Monthly Archives: February 2009

Off the Marketing Richter Scale

Man, what a month in Marketing land.

First, you have one of the largest Ad Agencies in the world admitting their business model is broken, because agencies are not in charge of the fundamentals of Branding – service, innovation, engagement, and execution.  I would add the same thing could often be said of the client side; MarCom people spend way too much time on “Com” and not enough on “Mar” – is it time for a realignment?

Then, in an even more spectacularly unexpected move, you have C-Level folks at 2 gargantuan Advertising Agencies (though both part of WPP) co-writing an article declaring that Brand and Response are the Same.  Here’s the opener: “the value that brands bring to a company’s total business value is exaggerated.”

Holy Branding Batman, that’s one heck of a thing to say for an Ad Agency, know what I mean?  But they are absolutely right, the nature of a Brand has changed, this ain’t the 1960’s.

This is how they get to “the singularity”:

“What was once sales is now enhancing the brand expe­rience, because through direct marketing technology and strategies, a brand can reinforce its ability to listen, customize and learn from the consumer. This is not just direct marketing, its direct engagement with every potential customer, sometimes at the moment they’re introduced to the brand.  In fact, in a world of compressed consumer decision-making, direct response is now a potent form of brand­ing.”

I love it when you talk that way.

Let’s be clear on this.

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Sales or Profits?

Seems the previous post (Best Seller Gone Bad) really hit home for people; perhaps we should drill into  this a bit.  So:

1.  Is the impact of your work evaluated against Sales or Profits?  (example)

2.  Do you think this evaluation approach is correct for your job and company?  Why? 

3.  Would you change this evaluation method if you could?

4.  What is holding you back from trying to make this change?

Personally, I always choose Profits if I can; the leverage is so much higher than Sales.  It’s much easier to generate $5 in Profits than $5 in Sales for any given $1 in budget, because there is generally so much waste in the Marketing system.

Update: OK, how about answering this question – when your work performance is evaluated, what percentage of this measurement is based on qualitative factors?  quantitative factors?

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Best Seller Gone Bad

Electronic keyboards were expensive in the 80’s and early 90’s, especially good ones.  Then came Casio, and the whole business changed.  At HSN, we loved the electronic keyboard business.

The category was made for TV shopping – the demonstrations were killer, and with all the new-fangled automation on board, “anybody can play the keyboard”.  In HSN language, “keyboards screamed” and you always got a call center “whoosh” – the sound you hear when inbound calls ramp from 100 to 1000 in 30 seconds.

So I’m talking with the keys merchant, and he says they’re having a supply disruption, and there will be challenges keeping the keys in stock because they sell so well.  This is a problem for me, because I’m publishing the monthly customer (offline) magazine and we’ve got some layouts and articles on the product.

I ask for a simple merchandising run on the SKUs to get a feeling for product in pipeline, to see if maybe I have to kill the spread.  We’ve sold 45,000 of the little beggars, which is pretty good for (what was then) a $500+ item.  It averages about $1,000 a minute in Margin, which is great versus network overhead cost of $300 per minute.

Problem is, we’ve only ever purchased 17,000 of them.

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