Category Archives: Positioning

The “Word of Mouth” Trap

Let’s get this out of the way: Positive word of mouth is terrific. I can think of nothing more powerful than an instance where one reliable source tells another person how great a product or service is. It’s instant credibility for your brand.

Unfortunately, there are people who don’t know how to make word of mouth all that it could be. Word of mouth can build business but it can also build complacency in people that benefit from it because those same people believe they don’t need to do anything else or that everything they’re doing currently is just fine. But in time, that kind of philosophy can result in decreased market share or worse.

Still, maybe you don’t see the big deal. All is right with your world. Good things are being said about you, customers seem to be consistent…so who needs anything else when word of mouth is pulling in people for you and the numbers are up?

Well, I’m going to go out on a limb here and say that you’d rather have more money than less of it. Which is why I offer forth this little scenario about two companies for you.

Company A has 200 customers. Company A provides great service and a great product but does nothing to encourage its customers to put in a good word about Company A to someone else, like a friend or family member. Still, let’s say that every single customer tells 1 other person about how great Company A is. Those people become customers too.

Company A’s year-end total: 400 customers.

Company B has 200 customers as well. They provide great service and a great product. But they implement a referral program that rewards its customers for referring three friends to become qualified customers – Company B offers a pretty good-sized prize for doing so, but then, the return on investment in getting three new customers for every one is well worth it. PLUS for every successful referral, the customer gets a smaller, intermediate prize. PLUS Company B’s program allows each successful referral to count as one entry into a grand prize drawing, which means the more referrals you make, the better your chances to win.

Company B’s year-end total: 600 customers (at least).

I’d say the difference between doubling your customer base and tripling it can be mighty big, wouldn’t you? Everybody’s company is different, but my point is that while both companies shown here use word of mouth, one chose to cultivate its customer relationships off of that word of mouth with far better results than the one that stuck to the status quo and did nothing.

And by the way, the referral program idea is only one potential way of building on what you have.

Remember, word of mouth is a foundation, not the end result. It’s a springboard for even better results to occur because what you have is a happy customer base – however, just because that’s something that many other businesses would be jealous of doesn’t mean you should sit still.

Specifically, think about two things:

1) Where does your audience interact with your brand?

2) What will your reward for making a successful referral be when you get in front of them?

A better reward does not have to equal more money either. It can be a discount off of one of your products or services (perhaps a discount off of a new product or service you’d like to introduce?).

Word of mouth gives you the opportunity to be proactive and make that goodwill work for you even further. Otherwise, there’s only going to be so many words about you passing through so many mouths.

Will Movement Make Banks Remember, Remember the Fifth of November?

Perhaps this isn't just the stuff of movies after all.

Smaller institutions may leverage outrage behind “Occupy Wall Street” and “Bank Transfer Day” to their advantage if they know how to act instead of analyze.

You’d like to think they saw this coming. You’d like to think they wouldn’t be surprised. And at the end of the day, I’d expect the biggest banks in America, including Chicago’s, to still be standing tall. Yet the movement known as “Bank Transfer Day” is gaining momentum and it’s important for all of us to note the new speed with how audiences mobilize, no matter where we stand on the issues. For marketers of financial products and those of us who advise them, it represents an opportunity to listen to audiences and pause before considering what to do in the name of getting more money from customers without giving them something in return.

Why? Because of this writing, one person is having an impact on what 25,978 people may do toward their bank on November 5th. And that’s just today. What will that number be by November 5th?

Organized by Kristen Christian, Bank Transfer Day is imploring people to move their funds from major banking institutions to non-profit credit unions on or by November 5th. The point of doing so is to send a message to the largest banks that there are consequences for unethical business practices. Christian isn’t trying to install anarchy or any more economic instability than what’s already in place.

Rather, as she told the Village Voice and KTLA Los Angeles:

“It’s not about people taking their money and burying it under their mattress. It’s shifting the money to a company people respect the practices of. If you don’t like Wal-Mart’s practices, shop at a local grocery store instead.” 

Christian is a 27-year-old who has banked at Bank of America, both personally and professionally. But she found her breaking point when B of A charged bank fee after bank fee. When she called into the bank because the site was down, she was charged two dollars. When she took her mother to brunch, her mother wound up paying for it because Christian’s account was frozen for three days due to suspicious activity – without any communication from B of A.

Many people who bank with institutions like this have a similar customer service story to tell. The more of them there are, the easier it is for groups to mobilize.

Is there a lesson for smaller banks and others in the financial industry in positioning themselves in this “recovering” economy? Absolutely.

While credit unions are the benefactor in this case, there’s no reason why others, such as community banks, can’t also benefit as long as they don’t act oblivious to current events and remember a few key points in their positioning/re-positioning:

If you raise a fee, there could be consequences beyond a few angry letters and posts online. What Occupy Wall Street and now Bank Transfer Day are showing institutions of all sizes is that there is a very real emotional limit to bank fees.

On the basic level, there is anger and frustration, where people throw their hands up in the air and say, “This is ridiculous and stupid. But what are you going to do?” Then they ask each other what they want for dinner.

Then there’s another layer where you’re ticked off enough to withdraw your account in favor of another institution.

Well, this is actually the point beyond that. 

What we’re witnessing is a new point where people are withdrawing accounts and organizing in order to bring like-minded people with them to send a clear message. And I don’t believe it’s going to end on November 5th either.

Regardless of politics, people are making a grave mistake by marginalizing these types of movements (right and left, mind you), because in a world where it’s not about size of crowd but how well the message is distributed through channels such as social media, a great deal of impact can be made one way or another on a brand. True, the world won’t pay as much attention to a couple people with signs. But I think we can all agree Occupy Wall Street has been greater than that. 25,978 people who sign up for Bank Transfer Day via its Facebook Page is greater than that. The story has the potential to spread far beyond the physical location (if we learned nothing from the uprisings in Egypt).

To ignore that sentiment without addressing it is shockingly short-sighted, if not arrogant. It is at this moment that smaller financial marketers at the community level (banks, financial advisors) should look at themselves and say:

“We’ve got an opportunity here to be portrayed in a light apart from our much larger colleagues. They’re doing us a favor, really. Whereas we might’ve been lumped in with them at one point as ‘Financial Institutions,’ they’re the ones getting hammered in the press for what they’re doing wrong. They’re fragmenting our industry in a good way and we should take advantage of the moment to tell our own story, how different we are from them. We need to show that when people trust us with their money, we’re not going to gouge them to death with ticky-tack monthly fees, nor are we going to do things to do their account without telling them.”

I wonder how many community banks are having that conversation within their walls. Because they should. Now. People are literally taking to the streets and to the web in anger directed primarily at your competitors. And you won’t address that raw emotion because you want to stay above the fray? Because you won’t talk directly about what’s going on in a financial industry where trust is being eroded and what you want to do to fix it? Mistake. Huge mistake. Lost opportunity.

In fact, the issue doesn’t even have to be about how large or small the bank is but rather what it believes in opposition to its counterparts getting hammered in the media and conveying that differentiation clearly.

It’s possible some people who said “I’m attending” Bank Transfer Day won’t ultimately transfer funds from one bank to another. But the larger picture here is that they want to show solidarity and identification with a group against large bank brands. That matters.

It’s also possible that some people will say, “It doesn’t matter because it’s not like these banks are going to be hurting in their bottom line from this. Get real.”

That’s probably true. But I’ll go out on a limb and say any company that takes a “who cares what they think” attitude toward their own customers as long as their numbers are good won’t be doing wonders for their long-term brand perception.

What are your thoughts? Do movements like Occupy Wall Street and Bank Transfer Day change your feeling toward your financial institution? Or does it have little effect on how you view it? If you’re in the industry and feel comfortable commenting, what are your thoughts as well?

What happens when your leader IS your brand?

Most of us have bosses. Some of us have great CEOs. And a very precious few of us have what can only be referred to as a legend – the kind of iconic visionary who is responsible for making the brand what it is today in the eyes of many.

Of course, nobody is immortal. Time ensures we all move on, whether it is due to a new job, retirement or (not to be morbid), expiring. The challenge Apple faces today in the wake of Steve Jobs’ resignation as CEO (but he is staying on as Chairman) is no different than what Chrysler had to face in the post-Iacocca era, Ogilvy had to face without David Ogilvy, Disney without Walt or what Virgin will face when Richard Branson steps away someday. These are imaginative, charismatic, exciting people who not only shaped the foundation of their companies but have had influence far beyond it for managers in all kinds of industries. They are not just people associated with the brand. They ARE the brand.

What do you tell the world when they aren’t around on a daily basis anymore? Do you regret having linked to one person so strongly? Do you pretend it’s business as usual and no big deal?

It’s not a catastrophe as long as you remember a few key fundamentals before, during and after that transition for the good of your brand.

1. You don’t replace genius.
The world knows that. You’re not fooling anyone when you pretend that the person no longer involved in your company is no big deal. “Oh, yeah, he left but we’re humming along.” Give me a break. It’s about saying, “You don’t replace someone like him. He was remarkable. Fortunately, we’re a better positioned company today because of everything he’s done.” You don’t have to say you’re devastated and don’t know how you’re going to go on either. Which leads us to #2.

2. Show what the legacy has brought to your business and culture.
The Chicago Bulls couldn’t replace Michael Jordan. Hockey itself couldn’t replace Wayne Gretzky. But as a testament to their influence, they had disciples and students of their genius and skill. Steve Jobs has had the same and I’m sure Apple will take great steps to show how Jobs’ principles are alive and well even as he pulls back from responsibilities at the company. For example, Jobs was a master of stripping away technical elements that the consumer didn’t necessarily need – I doubt that Apple will suddenly become a company of unwieldy designed products now. They’ll keep this legacy strong if they can continue to show how they produce not just great products but magical feelings that make people salivate over what’s next. Great leaders have great influence and great respect long after they’re gone – how often do we hear architects and city planners in Chicago invoke the name of early 1900’s architect Daniel Burnham in an effort to stay true to his vision of the city today?

But again you ask, “isn’t Steve Jobs the primary person who triggers the emotion behind Apple with every introduction?” Yes. But that leads us to point #3.

3. Terrific leaders don’t leave the skill set cupboard bare when they leave.
If you believe Steve Jobs is a great leader – which I do – you know that he has been preparing his internal team for a moment when he was going to step away for some time now. And if you have ever studied the succession plans of companies that tend to do well in transition, fortune tends to favor those who select leaders from within who have understood the culture for quite some time – not a hard and fast rule, but a trend. In that context, can you imagine anyone better prepared to take on this responsibility than Tim Cook, a man who has been at Apple for over a decade and has already had to step in for Jobs once before? What about the talented people who have an eye not just for technological greatness but artistic beauty in what they create for Apple? Steve Jobs is a great thinker but to say he was the one and only visionary behind the iPad, iPhone or iCloud is doing his team a disservice.

4. Perception is reality. Think about experiences and emotions, not just dollars and cents.
You can talk about dollars, cents and profitability until the cows come home. But there’s an immeasurable quality of captivating customers like the past leader did that should be your goal just as much as earning revenue. People who take their eye off that function of branding and try to say that the company is in an even better place are fooling themselves. And I’m not just speaking externally – what’s the chemistry of your culture post-iconic leader? Is it just as fun of a place to be? If you used to be a magical place to work and have become just a profitable place to work, something is lost. Sure, technology must evolve and ways of doing business must evolve. But the spirit and vision that is the company’s reason for being must be just as inspiring to its people from one leader to the next. If you don’t have that, the promise of what your brand is all about rings a bit more hollow. I don’t think Mr. Cook will make the mistake at the next big Apple event of presenting just about profit and loss instead of trying to excite people for what’s next. I sure hope not.

5. With consistency and focus, you ensure the iconic leader leaves his mark on the brand forever.
None of us may live forever, but the more our successors can use our principles as a guiding force for why they do what they do, the more they honor us. More importantly, they keep the brand strong. If those principles fade because some new CEO from the outside wants to put his own stamp on things and forget all the good things done in the past, well, chances are the company probably loses its shine as well.

Most of us may never know what it’s like to work for a person so iconic that they become synonymous with the brand. But their leaving isn’t the tragedy – forgetting how they made the company great in the first place is.

Can you think of instances of where greatness transpired from one leader to the next? What about stumbles that could have been avoided? Of course, if you have a bold prediction for Apple’s future in the wake of Steve Jobs stepping back, I’d love to hear that too.

Downers Grove Golf Club travels back in time to go forward

There used to be a time when country clubs and golf clubs could mention who their course was designed by, show some great aerial photos of the course and rely on that to do much of the heavy lifting for drawing interest.

Those days are gone and I don’t think they’re going to return. Clubs of all varieties find themselves trying to plant their stake in the ground when it comes to positioning themselves and standing out. Why? People aren’t walking away from playing the game in the midst of economic turmoil (walking away temporarily due to their scores, perhaps), but these people certainly are being given options to explore. And it’s forcing clubs to get creative. Yet, some of the “creativity” I’ve seen from club managers consists of price-driven daily specials to get golfers in the door that may give a short jolt at best for a slow day but rarely results in any long-term loyalty.

When a golf club or country club can build an effort that’s true to who it is as a brand based on its heritage or profile of members, I think it’s got a genuine story to share that’s worth telling. When it’s not genuine (i.e. a country club that pretends to be kid-friendly toward potential new members despite the fact there aren’t any facilities or programs to cater to children), people find out not long after the membership Open House, if not right then and there.

So it was refreshing to witness a tournament that plays so well into the fabric of what a club is all about. Downers Grove Golf Club  is the oldest golf course in America west of the Allegheny mountains, established in 1892. Sure, this is a nice factoid that’s good for bragging rights vs. your typical course, but rather than resting on its laurels, Downers Grove let its past come to life at the All American Hickory Open this weekend.

If you think this is your ordinary corporate golf tournament, think again.

Put away your tees, sir. You'll be making your tee old-school today from a pile of sand.

The beauty and originality of the Hickory Open is that it is played with pre-1900 golf equipment, including golf clubs and golf balls. As a bonus, I was pleased to see nearly all the players in the tournament getting into the act by dressing the part of a turn-of-the-century golfer too. Knickers and ties for men, ladies with parasols. From a real brand perspective, the result I see here when you have an event like this is that it’s not only a nice piece of revenue for the golf course but hopefully an annual event that gets continued and growing coverage – not as a gimmick but as an authentic tie to the club’s roots. It’s about playing with the instruments of the past on a course that’s as steeped in history as any. Close your eyes and you’d think you’re in 1890. Considering how many of us see the golf course as an escape, think about the number of gents I saw taking pictures of one another as they whacked at a ball not off of a tee, but off a mound made of sand – just like the way they used to do it back then.

They had an experience that was unique, memorable and just as important – tied back to the club. A brand can get a lot of mileage out of a memory like that.

On the left, a ball from the old days. On the right, a modern day ball. Different size, different texture. They hit the one on the left a lot better than you'd expect.

In case you’re wondering, even though there’s definitely a difference from yesterday’s clubs and balls to what we use today, most of the shots I saw with the old sticks were pretty darn good.

If you’re a GM, Membership Director or Board Member of a golf or country club, what are some of the creative ways you’re attracting interest with your authentic brand’s story? If you’re stumped and need a framework on where to begin, here’s a good starting place.

Downers Grove Golf Club is located at 2420 Haddow Ave. in Downers Grove. Call 630.963.1306 for more information.

Simplifying your brain even with an additional 37 Signals.

A thought today that inspires me from Chicago-based 37 Signals.

Rather than add on, think about what you can strip away and simplify to make the experience of working with you more enjoyable for your audience.

Innovation via undoing complexities your customers face. What a refreshing concept in this perpetual “add on” world of ours.

When people have come to me over the last several years with an idea that will launch a new product or service, their minds often start to race with product line extensions, offshoots and even selling the company. All before anyone on Earth knows about them.

This is where taking your eye off the prize can lead you into trouble. I’m paraphrasing, but I can recall reading 37 Signals founder Jason Fried saying to the effect of, “We don’t need to offer training for our products because they’re so intuitive, you just get them.”

He’s right. Just to be on the safe side, they supply 1-2 minute bite-sized videos of each feature of his products, but you never need to watch it more than one time. His project management tools like Basecamp, Highrise and Backpack are that intuitive and easy to grasp. Basecamp essentially allows your team to collaborate and communicate with clients in a way that’s both advanced and very simple (posting thoughts in streams of communication not unlike what you see on Facebook but easier than e-mail).

Let’s look at another company – Yammer takes the concept of e-mail communication and speeds it up internally for greater group communication and input. Sending e-mail back and forth: Clunky. Yammer: Crazy simple.

Think about this notion for a moment as it applies to you. Is your product something that is so simple that nobody would have to sit down with one of your people to understand how it works? That they could just watch a 2-minute video? If not, where do the complications occur?  If you offer a service in the B2B realm that requires a face-to-face, can you structure yourself in such a way that people get exactly the advantage of working with you (“Just go to our website and you’ll see what we do.”)?

This is not an easy challenge as we all have varying things of complexity we sell to the world, whether it be bobbleheads or I.T. solutions. Yet, I believe we hurt our own cause when we try think about one-upping competitors by adding on rather than taking away. It goes back to focusing on what you are absolutely best at, not what you are mildly good at.

By now, this is where I get a reply sort of like the following:

“We’re a full-service accounting firm. We can’t strip away our services. That wouldn’t be realistic.”
Perhaps, but you’re not making it easy on someone to say you can do it all. Really. A more likely and natural scenario is that they’re looking for one service at this moment. Then, in time, you may be able to expand the relationship into other areas as they become more trusting. In other words, are there areas of your communication that could be simplified to focus more on ONE area of service that you are particularly known for or a partner has gained a reputation for that you can play up more than ALL of your parts?

Similarly, if you’re a Realtor, why say you’re the Realtor who has been around for 25 years? No offense, but that’s what a lot of people say. How do you make the process easier on first-time homebuyers in the western suburbs of Chicago?

What I’m getting at is a combination of de-cluttering your brand and clarifying your focus from an operations/technological/process/people perspective.

Simplification of Audience
Be honest with yourself. Who represents the audience you have related best to? If they’re not profitable enough, you can add on another audience to go after, but just remember how that will affect the communication strategy you need to present. I’m a bigger fan of “Here’s how we understand your audience” messaging that’s tailored to a specific group vs. “Here’s what we do at our firm” messaging that aims to appeal to all.

Simplification of Process
It’s not merely about some fancy name and putting a “tm” next to it. Is your process marketable by its simplification or does it follow the same path that any other competitor would expect to follow? From a customer service standpoint, if other companies have a maze of an automated phone system, do you have texting, Skype and other methods that streamline the way to get a hold of you faster? Can you use a product like Square to let them pay for services then and there?

By the way, this has applications to internal processes too. I once worked at an agency that had 8 pages on workflow process, complete with flowcharts for all scenarios. Impractical? You could say that. Talk about a glaring need to do away with extras for the benefit of the end user: the client.

Simplification of Product/Service
What can you “undo” in complexity that is atypical of your industry? This doesn’t even have to mean entirely new products or services – you can start with aspects of your business. For example, if the client expects a mountain of paperwork in order to engage you, what can you do to go paperless or provide just one invoice (there’s a nice environmental angle in this as well)?

Listing all your services is fine, but how do you make it easier on someone to find a wealth of information on exactly the service they know they need? And please, give them more than “We have X employees in the ____ division” when they get there. You’re not making it more complex by adding content here – you’re making it easier for them to make a decision because they’re finding more about you than the other firm and it’s raising your credibility in their eyes.

Simplification of Rewards
Think about the mechanism you can implement that make it easy as pie for a client to understand what they need to do in order to get rewarded from you. Maybe it’s nothing more than giving you their business – so what reward do they get? Maybe it’s a certain number of times visiting your restaurant and checking in on Foursquare. Maybe it’s an Amazon gift card for every qualified referral they make. If they sign up to try your software and forward a link to 5 friends who also sign up, does that original person get an upgrade? In any event, the complexity here isn’t that there’s too many rewards…it’s that there’s usually none. You can take advantage of this empty space others don’t always inhabit by communicating what clients will clearly get for a desired response.

Innovation through simplification. I’d love to hear examples of it you’ve come across, whether in your own company or other brands you’ve encountered.