Not paid enough?

I have always been confused why marketing is not better rewarded. They grow profits by attracting customers and increasing their long term value. Intuitively it feels good, businesses worship growth.

But there again an accountant can save the company millions by hedging against changes in exchange rate or against oil prices (although i know of one budget airline that forgot to do this) or depreciating capital equipment at a faster rate through some neat sleight of hand. Intellectually it is not very imaginative, a bit black and white. So why the big rewards?

I know some of the arguments.

Share price, short termism of the city, easier to measure the impact of savings, paid on a % of savings etc. And i am pretty sure the guy who came up with every little helps (culture not just an ad line by the way) got a whole lot less than many jobbing in the procurement department.

However given the recent activity it is clear that financial roles are far more valuable than i realised. Businesses that have not managed their cash flow, suppliers and balance sheets are going under. And clearly it must be difficult because so many who get paid so much got it badly wrong, which goes back to my first point.

Knocking the ad industry

Looks like we are still an easy target. I didn't get drawn on the 'paid handsomely' and the 'wacky'. Article below, response at the bottom.

Bernard Matthews ad is a right turkey

Richard Fletcher - Telegraph 15 Jan 09

USING your own staff in your adverts is the latest whizz of those clever admen, who are paid so handsomely to come up with "wacky" ideas.

It all started with those (rather annoying) Halifax adverts – starring Howard the cashier.

With his singing and dancing routines Howard quickly gained cult status and others inevitably followed. It has even got to the stage where actors pretend to be real staff.

One of the last to jump on the bandwagon is Bernard Matthews.

As part of its rebranding (following that rather unfortunate bird flu incident) its own staff starred in Bernard Matthews' adverts – holding up handmade signs expressing how proud they were to work for the company.

Let's just hope that none of the "stars" are among the 130 redundancies announced yesterday. Somehow I doubt those clever ad guys factored that possibility in when they pitched the idea.

Read the piece on Bernard Matthews, an interesting perspective. And in the interests of disclosure, I don't work for the ad agency or Bernard Matthews, nor expect to do so in the near future. I am not related to Bernard either.

You would like to think that the possibility of staff redundancy had occurred to team Bernard Matthews. It would certainly have occurred to the admen, there are too many stories about what can go wrong when you turn staff into media stars.

But two points. One. The ad is clearly about product quality not staff commitment, this must have been a blessed relieve given recent history. As you suggest Bird Flu is hardly likely to be a source of competitive advantage.

Two. Clever admen, you are joking. No we are not. All we do is give advice and consultancy on marketing strategy, branding, pricing, service, customer management, marketing optimisation but only get paid for the production of the advertising, then get picked on by journalists. If you do it again i am going to become a banker.

When communications is just not enough

Imagine a time when marketing department headcounts are drastically reduced. The head of marketing turns to a consultant who brings in a few experts. They help with a bit of strategy, some research, the brand values, PR, the database and a bit of customer retention. The client loves it because he is in control of costs, limited overheads. He gets the expertise and people who do or will understand his business very well. And importantly their ambitions are aligned to his, no one to say behind his back to what extent he has got it all wrong.

And then when it all picks up, which it will i am just not sure about the timing, this team helps him run pitches for advertising projects, direct mail, web build. The purist communications agencies fighting it out on a project by project basis, best one wins.

Ouch.

But there again it sounds like a really interesting agency model.

Measuring advertising effectiveness

It's tricky.

But clients don't (want to) belive you.

Then some consultant comes in with a econometric model built with half a data set, lots of dummy variables or worse than that neural networks completely confusing cause and effect. The outrage.

Anyway nice when someone like Stephen Levitt (Freakonomics) says it is difficult, and it is on film, and it is funny so you can show it to someone without hammering the point home.

http://linkbee.com/3KH

If you don't want to watch it all, watch the 5 minutes 15 minutes in.

Pepperoni power - The best piece of marketing ever

I reckon it's Pizza Express.

a) the kids get a crayon set when they go there
b) i think i am getting a bargain with the kids menu so i am happy to spend a bit more on me.
c) at 10am during the week they invite school kids in, 30 of them, to make Pizzas. They (the kids) then tell their parents how to make Pizzas. And now every time we go past the restaurant they point out the 'Pizza Shop'. It's pepperoni power. No advertising required.

Clearly PE know their market, they price it accordingly (very of the moment), get the product and experience right. In marketing terms it sounds very old fashioned, a bit 4Ps.

I'm a fan.

Dusting down our customer retention models?

Are we going to see the return of the retention focussed consultancy?

We are already seeing clients with limited resources and a need to show immediate returns on investment so a campaign to retain, win-back and save customers could be an easy sell in, especially if you can utilise email.

Reinvigorating Brand Santa

Santa has won the hearts and minds of his customers. But growth is fuelled by population expansion, retention rates are average at best. The customer relationship starts round year three and fades year 7 to year 9.

Santa is privately owned so there is no financial reporting requirement. The business model is hazy; it is not clear how Santa makes its money. To grow the business you require cashflow or substantial capital. Property lease back is a non starter; they only seem to have seasonal concessions within a variety of retail outlets. Lapland HQ is not practical for other businesses of this scale. Opportunity cost of these assets would seem to be close to zero.

The solution to turning Santa around must lie on the revenue side of the equation. Here are our recommendations.

1. Santa, St Nicholas, Father Christmas, Papai Noel, Babbo Natale – the different names dilute the brand. Choose one name and stick to it. It worked for Snickers. Whilst a name that resonates with the Chinese market is tempting we feel an English name provides the greatest global reach. SantaServices gives you brand stretch.

2. Create added value services e.g. charge for different delivery options, delivering on Christmas Day should be the premium not the standard service. Charge for returns? Provide warranties? It estimated that 15% of presents are damaged on Christmas Day.

3. Merchandise yourself e.g. replica kits for children; think laterally! What would be the equivalent of the soccer away strip? What about a light suit for hotter climates. Don’t be a slave to red.

4. Investigate sponsorship opportunities. Formula 1 would offer the best benchmark. Look for brand synergies, but obviously avoid competitors like DHL, red letters days unless there is a clear income opportunity.

5. Branding. Make sure santaservices.com is on all packaging and clothing. “This present was bought you to by Santaservices.com”.

6. Embrace digital. Letters posted up chimneys is a nice touch but difficult to believe it is practical. How do you manage surges in activity? And of course it doesn’t feel very 21cn. Email has to be the way forward. Make the website work harder, a personalised web experience is essential. And of course this year we are expecting mobile technologies to take off so integrating SMS is a must.

7. Brand experience days help your best customers embrace the brand. It is probably Pizza Express No.1 marketing activity.

8. Business is over-reliant on one man; no one is going to invest in a business without a clear accession plan. Consider an X-Santa factor show.

9. Give Mrs Santa more of a role cf Cameron and Brown. Older men into children can be perceived as unusual e.g. Michael Jackson.

10. One day a year! Enormous opportunity even if we don’t go 24x7x365. Of course it is possible more frequent Christmases may be difficult to market but the core competence is distribution and logistics. Look to provide corporate outsourcing solutions.

11. Develop retention program for teenage into adult years, you know all about random acts of kindness. Put the Christmas back into CRM.

12. Appearance is everything. Looking that comfortable in the present climate does not seem appropriate. Even Puff daddy is forgoing bling in concession to the crunch. Obesity and children is a hot topic. Think about going on TV with Gok or Gillian Mckeith.

And finally, don’t get pissed in public and learn to dance Salsa.

Please feel free to add advice, Santa does read every comment. In the next few weeks we will be discussing God, Germany and WH Smiths.