Re:Focus

Don't Strive To Be A Leading Company, Strive to Lead

Dell is a leading company but Apple leads.  American Airlines is a leading company but Southwest Airlines leads. Kroger's is a leading company with over 2,400 supermarkets, but with only 270 stores both in the US and UK combined, Whole Foods leads.

There is a difference between being a leading company and being a company that leads.  A leading company may have the biggest market share or have the most revenues, but they don't lead the industry.  A company that leads sets the tone for all others to follow.  Though leading companies may be bigger, companies that lead are more innovative, more profitable and command greater loyalty.  

Companies that lead always know WHY.

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

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.

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?

Are You A Product Or A Shelf?

Almost every business in existence is either a product or a shelf, an idea or a platform for ideas – they either have a thing or service to sell you or they are a place to buy things. Wal-Mart has shelves and Proctor and Gamble has products for those shelves. It is a beautiful and symbiotic relationship because all products need shelves and all shelves need products.

 

As a business model, the shelf is easier to scale because products have, please excuse the pun, a shorter shelf-life.  Things go stale, technology advances, new systems and processes are developed.  The products and services we buy are constantly being swapped out for something newer.  Better.  Faster.  Cheaper.  Whatever…

 

As a company you must decide if you want to be a product or a shelf.  It’s very hard to be great at both.  You can’t aim to have the best product and the best website to sell it on also, for example. How would you know where to allocate resourses?

 

Amazon is a shelf and they spend all their time and money making their shelf easy to use.  Their shelf even offers us new products they think we might like.  Starbucks is a shelf too.  It’s not about the coffee or the food or the logoed mugs they have for sale.  Starbucks is place to go to.  The minute they start trying to differentiate based on how good their coffee tastes they will stop focusing on their store experience.  Remember, it’s hard to truly excel at both.  Companies like Lavazza make much better coffee than Starbucks – but they don’t have a shelf – they rely on others to help them sell their product.

 

I’m a product.  I offer ideas.  The only ways I can share my ideas to more people is by looking for more shelves for my ideas.  I write a blog - typepad is the shelf I chose for that.  I wrote a book – it’s available on real and virtual shelves. I speak at companies and conferences who offer themselves as a shelf for me talk for an hour or two.  I teach - Columbia University is my academic shelf. I know as a product , the only way I can succeed is by finding more and more shelves.  But I’m not just interested in any shelf.  I only want to stand on shelves that help me spread my cause – to inspire people to do the things that inspire them.

 

But likewise, all the typepads, book stores, conferences, universities and other shelves need to stock the products that help them advance their causes also. Wal-Mart wouldn’t work if they sold $1,000 couture dresses.  If their products don’t serve to promote their own Why, then the perception of the value of their shelf goes down.  And that’s the perfect symbiotic relationship between the two models.

 

To be the best at whatever you do, first you have to decide which you want to be – a product or a shelf.  Then the focus has to be on being the best shelf or product you can be.

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.  

The Best Thing You Can Have Is Bad Intelligence

During the Cold War, America would fly spy planes over the Soviet Union to count how many bombers they had. Knowing exactly what the Americans were doing, the Soviets laid out hundreds of fake, wooden bombers to trick the Americans into thinking that they had a much bigger capability than they actually did.  The problem was, America believed its own intelligence and built real bombers to counter the perceived Soviet threat. 

It wasn't until after the fall of the Berlin Wall did we learn that, if we ever had gone to war with the Soviet Union, we would have annihilated them because our resources vastly outnumbered theirs.  This massive unfair advantage would not have happened if it weren't for the good fortune of some bad intelligence. 

Believing that your competition is stronger and better than you will pushes you to better yourselves. Whether real or perceived, believing you have a disadvantage forces you to find new and clever ways to compete. It's always the organizations that are resourced constrained that come up with the good ideas to win.

You can save money on competitive analyses by simply pretending that whatever your competition is doing, they are doing it better than you. This works no matter if you're the leader or the challenger.  Instead of constantly trying to compare what you're doing to others, focus instead on constantly trying to improve yourself and the way you do things. You should believe, true or not, that there is always someone lurking on the horizon waiting to take advantage of you.

The greatest threat any organization can face is not its competition but its own success. With great success comes complacency - the false belief that you are the best and that you don't have to worry. The problem is, you'll only realize it's a false belief when someone else catches you by surprise. This pattern is repeated over and over and over. Wal-Mart, Microsoft and General Motors all believed that they were unbeatable...until a company who believed they were not as strong found a better way to compete with the 800lb gorilla.

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 The Two Parties In A Two Party System Don't Know Why They Exist

Republicans are completely befuddled by Obama’s “star power” and don’t seem to have a clear or effective strategy to compete. Though they are able to coordinate their messages better than Democrats, absent a leader who can clearly articulate a Republican vision for America, the only thing they can do is attack, attack, attack.

Democrats have a leader who defies all the political odds. Obama became president with little experience, he’s making headway reforming health care, and won a Noble Peace Prize which, even he admits, he probably didn’t deserve. But as a party, they bicker, they can’t coordinate messages and they seem more obsessed with “setting the record straight” than advancing their vision for America. Absent the ability to focus, the best they can muster is defend, defend, defend (and sometimes, maybe, if it’s not too harsh – attack).

Leadership is not derived from having the loudest voice or the biggest base.  Leadership isn’t about having all the answers or having all your i’s dotted and t’s crossed. Leadership doesn’t necessarily even come from simply having your name on the door. True leadership comes from inspiring people to focus on where they are going, not fighting against whatever is happening now.  This is what it means to offer a “vision for America.” This is what it means to inspire. 

Democrats are flummoxed by Republicans ability to stall or redirect progress. No matter the message Democrats develop, Republicans almost always come up with a better sound bite for the headlines. The Democrats response throughout the healthcare debate? Give the people more statistics.

Republicans are perplexed how Obama’s star shines so brightly. No matter how much they attack, Obama seems to keep moving forwards. Just this week, we learned the Senator Olympia Snowe (R-Maine) supported the health care bill in the finance committee. The Republican response? Attack Olympia Snowe.

But neither party does a good job of contextualizing why they have the opinions they do in the first place. Both care about America, both believe in upholding the values laid down by our forefathers. Both are deeply patriotic.  And both know why America exists – it’s all about life, liberty and the pursuit of happiness. The difference lies in how they think we should deliver on that American Dream. Though both parties know why America exists, neither party can tell you why they exist.

Republicans are the party of “I”. They believe the responsibility of government is to support those who pursue the American Dream – which is why their policies have historically favored the rich and businesses. Buried in the pages of their newly designed website, the RNC hints at why the Republican Party exists, “The Republican Party is inspired by the power of ingenuity of the individual to succeed through hard work, family support and self-discipline.” Instead of opening their website with their cause, with their Why, there is a video about how bad America is doing and how bad Obama is. It’ll make you angry, it may rally a crowd…but it’s not inspiring. It’s not leadership

Democrats are the party of “we.”  They believe the responsibility of government is to try to help everyone pursue the American Dream – which is why their policies have historically favored labor and the poor.  Buried in the pages of the DNC website they also hint at why the Democratic Party exists, “The Democratic Party is committed to keeping our nation safe and expanding opportunity for every American.” Instead of leading with their cause, with their Why, one of the first things is a section called “Call ‘em out” devoted to correcting the lies being spread by Republicans.

Instead of trying to plan the next attack strategy, it may benefit the Republican Party to try to understand why Obama's star shines so brightly. After all, it is this “star quality” that Republicans attribute to Obama’s winning the Nobel Peace prize last week – an observation that would be entirely correct. I understand why Republican leadership invests so much money and energy trying to dim his star, but the benefit to trying to understand it and even learn how to turn up the wattage of one of your own is not only better for the Republican Party, it’s better for the country. A strategy of attack, attack, attack – from either party – inhibits progress and divides us as a nation. 

Though he's not always perfect at expressing it, Obama has a vision for America, one born out of optimism, that comes out whenever he gives big speeches. Sadly, that’s the only time it does. He believes that any people, no matter how divergent their differences, can always find common ground to advance a common cause. He believes America can work together to mend its economy. “Yes we can.” He believes that America can come together to reform healthcare. “Yes we can.” He believes the nations of the world can come together to find common understanding. “Yes we can.” And it is his optimism in this belief that inspires and gives him his star quality. Democrats need to focus around Obama’s vision and focus their message and energy on drafting legislation that will breath life into the vision.

Republicans don’t need to look to Obama to learn how to make a star. Go back and study Ronald Reagan – a visionary leader who confounded Democrats at the time with his own star quality. Reagan spoke about “morning in America” – he oozed an optimism for what America could be. Reagan had an undying belief that each American has the ability to make their own lives better if they put our minds to it. In stark contrast, the modern Republican Party defines itself by what it’s not rather than what it is.  Republicans need an optimistic leader who can present an alternative vision for America’s future instead of just rallying against Obama’s vision of it.

The way the two party system is supposed to work is that both parties present their vision for America and then the people will choose which they believe best suits them based on the challenges they face at the times.  Sometimes we want to celebrate the ingenuity of the individual – like in the booming ‘80s and sometimes we feel the need to band together and work to support those who can’t support themselves – like in times of war, economic crisis and when the social security and health care systems are ailing.

I’ve studied great leaders and great organizations, those with the ability to inspire. And they all have something in common. Regardless of their party or their politics, unrelated to their business or their industry – they all think, act and communicate the exact same way, and it’s the complete opposite to everyone else.  In all cases, the “stars” clearly communicate an optimistic vision of the future, they tell us why they do what they do. It is so clear that the rest of us know why they do what they do also, even if we disagree with the specifics of how they aim to do it. When there is clarity of Why, those who believe the same will take it upon themselves to join the cause. A following, by its definition, are those who share a common set of values and beliefs. This is the reason great leaders command a loyal following.

Democrats have a leader with a vision, but lack focus. Republicans are focused but lack a leader with a vision. Perhaps, in a day-and-age when both parties can only point at each other and define themselves as “not that,” we need a president who can find their common ground. Yes he can.

To learn more about how great leaders lead, read Simon's new book Start With Why: How great leaders inspire everyone to take action, available for pre-order now and on shelves Oct 29th.

This post originally appeared on the HuffingtonPost

Read more at: http://www.huffingtonpost.com/simon-sinek/when-the-two-parties-of-a_b_321568.html

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. 

How To Be More Creative

The driving force behind innovation is creativity.  That's not such a profound realization.  But where does creativity come from?  I'm always fascinated when organizations have "creative sessions" to come up with ideas. Putting everyone in a room together for an hour or two with the purpose of coming up with a new idea or a new way of seeing things is not necessarily the best way to come up with new ideas.

Think about it.

How many of your best ideas happen driving to work or standing in the shower? Or watching a movie or reading a book that has nothing to do with the problem you just solved? The fact is, our brains are processing vastly more information than we're even aware of. And sometimes it's making connections between things that we weren't even looking for at the time. 

Jarbas Agnelli, for example, created music simply by seeing. "I saw a picture of birds on the electric wires," he said, "I cut out the photo and decided to make a song, using the exact location of the birds as notes." Below is what he created. There is no Photoshop edit, it is the exact picture he saw.

Creativity comes from curiosity. The more curious you are about the world, the more you experience and learn. The more you experience and learn, the more connections your brain is able to make. And with more connections, you can find new solutions to problems or just see things no one else can see.  In other words - you can be more creative.

Birds on the Wires from Jarbas Agnelli on Vimeo.

Those who know WHY are more creative. Do you know your WHY? pre-order Start With Why and find out WHY. And if you do, please order two and give one away to someone you want to inspire.

Simply Doing Your Job Is Not Special

I saw this fantastic commercial for a car company that has an amazing new model.  It goes when you press the accelerator, it stops when hit the brake.  It's got another seat next to the driver and a big seat in the back for kids or friends or whomever wants to join you on your trip.  Here's the best part - you can travel between any two points you want - no bus stations, no waiting for a taxi - you can go directly from your home to work. Amazing right?!

Imagine if that's how car companies attempted to sell their products to us.  Not sure many of us would be that impressed.  We expect a product to do what it's supposed to do. Amazingly, so much advertising today, does just that -  they simply advertise what their product is supposed to do.  They advertise the category, not themselves.   A fast food company tells us their food tastes good.  A weight loss center says it will help you, you guessed it -  lose weight.  A gym says it will help you - wait for it, wait for it - get in shape. Cellphone companies tell us that their calls get through - isn't that a minimum standard?  And so on and so on....you get the idea.

Here are links for two commercials from the Super Bowl, Career Builder and Monster.com.  Both are very funny.  And both tell us nothing other than what we expect.  If you hate your job, we are a job posting site that will - that's right - help you find a better job.  Isn't that what they are supposed to do?  No one can remember any of the claims or that are supposed to distinguish one from the other. We expect them to both basically do what they say.  And neither does a very good job of telling us any more about why we need them beyond what we already know - to find a new job.  Sadly, this is the norm in marketing today.

I long for days when companies tell us what they believe, not simply what they do.  When they align themselves squarely with one point of view or one perspective, something to which I can relate.  Trying to appeal to everyone that may need what you sell often results in fewer people wanting what you sell...no matter how good you are.  Giving a few "differentiating" facts and figures is not enough either.  No one walks around with a score card to keep up with all the claims made in advertising.  For the most part, we to ignore them.  Monster, for example, offers some "differentiators" and Career Builder offers none.  Are any of us convinced Monster is better because of a couple of claims?

Few companies have the discipline to focus on a small group of higher quality customers that share their values and beliefs and instead aim for the lowest common denominator - those who just need what they sell.  I have to imagine that Career Builder is better for some people and Monster for others.  But, with no help from their advertising, none of us will ever know which is right for us.  But they will keep running their commercials and they will send me emails telling me how effective their advertising strategy has been.  And if you throw enough spaghetti against the wall, some if it is bound to stick.  "Good" advertising, however, is only throwing the spaghetti you know will stick. 

"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.

 

A Marketer's Job Is To Simplify The Buying Experience

If there happen to be any agency folks reading this, I need a small favor from you. You see, I’m trying to buy some stuff and you’re not making it easy for me. In fact, according to the eminent neuroscientist Richard Restack, you’re actually making it more difficult.

I only need a couple of things—a flat screen TV and a new computer. I’m interested in products that will last. I’m interested in a higher level of customer service. And I’m interested in making the proverbial “smart choice.” Price is a factor, of course, but I won’t be angling for the lowest price at the expense of those other things I want. All of this means I’m not yet ready to make a specific product decision; I’m still at a brand-decision level.

My experience is not unique. In fact, right now, I’m like most other consumers out there. Much like those other consumers, I started my research online. And, much like them, I was familiar with some brands, but didn’t know much about the products. So, naturally enough, I was hoping that those brands’ Web sites would help me. They didn’t.

In his book Mozart’s Brain and the Fighter Pilot, Restack explains that too much conscious attention—thinking too hard, if you will—actually decreases accuracy and efficiency in decision making. And in this sea of sameness we call today’s marketplace, thinking too hard is generally the only option we have.
But it doesn’t have to be this way. Marketers have the power to help us simplify decisions. They can help reduce the need to think too hard by communicating the core beliefs of a brand so that we can just let the emotional parts of our brains guide our decisions. I figured, I’d just find a brand with which I connected emotionally and then I’d simply pick which of its products I wanted. That would have worked if the marketing did it’s job properly.

I started with the computers. I went to the home pages of four major PC manufacturers, but all I found were the same, empty pitches: “Weekend savings,” “Slim, sleek design,” and “save up to 15%” What did any of these tell me about what the brand stood for or believed in? My brain starting to hurt.  Without so much as an inspiring tagline, I moved on to the TVs.

Sadly, it didn’t get much better. Sony assured me that it had Sony Style—whatever that is. Samsung invited me to “imagine living in the world of tomorrow now.” You mean the world in which marketing makes life simpler? Then came Philips whose “sense and simplicity” message was appealing for obvious reasons.  That was until I got a little further down the page to a little tutorial designed to help me: “Two sheets of polarized transparent material, one with a special polymer coating that holds liquid crystals, are adhered together. Electric current is passed through individual crystals, which interpret the information from the broadcast signal to allow or disallow light through them to create an image.” Thanks Philips, that was simple…if I had a PhD in electrical engineering.

None the wiser, I abandoned my search and decided, instead, to look into why modern ad agencies are forcing everybody to think too hard. Ironically, this answer was easy to find. All I had to do was hit the agencies’ Web sites.

Ogilvy said it was a firm “defined by their devotion to brands.” (As opposed to other firms, I suppose, that are not devoted to brands.) JWT “creates ideas for [their] clients that people want to spend time with”—a noble idea, even if a complete grammatical abortion. “We’re a factory,” said Crispin Porter + Bogusky. “A factory that makes advertising.” (Which actually sums up the problem of advertising today – it’s all the same). EuroRSCG’s site wasn’t working at all—unless, that is, a white screen with “Directory Listing Denied…” was meant to help differentiate them.

To make intelligent product choices, consumers want to know what a brand stands for. But brands have little hope conveying that message if the agencies they have to choose from can’t convey what they stand for. So, as I said, if any agency people are reading this, I need a favor—and it’s the same favor that consumers need, too: Up the quality of your game, so you can help your clients better serve their customers.

P.S.—I bought a Mac.

This piece was originally published in the April 28th, 2008 issue of BrandWeek.

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