1. Sven: What are currently the most exciting markets & developments for you?
Oli: In this marketing context, digitisation in commerce: The shift from brick n mortar sales to omni-platform and marketplace commerce. Marketplaces are part of the retail DNA. Digitisation must become part of the culture, too. Germany has recently lost over 50 places in an international ranking of digitisation. Even for pure (online) players it will take still a while before standard customer, data and product-related processes can be used completely digitally or even automised. Sustainability becomes a top issue: Customers and employees recognise that profit maximisation cannot be the only purpose of our society. Everything is networked. Patagonia is a thought leader here, North Face recently stopped investing in facebook for ethical reasons. Small brands like Armed Angels, ChocolateandLove, La Louve, purewaste do good and give back.
2. Sven: Should brand and performance be clearly separated?
Oli: Marketing and performance don’t pursue a self-purpose, they are both means to the same end: Customer and sales growth. Customers’ purchase decisions usually go through several loops. Brand and performance are effective when both are centered on the same potential buyer segments. Messages need to be orchestrated along the various experience touchpoints of the funnel. Mixed messages and gaps in the funnel allow the competition to get between your brand and “your customer”. This results in lower sales and a higher cost of acquisition, unnecessarily. It is the result of different departments acting in planet isolation: Brand runs an innovation campaign, the CRM team plays loyalty campaigns and the performance team runs various a/b “campaigns” to push special discounted offers and top sellers. This does not leave a lasting impression on the customer. Nothing sticks. Little sales.
Brand and performance can be operated in separate departments of course, but they need to be aligned, when and where the baton is handed over. Brand marketing focuses on visibility, reputation or creating demand, whereas performance deals with data and conversion of the low hanging fruits (grown by marketing). We helped a national shoe retailer to find one “big organising idea”, that synchronises brand with performance, trains sales clerks, and translates in POS marketing. The principle was simple: Sell the shoe the customer wants plus one idea. That could be an alternative like a sneaker vs an office shoe or accessories – the sales clerk decides. Videos, posters, newsletter, web shop and clerks followed this approach and used the same messages. If all speak with one voice (the voice of an empowered sales clerk), the retailer has a bigger chance in winning and keeping customers – each contact, adapted to the occasion and customer segment increases emotional connect, hence probabilities to sell. We were able to increase traffic in-store and online with relatively small digital media budgets, but perfectly aligned. A great team success rewarding and encouraging for everyone as KPI figures went up higher than ever before. It needed the idea, hard work and someone to orchestrate it. Nothing else.
3. Sven: Can performance even work without brand?
Oli: Most marketing tools create a certain direct impact on its own. Performance marketing has an awareness effect and is a very good tool to start with and see where it sticks. However, with increasing competition or a high degree of innovation, performance without a strong brand depot quickly reaches a plateau at a high CPL/CPO cost – because it is not made to create a “monopol in the customers’ mind”. The emotional part of a unique selling proposition, desirability, brand trust, all that is essential for building a strong brand equity. This is the basic idea of a brand: To make products sell almost automatically. Brand and digital are the most scalable concepts and are based on a clear idea. A change in brand positioning affects tomorrow, a change in performance campaign only affects today’s sales.
Generally speaking, an integrated multi-channel marketing approach is more successful than an isolated and purely analytical single platform approach. “It’s in the mix”. Take the e-bike market: New suppliers seem to come onto the market almost every day. What is their intention? Mobility? Freedom? Sustainability? Is the eBike a replacement for existing mobility solutions or an addition? Who are the competitors? Other eBike brands? Two wheelers like bikes, eScooters, eVespas, eMotorbikes? eCars, sharing concepts? Or do I prefer to save on the eBike and buy an expensive smartphone instead?
In a nutshell: The process of the purchase decision is complex and therefore has to be played in a more differentiated way. It’s never a one-pony horse show that leads to a profitable and sustainable growth. Only a few people will invest in an eBike just with one “click” without brand trust. Before, they need an emotional brand experience. The decision of purchase is the result of good funnel work. In some areas CRM, influencer marketing or stationary trade are also important levers. Anyone who only relies on the performance horse and customer chase misses a lot.
4. Sven: What are the most common strategic mistakes? What are the reasons why companies fail in implementation?
Oli: The first strategic mistake is to start without a strategy. In many cases, the so called “strategies” are more a list of tasks, priorities, poorly aligned or actionable. In other cases there is a good strategy, but it is not well communicated and followed up to create an integrated action plan, that follows customers’ needs and is scalable.
A second potential error or risk lies in the incorrect analysis or selection of the success measurement indicators (KPIs). Big Data needs Small Data: What and why customers do something. Marketing is about changing the behaviour of customers, for example to change the brand, try a new category or increase frequency of purchase or use. Customer behaviour and judgement of brands value are based on their personal values and experiences. Often we only look at the monetary output figures and try to optimise one KPI to death like turnover, conversion and costs, which makes no sense. They are the result of various customer interactions with the brand and competitors, planned or accidently. The more “early” in the process of the funnel a brand influences a buying process, and collects soft data, such as reputation, brand trust etc., the better the chances. If a company has an awareness level of 2% and a good conversion, the focus should be on boosting awareness and make sure you differentiate on an emotional level (beyond price, product features, etc.). Take a restaurant for example: Upfront online reservations and take away orders allow to improve operational planning, so improving the online service experience and CRM to personalize it. That creates value.
The third error is “business as usual” – the tendency to fall back to old patterns, especially in moments of change, where old patterns don’t work anymore. Routine and fear of mistakes can be toxic for growth. Experiments, mistakes and a value-based learning culture are a necessary part of development.
5. Sven: Do you have examples of companies with a common strategy?
Oli: „Great companies are made from great experiences and surprising stories. Brands are their stories.“
In the end, we all act irrationally in our purchase decisions. VW and Samsung sell more products today, while Tesla and Apple have the better market evaluation for tomorrows sales. They have a convincing plan or a so called unfair advantage – their story is emotionally and seems bulletproof. They all have an integrated digital ecosystem and one internal culture across all areas, so that the processes interact seamlessly. Conflict-shy structures, thinking in boxes are a growth blocker because they hinder needed friction to evolve. The medium-sized electronics retailer Cyberport has managed to position itself as a small supplier (est. >700 million € turnover) against giants such as Amazon, Saturn, Mediamarkt and Notebooksbilliger. They follow a clear plan and culture, we helped building: Brand & performance approaches are synchronized, service processes are integrated across all platforms and right measurements are in place to react and make informed decisions. At Cyberport customers can have their Apple products repaired, even if they were purchased somewhere else. This makes people return and recommend. Products are curated to help making the right decision and not get lost in an ocean of options. Some shopper segments prefer to buy online, when they know that there is a service point nearby locally or via a personal telephone contact. The result: A very successful, sustainable growth since several years. Also during and after the lockdown in 2020, they are clear winners of the crisis. Same applies to Decathlon and Nike, which have been growing rapidly for over 10 years. Non-Stop.
6. Sven: Many companies might be deterred by the potential costs and duration of implementation. How much time does it take to design and implement a successful brand strategy?
Oli: Digitisation has accelerated the process of building brands. On one hand, it has never been easier to start a business. A business account at Instagram or Kickstarter, for example, is enough to get started. Digital platforms become user friendly for customers. They can easily find and recommend brands on Google, Facebook, Amazon, Booking, etc. or vent their disappointment. On the other hand, it has never been so difficult to stand out from the many providers and channels and become sustainably profitable. A good customer experience and innovations help to increase brand value. Today pilots can be set up very quickly using digital means. In some cities spontaneous initiatives for Covid19 were created to help digitising local f&b and product retailers within 48 hours. Sometimes it was helping to promote the stores, in other cases it was building the base, by creating a website, google business or social profile, CRM or simply helping implement digital services like reservation, payment, electronically scanable menus and delivery solutions. Retailers gain an additional sales channel and build digital brand reputation through their service, ratings or user generated image content. The example shows that it is no longer a question of company size and budget to enter the digital space. The important factors are creativity, technology and empathy to bring alive specific projects with direct benefits for customers and business. Often it is best to start a small pilot project with a small task force, and then take the learnings step by step into the big picture. With the first results, the new concept becomes more tangible and success builds confidence, that the “company” actually can evolve. This is core of my most doings. Building cases to create confidence to go the new growth path. Only if “the new” brand idea becomes part of the company’s culture, it can succeed to create customer (added) value. This requires consistent communication and an internal “guardian of consumer & innovation”. Scaling is the second step.
7. Sven: What are “must haves” in operational implementation? Which team is necessary?
Oli: In Germany there is a saying “The fish stinks from the head”, translating that brand and change have to be lived top down and require a clear plan and constant communication. At the same time, the organisation has to have the “ok” to try things bottom up and learn from mistakes and quick wins. It needs a special task force to start, a direct reporting line to the top management and external support to bring experience and expertise. Why? (1.) No one can pull his car out of the mud when he is at the wheel himself. (2.) New things don’t always work out the first time, but with outside experience, problems can quickly be turned into successes. (3.) As a leader, you got one shot and need to execute a line of strikes to gain the team’s and your clients confidence. Especially now, in our time of change, digitisation and postcovid, it becomes evident: When consumer behavior changes, the brand culture needs too. New times ask for new measures and new messages to win and keep customers (and talent).
Thanks to our readers and Sven for dealing with these interesting questions.
Stay safe. Stay strong. Enjoy your day.
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