As we closed the year 2013, I have rounded up the ten most read articles of 2013 by my readers. The following ten articles captured the most attention. See them all below in descending order. Your views are always encouraged.
THANK YOU for your readership and look forward to feeding your mind with much more business food for thought which can be applied for timely results.
Filed under 1, account management, B2B sales, Branding, branding not products, brands with sex appeal, Business, business development, business model, business plan, Business success, catering to picly clients, customer service, description of fashion, description of luxury, description of premium, discerning clients, discriminating clients, entrepreneur, entrepreneurship, entrepreneurship success, leadership, Luxury, luxury storytelling, management, Marketing, sales, sales strategies, selling luxury, sensuous brands, sexy brands, starting a business success, stimulating brands, what is fashion, what is luxury, what is premium
“An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success.”
─ Stephen R. Covey
“No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.”
─ Peter Drucker
“Hire people, who are better than you are, then leave them to get on with it. Look for people who will aim for the remarkable, who will not settle for the routine.”
─ David Ogilvy
“Be willing to make decisions. That’s the most important quality in a good leader. Don’t fall victim to what I call the ‘ready-aim-aim-aim-aim syndrome’. You must be willing to fire.”
─ T. Boone Pickens
“You will never understand bureaucracies until you understand that for bureaucrats, procedure is everything and outcomes are nothing.”
─ Thomas Sowell
“If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don’t have to manage them.”
─ Jack Welch
“What’s a brand? A singular idea or concept that you own inside the mind of the prospect.”
─ Al Ries
“Improving your brand is an investment in building your personal profile, reputation and the results you will achieve.”
─ Rachel Quilty
“If you don’t get noticed, you don’t have anything. You just have to be noticed, but the art is in getting noticed naturally, without screaming or without tricks.”
– Leo Burnett
“You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.”
─ Jerry Fritz
“People don’t want to communicate with an organization or a computer. They want to talk to a real, live, responsive, responsible person who will listen and help them get satisfaction.”
─ Theo Michelson
“Design is the method of putting form and content together. Design, just as art, has multiple definitions; there is no single definition. Design can be art. Design can be aesthetics. Design is so simple, that’s why it is so complicated.”
─ Paul Rand
“During a political campaign everyone is concerned with what a candidate will do on this or that question if he is elected except the candidate; he’s too busy wondering what he’ll do if he isn’t elected.”
─ Everett Dirksen
“Effective communication is 20% what you know and 80% how you feel about what you know.”
─ Jim Rohn
“The quality of life is determined by its activities.”
─ Aristotle
Delirious, confused and frustrated are merely three terms which best describe what clients typically experience when dealing with many customer support representatives. Excellent customer service is a crucial component of your business image and philosophy. Regardless of how good your products and prices are, if you can’t offer a positive experience for your customers, they will likely not return. Moreover, you can be certain they will spread negative word-of-mouth. With social media so prevalent, a brand’s reputation can eventually take a nose dive. Today, customers are more demanding than ever. They want to know their issues are genuinely acknowledged and demand timely results. Simply apologizing to them does not suffice.
Do head honchos get it?
Much is touted by companies about customer satisfaction but surprisingly only a few actually deliver on their promises. Prominent brands are not immune either. At the outset, it appears that many lack a vital customer relations policy. Inadequate staff training amongst other factors further aggravates the problem. Picking up the telephone and calling certain companies, for example, can sometimes lead to an exasperating experience. People love to hate the phone tree experience where you have to go through a maze of menus until you eventually get to speak to a human – assuming you’re lucky. It shouldn’t have to be that way.
The executives who are is in charge of finance and operations respectively (consider the CFO and COO) are mainly focusing on costs and productivity even to the detriment of the average customer. Consequently, they will measure the calls answered per minute – regardless of the outcome. In contrast, a customer focused executive will reward those who take their time to listen, engage and solve customer issues.
Deliberate bad customer experience
Sadly, some brands have a built-in mechanism to test their systems with some clients in the hopes they will give in which in the short term will not entail refunds or product returns which can hurt bottom lines. However, this approach is quite short sighted with long term negative consequences. Those companies use their seemingly discounted prices to lure customers but their real business model seems to be in tricking customers with inaccurate payment information and then charging extra for any delayed payment amongst other inconveniences and unpleasant surprises along the way. Many gym memberships and website hosting service organizations are notorious for such trickery. Their hope is that through a lack of awareness, or constant frustration an average customer will simply cave in. This ultimately backfires with constant negative consumer publicity and an unusually excessive business turnover. Most modern consumers are too sophisticated to relinquish their rights to fair treatment. Companies may ignore this syndrome claiming it’s a ‘numbers game’, as well as a cost of doing business. Though, in the process, they also corrupt their front line staff who have to address an abnormal rate of legitimate grievances.
Marketing maven and best-selling author, Seth Godin rationalizes it this way:
“Unfortunately, just about all big customer service organizations do this precisely backward. They don’t escalate to a supervisor or roll out the kindness carpet until after someone has gone to Defcon 4. They decide that it’s too expensive to be flexible, to listen or to treat people fairly, and they wait until the costs to both sides are really high, and then they give an empowered person a chance to solve the problem. There’s huge waste here, as the problem costs more to solve at this point, and the unseen challenge is that they’ve established a cycle in which umbrage is the rewarded behavior.”
The customer centric organization: solving issues before they occur
Going above and beyond customer expectations is focusing on customer centricity. It begins by developing, implementing and continuously delivering a total positive customer experience at every touch point and beyond. The costs and benefits of this practice are equally beneficial for the customers and the business. A University of Michigan study revealed that companies which received high scores in the American Customer Satisfaction Index (ASCI) consistently outperform the S&P 500. Those companies include Walt Disney and Amazon, amongst others. Those are most certainly organizations that focus on quality over quantity and measure what truly make them remarkable.
The after sales service department should be designed with an efficient infrastructure in place so as to make the entire experience an effortless task for both the customers and employees who are assigned with the responsibility. It should be easy for the client to reach a customer service agent and/or online agent to chat with. Moreover, the client should not have to be placed on hold for more than 5 minutes. Whenever the wait is more than two minutes, there should be an option to offer a simple way to be called back. The organization’s mindset should be to constantly think of ways to release tensions and give solutions to the client promptly.
Since many of the inbound calls normally concern frequently asked questions, why not have them prominently displayed on the website and/or printed on the product insert. Having them recorded as an option on your phone line, in a clear English voice (and second or even third most popular language relevant to the region’s business demographics), can eliminate unnecessary calls and waiting times with a live person.
Staff tasked with customer service should:
There is no better example to illustrate this than online shoe retailer Zappos.
What customers get to see displayed prominently on the web site:
– 24/7 1-800 number on every page
– Free shipping
– Free return shipping
– 365-day return policy
What customers will experience:
– Fast, accurate fulfillment
– Most customers are “surprise”-upgraded to overnight shipping
– Creating a “WOW” factor
– Friendly, helpful “above and beyond” customer service
– Occasionally direct customers to competitors’ web sites
What’s done behind the scenes?
– No call times, no sales-based performance goals for representatives
– The telephone is considered for them one of the best branding devices available.
– Run warehouse 24/7. Inventory all products (no drop-shipping).
– Five weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas office.
– A Culture Book
– Interviews & performance reviews are 50% based on core values and culture fit.
Putting it all together
Within every organization, decision making drives performance. Every day, employees at work make decisions that impact performance. These decisions, at every level of the organization, including customer service policies and tactics, define the corporate culture and drive performance.
It’s important to keep in consideration that measuring customer satisfaction is a way to assess its effectiveness, and refine what’s necessary along the way. This is performed by evaluating communication at your help desk or and/or call centers, as well as conducting surveys or sending out brief questionnaires soon after a call has been consummated. How satisfied were your customers with the level of service they received and will they do business with you again in addition to recommending you to others?
Customers are not concerned about your operational problems, your costs and margins, your lead times, your staff shortages, and much more. They are only interested in themselves and the benefits they may be able to obtain from your business instead of the one down the street, or the other ones found over the internet.
Thus, a priority need for every (selfish) customer or prospective buyer is timely and personal service.
Bill Marriot said it succinctly with “Take good care of your employees and they’ll take good care of the customer—and the customer will come back.”
This management philosophy isn’t common but it is shared by both Southwest and Costco. When using either company you can experience it as employees are generally in a great mood, and in turn, happy to help.
Customer centricity should be everyone’s job in an organization. It’s to be embedded in the internal culture. It begins with the top leadership and permeates through the entire organization. Implementation of new and refined strategies and tactics equate to daily and long-term success in building profitable customer relationships. Been helpful with your customers, even if there’s no immediate profit in it, is simply a good business practice with pragmatic thinking for the long-haul.
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By James D. Roumeliotis — Complimentary topic from the book “Entrepreneurial Essentials: Unconventional Business Wisdom & Bold Tactics”
I had a striking and might I dare say, haunting thought that continues to stick with me. Twelve years ago, I met a girlfriend through a dating site. Yes, I know this is not unusual. However, she once remarked that I marketed myself online like I was a (human) “product.” Through that pleasant conversation, I wasn’t certain if this was to be construed as a compliment or a criticism. Although my intent was not deliberate, I now understood the power of personal branding.
Today, personal branding is ubiquitous and an essential part of professional and non-professional activism. It isn’t different from product branding and relies on the same critical and analytical eye and criteria to float the “product” in the market. The only difference is that the product in question is “you.”
For example, if you are in the job market, the commodity you are selling is “you”. This also applies if you are seeking a promotion within your organization or whether you’re selling/categorizing yourself as the ideal independent consultant or political candidate respectively. The motives can be one or several.
The Brand Called “(Place your full name here)”
No matter what your name is or who you are, you are engaged in selling an image you wish to portray to a targeted audience. Joe McGinnis in his cutting edge book “The Selling of the President” showed how this could be done effectively. The book focuses on how Richard Nixon was able to “sell” his profile to the American public in 1968.
As individuals, celebrities have pretty much mastered the art of turning themselves into powerful, eye-catching and memorable personal brands. Think Paris Hilton, Madonna, George Clooney, and Donald Trump. Even President Barack Obama, during his campaigns, demonstrated how to take an unknown quantity and build a persuasive persona.
What Can We Learn from Them?
To start with, it’s not a one-off event but rather an on-going process. Companies constantly bombard us with messages and adverts for precisely this reason. To keep us reminded of their brand and thus reinforce their brand equity.
Keeping it genuine and delivering on promises is an equally important factor to consider. Your attitude and actions, from start to finish with any task you perform, sets the tone for the type of individual you are and what others can expect from you.
Create a Brand Statement and a Value Proposition
Marketers, most notably, product brand managers, create messages about their products or services that encourage us to buy. Those messages tell us attributes about the product and the benefits to us as consumers if we purchase their products/services. Likewise, as a personal brand, you need to develop at least one message about yourself that tells your target market what you bring to the table, the benefits they receive from doing business with you, as well as what attracts them to you.
Your value proposition is all about your competitiveness and should spell-out the strengths that surpass your competition. To put your brand to work for you in your job search, you’ll need to pull together all the pieces that make up your value proposition in the marketplace. A vibrant personal brand statement makes it that much easier for those assessing you to get an indication of what you bring to the organization.
Effective Communication Enhances your Brand
Whether you’re a CEO, manager, consultant, entrepreneur, business owner, professional or even a job seeker, you should have the ability to persuade through your written and verbal messages. This includes giving effective interviews. Effective presentation skills will not only help you sell your ideas and products, but it will elevate your personal brand.
Management guru, Peter Drucker once stated, “As you move one step up from the bottom, your effectiveness depends on your ability to reach others through the spoken and written word.” This effective quotation not only tells it as it is, it also tells us a lot about Peter Drucker as an effective management expert
and communicator.
Character vs . Reputation
Reputation is what people say or think about you. That’s your personal brand and should be well-preserved. Character, on the other hand, is what you really are. It is crucial that you understand the distinction. It is said that character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing. Always deliver on what you promise and if you look after your character, your reputation will look after itself.
What does Personal Branding Entail?
For personal branding to be effective, it requires managing perceptions
effectively. This encompasses several characteristics including:
– Be Unique and Remarkable in what you do by differentiating yourself from the mainstream. In today’s crowded and competitive world, we need that extra something that sets-us apart. Be distinctive, daring and acquire a competitive edge. After all, it’s a “dog-eat-dog” environment and survival of the fittest. No
matter what you do, you don’t have to live your life the way other people expect you to.
– Grooming and Clothes: — They are the packaging of your total image. The way you dress and groom says a great deal about you — whether you’re doing so out of necessity or doing it with flair, one can usually distinguish the difference. Watching your appearance also makes you feel good about yourself.
– Etiquette: — It forms a part of human interaction skills, is a strong indication of a refined person and proper upbringing. It should be applied in everyday life in a civilized society. In addition, Respect is esteem of a person, a personal quality and ability to demonstrate it to others through deeds.
Social Networking: Is it going to be Facebook, LinkedIn or Both ?
LinkedIn is the number one professional network, whereas, Facebook is presently the largest personal network with over 1 billion active users worldwide. Each has its unique purpose. Whether you’re a job seeker, consultant, and entrepreneur or happily employed, LinkedIn can be an incredible asset for your career or business. You can connect to over 300 million professionals in over 200 countries around the world. This is a cyber venue where a polished profile with a professional looking photo and error free text should be the only acceptable standard. It’s a portrait of you and your brand. It’s also where you will be importing your contacts and growing your network through new connections. In contrast to LinkedIn, Facebook is geared more toward socializing purposes with friends, relatives and acquaintances.
Many companies are also taking serious notice whose idea is to engage with
present and prospective clients. It’s equally important that you are prudent and selective with the type of content and photos you place on your page as anyone can come upon it through searches. The message your page conveys will either be positive or unfavorable to your image. Frequent verification and updates on both social networks is recommended. Otherwise, your profiles become stale and unattractive.
Blogging
Another powerful marketing tool to consider is a blog. Writing articles for your own blog and for others will earn you consideration as a respected expert in your industry and subject matter, which, taken together, will create more credibility for you and increase your presence on the Internet.
In the Final Analysis
Regardless of the business you’re in or message you’re trying to depict to your audience, if you’re going to successfully shape your brand, you need to start by knowing who you genuinely are, then form the image you want to present, and subsequently, behave the part consistently.
Everyone, it seems, has a personal brand, but most people are not aware of this and as a result do not manage it strategically, consistently, and effectively. As your own “brand,” you are the head of “Me Inc.”
How does it feel to be the CEO of your own brand and life?
For a no obligation FREE preview (two chapters) from the book, “Entrepreneurial Essentials: Unconventional Business Wisdom & Bold Tactics” kindly click here.
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How often do we hear of CEOs who have been discharged for lack of performance? Contrast this with those whose Boards have kept them on the job despite controversy and/or inept leadership. The latter decision seems troubling. Consider Steve Ballmer of Microsoft and Mike Duke of Walmart amongst others.
It is my belief that the key issue here is organizational structure. Far too often, successful groups grow and get out of control. No organization should be too large. When it grows in size, inevitably it becomes overburdened and self-protecting. Incompetence is a guaranteed result.
The prime decision maker of the organization exercises a variety of leadership styles. Leadership is linked to personality. ‒ there is the empty, well compensated, well-tailored, neat and polite dapper boss; the absolutely lost and ineffective one; the barking, intimidating, eager for respect boss; then you have the hypocritical and/or bipolar type ‒ one day treats you well, whereas, the next day treats you with utter disrespect. For the most part, there is the worship me and exceedingly charismatic kind in vast numbers who mostly got there because of that particular trait along with shrewd politicking each step on the way up.
What most, as described above, do have in common is incompetence. Despite all the act and ego stroking, in the end, they do what it takes to remain in their dynamic position.
Short term results at the expense of long term consequences
Shareholders and the Boards focus on quarterly earnings growth results. As a result, we often witness severely dysfunctional decision making with public corporate leadership. This includes irresponsible behavior, as well as lack of depth and vision. HP’s Board is a case in point. It has been notoriously dysfunctional in the ways it has governed itself which resulted in a spate of upheavals over the last few years.
There is tremendous pressure to perform in a short period of time. There are no silver bullets for quick results. Seeds need to be planted for the future and for the good of the organization. Panacea creates decision making blunders which abound. At times it’s error in judgment and neglect. Every business sector is riddled with poor senior management. Here is a sample of some companies whose inept and/or negligent decision making have made headlines in unflattering ways.
– KODAK: In 1975, engineers at the company introduced the first digital camera to its executives. Rather than embracing it, fearing it would cannibalize its lucrative film sector, the top brass asked that the digital camera be kept under wraps indefinitely.
– WALMART: The company leadership has a long record of unethical behavior, from brutally exploiting workers to discriminating against women to bribing Mexican officials.
– MICROSOFT: Its CEO has remained long enough in his position to wipe out shareholder value by falling asleep at the wheel rather than vigorously pursuing web and mobile based businesses which companies such as Google and Apple, amongst others, have remained ahead of the game.
– JOHNSON & JOHNSON: Its former CEO who was employed at the company for 40 years resigned amid a series of missteps over the last few years of his tenure which damaged his and his company’s once sterling reputations. This included recalls of numerous over-the-counter well established drugs, including the largest recall of children’s non-prescription drugs, as well as medical devices. In addition, it was warned by the FDA about false claims it issued about its popular mouthwash, while another U.S. Federal agency, the Securities and Exchange Commission, charged the company with bribing doctors in several countries to prescribe its drugs and medical devices.
– ABERCROMBIE & FITCH: CEO Michael Jeffries’s snarl and insensitive remark that the brand’s apparel are solely targeted to the hip, slim, attractive and affluent “All American” teenager, offended many. As expected, it set off a storm of controversy. For someone concerned about his company’s image, the self-inflicted incident has damaged his and his company’s reputation. Even A&F’s investors are not pleased with the discriminatory statement which has negatively affected revenues and the stock price.
Organizational leadership is bestowed with the authority and accountability for creating value for customers, employees and its owners or shareholders. In spite of this, a significant weakness in running an organization is pushing for short-term profitability at the expense of solid planning. It’s my notion that the leader of many large multinational corporations, competence is not the primary value but rather the connections, politics, and clever tactics. Such “benefits” can usually compensate for incompetence.
The best-managed companies are constant achievers in their respective industries. They exude managerial excellence and financial performance is a reflection of capable management.
Typically, small businesses with inept ownership usually fail in the first year or two, but even companies in their growth stage can stumble badly when they outgrow the capabilities of the founding team. Research by the U.S. Bureau of Labor Statistics demonstrates that nearly 6 out of 10 businesses shut down within the first 4 years of operation.
Enterprises spanning a wide array of industries, have earned distinction as “well-” or “best-” managed” by demonstrating business excellence through a meticulous and independent process that evaluates their management abilities and practices – by focusing on innovation, continuous training, brainstorming and caring for their employees’ well-being – as well as investing in meeting the needs of their clients.
Identifying the shortcomings of incompetents
Regrettably, there are not many business leaders who make the cut. This includes those who also possess credentials from Ivy League educational institutions and/or oodles of charisma. A President or CEO grooming school doesn’t presently exist. Contrary to what many may think, there are no natural born leaders. In the past two decades, the average tenure of a CEO has halved. This is adequate proof how demanding the job is.
Our experiences and conditions shape who we are as people and as leaders. Leadership, like management, is not a science but a practice. The difference between the two, according to the late management guru Peter Drucker, is “Management is doing things right; leadership is doing the right things.”
Telltale signs of poor leadership in an organization include:
Anatomy of a competent boss: in search of sustainable leadership
A prime responsibility of leadership is the capability to constantly be one step ahead of their game, to envision what lies ahead, and in the process, be well prepared to lead the organization to great heights.
Effective leaders focus on long-term growth not short term decisions to increase or stabilize the company’s stock price. Furthermore, they should be open to ideas from lower level management not exclusively from their inner circle of “yes” men/women.
The following skills may appear as a list intended for a job description. However, they should be deemed a prerequisite for a leadership role regardless of the size or type of organization.
– Bonds emotionally
– Communicates well
– Possesses character
– Accountability
– Humility, not ego
– Foresight but with an open mind for feedback
– Passionate
– Can handle criticism
– Tenacious
– Articulate
– Regard for people
– Able and willing to delegate
– Team player
– Sales and marketing savvy
– A disciplined and flexible individual who is not only open to change but a driver of change
Examples of highly effective business leaders who possess many of the above characteristics include Sir Richard Branson (Virgin Group), Megg Whitman (HP), Howard Schultz (Starbucks), Jeff Bezos (Amazon), Brad Smith (Intuit), Indra Nooyi (Pepsi), and Carlos Ghosn (Nissan), amongst others.
Public vs Private leadership ‒ and the authentic luxury enterprise
There is no doubt that the pressures and priorities of heading a private company differ as opposed to a publicly traded company. Different industry sectors may also require certain competencies.
Kellie McSorley, founder of SILK Search, the London-based boutique headhunting firm specialising in senior executive appointments in the luxury industry, explains the differences with the type of top executives sought in various sectors this way:
“For example, our Private Equity clients look for certain qualities in a person generally around urgency and result orientation whereas a Public company may place more value on other characteristics and competencies such as process, procedure and thought leadership. With Private companies there is a level of sensitivity and emotional attachment to the brand that any new hire absolutely has to understand, respect and harness, in order to succeed.”
Authentic luxury brands, on the other hand, operate by their own distinct rules as they do what it takes to retain their aura of exclusivity and cachet by focusing on production limits, premium quality and catering to UHNW patrons ‒ the antithesis of mainstream brands and products. For instance, Hermès has no need to deal with pressures of shareholders and stock analysts that are prevalent with corporate brands such as the LVMH luxury group. Instead, Hermès’ family stakeholders choose to keep the current business ethos along with their complete independence.
As for what the luxury sector desires in its future CEO, Ms. McSorley states this succinctly as follows:
“Historically C-Suite recruitment in Luxury was much more based on who you are, but now it is definitely about what you have done. Brands are looking for people with results, across industries, people that have proven themselves as key collaborators, innovators, people that can manage change.”
She further adds:
“We are noticing luxury brands really looking into other industries for both talent and inspiration. When you talk about digital, brands are looking to Google or pure play companies. In retail they are looking to hospitality for knowledge of customer service. Luxury fashion brands are also speaking about Apple when it comes to best in class service and customer engagement.”
In the final analysis
In large corporations, the Boards should be held more accountable by paying closer attention to the behavior and actions in the C-suite ‒ thus reacting before things go awry.
The top executive’s job is to operate a business that adds value by means of the goods and services it provides to customers.
The way to solve an organizational problem is to confront the structural issues with a moral sense of purpose and ethics. Higher morale generates higher profits – though occasionally other priorities undermine that objective, for example, self-serving behavior by certain executives or chasing short-term selfish objectives in search of rapid market share, profits and self-interests before people. Monsanto’s executive conduct would make for a marvelous case study in this regard.
According to marketing maven Seth Godin, “It’s the flameouts and the scams that get all the publicity, but it’s the long-term commitment that pays off.”
In the end, what you manage and how you manage it is what you get.
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Author, lecturer and business catalyst, James D. Roumeliotis, describes his book, “Entrepreneurial Essentials: Unconventional Business Wisdom & Bold Tactics” along with his overall business philosophy with some practical and refreshing ideas.
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There was a time when customized products and personalized services were catered exclusively for the discerning and well heeled.
London’s Savile Row stands as a testament to personalized luxury. In a world full of luxury dumbed down and mainstream, there has been an up-shift by certain manufacturers trying to offer tailored ranges and services to a wider audience.
This development is technically referred to as “mass customization” and “mass personalization”. So why the shift?
Simply put, clients are demanding more and don’t share the same sense of brand loyalty as previous generations. Marketing strategists believe that focus must be on generating a community tied to customer satisfaction. I won’t call this CRM on steroids but the analogy could hold.
With ever increased competition, brands must show genuine benefit to hold the client’s attention as well as affection. The trend is quite sweeping once you start to examine the determinants. Look at fashion apparel, beauty care products, shoes, bicycles, laptops, and even smart phones. All claim they are perfect for customization.
Mass Customization vs. Mass Personalization
According to Wikipedia, the definition of the term “mass customization” in marketing, manufacturing, call centers and management, is the use of flexible computer-aided manufacturing systems to produce custom output.
These systems combine the low unit cost of mass production processes with the flexibility of individual customization.
“Mass personalization” on the other hand, is the custom tailoring by a company in accordance with its end users tastes and preferences.
The main difference between the two concepts is the ability for a company to give its customers an opportunity to create and choose product specifications. There are however limits.
The Financial Times lists “personalized production” among six other factors driving the future of manufacturing – namely network manufacturing, technological innovation, industrial democracy, boutique manufacturing, cluster dynamics, and environmental imperatives.
A case in point: Pomarfin is a small family owned Finnish footwear company. With strong competition from Asian manufacturers, the firm decided to change its strategy. It carefully looked at the adaptation to the mass customization paradigm, alongside a revision of its business model. Its choices were to either outsource the manufacturing of its shoes to China and simply become an ubiquitous brand, or differentiate itself while keeping its production in Europe. It chose the latter, by deciding to compete in mass customization, making made-to-measure shoes for discerning and affluent men. Pomarfin then introduced the clever concept of installing and utilizing a foot scanner in retail stores, which sells its shoes. The client’s foot gets scanned and the image is then uploaded to a server and sent to the firm’s manufacturing plant. The client then decides if he wants his exact fitting shoes shipped directly to his address of choice or picked up at the retailer.
Moreover, as an additional convenience, the customer can reorder custom shoes through Pomarfin’s website. To be fair and retain loyalty with its retailing partners, Pomarfin pays them a royalty for life for each new pair of shoes purchased by a customer sent its way.
Broad Marketing of Bespoke Products & Services
Clients have simply become more demanding. They expect more, and have no loyalty to brands that do not come up with the experience to match the product or service hype. This trend is both at the B2C and B2B level.
Everyone it seems is looking for the enviable win-win scenario.
It is natural to think that bespoke is the sole domain of the fashion industry whether shoes, suits, shirts or haute couture. These items with their stress on handmade carry heavy price tags and are geared to people with a high DPI.
You would be mistaken to believe that this is not possible for a mass market. For example, Dell computers was the first firm to offer customization to their entire range. In fact, designing your own computer needs with a consultant is the DNA of this organization. Dell understood that this type of differentiation would mark them apart from anyone else in the industry.
Other consumer goods operations quickly followed suit. For example, Adidas AG launched the miAdidas unit which offers custom sports shoes. Nestle delivered a market coup to the coffee industry with Nespresso, bringing single serve coffee into the home and office. Now you can serve different types of coffee within a group with no effort.
Individuality is a Sign of Personality: The Way Forward
The mass customization trend has been a rolling bandwagon. Understanding and harvesting this demand is easier said than done. Smart firms generally respond by building production facilities and systems with an increasing number of modifications in order to produce and deliver individualized units as per customer’s preference.
This certainly has its benefits and drawbacks:
Advantages
– Allows customers to create customized products
– Products deliver excellent value for money
– Makes comparative shopping difficult
– Shifts the focus from price to benefits
– Economies of scale/mass efficiency
– Manufacturer can justify charging a premium
– Easily differentiated against similar products
– Provides deeper form of customer engagement and data
Disadvantages:
– Increased overall complexity
– A significant initial investment + per unit cost of production
– Layover time – takes longer to manufacture
– No return policy on custom orders
Progress in manufacturing technology such as computer-aided manufacturing (CAM) and computer-aided design (CAD) have increased the flexibility, as well as the efficiency of the modern-day factory to achieve build-to-order products.
Ordinary is for the Mainstream – Do Luxury Brands Have Your Number?
Traditionally, the wealthy have great purchasing power. In theory, they are sophisticated and unafraid to express their taste as trendsetters and style mavens. They can also be the hardest segment to market to effectively because they are spoiled for choice.
Yet billions are spent catering to the tastes of this ever growing segment. Take the Paris Fashion Week shows and you can see the parade, the fanfare, and the glitz. Everyone is here: the paparazzi, fashionistas, and even fashion bloggers. Is it any wonder? Everyone craves glamor and it’s big business.
If you are one of the Jet-Set, do you want to be just mainstream? Of course, you don’t. The luxury trade has got your number, no matter how idiosyncratic your taste or preferences. Need private banking where professionalism and discretion are key? You got it. Want to stay in a boutique hotel so exclusive that few even know it exists? It’s there for the taking.
The providers of these services use what I refer to as “Bespoke Marketing” along with “Sensorial Branding” to differentiate their message and total customer experience respectively. These branding exercises are narrow in scope and speak of privilege the way its understood among the cognoscenti.
It is typical for certain shoppers at Louis Vuitton on the Champs-Elysees in Paris to serve the right customers flutes of champagne while they try things on or discuss their luggage needs upstairs. It must be said that LV knows how to coddle their clients. As I am sure you can appreciate, LV is not the only store in this town to offer VIP red carpet treatment. Most major luxury firms do likewise such as Cartier, Dior, and Chanel.
Need a personalized briefcase? Why not pop over to Hermes? They are awaiting your next visit. The world of Hermes personifies exclusivity. Open one of their in-house magazines, and a special universe is revealed. The key beyond outstanding products is the creation of something bordering on revelation. The store itself has become a stage set, and sales pros are the players who embody the firm’s DNA.
Bespoke is the middle name of this institution. Real luxury brands understand this concept like Stradivarius handcrafted violins.
Needless to say, the term “luxury” has been misused over the years. It is mysterious and elusive. In essence, it revolves around subjective criteria referred to as lifestyle.
Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated:
“A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”
Perfume connoisseurs are taking their choices a notch above most as the top-end of the fragrance industry is a very personalized one. Consequently, niche perfumes for the discerning and well-to-do are growing rapidly. This sector is creating new trends in the beauty and fashion world through an artisan approach. Customers visiting bespoke perfumery shops expect highly trained staff to advise on fragrances. A great “nose” knows different clients value different scents, and thus will prescribe like an old fashioned doctor, who used to make house calls. Chemistry and diet also play a role in developing your own signature perfume.
Quite sophisticated and personalized indeed. But then, isn’t this the true symbiotic meaning of luxury?
The Final Take
“Mass customization” and “mass personalization” (or “build-to-order marketing” and “one-to-one marketing”) in delivering either products or services when properly implemented, bring about across-the-board improvements in all dimensions of a business. This includes, price, responsiveness, quality, and a positive experience. Competitiveness and operational effectiveness of a company also improve.
However, mass customization also has a few drawbacks as it does come with a cost. Along with a substantial initial investment in manufacturing equipment upgrades, the primary challenge in pursuing mass customization stems from increased complexity in its operations. A higher level of product customization requires greater product variety, which, in turn, entails greater number of parts, processes, suppliers, retailers, and distribution channels. As a result, bigger challenges exist to manage all those aspects of the business from raw material procurement to production and eventually to distribution. In addition, an increase in product variety has the effect of introducing greater uncertainty in demand realizations, increase in manufacturing cycle times, as well as an increase in shipment lead times.
In the luxury sector, traditionally there hasn’t been any shortage of customization for the ultra-high-net-worth. Exclusive and bespoke travel companies provide tailor made adventures and excursions, whereas, the ultra luxury and exotic automobile sectors such as Rolls Royce and Ferrari respectively offer a wide array of customization options. Each vehicle coming out of the studio will be completely unique and guided by a personal designer at the manufacturers.
“Good things come to those who wait.” Or so the saying goes.
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Today, consumer purchase decisions are increasingly driven by consumers’ hearts. With ambiance marketing/sensory branding, a custom designed attractive setting, yet alluring with captivating style, invites customers to truly feel the brand experience by adding character. This is accomplished by connecting the emotions to a product or service, and infusing it with a tangible and intangible essence that remain in the customers’ minds.
See images and videos which depict the essence of ambiance marketing/sensory branding.
CLICK ON THE IMAGE for the link to the images/video page
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Filed under Branding, customer service, Luxury, Marketing, selling luxury
Viewpoint by James D. Roumeliotis
Traditionally, entrepreneurs know they need a road map we all call “The Business Plan.” Some see this as a necessary evil and others welcome the concise texture of not launching a venture blind.
Average business plans describe the new venture’s offer to its target market. It also explains how the organization will reach its goals.
Such plans should include:
A) Brief bios on the key players
B) A section detailing the sales and marketing strategy section
C) The organizational structure of the project team or organization
D) Detailed operations description
E) Financial projections
F) Capital investment required to launch the product/organization
These days building a plan is simple enough. You can go to a bank or online and purchase a business plan template. You can even choose the option of hiring consultants who will set the plan up for you.
However, nobody can tell you what you want the business to be. No, I’m not referring to the ‘executive summary’, which is part and parcel of any coherent b-plan. It is my advice that prior to building your business plan, you need something else: call it a viable business model.
The Vision Thing
If the mantra in hospitality chants “location – location – location”, then an entrepreneur’s should be “vision – vision – vision”. Putting the vision on paper is crucial. It will help you secure financing, attract investors and even partners.
New Ventures need this to articulate how the new organization is going to achieve its operational, sales, marketing and financial goals.
Established Enterprises use this tool to depict their objectives in detail. There is a step-by-step engagement and procedure to move forward never forgetting the next level. I call this strategy the “Prelude to business planning”. You simply must have a model first. How can you test an hypothesis without a model? Simply put, you cannot.
Once this initial step has been accomplished, the business plan will be simpler to prepare as the foundation of the organizational structure can be produced. The idiom “putting the cart before the horse” clearly reminds us of this erroneous and common approach.
The business model also makes it easier to visualize and analyze a business from the customer’s perspective. A simple illustration of an apparel retailer’s business model is to make money by selling a specific line of clothing to consumers whose taste and budget are aligned with the store’s offering.
Anatomy of the Business Model
What is a clear definition of a “business model”?
What does it entail?
According to Investopedia.com it is regarded as:
The plan implemented by a company to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs.
Dr. Alex Osterwalder, a sought after speaker and advisor with a particular focus on business model innovation, strategic management and management innovation, as well as co-author of the business bestselling book “Business Model Generation”, produced a more succinct definition:
A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, cultural, or other forms of value). The process of business model construction is part of business strategy.
Developing a business model seems to be an overwhelming and a somber task. However, to alleviate those concerns, Dr. Osterwalder is further credited for creating an ingenious and popular visual version of the conventional business model.
His consists of nine building blocks which focus on the big picture as follows:
1) Customer Segments: Describing who a company offers value to
2) Value Proposition: Describing a company’s offer
3) Channels: Describing how a company reaches its customers
4) Customer Relationships: Describing the relationships a company builds
5) Revenue Streams: Describing how a company makes money
6) Key Resources: Describing what capabilities are required to make the operation function including your suppliers
7) Key Activities: Describing what activities are required to make the operation function
8) Key Partners: The partners that leverage the business model (if applicable)
9) Cost Structure: Describing the costs of a business model
The first 4 (right half of the model) are portrayed as the ‘front stage’ of the business where the client experiences transactions, whereas, numbers 5 to 9 (left half of the model) are the backstage where the action takes place to make the right half (‘front stage’) work seamlessly. The client doesn’t see this part. It’s analogous to a performance in a theater.
The above business model can be sketched on the wall on what is referred to as the “The Business Model Canvas” (see sample image below). A business can turn up with several business models but choose the most ideal for its circumstance after having tested each one through brainstorming, simulations and/or by approaching its intended market for feedback.
Nespresso, the Alluring Business Model
If there is a business success story worth noting and plotting on a business model canvas as an attractive case in point, it should be Nespresso. This brand of high-end single serving espresso coffee systems is a standalone operating unit of the Swiss food conglomerate Nestle SA and its fastest growing brands. Reportedly, Nespresso sales have been increasing by as much as 20% on average for the last several years and earns 4% of Nestle’s total annual revenues.
Nespresso has registered numerous patents for concept including its signature colored capsules containing the ground coffee. Initially, Nespresso wasn’t much of a success with its original business model as its sales channel, back in 1986, was based on the coffee machine partners’ own sales reps touting the distinctive looking apparatus and capsules in the office coffee sectors of Switzerland, Japan and Italy. In 1989, their coffee system is introduced to the consumer/household sector which became a sensation and opened up a new category altogether in the single serving market.
Nespresso’s strategy circumvents the wholesalers and dominant supermarkets. It’s positioned itself as an exclusive luxury good. Taking a branding page from genuine luxury houses, such as Hermes and Chanel, Nespresso too controls its own distribution channels. though its machines are sold in department and fine retail stores, Its capsules are sold solely via online, by phone orders or at its more than 300 boutiques in prime locations throughout the world. This is by far its most successful business model as the company controls pricing and has an intimate relationship with its customers – most notably with regards to the total customer experience and its proactive customer service. Recognize George Clooney in its ads? He’s been a strong connection to the brand which seems to work – at least for the female audience.
Business Reassessment: Strategic Planning Tool
Business models don’t merely apply to start-ups. They equally vital for growing and established businesses which should re-evaluate their business model when revenues are dropping or when working on strategic planning.
An organization should not be operated as a static entity but rather as a progressive and innovative type with foresight to changing economic, technological and market conditions. This includes at looking at new distribution channels and revenue streams.
A case in point are the companies that make up the recording industry. For decades, they had an attitude of arrogant superiority until the day the digital download era came upon them. This development caught them off guard despite the imminent warnings, Having been built on a brick-and- mortar distribution model, they were too complacent to adapt despite the threats and decline in revenues.
Rather than re-evaluate their business model, focus on innovation and ultimately transform by embracing an opportunity, Time Music Group, and several other members of the recording industry, chose a path of least resistance. They decided to hire an army of attorneys and began to aggressively hunt and sue the illegal downloaders, including minors.
Through legal means, they successfully shut down websites such as Napster, BitTorrent and others. Meantime, online music start-ups such as Ritmoteca.com came along and conceived a novel way to distribute and monetize digital downloads. As of April 2008, the largest online music store is Apple’s iTunes Store, with around 80% of the market (source: theregister.co.uk).
Closing Memo
Whether starting a new business or moving an existing one to a new direction, a business model is the first strategy to consider developing prior to the business plan. The former is a proprietary method used to acquire, service, and retain customers. It makes you think through your business plan, which in turn communicates the business model. Both should synchronize.
The business model need not be a chore to design. By utilizing a creative one page visual orientation named “Business Model Generation”, developed by Dr. Alex Osterwalder, one can view the business holistically.
Several business models should be considered, their hypothesis validated in the real world and finally the most ideal model chosen.
It took Nespresso almost 30 years, since its first patent, to refine its business model.
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Entrepreneurship is not for the insecure. It takes a good idea, a burning desire to execute it, and the right personal characteristics including:
– At least some fundamental business knowledge
– Passion
– Drive
– Resilience
– Perseverance
– Persistence
– Curiosity and and open-mindedness
– Willing to take calculated risks
CLICK HERE for a collection of images that speak for themselves pertaining to entrepreneurship and the entrepreneur.
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Filed under B2B sales, Business, business development, sales performance
I am pleased to share with you the top 10 most read articles in my blog for 2012. Thank you for your readership.
#1 Brand Awareness: the influence in consumers’ purchasing decisions
#2 Sensorial Purveyors: Creating an Enticing Ambiance in the Hotel Domain
#4 A Philosophy Named CUSTOMER SERVICE – How to Refine it and Maintain It
#5 THE SEVEN KEY PRINCIPLES FOR BUSINESS SUCCESS – A Personal Belief Through Years of Practical Experience
#6 The Art of Selling Luxury Products: Brand Story Telling & Persuasion
#7 Branding Bottled Water: Differentiating a commodity through various tactics
#8 Branding by Design: The Impact of Fashion on the Automobile Industry
#9 Perceived Quality: Why Brands Are Intangible
#10 How to Run an Effective Political Campaign – a Synopsis for the Aspiring Candidate
I’m planning something neat for those who participate here. If you don’t mind, would you kindly do my 10 second survey. In return, I will send you my book, “Entrepreneurial Essentials:…” in PDF format with my compliments. Please click HERE for link to the survey.
Open any fashion magazine and you are immediately struck by the mystique of perfume adverts. It is an industry, which combines the power to make people dream, to imagine their ability to attract, and better still seduce. It plays on the psychological heartstrings of self worth and self-perception.
When the elements come together with force, people feel sexy and desirable. Billions are spent on their consumption. Large and small houses spare no expense in their creation and marketing. Perhaps this explains why so much effort is spent on designing an appropriate package along with creating the right name.
The Commercialization of Designer Fragrances
Mainstream body fragrances are usually a blend of synthetic elements. They are produced by only a handful of firms.
Niche perfumes however, are not generally associated with fashion labels, celebs or extravagant looking bottles. Their trademarks are rare components constructed to leave an indelible mark.
Such fragrances are built on a pyramid, harness raw materials and are aromatic. Many are botanically sourced and distilled by master perfume makers. Key ingredients include Damascus rose, jasmine, citrus from Sicily or Corsica, and even tree bark such as sandalwood, juniper, and cedar.
For these reasons, trained noses are in high demand. However, the use of perfume and the selection of ingredients are cultural and even generational. Take two well-known brands as examples:
Many young clients prefer the scent marketed by Abercrombie & Fitch. It is light, sweet and attracts. Although everyone knows Chanel No.5 not everyone will wear this fragrance. It is heavy and voluptuous. Marilyn Monroe might have worn nothing else to bed, but who else follows suit? Chanel’s new advert campaign online has been designed to capture a new generation of advocates.
When Only Luxury Perfume Will Do
Recent statistics show that the demand for fragrances continues to grow most notably in the Gulf and Middle East. Euromonitor, a consumer research firm states that perfume sales in Saudi Arabia top sales in 2010 ($827.5 million) followed by the UAE, ($205.8 million) during the same year. On average, a Gulf client will spend $380 per annum on perfumes.
Lifestyle and DPI do not alone explain the stats. It is also the demand for rare elements used in their preferred fragrances some of which contain oud and amber. Just last year Christian Dior has tried to tap this lucrative market with much success.
Other classic brands such as Armani and YSL have tried to do likewise. Historically however, more emphasis was placed on naming the product and the packaging rather than the actual contents. Lifestyle has always been the key market driver when a big fashion brand launches a new perfume. They are seen as key pieces of the accessories puzzle to the brand, which can include cosmetics.
I am often reminded how such brands will even create a timepiece, which sports the brand name. However, these timepieces have nothing in common with genuine luxury watches such as a Patek Philippe.
As consumers become more sophisticated, they begin to shop around for more articulate perfumes. Think of Annick Goutal, Kilian Hennessy (Kilian Paris), Roja Dove (Roja Parfums), Serge Lutyens, or better still Frederick Malle. These houses stress sophistication as well as natural ingredients whenever possible.
The luxury brand Hermes for example, has taken great care to hire some of the noses that work for Frederick Malle. The smell Terre d’Hermes immediately comes to mind. With each creation, there is an eau de toilette and for others there is the perfume. Both products commit the client to the brand and provide accessibility as well as exclusivity, which is the hallmark of Hermes in the first place.
Distinguishing Natural Perfumes from Mainstream Fashion Brands
Contrary to popular belief, France was not the first country in the world to conceive perfumes. The ancient Greeks and Romans were devoted users of fragrance. However, Grasse, a town on the South of France, is today considered the world’s capital of perfume.
The natural perfumer is both a scientist and an artist. He/She demands rigor in his/her quest of creating beautiful perfumes including his/her “nose” as an inherent talent.
According to The Natural Perfumers Guild – the world’s largest trade association dedicated to natural fragrance, natural perfumers do not use synthetic aromatic chemicals. Natural aromatics are natural biological chemicals, thus their scents come from nature. Additionally, the need is greater than the mainstream perfumers in developing a fixative base for the perfume (so it is held onto the skin to last longer.) Mainstream perfumery has a huge number of synthetic fixatives at their disposal, and natural perfumers do not, and would not, use them. Moreover, the bottles or body care containers are filled by hand which, typically, makes the entire process personal.
Niche perfumery maker Creed, established in 1760 and one of the oldest, uses such methods of hand production, including maceration and filtration, instituted at the company’s founding. It is the industry’s firm proponent of natural ingredients in fragrance. As a result, it has a loyal following that includes royalty, Hollywood stars, political leaders, legends in business, sports, music and the fine arts as well as discerning members of the public who value beauty and quality in scent.
Applying the slogan, “Fragrance without compromise” to his brand ethos, Frederick Malle runs the exclusive fragrance boutique in Paris, Les Editions Du Parfum. His shop and the niche perfumes he sells epitomize how the luxury perfume trade has moved on from just name brands to something beyond marketing hype.
Of Art and Storytelling
The fragrance industry is a very personalized one. For this reason, niche perfumes for the discerning and affluent are growing rapidly. This sector is creating new trends in the beauty and fashion world through a niche/artisan approach. As the perfume market grows in important markets including the Middle East and BRIC countries, and as companies expand outward, the traditional perfume tastes are affecting the world of perfumery. Thus, these highly coveted and hard-to-find perfume notes are becoming ever so popular. Those boutiques able to offer the most sought after fragrances such as oriental amber, Agarwood (oud), and musk amongst others, along with their striking ambiance, will distinguish them from their competitors.
Customers expect highly trained staff at bespoke perfumery shops to understand the art of fragrances such as the origins and chemical make-ups as they are able to tell a customer why a certain fragrance will or will not work with her/his body chemistry and suggest alternatives. This includes the suitability of a perfume to someone’s skin chemistry and diet.
At specialty perfumery shops such as Madison, with a location in Bucharest and Budapest, fragrance aficionados will find an exclusive array of scents, niche colognes, hard-to-find perfumes, room scents, and incense. The 46 or so brands they carry are not available in traditional department store beauty and cosmetic counters.
The Role of the Influencer in the Fragrance Domain
With the advent of in the social media sphere, most notably on YouTube, the “influencer” persona was born. An influencer is someone in a niche or in a specific industry with sway over a large target audience. This individual can also persuade others to act based on their recommendations.
The fragrance domain has several of its own. These passionate souls with their YouTube channel have amassed hundreds of thousands and in some cases, over a million subscribers. One of those on the top spot is former German model, “Jeremy Fragrance” (née Daniel Sredzinski). Jeremy vlogs about both women’s and men’s perfumes and features niche fragrances as well as the popular scents. He is a smooth-talking YouTuber who began his video platform in 2014, He has a high influencer equity score. Another one on the top three spot, is New Yorker Tiff Benson, a fragrance and beauty vlogger and blogger. She shares perfume reviews on YouTube who also writes about beauty and lifestyle topics on her eponymous blog. Tiff is part of the Sephora Squad and founder of The Fragrance Society.
The Olfactory Take – in search for something new and singular
Great perfumes are like works of art. They are inspiring, delightful and memorable – despite their staid looking bottles in contrast to those of the designer house perfumes. Perfumes and emotions are also linked together since they impact our mood considerably. They are the new luxury category which is treated as a work of art.
The lesser-known fragrance brands are often touted by celebrities who publicly declare their preference for them, because of the mystique and rarity they possess. Niche labels often use exotic and rare ingredients which make their brand stand out from the rest. The more than two century old Creed Perfumery has a large freestanding store in New York, considered one of a kind in North America, where it sells its own limited produced fragrances.
Small and privately owned fragrance producers are, for the most part, family run – which make them personally involved in all aspects of the productions process. Their uniqueness ranges from fine-quality ingredients stories of pedigree to environment-friendly practices. Such niche brands normally cater to a small, yet extremely loyal clientele. Personalized service, through well trained front line staff, adds to the emotion, as well as the total customer experience demanded by its discerning patrons.
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Filed under Branding, Business, Luxury, luxury storytelling, Marketing, niche perfumery, selling luxury
The new normal encourages an entrepreneur to deal with any current situation no matter how daunting. However, rather than lamenting the obstacles, confront and deal with such issues directly.
To quote Albert Einstein:
“We can’t solve problems by using the same kind of thinking we used when we created them.”
A savvy business person and a leader views great opportunities in a rapidly changing world economy. Amongst other tactics, make sure you thoroughly plan with fortitude and execution.
Driving Initiative
Leadership with a clear vision is what’s needed first and foremost; otherwise everything else in an organization may not matter much. Businesses with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team.
Research by the U.S. Bureau of Labor Statistics shows that nearly six in ten businesses shut down within the first four years of operation.
Being a successful entrepreneur is not an effortless task. It takes plenty of sacrifice and will power to confront various problems which not many are prepared to make. It takes strong faith, to believe in yourself, your product or service and to stay motivated on a daily basis to keep it running despite many obstacles, as well as the added challenge of staying ahead of your competition.
Note that there are no magic formulas. During trying times and particularly in the growth stages, you must stay on top of your project. Adapt to your new competitive environment. Do so in a proactive manner and in a spirit of authority.
Understanding Customer Relationship Management (CRM)
Entrepreneurs sometimes make the cardinal mistake that they are in business just for themselves. Don’t forget that you are working on behalf of your clients. Without the ability to attract and retain clients, revenues and cash flow will be greatly affected. Always be customer centric.
1) Build brands then launch products. People buy brands not products. Brands stand for something your target customer identifies with.
2) Having customer experience is never enough. It is the value created for a customer. You may buy great bagels at a place that has poor customer service, or mediocre tasting bagels at one which is very customer centric. It is all about value perception.
3) During economic downturns, marketing spend should continue, not decrease as you want to lay the groundwork for better times ahead. Maintain building and retaining your brand in the consumers’ mind. Just about everyone knows McDonald’s. The reason is clear: the firm never ceases to spend at least 5% of sales on marketing activities.
4) Listen to your customers who truly transform your business and deliver value, excitement, and surprise. Most importantly, learn how to truly engage with your customers.
Fate Favors the Bold
Forgo routine and avoid surprises. Complacency is a comfort zone which yields marginal performance. It can cause deficiencies, stifle growth and progress. This syndrome should be replaced with drive and consistent improvement. The culture of the organization, along with its structure, plays a major role with the challenges it faces and how it deals with them.
Fred Hassan, a former CEO and chairman of Schering-Plough (now merged with Merck & Co.), once discussed during an interview that “Adversity is part of life and part of business. By dealing with adversity effectively, both people and organizations become stronger and better. It makes them more resilient. It makes them more confident ─ because they know they can prevail even in tough times.”
Goals and objectives of the business are reached by preparing for them and taking bold steps to implement, as well as monitor progress against plan and adjust accordingly. Nothing should be set in stone. Changes and adaptability with the circumstances should be adhered to.
Differentiate Yourself
Regularly brainstorm with your staff and outside advisers (accountants, mentors etc) on unconventional, yet lawful, ways of improving what you do. In fact, change your paradigm and as Simon Sineck wisely stated at a TEDx presentation entitled, How Great Leaders Inspire Action.
“Every single person, every single organization on the planet knows what they do, 100 percent. Some know how they do it, whether you call it your differentiated value proposition or your proprietary process or your USP.”
He went on to say, “But very, very few people or organizations know why they do what they do…By “why,” I mean: What’s your purpose? What’s your cause? What’s your belief?” In other words, what Simon was questioning is why does the organization even exist?
Continuous improvement (or progress) is not a onetime event, it’s an ongoing process. “Business as usual” is no longer a viable option and consistency is vital. It takes a willingness and involvement from everyone within the organization, including suppliers, to be on the same page, the right fit/culture and with the right attitude to get seamless results.
Strict Internal Financial Controls
A businesses’ finances should be supervised closely, borrowing/leveraging done wisely, and spending conducted within a prescribed budget.
In certain industries, such as manufacturing and food establishments, financial ratios and yields, respectively, should be strictly adhered to at all times. The success of any business is, in many ways, measured by the bottom line.
Should a newly minted entrepreneur need to hire an accountant, he/she would still need to have a fundamental knowledge of accounting functions. Nothing in that area should be taken for granted regardless if the task was delegated.
It’s Time to Execute – a recipe for strategic success
Creating strategy is less formidable than implementation, thus execution is not without its challenges. In addition, the larger the organization, the less nimble it is at executing strategy. It’s akin to a large ship having to make a sudden turn to avoid catastrophe.
Needless to say, tough decisions need to be made and those given/accepting the task are accountable for the timing and manner of implementation. The requisites for such individuals include project management skills, a definitive understanding of the execution of strategy, tenacity and most certainly achievers who thrive on results.
Organizations with a bureaucratic mindset struggle making fast decisions. Bureaucracy creates a climate in which the customer is not as important as the management and the company’s other employees. It also kills the organization’s competitive spirit.
As Jack Welch, former CEO of the industrial powerhouse, GE, has stated, “Bureaucracy is the enemy – it means waste, slow decision making and unnecessary approvals.” Welch felt that ridding the company of wasteful bureaucracy was everyone’s job. He urged all his employees to fight it. “Disdaining bureaucracy” became an important part of GE’s shared values.
At Google, the role of the manager is that of an aggregator of viewpoints, not the dictator of decisions.
For an organization to avoid the complacency and bureaucratic trap, it should encourage creative thinking, consider making innovation its foundation, and if applicable, cut layers of its bloated management structure for a leaner decision making process.
Innovation is what a business should be carrying-out as often as it’s required for its long-term existence. The old adage that goes something along the lines of “If it isn’t broken, don’t fix it” doesn’t sit well today with forward thinking companies that thrive on practical improvements.
There is nothing wrong with change if done to enhance or replace the status quo. It’s part of collective progress. For this to work everyone within the organization must embrace continuous change, rather than resist it. That may be easier said than done due to typical resistance emerging from people as a result of fear of the unknown.
It’s up to management to persuade their subordinates of the mutual benefits of change.
The Heart Of The Matter – being at the top of your game
The way to solve an organizational problem is to confront it and have it resolved without delay. It begins by laying a foundation which mainly encompasses creating strategy, optimizing structure and managing execution of decisions, ideas and new products.
Long term potential outcomes and worst case scenarios should be anticipated before problems even strike. This type of planning constitutes part of risk management. Unfortunately, most decision makers/managers are capable of planning, not executing. This creates a lack of bravado when carrying out strategy and/or confronting adversity
For an organization’s clients to receive stellar service entails having its house in order. Besides structure and an efficient operation, employees should be trained and empowered to do their jobs efficiently.
Seth Godin, a renowned marketing strategist stated succinctly: “If you want to build a caring organization, you need to fill it with caring people and then get out of their way. When your organization punishes people for caring, don’t be surprised when people stop caring. When you free your employees to act like people (as opposed to cogs in a profit-maximizing efficient machine) then the caring can’t help but happen.”
Well-tuned organizations are operated by executives who are focused, resilient and disciplined yet not so rigid and resistant to change that they don’t check their assumptions with trusted advisors/sounding board.
There should always be an element of adaptability in decision making and business policy changes in tune with circumstances and with the times. Planning for adversity before challenges even appear on the horizon is key to the strategic success of any organization – big or small.
The best managed companies have one factor in common: They are constant achievers, exude managerial excellence and a well-targeted CRM. Their financial performance is reflected in their results.
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Filed under Business
Editor and news correspondent, Kathy Tzilivakis, interviews James D. Roumeliotis, author of this blog and of the book, “Entrepreneurial Essentials: unconventional business wisdom and bold tactics.”
Click here for the interview in “The Pappas Post”
Luxury Brand Management is sometimes like weather forecasting. With the media and fashion industry in full tilt this autumn, there is wave upon wave of adverts, campaigns, and promotions. Within the glitzy magazines and online videos geared to seduce, consumers and even those within the industry have a difficult time distinguishing luxury from premium brands.
Price is not the only determinant. Add the crossover product strategies between the 2 types of brands and there is more confusion still. Luxury enthusiasts are always looking for the “best”. The problem arises on what this term really means if it means anything at all. Most studies indicate that the term “luxury” is highly subjective.
For this reason, I have decided to try to clarify this important topic and booming business sector.
Take for example the terms, “premium”, “luxury” and “fashion”. Is it possible to define and portray these ethereal ideas in concrete terms? Marketing hype blurs the lines, and of course, this is intentional only adding to the misinformation among diverse constituent audiences.
Defining Luxury
Definitions of “luxury” vary enormously and depend on with whom you discuss the topic and in what context. The term “Luxury” has never been something easy to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.
Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated:
“A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”
Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test:
Is the product manufactured in artificially limited quantities?
(i.e. the rarity factor)
Does the firm have a story to tell? (i.e. history & pedigree)
Is the firm portraying a unique lifestyle?
Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals (HNWI/UHNWI) can purchase without question?
Does the brand offer authenticity?
Identifying Luxury Sectors
Luxury is classically defined in two key segments:
1) Luxury Goods: Fashion & Accessories, Watches & Jewelry,
Well-being & Beauty products
2) Lifestyle Purchases: Automotive, Experiential Travel, Home & Interiors, exclusive alcoholic beverages (read exceptional wines, champagne & spirits)
Brands Which Claim Authentic Luxury Status
Few brands can really claim the trademark of luxury. Those that do combine allure, sex appeal with pedigree and quality. Discounting is not part of their strategy and their entire raison d’être is geared to UHNW (Ultra High Net Worth).
Anyone in this business can rattle off the litany of names recognizable to most people:
Hermes, Chanel, Louis Vuitton, Bottega Veneta, Rolex and Cartier.
Other players to this core list include: Bentley, Rolls Royce, Gucci, E. Goyard, Charvet, Salvatore Ferragamo, and Bulgari.
Contrast the above lists with Daimler’s Mercedes-Benz. This firm has reduced its cachet ever since it introduced the entry levels A, B Classes respectively and the SMART car.
The firm also does not hesitate to harness frequent promotions to boost sales revenues. This type of strategy is pursued when the board is under pressure from stakeholders to tap what is referred to as affluent consumers of the mass market. DPI (Disposable Personal Income) of this segment is over $100,000.
Because of this strategy such brands can no longer be considered as “luxury” in the true meaning of the term.
Genuine luxury purveyors should remain relatively small and select in their industry. Wealthy consumers purchase luxury products because they seek to distance themselves from the mass through the emotional value of acquiring flawless and rare objects of desire.
Luxury service brands follow a similar pattern. On the basis of my expertise and experience I would list Hotel de Crillon, Hotel Plaza Athenée, Ritz Carlton, and Hotel du Cap. All these hotels provide the perfect luxury experience of outstanding service, exclusivity, and pedigree.
Identifying department stores is a bit more tricky considering the makeover of this retail concept in the last 15 years. Despite the changes consider the following 3: Harrods (UK), Le Bon Marche (France), and Saks Fifth Avenue (USA).
Exclusive and bespoke travel companies provide tailor made adventures and excursions. The four key players in this category include: Abercrombie & Kent, Kuoni, Orient-Express and Cunard Line.
Broadening our view of luxury services, certain firms offer services and privileges to a rare percentile. Such services include credit cards with no limits, jet ownership, private plan charters, global concierge services and the like. Think NetJets and Amex.
Considering magazines, if I were asked to name one magazine catering to this crowd and speaks its language, I would nominate: Monocle. It has been described in certain circles as “Foreign Policy meets Vanity Fair.”
“Premium” Clarified
If luxury brands are related to scarcity, quality and storytelling then premium goods, on the other hand, are expensive variants of commodities in general: i.e. pay more, get more.
These brands are less ostentatious, more rational, accessible, modern, best in class, sleek design, and manufactured with precision.
For example, take the case of L’Oréal. The firm is a giant in the cosmetics sector. It positions its “premium” products with subtly. Clients get the luxury feel they hanker for and the presentations are done with élan.
Dior on the other hand makes no pretense. It is categorized as a luxury beauty product and is priced accordingly.
What about Fashion?
This is quite a question. Is it luxury, premium or neither? If you were to stroll into Camps de Luca in Paris for a bespoke suit, you will be treated like royalty and the titans of business, who make up the firm’s client base. Afterwards, you can meander over to Place des Victoires and place an order at arguably the best shirtmaker, Charvet and order a dozen shirts cut to your specifications in sea island cotton.
Clearly, these firms are luxury in every meaning of the term.
Designer labels or “fashion houses” are a different kettle of fish. Some can be quite pricey. However the nature of fashion is ephemeral and change. Pick up a copy of September Vogue and judge for yourself.
Do not confuse what you see in Vogue with “haute couture”. This niche is always there and the French keep it this way. Clients are limited by definition of the cost involved, not to mention the intense hand labor, fabric selection, and attention to the tiniest details.
These luxury fashion statements convey ostentation, glamor, lavishness, and elegance. They are one-of-a-kind garment.
The following fashion houses measure their creative worth with the designer talent, which marks the brand: Chanel, Hermes, Ralph Lauren, Burberry, Brioni, Prada, Gucci, Dior, LV, Valentino, YSL, and D&G.
Needless to say, quality control is fundamental and is offered in lifestyle controlled environments at the above brands flagship stores worldwide.
Luxury Time Waits for No One
If you need a watch to tell time, a Timex vintage piece made simply for that purpose will do the job. If you want to make a statement that you have arrived, you will undoubtedly look to see which watch best suits your personality and budget. Think James Bond and the flagrant exposure of Rolex and later Omega.
Luxury timepieces exist in many categories and can accommodate a wide variety of budgets. A good example of an entry level timepiece is a Movado at $500. At the other end of the spectrum, you could chose a Chopard at $70k. Watches are often sold via adverts of sports heroes or movie stars. The reasons are clear. Personification and self-identity play a large role in watch acquisition and social status.
Chronocentric categories watch brands in the following groups:
Basic Luxury Watches
Description: Attractive and functional
Brands include those of fashion designers such as Michael Kors, Fortis, and Movado.
Retail prices: > $1,000 stainless steel; ( >$2,000 for gold)
Strategy: Moderate to heavy discounts available among specialized dealers.
Pseudo Luxury Watches
Description: elegant and stylish
Brands: Baume & Mercier, Raymond Weil, Tag Heuer
Retail prices: $500-$2,000 (steel); $750-$4,000 (gold)
Strategy: discounting via accredited dealerships
Luxury
Description: accent is on prestige. Quality and durability are stressed. Elegance and value underpin the watch.
Brands: Breitling, Cartier, Ebel, Omega, Rolex
Retail prices: $1,000-$4,000 (steel); $2,500-$8,000 (gold with leather strap); $5,000-$20k (gold with gold bracelet)
Strategy: modest discounts sometimes available via brand-authorized dealers. (The unauthorized “gray market” can give bigger price breaks)
High-End Luxury
Highly crafted timepieces made by experts. These watches are highly “refined” and easily recognized by collectors and people “in the know.” Sold with a strong emphasis on exclusivity, design, and craftsmanship. Produced in small numbers, available via specialized dealers. In short, these are the Rolls Royce class of timepieces.
Brands: Alain Silberstein, Audemars Piguet, Blancpain, Breguet, Franck Muller, JLC, Parmigiani, Patek Phillipe, Ulysse Nardin, Vacheron Constantin.
Retail prices: starting at $5000 (steel); starting at $20k (gold). Some watches can exceed $2m.
Selection
Watch selection is highly personal. This is true no matter what the person’s budget. Even if you are shopping in a budget category, there are many to chose from. Think Swatch or Nixon.
However, once a person seeks to make a watch statement then choice will be determined by social class, DPI, sports inclinations, sense of self-esteem, pedigree, craftsmanship and of course function. Your average person does not need a chrono watch with its multiple dials and buttons. Yet, the 25-35 year old segment see these pieces as a station in life.
A youngish successful profile will not usually be drawn to a Patek Phillipe. But someone over 40 will. Most Westerners will not go gold unless it is old gold meaning a vintage high end timepiece, which is thin and elegant.
You will also notice that in certain milieus that watch brands count. People weigh there status, revenue generation, prestige in tandem to the watch or even watches that they own and collect. Lastly, even though there are many successful business women who own and wear high-end watches, men seem to be the more obsessed. This can be attributed to the fact that it is one of the few pieces of jewelry a man can wear and not draw too much attention to himself.
Baby You Can Drive My Car
In my other two columns, I tried to clarify the differences between “luxury” and “premium” in the fashion industry and in the horology markets. Similar problems also exist when assessing the automobiles.
It is quite clear to most professionals that luxury cars carry high price tags many of us normal mortals would consider exorbitant. Price aside a luxury car should embody a cache selling prices. Read here: exclusivity, pedigree, craftsmanship and limited production.
R.L. Polk and Company, a global automotive information and marketing firm that provides solutions to automotive and related industries, has re-defined the term with the appellation, “super luxury”, i.e. cars that cost +$100k. This category includes brands such as Rolls Royce, Bentley, Aston Martin, Maserati, and until 2013, Maybach, by parent Daimler AG.
Premium cars are defined as those, which offer clients cutting edge design and technology. Their target market are individuals in the upper middle class. Some label these vehicles as such because they have creature comforts with all the bells and whistles.
Cars in this category normally range from an entry level BMW 1 or 3 series (depending on the country) from ~ $30k- +$95k.
Competition for market share in the profitable premium category is fierce amongst rivals BMW, Mercedes Benz and Audi, along with their Japanese counterparts Lexus and Infiniti.
Acura and Volvo are not regarded as strong contenders. Instead, they are viewed as part of the compact executive car segment. This category is a combination of the standard class vehicles from the top name brands and top models from automakers not necessarily known as being premium category brands.
Impeccable service is also another important measure for premium automobile brands with a strong emphasis on the total customer experience.
At the same time, we are witnessing aspiring premium brands from deep rooted economy class automobile manufacturers such as Hyundai with their Genesis (including the coupe version) and Equus models. However, compared to their established counterparts, they’re lacking “brand cachet”, thus in their clever marketing, Hyundai is pitching “Smart Luxury & Engineering” as its differentiator.
There had been internal discussions within Hyundai about creating a separate brand to feature the Genesis sedan as well as the imminent Equus sedan in North America, but due to prohibitive costs and potential delays, those models will still remain labeled with the Hyundai brand.
For exotic sports cars such as Ferrari, Lamborghini, Bugatti and others, Ferrari chairman Luca Cordero Di Montezemolo, explained at a recent FT Business of Luxury Summit:
“I tell my employees listen, be careful, we are not selling a car, we are selling a dream. Because we sell something that is not a typical car, in this rests the emotion of driving.”
Ordering any one of those cars can quote an average wait of 24 months before delivery.
As with the ultra luxury cars, the exotic sports car (limited) producers are now offering their own customization program. Ferrari, for example, offers no limit on imagination to potential buyers who want something different or want to make their Ferrari unique to them.
The Takeaway
The proliferation and marketing misuse of the word “luxury” on many products across sectors is quite evident. Brands either do it out of ignorance or to enhance the desire for the consumer to purchase their products.
Some “premium” products are labeled as “luxury” and promoted that way vigorously. This is where mass brands imitate luxury and its characteristics. As a result, it has caused confusion amongst consumers along with plenty of fancy jargon adding to the perplexity.
Luxury is not premium – and premium is not luxury. They are two dissimilar categories catering to different market segments.
A luxury brand is more about prestige and appearance – it’s about pedigree and social stratification. As objects of desire, they stand out as aspirational to all but a few souls. These crucial elements keep these products exclusive on purpose. Premium, on the other hand, stands for performance, value added, state-of-the-art, craftsmanship, and timeless design.
Certain brands deliberately generate this confusion, while others can’t figure out the messages they want to send to potential clients themselves. Obviously, the wealthy know the difference. Perhaps now, so will you.
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by James D. Roumeliotis
There was a time when the Olympic Games stood purely for global athletic competition. Nowadays, you have to be somewhat paranoid considering the gross commercial exploitation. The management team in charge of the IOC (International Olympic Committee) have gone for tight-fisted brand control. In today’s economic environment, everyone is brand conscious. The defining line between sports and business and non-profit endeavors is a thing of the past.
Like Christmas, the Olympics have been hijacked by commercialism. What was once a tribute to athleticism has been transformed into an indulgence of consumerism.
Change In Perspective
Do you realize that the Olympic games went from honoring the Gods to becoming a vehicle for financial gain?
It is common knowledge that the Greeks invented the Olympics in 700 BC. However, the “modern” Olympics as we currently know it was established by Pierre de Coubertin, a Frenchman in 1896.
Until the year 1972, the International Olympic Committee (IOC) would not accept money from corporate sponsors because it believed that due to their influence, the decision making authority of the IOC would be diluted. Until that year, the IOC was operating on a scanty budget with assets of $2m.
Following 1972, there was a radical shift on managing and running the Show. Members took the radical step to accept corporate sponsorship. In the next 8 years, the IOC accumulated assets worth $45 million. In the last four-year cycle that includes the London summer games as well as the Vancouver winter Olympics of 2010, the IOC raised $4.87bn in sponsorship and broadcast fees. On top of this, it earns a handsome sum on venue ticket sales, as well from licensing products/souvenirs.
The Commercialization of the Games
A new program called TOP (The Olympic Program) was created by the IOC in order to increase the Olympic brand value. To acquire a membership in TOP, a company has too forfeit $50m for four years. If a company becomes a member, then it has the right to use the Olympic symbol of the intersecting rings in its advertisements.
The 11 major brands have invested for the prestige and global celebrity. This intense exposure adds an exceptional opportunity to bond closely with their worldwide consumers. Alternatively, the IOC benefits from the revenue it earns from the sponsors, as well as the additional publicity it receives for the Olympics which the sponsors are contractually obliged to offer through their ads.
As for TV broadcasting rights, the bidding process can reach amounts in the low billions with some notable broadcasters such as NBC Universal. Despite lucrative advertising revenues, it is believed that it loses oodles of money for the sake of the title as “official broadcaster” to the Games.
An Excessively Antagonistic Brand
Prior to and during the actual Games, the IOC brand thugs are busy chasing down grandmas who sell muffins, a butcher who had to remove a bunch of sausages made to look like the iconic five ring logo and a shopkeeper who displayed intertwined bagels in alleged violation of branding rules. If that wasn’t enough, they have also threatened legal action to a dry cleaners operation named “Olympic”, whose business name existed for two decades, including improv comedians and Facebook users who mentioned or attempted to showcase any corporate entity that is a competitor to the official Olympics sponsors.
Renowned marketing expert Seth Godin articulated it best in his recent blog post by stating:
“Today, of course, everyone is a media company. In their misguided attempt to stop guerrilla marketers, squatters and media pirates, the IOC has completely missed the point of what a brand is. It’s not a word. It’s a set of expectations. You can’t build a brand by trying to sue anyone who chooses to talk about you.”
On the contrary, you have a Tennessee based distillery brand which handled a trademark violation with finesse and won it plenty of positive publicity and admiration. Referring to a recent story of a lawyer who defends trademarks for Jack Daniel’s whiskey and who was in the news for writing a cease-and-desist letter that is exceedingly polite, encouraging and empathetic. The letter was sent to the author of the satire “Broken Piano for President.”
Apparently, the book cover bears a striking resemblance to the label for Jack Daniel’s Tennessee Whiskey. All in all, both sides settled quickly and amicably with the absence of any needless strong arm tactics from the Whiskey’s legal counsel.
To add to the debacle, the IOC designates certain car lanes which are restricted to Olympic officials and athletes. Under normal every day circumstances, those are available to taxis for pickups and drop-offs. As a result, the “Olympic lanes”, although under-utilized for their intended purposes, in the interim create a great deal of inconvenience for drivers and passengers along with a significant drop in revenue for the cab drivers.
Suitable Sponsorship
Corporate sponsorship has also created controversy with the validity of some which go against the image of the athletic games such as McDonalds, Coca Cola and Dow Chemicals. With the McDonalds and Coca Cola, health food activists claim that the IOC could have taken a stand against obesity. They’re junk-food companies and have no business being associated with sport, health and performance.
Dow also a major sponsor, including its contribution of the fabric wrap around the stadium in east London, has caused a debate with campaigners arguing it holds responsibility for the disaster in Bhopal, India in 1984 which killed an estimated 15,000 residents. It’s a claim which it denies because Dow bought Union Carbide, the company which ran the plant at the time –16 years after the disaster and argues it has no responsibility.
Brash Marketing
In an online survey of 1,034 U.S. consumers, a week prior to the opening of this year’s summer games, respondents incorrectly mentioned Nike, Pepsi and even Google as brands behind the Games. Thirty-seven percent of respondents identified Nike as an Olympic sponsor, and just 24% said, correctly, that Adidas is one. That may be partly due to Nike’s success in identifying its brands with serious athletes of all types. Nike is also a master of ambush marketing.
Rival sponsor activities also invite bold antics from non sponsors who are willing to make a point by pushing the envelope to the edge. One sponsorship adversary who’s standing up to the Olympic branding czars is Nike. It’s got a longstanding reputation as a slick ambush marketer with more chutzpah and success than any other player on the field. Their latest “dare you” campaign has been named “Find Your Greatness” (theme: “Does greatness get handed out?”) and pokes fun at rival Adidas who is an official sponsor. Nike’s aim is to diminish them while elevating everyday athletes.
Bottom Line
Sponsorship should not be used to secure an unfair advantage. The Olympics may need sponsors, but they should refrain from applying bizarre brand exclusion zones to protect their investment. Sponsoring a big event gets the sponsor immense exposure and that’s its reward as a business. It shouldn’t buy special privileges. This is a big opportunity for the Olympics to get maximum exposure and conversation by anyone who cares to talk about the Games rather than stifle and control any discussion by ludicrous brand policies which only satisfy its sponsors.
Olympics sponsorship should not imply or allow carte blanche for sponsors to take jabs at their competitors. A case in point, Visa’s first Olympic campaign was full of ruthless antics. Having displaced American Express as the official payment card for the 1988 Winter Olympics, its ads bragged: “At the 1988 Winter Olympics, they will honor speed, stamina and skill – but not American Express.” Visa demonstrated how an Olympics sponsor can get away and deliberately put down its rival, in this case American Express.
Sponsors accepted by the IOC should be appropriate. Adidas, for instance, is a sports company and a fitting partner for the Olympics.
As politics and religion don’t mix, we should add that global athleticism, whose founding principle was to assemble top athletes from all corners of the earth to compete, should not mix with commercialism either.
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In the book, “Fascinate: Your 7 Triggers to Persuasion and Captivation”, author Sally Hogshead stated that marketers must strive to fascinate people beyond the bounds of rationality. Companies must activate such mental triggers as lust, mystique, power, trust, and vice.
Though the marketing and branding folks are relied upon for their artistic output to create a buzz and compel consumers to buy, the industrial designers of car brands work diligently on fashion inspired creations for new model launches.
Like an outfit, an automobile should wrap its owner in a new outer shell, both protective and decorative. Premium cars like extraordinary clothes, invoke a whole new life as the glamor of both comes from the promise of escape and transformation.
The automobile as eye candy
Fine arts, fashion and luxury brands have long crossed paths creating a blend of culture, merchandising and branding. The similarities could not be more striking with cars and fashion. Seems European auto designers have always had this ethos ingrained as demonstrated with their design flair. The Italian industrial design houses such as Pininfarina, Italdesign and Bertone are renowned for churning-out architectural inspired automobile designs. In the past and present, Pininfarina has been employed by a wide variety of high-end automobile manufacturers, including Ferrari, Maserati and Rolls Royce.
Italians are very proud of their brands such as Panerai or a Lamborghini. They epitomize the essence of style. Even smaller motorized vehicles such as the Vespa convey savoir fair with simplicity.
Fiat & Gucci: complementary collaborators
The Fiat 500 is no exception. Once again, the firm is partnering with Gucci. The 500C by Gucci is offered in two colors, white with satin chrome accents or black with shined-up chrome bits. On both, a black soft-top covers occupants. Gucci’s color scheme signature runs down the middle. At all four corners sit 16-inch alloy wheels sporting the Gucci double-G logo in the center. Inside, a Gucci print adorns the seats and the fashion house’s moniker can be found sprinkled liberally throughout. When Fiat revealed the hardtop version of the Gucci 500, more than 3,000 pre-orders came flooding into the automaker’s website.
Bob Lutz prior to his retirement at GM
After holding top executive positions at BMW, Ford, Chrysler respectively, Bob Lutz had a very good idea what a car company and its car models should look like, which he didn’t find when he was hired at GM in 2001. Within days of arriving at GM, Lutz began reviewing the future model lineup and was shocked to discover that none of the models he reviewed, as he put it, “had any charm or ornamentation to delight the eye”.
The Cadillac CTS (2001 model) “lacked any charm or warmth.”
In his experience, there was an internal battle between the design team, what he regarded as “the car guys” vs. “the bean counters”. Read here the people in finance. Although now retired, Lutz can proudly claim that he was instrumental for the changeover to a sleeker line-up. GM sales figures show it has succeeded in generating committed buyers.
Fast forward more than a decade and this time Cadillac has moved its headquarters from the automobile manufacturing capital, Detroit, to the trendy SoHo district of Manhattan so as to establish a new brand identity in this luxury international city — as it yearns to convey a global avant-garde identity. At a New York Fashion Week party, in September (2015), celebrating Public School, GMs luxury brand enticed its onlookers with a sneak peak of its successor to the brand’s best-selling SRX SUV, by utilizing a hired helicopter to fly across the Hudson River carrying a XT5 SUV on a platform underneath it. More on this here http://bloom.bg/1EYmHft
The Rolls-Royce Wraith – high fashion on wheels
The latest motor carriage to be inspired by the world of fashion and film is the epitome of luxury cars – Rolls Royce Motors with its 2013 coupé Wraith model. The automotive brand to the well healed describes this 624bhp, $285,000 priced two-door as a debonair gentleman’s GT – a highly refined, luxurious and exclusive like its stablemates, but more dramatic and exciting than any of them. To add more pizazz, the designer edition of the Wraith model will be customized with the finest materials as per the customer’s specific taste and choices.
According to Giles Taylor, director of design at Rolls Royce, “There’s a sense of effortless grace and elegance, but at the same time something more contemporary and daring.” The interior is equally elegant and sophisticated. It is flawlessly outfitted with fine silks along with inspiration drawn from haute couture as evidenced by hints from the materials, color palettes and the techniques applied. It is the ideal combination of power, style and drama.
Two supermodels along with their new fashion statement — the Rolls Royce Wraith.
Branding by design
Product design is key to a great brand. Design is the elemental differentiator with competitors. Eye catching sex appeal builds the emotional bond and turns owners into enthusiasts.
“It’s all about integrating design and brand,” says Joe Doucet, founder of Joe Doucet Studio.
“We need to cease thinking of them as different disciplines. The essence of the Apple brand comes through its design. Take the logo off a BMW and you still know it’s a BMW.”
Design also needs to be part of the strategic plan from the start, embraced by the CEO and across the Board.
“A brand is not your logo or ID system,” says Robert Brunner, founder of the design shop Ammunition and author of ‘Do You Matter: How Great Design Will Make People Love Your Company.’
“It’s a gut feeling people have about you. When two or more people have the same feeling, you have a brand. You get that feeling via smart design, which creates the experiences people have with the brand. Everything you do creates the brand experience; ergo design is your brand.”
Striking success at Audi
Premium brand Audi has come a long way with a big streak since its prolonged slump in the late 1980s and early 1990s. Today, the firm continues to surpass its own benchmarks. As one proud owner succinctly stated, “It’s elegant without being ostentatious.”
If you think fashion”, new Audi cars are akin to a well-put-together outfit. They are considered “classics” upon release. They are prominent not only for their impeccable sophistication and styling but also for the brand’s hard found creative innovation. Luxury and comfort are blended in a seamless mix. New technologies and taste trends are calculated to coincide with market shifts. The firm’s signature LED highlights reshaped an entire industry to become the standard.
Hyundai’s economic aesthetic appeal
In automobile parlance, Hyundai is a relative newcomer to this game, but the firm has learned quickly and converted previous Toyota and Honda evangelicals to switch. Jessica Caldwell, a senior analyst with Edmunds.com, claims that Hyundai is operating from a much older playbook.
“What Hyundai did was nothing new,” she says. “They developed the oldest formula in the book: Have a good design at a good price.”
Caldwell further states that she’s surprised that other car companies haven’t caught on to Hyundai’s “secret” sooner.
“That, to me, is Car making 101,” she says. “You would think that it’s not that hard to figure out. And I just think it’s interesting that people think that Hyundai’s success is so surprising. But, if you look at it, it’s not at all. I mean, of course people are going to buy something that looks good and is not expensive. I think, regardless if you’re buying a refrigerator, a shirt, or a computer, that formula is always going to work.”
Lookout for the Fashion Patrol
As Fashionistas and celebrities piled into New York City during the Mercedes-Benz Fashion Week in February, the fashion police were out in full force. To capture attention, MB deployed its “fashion force” in CLS 63 AMGs four-door sports coupe painted in police-livery black and white, with sirens and yellow flashing lights.
It was fast enough to stop anyone in the middle of a styling faux pas. The ultra stylish police officers, though, were more interested in looking-out for some of the city’s most fashionable citizens, who were rewarded with a ride to their next destination. Other participants won prizes, which included seats to the highly prized fashion shows themselves.
“Mercedes-Benz has a natural affinity with the world of fashion with cars that appeal to those with a strong sense of style,” said Lisa Holladay, manager of brand experience for Mercedes-Benz USA. “The 2012 CLS 63 AMG four-door coupe is the perfect vehicle for the Mercedes-Benz Fashion Force initiative with its fascinating design and significant curb appeal.”
Along with its affinity in the fashion domain, Mercedes also has a micro-site, named “Avant Garde Diaries” depicting scenes and visual stories of its cars with fashion industry icons.
Victoria Beckham and the Range Rover Evoque
Victoria Beckham, the former pop star and wife of renowned footballer David, has earned critical acclaim for her finely tailored, ultra chic fashion line, winning the Designer Brand of the Year award at the 2011 British Fashion Awards.
Likewise, her special-edition, 200 unit, Range Rover Evoque line boasts a hand-finished matte grey paint, 20″ black alloy wheels and rose-gold detailing. With Rover head designer Gerry McGovern, she spent 18 months on the SUV working from elements like jewelry and textile. The results are distinctive. She was reported stating that the car must appeal to both men and women.
Applying design cleverly makes a difference with brand perception. Thus, a fashion design culture needs to be strategic, not an afterthought.
When you consider the planning, demands in the fashion and car industry are similar. Grab the customer’s attention. Use innovation and design to generate passion and commitment. By doing so, you are able to build brand loyalty with staying power and revenue generation. Who knows, you could be at the forefront of starting a new cult!
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Unconventional Business Wisdom for the refined entrepreneurial mindset - by James D. Roumeliotis 