We are losing our heritage brands.

We are losing our heritage brands. After the collapse and loss of businesses such as Deane Apparel, Line 7, LWR and in Wellington Radfords the question must be asked why such iconic businesses fail. In the case of Radfords this was a brand that had been in the market for over a century.
Well stand back because there are many more brands of significance on the path to extinction. There are two issues I need to draw attention to; first these failures don’t have to happen and secondly when it does occur the nation is robbed of hugely valuable assets.

We are mis-managing our businesses. Not deliberately but because we are averse to change. It is easy to understand that the science of making stuff and the art of creating a service should be the primary focus of any business. I’m not suggesting this isn’t important but it is rapidly taking a back seat to another business prerequisite 'engaging an audience'; skills and experience more akin to marketing than the legal and financial skills we currently see.
Marketers, advertising and PR people have struggled to find a seat at the board room table mainly because their profession has relied for the most part on creativity and suspect research (not the kind of skill sets needed around a board table).
So for the most part, warming the seats of our board rooms are accountants and lawyers.
Let’s understand why accountants and lawyers on their own can’t run modern businesses (with some notable exceptions).
A lawyers primary reason for being is to protect legally what you own (that assumes you have something worth protecting). A laudable enough idea except you can’t own a brand because it resides in the minds of your customers. Once upon a time when markets and audiences were more static and easily defined legal protection was sensible, but legal protection comes after you have built the business.
Accountants view businesses through a rear vision mirror (they have a forensic approach). Their job is to study where you have travelled and predict where you might head and ensure you have the right measurement and assessment tools in place. They base their predictions on past activity. Again a long time ago when markets performed in the same old ways year in and year out this was a very sensible and effective approach but now no longer enough.
Neither of these groups have skill sets required to tackle markets that are at best chaotic, now global, and in constant and rapid change.

The marketing view is about understanding markets today and how they will trend based on how consumers might behave tomorrow so that you can manoeuvre into the right place at the right time. Most marketers have been trained in the old world practises and are unlikely to understand the new chaotic commercial environments. They still have a penchant to call in the advertising agency as their solution to growing the business.

The new path forward will come from understanding the science of branding and brand building
With the assistance of neuroscientists and psychologists we can now make far more accurate predictions about purchasing and decision making behaviour than we could have even a decade ago; many of these advances have occurred in only the last five years.
Brand building (the science) is a skill set required at an executive and board level if businesses are to survive let alone thrive. These new skills are unlikely to be found in traditional advertising agencies or marketing firms; these people are thin on the ground but they are out there.

But these new business builders are struggling to push back old paradigms and are battling entrenched thinking.
Unless business embraces these new business builders and give them seats on the executive and in the board rooms, then the future will be difficult indeed.
It is time to accept the new reality; there are too many products and services, traditional media is failing, old marketing methodologies are struggling and the new 'more for less' economy is here to stay. It all adds up to a need for a fresh approach and the refresh starts at the top.

If businesses want control and certainty then they must embrace the new brand building dynamics and enshrine it in the planning process.

They need to or they will perish.

Remember the bank queue?

Having slagged the BNZ (I’m allowed to given I am a customer) I now find myself sprinkling a little praise. In this world we need to both give and take so back slaps where back slaps are due. The bank hasn’t surrendered its childish pigs yet but something profound is taking place right where it matters. I went into one of their branches several weeks ago and stood in the cattle race with a bunch of others during the lunch hour rush when bank tellers obviously desert the counters to also have lunch. But here is where the classic bank paradigm changed.
As I stood patiently in line I observed a bank employee emerge from an office and head straight for the woman standing in front of me. He asked her a question (I didn’t hear what was said) and took a keen interest in the wad of papers in the lady’s hand. They both headed off for his office and disappeared.
Now I was left pondering because there is little else to do in a bank queue. Did the banker know this woman, why had he picked her out of the cattle race, if she was here to see him why had she lined up with all the rest of us plebs?
As these thoughts raced around in my head I spotted another man emerge from another office but this character was making a bee line for me.
"Is that a cheque you are depositing sir?”, he asked me with a smile. I admitted it was. “Then I can sort that for you”, he said as he took the cheque from my hand and headed back to his office.
Now I know this isn’t exactly Mohammad going to the mountain but culling me out of a queue is a significant step forward and one that I think deserves a mention.
What is even more impressive about this ‘customer interface improvement’ is that the BNZ haven’t advertised it. My advice is don’t. It is better we discover this great service than hear you skite about it and then not deliver.
In fact lose the pork guys and beef up your customer service; we might just get some real competition in the banking industry.

First Impressions Count

Jet Star is struggling to get off the ground. It is hard to believe an airline with the experience and resource such as Qantas could get it so terribly wrong. While they may put it down to ‘teething problems’ the New Zealand public are unlikely to be as dismissive. The current global economic predicament seems to be completely lost on Jet Star and their advisors. This is no time to ‘get it wrong’.

Not only are they off to a bad start but their response suggests they are hell bent on making things worse. Full page apologies might make the advertising agency happy but it cuts no ice with today’s consumer. It is possible to make a mistake and enjoy a great recovery. In fact there are some great cases of businesses that have turned a ‘screw-up’ into an opportunity to engage with customers; because mistakes can happen. As Alan Martin famously said, “it’s the putting right that counts”. He didn’t say, “An ad in the paper will put it right”
Come on guys this is pathetic, you are well on the way to becoming the 'Skoda of the sky'.

Something truly frightening is happening in the corporate world right now. These businesses are either being run by ‘unqualified communications executives’ or they are getting atrocious advice (or perhaps both).
Jet Star are not alone in the dunces corner. With them stand Cadbury who have recently tried to slip passed their trusting customers a shrunken chocolate block full of Palm oil. Whittakers, the eagle eyed competitor, spotted the sleight of hand and ratted on them. (Good honest Whittakers); this only weeks out from Readers Digest announcing Cadbury’s as our most trusted brand (yeah right).
Joining the duo is Methven, New Zealand’s iconic tap ware manufacturer. They have come to the attention of the Commerce Commission (once again courtesy of a helpful competitor) for allegedly ‘telling porkies’ in their ads about one of their showerhead’s ability to deliver savings to consumers.

At a time when businesses are trying to make efficiencies (and need to get it right) we instead are witnessing horrendously expensive screw-ups. These mistakes are costing business hundreds of thousand of dollars in unnecessary expenditure, lost sales and long term ‘brand damage’.
Sure strong brand reputations can weather storms better than the also-rans but having a reputation also means it can sustain damage; damage that could take years to repair.
Now if anyone from Jet Star, Cadbury or Methven are reading this, then here is the best advice you will ever get and it won’t cost you a cent.
A brand is simply a reputation that resides in the minds of others. Like any reputation it can sustain damaged. Human nature demonstrates that you can get ‘it’ right a thousand times and do yourselves proud; but get it wrong once and you will get a caning.
But if you do get it wrong please don’t apologise; simply get some grown up help and put it right.

To hell and back

This is the best news I've heard for a long time. Callum Davies and his mates at Hell have bought back their baby. The Tasman Pacific Foods Group purchase three years ago was a disaster. It was fifteen million dollars the boys needed to take Hell to the rest of the world but they also now know that large corporates are not the best custodians of boutique brands (see my last blog). In just three years Tasman Pacific succeeded in getting seriously offside with the franchisees, they tried to lift sales by slashing costs, they showed a complete lack of understanding of what they had bought.

Fontera’s purchase of Kapiti has all the hallmarks of a similar fate. The only difference is that Fontera will know how to milk the brand dry before they destroy it’s ‘heart’.
It took Ross McCallum twenty plus years to create Kapiti (Callum has worked in Hell for a similar time period). Brand bashing corporates can bleed delicate brands dry in only a couple of years.

Lane Walker Rudkin has gone down the toilet along a frightening number of other one hundred plus year old companies in the last few years. These iconic brands are worth fortunes and large corporates are seriously mismanaging the brand equity that has been built up over years of investment, toil and sweat. It is a form of asset stripping gone mad. It is also at the crux of this so called global recession. Mass destruction of trust, value and quality.
I’m sure businesses would protect their investment if they knew how but the problem highlights the fact that major companies, their legal, financial and marketing advisers know next to nothing about brands. They think brand is something they own and bleed rather than something thay should nuture and ‘garden’.

So here is my advice to all big corporations. Watch carefully the road to Hell and learn. Callum and his team will get things back on track I know. They are very clever people. They understand the essence of a brand. They understand Hell connects with franchisees and customers alike. They understand that Hell is more than fast food. They treat it with care, they love it to bits and they will stay with the game plan.

Callum's road to Hell has always been paved with good intentions. He now sits on a well deserved wad of cash in his back pocket after buying back the franchise for a fraction of the original sale price but a devil of a job in front of him.

Bring on the resurrection.

Let's play telephone tag

Just because you are the biggest doesn’t mean you’re the best.
In fact market leadership until recently has often occurred by default. Big organisations, first to market gain a size and momentum that is almost impossible to stop. Telecom, Vodafone, ANZ, BNZ and TVNZ are good examples. With their market dominance often comes market arrogance, what I call ‘business chauvinism’.
These businesses are often run by accountants and financiers who know the cost of everything and the value of nothing. They become skilled at the end game of economic chess to a point where winning (or making a profit) becomes their reason for being. They lose sight of what being in business is all about (looking after the customer).
Throwing your weight around is no longer a valid strategy for maintaining leadership (as the American auto industry is learning).

So when businesses such as Telecom and the ANZ decide to take their call centres offshore as a way of slashing even more costs they expose themselves to ridicule. I’m not talking about robbing New Zealanders of jobs; that’s another story in itself, I’m talking about turning an already shocking service into a farce.

Taking call centres to countries where English is a poor second language, where the people probably don’t even know where New Zealand is on the map is tantamount to telling customers “we’d rather you didn’t call at all. You won’t understand a word we are saying and we have no idea who you are or where you live anyway.”

The phone is the front gate for many of these businesses and ‘dumbing down’ the service to save costs will come back to bite them in their rears big time. The only good news is that it opens the door to competitors who understand that delighting customers is the key to business success. Energy, telecommunications and banking services have become commodities because the big businesses that dominate these sectors haven’t figured out that they could add value (answer phones quickly and intelligently) and make even more money.

But hold the phone folks. AXA is out of the blocks with an advertising campaign promising to answer the phones locally. Good on ya AXA. It appears some of the big guys can eventually figure it out

What's wong with Wanganui?

Michael Laws is the one throwing hissy fits now. At a time when the world is losing stuff the mayor of the city is rejecting the New Zealand Geographic Board’s kind offer of an ‘h’. Adding a letter to the city’s name aligns it with the correctly spelt Maori name of the river Whanganui that flows through the city. It is claimed to have been named by the legendary chief Haunui (spelt with an H) who arrived on the Aotea waka over six hundred years ago.

Now I can sympathise with some aspects of Michael's reluctance to change. The name Whanganui means ‘great harbour' and clearly the city can not claim this. But once again is this another example of just how intransigent the brain is to change especially an aging male brain or are there really major problems with undergoing a name change process?

Most women in this country change their names when they marry and it is usually requires more than adding a letter. They seem to cope with it Michael.

The name is not offensive, in fact it could be argued Whanganui is more flattering. I hear some business owners claiming the cost of changing signage and stationery will send them broke. Manage the change folks.

Now Mr Laws has in the past had no end of trouble with some of the local Maori camping on his flower gardens so perhaps he is taking this opportunity to tell them ‘to stick their name in a pipe and smoke it’.

What ever his gripe surely his emotional state is diverting his attention from the city’s 'opportunity of the century'. Most businesses seize on the renaming process as a way of reconnecting with key markets. They usually beat up a real song and dance, proclaiming to the world what a change means.

What an opportunity this could be to put this town on the map, change some old paradigms, focus on what the city has to offer.
Come on Michael, don’t be such an old stick in the river mud. Embrace the change, add value to the city; the promotional opportunities are boundless.

This is something to celebrate. Welcome home your prodigal ‘h’.

The pigs are fed but unlikely to fly

At a recent conference in Auckland I was addressing a group of mainly marketing executives representing national and international cosmetics brands. I wanted to reassure them that the current economic climate should not be viewed as a recession. If you are unwilling to change the way you do business and continue to play by the old rules then I guess you could be excused from seeing it that way. This is not a recession; it is a tectonic shift in the way business is conducted. There is no point in battening down and waiting for this to pass. This is not a storm you can ride out; it is a change to completely new ways of working.
There is no point in trying to read the tea-leaves down at the stock exchange or listening to the hand wringing gnomes of finance. These people are merely historians, forensic accountants raking over the smoldering coals trying to make sense of the global melt down. They have no view of the future worth considering.
You see balance sheets merely reflect the results of our behaviour, the red figures are what is or is not left when the job is done.
What they can confirm is that business has not been delivering value, the world has been caught up in paper investments, creative accounting and misguided loyalty. We have created a climate of distrust. We have been busy doing nothing other than creating an illusion
We are now painfully aware that business relies completely on trust. If we don’t trust each other then our sphincter muscles cramp; nothing goes in and nothing comes out. Business stops.

There are plenty of examples of old world behemoths. The BNZ, antiquated and lost, their new identity is devoid of any of the three new building blocks. They waste millions of dollars on billboards and TV ads that show us their cartoon, coloured pigs, old world creativity rather than meaningful value. Go into a bank and pick up an empty cardboard box instead of a helpful brochure (another example of creativity gone mad). Ask to talk to a business manager, as I did recently and you will quickly find they know nothing about business and what advice they offer is worse than unhelpful. They will probably blunder on because of their sheer size but sharper, faster and better banking models will overtake them in time.

The news however is good.
In the new environment the three most crucial issues will be common sense, trust and value. If you can provide all of these then you will do extraordinarily well.
The future is about smart long term strategies rather than desperate short term (colourful pigs) tactics.
Not only will you need to deliver but you will also need to communicate these. There will be no point hiding what will set you apart from others.

Do such businesses exist, absolutely?
Kiwibank and ASB are at the front of this new change process. But there are others out there, smaller businesses that are founded on the three platforms and they are doing extremely well right now.

I am impressed with the clever folk Trilogy ( www.trilogy.com ) who have embarked on a campaign requesting that businesses sign up to ‘not using the R word.
Equally I suggest everyone sign up to the concept of delivering commonsense, trust and value

Yes Sir; no Sir

The gongs are back and thank God, or should we thank the National Party? Having our own New Zealand titles is an admirable idea and while shrugging off another vestige of colonialism appeals, how often do we cut off our nose to spite our face?

There are two sides to every coin. While the queen has her place on one face we are still able to make our Kiwi mark on the other.
What was the point of having New Zealand titles and the recipients receiving no recognition at a public level? If someone has earned a knighthood then we are duty bound to give them the respect they deserve and address them as Sir or Dame. While any titled individual may feel they would prefer you call them by their Christian name; then that’s their call. But as a society we owe it to them to let them know they have earned our respect. We lift their personal brand status.

It was who removed the titles in the first place, and why, that suggests something far more sinister was afoot. I have been told by a friend within government (and I suggest she would know), that a group of high ranking women members of parliament wanted to dismantle New Zealand’s male dominated elite. They believed an effective way to neuter them was to abolish their titles.

Some of you will have read my article in the DomPost last year about collapsing communities. Communities need structure and hierarchies; they are essential for community survival. Now I’m not saying that these politicians were trying to erode our fragile communities but that was the result. Like lowering the age of drinking what appeals to the intellect can have disastrous social consequences.
These experiments in social re-engineering must stop. They create more problems than they solve and they are usually promoted by people with highly questionable motives

Before we improve anything we need to understand the ramifications of the change; yes sir!

The euphemistic Claytons still lives

I couldn’t believe my eyes when I stumbled across a bottle of the infamous Claytons in an Ausralian supermarket recently. Appologies to any youngsters who are none the wiser but you would need to be over thirty to remember this one.
This was ‘the drink you had when you weren’t having a drink’.

The beverage originated in London in 1880 and is reputed to be a blend of Kola nuts and citrus essence although like the Coke recipe the makers still aren’t letting on. I’m sure the recipe will remain a well kept secret because I don’t imagine anyone will be beating the doors down to discover how it is made. The drink proved so unpopular that Beecham the New Zealand distributor withdrew it from the market mid 1980’s having spent a small fortune on television advertising.

The TV ads became the talk of the nation but for all the wrong reasons. In fact the term Claytons is still a part of Australian and Kiwi vocab. If something pretends to be something it is not then it is commonly called a ‘Claytons’.
The commercial finished with the line; “The drink you have when you’re not having a drink.”
I guess New Zealand wasn’t ready to become a nation of wowsers or more to the point if it was it didn’t want to draw attention to the fact by being seen with a glass of Claytons in hand.

Why the ad agency had to showcase the conncoction as something it wasn’t, turned out to be a very serious mistake, especially around a product (alcohol) that is so much a part of national folklore. The bottle was even designed with a label to look like a whiskey bottle.

The advert opened with a character (Jack) in a bar obviously enjoying a joke with his mates. We hear him deliver the punch line “…and then this guy says, ‘Now we can all get some sleep’” to which his mates unable to contain themselves burst into laughter. Not only did the drink become a joke but the joke’s punch line also became about as popular as Tui’s ‘Yeah right’.

Unfortunately the joke backfired on Beechams but not before they left our language a little richer for the experience. Claytons reluctantly joined the advertsisng ‘hall of shame’ alongside other notables of the day such as Skoda but that is another story for another day.

Kevin Robert’s plain unvarnished truth could do with a coat of something

Kevin’s cure for the economy is advertising. According to Roberts the country needs to advertise its way back to financial health.
Now why does that not surprise me?
Along with other flamboyant ideas I have heard him utter this is an absolute pearler. His New Zealand Herald article sounds more like a small boy whistling in the dark than words of wisdom

Put aside for a moment the obvious self serving motivation for this commentary and consider what he is suggesting.
If advertising can get us out of this mess then it would be fair to ask what part did it play in getting us here in the first place?
To be fair to Kev he doesn’t explain what he means by advertising but let me give you my definition; advertising is ‘paid skiting’. If the advertising industry was booming (which it isn’t) then his comments might make sense and I quote…

“Too often it's claimed that advertising is all about selling people stuff they don't want and need. If it had been that dumb and short-term advertising would have been up against the wall decades ago.”

…(which was about when advertising did indeed start its fitful dive.) Advertising right now is more than ‘dumb and short term’ (in general) it is also expensive, ineffective and for the most part poorly executed.
Recent statistics from the Fournaise Marketing Group a firm, which specializes in tracking, measuring and auditing the real-time performance of global marketing and advertising campaigns refute what Kevin is saying. The January 2009 WARC news article claims that ‘as much as 60% of all tracked advertising expenditure worldwide during 2008 failed to deliver the results expected by its marketers and can therefore be considered wasted.’

Business needs to build brands of value rather than advertise.
My definition of a brand is a ‘reputation’. We are in a value crisis not an advertising crisis. Brands are built with advocacy not advertising, because when consumers buy something of extraordinary value they talk it up to friends and family. Word of mouth is the most potent form of ‘advertising’, it always has been and probably always will be.
But don’t let me stop you form reading Kevin’s article it should provoke a hearty belly laugh. Perhaps he has shares in APN?

There will be tears

There’s going to be tears and cheers before this recession is over. There will be winners and losers. Unlike the buoyant growth markets of yesterday where in principle everyone did okay, the recessionary market is typified by what we call “iniquitous failure”; instead of every business sharing in the downturn there is a clear demarcation of winners and losers.
Those that did well yesterday will continue to do well but those on the wrong side of the fence will be in serious trouble. This will occur for a number of reasons.
Firstly some businesses will not have been making great margins when ‘the sun shone’ so this downturn will leave them exposed. But more of an issue is what we consumers tend to do with our dollars; we become more careful with our spending, getting a good deal and obtaining ‘good value’ now matters.
For this reason consumers gravitate towards and support ‘high performance’ brands. If yours is not a brand of significance then your future is likely to be bleak.
For those of us old enough, remember when supermarkets experimented with plain packs? ‘Generic house’ ranges were created that were cheaper because the purchaser did not have to pay for elaborate full colour packaging. Well that was the idea.
The expectation was that the lower socio-economic shoppers would snap up these cheaper unbranded products.
However research conducted after the scheme had been running for some time indicated that it was the rich people that were buying the plain packs, not the poor people.
Not surprisingly when shoppers were asked their opinions about the plain packs, they said they were unsure about who made the products or whether the product quality would match existing brands.
Rich people were trialing them because they could afford to make a mistake. Poor people couldn’t afford to take the same risks, they didn’t experiment with their hard earned cash, they continued to purchase the known and trusted brands.
Watch a variation of this experiment happen all over again. There are truckloads of generic ‘me-too’ woefully ordinary products and services in the market right now and I’m picking that there will be a gravitation toward known and trusted brands.

The question is; is your product or service one of them?

Where to from here for retailing?

What a wonderful job retailers have done training the public to hang off buying for Christmas. The New Year’s sales are now where it is all at. Many businesses who hang out for that last month of the year to do over half of their annual turnover have managed a ‘not so clever shift’. Instead of having the big month with full margins in December they have pushed purchasing back a month and slashed their profits. So they have maintained sales but they have done so at the expense of profits and don’t we consumers appreciate it.
They thought they would have their cake and eat it; a big Christmas and a big start to the New Year.
Well it doesn’t quite work like that. The public has said you can have one or the other, but since you insist we will take the cheap option
Retailers have blown their bolt.
This ploy has been their response to an over subscribed market place and an obsession with ‘sales’ as the ‘no brainer’s’ marketing plan.
So that just leaves another eleven months and the question “what will retailers do now?”
Good question. I’d say they have a monumental problem. Eleven months of sales sounds like Chinese water torture.
Watch for the closing down sales this year folks because there will be many retailers who just won’t make it through to January of next year.
So who will the survivors be?
Those retailers who add value rather than dropping their prices; the retailer who becomes a brand builder.