This week’s top 3 growth articles

11 08 2013

This week’s growth articles help you to:

  • Build an army of loyal customers without paying a fortune to acquire them
  • Improve customer retention by rethinking your acquisition strategy
  • Find ways to get your new ideas to spread (without spoiling the surprise its all about people!)

Building an army of loyal customers

Huge customer loyalty doesn’t need big budgets, just a genuine commitment to create something customers want to be part of. Community site Gentlemint demonstrates that you can swiftly build an insanely loyal community simply by putting your customers first.

How Gentlemint Built a Loyal Customer Base on a $0 Marketing Budget – Glen Stansberry, OpenForum.com

Improving customer retention

Customer acquisition and customer retention are intrinsically linked, and hence customer loyalty is developed or destroyed from the very first interaction. So to improve customer retention, organisations need to ensure their marketing sets expectations that match the typical customer experience, and that the marketing only targets those consumers who will value these experiences.

Customer loyalty should never be your only goal – Don Peppers, LinkedIn blog

Finding ways to spread ideas

Changing people’s behaviour requires more than logic or a good idea. New solutions need to solve visible problems, and need to provide a direct benefit to the people who’s behaviours you’re seeking to change. This is a long but fascinating article about how medical breakthroughs have spread at very different speeds.

Slow ideas – Atul Gawande, newyorker.com

Price v Value

And the quote for the week reflects the role of pricing in the customer value proposition…

“If you tell me that price is the only thing that matters to customers, I’ll respond that nothing about this product matters to them” Seth Godin, Purple Cows & Commodities





3 tips for being a successful customer centric organisation

29 06 2013

The three rules at the heart of customer centric growth for O2 in Slovakia, are equally relevant to developing high performing NGBs.

At this week’s Marketing Week Live, Jonathan Earle from Telefonica O2 shared three rules upon which O2 have built their success in Slovakia. These are:

1) Stand for something
2) Be consistent
3) Trust your people

Given they’ve taken nearly a quarter of the market share on a shoestring budget, and boast very high staff & customer engagement scores, its worth considering how their success could be applied to growing sports participation.

1) Stand for something – be distinctive
What this means: use market and consumer insight to define a clear and distinctive position within the market. Brands that target everybody end up being relevant to nobody, as one size rarely fits all. So instead focus on creating offers and experiences that are aligned to your brand and are relevant to your target market.

What O2 did: O2 choose to shake up the market by being the “fair operator”, and hence don’t make offers that their target customers would think are unfair. They don’t make anyone sign a contract, when they say unlimited there’s no “but…” in the small print, and if they create a more competitive offer for new customers they automatically extend it to existing customers (not when they ask for it, or threaten to leave, but automatically – otherwise its not fair!).

What NGBs could do: standing for something requires understanding the current market for delivering sport and also the wider needs and expectations of target customers. Understanding the customer’s decision making process when they choose sport, and then specific sports within that, is key to defining a position that will be more compelling than the alternatives (which are usually not sports-related). Of course being distinctive and standing for something takes courage. It means choosing not to stand for some other things, and hence not trying to be relevant to everybody. But that’s how growth and customer loyalty is created – by focusing on being the most relevant and compelling choice for your target market.

2) Be consistent – disciplined execution
What this means: Having chosen to stand for something distinctive, maintain this clear water through being very disciplined about communications and delivery. Consistent communications keep reinforcing the key message to stakeholders and customers. Consistent decisions and delivery reinforce the authenticity of the message through the experience of customers. It’s this consistency that creates brand advocates.

What O2 did: A ruthless focus on consistent messages, offers, and in-store experiences has made the brand experience authentic and compelling rather than just a strap line. This includes considering how staff need to be managed and rewarded so that they too feel that O2 is the “fair operator”. Interestingly, in this respect Earle sees their small budget as an advantage, as they can’t afford to be tactical or distracted by unplanned opportunities.

What NGBs could do: the mixed economy of delivery in most sports involves many organisations with different priorities. NGBs need to clearly communicate how their offers add value to their target customers. They also need to be very clear about what aspects of their products and communications are customisable to local needs and what aspects are non-negotiable.

3) Trust your people – give them room to breath

What this means: being customer focused requires agility and responsiveness to customers. This agility comes from empowering staff to take responsibility and make decisions when talking with customers. This agility can be achieved by shifting budget and/or decision-making responsibility locally, and combining it with a consistent approach to communications and measurement. The motto is clearly define expectations and boundaries, then get out of their way.

What O2 did: O2 believe that their people are the experts, and don’t want them bogged down by bureaucracy. So they “treat their people like adults”, giving them clear and consistent direction and then passing down the responsibility for achieving that.

What NGBs could do: many NGBs are good at empowering local staff to make decisions and even to manage budgets. However, in many cases this empowerment is not supported by clear communication of the chosen positioning and/or success measures aren’t consistent and aligned to the overall outcomes.

In summary, one size doesn’t fit all, and therefore every brand needs to stand for something that is relevant and compelling to its chosen target audience. To achieve scale organisations must then be very disciplined in how they execute across all of their touch points. This consistency of experience comes from treating staff the same way that customers are treated, which means they must be trusted to make the right decisions.





Nike’s growth fuelled by deep customer insight

2 03 2013

This week Nike announced it was committing $50m to Michelle Obama’s campaign to get American kids more active, citing the high social costs of the “inactivity epidemic”. This commitment is just the latest example of the lesson Nike learned many years ago – to sustain growth, they must be customer-led not product-led. And when you consider they announced double digit revenue growth in December and Fast Company voted them the most innovative company in the world thanks to recent product and manufacturing innovations, you realise just how customer-focused Nike must be!

Losing sight of customer needs & market trends

In the mid 1980s, Nike’s growth stalled on the back of a failed brand extension into casual shoes. Despite Nike being a trendy brand, and casual shoes being a growth market, they failed to grab significant market share. According to founder Phil Knight, the problem was Nike had lost sight of who their customers really were. Their target market had always been performance athletes, reflecting their heritage in the legends of Bill Bowerman and Steve ‘Pre’ Prefontaine. Since Bowerman invented the waffle sole by pouring rubber into a waffle maker, Nike have been at the forefront of product innovation in every category they play in. In entering a new market, Nike took the same approach and produced “a functional shoe we thought the world needed, but it was funny looking and the buying public didn’t want it”.

Why this happened is a warning to sports organisations that’s as relevant now as it was when Phil Knight originally gave it. “In the early days, when we were just a running shoe company and almost all our employees were runners, we understood the consumer very well. There is no shoe school, so where do you recruit people for a company that develops and markets running shoes? The running track. It made sense, and it worked. We and the consumer were one and the same. When we started making shoes for basketball, tennis, and football, we did essentially the same thing we had done in running.”

Eventually this one-dimensional approach to customer insight became a weakness. “We were missing an immense group. We understood our “core consumers,” the athletes who were performing at the highest level of the sport. We saw them as being at the top of a pyramid, with weekend jocks in the middle of the pyramid, and everybody else who wore athletic shoes at the bottom. Even though about 60% of our product is bought by people who don’t use it for the actual sport, everything we did was aimed at the top. We said, if we get the people at the top, we’ll get the others because they’ll know that the shoe can perform. But that was an oversimplification. Sure, it’s important to get the top of the pyramid, but you’ve also got to speak to the people all the way down.”

Becoming genuinely customer-led

So what’s different now Nike are customer-led rather than product-led? Knight continues “whether you’re talking about the core consumer or the person on the street, the principle is the same: you have to come up with what the consumer wants, and you need a vehicle to understand it. To understand the rest of the pyramid, we do a lot of work at the grass-roots level. We go to amateur sports events and spend time at gyms and tennis courts talking to people.”

Within this story are several keys to organisations being genuinely customer-led

  • Be wary of using staff as a proxy for the needs of the customer, as this becomes potentially limiting if/when the actual customer base diversifies beyond the core customers
  • To understand customers, get out to where they are buying/using the products and services you provide – see how they use it, and listen to how they would improve it
  • To achieve scale, design products and services based on the common needs across target customer groups, rather than focusing on the differences between them.
  • Changing the focus from creating products to delivering solutions (as discussed in this recent post on ‘Re-evaluating the 4Ps of marketing for sport’)

In this context, Nike’s announcement of combining social responsibility with business growth makes good sense. Nike knows what’s important to their customers both now (a company that takes social responsibility seriously) and in the future (active and sports-aware kids will become the target customers of the future). It’s not just their innovation department that is thinking several steps beyond the current product line.

To read more about customer-led growth, click here





Re-evaluating the 4 Ps of marketing for sport

10 02 2013

This month’s HBR magazine has an interesting article about rethinking the classic 4 Ps for B2B marketing. Instead of Product, Place, Price and Promotion, the authors propose Solution, Access, Value and Education. As NGBs are largely in the B2B space, rather than B2C, the article has some interesting ideas for sport’s governing bodies.

Instead of PRODUCT focus on SOLUTION
HBR – Define offerings by the needs they meet, not by their features, functions, or technological superiority.

Relevance to NGBs – as NGBs become more customer-focused in their planning and delivery, they are moving from just developing new products to providing the supporting services and experiences that collectively deliver benefits that meet customer needs. Central to this evolution is a deep understanding of their customer’s needs, influences and behaviours, as this enables them to clearly identify solutions that meet the specific needs of their target customers.

Instead of PLACE focus on ACCESS
HBR – Develop an integrated cross-channel presence that considers customers’ entire purchase journey instead of emphasising individual purchase locations and channels.

Relevance to NGBs – it’s often tempting to think about participants in just one place, whether its as a member of one club or on the end of one email address. In reality participants increasingly want choice and flexibility in how they engage with a sport, just as they do with many other brands. Therefore the modern NGB business model needs to consider who its target customers are, what kind of relationship the NGB wants to have with those customers, and who their key partners need to be to provide the range of access those customers want. These partners will include those offering local delivery options and/or online connections.

Instead of PRICE, focus on VALUE
HBR – Articulate the benefits relative to price, rather than stressing how price relates to production costs, profit margins, or competitors’ prices.

Relevance to NGBs – pricing is a common topic within sport, usually in the context of demands for programmes/sessions to be cheaper or free. To be able to achieve scalable growth, the conversation needs to turn to the value sport provides, as many of the competitors for people’s time have a higher price but still offer better/more relevant value. For example, how does the value of the hour of sporting experience you provide compare with the price of a coffee or a trip to the cinema?

Instead of PROMOTION focus on EDUCATION
HBR – Provide information relevant to customers’ specific needs at each point in the purchase cycle, rather than relying on advertising, PR, and personal selling that covers the waterfront.

Relevance to NGBs – in thinking about “grow” & “sustain” plans it can be easy to forget that most participants don’t quickly commit to a sport for the long-term. Therefore promoting the value and accessibility of the solutions a sport offers, needs to be an on-going process for retaining and growing customer engagement. This education can extend beyond where to play and why it’s adding value, to include information about the participation itself. Nike have already demonstrated that the cross-industry consumer trend for accessing and using personal consumption data can be harnessed as a powerful motivator of participation.





Sports Marketing 2.0 – when being a regular fan is not enough

23 07 2009

Ok, so you’re a fan, but are you a citizen?

This is the question asked by the Phoenix Suns NBA team, who are doing some intersting things to build a tribe through social media. The question is on a banner that advertises PlanetOrange.net, “a social network built just for real fans” (their emphasis).

Planet Orange includes a live twitter stream from 25 Suns staff, including the mascot (“who can’t speak but can type”) and Shaquille O’Neal. Shaq is regularly interacting with fans through twitter. So much so, that the Suns threw him a virtual birthday party where fans were encouraged to create a happy birthday video and send the link to him via twitter.

Back at Planet Orange, fans are encouraged to register as citizens, create blogs, join groups and share audio, video and photos. These include Fan Art – mashups of photos and drawing that other fans can share and use. And if all this isn’t enough engagement for the real fans, the Suns also have a Facebook fan site where citizens can share more comments and media with over 46,000 other facebook citizens.

At the centre of the Suns social media campaign is Amy Martin, aka PhoenixSunsGirl, seen here being interviewed on the Suns own TV channel.

While it’s easier to think of sports teams than businesses having fans, this level of customer engagement (Shaq has over 1.5m followers on Twitter) must have some insights for organisations in other industries. What type of content would  an airline or retail store need to share, in order to get real customers wanting to sign up and become flag-bearing citizens of their brand?





Why are vodafone charging customers to remain loyal?

14 07 2009

I visited my local vodafone store today, to ask about getting an iphone. However, despite being a vodafone customer for nearly 2 years, it’s not as simple as signing a contract extension and paying for the phone. Instead, they wanted to charge me “between $150 and $400” for the privilege of signing up for a longer and more expensive contract.

Charging customers who want to commit to a longer relationship at a higher price, seems a strange strategy. Banks have tried it with mortgages, but the fee is usually compensation for locking in a lower interest rate. Meanwhile local energy companies are falling over themselves to offer customers money to stay or return.

The language vodafone are using reflects the penalty for ‘breaking a contract’, not the benefits of extending a relationship. In contrast, airlines will let customers change a ticket (their contract) for free on most non-budget fares, and they have limited capacity to juggle. And could you image the reaction if a marketer at Sky TV suggested charging customers a break fee to upgrade their package with new channels..?

The point that vodafone appear to be missing, is that customers aren’t lining up outside stores to get the vodafone experience; they’re lining up to get the iphone experience. And until now vodafone were the monopoly that could provide it, and their pricing and in-store attitude reflected it.

But that’s starting to change. Apple New Zealand now sell the iphone online, for $50 less. And Telecom have launched a guerrilla marketing campaign to encourage customers to buy an iphone and then defect. They’re offering a $600 account credit – enough to cover the break fees – and the prospect of the iphone 3GS working at full speed nationwide (apparently the vodafone network drops to GPRS outside urban areas, and inside our building).

So what will stop customers defecting? According to the vodafone spokeman quoted in the NBR article, it won’t be a problem because tethering on the XT Network would be very expensive by comparison. But I have to wonder who sees tethering as a ‘killer app’? The customer wanting access to the mobile internet, or the mobile companies wanting to sell larger data plans?

I’m told I’m geekier than the average person, yet I’ve never once tried to tether my laptop to my phone. For a start, it takes to long to load the pages. So I’m confident that most people buying the iphone, are buying it for experiences other than tethering. And all those experiences are available on any mobile network, at a wi-fi hotspot and even on a plane.

As a consumer, I’m looking forward to watching the competition, and hopefully seeing some price innovation to match the Australian market.





AirNZ’s ‘bare essentials’ ad campaign becomes an in-flight experience

7 07 2009

Something wonderfully strange has happened to Air New Zealand – they’ve developed a personality! Following hot on the heels of their nothing to hide ads, comes their bare essentials in-flight safety briefing. I often rave about VirginBlue adding personality to their safety briefings, but AirNZ have successfully stripped away almost everything except the personality!

This is a great example of brand authenticity. They’ve taken what is already a catchy ad campaign and embeded it into their service proposition. The behind the scenes video shows how the campaign has engaged the brave staff in the ad, and my experience last weekend confirmed it (minus the body paint). The staff on my flight from Auckland seemed to be having more fun, the announcements felt less scripted, and they were giving out double helpings of cookies/lollie mix as standard (always a winner for me).

The customers are getting in on the act too, with a website to let them confess their own ‘nothing to hide’ stories. Putting the advert, safety video and bloopers on YouTube has added to the buzz, with overseas media like the NY Times and Daily Telegraph sharing the story.

The outcome has been game-changing. Airlines regularly struggle to get even a captive audience to watch the safety briefings. Yet AirNZ have already gained  3.5 million armchair viewers! Now that’s world-class thinking!








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