is core and material to their success. From the Indian call centre agent to the CEO in a financial organisation each needs to understand the brand and how it applies to their job.

3. Financial services products tend to be more risky and complex than many other types of products or services. They require much more effort from the consumer and the provider.

An irony of financial services businesses is that the organisation often believes they are the most commoditised of products. I used to be told all the time at Capital One – credit cards are a “low involvement” business. Consumers take a product and then want us to disappear into the background.

But having spent lots of time obsessing about how to make white gloop in a bottle exciting to consumers, I don’t think that financial services products are or should be low involvement – they have a massive impact on people’s lives and well being.

If they low involvement its probably because they are difficult and complex to communicate and understand. This combines with the terrible mess we are in from a regulatory perspective, defaulting to complete, unedited exposure of all information, to make it extremely difficult for the consumer to make an informed and empowered decision.

And finally (as Lucian called it the "Basini bombshell") I ended up questioning one of the core purposes of brand building:

4. Financial services brands – it's not about being different but about making a difference

The strategic goal of marketing in many businesses is to create a differentiated position in the market that gives you competitive advantage through cheaper cost of sales or price premium for example. Of the many principles that we could consider this is perhaps one of the most fundamental.

Actually I’m not sure this has been proven effective for the main stream brands in financial services. If we look at our banks for example. A highly consolidated and inert market with very little to split apart the businesses products, performance or promise.  Certainly not enough to encourage mass switching to occur except maybe in those more liquid and more easily gamed products like credit cards.

In highly competitive and easily switched categories there is definite advantage to creating new ideas that better match and deliver against the consumer’s myriad needs. But the difference in financial services given their complex, impactful and long term nature is that aim shouldn’t be to create the new, new thing to gain share at the expense of customer loyalty but to focus on superior product reliability and partnership as a route to extracting competitive advantage and value. This is how our organisations and products can make a difference.

As marketers, we may not be in the right job to get to the CEO spot, we might be wired a little differently from the mainstream in our organisations but given our products are difficult and risky, and are built through human relationships and service, we have myriad opportunities to build great brands which have lasting value for our organisations and customers.

Lucian's blog on the session can be read here. 
 

Here is my presentation as a slidecast:

 

Thanks for reading. As always please share and comment if you've got a view.

Justin

Mail me: justin@basini.com
My website & Blog: http://www.basini.com/
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A CROCODILE FOR BILLY?

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In his speech to the Financial Services Forum dinner in December Nigel Gilbert the outgoing Chief Marketing Officer of LloydsTSB talked about the role of marketing and the consumer in banking. He also talked about an initiative that LloydsTSB ran last year called “A Crocodile for Billy”. This is a book / ebook about saving and spending for parents to use with young kids.

His themes about the role of marketing and brands in financial services echo my own thoughts around the rights and responsibilities of marketing departments. I outlined some of these in my Battle of the Big Thinking presentation: Escaping The Matrix. Undoubtedly there is a massive need for more human understanding in business with its overfocus with quantitative analysis and comfort with people who are technically gifted but less comfortable with vision and working in our very human and emotional world.

When operating well marketing should be the “heart of an organisation” – and I mean that not to indicate its position but to capture its unique added value. Businesses and brands, the great ones anyway, are full of heart, vision, ambition and human understanding. They are often driven by a passionate leader who captures the heads and hearts of employees and customers alike. Marketing and the brands they develop have the ability to inspire and energise even when a charismatic founder or CEO isn’t available.

And there is something here that is at the core of why our big banks are not great businesses or brands. They have little heart, vision, ambition or human understanding. They can’t understand why people are appalled at billions sitting in bonus pools after the past two years of bailouts. They don’t have a vision for the role that banks and financial institutions need to play in our society. A senior executive at LloydsTSB recently said to me that their vision was “to become the UKs most recommended bank”. If that is the extent of their collective vision for a business that has been given near monopoly share levels and billions in state money (your money, my money) then my vote would be to break it up – they don’t deserve to exist with that little ambition or understanding of their responsibilities in society.

And Crocodile of Billy is a neat example of the practical impact of this lack of vision and “head beneath the parapet” attitude that most of our banks are operating in currently. Its cute, I like it, I’d like to get a copy (although I can’t see how? You can’t buy it anywhere?), and I’d like to read it to Luca and Daniel. There is no doubt that we need desperately need more financial education in our society. But Crocodile for Billy is a tiny, albeit positive, effort in this regard. Why doesn’t the financial services industry realise that they have a massive responsibility and the resources to fill this gap? They could work together, invest the hundreds of millions needed and ensure that every child gets the information they need to make informed decisions in their financial choices.

That would be a vision. That would be added value. That could be transformative to our view of financial services brands. Until they realise that we demand more as their customers and as members of our society, especially in the light of the last two years, financial brands will remain in the gutter, actively distrusted and disliked.

Get involved in the debate – comment below. Do you work for LloydsTSB or another UK bank – are you brave enough to share your view?

Happy New Year! I hope 2010 brings you all that you need.

Justin

Email me: justin@basini.com
My website: http://www.basini.com/
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DON”T CHANGE WHAT YOU DO, CHANGE YOUR BRAND POSITION

Ever considered whether moving your brand’s position is good idea?
Ever thought about whether you could thrive in a cheaper part of the market?
Ever got frustrated that you don’t make much progress against your competitors?

I’ve often looked at these brand positioning questions and recently experienced the repositioning of Aer Lingus, the Irish national airline.

I used to despise Aer Lingus. When I was travelling to Dublin every week for work (about 7 years ago) I avoided them like the plague, they were awful. Badly run, never on time and unpleasant. They were a poor imitation of British Airways or bmi. Worse of all they were bad AND expensive.

But in the last few months I’ve flown Aer Lingus four times and they have changed significantly. It seems they have upped their game but the main thing they have done is reposition their brand and that has done wonders for their perceived value.

They have kept the core of their national carrier approach – assigned seats, quite generous baggage allowances, trained and uniformed staff, sober style, normal planes with normal seats. But they have changed their pricing model to be similar to Easyjet – i.e. book early get cheap seats. For all the flights I have taken with them I have been booking up to 8 weeks in advance (so not incredibly early) and got flights for under £50.

Aer Lingus are now competing in my mind with Easyjet and Ryanair for my low cost flights. They aren’t competing with British Airways anymore from where I look at the market. They bring a certain national carrier quality to this low cost competition and this combination has won out for my last 4 flights. They didn’t win when they were competing against British Airways, they do when they compete against Easyjet.

Sometimes you don’t have to change what you do, you just have to move your brand or business model to compete in a different part of the market where you bring value.

Now, as a quick look at their results shows, the challenge for Aer Lingus will be to right size their cost base to the reduction in revenue per seat that low-cost has caused. They need to do this whilst maintaining a half decent customer experience and is currently differentiating them from their low cost competitors. Not an easy task but by focusing on the things that really matter, keeping some of the national carrier experience, and innovating on key dimensions they have a chance.

A good example is their investment in the hub at Gatwick or the very impressive self check baggage approach they have in Dublin. This self check baggage system means you can sticker and drop your bags automatically. Rather than detract from the experience this is a great innovation and almost guarantees no queuing.

We’ll see where the airline story goes. The “pack ’em in like cattle model” will I think become increasingly niche, especially as flying becomes more expensive. I, for one, will be looking for great value.

Thanks for reading, as ever, please comment if you have ideas or thoughts.

Justin

Email me: justin@basini.com
My website: http://www.basini.com/
Read my blog: http://www.blog.basini.com/
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THE NEW LANDSCAPE OF BRANDS

A quick post to share a presentation that I put together for the UK Marketing team for Carlsberg. An old friend of mine (Ian Hannaford @ihannaford) is now a Marketing Manager at Carlsberg and he kindly extended an invitation to talk through some thoughts on brands and marketing with the team.

It was great to meet the team and I really enjoyed the session. Some really interesting ideas surfaced which provoked lots of discussion. I learnt alot about Carlsberg including the fact that it is run as a trust contributing to Danish projects and the top board is scientists and artists. How differentiated is that?

I was impressed that the team was open to hearing ideas and thoughts from other marketers and categories – I wish all teams were as open. Thanks also go to the Director of Brands Paul Davies for allowing me a slot at his meeting.

Do you want me come to your team meeting and provoke some thinking and discussion? Email me – I might just take you up on the offer!

As ever – if you have any thoughts, disagreements, energy and passion to share about brands and marketing then please comment below or drop me an email.

Update on Battle of the Big Thinking (for those that have been following my frustrations on Twitter) – I finally have a stable draft of the presentation. If you are attending see you there and if you aren’t you will be able to take part because I’m going to extend an invitation for you to join the debate!

Hope you are having a great day!

Justin

Email me: justin@basini.com
My website: http://www.basini.com/
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THE PIZZA OF INNOVATION

I'm a huge fan of Pizza Express (for those non UK readers Pizza Express was the first sit down pizza restaurant chain in the UK established in the 60s). Both my sons were born soon after Pizza Express visits!

And despite now having a growing family we still love Pizza Express because over the past few years they have stepped up their innovation and much of it is based on really good insight into their customers.

After a recent visit a few lessons struck me on what pizzas reveal about customer led innovation:

1. Understand the desired experience not just the product attributes. My wife and I still like to spend an hour or so in a restaurant having a simple dinner. That hasn't changed now we have three kids. We've learnt, as many parents before us have, that the art to keeping that hour pain-free is keeping the kids occupied. Increasingly kid-friendly restaurants dole out the crayons and paper but Pizza Express have taken it to another level. They have tailored their kids menu to be multiple small courses over the space of an hour. So you quickly get garlic bread or dough balls for the kids to munch, then comes a small pizza, then an ice cream, then a really cute idea – the Bambicino – which is a frothy cappucino style milk. This means whilst we eat a starter and pizza the kids meal is paced to keep them occupied. Pizza Express have understood what I want and, more importantly, what my kids want so that we all get a good experience.

2. A well tried foundation is the best starting place for new ideas. Why is the pizza such an enduring food? Because it is a solid foundation from which to add and adapt. This is true for much innovation (and indeed solid incrementalism) – start with a good process or product, understand what is great with it, and then improve. A strong foundation also allows you to engage the customer through customisation…

3. Customisation was, is, and always will be a powerful way to engage. From its earliest origins the pizza has been a customisation engine. One of the reasons almost everyone can enjoy a pizza is that the solid foundation allows personal expression and the adaptation to personal taste and creativity. This is what I love about Apple products, a great base product facilitating creativity, for example, through the music you put on them or what you create on them. Dell were the masters of mass customisation but on attributes that were intrinsic rather than 'tasty'. Only now are they realising that allowing customisation on the surface is as important.

4. Innovation isn't always about adding things – it can also be about taking things away. Most companies that I've worked with start from a foundation of their current product or process and then think about features or benefits that can be added in order to innovate. This isn't a bad path to innovation but it can be illuminating to think about what to take away from the product. Pizza Express have a new product called the Leggera. This is a pizza with the middle taken out with salad replacing it. This fills a need for those who want a lower calorie option. I admired Vodafone when they launched their Simple proposition. A simple phone and tariff for those that wanted just a phone that worked like a traditional phone not a computer. Dyson took away the vacuum cleaner bag for a better experience. You don't always have to add.

5. Different occasions are sources of new volume, canibalisation can be a red-herring. In the last few years Pizza Express have launched a line of retail pizzas. I bet this gave them some sleepless nights. I can hear the discussions now: surely this would canibalise their take out business or, even worse, their core restaurant business (especially in these more difficult times as people trade down)? Perhaps it would damage the brand because they couldn't gaurantee product quality? Overall I think it works well and from what my friends in the supermarket industry tell me it has been a hit. It has provided a new occasion for loyal users to use the brand and allowed those who don't visit the restaurants to buy into the franchise in a different way. I bet frequency of consuming a Pizza Express product is way up since their introduction. Starbucks are now launching into instant coffee with their VIA product. I suspect they had lots of similar debates. If the product is good I bet it will slowly creep into the Starbucks loyalists' non-Starbucks coffee consumption and potentially open the brand up to non-users.

What do you think? How do you innovate? Got any lessons to share? Please comment below. Feel free to share this post with other innovators (or pizza lovers!)

Justin

Email me: justin@basini.com
My website + blog: http://www.basini.com/
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What future for the Orange and T-Mobile brands in the UK?

I was asked this morning about whether I had a view on the future of the Orange and T-Mobile brands in the UK now that Deutsche Telekom and France Telecom have announced that they will be merging their UK operations. It’s a fascinating brand problem that they are apparently going to take up to 18 months to decide and that the issue is of “vital importance”.

The UK mobile phone market is a really interesting brand landscape. The chart below maps the market a couple of dimensions which split out the top 5 players. Vodafone plays the Incumbent position (the safe, big choice), despite not being the market leader, and is still product, product, product. O2, the market leader, has used design and customer focus brilliantly to differentiate focused on a fresher, younger demographic. VirginMobile, as a virtual mobile network operator (MVNO) partner to T-Mobile, has carved out its now well trodden youth customer focused challenger position.

T-Mobile has always fallen between two stools: not big enough to be an incumbent but with an incumbent like attitude (from Deutsche Telekom ownership I suspect) which has tried to move from product to customer but has been erratic. Orange is the real brand disappointment of the category moving from its original high quality, customer focused, cool, challenger position into a middle ground between an incumbent and a challenger.

The brand and marketing challenges for T-Mobile and Orange will be to decide where the future of the market will be, which customer group they want to use as a focus, what customers want, and then to understand whether the Orange brand, the T-Mobile brand or both gives them the best solution.

The most obvious choice is to bin the T-Mobile brand whilst using the merger to re-invigorate the Orange brand. T-Mobile has always suffered from a patchy (at best) brand heritage (remember Mercury and then One-to-One?) and a down-market feel. Orange is a brand just waiting to be given the kiss of life.

However a more interesting solution might be to keep both brands. T-Mobile to target the more pay-as-you-go, value based customer, perhaps younger. Whilst the Orange brand becomes again the customer-focused, cool challenger to Vodafone and O2. Tactically this solution allows the T-Mobile brand to go to places that the Orange brand wouldn’t necessarily want to be seen in such as corner shops, or targeting the super value end of the market with hard hitting direct response marketing. This allows Orange to then be much more aspirational and regain the zeitgeist with a return to their cool, slightly arrogant, brand values.

Of course, as I have discussed in this blog before (Why do big companies struggle to get the customer experience right?), buying and using a mobile phone is a service experience, and all the mobile brands have had significant service issues. Creating a compelling brand strategy is the first step, creating a coherent brand reality will be where the really hard work starts.

It’s a great set of brand issues to try to work out and I wish the merger teams the best of luck!

Yours

Justin

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http://www.basini.com/
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