No points for Weight Watchers

McDonalds will be thinking all their Christmases have come at once. Who ever did the deal with Weight Watchers should be given a lifetime's supply of Big Macs for free. This is one smart move but one sadly that will cost Weight Watchers dearly over time. Both these brands are iconic and stand for very different values (nothing either should be ashamed of). When these brand alliances are formed they really need to be a win/win situations and the value for each party carefully considered.
McDonalds has been in the firing line from health authorities for some time and as western governments globally try to tackle the obesity tsunami brands such as McDonalds are very exposed.
First McDonalds responded with a switch to canola-sunflower oil to reduce saturated fats, they then decreased the sugar in their buns by 40% then it was the salads and now brilliantly it is the Weight Watchers endorsement. This is the big slam dunk compared to the previous initiatives.
Hands up all those who think McDonalds make a killing on salad sales? Correct; they aren't selling many, in the supermarket trade these products are called 'lost leaders' and this is a very apt term for McDonalds salads.
Keep an eye on how McDonalds respond because they masters at this game. Perhaps Telecom executive should spend a semester at McDonalds university and learn the art of 'positioning'.

So what is in it for WeightWatchers; a very expensive erosion of values. I'm sure members will feel betrayed and abandoned. Forget the semantics; "we are trying to show you that losing weight doesn't mean you have to avoid every indulgence". They are partnering with a fast food giant and that by association translates to a cop out. It would be like Tag Heuer selling watchers through the Warehouse.

So why did they agree to it, was it money or fame or perhaps they have run out of ideas as to how to re-energise their brand. Fill me in here guys?

Telecom's new logo loses its gloss

Dr Paul Reynolds has been I'm sure reluctantly dragged in front of the media to try to stem the current Telecom reputation hemorrhage. The significance of the damage the XT problem has caused is highlighted by his on camera presence. This is not a small issue, in fact it has and will do Telecom severe long term damage. But let's have a quick look at why they are or at least should be in panic mode.

Telecom is an oligopoly and as such can do pretty much what it likes without suffering any immediate major fallout even in an instance like this. Everyone just gets grumpy; Telecom tells everyone they are sorry, in fact if they use the CEO that should let everyone know they are really, really sorry. It is what I call 'brand chauvinism'. Other large institutions such as banks often display this same attitude. If everyone in the business (and let's face it there are only a few) all behave in a similar way then what options do consumers really have; bugger all!
The effort required to switch and the prospect of really getting a better deal creates a kind of 'brand atrophy'; "better the devil you know than the one you don't".
In effect Telecom has 'brand frenemys' rather than brand loyalists. Now Telecom know this and they can leverage the fact to their advantage

They will just try to see this one through and wait for the dust to settle, let it blow over. So what's the problem?
It is two-fold. The damage that has been done is not that apparent at this stage. It is a type of internal market hemorrhage, no one at this point can see it. What has happened is that no one trusts Telecom any more and trust is a vital component in a brand relationship. We have all seen evidence of this phenomenon in our own human relationships. Some one lets us down...they say they are sorry and we tell them it is OK and doesn't really matter, but inside we are angry and disappointed. That feeling stays with us and colours future decisions we make relating to this person.
Telecom have just made a lot of people angry and they won't forget it. Telecom's apology is weak and will be perceived as insincere.
Consumer's future decision making about all Telecom's products and service has now been compromised.

The other problem Telecom has is politicians. Telecom is dependant on 'other important relationships' if it is to have a secure and profitable future. Politicians are swayed hugely by public opinion. They will see this market disaffection and when the time is right they will leverage this to maximum effect. When it happens Telecom will be gob smacked...wondering why no one likes them.

Telecom is struggling now on three fronts:

1) It has an aggressive 'advertising strategy' but no 'brand strategy'...now why might that be? One look at the board structure and you will have your answer. Telecom director and Saatchi & Saathci CEO Kevin Roberts in his recent book 'Lovemarks' only emphasised how much he is addicted to advertising and how little he understands branding. Mass advertising has built consumer expectation (expensive, excessive skiting) and it is not a good look. So it is no wonder there is a back lash particularly from the media...anyone who skites can expect the same treatment.

2) Telecom has handled the network failure appallingly. There was a chance had they done a good job at fixing the problem (and I don't mean just the technology) then they may even have won over some advocates but they have failed.

3) No evident brand strategy. With their new paintwork seriously dented they have made their future just that bit more fragile and uncertain, something no doubt they will expect consumers will simply pick up and pay for. What they will find however is that things are different and chauvinism is a burden not an attribute. They will need to shift their efforts from peddling products to building customer relationships. How will they do that?...they should go and ask Steve Jobs.

Maybe it is time for a brandnew new logo?

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