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A belated Happy New year from the Promise Blog! We have had an extremely hectic start to the year, with a group from Promise spending most of last week in Sydney, working on a co-creation project for Etihad, the national carrier for the UAE.
Etihad are a fantastic organisation and great for us to work with. The airline is only six years old but already has a fleet of over 50 aircraft, a powerful global brand and this year was awarded ‘The world’s leading airline’ by the World Travel Awards. The organisation uses co-creation to help drive innovation in new products and services, and despite its rapid growth is still nimble enough to implement change quickly and effectively.
The airline market has changed massively in the last 10 years with the introduction of low-cost carriers and the erosion of the power of traditional national carriers. The international long haul market is far more open now and choice and loyalty are being driven not simply by National allegiances or points programmes but by educated consumers making choices based on product quality, innovation and price.
In our work in the sector we have found that Etihad is one of a number of airlines which may well have been off the radar previously but is now well known and respected. Today carriers such as Qatar, Etihad, Singapore, Jet and Kingfisher are all well and truly in our air-space as consumers. Why? Because they offer great quality, new thinking and are rapidly developing the size of their networks to ensure that they are more relevant to more consumers around the world. It would seem that as in many aspects of the global economy, the balance of power is heading east.
Of course, that rule does not apply to JAL (Japanese Airlines) which is just about staying air-born at the moment but is looking to emerge from bankruptcy with a vastly smaller fleet. It is also true to say in the UK that despite a prolonged period of turbulence, there is still a great deal of residual appeal for British Airways while Virgin also remains a strong brand. From talking to consumers in Sydney and the UK though, the reputation of American carriers among international travellers is going to be more difficult to mend.
Of course the industry is going to have to change further in the next 10 years. As we all are. The winners will be those who continue to listen to customers, to innovate and push ahead with both the quality of their offer and increasingly, I would wager, the efficiency and environmentally friendliness of their product.
We’re going to be going a bit quiet on the Promise Blog for a week or so. Everyone is taking a break from co-creating for a couple of days. My experience is that the co-creation philosophy doesn’t work so well in a busy kitchen on Christmas morning. Dictatorship is the accepted wisdom in this particualr scenario.
We will of course be keeping our eye’s open for anything that interests us, and we think would interest you, over the holidays and we will resume blogging in earnest in the New Year.
In fact, we already have a bit of a plan for January, so here are a couple of things to look out for on the Promise Blog in 2010:
- Building fertile environments for co-creation - A series of five pieces on setting the scene for co-creation and getting the most out of the people you are working with, whether internal or external. This will be coming out on the second week of Jan.
- The Expert Forum: Ten co-created trends for 2010 – A synopsis of our next Expert Forum, which will bring together 30 consumers and marketers to think about the key issues and opportunities for brands and businesses to look out for in 2010. For this one, you’ll have to wait until the end of the month!
- What Christmas served up for the retailers - what were the succesful retail strategies for Christmas 2009?
Thanks for your interest in us and our work during 2009! We are lucky that we work in an area that fascinates us and that is changing all the time; so expect more information, opinion and new thinking from Promise next year. In the mean time, have a fantastic Christmas and best wishes for a happy and prosperous 2010 from all of the team in London and Washington!
Last week we ran two workshops with consumers exploring the question – ‘What has changed for you in 2009?’ We are currently producing a report on changing consumer attitudes in 2009 and how these will affect behaviours in 2010. This document will be available at the beginning of next year and will be designed to give marketers an insight into a changed consumer mindset going into 2010. However, being something of a report writing maverick, I have decided to give Blog readers a sneak peak at the key ideas that we will be exploring and tell you a little bit about our process.
The thinking behind the sessions was that we had run a very successful Expert Forum on The Post Recession Consumer back in May. On that occasion we used projective techniques to engage with consumers and experts on how they thought their attitudes and behaviours might change coming out of this recession.
The focus of this piece was very different. We framed it as a retrospective, hoping to tap into current emotions, hopes and concerns and the direct impact that would have on 2010. If the Post Recession Consumer gave us some strategic insight, this was designed to support immediate tactical initiatives for companies. Incidentally, this was a Promise funded exercise so no one else’s agendas were in the room apart from our own.
Anyway, the key themes coming out of the research were:
1) A hardened consumer – This was the key theme running across the two sessions. This was a much harder, battle scared group that we were talking too in the summer. They did not see the light at the end of the tunnel casting a warm glow over their personal, professional and financial situations. The recession had affected them all in different ways and had made them tougher, much more ruthless when it came to making brand choices and far less loyal. They were more savvy and had a hard nosed, more transactional approach to their relationships with brands.
Impact for 2010 – This winter consumers will engage with brands, products and communications that speak to their needs and offer them support
2) Diversification – 2009 has taught consumers that they have to diversify, in all areas of their lives. This had meant that Waitrose shoppers are not just trading down to Sainsbury’s but are shopping at Lidl and Aldi too. It means that people are learning new skills in their spare time for fear of redundancy and obsolescence. We also heard about people trying to broaden their spheres of influence and being more socially conscious.
Impact for 2010 – People will be trying new things. If the price is right, and people see you as adding value to their lives, people will experiment
3) Seize the day – Over the last 12 – 18 months the groups talked about having learned to take nothing for granted and taking opportunities as and when they came up. The consumer mindset is to snap up a bargain, even if they weren’t currently in need. Marks and Spencer’s Penny Bazaar was mentioned as an example of stocking up on small gift items, as were efforts made by chain restaurants such as Pizza Express to entice consumers through 2 for 1 e-vouchers – as one consumer put it “making hay while the sun was shining”.
Impact for 2010 – Use ballsy loss leading sale offers to create noise in a crowded market
4) Brand winners and losers – We talked about which brands had stood out in 2009 as being in touch with consumers. It is no surprise that the supermarkets were mentioned – M&S, Tesco’s and the low cost brands like Aldi and Lidl being viewed very positively. The Waitrose essentials range was seen as too little too late by these groups who had already moved on. Value retailers were the main focus of discussion.
The problem for brands here is that price consciousness has caused something of a brand vacuum. The emotional pulling power of brands has been reduced to a price, value, convenience equation. In other sectors though, such as travel, trust is still key. Where the investment in the purchase is higher, the brand still plays a crucial role in decision making.
Impact for 2010 – Combine product, price and brand led advertising – giving emphasis to the price led stuff during the next three months.
Please look out for the full report. As well as detailing more themes and giving recommendations we are also looking in more detail at the long term impact 2009 has had on consumer attitudes.
X-Factor has undeniably revolutionised the way in which the music industry interacts with consumers. The now ubiquitous televised voting format has created the kind of star with whom it seems consumers share some affinity. Leona Lewis and Alexandra Burke in particular garner support not just because of their incredible talent, but because without such voices, they’re nothing exceptional in themselves; they’re normal, just like you. Both are quintessentially girls next door, made good.
Not only is there an emotive bond between star and consumer, with televised talent shows, the consumer is given a sense of ownership over the act; a sense of collective engagement –by expressing opinions through the vote. Even if consumers are not actively voting in the shows, more often than not many will shape opinions during the (often fierce) debate raging in playgrounds, offices and bars across the country. Cowell’s phenomenal success rests simply on investment in the consensus; in his dogmatic assumptions that the public knows best – that the crowd can source their talent, or at least his profit. Of course, this is how it would outwardly seem. In reality, the public has little directional input on the music, the editorial format of the show, or the post series production and transformation of the artist, all of which may ultimately contribute toward future purchase considerations.
This year’s pool of talent was, in comparison to previous years, considerably limited. The fact that one of the highlights of this year’s show was talent deprived stars Jedward, reflects, in my opinion, the nations transference from desiring simple talent to desiring all round entertainment (consider also, Stavros Flatley of Britain’s Got Talent fame). If one were to consider the potential to harness these kind of acts, there may be no better pastoral team than Cowell and Walsh, who between them have thrust Robson & Jerome, Zig & Zag, the Mighty Morphin Power Rangers and Westlife to musical stardom. The consensus however, may be moving against them.
The public has not fallen out of love with the formulaic approach of such talent shows; viewing figure high’s for this year’s X-Factor final were up 5.1 million on last year. Consumers seem to be as much, if not more in love with the talent(less) models of entertainment than ever before.
So how is it then, that we find ourselves in a position where we are contemplating the accession of a seventeen year old rock track to the coveted position of Christmas number one?
Jon Morter’s ‘Rage Against the Machine for Christmas #1’ campaign has attracted well over 750,000 followers on Facebook. Current sales figures are suggesting that the single has a ten point lead over McElderry’s offering (although this is based on downloads alone). As with the Burke/Buckley Hallelujah’off of 2008, the blogosphere has united against the SyCo Empire.
The fact that a relatively small number of consumers can transform a widely anticipated purchase driven contest however, reflects the growing power of the outsider.
Any X-Factor winner has had at least ten weeks of direct and unparalleled market exposure, and one must also consider that the public is now preconditioned to expect that the X-Factor track dominate the Christmas charts, after all Cowell’s creations have topped the Christmas chart for the past four years.
No one therefore, would have anticipated that a song based on racial upheaval in America, from a minority appeal band with known extreme left wing views, would compete – but that’s that magic of the power of the mass. By utilizing social networks and by coming up with an idea that would be popularly transferable into a viral platform, Morter et al have managed to promote their ‘product’ as a viable contender, and have spent almost nothing doing it.
So, is this the beginning of the end for the colossus Cowell? It would be interesting to consider: What if the final act of the noughties was the downfall of the reality-media idiosyncrasies that have so defined the decade? What if it transpired that hit audiences could be bought to their knees by a small but dedicated and collectivised core of web geeks?
This threat to the success of the X-Factor formula lies not in the co-creative concept of the show, but in the perceived arrogance of the brand. If the show were to open up wider opportunities for participation, particularly through additional genres of music, perhaps the protesting crowds could be calmed; the shows popularity is not diverse.
Marginalised audiences, or those who distance themselves from the mainstream will have more input in consumer trends as they adapt new technologies and means of communication, and continue to influence purchasing patterns; be it in protest or not.
I believe it is clear that the Tweenies (with reference to the next half decade, and not the hit BBC children’s programme) will see the widespread embedding of all consumers at the core of product development, not just in the entertainment industries (where there are obvious benefits) but across the board.
We’re big fans of the crowdsourcing logic here at Promise Communities. The potential for the Internet to harness and promote the logic of the ‘mass’ is central to the development of ongoing dialogue across Web 2.0 platforms. Sticking an idea out there and encouraging service users and experts to comment opens up new ideas and the potential to develop key angles for products and services.
This week, I was pleased to learn that I was one of three winners of the crowdsourced Camden poster competition. I devised a caption to accompany posters for Camden’s ‘Golden Ticket’ competition, in which customers of independent stores in the Borough can be entered into a £1,000 prize draw over the festive period. The caption will appear in bus stops around London from 1st December.
I spotted the competition in my Twitter feed. It was announced by @lovecamden with the hash tag #loveposters.
Camden council are claiming a first of any local authority, by using the online tool to engage with locals in this way. The success of the campaign has already been picked up by Marketing Week, UTalkMarketing.co.uk, and Mad.co.uk.
Twitter is a really useful communication tool and there are some great communities you can come across. In the past 24 hours I’ve enjoyed heated political debates with bloggers and MPs, found out about places to pick up a new winter jumper and have sourced most of my online news.
Using tools like TweetDeck on my laptop and my phone, I’m integrating Twitter into my daily routine so as I can keep on top of the latest developments in online public sector engagement, the latest marketing industry news, and keep up to date with many of my contacts.
I’m very happy that my entry was a winner in the #loveposters competition. I can’t wait to see the quote on bus stops and billboards. It’s exciting to be at the forefront of this kind of working.
More and more companies and organisations are turning to the power of the web to help product development. I hope to see more of this kind of fun, along with the development of online communities, as we head into 2010.
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And then there was one...
Gillette must be kicking themselves! In the space of two weeks, two of their three iconic global brand ambassadors (Thierry Henry, Tiger Woods, Roger Federer) have made the headlines for the wrong reasons. Unless of course I’ve got the wrong end of the stick and Tiger Woods smashing into a fire hydrant outside his house was part of some elaborate guerrilla marketing campaign – he lost control of the car while shaving? He was dragged from the vehicle only to flip to his feet and have a 2am street-shave under the erupting hydrant? Maybe not – bit ‘80’s…
Two weeks ago, of course, brand ambassador number two, Thierry Henry, found himself in the centre of a storm of negative publicity after using his left hand – his shaving hand – to propel France into the World Cup Finals. Despite his clean cut image and exemplary professional record, he was immediately placed in the same bracket as comedy sporting baddy, Diego Maradona. And in some parts of Dublin football fans would have you believe that Henry had shared a changing room with the devil himself as they called for a complete boycott of Gillette products.
Of the smooth skinned triumvirate, only Roger Federer remains untarnished.
The Gillette brand ambassador strategy is quite interesting. The rationale for their choices is fairly self explanatory: Best of the best, clean cut, multi-national, multi-racial, cross-sporting, multi-award-wining, record-breaking, global heroes. If you could afford them, why wouldn’t you want these people endorsing your brand?
There is also a more functional element of this strategy. It is the same approach that aeronautical engineers take to designing jet engines on large planes – All engines have separate fuel lines, separate power sources and separate controls. On a large aeroplane, if one or two engines fail, no need to panic, there are two or three others working just fine.
The analogy is not perfect, and as a nervous flier, I’d rather not take it too far, but the point is clear; by spreading their bets Gillette can avoid any single misdemeanour undermining their whole endorsement strategy. Examples of stars being dropped by brands are fairly common: Olympic swimmer, Michael Phelps was ditched by Kellogg’s after getting caught smoking a bong at a frat party, Kate Moss was ditched by Burberry after allegations of cocaine abuse.
Two down in as many weeks is a test for the Gillette brand ambassador strategy. As Woods himself said yesterday, “I am human, and I am not perfect”. As well as being a great way to increase desirability, personifying your brand’s values through a celebrity endorsement will always carry this risk. It is the humanity of this endorsement that is both the opportunity and the threat.
For Gillette, the key issue is the size, purity and ‘grouping’ of their stars. The three shine even more brightly together, but also make a tremendous impact when they come crashing down. Last week the company made a statement to say it would not be dropping Henry for his handball. The Woods story is of course still unfolding.
To return to my earlier analogy, Gillette will be praying that their third engine doesn’t fail and that Roger Federer holds his form until Christmas. However, knowing the brand’s luck at the moment, expect to see grainy images of the wholesome Swiss running down the street wearing nothing but his trademark headband, howling at the moon and playing his tennis racket like a banjo.
We have been thinking about ‘loyalty’ and what it means for brands, long and hard over the past few years. Recently we have published a thought piece on the issue. Read the full article here:
Below is an excerpt from the piece:
In our personal lives we generally use the word ‘loyalty’ when we talk about deep relationships that we have with only a few people. These are people we stick with even when things go wrong – we give them the benefit of the doubt and maintain our relationship with them, even if something happens to ‘rock the boat’.
Many marketers are really only interested in repeat purchase. For them, ‘customer loyalty’ means customers coming back for more, and they are not too fussy about the reasons why. A programme that does it successfully is often called a loyalty programme with little real examination of whether people are being loyal or simply exhibiting short term self interest.
So what should brands aim to achieve? Is it enough to be content with repeat purchase? Or is it worth going for the bigger prize, true loyalty? And where does ‘habit’ fit within this? Can we amplify our efforts to build loyalty by making it into a habit rather than a series of one-off conscious choices?
We think that the canny brand owner will focus on both. Repeat purchase is clearly a good thing and there are many ways customers can be encouraged to come back for more – discounts, BOGOFs and vouchers, to name a few.
But true loyalty has value beyond these.
It can protect brands against a new competitor with an attractive offer, or against a short term production problem that leads to faulty goods, or against a high profile court case from an unlucky or disgruntled customer.
This combination has to be an attractive prospect, leading to a whole range of potential benefits…
> Customers come back, the brand becomes the preferred brand (retention)
> Customers come back for more, more often (repeat purchases)
> The brand creates a habit (customers come unconsciously)
> Customers stay through bad times, are willing to forgive mistakes (when they happen and they are addressed) and find a reason to stay
> Customers advocate the brand (helping the brand retain existing business as well as win more customers).
And one thing that most business observers agree on, is that it pays!
“ Retailers who take meaningful steps to drive consumer loyalty are 88% more profitable than their competitors who do not.”
Deloitte research study – “Serving the Networked Consumer”
“It costs at least five times more to acquire a new customer as it does to retain an existing client.”
The Loyalty Effect, Frederick F. Reichheld
“The probability of selling something to a prospect is only about 5-20%, while the probability of selling something to an existing customer is 60-70%.”
Marketing Metrics
Loyalty programmes can help in different ways
The ingredient that turns repeat purchase into true loyalty is the consumer’s relationship with the brand.If they feel that the brand is truly on their side, and is looking out for their long term interests, repeat purchase and loyalty will become synonymous.
If, on the other hand, they feel that the brand is only interested in the next sale, it will be impossible to build true loyalty. So it is clear that brand loyalty is contingent on the brand itself.
Consumers cannot, and will not, be loyal in a vacuum. They will only be truly loyal if they believe in your intentions as well as your actions. How do you go about building true loyalty?
Want to know more? Read here:
