Archive for March, 2009

How to acquire “an eye:” visit Kyoto

If you want great results in creative efforts, such as product design or advertising, you need three things:

1)  The “A” team within your agency or design group.

2) An insightful brief that gives the creative team an intimate view of the customer and clarifies project goals.

3)  An eye, enabling good judgement of whether the results achieve the objectives in the brief.

About #3…   You might be born with this ability.  You might have access to a good teacher.  Or, you can travel to Kyoto, Japan for an aesthetic infusion.

Kyoto is home to the highest concentration of beautiful gardens that I know of.  Three days of patient absorption in Kyoto will train your eye to see balance, scale, subtlety, refinement, excellence, and restraint.

Nijo Castle, Kyoto

My mom (a fine arts major) remarked after her visit, “you can aim your camera in any direction and get a perfectly composed picture.”  I was inspired by Kyoto to make my own halting attempt at a Japanese garden in my back yard.  I feel like I’m trying to conduct Beethoven after attending the Chicago Symphony a couple of times.  I have even dared to invite a Japanese colleague (a designer!) to my house to see it.  In finest Japanese fashion, he claimed not to know much about garden design, and was cautiously complimentary.

DSC_0429

I will write more about the garden over time, but suffice it for now to say that it is a humbling experience to try to create a worthy Japanese garden.  Maybe I need to return to Kyoto for a refresher.  If you are convinced that you need to go as well, the Journal of Japanese Gardening runs trips with access to private gardens, thought to be the best.

Advertisements

Branding vs. “demand generation”

Our (Lenovo’s) new CMO, Mike Sievert, has shared his marketing principles in this post.  Well worth a look.

Two outtakes I endorse strongly:

Let’s stop the debate, happening in companies everywhere, over whether the priority should be on “brand-building” or “demand generation”. It is a false trade-off. Good marketing does both.

Customers should be segmented according to what they value when they make their purchases. As such, the “target audience” for your product is all of the customers who want what you are selling. It may sound backwards, but it’s not.

I would like to add a point on branding vs. demand generation (marketing tactics focused on immediate purchase conversion). While the debate Mike references (wherein people assume you either turn branding on or fully off) is indeed fallacious, the balance of brand desire vs. price/offer incentives is relevant and important.

Most people, including non-marketers, will readily agree to the principle that every marketing tactic should contribute to brand building.  But to what degree?  In practice, many people will insist on price/offer focused approaches (with a little brand essence sprinkled in), especially when times are tough.  This is because the measurable response rate to such tactics is always higher.  It is tempting in high volume, low differentiation categories (like personal computers) to promote on price when you need revenue.  But it is best to resist temptation.

I had the opportunity to participate in a discussion with Stanford professor Baba Shiv.  He shared compelling research that shows that a company generates higher returns (growth and profit) if it presents its products primarily based on brand benefits, vs. price.  Price oriented value propositions essentially train the customer to buy when the price is low, and reinforce associations of lower inherent value in the product.  Poor margins result, and lack of competitive sustainability for all but the cost leader.

Tech hardware companies in “commoditized” markets have a tough time with this.  Sales increases from price promotion are immediate, while profit growth from brand investment takes time.  And right now, companies understandably don’t feel they have time.  But, at a cost.  With low margins prevalent in device markets, a price premium is needed for attractive returns, and that requires brand investment.  I know, companies don’t have the budget room right now.  But there are creative (cost effective) ways to build a brand.  More on that later…

Now let me offer some practical suggestions.  If you elect to promote with price, protect your brand by offering your discounts via third parties.  For instance, pay resellers to offer discounts or incentives to customers, associating the discount with the reseller instead of with your brand.  This is what the higher end car companies do.  Create clever associations between product differentiators and buying incentives, or make the incentives themselves “on brand” (buy a Blu-Ray player and win a cameo in the next Star Trek film).  Mostly, ensure that your brand intent is never undermined in your marketing (e.g., Best Quality and Cheapest are not credible together), and that brand image has substantial weight in your tactics.

And keep your quality and service levels up, so your customers endorse your brand to others, and the next products you sell won’t require discounting.

del.icio.us Tags: ,,

Originality — preview

I’m working on a post about the business value of originality.  But seeing this picture today (at PC World) of the Dell Adamo external optical drive, I felt a preview was in order.

image

While imitation may be a high compliment, it disappoints.  Not simply because people are compelled by innovation (novelty is implied), but because there is real business value in it:

The original is authentic.  Authenticity drives loyalty.  Loyalty drives margin and shareholder value.

ThinkPad was an authentic original in 1992, with its black minimalism and thoughtful engineering.  We at Lenovo continue to nurture that authentic position.  And we enjoy a reasonable premium and customer loyalty.  A milled aluminum rectangular prism with generous radii on the corners, and crisp edges on the planes, is an Apple original.

image

Dell has (predictably) added some decorative graphics to the surface, but this further solidifies its position as a copy.  Dell has aggressively recruited design talent over the last few years, including from Lenovo, with the promise of investment in differentiating design.  I know at least one person who must be embarrassed today.

The whole PC industry bemoans commoditization; but without originality, it cannot hope to break that cycle.  Plus, isn’t it a whole lot more fun to do things first?

Looney Tunes are essential to child development

image

Do your kids recognize Wagner or Rachmaninov themes?  Do they have a grounding in post-WWII culture and politics?  Do they understand the tensions between American crassness, and the refined, more ancient mannerisms of Europeans?  Can they quote, “That creature has stolen the Aludium PU-36 Explosive Space Modulator!” in the correct falsetto?  If not, then your kids are going to be working for my kids one day.

Wait!  Before you write angry comments or click the Back button, it’s not too late.  You too can invest in your children’s future, as I have.

Simply order at least two of the four-DVD Looney Tunes Golden Collections, and start looking up the definitions of perspicacious, jocose, and sagacity to use in your holiday brag update letters.

While your little Cindy Lu Who stares open-mouthed at parodies of opera, or shrieks with glee any time Daffy Duck gets his bill shot sideways by Elmer Fudd, she will be developing advantageous knowledge.  Witness…

Cold War dynamics, not to mention adult one-up-man-ship:

Russian circus bear (apply Russian accent): “Oh ya?!  I will dive 5000 feet into a block of cement…on my head yet!”  Bugs:  “Hey, that’s a pretty good trick, doc.  But I’ll go first.”  When the Russian hits the cement block, the hazards of military threat escalation become apparent.

The cost of war…

Sam:  “I’m going to blast you to smithereenies!” Later…“I’m a Hessian, without no more aggression.”  The white flag means surrender.  Your kid is ready for honors history class and will know when to fold ‘em in Yo’ Mama insult joke fights.

More…

Large, loud Rooster, hiding in a bin:  “Heh, I say…heh, heh.   That boy will have to use a slide rule to find me in here.”  Your kid now realizes that computers did not exist at one point, and that some people can do math without pushing buttons.  Later, after being found (impossibly) in an entirely different place:  “But, but Boy!  I’m over there!…Nah, I better not look.  I just might be in there!”  The theory of multiple parallel universes!  And Descartes’ philosophy of “I’ve been dug up, therefore I am.”

From Bugs Bunny’s misdirected trip to Scotland, one learns about other places and people of the world, e.g.,…

1) golf is big in Scotland,  2) they speak differently there,  3) there are bagpipes and kilts on men (which Americans feel strangely about), 4) a good score in golf is a low one, 5) auctions sometimes create unwary victims, 6) there are La Brea Tar Pits in California, 7) rabbits tunnel underground for long distances.  A treasure trove.  In other episodes, you can also learn all manner of ethnic stereotypes prevalent 50 years ago (and posit associated modern day sensitivities).

The importance of proper use of language…

Rabbit:  “Do you want to shoot me now, or wait ‘til you get home?”  Duck: “Oh no you don’t!  I demand that you shoot me now!”  Blam!  Duck:  “Ah ha.  Pronoun trouble.”

The art of film…

Daffy’s transporting homage to Errol Flynn’s Robin Hood (“Yoikes and away!”) manifests the Golden Age of movies, without exposing your dear one  to Errol’s 1938 standard, and reveals to her the stylistic continuum running from there, through Looney Tunes, to The Princess Bride’s man in black, which I’m sure is de rigeur in top film schools.

I could go on and on.

Seriously, sit down a few Saturday mornings with your kids and some Looneys.  Explain what they are seeing and hearing.  They will learn about music, history, culture, politics, geography, smart humor, and the legitimate value of good ol’ slapstick.  They will even sing with you… “Kiwl da wabbit!”

And that’s all that I wrote for you…TA HAVE!

(points for the first to ID that last reference)

Don’t put the milk in the front (e-tailers)

Grocery is an extremely mature channel.  Every conceivable study of shopper preference and behavior has been conducted.  Many of those have discovered where the customer would prefer the milk to be located: in the front (and the same for eggs and bread, the items my wife most frequently requests that I pick up).  Notice:  the milk is not in the front, but in the most distant corner of the store.

image

On the way to the milk, I pass frozen novelties, beer and wine, candy, coffee, etc.  Higher margin categories, perhaps?

There is a lesson here for a less mature channel:  e-commerce.  Website design is a thoroughly tested undertaking, I know, but often takes an approach of asking the customer what he wants, and building exactly that.   [Note:  I’m talking here about the site architecture and flow, not so much about offer and content tuning.]  If the customer prioritizes efficient achievement of his goal (like selecting a product and ordering), the designers test variations of the site and choose the one which optimizes for that goal.  This seems sensible, but since many customers desire to pay as little as possible and not buy anything extra, the more you do precisely what the customer wants, the less profit you may capture.  This is putting the milk in the front – compromising shareholder value based on a shallow approach to sales and customer satisfaction.

Back to the grocery store.  Store management realizes they are creating frustration for the consumer with the milk placement.  So, they make up for it.  First, they never move the milk.  I can walk into any grocery store and the milk will reliably be in the back corner, usually to the left.  Also, during my round trip to and from the milk, I munch a free sample, and grab a box of fudgesicles, knowing that my kids’ enthusiasm will counteract my wife’s annoyance.

When we build e-commerce sites, certainly we need to know what the customer wants, and give it to them.  But we also need to use our spiffiest analytical tools to optimize two things:  profit (dollars, not percent) and Net Promoter Score.  Carefully balance delivery of what the customer seeks, with the addition of unlooked-for benefit.  A great customer is one who leaves your site with something better than expected.  Maybe an engaging video helped her make a more confident choice;  maybe a well-paired accessory was suggested; maybe discovery of the company’s social responsibility initiatives validated her association with your brand.  Certainly, she found the milk, but you also sold the fudgesicle and she felt good about it.  Ultimately, you want the type of customer who doesn’t even think of your competition (I rarely shop for business clothing outside of Nordstrom), and who considers your brand part of their identity (see Harley Davidson tattoos).  This will not result from simply lubricating the path from the home page to the credit card validation.

Here is an example of a site that puts the milk in the front.  It takes only three clicks to get to checkout, and there is no attempt to tell why Abe’s (of Maine?)is better, other than price, and only a limp below-the-fold attempt to up-sell or cross-sell.

image

By contrast, Target.com met me at the front door with this hero spot about re-doing my interior.

image

They offer a low price, and sweeten it with free shipping, but also present an image of my transformed interior, supporting their brand proposition of great design for less.  [E-commerce manager, you are the stewards of your company’s brand!  More later on this.]  Clicking through, you see products from various categories, and even well into the cart, they cross-sell with matched items, Amazon style.

image

I also noticed Walmart doing a smart thing.  They entice you to have your online purchase shipped to the store for pickup (where you’ll buy a cartload of something else).  The whole time, they will reinforce their brand value prop of selling virtually everything, at everyday low prices.  They are probably hoping to sell some milk, which is in the back.