Enlightened Conflict

why we buy stuff, luxury items and the everyday schmuck

March 14th, 2013

“One generation’s indulgence becomes the next generation’s necessity.” – James TwitchellLuxury-must-be-comfortable,-otherwise-it-is-not-luxury.

So.

First. With higher unemployment and all the talk of recession and poor economy it is easy to forget a lot of shit is being purchased by people. And a lot of money spent buying stuff.

Second. A shitload of that shit being purchased is in the luxury category. The expensive stuff.

Third. Maybe 90% of what we call “fads” arrive on the scene from the Luxury category <note: I made up that %>. And because of that I almost called this post ‘fad to functional.’ Sometimes today’s fad does become tomorrow’s functional necessity. Sometimes. A lot of people make a lot of money figuring out which fad will become tomorrow’s necessity. By the way … most fads do not become anyone’s necessity.

Regardless.

I decided to write this to say you would think why we buy things would be simple <we like it>. Unfortunately it isn’t that simple. What happens around us and what happened to us in our youth impacts … well … what we like.

And, of course, we like what other people like.

And, of course, we like what the fabulously rich like <but they can afford it and we cannot>.

And, of course, we like the best. Having ‘the best’ excites almost everyone <I typed almost because I didn’t want to say everyone but I honesty cannot think of anyone who wouldn’t want the best>.

 

With that I will begin with the slightly odd relationship between luxury and value and how us schmucks who aren’t millionaires get led to purchasing behavior by the schmucks who are millionaires.

 

“The rich adopt novelties and become accustomed to their use. This sets a fashion which others imitate. Once the richer classes have adopted a certain way of living, producers have an incentive to improve the methods of manufacture so that soon it is possible for the poorer classes to follow suit. Thus luxury furthers progress. Innovation “is the whim of an elite before it becomes a need of the public. The luxury today is the necessity of tomorrow.” Luxury is the roadmaker of progress: it develops latent needs and makes people discontented. In so far as they think consistently, moralists who condemn luxury must recommend the comparatively desireless existence of the wild life roaming in the woods as the ultimate ideal of civilized life.” –  Ludwig von Mises

<note: that last sentence is priceless>

It may seem obvious to everyone (but just to be sure I am writing about it) but there has always been a relationship between luxury and value.

Not “in the moment” but rather as a future tend indicator.

A lagged effect.

Huh?

Well. Here is what happens (simplistically)

 

A luxury item or service is developed.

Only the richest (or those who decide to splurge) can afford it.

It gets a lot of press and people become more aware of the luxury items.

People desire it.

The item manufacturer recognizes one of 2 things:

  1. It will become obsolete (or less desirable to the 1% who can afford it) as more people own it <and they then develop something new & different>
  2. They can make a shitload more money by selling it at a lower price to the masses <once the 1% has moved on to another item they have just developed and are making a shitload of profit on>

All the everyday schmucks <that is you & I> then start buying it and everyone on the street has it.

 

There you go.

Now.

find xSome really savvy business people stare at the luxury category <sometimes even cross eyed> and try and make sense of which luxury products & services are likely to trickle down to the mainstream consumer … and even more difficult … when it will trickle down.

It is more difficult than you think it would be <note that this is different than ‘early adopters paying more to be the first’> … but if you know what to look for <and I am not one of those who knows what to look for> luxury is a pretty reliable indicator of what next generations will consider basic necessities.

“Luxury consumers are spending more, in many cases lots more, on life-changing experiences, while their need for luxury goods is waning. Spending on luxury experiences in the US, including travel, dining, entertainment, spas and beauty services and home services.” (source: Pam Danzinger, Unity Marketing).

So sometimes luxury is not just things and widgets … but also experiences.

Oh.

And then there are toys. A toy industry consultant said “the toy industry has always reflected adult culture.”

(I was sad just typing that)

Oh.

But it gets worse (for us americans at least).

Britain is Europe’s biggest toy market, followed by France and Germany, according to Frédérique Tutt, an analyst at NPD EuroToys. British parents buy an average of 41 toys per year, which is almost a toy per week.

In Spain, by contrast, children receive few toys outside the Christmas season.

Britons seem highly susceptible to marketing campaigns <but no one is more susceptible than American consumers>. Britain’s toy market is similar to America’s in favoring entertainment over education, says Gerrick Johnson, a toy analyst at BMO Capital Markets. About one-quarter of toy sales in Britain are license-driven, which means they are based on characters from Disney films or television series.

The proportion in Germany is just 14%.

German parents are bigger on engineering. Last year building sets accounted for 13.4% of German toy sales compared with only 8.6% in Britain. Germany is the biggest European market for Lego, the Danish maker of colorful bricks.

Oddly … even UNICEF has stepped in with an opinion:

UNICEF, a United Nations agency, slates British parents for encouraging “compulsive consumerism” in their children.

Ok. I apologize. Toys really don’t have shit to do with luxury and ‘fad to functional’ other than the fact we mostly buy toys for entertainment <fad> and not educational <functional>. But. It gave me a chance to throw around some research I actually did.

Anyway.

All the examples aside … there is a really odd <interesting?> thing happening in the middle <between luxury and what us schmucks are buying>.

The middle of the middle is disappearing.

The explosion of choices at the low priced <but with quality> and the high priced <with high quality> is leaving run-of-the–mill products in desperate straits.

In fact … no one is buying them.

Oh. How do you recognize the mediocre middle? They are the folks couponing like madmen and cranking out buy-one-get-one-free deals like shit through a goose.

This explosion is also making it more difficult to discern fad from functional.

Yeah.

Discerning what is fad <in other words … what will disappear over time> and what is functional <useful and/or humongously important> is really really difficult.

And becoming even more difficult in our world of instantaneous hype.

A combination of transparency online <and sometimes the transparency is bullshit but if you don’t invest the energy to discern between the bullshit and the truth it all becomes blurry> and the fact that the global entrepreneur business brain attacks high priced items thinking how to offer a designer/quality version at a lower cost <not by cutting corners but simply building it better & more efficiently> is making the luxury category a turnstile category.

 

Anyway.

This topic became a great excuse to highlight one of my favorite sites <and thinkers> … 50topmodels.

They have once again humorously <but smartly> mapped the hype cycle which tries to predict the beginning of corporate marketability of technological innovations.

They note that it maybe also predicts the time you will marry … but that’s their interpretation.

 fad to functional gartner2

The model cuts a new technology roughly into five periods in its life cycle (although real time is phased differently and individually):

 

-          Technology Trigger — the product is on the market and you hear the buzz all over the place. Kind of a breakthrough in visibility.

Comes along with: “Have you checked this out? It’s great!“

 

-          Peak of Inflated Expectations — The hype is on top, but more and more people uncover that the product or services is just half-baked.

Comes along with: “It’s great, but…!“

 

-          Trough of Disillusionment — the technology fails to meet expectation and becomes boring for early adopters. There’s hardly any press about it, but still, people use it.

Comes along with: “It would be great, but they should change this and that!“

 

-          Slope of Enlightenment — press stopped covering the technology, but some businesses take time to experiment with it or they invest in it. The feature becomes more practical. Maybe 2.0 version.

Comes along with: “I use it, but in another way.“

 

-          Plateau of Productivity — now it’s a real benefit for the users. The technology is accepted and maybe even broadly spread (within it’s purpose to serve).

Comes along with “I knew it!“

 

The 50topmodels little drawing shows parts of the  2008 issue (german). Compared to 2006 (german), Web 2.0 went from “peak” to “disillusionment” – just as the market researchers of Gartner predicted.

 

Anyway.

It is more difficult to select that which is in luxury which will make it into the everyday schmuck’s home than you think.

But give it a shot.

Its fun to think about it.

The only thing you can be really sure of?

What looks like an ‘indulgence’ today … will be a ‘necessity’ tomorrow more often than you would like to believe.

answering the help wanted ads for data decipherer

March 12th, 2013

Help Wanted!- Data, data everywhere—and not enough people to decipher it – WSJ headline 3/11data decipherers

 

51% of surveyed IT professionals currently involved in big-data projects cited ‘lack of expertise to connect the dots’ as a reason projects fail in their organization. No other factor was more commonly cited. – infochimps, inc.

 

Well.

This post is either going to show I am incredibly naïve or incredibly smart or incredibly stupid <and clueless>.

Look.

Everyone in business is drowning in data these days.

But here is a newsflash … we were always drowning in data … albeit different data … but I am willing to bet a shitload of money that anyone with any business experience will agree that we had so much data crossing our desks <in the good ole days> that you could build your own great pyramid of paper if you so desired.

As I scratch my head over the flurry of farcical diatribes around “big data” I can’t help but be reminded of the poem “The Rime of the Ancient Mariner”:

 

“water, water everywhere, nary a drop to drink.”

<Bruce translation: despite the depths and vast expanse of the ocean it can’t begin to quench our thirst>

 

We might say the same thing about how technology has enhanced the volume of data these days.

The volume of data is almost unfathomably vast.

And because of that we see thousands of articles on how to sift through the data for business advantages.

Well.

This is crazy talk. Mostly because it seems like everyone is mesmerized by the quantity of data available.

Anyone with any business chops will quickly point out that anyone, throughout the history of business, has always had a quantity of data available.

And we almost always had too much quantity <more than they could ever use>.

The access to quantity has never been an issue.

Now.

data analysis statslogocroppedThey will also point out that part of knowing your business shit is setting up efficient/effective data gathering … so you capture the most important <and not invest gobs of energy on stuff you will never use, cannot use, do not really want to use or is just plain useless> data.

Now.

They will also point that data analysis has three components:

-          Assessing the data available <with gobs available which gobs are most meaningful>

-          Setting up a system to use the useful data <consistently trapping & tracking the useful stuff consistently saves time and effort>

-          Analyzing the data <connecting the dots … instead of just showing numbers>

Now.

They will also point out that the third step in the process is often best done by someone who has no clue how the data is gathered … or even needs to know exactly what data was not gathered <although they may at some point suggest gathering something that someone up the ladder had decided was unimportant> … but they know how to connect dots.

Now.

I will now point out we in business have been doing this for years.

Sure. More and different data may be available today but the schematic looks the same.

 

Business management has always faced an obstacle when it comes to reaping the benefits of big data because they always need someone who can tell them what it all means.

But it seems that because there are so many new ways to gather and track data there is a heightened awareness, and desire, to actually use all this data stuff … with the same good intentions that business had in the past … gain a competitive edge … or at least to keep up with the competition.

Oh.

And here is what any business person with chops will also tell you … relying on data alone isn’t enough. This is a game of both head and gut.data connecting-dots-stevejobs

When you rely too heavily on data, you can become too reactive, too myopic in your thinking and miss out on what the numbers can never tell you … the why’s and the what’s and the <inconceivable to number crunchers> impractical inconsistent sometimes illogical human mind & behavior. Data cannot tell you what to do.

<Big> data can lead to small sharp insights and beget great decisions and action.

But.

Here is a business truth <that most executives do not want to hear these days> … data, of any size <double venti, regular venti, grande, etc.> has no value in and of itself.

The true value of data is found in context.

Look.

You absolutely need a team with technical people to gather & mine the data … but they need to be working together with an experienced analytical person who knows how to ‘connect dots.’ This type of person knows how to observe information, interpret information and place it in context with non-number/data stuff and explain it.

And, no, that person may not be a data gwonk.

They are just good at connecting dots.

And they are good at not being blinded by the newest  & nearest data point.

 

“Gut feel is great for everyday problems. But, it often leads us astray when we’re presented with complex streams of information. We can be blinded by the newest and nearest data point and miss the big picture.” – Nate Silver statistician & author

 

I don’t agree with Nate … well … he did caveat it with “can” and “often” … so maybe I will give him a break.

Gut feel … intuition … ability to “feel” the numbers in context … is essential in order to use the data.

I do believe in what IBM calls “augmenting intuition.” And that means … well … what it says. Augment … ‘in addition to’ … add in as part of your decision criteria.

No amount of numbers <and data of any kind> can eliminate all decision risk. Nor can any amount of numbers <and data of any kind> insure you make the best decision.

Here is my last “Truth” of this post … data & analytics can make you equally smart & stupid.

People make smart decisions using data all the time.

People make stupid decisions using data all the time.

The only thing consistent is people.

And here is where the article kind of truly went a little nutso.

data connectdotsIncreasing training & skill set on ‘connecting dots’ <I assume this is “analyzing the data” in academia> to increase the amount of decipherers available to businesses.

This is where it all falls apart for me.

Because doing what they suggest basically means that data drives good decisions. Data all by itself. No intuition … no feel … no gut from experience … that maybe data can make a decision for you … and they are wrong.

I become scared because I almost feel like this is a deeper dive into that business hellhole I call “responsibility free decision making” with the intent to do the “safest behavior to increase return <or increase advantage>”.

This is using data to make all the decisions <and they even use it to hire a person which is also kind of nuts>.

This is dancing on the head of a pin business management.

And it doesn’t teach people how to think.

It doesn’t utilize skills of existing people <who aren’t steeped in ‘Big Data” but are also not intimidated nor blinded by the newest & nearest data point> who are very good at connecting dots.

And, worse, it guarantees a next business generation of “big Data decipherers” … or people who use data decision making skills and have honed no intuition skills at all.

Am I suggesting “gut management” alone? Of course not. I never have. I never will.

In the 80’s we scoured computer printouts with ‘crosstabs’ and supermarket SAMI and Nielsen reports which contained reams of data point we had to make sense of.

In the 2000’s we are scouring computer printouts <assuming you print out> which contain reams of data points we have to make sense of. And you did it then, as it should be done now, as part of a team to insure you didn’t get dazzled by some shiny data point.

This stuff drives me a little nuts because we all think the newest and nearest data point <oops … innovation> means that the world has turned on its head.

It hasn’t.

Some skills are just … well … good business skills. Adaptable to pretty much any new widget or innovation that mankind can create.

I know how to connect dots. I have no clue how to build systems to gather these dots. And you know what? I am not sure I have ever known.

And I am not unique. There are hundreds if not thousands of Me’s out there.

The skill?
Making Big Data nice small simple learnings/conclusions. Ok. Making any data available into nice small simple learnings.

2013. 1913. 1813.

The skill has always been relevant … and thinking that ‘data decipherer’ is some new skill is crazy.

b2b selling, heck, selling in general

September 1st, 2010

Yes. I have an entire white paper on b2b marketing.

But.

Some things just need to be said again (and again and again and again).

For some reason there seems to be a wacky belief that b2b marketing is so radically different from consumer marketing that … well … if you can do one well you could never do the other well.

With that said.

Just out of sheer spite I am going to invest some energy suggesting some thoughts on how the underpinnings are quite similar (so if you are a b2b business and you are speaking with some consumer guy and you think you are wasting your time pay attention because if he/he suggests some of these things they get the nuances and the similarities).

Let me begin with a word I have come to absolutely abhor. Brand (or branding).  Inevitably any discussion seems to begin here so I will try and get it out of the way.

Whether your company is selling products or services to individual consumers or to businesses there is a need to get above the “noise.” Creating a branding imprint in the business/consumer world relevant to you is the “simplifier” and can assist in the sale (and getting a higher price, and getting considered more often, and being differentiated in a sea of sameness, and, well, you get the point).

Look.

Good ‘branding’ is not about stirring rational people into frenzy so they make irrational decisions. It is about communicating the benefits and value proposition that a business or product provides its customers.

Okay. I think I got the “B” word out of the way.

Anyway.

I had this old dated factoid lurking on my computer (and I can only imagine what the numbers are today … higher).

In 1998 the average U.S. office worker received more than 160 messages a day via e-mail, fax, voice mail and conventional mail (lets go ahead and assume it is exponentially bigger now).

Go to a grocery store and you are faced with over 37,000 different products with distinct SKU’s (stock-keeping units) compared to 8,000 in 1970. Some other examples:

SKUs 1999 1970
Orange juice 70 20
Coke 25 6
Crest Toothpaste 45 15
Philly Cream Cheese 30 3

All that said …  it seems obvious with that many choices … establishing some added value (in the form of a brand) is almost necessary to be successful.

Oh.

Are you now thinking that maybe all of a sudden I am not talking about b2b anymore because I used some consumer facings information? Nope.

For every product on the shelf there is a business decision maker choosing to put them on the shelf. So combine the numbers I just gave you above with the fact a grocery buyer is seeing twice as many (ones that end up dying and ones that they just cannot justify putting on the shelf) and all of a sudden you start seeing some of the challenges a b2b marketer faces.

So how the heck do you attack this issue (keeping in mind I am suggesting the more you tie consumer thought process and business thought process the more likely a company will be to be well prepared to meet any customer challenge).

First.

Any business (that includes the sales and marketing departments) has to recognize and plan for various buying styles/attitudes as well as the various buying cycles of their customers (this is the same with anyone b2 or consumer).

I (being JWT trained in customer buying behavior analysis) believe in beginning with the basics.

Let’s call it a Consumer Buying System (because it is called that …. oh … and by the way … a b2b customer is a consumer also … anyway). Think in terms of simple phases/stages in a purchase decision cycle:

-          Predisposition.

-          Stimulus to act

-          Consideration

-          Search

-          Choose

-          Buy

-          Experience

(then it circles around again which would be called the “purchase cycle”).

Yeah. Sure. Here you go. An explanation of The Consumer’s Buying System.

This is more than just a theory or model for consumer behavior; it is the key to understanding the purchase process from the consumer’s perspective, and the tool for allocating the right communication resources and sales techniques at the most appropriate points in the cycle.

The easiest way to us it is to put yourself in the consumers’ (prospects, potentials, interested rejecters, customers) shoes and look at the category through their eyes. What makes them enter it in the first place? What criteria must their brand or service selection meet? Where do they get their information about the brands or services in the category, and where do they go to actually make the purchase?

Not all categories involve the same degree of time, effort and consideration. The buying process for chewing gum may last no more than a second or two; for a car it could take months, a business software system could take years and the consumer may make several loops through the search and channel contact phase before actually arriving at the contract/buying stage.

How do we use it?

It’s easy to use (and in its simplicity many may want to complicate it) because once you can describe how the consumer moves through the buying system for your particular category you can ask yourself all the right questions: “Where in this cycle is there a role for advertising, promotion, direct response, PR, telemarketing, sales, etc.?”

So.

Because I am ranting about the b2b specialty that no one can do but b2b specialists … let’s look at some real numbers and see how they could be improved by this Consumer Buying System process.

According to recent studies at any given time:  15% is in buy aspect, 70% is not in a buying aspect (43% will enter into a buying cycle in the next 18 months) and 15% will not purchase from your organization.

Ok.

Next.

According to a Marketing Sherpa study:

7% are sales ready, 11% are mid term prospects, 73% are long term prospects and 9% will not purchase from your organization.

You look at these and think you have some good information.

Well. Not really.

In fact.

If I were to take the consumer buying system and apply it against each of those percentages I can actually derive what percentage of all those percentages would be likely to consider me, likely to run across me during a search phase, what percentage I can actually impact (and I could provably figure out what would be most important to say to them if they ‘glanced off of me’ while searching for information that would be most likely to get me back in the game).

In addition I could see what percentage of the buyers (consumers) actually have different criteria they are evaluating in the choose phase then when they were in the consideration phase (you would be surprised how often ‘price’ is a low priority in consider phase and then when choose comes rocking down the road price all of a sudden rears its ugly head … oh … in fact … that is often why companies/people aren’t REALLY choosing the lowest price because their initial consideration set was flawed if they truly wanted the lowest cost provider … anyway).

That’s just a couple of quick examples.

Ok.

Maybe it would help with the b2b people if we call this entire mumbo jumbo ‘Final disposition versus sales staging.’  Yeah. It’s the attempt to gain a true understanding of the status of your potential customers and existing customers all in one buying system analysis/discussion.

Look.

The buying system is simple but complex.

Adding meaningful status or stages to your marketing efforts can greatly enhance visibility into the overall marketing/sales pipeline activities AND put you in a position to understand the timing and movement of your prospects.

So.

Ultimately this process is set up to understand that buying phases exist and having an execution strategy for each phase to drive customers down the path to a transaction (adding value and setting expectations that can be met so that they end up satisfied).

Oh.

Another benefit of this Consumer Buying System thing? Long term consistent performance.

Sales and marketing often treat all prospects and customers the same. They deploy the same strategies, messaging and collateral to all. In doing that of course you obviously lose the ability to deliver relevant content at the appropriate time.

Maybe worse? You lose the ability to build relationships with those that are not in a buying mode but will be at some time in the future. Oh. And you lessen the probability that you will be in front of your customer when they enter a buying mode.

The value of thinking in a ‘consumer buying system’ like this way is you end up thinking long term engagement and not short term project.

Everyone fits into the funnel. Customers, interested, interested rejecters, dissatisfied, whatever. They all fall in and become part of the cycle.

Therefore activity avoids a ‘Project mentality’ (and even ‘just get me some leads to call’).

(note: my entire write-up on the company TelAffects addresses this: http://brucemctague.com/an-interesting-company-and-idea).

An additional benefit is a continuous effort (which maintains any momentum) instead of a more sales driven ‘stop-and-start’ activity style. I guess I could throw in that a continuous buying system communications plan invariably entertains the idea of an “ongoing dialogue’ attitude rather than “oops, I need to talk with you today” attitude (that also inherently strengthens efforts and efficiencies and relationships).

The consumer buying system inherently also integrates activities by simply suggesting it is all one cycle and therefore specific tactics aren’t utilized in a vacuum but rather in coordination with everything else affecting the cycle. And by integration I mean not just traditional marketing … but all aspects (let’s call them touch points) of interaction between the company and potential customers.

Ok. I will stop on that discussion point.

You get it. The Buying System forces everyone away from “one off” actions and inherently incorporates a longer term focus (without sacrificing short term).

Yeah. Yeah. Yeah.

Yet. Many fail to invest in a process (although I just gave one for free) that develop strategies and deploy tactics at each buying mode.

Ok. One last thing.

The buying system thought is dead if you don’t have information.

In fact.

If you use the buying system (which is so frickin’simple) it is difficult to go into data overload and easy to gather pertinent information.

Why? Because it is a thinking process/methodology … you are actually systemizing information. Okay. In English that means as you gain data, rather than analyze data, you bucket it first. You put data into the system where the data/information most useful to you.

After a while rather than conducting massive research studies and huge data dumps you are rather simply updating or filling in holes as you gather items.

A process like this stops data overload and lets you actually go ‘do.’

And.

It really helps if you aren’t solely dependent upon ‘research research’ (you know … traditional qualitative or quantitative research) but rather you have the ability to capture prospect and customer information through sales (or marketing or even telemarketing).

Sales and marketing should be constantly striving to gain information on their possible customers (in fact you can build a parallel consumer buying system for those costumers/consumers who have never purchased from you with the purpose of not getting them to ‘do’ your buying system but seek the moments where they may actually sneak close so you can suck them into yours <… uh … that’s called converting competitive users …> and customers that will give them insight into not only their organization’s sales cycles but purchasing behavior.

Often the most overlooked and most valuable information is the information captured directly from your prospects and customers from previous dialogues.

Why does this happen?

Lack of attention from the sales and marketing personnel to gather and enter information.

Lack of consistency across the sales and marketing teams to gather and enter information.

The lack of understanding on how to use the information in a meaningful business dialogue.

These are solvable but that isn’t the point of this write up.

Here is a fact (that many marketing groups fail to see despite its obviousness).

The buying system is truly dependent upon information and information is often most attainable through sales (or any customer interaction including telemarketing and service providers). Once you have the information (an you have something as simple as a Consumer Buying System analysis) it is incredibly easy to Train sales and marketing people on “how” to use the information and “when and where” to use the information (in fact … sometimes the Buying System is so simple that people want to try and get something more ‘complicated’ because something that simple cannot be right).

Look.

(sticking with b2b)

Here’s the deal. Doing more with less seems to be a common issue we all face regardless of our roles or our responsibilities or industry. That means companies just need to be plain smarter with their activities and, in particular, with the information available and how they use that information (and leverage the information across their entire demand creation – consumer buying system – pipeline information process).

Yes.

I have written about a company called TelAffects. I didn’t want to call them telemarketing but, if you do, then you have to admit that many companies never receive the potential benefits of a well planned telemarketing program (read my article if you don’t agree).

People just don’t approach telemarketing in b2b as an effective marketing tool and integrate that activity into the entire process (as a marketing tool as well as an information tool).

Anyway.

The buying system naturally incorporates partners and alliances (telemarketers, crm, service providers, and suppliers) because the all affect the buying system and get built in to the entire fabric weave of interactions.

So.

All that said it all really falls apart if you don’t get the core thinking right.

Core thinking being value proposition, brand strategy and positioning in the marketplace (what need to does the company want to fulfill and how does the company want to be perceived by the customer).

An excellent example of brand vision in the semiconductor equipment industry is provided by Jim Morgan of Applied Materials. As chairman of the world’s leading semiconductor equipment supplier. He said, “Information is power. Information is wealth. Information is self-determination and in the 21stCentury, we have the potential of placing information in the hands of people around the world. This is the promise of the networked economy; the hope of individuals around the world; the purpose of Applied Materials.”

But. Core thinking is an entirely different article and write up.

This is about how b2b isn’t just for b2b rocket scientists. It’s for anyone who is smart enough and understands principles of differentiation and buying behavior.

Enough ranting.

Suffice it to say a good consumer marketing person can do b2b and a good b2b person can do consumer. And that’s that.

about transactional branding

August 27th, 2010

Ok.

I use this term ‘transactional branding’ a lot when I am talking about business and defending why we shouldn’t talk about branding (or at least stop until everyone can turn off the bullshit meters and maybe all agree on terms of usage).

The premise behind the phrase is that excellent marketing/communications/branding activity/whatever you want to call it and business results – transactions – can and should be inextricably linked.

I do believe a truly inspiring insight or idea will inspire positive brand value and inspire consumer action and I call it Transactional Branding.

Now.

Let me be clear.

I wasn’t the genius who came up with the phrase and idea (although the concept behind it has always resided in my pea like brain).

Some guy at an agency I worked at articulated this idea (probably scribbled on a napkin over cocktails) and came up with the phrase and wording in maybe the late 90’s.

I loved it.

My boss loved it (who was actually the president).

Pretty much everyone else hated it.

It’s that damn word transactions.

Marketing and advertising agencies feel like it diminishes their abilities (and their art) to suggest that they do anything transactional

(but … to come to their defense .. while this is a visceral response I have not run into one great marketing/advertising creative mind … EVER … who didn’t understand that ultimately whatever they created needed to generate a business result or their ‘creative idea’ just wasn’t worth a shit).

Anyway. All that said.

Recognizing a brand cannot exist without ongoing sales, revenue or retail traffic seems to be an overlooked topic in the branding world.

Okay. Someone is going to suggest that it is simply ‘understood.’

Well.

It’s not.

In fact there is an entire generation of young marketers entering into the ‘branding world’ thinking it is all about building value (or adding value).

Well geez … adding value on ‘what.’ Not a logo. Or not on some culture. The value has to be added to … well … some ‘thing.’

And, oh by the way, that ‘thing’ needs some sales, revenue or traffic or your ‘thing’ will become ‘no-thing.’ (let alone a brand).

So this transactional branding concept means building the ‘encourage consumer action’ into the branding effort. In other words, create business outcomes today so the brand lives tomorrow.

It’s kind of a simple concept.

Some people may call it ‘holistic’ or something (maybe not).

Anyway.

How it works:

One brand idea. One brand voice. One brand strategy. An integrated communications plan with multiple tactics (which can be changed constantly because the strategy remains the same).

-          note: see my glocal article on my point of view on flexibility in execution.

It begins by identifying ‘the’ inspiring insight  (typically the marriage between consumer and brand insight).

Of course you identify the desired business results.

You identify the best communications/marketing ideas to generate the best results.

You develop smart insightful creative messaging (within the organization as well as externally to insure some alignment).

Then you measure results and adjust tactics as appropriate.

Whew.

Sounds simple.

Bottom line.

Here is the tricky part (t least to me)

Everything emanates from the inner truth (the essence, the company value insight, the cultural & functional core of the organization, whatever you want to call it) of the company. THAT my friends is really the brand.

All you are doing with transactional branding is sharing your ‘brand’ with people and let them fall in love with you (hmmmmmmmmmmmmmmmmm … and really the only way they can fall in love with you is if they go out on an actual date … uh .. a transaction.)

So from that ‘inner thing’ you get to create some inspiring brand idea and incorporate it into tactics that create transactions.

THAT is Transactional Branding.

Oh.

And if you buy this thought/philosophy. It isn’t just about advertising or marketing.

Transactional Branding is about working on all aspects of a business – from traditional and non-traditional tactics to in-store to organizational attitudes and behaviors and … well … whatever. Because brand and transactions are so inextricably linked that it is about internal organization equal to, if not more important, than what is done externally wit customers.

Oh.

One last great thing about attaching transactional and brand.

It’s all about “selling ‘more’ of what they want to sell at a higher price.”

Whew.

Doesn’t get much better than that if you are running a business, does it?

Enlightened Conflict