It’s easy to describe a challenge and hard to overcome one. Therefore, in the spirit of admiration for great marketing, here are five examples of companies and brands that demonstrate great consumer and customer vision.
I’ve tried to be careful to draw them from a broad mix of industries: CPG, alcoholic beverages, services, media and internet B2B.
Heinz Ketchup. Here was a staple brand that was declining into old age, no longer relevant and reduced to the point (familiar in packaged goods) where pricing was its only promotional tool. But refusing to believe that there are any tired brands ("only tired brand managers"), a new marketing team at Heinz set out to re-think and revive the brand. Where did they start? With the question, "Can we see the consumer?" The answer was both surprising and (with hindsight) obvious (duh!). Heinz had been looking through the wrong end of the telescope.
The consumers of Heinz Ketchup are kids. But all the marketing had been focused on mothers. After removing the barrier to a clear view of the consumer, whole new vistas opened up. Kids want fun, they want to play with their food (or have an entertaining meal experience). The Heinz Ketchup bottle is pretty difficult for a kid to handle, and so parents often didn't let it into kids' hands. These and many other insights led to green ketchup in a squeezable bottle that was easy for kids to handle, and let them make faces and designs on their hamburgers. They led to amusing and iconoclastic advertising where kids painted ketchup designs on their dad's car and did other similarly mischievous things. And they led to an increase in volume, share and profitability for a brand that many had written off as hopelessly out of touch and unfixable.
Now the challenge for Heinz is to apply this consumer vision to some of their other venerable brands. If it can be done once it can be done again.
Smirnoff Ice. One of the barriers to clear consumer vision which we cited last time was the "product view." If our launching point for marketing innovation is defined by what the product is today, we might limit our opportunities to create new value.
Diageo is a company committed to innovation and insight based on understanding the consumer before all else. This commitment (the first step in the Diageo Way of Building Brands) has enabled the creation of a wide range of innovations. One of the most successful is Smirnoff Ice. If you were to define Smirnoff Ice from the perspective of the product view, it's a colorless malt-based low alcohol beverage (a "clear beer" – remember when U.S. breweries were playing around with that product-view concept?) But that's clearly (sorry!) not what Smirnoff Ice is about.
If our launching point for marketing innovation is defined by what the product is today, we might limit our opportunities to create new value.
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Diageo has been able to create a fast growing, highly profitable market by concentrating on who is the consumer -- the low end of the legal drinking age segment who seek both refreshment and contemporary brand imagery in a range of drinking occasions. They were drinking light beer for refreshment but weren't meeting their imagery needs. This opened up the opportunity to harness a brand that could deliver the same product benefit with a much more preferred image delivery -- lively, contemporary, energetic, cutting edge.
Diageo's customer-first approach makes it the leading innovator in its category.
MTV. MTV is just as much a brand as Heinz Ketchup or Smirnoff. Viacom faces the same challenges as other brandowners -- how to keep the brand fresh and vibrant, keep and grow share and increase profitability in a competitive world. So we shouldn't be surprised to learn that MTV has a superb consumer research department, that they have a "feverish addiction" (the words of Todd Cunningham, SVP of Strategy and Planning) to understanding young people, and that the primacy of the consumer's voice is embraced from the president, all the way down through the organization.
MTV's researchers are young and hip, just like their viewers. They devise and conduct imaginative and ground breaking research programs. These include ethnography studies where "we go out and rifle through kids' closets and ….music collections." These and other intimate insights are videotaped and edited for playback to senior executives in high-level strategy sessions. Sometimes the kids themselves come to present to the strategists and marketers.
These and other techniques help MTV to identify key needs of their consumers -- such as authenticity, reality and originality -- and to leverage this understanding into a relationship based on the trust the young viewer can place in the MTV brand because the brand understands and reflects these values.
MTV's researchers are young and hip, just like their viewers. They devise and conduct imaginative and ground-breaking research programs.
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As a result of this devotion to, and investment in, consumer insight, MTV has been able to build share and even recover after a period when it was sliding because it had lost some of its reputation for creativity and risk taking. Consumer understanding is the best investment.
Southwest Airlines. Southwest Airlines has a greater shareholder value than the three largest U.S. based global airlines (AMR, UAL and Delta) combined. It has a well defined business model that we are all familiar with (single aircraft type, short hauls, secondary airports, point-to-point versus hub-and-spoke). But it also pays great attention to consumer insights and to brand building, and that devotion contributes significantly to the value of the brand and therefore the value of the enterprise.
Southwest has a very sharply defined portrait of its consumer. About half of its revenues come from executives in small business (mostly male) who travel short distances, and prefer low cost and frequency of schedule (so they can get home to the family faster if their business trip is shorter than anticipated). SWA has built its brand on low-priced fares (a brand equity which it "owns" in the mathematical sense of being the only major airline with a strong score on this attribute in research) and a fun, down home attitude (which it can leverage to present the consequences of low fares – no meals, no lounges, etc -- in a positive light).
Herb Kelleher, the chairman, is said to read every consumer letter, or at least as many of them as he can, as well as spend a lot of time with the consumer and the front line employees who deliver the brand experience directly to the consumer. Once again, the belief in consumer vision comes from the top.
eBay. eBay represents an intriguing model for us branders. There is a cliche that a brand is owned by its consumers. In eBay's case, the cliche is taken to a logical extreme in which the company is run very much as a consumer democracy. Partly through the natural consequence of its business model, and partly through philosophy and commitment, eBay is a master at tracking its customers' every action in a way that lets the company turn the information into new products and services very quickly.
"If there's noise, you'd better listen," says Brian Swette, COO of eBay.
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When eBay observed their customers buying and selling cars (even though there was no existing eBay category for it) they were able to harness that market and become the country's biggest car dealer with $1 billion in sales of cars and parts in 2001. When they heard that consumers wanted to speed up auctions, eBay developed a "Buy It Now" feature that lets bidders close an auction at a set price, and which is used today in 40 percent of listings.
Customers are eBay's R&D and product development team. Isn't that the way it should be? "If there's noise, you'd better listen," says Brian Swette, COO. eBay employs conventional research techniques such as Voice of The Customer Groups, but much of its consumer vision comes from its business model, such as the feedback mechanism that lets buyers rate sellers and therefore publicly promotes outstanding customer service and brand experience for the user.
In this case, the internet has enabled a business model built entirely on the concept of listening to the customer, not as an afterthought but as a first thought and fundamental building block. This is the consumer vision of the future.
In summary, it's easy to criticize companies that don't have consumer vision. That's why this month, we wanted to highlight some that are showing the way. As illustrated in the case of eBay, the opportunity to win with consumer vision may, in the Internet age, be greater and more compelling than ever.
Hunter Hastings is managing partner of EMM Consulting Group, which advises companies on how to implement Enterprise Marketing Management, a multi-faceted system for global brand management combining marketing knowledge, best practice processes and training with collaborative software, marketing tools and infrastructure. He can be reached at HunterHastings@EMMConsulting.net
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