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Are you Jeopardising your Customers’ Loyalty? Or is it Going to Disappear Anyway?

As you have no doubt already noticed, my Blog posts and those of many other Bloggers too, are often prompted by real-world experiences. This week is no exception.

I want to share with you some examples of how companies jeopardise the loyalty of their customers and also seriously limit their chances of getting repeat purchases. But manufacturers aren’t the only guilty party; there have been some interesting comments on retail loyalty as well these past few weeks, so I will touch upon that too.

Promising More than the Customer Gets

This week I bought a new br and of bacon; I fancied a real English breakfast for once. When I opened the pack up, I was shocked to see that under the first three or four deliciously lean slices, was a pack of rather fatty, poor quality meat. Now why would a company do this? To make the sale of course. Seeing such great quality you would rightly expect the pack to contain similar meats to the front slices.

Another example which uses a similar ploy involves packaging. How often have you been enticed into buying a new product because of the picture on the pack? Or perhaps it was in an advertisement showing a delicious-looking meal or an amazing improvement to the skin or hair? Sometimes the pack content or product result may be acceptable, but when it’s not, you’re disappointed rather than delighted, aren’t you? (I previously wrote about one such experience in a post on br and honesty here) Again, why would a manufacturer set themselves up to deceive the customer into buying – once?!

Are such behaviours customer-centric? Certainly not! They are deceitful tricks used to sell customers less than they were led to expect. Yes you may get the sale, but you won’t get repurchase and certainly not loyalty. Which do you want? One, several or long-term purchases?

Raising Prices without Saying so

Most major markets have seen low rises in their CPIs (consumer price index) in 2014 with Switzerl and actually in the current situation of a deflation! However that hasn’t stopped several manufacturers from increasing their prices. Or should I say decreasing the content of their packs, as that seems to be the more usual response of many of them? This is not a very customer-centric approach to pricing.

The shopper is buying the same br and at the same price, but the contents, which the consumer rarely verifies, have decreased. If the reduction is significant, consumers may notice that the pack is significantly larger than the contents inside, which may then prompt them to check the actual weight they have bought.

A recent article in the UKs “The Telegraph” talked about some of the most noticeable offenders, including Birds Eye (Pirmira’s Iglo Group) and Twix (Mars) c andy bars. However many categories were using the same method of hidden price rises.

A survey of 1,257 UK’s Which? members found that over half (58%) said they would rather prices rose than packs got smaller. A further 37% would rather the pack shrank, but only if they were told. (>>Tweet this<<)

 

M andatory Sign-ups for Free Products

There are hundreds of new offers on the internet every day, trying to entice new customers to “try before you buy”. However some sites dem and m andatory sign-up to the paid program before allowing their customers to test their service. Credit card details and other personal information is requested, supposedly to “help the customer to subscribe more easily” should they decide to buy after the trial period.

However there is also most likely an automated transfer included from the free to a paid service should the customer forget to cancel in time. They then find themselves in the situation of buying a paid suscription without full knowledge of it. Is this customer centric? Of course not. If a customer decides to buy, he would be much happier to provide the necessary information to do so at the time of purchase. Again, you may have sold one more membership, but are extremely unlikely to get a happy or loyal customer.

 

Cheap isn’t Always Less Expensive

More and more airlines and hotels are selling their services “on the cheap” or at least that’s what it looks like. However, when you start adding on the extras, those attractive prices don’t seem quite so cheap anymore.

Take a low-cost flight for instance; in Europe that would probably be with Ryanair or EasyJet, and in the US with SouthWest Airlines or JetBlue. In addition to the cost of the flight, you will often pay for hold luggage and sometimes  carry-on items too, as well as food on board, priority boarding, seat reservation, pillows, blankets, headphones and even entertainment.

Hotels will add on charges to guarantee bed type, taxes, WiFi, breakfast, gym use, bag storage, resort fees and even m andatory gratuities.

IMG_0217Retail advertising and promotions are other areas where shoppers need to have their wits about them and a calculator on h and. The old adage that bigger is better no longer seems to apply. If several sizes are offered purchasers really need to check prices per 4 ozs or 100 gms. The BOGOF (buy-one-get-one-free) and BOGO promotions can also sometimes work out more expensive than buying one pack at the usual price charged.

One of my favourite promotional ads of all time is one I photographed in the UK at the local Pound Store, the equivalent of the Dollar Store in the US. See the photo above. Now that really is a bargain!

Consumers are Getting Wiser

The above are just a few examples of “tricks” that manufacturers and retailers play on their customers. It’s almost as if they are trying to see just how far they can go before their clients notice. Well, I think we have noticed, and this is confirmed in an article on CMO.com that caught my eye last week. It mentioned a panel discussion at the National Retail Federation’s Big Show in New York City. Faisal Masud, Staples’ chief digital officer and EVP of e-commerce, who was part of a panel discussion at the event, made the following comment:

“Consumers are agnostic to where they shop. The days of window shopping and just paying the price you think is fair are gone. A lot of folks don’t even want to interact with people or companies. They just want their goods fast and at the lowest possible price. For that reason, a lot of the retail loyalty programs are a little bit doomed.”

I would add that a lot of br and loyalty will go the same way if practices such as those mentioned in this article continue. I believe these behaviours are short-terms acts of desperation of a losing br and. In fact I spoke in detail about using pricing in another post calledAre you on the way to br and heaven or hell?

Winners treat their customers as important people who have a choice and to whom they offer the best product or service they can, to satisfy, delight and why not also surprise them? If you are still thinking of such trickery as a way out of your current br and decline think again. It’s just not customer centric.

Do you have other examples you have seen of behaviour that is not customer centric? If so, I would love to hear about them.

And if you would like help in finding a solution to your own current business issue I would love to help. Just contact me for a chat and let’s see where it takes us.

C³Centricity used an image from Microsoft in this post.

This is Why your New Products “Crash & Burn”

Last month I invited readers to share some of the problems and challenges they need to address in 2014. I offered a free consultation to one lucky winner who asked the most interesting question, which could also be of interest for me to answer for other readers.

Well, the winner is Jean-Francois (JF) who has just started working with a start-up in the tech and app areas – I feel that’s more and more of us these days, don’t you? His question was:

“I would like to commercialize a new XXX; what would be the right approach to identify the consumer need and then the market potential, considering that the company has very limited financial resources?”

This is a great question and a reminder that not every organisation has access to large market research or marketing departments and extensive budgets. In fact, in many companies these roles are being h andled by one and the same person with very few resources; is that your case? If so then you will definitely find this post of interest, but even if it isn’t, I’m sure you will still find value from the ideas shared.

As I had promised, I gave Jean-Francois a one-on-one consultancy which ended up lasting several hours, as he had planned well for our session together. He also happens to be really passionate about his innovative idea, as well as in finding solutions to all his challenges.

The product JF and his team want to launch doesn’t exist on the market today, although there are some products which are unsuccessfully trying to address the perceived customer need. The proportion of product launches which fail every year is generally “accepted” to be about 95% – although why companies continue to accept such levels is beyond me! With such odds, I think it is incredibly courageous to start a whole company based around just one new product idea, but that seems to be the norm in many areas today.

Let’s start by taking a look at some of the reasons new products fail and identify ways to reduce if not completely eliminate them for your next launch.

  1. New product Process wheelThe process itself: Innovation is by definition a creative process, but many organisations use a well-worn, restrictive and uncreative process to develop their new products. They are at best most likely to come up with renovations than true innovations. The solution is to introduce some creativity into the process, and why not include potential customers in the process too?
  2. Meeting company quotas: It is surprising that with such miserable statistics concerning the likely success rate of new products, that so many companies – and which shockingly include many of the largest CPGs around – fix quotas on the number of annual new product launches. How crazy is that?! It just encourages too many new products to be launched too early, and almost guarantees failure! I believe it would be much better to seriously limit the levels of acceptance amongst all new product ideas proposed in any year, then only the best would get through.
  3. Lack of customer underst anding: This is most likely one of, if not the most important reason for new product launch failures. And I don’t mean that you should ask the customer what he wants, he doesn’t know until you make it available to him in many industries. No, I mean starting by looking at a customer’s lifestyle and seeing how you can make it easier and more enjoyable for them. If you already have a new product idea, which was the case for JF, then consider how it would make the customer’s life easier or better. If it doesn’t, then you perhaps need to reassess its market appeal.
  4. Lack of category underst anding: This follows on from customer underst anding, in that you need to identify how the customer is currently working around or compensating for their need today. Don’t assume you are competing in a certain category until you have identified what the customer is currently doing or using. That is the way to identify your true competition.
  5. Not living up to your promises: If you promise a better, cheaper or more enjoyable experience, then customers deserve to be able to confirm this if they buy. Especially in today’s connected world, if you disappoint by not meeting customers’ expectations, your product will fail even more quickly than in the past, since early-adopters will Tweet or leave comments on Facebook, Blogs or other social media platforms for all to see.
  6. Not being sufficiently differentiated: Following on from living up to your promises, customers need a reason to change behaviours, and depending upon the category this can be costly, whether in time, money or effort. Many customers prefer to continue buying an inferior product or service than making the effort to change – think Telecom, Banking, Hotels, Air travel or Insurance as some of the most typical examples of such industries. These businesses are in a constant battle to differentiate themselves and provide a real advantage to attract new customers.
  7. Being too different: Whilst not being sufficiently differentiated can be a certain cause of failure, being too new can also meet with no success. The reason for this is that if customers are totally unfamiliar with the new product or service offering, you will need to spend considerable resources to educate them. If you are unable or not willing to invest the time and money in doing this, then you will undoubtedly fail to attract more than just a few customers who take the time to underst and what you are offering.
  8. Correct pricing is key to NPD successPricing yourself out of the market: Here I’m not just speaking of pricing your product too high; being too low can also negatively impact your likely success. Underst anding how much potential customers value your offer to essential to the success of any product. Getting it wrong can result in lost revenue or worse a promotional spiral leading to br and hell (read more about this in “Are you on the way to br and heaven or hell“)
  9. Inappropriate distribution: This can be the consequence of an incomplete underst anding of your customer and is also linked to differentiation. Whilst you can just follow near competitors into their own distribution channels, why ignore the possibility of being available where and when your customer might buy it most? By reducing the effort necessary to change their habits and buy, you can attract more potential customers to at least try your new product.
  10. Being too far ahead of the customer: There are many examples of great products that were ahead of their time. Gillette brought out 2–in–1 shampoos with conditioners included in the early 70’s, but they were a dramatic flop. Ten years later most personal care manufacturers offered these products, and were met with huge success, even if such products have gone out of fashion somewhat since then. It took Nespresso almost twenty years to become profitable and Philip Morris has needed similar levels of patience for their most infamous of br ands Marlboro, in many markets. If you can’t afford to wait for your customers to catch up with your new product idea, then you should certainly reconsider your launch decision.

These are ten of the most common reasons for new product launch failure. Which do you think is most prevalent in your own company? What are you going to change to increase the success of your own new products? Is it some other reason altogether, that I’ve missed? Let me know and share your thoughts below. 

Coming back to JF, most of our time together was spent discussing ways to collect information on many of the above points. As he has little budget for extensive market research, it was important for him to find other ways of gathering the much needed information and not to just bypass that stage; perhaps many people don’t bother to search out the information they need to truly assess the likely success of their new product, which would explain the high failure rate mentioned above.

By the end of my session with JF, he had a clear plan of action and I have since heard that he is progressing incredibly fast, so watch this space for an announcement concerning the launch of his new device.

I will be sharing the tips I gave him in a future blog post, but in the meantime feel free to continue sending me your own questions; I’m always ready to have a short Skype or phone call to assist you with your own marketing and innovation challenges.

C³Centricity uses images from  DreamstimeKozzi  and Microsoft

HELP! Your Customers don’t Value you as much as you do!

Have you noticed how extra “freebies” are always suggested to have an extremely high value, sometimes close to the level of the product you’re thinking of buying? Last week I spoke about the best 10-step process for following and developing your br and / corporate image. This week I want to speak primarily about value, an important area of any image.

I have just returned from another trip to the US; the Americans are, amongst many other things, the champions of exaggeration (apologies to all my American friends, but it’s true!) Here are a few examples I saw during my recent trip – thanks to my jetlag and my late night TV binges – of valuations of extras offered for free with the sale of various products:

  • Three additional CD’s are valued at $59.99, when the proposed product’s asking price is 3X $39.99 or almost $120
  • A set of plastic measuring cups valued at $39.99 and a recipe book valued at $79.99 are offered free when you purchase a $129.99 express cooker
  • Mini samples of other products when you buy a “starter kit” of cosmetics, valued at twice (!) the price of the product you are buying – which is incidentally already grossly overpriced.

Do the companies making these offers really believe that people will purchase the product they are advertising because of the value of the “free” extras? Or is it me that doesn’t underst and their motivations? We have all become used to the exaggerated claims of the products offered on TV in these infomercials, but have you noticed how they are now creeping into online offers too?

This post was in fact prompted by a recent email I received from what until then I had judged to be a serious resource for tips on social media best practices. If I signed up for a bi-weekly newsletter service, I was offered two “free” eBooks totalling 130 pages between them and valued at $157! Come on, be serious! How many books do you know that are worth almost $80 each? Even those filled with lots of glossy colour photos are usually on sale for less than that. And to make matters worse, with the explosion of self-publishing, many excellent books are being offered at below the Kindle royalty threshold of $9.99 these days.

My reaction was to immediately cancel my subscription to the person’s newsletters; if he can claim such prices for his eBooks, perhaps his tips were just hot air claims too. I do get upset by companies which are stupid enough to think they can fool their potential or even current customers into buying something because of an over-valued freebie. So let’s talk value and look a little more closely at what customers think about the value of your own products / services.

Setting the Price

Setting your price to reflect customer valueWhilst you can put a price on your offer – in fact you will certainly do this before launch, with or without the help of your customers – it is only once it is on the market that customers will confirm its true value. If you over-price your offer, your product will either fail or will have to be sold at a constant discount. I wrote about the danger of continual discounts in my post “ Are you on the way to br and heaven or hell?” which concluded with the thought that the slippery slope of price-cutting ends in turning your br and into a commodity bought on price alone.

 

 

Underst anding your Value

The journey to customer valueThere is a big difference between price and value. Hopefully you are (no longer?) pricing your product based upon its cost and then adding your margin. If you have correctly identified your customers’ need and have produced a product that meets or hopefully surpasses these needs, then the price your customer is willing to pay can be higher than its actual cost. This is why it is essential to start new product development by observing and listening to your customers.

Communicating your Value

Communicating your value through dvertisingIn contrast, from C3Centricity’s recent work on luxury watch communications, Terry Villines of our partner PhaseOne wrote a guest post about the essentials of value which can be applied to any category. It is called “ Is your br and worth paying more for?”.

In it Terry speaks about the six specific types of benefits found among br and messages wanting to imply premiumness. These were:

 

  1. Product innovation – your br and brings a new or enhanced benefit to the category.
  2. Human Worth – by tapping into the target’s self-esteem, a br and communicates how they are worthy of the more costly br and
  3. Unique Production Process – the way in which the product is made results in the delivery of a more significant benefit
  4. Premium imagery – associating the br and with other things that are premium in nature
  5. Higher performance than competing br ands
  6. Endorsement by a credible authority

These six elements will indeed suggest added value or premiumness, but if your product does not live up to your customers’ expectations they won’t be happy – and in today’s world your sales will be immediately impacted, thanks to social media. Therefore it makes sense to make a good estimation of the value of your product and then if necessary see how you can substantiate it with additional communication elements as detailed above.

Is your product correctly priced or are you forced into a price war to maintain sales? If so then you are already on the “stairway to hell”. If you aren’t (yet?) then you should ensure that your communications and product quality are always in line with your customers’ ever increasing dem ands. Keeping your finger on the pulse of the market will maintain your br and at the forefront of changing market conditions and dem ands and will enable you to defend your pricing without the need for price cuts. That way you can use discounts to attract new customers rather than to keep your current ones alone.

What do you do to guarantee your br and is priced correctly? I’d love to hear your own ideas. Need help in knowing more about pricing and value identification? Let us help you catalyse your customer centricity; contact us here.

C³Centricity uses images from  Dreamstime.com  and  Kozzi.com

Are you Happy with your Market Research?

Next week is the official start of Spring in Europe, although in the US you have already moved your clocks forward by an hour.

Therefore, this seems to be a good time to review what market research we are running and spring-clean our toolbox in line with our new company objectives. If you would like some help in doing this then please read on for some original ideas on how to make it all easier.

In order to decide on the tools you need, it of course depends upon the maturity of your market, the size of your budget, as well as the position of your br ands in their life-cycles.

Last Spring, we used the 5Ps of marketing as a basis for the review of the market research toolbox; if you didn’t see it or would like to re-read it then you can find it here. This year I will be taking into account the three elements mentioned above and looking at how you might adapt the tools in consequence. Whatever stage your br and is in, however, there are some metrics that you will always want to follow. These include awareness, usage, product performance versus competition and advertising & communication (including pack and web) effectiveness.

 

Market maturity

Are you competing in a mature category or is it still growing strongly? Mature markets tend to change more slowly; consumers have their purchase habits settled and in some cases choose from amongst a portfolio of br ands, between which they switch depending upon current promotions.

If you are competing in such a market, then you can probably manage with monthly or bi-monthly or even less frequent data about stocks, pricing and shares. Unless a newcomer is launched onto the market, many mature categories have br ands that are being “milked” by their manufacturers, with perhaps little investment in communications. Therefore it is price that usually dominate share changes and can to a large extent be predicted.

In terms of market research needs, retail audits, price tracking and promotional monitoring are all important metrics to gather. Br and Image studies are also important, but can be limited to every few years, when real changes are more likely to be recorded. Too frequent measurement of a static market is likely to show only noise from sample error rather than true shifts in image. If you are in a service industry, then loyalty and satisfaction (NPS) metrics are also useful. (If you’re not quite sure what NPS is or how to use it, then HubSpot did a great Infographic a few months back that I recommend reading)

If however, you are competing in a new or strongly growing category, you will need far more frequent data in order to make informed decisions. In these cases, retail chain data, shares, stocks, out-of-stocks and pricing will be vital to follow, ideally on a weekly basis. Br and Image data should be gathered annually, but everyone should underst and that in a fast moving market, things can alter rapidly, so the ratings are merely snapshot comparisons versus competition. To complement image data, social media monitoring can provide additional information on how your br and’s equity may be changing. Check out what is being said on LinkedIn groups, your Facebook page and those of your competitors, as well as on Twitter using a “#word” search.

 

Size of the Budget

Although companies should invest wisely in terms of their information needs, in reality budgets are (too?) often defined based upon previous year’s spend rather than current investment needs. It is also not wise to rely solely on a sales percentage for market research, nor marketing come to that, since you should arguably invest more in a growing br and. Many times companies work with this percentage model which seriously limits the potential of promising br ands through lack of customer awareness and information for decision making.

In addition, when budgets are tight, organisations can sometimes be tempted to use qualitative research rather than the needed quantitative data. If you need metrics, then you have to run the appropriate methodology; decisions cannot be taken based upon a few group discussions alone. And please don’t think about doubling the number of groups to get a larger sample! The results will remain qualitative in nature whatever the sample size.

 

Br and Life-cycle stage

As mentioned above, we often need more information when a br and is stagnating or declining than when it is growing, to underst and exactly what is going on. You could argue that when it is decreasing it is (almost) too late, so in fact it is important to find ways to forewarn potential declines before they happen. In many cases a br and’s image will start to stagnate or decline long before there is any dip in sales. Therefore br and equity measurement is particularly vital for a maturing br and. Other ways to revitalise such br ands is through renovation and this is where concept and pack testing come into their own. You may also decide to look at pricing and new campaigns developments which will also need verification.

When a new product or service is launched, it is wise to do some quick tracking of off-take to gauge likely success. Early measurement can help you make small adjustments to the offer before many people have considered or tried it, reducing the risk of failure in the mid-term. Of course once launched the br and can also be added to your ongoing monitoring of the basic information mentioned above.

If you have information and answers to all of these questions, whatever the stage of your market, category or br and, then your MR house is in good order. If not, then perhaps it is time to update your toolbox with newer, better tools.

Do you review and Spring clean your toolbox every year? What changes have you identified as being needed in your own toolbox? It would be great to compare our spring cleaning efforts, so please add your thoughts in the comments below.

For more information on identifying KPI’s and performance metrics please check out our website here: https://www.c3centricity.com/home/underst and

Need help running your own MR review? C3Centricity offers a 1-Day Catalyst session, where we work with your team to identify priorities & needed change in your processes. Contact us here for an informal chat about it. No obligation, just INSPIRATION!

C³Centricity uses images from  Dreamstime.com  and  Kozzi.com

Is your Br and Worth Paying More for?

This week’s guest post is from C3Centricity partner PhaseOne. Terry Villines, their senior vice-president shares some of the learnings from analysing the marketing communications of thous ands of premium br ands. Whether you work in the Luxury Industry or not, wouldn’t you like your br and to be worth more?

Every product category has at least one – a br and that costs more than the competitors; a br and that, even though it costs more, is successful at building the business; a br and that has been successful at convincing their target that they have a premium offering and are worth the extra cost.

For example, Rolex is clearly seen as a more premium br and than Timex or Fossil, and consumers are willing to pay more money for a Rolex even though all of these br ands provide those who wear them with accurate time. 

How are br ands ableto convince audiences that they are worth paying more for – regardless of category?

PhaseOne has mined over 1,000 pieces of marketing communications to identify guiding principles for establishing a premium positioning.  The key is to:

“Credibly promise that consumers will get more of what they want most from the product, promising more benefit than competing br ands”

Six specific types of benefits were found among the messages PhaseOne analyzed.  The inclusion of these benefits was associated with strong Premium Positioning.

#1.  Product innovation – your br and brings an enhanced benefit or a new benefit to the category.

#2. Human Worth Factor –  by tapping into the target’s self-esteem, a br and communicates how  the target is worthy of the more costly br and – “I’m worth it / You’re worth it”

#3.  Unique Production Process – the way in which the product is made results in delivery of a more significant benefit.

#4. Premium imagery – associating the br and with other things that are also premium in nature.

#5. Higher performance than competing br ands.

#6. Endorsement by a credible authority.

Interestingly, some of those things that we have readily accepted as contributing to Premiumness did not prove to be effective:

  • Claiming superiority alone does not confer Premiumness.  Positioning a br and as superior does not equate to the br and being worth more.
  • Having an abundance of features or advantages does not make a product worth more.  Features and advantages may contribute to a Premium Positioning, but they are not sufficient to establish the positioning on their own.
  • Marketing messages that contain breakthrough creative elements and premium production techniques do not translate into Premium Positioning.  Such techniques can reinforce a Premium Positioning, but they cannot create it.

We’re confident that these benefits can be tapped for virtually any product / service category.  Yet, it is likely that the weighting / emphasis given to them will vary.  For example, in a just completed study of the advertising for 16 Luxury watch br ands, PhaseOne found most messages cluster into only 3 of the benefit clusters:

  1. Premium Imagery – br ands focus on the visual aesthetics and the watches role as a fashion accessory
  2. Human Worth Factor – br ands add a layer of specific personal or lifestyle interests to suggest for whom the br and is most appropriate
  3. Unique Production Process – br and communications emphasis that the watch is made of high quality materials with precise craftsmanship.

How do you see br ands in your category successfully convincing their customers that they are worth paying more for whether it be durable goods (auto to washing machines), packaged goods (confections to sodas) or services (Insurance to Dentistry)?

If you would like help from C3Centricity on improving the positioning or communications of your own Luxury br and, then please contact us, we know we can help. For more on br and positioning, please check our website: https://www.c3centricity.com/home/engage

Do you yourself work on a Premium br and or perhaps you did in the past? Were you using another type of benefit that didn’t work? Then please share your experience here. Of course, you can also share what worked too, if you are feeling really generous! We would love to hear from you.

6 Ways to Offset Low Customer Dem and

Last week I spoke about how companies can become more customer centric, but in ways that will differentiate them from their competitors. This week I want to give some more concrete examples of actions, inspired by the latest results of McKinsey’s recent survey on the economic outlook.

As their chart below shows, whilst sovereign-debt defaults, economic volatility and geopolitical instability are considered to potentially be the biggest threats globally, low consumer dem and continues to be seen as the greatest barrier to business growth at a local level.

McKinsey economic threat chartThis has been the case in the last six months of results, so I thought it would be a good time to share some thoughts on what organisations can do to offset this (potential) threat to their renewed growth.

# 1 Customers

This should be the starting point for all strategy and plan development, but is so often only an afterthought. Tough times have a nasty habit of showing up an organisation’s incomplete or total lack of underst anding of their target customer. If there are any areas of your customers’ life of which you do not have a deep underst anding, including how they are likely to react in turbulent times, then this must be what you start to investigate, before going to the other five points.

Are your customers pretty resilient to price? Do they often switch br ands, products or outlets? Are they portfolio purchasers or highly loyal? The answers to these questions and more, will help you to be better prepared for tight times and to know how to respond to their specific needs better than anyone else.

# 2 Value

Many companies have reacted to lower sales by reducing price and increasing promotions. In most cases, this has been a waste of time, unless they have always been selling at a price higher than their value. If you don’t know what your customers believe is your true value to them, then you need to run some research urgently to find out, and only then, if your value is below your current price, should you consider either of these actions.

# 3 Offer

In an attempt to maintain pricing, some other organisations have been reducing the size or quality of their products and services, usually without making this clear to their customers. Whilst this might work in the short term, your customers eventually look at the details of the pack content or their service agreement, and realise they are no longer getting what they thought they were. This will both annoy them and make them lose trust in your company; you are at risk of also losing their business too, sometimes forever.

Instead of making reductions in your current product, why not empathise with your customers by offering smaller packs or reduced services for a lower price. In this way, should they decide to switch, it will at least be to another of your products / services, so they can remain loyal and hopefully return to the offering they previously purchased, when times become less difficult. You will also be building their trust and appreciation of your company and br and, by showing them that you underst and their pain and have searched to find a relevant solution.

# 4 Promotion

As previously mentioned, some companies are offering cheaper prices if a customer is willing to buy more of the product, as in a BOGOF or “3 for 2” promotion. Whilst this may make the price per unit less, it is also asking the customer to actually spend more than he / she usually does on the product.

A much better way, especially for companies manufacturing products in multiple categories, is to offer bundled products. In this way you are not necessarily asking your customers to buy more, just differently, whilst also giving some of them a chance of buying a product that they may not as yet have tried. A wonderful win-win for you both.

 # 5 Outlet

As customers become more sensitive to what and at what price they are making purchases, many will have decided to shop around or even change outlets. This means you need to stay connected to them and monitor their place of purchase in order to react should their habits change.

# 6 Communications

Are you one of the marketers who has faced a budget cut in the recent past? Unfortunately, when organisations are looking for money, advertising is often one of the first budgets to be cut. In the short term this often goes unnoticed, but by the time the reduction has an impact on sales, as it will, the slippery slope of share decline is often too difficult to reverse.

A much better reaction to hard times is to maintain or even increase advertising, since it can often be bought at a discount, due to lower dem and. Therefore you can get even more for the same budget and also increase awareness due to less competition and thus also a higher share of voice.

Have you already started thinking about what you can do to offset your own customers’ lower dem and for your products and services? Do your actions include any of the above, or have you decided on a different approach? Either way, we would love to hear about it; why not share your own story below?

For more information on how to better underst and your customers and their needs, please check out our website: https://www.c3centricity.com/home/underst and/

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Time to Spring Clean your Market Research Toolbox

This week we are officially into Spring in Europe, so we all now start thinking about spring-cleaning the interiors of our houses and apartments. Of course living in Switzerl and, where people seem to be born with duster and brush in h and, I can imagine that there is not much work for most of my neighbours, but I have to admit that for my place it is a slightly different matter!

This is the reason why today I want to speak about YOUR interior, however I am not talking about your home, but about your Market Research Toolbox. When was the last time you took a look inside? Isn’t now an appropriate moment to review the tools you have in there? Some may be a few years old and need updating, whilst you may now notice that some others are missing that you really need. If this is the case, then this post will help you to do your toolbox spring clean.

In order to decide on all the tools you need, I suggest you start by taking a look at your br and essence. What do you want your br and to st and for in the hearts and minds of your target customers and your stakeholders? Who is your target customer; what attributes describe your product or service; what is your br and’s personality and character, and finally what benefits can your target customers expect from your br and? Once you have these identified, you need to agree what measures you will use to ensure that you follow them effectively and efficiently.

The 5Ps of marketing have been around long enough to assume that many people still find them to be useful, so we will base our review of your toolbox around these five topic areas, keeping your br and essence in mind of course.

Here are some questions I came up with, to help you to identify whether or not your toolbox needs some cleaning or updating:

People:

Who is your br and or service targeting? To underst and, you will need to gather representative data on your users, current, past and potential, and not just demographics, but as much information as you can gather about their habits, attitudes, preferences, values and motivations.

Price:

Are you pricing your br and based on cost or value? What do your current, past and potential customers value and what price estimate do they place on your offer? What are the psychological price barriers for your category and br and? Where is your price in comparison to your competitors’? If it is higher, what additional value are you offering to warrant the difference?

Promotion:

How effective are your communications? What tools do you have to help in their development and to test their performance; not just at the end before airing, but also early on in the process of their creation? What do your category users talk about online? Are you gathering information on and responding to these discussions? What promotions and rebates are you offering and what do your target customers think about them? What is their impact on purchase and loyalty? What is their ROI?

Place:

Where do your current and potential customers expect to find your br and? What is your level of distribution in these channels, as well as that of your competitors? Do you have out-of-stock? Where, when? What is the estimated sales loss due to a gain or loss in distribution? Are there new channels developing or others that are losing in popularity? Are you also selling online? Should you be?

Product:

How does your product or service perform in the market? What changes have been made to your own as well as to your competitors’ offers recently? What changes are important to make and which do your target customers value less? What are your customers’ pain points and how can they be reduced?

If you have information and answers to all of these questions, then your MR house is in order and I can only congratulate you. If not, then perhaps it is time to update your toolbox with newer, better tools.

Do you Spring clean your toolbox every year? If not, perhaps you should. The world is changing fast and what worked in the past, even just a year ago, may need to be tweaked or replaced today.

For more on identifying KPI’s and performance metrics please check out our website here: https://www.c3centricity.com/home/underst and/

What changes have you identified as being needed in your own toolbox? It would be great to compare our spring cleaning efforts!

If you need help in running your own Market Research Toolbox review, C3Centricity offers a 1-DayCatalyst intensive but fun session, working with your team to identify priorities & necessary changes in your processes. Contact us here for an informal chat about it.

C³Centricity uses images from Dreamstime.com

Are You Sure You Know Who You Really Are?

Earlier this week I was discussing with a client about Br and Image and Equity. “Oh we don’t need to worry about that!” he told me confidently. “We know exactly who we are and what we st and for; look, here is our br and framework” he continued, h anding me a very impressive sheaf of paper. 

Whilst I was certainly impressed with the organisation of the document and its contents, I had a niggling doubt in the back of my mind. “This all looks really complete” I responded, “Is this what you want the br and to st and for, or is this what its image is currently?” I asked. “That’s the same thing isn’t it?” he responded!

OK, OK, so you saw that coming didn’t you? But it still amazes me how many companies spend time developing these frameworks, including relevance and differentiation, br and promise, br and personality, etc. etc. but in fact have never measured whether or not their content is actually what they st and for in the hearts and minds of their customers! Therefore, I thought it would be useful to summarise what you need to know about your br and and not just what you have decided you want your br and to be.

 

1. Awareness

If people don’t know about your br and or service, then they can’t buy it, so you need to start by measuring how your awareness is moving. Hopefully it is growing, but you need to look at top-of-mind (first mention), spontaneous as well as prompted awareness, and amongst your target audience, not (just) a representative sample of category users, especially if yours is not a category that everyone buys.

Of course if you haven’t even identified to whom you are selling, then stop reading and go to the post on targeting that we published a while back; you can find it here. Awareness should be measured regularly, as it will be impacted by your marketing actions, promotions, communications, events etc.

2. Image

Once you know how many people have heard about what you are offering, you need to measure what they believe it is. Whilst you may have identified what you want your br and to be, this may not be the same as what your customers perceive it to be. They will have made up their own minds based upon what they see, what they experience and what they hear from friends, families or your own communications, as well as those of your competitors.

Whilst it is a good idea to measure the attributes with which you want to be associated, it is important to also measure some attributes you believe are particularly relevant for your major competitors, as well as those of the category itself. These latter metrics will help you identify the “price of entry” into the category and whilst not providing any competitive advantage, can seriously harm your br and if yours is weak on any of them.

Although image can fluctuate a little, in line with your marketing actions, your base image is slow to move, certainly slower than most marketers would like it to. Therefore, unless you are in an extremely active category, are being attacked by an agressive competitor who could weaken your image, or have made significant changes to your communications’ content or frequency, annual measurement is usually sufficient.

One other tip about br and image; changes to it are usually a pre-cursor of market share changes, so this is definitely an important KPI to keep updated.

3. Value

The measurement of your image should include perceptions of its value for money, especially compared to its major competitors. However, in addition, it is also useful to run a separate pricing study, especially if you are looking to raise or lower prices, as a result of changes in the competitive market or commodity prices.

In the past, the most common way of looking at the price of a product or service was to take its cost of production and then add on a percentage for margin. Today, it is essential that you start with your customers, underst and how well they value your offer and whether or not they are willing to pay more than the cost, in exchange for its perceived benefits. I am constantly amazed at how many companies still work with cost-based pricing strategies, leaving thous ands, if not millions on the table. However, since value can be impacted by so many external as well as internal factors, it needs to be regularly measured, certainly more often than image.

4. Personality

Every br and today is trying to build a relationship with its customers. In order to do this, it must ensure that its personality and character are in line with its target audience. This doesn’t mean that it should be the same; rather it should complement or complete that os its customer as this is what provides the reason to to buy. As with image, personality builds up slowly over time, through all the communications, events and promotions you propose. Therefore an annual measurement should be sufficient.

5. Satisfaction & Loyalty

I mentioned earlier that people won’t buy what you offer if they don’t know it and the same goes for its image, value and personality if they are not well perceived. The fifth metric to underst anding your br and is to review its overall satisfaction and loyalty levels. If these are lower than the category average or than you would like, then something in the mix is under-performing and you will need to identify what that is. Some categories with little differentiation may have lower levels than those with few br ands with larger differences, so no absolute number can be proposed here. However, comparing your levels to those of your major competitors, or to the category average should tell you what you need to know.

Which brings me to my final thoughts on image metrics; always make comparisons with your category and competitors rather than looking in isolation at your own numbers and their growth or decline. As with sales, it is share or their relation to others that holds the real truth.

Do you have a question or challenge about starting, updating or harmonizing your br and equity measurement and metrics? I am sure I can help; just contact me here  and I’ll respond personally.

How do you follow what your br and st ands for? What metrics do you use to ensure you know how your br and is perceived by its current or potential customers? I would love to hear your own additions to this list.

For more ideas on br anding please see our website: https://www.c3centricity.com/home/engage/

C³Centricity sources images from Dreamstime.com

 

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