Re:Focus

Slippery Numbers

There are two types of claims: those based on hard numbers and those based on slippery numbers. 

Hard numbers are facts that, when evaluated, lead to a logical conclusion...and a hard claim.  For example, the US Constitution is 222 years old and, as such, is the oldest written constitution still in use today.  Slippery numbers, in contrast, are used to support a claim that someone wants to make, regardless of the hard numbers. For example, George W. Bush was one of the most popular presidents in US history (when compared to presidents with under a 40% approval rating).  The claim is technically true...when based on slippery numbers. But the measurement is clearly manipulated to help make the claim.

Sadly, hard numbers and hard claims are often reserved for scientists and text books.  Slippery numbers, however, run rampant in politics and marketing. Here's a real ad that Continental Airlines is currently running as an example.  The headline says - "The newest jet fleet.  Not just a new paint job." The problem is, their claim is based on slippery numbers.  The fine print right beneath the headline says, "Continental Airlines flies the newest jet fleet among global airlines based in the US." (click here to see ad full size). 

They only compare themselves to US based global airlines.  In other words, they only compare the age of their fleet to American Airlines, Delta and United - the only other US based global airlines.  Their claim of "newest" is factually correct...when based on slippery numbers.  If you consider the hard numbers and the claim they are attempting to make, you'd have to compare them to all airlines flying in the US. The problem is, the truth would not be the version of truth that they like.

As consumers we have to look out for any company that claims to be the best, youngest, fastest, smartest or any other absolute.  Odds are, to be the absolute at something, they are using slippery numbers to make their claim. Slice the numbers a different way, and some other company can make virtually the exact same claim.

As companies, we need to be honest with ourselves about what's more important to us - manipulating numbers simply to appear to have an advantage that we don't really have. Or to be honest about the things we believe and the way we conduct business.  As the old Buddhist saying goes, "how you do anything is how you do everything." Any company willing to trick their consumers in advertising is probably willing to include hidden fees in their price, offer benefits that aren't really there and promise guarantees or protections that are hard to claim when you feel you deserve them.

By the way, Spirit Airlines has the youngest Airbus fleet in the Americas and AirTran flies the youngest all-Boeing fleet...and I write the most popular blog on the internet*

*comparison made to less popular blogs.

Back To Basics

There was a time when there was a GAP store on every block.  They were to retail clothing what Starbucks is to coffee.  Everyone had at least one GAP item in their closet – a plain white t-shirt or a pair of khakis.  And that was the problem.  GAP’s biggest challenge was its own success. The GAP thought that, because of their success, they no longer had to serve fashion – they could dictate it.  They stopped offering basic cuts and started selling low cut mini-skirts and candy colored shirts with puffy sleeves, for example. People would buy them, they thought, because the GAP was selling them. But their growth strategy (and their hubris) cost them. And cost them big.

They used to have 1,800 stores 7 years ago, these days they've got 1,084 - that's 40% fewer stores. And their stock price hasn't lifted above half of what it used to (it's hovered around $20 for the past 7 years when it used to trade at nearly $50).  Realizing that they had overextended the value of their brand, their CEO revealed their new, new strategy – “back to basics.”  Sadly, the GAP was not the first to go back to basics and they won’t be the last.

 Whenever a company starts to think they think they can do no wrong they start to overextend themselves. A fact they only discover when their grand plans for world domination either lose money or flat out fail. And when the inevitable collapse happens, they always invoke the same new strategy to right the ship:

"We’re going back-to-basics," they say.  And they’d be right.

 Back-to-basics is shorthand for a company’s strategic return to their cultural roots.  GAP was founded in 1969 by Don Fisher with the purpose of, as he put it, "a simple idea: to make it easier to find a pair of jeans." It was only when they forgot why they were founded and started pursuing random market opportunities that things started to go awry.  Market opportunities that, on paper or when delivered by consultants, I’m sure seemed like viable options.  Until, that is, you take a step back and realize that the company, its brand and its culture don't belong in those businesses.  It doesn’t make sense for GAP to be dictating new fashion trends...they are supposed to be the fashion staples in our closet.

 If basics is where so many company’s end up returning after they eat a big piece of humble pie, then why do they leave the basics in the first place?

The answer is surprisingly, well, basic.  They simply forget.  With great success, companies often forget why they were founded in the first place.  The best way to stick with the basics (thus avoiding ever having to return to them), is to talk about why the company was founded.  Constantly.  Write it on the walls.  Put it in your tag line. Tell the stories and pass on the folklore of when the company was founded.  Anything to keep the story alive, the message clear and in the forefront of everyone’s mind.

Takashimaya, the Japanese luxury department store, has a motto that sums it up best.  Though the company was founded in 1831 as a kimono shop, the live by the credo, “Never changing, always new.”  A perfect expression to always remember where you came from.  Though their products and their stores have remained new and modern, their Why, their founding purpose or cause, has never veered.  

If you never want to find yourself in a position in which you’re forced to implement a “back-to-basics” strategy, make sure you and everyone in your organization always know what the basics are…then remind them again everyday.   It's that basic.

Learn why the basics matter so much, read a free chapter from Simon's new book Start With Why

Read Now - http://bit.ly/L26zk

Twitter - @simonsinek

What The U.S. Special Forces Know That You Should Also

Somewhere a True Believer is training to kill you.  He is training with minimum food or water, in austere conditions.  He doesn’t worry about what workout to do – his rucksack weighs what it weighs and he runs until the enemy stops chasing him.  The True Believer doesn’t care “how hard it is”; he knows he either wins or he dies.  He doesn’t go home at 1700; he is home. He knows only the cause.

  Now, who wants to quit?   

These are  the words that hang on a nondescript door, in a nondescript hallway, in a nondescript building on a military base somewhere in the United States.  There is a small plaque next to the door with a room number embossed and the word: SOCom – military speak for Special Operations Command.   What the leadership of SOCom understands so well is that belief is more powerful than resources. Devotion is more potent than technology. And “the cause” is what inspires people to take extraordinary risks or suffer awful conditions for no other reason than to advance the cause.  

Business is no different. 

Apple, Southwest, Disney, Harley-Davidson, Container Store and the handful of other companies that seem to have mystical powers and unbalanced success all have something in common.  They are defined by their cause, not their products or technology. More importantly, they only want to hire “True Believers,” those who believe what they believe.  And for good reason. People who believe what you believe will work for you with blood and sweat and tears.  People who don’t believe what you believe work for your money. Customers who believe what you believe will pay you a premium, suffer inconvenience and give you a lifetime of loyalty.  Customers who don’t believe what you believe will demand that you offer them a cheaper price and even if you do, they’ll still never be satisfied.

A company of True Believers will always frustrate the competition, regardless of how well resourced the competition is.  Apple frustrates Microsoft.  Lexus frustrates GM. Google frustrates pretty much everyone.  And Obama’s grassroots $5 and $10 fund raising frustrated both the Clinton and McCain campaigns.

Being flush with resources does not guarantee success.  In fact, it seems the better resourced an organization is, the more its people seem to stop caring about the cause.  They become more concerned with how many hours they’ve worked, the size of their offices and the benefits they will get.  The huge advantage companies with a cause have over even much bigger competitors is that everyone who comes to work is there for the same reason - to be a part of something bigger than themselves. They have no resources.  They have no expense accounts.  They play the hand they are dealt and they will fight on for no other reason than because they believe. 

People who go to work to be a part of the cause don’t go home.  They are home.

Now - who wants to quit?

No One Has A Passion For Customer Service...So Stop Saying You Do

I love it when companies say things like, "customer service is our passion"...because it's a flat-out lie.

Our passions are formed when we're young and there is not a single person involved in customer service in any company today that dreamed of being in customer service as a child.  Not a single one was lining up their teddy bears pretending to help them fix a software issue, get their cable TV working or helping them return an item of clothing that they've clearly already worn.

The truth is no one has a passion for customer service so saying it lacks any credibility whatsoever.  It is totally inauthentic.

However...

There are lots of people out there who care about other people.  There are many people in the business world who carried their teddy bear with them where ever they went and tucked it in to bed at night.  Later in life, the teddy bear was replaced by people.  These same kids genuinely cared about other kids on the playground.  They made sure everyone got invited to the birthday party so no one would feel left out.

And as adults - those same people make the best customer facing employees - not because they have a passion for customer service, but because they genuinely care about people.

If you want to offer great customer service, then hire people who care about other people then give them the tools and the freedom to do it.

And if you want to tell people about your "passion for customer service," try saying this instead: "we only hire people who care about other people." And, if you actually do it, your customers will feel the difference.

Do You Want To Be A Leading Company or A Leader?

There's a difference between being a leading company and a leader.  Leading companies sell more than everyone else.  Those who lead set the direction for the rest of the industry.  Here's what it takes to be a company that leads.

Visit msnbc.com for Breaking News, World News, and News about the Economy

To read more about what it takes to lead, read Start With Why.

And to be one who leads, give your copy away to someone you want to inspire...

Start With Why

Read an excerpt - http://bit.ly/L26zk

Twitter - @simonsinek

Membership Had Its Privilages

Being a member of American Express (and “member” was indeed the term) used to mean something. To carry that green card with the Roman centurion in your wallet was a sign of success, a sign of independence, proof that you were going somewhere. But the brand built on the premise of “Membership has its privileges” seems to have forgotten its cause and become just another company selling credit-card services. In an attempt to capture all the market segments, to have something for everyone, AmEx has tarnished its brand.  And worse, it’s hurting its own business.

Anyone who has an American Express card knows that it’s not accepted everywhere—but we were okay with that. The occasional inconvenience was acceptable. As with any premium brand, there was a price to be paid because we wanted to be part of an elite group. We didn’t carry an AmEx card because of  universal acceptance, anyway; we carried it because it was a symbol of who we were.

But no more. What had once been an exclusive club has thrown wide its doors to admit everyone. Suddenly, membership doesn’t feel so special anymore. The entire concept of membership—the whole idea of premium—is that it’s exclusive. The physics of it are unavoidable: The more you appeal to the masses, the less exclusive you become, and the less value your premium possesses.

This degradation is no theoretical matter: With the loss of value inevitably comes the loss of business. Card carriers hear the phrase, “I’m sorry, we no longer accept American Express,” more frequently now than ever before. I understand a small business’s decision to stop accepting the card; the fees, they say, are too high. But for me, the real red flag started waving when my American Express card was denied at H&M. The clothing chain has 175 stores in the U.S. and 1,800 worldwide. Last year, the company rang up $14 billion in sales—and it no longer takes American Express.

Only a bit less disconcerting is to slide your AmEx card across the counter and be told by the cashier that the store “prefers” that you use Visa or MasterCard, if you have one. There was a day when “members” insisted on using their AmEx cards. We did this because the experience of using it meant something to us. These days, more people are all too happy to flip through their wallets and pluck out the alternate plastic, as requested.

And that’s a problem. When those who pay to be a member of a club—and once a year, the membership fee still pops up on their statements—no longer defend the club as though it were their own, it’s a sign that the brand is slipping. Almost every AmEx cardholder also carries Visa or MasterCard, but not all Visa or MasterCard holders carry American Express. In other words, AmEx holders have a choice—and they are becoming increasingly indifferent to that choice.

Consumers’ appreciation of their American Express membership has never had anything to do with points or air-miles. Those are tricks that lots of companies use to drive repeat business—but it’s not the same thing as loyalty. Loyalty is the willingness to pay a premium, or even to turn down a better product, in order to continue doing business with the same company. Like any couture label, the American Express’s centurion was a badge of honor, and a physical symbol of living the American Dream. “Privilege,” as AmEx should know, isn’t about perks—it’s a feeling you imbue in your loyal customers.

And what of the retailers? Retailers rarely have nice things to say about AmEx anymore. They complain that it takes AmEx forever to pay them. The retailers are just as much a constituency as the cardholder; they should be made to feel like members, too. When a company has a strong brand, its constituents either tolerate the inconveniences or rationalize them away. But when the brand is weak, the only thing people focus on is what’s wrong.  And it gets worse. AmEx used to be one of those stocks that people held onto for the long term. But it’s very different now.  Like its product, AmEx stock is becoming just another equity, and investors bail out at the slightest hint of a cloudy day.

It all boils down to a few essentials: Great companies are built on the backs of the loyal, not the masses. AmEx no longer has shareholders, it has share-squatters. AmEx no longer boasts members, it gets visitors. And retailers no longer want to be a part of a purportedly exclusive club when they can get all the same services at the YMCA. Serving the mass audience and the luxury audience is fine—but you can’t do it with the same brand. Honda has Acura. Toyota has Lexus. American Express needs another card. Call it, say, People’s Express. People’s Express can chase market segments and go head-to-head with MasterCard and Visa. Meanwhile, that proud centurion on the AmEx card needs to stand for something again.

Learn how to keep your membership exclusive.

Read a free chapter from Simon's new book Start With Why

Read Now - http://bit.ly/L26zk

Twitter - @simonsinek

Article originally featured in BrandWeek.  

Advertisers Ruin Yet Another Medium. This Time, The iPhone.

We complain about there being too much advertising in magazines.  We love our DVRs so we can skip the ads when we watch TV. We call the advertising sent to us in the mail, "junk." And we install "blockers" to suppress the pop-up ads that want our attention while we're surfing the internet.  It seems no matter how hard we try to avoid it, advertisers will always find a way to get in there messages in our faces. If there's a wall or a construction site or a bus stop - if they can find a way to stick an ad on it, they will.  So I guess I shouldn't be surprised that advertising is slowly becoming more and more invasive on the iPhone. 

I'm quite fond of my iPod Touch (my telephone-less version of the iPhone) and I download apps on a fairly regular basis. Early on, there wasn't a single ad on any of the apps. Slowly but surely, however, the ads started to creep in.  For a while, they didn't bother me. There were banner ads at the top or the bottom of a screen. Fairly unobtrusive. But now? It's pop-up city. More and more app makers are trying to up-sell you on a new version or another app. I hesitate to turn on my iPod now because it's starting to feel like I'm walking on to a used car lot.

What Apple has created is remarkable. Not only is it a clever piece of technology, but it has become a legitimate marketplace. Many years ago, Sears allowed us to shop without going to the store with their beast of a catalog. The internet offered another marketplace, for which some companies, it is their only store front. The iPhone/iPod is the new frontier for commerce. The majority of the money passing through the device is from buying apps to use on the device itself. But not for long. You can already order a pizza to be delivered from Pizza Hut. You can buy a book to read from Amazon. Soon we'll be shopping for just about everything from our little pocket shops.

I applaud Apple's ingenuity for creating this new marketplace. And I've always appreciated Apple's obsession with simplicity and user friendliness.  If you buy a PC, in contrast, the desktop is jammed with all kinds of icons from third party sellers trying to hock their wares - Norton wants to sell you some anti-virus package, AOL would love to sell you something too.  It takes at least 30-60 minutes to decontaminate a new PC of all the sales pitches before we can start enjoying your new computer. Apple never went down that root. You buy a new Macintosh and all you get is...a new Macintosh.

But not the iPhone. Apple is letting the app makers destroy the simplicity of it all. I'm all in favor of iPhone-commerce, but can't Apple create rules about the advertising to protect the user-experience? If things keep going the way they are, the iPhone is in danger of, dare I say it, looking like a PC.

What do you think of that Mac?

Do You Know Why?

  Why are some people and organizations more innovative, more influential, and more profitable than others? Why do some command greater loyalty from customers and employees alike? Even among the successful, why are so few able to repeat their successes over and over?

 People like Martin Luther King Jr., Steve Jobs, and the Wright Brothers might have little in common, but they all started with why. Their natural ability to start with why enabled them to inspire those around them and to achieve remarkable things.

 Three and a half years ago I made a discovery. I discovered that all the most inspiring and successful leaders, regardless if they are individuals or organizations, regardless of their size or industry, all think, act, and communicate in the exact same way—and it’s the complete opposite of what everyone else does. I called this powerful idea The Golden Circle, and it provides a framework upon which organizations can be built, movements can be led, and people can be inspired. And it all starts with WHY.

Any organization can explain what it does; some can explain how they do it; but very few can clearly articulate why. WHY is not money or profit—those are always results. Why does your organization exist? Why does it do the things it does? Why do customers really buy from one company or another? Why are people loyal to some leaders, but not others?

Start With Why is a book for those who want to learn to inspire others and for those who want to find someone to inspire them.  Start with Why is available now at your favorite book seller.

Special Promotion: Buy two copies, give one away and we can inspire even more people...

When Your Why Is Clear...Everyone Knows It

I am often asked "how do people know when your WHY is clear?" The wonderful thing about a WHY is when it's clear, you know it...and so does everyone else. Sounds suspicious right? What you just read is a manifesto, a statement of belief, from the home page of a company called Yoga To The People. Do you know what they believe?

Even if you've never been to there, you probably have a very clear idea of what the experience would be like? It might not surprise you that they charge $7 for a class...or that on same days, the cost is just a donation.  Their goal is to get back to the essence of yoga - to relax. As they say, "Yoga is meant to help strengthen and stretch your arms and legs, not cost you one!"

This manifesto is a statement of WHY they exist.  WHY they do what they do. What they believe wasn't buried deep in some "about us" page - it was right on the home page. Because Yoga To The People starts with WHY, anyone who comes to their site knows exactly how they see the world and already has some level of expectation of what their products and services will be like. And they didn't have to read a single brochure.

When people believe what you believe, it piques their interest to either learn more or  buy from you without much "selling" required. If people don't believe what you believe, they will either turn away or do business with you anyway because you meet some other requirements. In other words, you won't lose those customers, but you will gain some very special, high quality ones.  Start with what you believe, start with WHY, and you can instantly filter and attract the customers most likely to be loyal.

Surf around the web, look at some other companies and you'll quickly see websites with home pages filled with details, prices, facts, photos - everything to "attract" new customers.  But none of it really does. And of course, your IT professional will tell you the importance of filling your homepage with more instead of less.  All that does is attract more people but it doesn't inspire them to do business with you.

The best part is, if you have the discipline to start with WHY and if someone believes what you believe, even if they don't buy your product, they may talk about you to their friends...or blog about you.  And that blog may attract more new customers than the one you think you lost.

p.s. let me know if you visit their studio because of this blog. 

TED Talk - Simon Speaking at a TEDx Conference in Seattle

We make assumptions about the world.  More importantly, our behaviors are often governed by those assumptions. But what if our assumptions are incomplete or wrong? This doesn't necessarily only apply to things when they go wrong...what about when they go right? Do you know why things go right? Most people would say yes - but then why is it so hard to repeat great success?  If we know why Apple is so innovative, for example, why can't anyone else do it? Don't you want to know WHY?

This is what I talked about when I had the honor of speaking at a TEDx event in Seattle this year. It was such a privilege to share the stage with some remarkable and inspiring people. Ed Visteurs, the only American to scale the 14 highest peaks in the world without oxygen, and Erik Lindbergh, Charles Lindbergh's grandson and an amazing human being in his own right, to name but two. (Click here for other TEDx talks).

The vision is that everyone knows WHY. To learn more about why you do what you do, check out Simon's new book, Start With Why. If you order a copy, order two and give one away to someone you want to inspire. The goal is to share the WHY with as many people as possible.

What Companies Can Learn From The Homeless

"I'm homeless. I'm hungry. I've got 6 kids.  I've got AIDS. Pleas help. God bless," reads the handwritten cardboard sign sitting in front of the homeless man. Sometimes we are drawn to give and sometimes we're not.  Regardless of what you may think is happening that sign he are holding is in fact a piece of marketing.  The question is, is it an effective piece of marketing?

As much as we like to think we are giving selflessly, the fact is, every time we drop some spare change into the cup of a homeless person we are completing a perfectly legitimate business transaction.  What the homeless are selling is the feeling of goodwill...and sometimes we buy it.  More importantly, our decision to buy goodwill from one homeless person or another is based on all the same decision-making principles as any other purchase decision we make everyday. And, like most businesses, the homeless use marketing to help drive the transaction. In their case, billboards.

 If the principles of communication work the same way for a company as they do for a homeless person, I decided to do a little experiment to prove it.

We found a homeless woman in New York who was willing to help. Sitting on the corner of 23rd St and Park Ave, she told us that she makes between $20 and $30 over the course of an 8-10 hour day ($30 constituting a good day).  Her sign was similar to the norm - I'm homeless, I'm hungry, please help, etc.  She agreed to use our sign the next day and with it, she earned $40 in 2 hours.

So what did the new sign say?

For starters, it didn't talk about her. Like so much bad marketing out there, her original sign tried to sell based on facts and details about her  without considering why anyone would give to her in the first place. We don't know if any or all of their claims she presents are true and, like companies, she has also experimented with which claims work better than others.

Companies are no different. They offer features and benefits, facts and figures, everything they think we need to know about their product or service to encourage us to buy. A computer company, for example, tries touts the superior memory and the processor speed or other bells and whistles.  A law firm tells us they are one of the biggest firms with all Ivy League attorneys.  A cereal company tells us their product is packed with vitamins and minerals and is part of a well-balanced diet.   But why should we care? They've spent most of their time and energy telling us about them without saying a single word about us.

Claims or no claims, what if the whole marketing approach was completely flawed?  What if effective marketing had nothing to do with features and benefits at all?

Good, effective marketing is that which talks about the buyer not the seller.  We don't care about the seller, we care what we can get from the seller, and I don't mean the product attributes . We want things that reflect our own values and beliefs, things that fit into how we live our lives.

So what can companies learn from the homeless?  Stop talking about yourselves and start talking about why anyone should care.  Talk about our lives and simply place yourself and your products comfortably into our lives.  That's exactly what we did with that homeless person's billboard.

And what about that sign?  What did the new sign say that was able to double revenues in a quarter of the time?

It said simply: "If you only give once a month, please think of me next time."

Click here to download a PDF version of this article

This piece originally appeared in the Huffington Post

"More" Is Not A Value Proposition

    In the 1970s, there were two choices of Colgate toothpaste.  The last time I checked, Colgate is now up to 32 different types of toothpaste.  With 32 options, I'm not sure anymore which one I should choose to get my teeth clean.  There is this rather odd assumption that companies have that more is better.  The problem with more, is that more is never enough. 

    The best example of companies trying to differentiate simply by offering more is in the razor blade business.  I still remember the commercials.  "Because two blades is better than one."  "Because three blades is better than two."  "Because four blades is best."  "Because five blades gives you a closer shave than four."  Companies like Gillette and Schick spend so much time and money trying to convince us that each blade they add is better, they forgot to do something that actually distinguishes one company from the other.  I ask all you who are reading this - which company is better? See what I mean.

    Value is not a see-saw.  A company and it's products either have the perception of value in a consumer's mind or they don't.  Simply by adding one more of something does not mean that there will be a sudden shift in loyalties simply because one manufacturer offers more than another.  More raisins.  More chocolate chips.  More taste. More destinations. More channels. More features. More, more, more.  More confusion is all it creates. 

    A real value proposition, one that can truly differentiate one company from another, is not pegged to the number of features offered.  A real value proposition is born out a company's ability to articulate what its values and beliefs are.  Believing they offer you a closer shave, is not a belief, it's simply what the product does.  And that is the root of the problem.  Too many companies believe that their value is defined simply by their products.  It's not.  Of course good quality products are important, but having the best does not guarantee everyone will fall in love with you.  There are countless examples of better products or technologies losing out to someone else.  Beta was better than VHS, VHS won.  TiVo is better than all the cable company DVRs, but TiVo has trouble selling its products.  XM and Sirius Satellite radio battled it out, each attempting to woo customers by offering more channels than the other.  The results were so miserable that they they gave up and decided to merge the companies into one.

    What if a razor company announced that they recognize that getting ready in the morning is something we all do, but for some, the requirement is more ritualistic.   What if this razor company said that it believed that we are all different and we should celebrate our rituals in the morning.  It believed in making razors that suited who we are as people.  A razor for the person who likes to wake up extra early in the morning so they can take their time getting ready.  Those razors are made to offer a slow shave.  And the shaving cream that goes with it has to be really lathered up so that it gets full and soft.  For those who are always running late, a razor that is great (and safe) when you're in a rush.  And special shaving cream that goes doesn't clog the razor (because that takes time).  It's entirely possible that all the razors only have two blades, but it's how the blades are mounted to suit you and your own ritual that matters more .  Unlike Colgate that just kept adding toothpastes or the razor companies that just kept adding more blades, my mythical company decided to fit its products into our lives, not just offer us better products.  In fact, if it wanted, it could decide to sell toothbrushes and toothpaste to match your ritual.  And soap.  And towels.  The list goes on.  The value we'd have from these products is not that there is more of one ingredient.  It's not the addition of features and benefits.  The company is now differentiating itself because their products suit me and my lifestyle.

   The success of Method brand products proves this.  Are their soaps better?  Do they kill more germs?  Does their dish washing liquid cut more grease?  Who knows.  They could be worse for all we know, but the packaging looks good in our kitchens and bathrooms.  And for those who care about design, that matters to us...even more than more.  Method, more than other companies has the ability to sell products the others can't.  They sell hand soap and leather cleaner, for example.  Would you buy leather cleaner from Dove?  Of course not, we'd only by soap from a soap company.

    I'm not suggesting that any company can differentiate simply by offering pretty things.  I'm suggesting, however, that when companies start thinking about how they fit into the lives of their customers and not just thinking about themselves and their products, they might find something more might happen.  They'll have more loyal customers and they will make more money.  And that's real value.

 

Promotions: Good For Sales, Not Always Good For Business

"Buy one, get one free."  "Free toy inside."  We've all been enticed to buy something or choose one brand over another simply because of the free stuff they're offering us (in the business-to-business world, this is called value-added). And there is no doubt about it, promotions work.  They can indeed drive sales, but they will never drive loyalty.

That's because the way a promotion works is by manipulating someone to buy.  There is no real, emotional value created.  Instead, it appeals to our desires to get something for free.  It's a system of short term gains for both the seller and the buyer.

I was handed this while walking down the street a few days ago (you can click on the pictures to see larger versions).  Sovereign Bank is trying to attract new retail banking customers.  Do they offer a  trusted relationship?  Do they tell what they believe in hopes of attracting customers with similar beliefs?  Nope.
They do it by offering you $150.  The big phone companies tried this many years ago.  You could get up to $100 to switch from AT&T to MCI, for example.  It did nothing for loyalty and it cost the phone companies a bundle.

It gets worse.

On the back of the leaflet, the promotions goes on: a Visa with no annual fee, bonuses, discounts, no fees and so on.  This is as bad as marketing gets.  The irony is, they actually have a compelling position that they aren't usig- it's in their tagline - America's Neighborhood Bank.  That idea alone is vastly more compelling to attract a more loyal type of customer.

Remember, people don't buy what you do, they buy why you do it.  People buy the purpose, cause or belief, your company stands for.  What you do simply serves as proof of why you do what you do.  Apple doesn't sell computers, they sell the belief in challenging the status quo - their products just prove it.  In turn, they attract a VERY loyal customer base with the same beliefs.

With that in mind, here is some free advice to Sovereign on what would work vastly better.  They should tell people what they believe - not try to trick them or bribe them into coming in the door.

Imagine if they handed out a leaflet that said:

FRONT:
We believe banking is more about people than money.

We believe banking should be personal again.

We believe in the idea of a neighborhood bank.


BACK:
Here at Sovereign Bank, we take pride in the little things, like helping you when you need help.  Giving you honest answers when you have questions.  Treating you like a person, not an account number.

If you come in to ask about all the other  great banking services we offer when you open an account, please don't be surprised when someone says thank you to you.  That's what happens in a neighborhood bank.

If anyone reading this knows someone in the marketing department at Sovereign Bank, please send them this.  It's free...and I know how much they appreciate that.

If You Want To Differentiate, Features Aren't Enough.

“They’ve done it again.”

That’s the Hollywood way of paying someone a “compliment” when you can’t think of anything nice to say.

And Chase has done it again.

The launch of their new “Chase What Matters” campaign is a fine example of a retail bank’s inability to differentiate itself from a sea of sameness and their agency’s inability to help them.

Chase What Matters is an attempt to communicate value for the consumer bank by illustrating that Chase offers customers various perks or features “that matter.”  The creative is clean and well designed, but the campaign is slim on strategy. I have no doubt that a great deal of expensive customer research revealed that customers like real time information and fraud alerts, two of the benefits featured in mcgarrybowen’s new campaign, but those things are not proprietary to Chase.  Every large retail bank either offers these exact features, offers very similar features, could easily offer similar features or offers other features that Chase doesn’t have.  In other words, no brand ever successfully differentiated itself with a positioning based on product features and benefits.  At best, Chase successfully communicated the value of using a bank versus keeping your money under your mattress. 

Before I even took a look at the campaign, mcgarrybowen’s press release gave clues that the new campaign didn’t have a strong strategic position.  After the first sentence that announces the launch of the new campaign, the second sentence reads, “Shot by director Steve Rogers, the black/white/blue TV executions create a unique and contemporary look and feel in the category.”  I can’t help be cynical when the first thing the agency wants to tell the public about a campaign designed to reposition a brand is who shot it and what color palette they chose.  Style and tone are important in any successful communication, but they cannot create a compelling reason for people to do business with a brand.

And that is what is most lacking from Chase’s new work – a compelling reason why anyone should do business with them versus anyone else. There is not a single bank that offers anything that a customer can’t get, for about the same quality, price, service or features from another bank.  These things do not distinguish a bank, they are the cost of entry of being in banking.  If Chase can’t offer fraud protection and real-time information, then they have bigger problems.  It would be like Ford advertising their cars come with power steering and power windows.  Yes, customers think those things matter and good for Ford for thinking those things matter too, but such basic features, even if Ford’s power steering and windows really are better, will not help Ford sway a customer to choose them over another similar car.

Great brands don’t tell us what they do, they tell us why they do it.  How they see the world differently.  This is what differentiates them.  Saturn told us they didn’t see sheet metal, they saw the people inside the sheet metal (click to watch it).  Their belief in people wasn’t just an advertising idea, the advertising captured their unique belief and service model.  I don’t fault the agency, perhaps the reason the advertising doesn’t capture a unique belief and service model is because Chase doesn’t have one.  Perhaps the best the agency could do was to highlight some features and slap some lipstick on that pig.

If Chase actually lived and breathed “Chase What Matters” they would be offering more ingenious products than fraud protection.  They would be offering advanced loans for college students, better ways to fund a small business, training for entrepreneurs, advice to parents and pointers on writing a better resume.  Alas, all they have is a pretty ad campaign and a hollow tag line. 

They’ve done it again.

This column originally appeared in January 21st, 2008 issue of BrandWeek

How To Be Authentic

"Authenticity" is the big buzz word in corporate and political America these days.  "Be authentic" is the advice that gurus and pundits offer from afar.  But just instructing someone to be authentic is not actionable.  If you walked into your CEOs office right now and told him to be more authentic, what would he do?  If a CEO walks into the head of marketing's office and charges, "make our marketing more authentic," what steps would the marketing executive take to make that happen?

The advice  of "be more authentic" is just not actionable.

The best example I can point to of what it means to be authentic is what happened to Hilary Clinton in New Hampshire.  Here is a strong woman who has spent at least a career, if not a lifetime, acting strong.  Being perceived as strong.  Her whole campaign is about being experienced and strong and qualified.  The problem with that as a strategy is that it's unreal.  No one is like that.  Robots maybe. 

It takes more courage to be to be human, to be "authentic," than to act strong. Only because of complete exhaustion did Hilary Clinton, for the first time in memory, publicly let down her guard, brush aside her act and show us that she has self-doubt, she has fears and is indeed human...and it made her beautiful.  She didn't come across as weak for welling-up when she expressed what she believed.  In fact it made her seem stronger.  The folly is, all her advisers who tell her to be authentic tried hard to suppress the clip.  To hide  it from the world.  The one time Hilary was authentic and they panicked (I'd love to know what their definition of authenticity is).

Democrat or Republican.  Hilary supporter or not, when you see this video, you can't help but like her just a little more.  And so did voters in New Hampshire.  That's because being authentic works.

Here's what it takes to be authentic:

Being authentic is not difficult, per se, it just takes a lot of self-confidence (and not the "act strong" kind).  It means you believe in everything you say and everything you do.  It means that you always speak the truth and act in accordance with your moral compass at all times to all people: to your friends, your colleagues, to the public and to your customers.  No "pitching."  No "selling."  No little white lies.  No fear of what others will think of you, your brand or your company.  No acting in a way that you think others will like you more.  Complete and total honesty.  Nothing more.

The truth is, few of us, as individuals or as companies, have the courage to be completely authentic all the time.  This is why authentic people and companies are so attractive to us and why they are so few in number.

Lesson to be learned: It takes more strength to be authentic than it does to act strong.  And the more authentic you can be, the more people will like you, the more they want to vote for you or buy your products...and the stronger you will be.

The Effect of Why

I can't watch this video clip without crying.  It is the perfect embodiment of what it means to live your Why. 

People and companies alike are more focused on What they do (e.g. product features) or what people will think of them.  But those that wake up everyday driven by a purpose, cause or belief, their  Why, have a different presence in the world.  We are drawn to those with a strong sense of Why.

Here is an example of a humble man who works in a cell phone store.  By all outwardly characteristics - he is shy and insecure and his teeth are bad - we are not drawn to him.  Though he does not believe in himself that much, he does believe in the one thing he loves above all else - opera.

In daily life, Paul worries about what the world thinks of him.  But not when he sings.  When he sings, he stops caring about the world and gets completely lost in what he's doing.  He has so much love for opera that nothing, not even low self-esteem, can affect him. 

We are drawn to him.  Everyone is drawn to him.  We are drawn to his passion.  And at the end of his performance, all the things we smirked at - his teeth, his low confidence - vanish.  Paul becomes beautiful.

This is one of the most wonderful examples of a person embodying a Why I have ever seen.  People, companies and organizations are all the same.  Embody a purpose, cause and belief and people will be drawn to you...you might even give them goosebumps.    

Thank you to Seth Godin for posting this.

Write A Vision Statement That Works

Most companies' vision and mission statements are useless.  Where as a good vision statement can inspire loyalty, hard work and innovation, most of the framed statements hanging on the walls of businesses are nothing more than a description of what the company does.

The kind of "vision" statement to which I am referring usually look something like this:

...to be the leading supplier of [insert product or service] at the best possible price with the best possible service...blah blah blah value...blah blah blah customer satisfaction & innovation....blah blah blah leader in our industry.

I always ask companies with statements like the above what they think the vision statements on their competitors' walls say.  Eerily similar I imagine.   

A good mission or vision statement is just that, a statement of a vision - a look ahead into the future.  A vision statement is an articulation of a view of the world that your company and your people are working towards, not what they are expected to do now.

But the vision alone is not enough.  Given your vision of the future, how, specifically, will your company work to achieve it?  These guidelines or values should be written in a manner by which people, at all levels, can be held accountable.  "Innovation," "authenticity" and "integrity" are not measurable (and frankly things like integrity should be a given...anyone in your company lacking this quality shouldn't be given a mission statement, they should be given a pink slip). 

Here are some guidelines to writing a vision or mission statement that works.

 

Why do you do what you do?

• Begin your statement with "I believe..."
  • Your Vision Statement should start with what you believe, why you do what you do -- your purpose or cause on a level higher than what your company does or makes.  Try starting your statement with the words "I believe..."  or "I envision a world..."  You'll find what follows will be quite different than what you expect.   You can always take out those opening words later, if you want.
    

• Don't write more than two lines for what you believe.
  
  • This is not the place for long-winded descriptions about what your company does or its value to the world.  The opening of your statement shouldn't require more  than a line or two to capture the world you imagine.

• Leave what you sell out of it.
  • This is a statement of your vision, not what you do.  Nowhere in Southwest Airlines' mission does it say anything about being an airline.  What you do is important, but not at this level.

How do you do it?

• Explain How you think and act.
  
  • Now that you've articulated Why you you do what you do, it's time to explain how you do it.  There are probably two to five distinct characteristics or values  about How your company operates that makes you unique in the way you are going about realizing your vision.
  • These ideas  should not be amorphous.  They should be specific and actionable.  They should be written in a way that people can be held accountable.  "Innovative," for example, is hard to hold people accountable to.  You can't say to someone, "be innovative."  How do you know when they are?  But you can say, "always have options to any solution you offer,"  for example.

What do you do?

• What are you doing to bring your vision to life?
  
  • You've articulated your belief and how you go about doing what you do, now explain what you do - the things you sell that will serve as proof to the world of Why and How you do things.

Put your business goals on another piece if paper.

• • No matter how robust,  your business goals belong somewhere else.  They are the result of pursuing your vision and holding yourself accountable to your guiding principles or values.   Your goals may serve to motivate a few people in management, but most people are not inspired by financial objectives.  They are, however, inspired by a pursuit greater than any one person or product.

Only if you're interested, here's my vision statement:

I work to inspire people  to do the things that inspire them. 

And no matter what I do in order to realize my vision, I hold myself accountable to five guiding principles:

1. Be  unconventional:   Shake things up.  Offer new perspectives.  Only when you see or hear things in a different way can you see greater opportunities.
2. Keep it simple: If people can more easily understand something, then it's more likely to get done.
3. Collaborate:  Work with others, because they know more and have already made all the mistakes.
4. Silver-line it: Look for the silver lining in every cloud.  It's better to amplify what works than obsess with fixing what doesn't work.
5. Act!:  Action is always better than inaction.

To realize my vision: I write about how to inspire action.  I consult companies how build corporate cultures that  inspire their employees.   I guide companies how to create marketing and communications that inspire customers to buy from them over and over and over.  I speak to anyone who will listen.  I work to be my own best case study, practicing everything I preach.

 

Learn More in London

How's your trend spotting?

The wonderful PSFK is having another conference - this time in London.

For those of you that can make it, I highly recommend it.  The one in New York was fantastic.

For info and tickets, visit  : http://psfklondon.eventbrite.com

Finding Insights in Trends

If you're interested in tracking the trends that are reshaping business and our culture, then you already know about PSFK.  They are one of the leading trend spotting groups in the world.

As I mentioned in my previous post, I recently had the honor of sitting on a panel at the PSFK trends summit in NYC.  I joined Steve Hardwick, president of one of the hottest ad agencies in the world - StrawberryFrog and Grant McCracken, former teacher at Harvard Business School and renowned anthropologist, to  discuss  how to turn  trends into actionable insights.  The panel was chaired by Florian Peter, a brilliant trend spotter in his own right.

If you'd like to see our discussion, I've posted it below.  Just click the PSFK logo.

Trends That Spot You

I had the pleasure of sitting on a panel at a recent trends conference thrown by the wonderful and influential PSFK.  This conference was much better than most (it was all about action).  Most trends conferences consist of throngs of marketers from all over the country descending on a hotel for 3 days. During which time, they listen to "experts€" tell them what's happening in the world and what they need to pay attention to.  I recently heard a "€œtrend spotter"€ tell a room, "the big trend this year is all about color - and lots of it!" Later, another admonished, "if you're not taking advantage of web 2.0, you're missing the trend!"

Here's a trend - marketers seem to spend more time worrying what others believe in and less time working towards what they believe in.

Unless you know Why your company does what it does, how can you judge what trends are appropriate or not?  And when I say "Why" I don't mean to make money - that's a goal - I mean, what's your purpose, cause or belief in the world? Literally - why do you do what you do? Unless you know that, going to a trends conference is like going to the supermarket hungry - it ALL looks good!

Would your shopping habits change if, before you went shopping, you had perfect clarity of why you do what you do?  What if you believed  in looking after your body? That would mean that everything you did would either help you achieve your goal or at least not set you back. 

Imagine if the night before your trip to the supermarket,  you were at a party where all these people (some whom  know a lot more about food than you) told you about ALL  the great things that EVERYONE was eating  that you just HAD to try. Things with butter.  Rare cuts of steak.  Hydroponic celery.  New triple stuff Oreos. Organic milk.  Refried beans. I'm pretty confident that, without much effort, you'd  know exactly which ones to listen to and which ones to filter out. More importantly - your shopping trip will be easy despite all the advice.

Everyone of your friends, even the strangers standing in line, would instantly be able to recognize what you believed in just by seeing what you were buying. "Look at that guy, he's so healthy."  And better, they might even say, "I want to do what he does."  But what would they think of you had bought everything you were told to and then some? Not much, I suspect.

The same is true in marketing.

Know what your company believes in first and the trends that matter to you will become self-evident. Even better, €“your  customers will know that you truly believe in the things you say you believe in. So, be clear on why you do what you do and you'll be perfectly positioned to capitalize on another trend: authenticity.

Happy shopping.