Here's Some Magic for the Holidays.

This year I was honored to be a contributor to the Book "Marketing Magic" from Insight Publishing. This book features 18 interviews with marketing experts from various backgrounds and expertise, including Brian Tracy, author of "Turbo Strategies", and Jay Conrad Levinson, author of "Guerilla Marketing" and yours truly. I offer this book at my presentations for the list price of $19.95, but wanted to offer my blog readers a special offer. It's yours FREE if you just send me the names of five other executives who might benefit from my monthly blog. Or if you want to order a quantity for you and your staff, it's only $10 a copy(plus shipping). Just send me an email, and I will send the book to you right away.
I think it's pretty great reading with a lot of helpful insights in conversational style.

Hope you enjoy it.
Ken

‘Tis the Season to Remember

Over the past couple weeks, I’ve had several conversations and phone calls about Wal-Mart’s holiday advertising which broke prior to Thanksgiving. Committed to not making the same mistake as in 2004, Wal-Mart aggressively launched a media blitz to insure that they would get out the blocks selling at 5 a.m. on Black Friday. They launched the holiday with a series of spots featuring celebrities like Garth Brooks, Martina McBride, and Destiny’s Child. Then, they essentially bought out the day before Thanksgiving television networks with spots touting their Friday morning blockbusters with as strong a price/item blitz as I have ever seen from any retailer.

While they claim that 2 million+ shoppers broke down their doors in the first two hours on Black Friday to get their $398 laptops and $179 flat screen televisions, I’m afraid that the world’s #1 retailer forgot that this is the season to remember what got you to the top spot in the first place.

It certainly isn’t running a feel-good campaign with big names singing nice songs, which looked a lot like Target campaigns of old. Actually, these reminded me of campaigns that used to make Dayton’s and Marshall Field’s the place for holiday shopping when department stores were just that. I don’t think running department store type of spots is what has made Wal-Mart the shoppers destination store all year long as well as the holidays. Then to come back with a price-item campaign for Friday morning specials when you have been touting “Always low prices. Always” for years just to make traffic goals for 7 hours on Friday seems really contradictory. Granted having an exclusive boxed CD set from Garth Brooks (even though he’s been retired for 4 years) is a real merchandising coup. But to go and break prices on laptops that cause people to trample each other just getting into the store and then have fist fights over one of only six that were in stock that morning does nothing but put you in the same boat that nearly sunk Kmart years ago. The news is filled with reports trying to discredit the company now that it’s so big. Why do they have to resort to old time tactics that not only disappoint customers who are used to being able to get what they see advertised at Wal-Mart but also to undermine the trust that they have so effectively built on their march to the top?

It seems they forgot what got them there. Real people talking about real savings on real items they want that are in stock. No doubt Wal-Mart’s campaign needed a fresh look and inspired outlook, but simply running a campaign that looks and feels like those done by the very retailers they took market share from every year is really a step backwards.

The New York Times reported that Black Friday sales were down .9% from last year and that it was a “lukewarm” sales day. I actually went to Wal-Mart on Black Friday at about 4:30pm (you think I'm crazy enough to be there at 4:30 AM?) to see what was happening and pick up some outdoor lights as well. There were no lines at the registers, there were no traces of the blockbuster items, and it was as exciting (from a customer standpoint)as a Friday in mid-August. It sure isn't the way I remember holiday sales from years ago. ‘Tis the season!

Here's to you and your--hope your holiday is more exciting!

Happy Holidays!

Ken

MAKING IT EASY—THE KEY TO BRANDING.

Today, November 3rd, is World Usability Day. Have you planned all of your celebrations for this memorable event? If you haven’t, you might want to celebrate something significant—like the fact that you figured out how to hot sync your Treo or that you finally were able to set the right ringtone on your cell phone or Blackberry. In short, it’s the day founded by the Usability Professionals Association (product designers, testers, etc.) to signal the need for improvements in making things we use every day more easy to function in our life (according to USA Today).

Having spent a lot of time in the consumer electronics industry, I am well aware that one of the biggest consumer needs from the retailer is HELP in not only picking out the right model and brand but also assistance on how to get that gizmo to work right from the start. A big part of the burden certainly has to go back to the manufacturers who want mass market appeal but who in fact make their products extremely difficult to figure out and even harder to operate the stuff that they make.

Several years ago while at Eckerd, we worked with Ken Dychtwald and the Age Wave organization in an effort to make our stores more “friendly” to the growing mature market as we looked realized that the baby boom generation was moving quickly past 50 and looking at their sixties in the next 10 years. Besides looking at merchandising that met this customer’s needs (from reading glasses to Metamucil), we also looked at ways to make our stores easier to shop for an aging customer. Better signing, automatic doors, eye-level shelf positioning, and blood pressure machines were just a few of the things we addressed to make it easier for the 76 million baby boomers to shop our stores. Unfortunately, we didn’t do much with our people in the stores to make the experience more relevant and more usable. We still had 16 year-old high school juniors working in the pharmacy counter talking to 67 year old customers who needed help with hemorrhoid medications, vitamins, diabetic needs, etc.—all things that the clerks neither knew anything about nor did they often know what they were used for.

Inspired by what we learned from Age Wave, I asked a lot of questions later when I joined Circuit City and I pushed for us to challenge the Sony’s and Panasonics of the world to make a VCR or television with dials and labels that a person with bi-focals could read and understand. That still hasn’t happened, obviously, according to the Usability Professionals Association, and it will only happen if retailers demand it. They probably won’t because their sales associates don’t get it either. Not only do the store associates need to know the features of the products, but they also need to be able to relate to the growing mass market of people (like me) who have the cash but maybe not all the savvy (or eyesight) to understand the latest technology and how to use it. This is a big opportunity for companies that are “customer centric” or who claim to have “just what I needed” to keep me up to the state of the art in electronics. The Wal-Mart’s and Costco’s are going to continue to grow their market share in these categories, but they are not likely to provide any more help than to assist in loading the items in the customer’s car. It ‘s the specialty stores who have a big opportunity (and their best defense) to provide people who can help explain how to use the products and determine the right item for each customer. That’s where the Geek Squads can help, but they are basically an after-the-sale swat team. What about before the customer buys?? The marketing opportunity is to have the right people (maybe they should be 47 instead of 17 years old) who can relate to the customers and at the same time provide feedback to the manufacturers on how to make their products more usable. Maybe then, we could have a “World Helpful Associates Day”.
Have a great day.
Ken

AND THE WINNER IS….. LESSONS FROM THE WORLD OF BASEBALL.

As the baseball playoffs got underway last night, the line-up of teams by and large looked the same as usual with the Yankees, Red Sox, Angels and –oh yeah, for the 14th straight year—the Atlanta Braves.

It’s hard to remember back to the days when the Atlanta baseball team came to our marketing group at Eckerd looking for potential promotional tie-ins with their sorry team of perennial losers. Now they hold the longest winning streak of any professional sports team. It hardly seems fair to someone like me whose Devil Rays finished last for yet another year in the American League.

As I read an interview between the Wall Street Journal and John Schuerholz, the Braves EVP and General Manager for all of those 14 straight playoff years, I was impressed on how the principles of building a consistently, great team is a lot like building a great brand, especially in the competitive retail world. When asked how he managed to achieve a record that any CEO would die for, Mr. Schuerholz said:

“It really turns on one significant principle, and that is surrounding yourself and filling your organization with quality people and providing them with a clear vision, an uncompromising game plan.”

Notice he didn’t say put together an exciting group of characters, have regular stadium promotions, and have a memorable team slogan. Once again it’s the people, stupid! Now I know there are some that will say that it’s just a matter of getting the best players, spend a lot of money on them, and the rest happens. Schuerholz talks about the entire organization and not just the players and coaches. Winning brands are the same. It’s not just having great merchants, great marketers, and dedicated operations people. It’s having everyone from the distribution centers to the sales floors understanding the brand vision and then executing it better than the store across the parking lot.

I’ve talked about the 5 steps of totalbrandintegrationÒ that we have developed to get everyone to live up to the brand everyday. It’s not coincidental that Schuerholz’ 5 Tips on Transforming a Culture of Losing are very similar to the branding principles:
· Gather everyone, communicate the plan and preach it daily. How often we forget to market our brand to our own people as effectively and as consistently as we do to our customers.
· Constantly remind them that it works. Just sending out a video and a newsletter is not gong keep the brand top of mind. It has to be talked every day at every store. The store managers are the team leaders.
· Don’t be afraid to get rid of the people who don’t buy in. There is no shortage of the right people for the job even at store level. You have to go after the right ones and recognize the attributes of your best people and replicate them. Let the rest of them go on the free agent list.
· Make the lowest level employees feel as important to success as the top-level executives. The people on the floor or on the phone in customer service are the one’s who have the interaction with the customer and make the brand a reality (or a false promise).
· Show trust in everyone to do their jobs well. We all talk about empowerment as much as we do about branding. The key is to living it with great people who understand what the company is all about.

In the coming days, we will hear a lot of interviews with the winning players and managers and they will likely say something to the effect that “it’s really a team effort” that makes winning possible. Winning consistently and having a preferred brand day-in/day-out, certainly is a team effort and the brand is the personification of the team and the vision.

Now back to the game.

IT’S ALL ABOUT PRICE. (Yeah, right.)

There isn’t a presentation that I do or a discussion that I am involved with in this retail marketing and branding world which doesn’t come down to a discussion about low prices being the key to getting today’s consumer. No doubt about it. Every consumer market research study that I have ever seen ranks price as number one in importance in selecting a place to shop. I always point out that this is no surprise and that price just gets you on the playing field and it’s all the other branding and marketing activities that a store does which make up the customer’s mind as to where he or she is going to spend their dollars. It inevitably comes down to a discussion about value. After all, if it really was all about price, we’d all be driving Dodge Neon’s and doing all our shopping at Wal-mart.

That’s why it was interesting to see the news reports last week about Neiman Marcus’ 4th Quarter performance, which showed record-breaking results:

“Apparel and accessories retailer The Neiman Marcus Group Inc has enjoyed fourth-quarter and full-year profit increases, encouraged by full-price sales and expense control.

Fourth-quarter net earnings leapt 67 per cent to $34 million compared to $21m in the same period last year. Net sales totaled $851m compared to $784m the year before, while same-store sales grew 9.6 per cent.” Just-Style.com, 9/7/05

Wait a minute. Did that say “full-price sales” helped earnings increase 67%? Now, granted N-M has never been known as a place for great discounts. But if the consumer is so conservative and looking only for a good price at all levels of income, this just doesn’t seem to make sense. (Especially, when you read that Saks sales were down 0.3% for the month)

I didn’t have to wait long for an explanation. The day after reading this report, I was talking with a colleague of mine from the National Speakers Association and we were discussing my presentation focus and the importance of people in the branding strategy and execution. She indicated that she was a regular shopper at Nieman’s—not a really big spender, but a loyal customer. She said it was all about the way she was treated and that even though she didn’t consider herself a major customer, the store treated her as if she was one of the late Stanley Marcus’ dear friends. She said she regularly received mailings and personal phone calls advising her of new merchandise that matched her past purchases and tastes. More importantly, she said, “was the way she was treated when she walked into the store. “People actually called to me by name and welcomed me back. They made me feel like I was the most important customer in the department. And my friends, who sometimes accompanied me, were really impressed.”

Well, if it works at Nieman’s, it certainly works at the local grocer, the corner drugstore and the big box at the local Town Center. Give the customer personalized and interested service and they will come back and drive up your profitability. A few years ago, Yankelovich and Partners, did research which showed that over half (53%) of customers will pay as much as 10% more to get good service. So why don’t stores make sure that the people in the store understand this and perform to customers’ expectations. Unfortunately, it’s because management is too obsessed with the next great sale circular or full-page ad or major promotion. Loyalty is the key—both from customers and from employees—to driving up record sales and profitability. Stanley Marcus understood this a long time ago. It’s time for today’s merchants and marketers to get with it too. It’s a people business after all.

Let us know what you think.

Ken

The story behind the headlines.

"Exec cleared of Kmart Fraud"
Headline Detroit News, 8/15.
"Wal-Mart author's theory says discounts are now entitlements" Headline, USA Today, 8/15

Much has been written about these two discount chains over the past several years, drawing comparisons (and mostly differences) about how one chain has succeeded unbelievably while the other has teetered on extinction for quite a while. A couple things occurred to me as I read these articles that I thought would be good material for this forum.

First, Charles Conaway, may have been found not guilty of doing anything illegal while he was CEO, but he certainly can shoulder a lot of the blame (as could some of his predecessors) for Kmart's ongoing loss of share, loss of sales, and loss of trust by its customers. The company simply ignored what competitors like Wal-Mart and Target were doing in building brands that people not only trusted but where people liked to work. The ongoing reliance on sales and promotions that were not supported in the stores not only turned off most of Kmart's customers but it depressed and de-motivated most of its employees. So the stores looked lousy, the inventories were never where the customer expected, and the customers basically had a poor shopping experience until they gave up.

Unfortunately, the company continued to reward this poor performance with big bucks at the top and big severances for doing a pitiful job of branding the company. The civil court may have found him not guilty, but the jury of customers passed their judgment a long time ago and they haven't forgotten.

Secondly, in his book, "The United States of Wal-Mart", John Dicker calls Wal-Mart the "champion of cheap" while maintaining that all customers care about any more is low prices and one-stop shopping. Well, there's no doubt that Wal-Mart's success has its foundation on having the lowest price perception of any retailer (notice I didn't say cheapest). For some reason, since Wal-Mart has become the largest company in the world, we think it's a fault that they have driven down prices for the consumer. The reality of it, as born out in countless research studies, is that the company has won because the customers trust them to have the lowest prices and to have what they want and need. And they trust the people working in the stores to make sure they do in a friendly way.

Is Wal-Mart a predator? I think "competitor" is a more appropriate description. As a company obsessed with getting the best prices and the best values for its customers, Wal-Mart has beaten a lot of lesser retailers (like Kmart and all those poor small town retailers who never provided good value to their captive markets). And it has developed an organization that believes they are providing the best for their customers. Sure there have been some guilty parties who have taken advantage of the company's strength and positions lately, but with over a million people in an organization, these have been the exception. In a recent store check (which I do regularly), I found the checkouts at both Target and Home Depot (2 of my favorite stores) to be fairly empty on a recent Tuesday night with only two checkouts open plus the self-service aisle. Wal-Mart, on the other hand, had at least seven open and ringing up big shopping baskets.

People shop Wal-Mart because they like it, they trust them, the like their people (who most of the time love where they work), and by the way they save money. That's not being cheap!

What do you think??
Ken

It's about people, not advertising!

Just over a month ago, I finished an exciting and challenging assignment with Doner Advertising in Detroit. Doner is one of the leading agencies in the country and one which still specializes in working with companies who need to reposition themselves in a hurry in order to survive.

Working with a terrific account team in Detroit, I revisited the marketing department of Circuit City in Richmond, where I had been VP-Marketing back in 1994. The challenges were even greater now than a decade ago for the chain. However, instead of being #1 in the industry as it was back then , Circuit City now trailed both Best Buy and Wal-Mart as the preferred choice for America's consumer electronics dollar. It was a great opportunity as we worked to reposition the stores as the places that had "Just What I Needed" in the complex, sometimes-intimidating electronics business.

One thing became blatantly obvious and that was that the lines between category competition are more blurred than ever. No longer can a big box store only worry about its similar competitors and ignore the mass merchandisers, the warehouse clubs, the drug stores, department stores, and, oh yeah,even my old favorites, the chain drug stores. Don't forget all of the online marketers as well who have taught consumers that the easiest way to "shop" is to simply log on and take a look and learn. It still comes back to being the preferred choice by your target customer. Creating a brand that reassures you that you'll get just what you need, at a good price, with an easy return and service policy, and with the convenience of making it easy to get what you wanted and get back to your busy lifestyle.

However, I am more convinced than ever that the most important piece of the branding strategy is often left untouched by all the marketing efforts--the people in the store must live up to the brand everyday. We simply can't expect to hire some warm bodies, give them some essential floor training, and then expect them to personify the brand that we marketers spend so much time and money trying to develop with our customers. For the past five years, I have discussed this in presentations and conversations as we developed totalbrandintegration (tm) as a strategy to make the brand come alive at store level with everyone who comes in contact with the customer. I am more convinced now and am re-focusing my energies to develop programs that will integrate the people into the brand and help companies stop disappointing their customers when they come back to the store.

This web communication is the first of many that I hope will engage others in the business to bring ideas and concepts to the readers on how to better make the brand come alive at the store. Your input will be invaluable and will serve as the catalyst for more research and strategies to help retailers (and any other companies that serve customers directly) make it happen. I look forward to your help and comments.

This blog is just part of the process to keep me and my associates in this crazy business in touch about the business and what's going on today with the consumer.

I hope you'll join me often as we try to understand the consumer better and figure out ways to help companies become their brand of choice.

Let's go.
Ken