Where’s Home? Using Br and Source as a Competitive Advantage

Thanks to sc andals in many countries in the last few years, the global Food and Beverage industry has been forced to recognise that consumers want to know where products are made and from where their ingredients come.

Most US retail food stores are now required to inform consumers about the country of origin of fresh fruits, vegetables, fish and meat. The final rule to implement country-of-origin labeling (COOL) took effect on March 16, 2009 there. Sales of prepared dishes containing beef dropped significantly in Europe earlier this year and this resulted in lower prices for wholesalers and eventually also for the farmers. According to Reuters, a recent poll run by Consumer Intelligence in the UK, showed that more than 65% of respondents said they trusted food labels less as a result of recent incidents, so in fact the whole food industry has been impacted.

This interest in sourcing is happening in other industries too, but rather than seeing these dem anding consumers as a challenge, you can answer their thirst for information and turn it into a competitive advantage.  To illustrate how you can do this for your br ands, here are a few br ands, including some of the global heavyweights,  that have done exactly this.

Beverages

Wine, alcohol and coffee have always been sold primarily on origin, because it has a significant impact on taste and consumers’ enjoyment of the products. However the br ands in these categories have usually been built upon their blending expertise or regional knowledge.

SOURCE: Nestle.com

Although tea has also used sourcing to differentiate itself, it is only recently, with the launch of Nestlé’s Special T that a br and has built itself based upon the country of origin of its ingredients. Special T offers teas from five regions of the world, Japan, China, India, Ceylon and South Africa and claims to propose to tea-lovers the same quality and ease of preparation as the very successfulNespresso system.

 

Electronics

Apple.com

This post was prompted in part by the latest, rather indulgent campaign of Apple. The company has been running a cross-media ad campaign with the sign-off “Our Signature“, to state and reinforce its core values. Whilst it cannot claim American sourcing, it has cleverly made an association with the US through their claim “Designed by Apple in California”.

Some, dare I say many, consumers will “hear” American and attribute a better image to the br and than they would with the reality of Asian sourcing (no criticism intended). The ad is also, at least in my opinion, a covert attack on Samsung’s iPhone-threatening Galaxy range whilst also responding to the growing dem and in many countries to repatriate labour from Asia.

Apple has responded to their customers’ need for information by turning a possible perceived negative (Asian sourcing) into a positive (Californian design). Very clever.

 

Cars

Renault logo

Certain industries have perceived best-in-class country associations; take French perfume, Egyptian cotton or Italian fashion. German cars have also been seen as the most robust and well made, at least in Europe, even if they are not always the most attractive in terms of design. Continue Reading

Social Customer Service: How to be Responsible, Resourceful & Ready in Real-time

A recent Infographic got me thinking about what has and hasn’t changed in customer service thanks to social media. In fact I should have said what has still not changed and MUST change in the very near future.

If you feel that you haven’t made all the necessary changes to meet the challenges of the new social customers and their dem ands, then read on for four actions you should be taking to improve your customer service.

#1. Responsibility

Marketing, Sales and Customer Service all have contact with customers and therefore also responsibility for them. Today these departments must work more closely together to provide a seamless connection with the customer. They need to build on each other’s efforts to satisfy the customer, so that each customer perceives that there is one company working to delight him and that he is really important to them.

Action: Employees from all customer-facing departments need to meet regularly, at least monthly, to exchange and share their latest experiences and learnings. What are customers talking about, complaining about or dreaming of? What new opportunities are there to get ahead of competition in better satisfying these current or latent needs? Organise regular exchanges or “lunch & learn” sessions and if you work in the USA recognise your most active employees by signing them up in the “Most Engaged Employee Contest”.

#2. Resources

Most organisations underst and the importance of their customer, and we all know they are more than ever in control thanks to social media. However, few companies are investing in developing their customer centricity and keeping their customer database current. Business needs to start walking the talk so their customers notice and feel a difference in how they are being treated, listened to and satisfied.

Action: Did you know it costs about 8 times as much to acquire a new customer as it does to retain a current one? Review how you collect and store your customer information. Have you verified their details in the last year? Most companies have upwards of 28% of their database which is out-of-date; when did you last check your own level? Is data stored by br and or business unit? Integrate the information, so the connection with your customer is seamless, more intimate, knowledgeable and fulfilling for you both.

#3. Ready

Social Media connections are growing exponentially but is your organisation staying ahead of the curve?. Recent figures from the latest Burson Marsteller Global Social Media Check-up 2012 suggest there are more than 10 million references to major global companies on social media every month and more than half of these are are on Twitter. Companies need to be following these discussions in addition to responding to customers in the usual way through call centers, email or postal mail.

Action: Review and revise your care center resources and training. Ensure you have a sufficiently growing number of trained staff to be available when the customer most needs to contact you. Provide the customer service agents with the knowledge, information and authority to respond to customers on social media as well as over traditional contact means.  Continue Reading

How to Innovate better than Apple

Last week I gave a lecture to a group of Executive MBA students at Miami University. It was a fabulous new experience for me, having only done lecturing in European Business Schools until now. There were lots of great questions and many comments about why organisations do what they do when looking to innovate.

It’s always easier to identify the sub-optimal processes a company uses when you’re on the outside and even easier to suggest possible changes that are needed, but when you are in the heat of the action, it is not so obvious.

I therefore thought it would be useful to list some of the ideas we came up with, in the hope that it will help all those challenged to improve the status quo within their own organisations and to provide some new ways to look at innovating outside the box.

 

#1 What business are you in?

When you are looking to innovate, instead of starting with your own current technology and skills, or products and services, how about taking a step back and thinking about what business you are really in. Lego is a great example; they realised that they were not selling (just) toys; they understood that they were in the imagination business. Which business are you in? Do you have an opportunity to redefine it? Here are some ideas to get you started:

  • Food: Family Time, Neutraceuticals – offer family sized portions, children’s play areas, partner with another industry as Nestlé did with L’Oreal when creating Inneov
  • Cigarettes: Personal Pleasure – tobacco companies should be going far beyond their current simplified expansion into electronic cigarette offerings
  • Alcohol / Beverages: Fun / Relaxation: br and lounges, music, video or internet services
  • Pharmaceuticals: Wellness – instead of curing or treating, offer prevention

 

#2. Can you add something new to an existing product?

Professor Steenkamp Knox Massey Distinguished Professor of Marketing and Area Chair of Marketing at Kenan-Flagler, proved back in 2007 that at least for Fast Moving Consumer Goods, small innovations (which are often referred to as renovations) can be just as successful as large step-changing breakthrough innovations. His research came to the conclusion that it was the ones that fall in the middle of “newness” that don’t meet with significant customer success. So what small changes can you make to your current offer to make it more appealing?

How about adding sound to a food, as Kellogg’s did with their Rice Crispies or Nestlé did by adding a layer of chocolate to the top of their cream deserts in France? Or what about adding smell to your outlet, as bakers and coffee houses already do these days, or Singapore Airlines did many years ago? A small change can have a big impact, especially if tapping into a different sensory perception from those customers are used to having stimulated.

 

#3. Can you add a service to the product?

Some products are actually designed to work with services, which are quite often the more expensive part of the sales equation (e.g. Continue Reading

6 Tips to Thinking Outside the Innovation Box

Does your business have an innovation process? No? Then perhaps you should count yourself lucky! Most businesses that do have one, sometimes get stuck in it, stopping them from thinking Bigger and Bolder, and therefore also stopping them from dreaming. If this is the case with your own organisation, then this post should offer some inspiration for change.

When companies are starting up, they often begin with just one or a few products or services to offer. However, as they grow, they get ideas about other products or services they could add, sometimes at the suggestion of their current customers. As business continues to grow, they might set up an innovation process or put someone in charge of searching for new ideas and unfortunately this tends to be when they start to lose contact with their customers and what they really desire.

Today we all underst and the importance of customer centricity, the power of putting the customer at the heart of the business and yet we still manage to forget them somehow when looking to innovate. For this reason, I thought it would be useful to share my six tips to help you to think outside the innovation box in your organisation, whether you are a big multinational, or just a small local firm.

#1. Start with your customers in mind

This makes so much sense and yet we all seem to forget it at times. Big companies have R&D departments so their innovations tend to be technology and skill driven. Smaller ones have maybe more limited resources, so ideation falls on the desk of the owner, marketing head or the person responsible for operations. All businesses have customers, so why not start with them? What do they dream about improving, what are their biggest issues with your category? Finding solutions to their frustrations will almost certainly guarantee the success of your next new product or service.

#2. Why do you want to innovate?

The answer to this simple question will give you some ideas of the solutions you need to create:

  • Is competition growing? If so, what do they know about your customers that you don’t? What can you do about it, both now as well as in the future to stop it happening again?
  • Is the market segment growing faster than you are, so even though your sales are growing you are losing market share? If so, why; what products and sub-categories are increasing, what benefits are attracting customers more than in the past? Can you follow or lead with a different benefit area?
  • Is your image getting old and in need of updating? Where are your comparative weaknesses and is competition filling all possible positionings in the category map?

#3. Do you need to innovate or renovate?

The difference between the two can make a huge difference in what you develop. If you need to innovate but actually produce a “small” innovation, closer to a renovation, you are less likely to succeed, at least in CPG, according to Steenkamp. Continue Reading

Be Customer Centric – differently!

If you are confident that you are doing everything you can to be customer centric, then this post is for you; it provides some further ideas on how to surprise and delight your customers in a different way, to ensure you keep your competitive advantage.

Last week I was in the US for a few days and stayed one night in a small lodge on Key Largo. If I hadn’t prepared my trip by checking out possible places to stay on Tripadvisor before I left, I wouldn’t have known about it, as it is hidden by greenery, even though it is on the main US 1 highway. I would highly recommend this lodge (Dove Creek Lodge) if you are in the area; not only does it offer great value for money, but they are very customer centric. They couldn’t do enough for us, even though we were only there for one night on our way down to Key West.

What touched me in particular, was the way they appeared to search for ways to surprise and delight their clients in everything they did, far beyond what you would expect, even from a star-rated hotel. For example, instead of plates of fruit, meats and vegetables for breakfast, they presented the same foods, but as sweet and savoury kebabs. Rather than serving a large bowl of yoghurt for everyone to dip into, they presented delicate glass cups filled with Greek yoghurt, fruit and granola, or graham biscuits with key lime cream. The whole stay was perfect but there is every chance that we will remember it longer than other places in which we have stayed, because we were surprised and delighted by that original breakfast presentation.

So what can you do differently, to surprise and delight your own customers? Think about what you or your category competitors normally do, but then do it in a slightly different way. Customers will be woken from their mindless, habitual behaviour, and made to sit up and take more notice of what you are offering. Here are some examples that I have experienced in the recent past, but I would love to hear about others that you have already seen, used, thought about or had the pleasure of enjoying:

Replacement product:

OK so you think that you have satisfied your customer when sending a replacement for a (perceived) faulty product? How about sending it express delivery, so they get it in record time? This will amplify your already good customer service and your customers will be delighted. Many companies add coupons as an extra, especially in the US, but those don’t delight or surprise any more. You could offer samples of new products as well, but just make sure they are relvant to the customer- I recently received a “normal” version of a “hypo-allergenic” product I had returned due to an allergy!

Bakery:

Instead of the usual fillings of bakery items, how about adding “surprise” additions. For example, how about jam donuts with jam and cream cheese for an added, surprising delight – I actually had this at the Bagel Isl and, Big Pine Key and would love to go back again to try some of their other surprising offers. Continue Reading

New Year, New Challenges: 3 Helpful Ideas for Innovators

As we ramp up to face the economic, political and societal changes that will surely continue in 2012, many organisations are challenging their R&D and hopefully marketing departments too, to develop and launch new products and services.

With luck, these developments were already in their plans and pipeline for this year, but sometimes businesses are forced into going to market sooner than they would have liked, due to market circumstances or competitive activities.

An article in Marketing Week (read here) at the beginning of last year, mentioned that Unilever said that increased investment, as well as their “Bigger, Better, Faster” innovation initiative was the driving force behind its increased profit and sales in 2010.

As we are all only too aware, today’s customers are highly dem anding of novelty and each period of satisfaction becomes shorter and shorter, as they quickly get accustomed to the latest improvements.

In an earlier post (read here), I spoke of the research carried out by Jan-Benedict Steenkamp, a marketing professor at UNC Kenan-Flagler which showed that CPG / FMCG innovation needed to be one of the two extremes of “innovativeness” to succeed:

  • either a minor improvement, or renovation, such as a new flavour, size, colour, packaging, content …
  • or a radically new product that is significantly different from anything else on the market. These are of course more breakthrough and therefore more difficult to develop. Past examples have included microwave meals, Sony Walkman, Nespresso, iPhone, Ipad,

The interesting and perhaps disturbing thing about breakthrough innovation, is that timing is everything; bring it out too early and people won’t underst and or see the need; too late and competition might beat you. This is one of the reasons that IT companies quite often offer “beta versions” of their products or software before they are 100% ready and then quickly follow with a version 2 with corrected or improved functionalities.

Other br ands such as Nestlé’s Nespresso or even Gillette’s Silkience, the first shampoo with integrated conditioner, launched almost 40 years ago, were introduced ahead of the curve, before their consumers were ready for them. The companies then had to decide to either wait it out (Nespresso waited many years to become profitable) or relaunch at a later date, but then risk being pre-empted by competition, who then have the time to copy the new product.

So how can companies better underst and their consumers’ needs, desires, or even unarticulated and unknown needs, and launch just in time to benefit from them? Here are three ideas that I came up with, but I would welcome your input too:

1. Develop Future Scenarios

Most organisations today are following trends, but as competition is almost certainly following the same ones, there is no competitive advantage and little chance of benefiting from identified tendencies. It is only when the trends are turned into future scenarios that the real competitive advantage appears.

 

2. Identify lead countries

Most industries have markets where the consumers are more dem anding or more open to innovation in certain categories. Continue Reading

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