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November 14, 2006

I'd Like A Sandwich, Please...Not The Parts of One!

I was at a Dunkin' Deli today...a rebranded sandwich location (formerly Togo's) owned by Dunkin' Brands, parent of Dunkin' Donuts.

I ordered a tuna sandwich combo at the drive-thru, was quickly served and drove off. Some minutes later, I unwrapped my sandwich and what I founded reminded me of an order from a now-defunct Burger King that used to be in the town where I live in CT.

The tuna was squeezing out from all sides of the sandwich. The lettuce was "almost" on the sandwich. The tomato was half on, half off. The onions were scattered about. Our old Burger King used to be like that...all the parts of the Whopper there, just not quite assembled right. In fact, my Dunkin' sandwich wasn't really a sandwich as much as it was the components for one...a sort of do-it-yourself creation that was really hard to eat on the road.

Service makes such a difference. I really don't remember whether I enjoyed the sandwich or not...I simply remember being annoyed about how poorly assembled it was. There are a few chains that are obsessive about consistency from store to store. I thought Dunkin' Donuts was one of them. They threaten that image if they can't get the meat on the bread.....

Posted by jcioban at 7:41 PM | Comments (0) | TrackBack

November 12, 2006

It's Radio Shack. What Do You Expect.....???

Seth Godin's blog has a great story of bad customer service at Radio Shack. My first comment is in the headline for this post...

Radio Shack has a 30-day, Money-Back Guarantee (although it is cleverly worded to potentially exclude situations like the woman's in Seth's post...). It has a published Return Policy (again, cleverly worded...). It also has a reputation, well-earned, of not having the sharpest knives in the drawer working the stores. Why have cool-sounding consumer-friendly policies if they are to be adjudicated by less-than-well-trained clerks like those described in the post? And why have cool-sounding services like a "30-Day Money Back Guarantee" come with caveats if you are really serious about customer service?

Now, there are many great Radio Shack employees. And, it is unfortunate how these good employees have to be shackled by the efforts of the ones who are not so swift. Every time I walk into my local Radio Shack, I get the same feeling I get when I walk into my local Wal-Mart...a creepy, cheap, low-budget feeling that I am anxious to extract from as quickly as possible. It may not be fair, but it is the result of my experiences with multiple Radio Shack stores that have now spawned a defense mechanism every time I enter one of their stores. It is a solid lesson for retailers, dealers and franchisees in how important consistency is.

Training store personnel on the keys to customer service is one of the most immediate ways to change the perception of the once-proud Radio Shack brand. In the meantime, as Seth Godin suggests...."Why Bother?"

Posted by jcioban at 12:37 PM | Comments (0) | TrackBack

Personal Fabrication: The End of Channels As We Know Them?

A favorite topic of mine is "adding value in the channel." From auto dealers to insurance brokers to industrial wholesalers, I am continually reminding clients to think about "how you add value to the customer transaction?"

A few days ago, there was an interesting post in MIT's Advertising Lab blog, a very forward-thinking location for discussion space on the future of advertising. The AdverLab's post discussed an article in Fortune magazine about MIT professor Neil Gershenfeld and his Center for Bits and Atoms.

Before you go running screaming into the hills, this is not just about pie-in-the-sky futuristic thinking. Both the MIT post and the original Fortune article bring an interesting perspective to the future of personal manufacturing and how the concept is being put to test today in $40,000 "fab labs" sprinkled around the world. The AdverLab post carries the conversation into the future of advertising where the implications are obvious. I am fascinated by the implications to distribution and sales.

Unlike the disintermediation craze of the Internet-fueled late 90s, this technology really does "eliminate the middleman." In fact, it eliminates mass manufacturers in many industries as well. Yes, the concept is some number of decades from reality, but take a moment to think how fast technology advances arrive today. As the article points out, the music and video industry is being recast by consumer-created content. But this is "consumer creation" taken to a new level.

Think it is all "geek speak"?? Check out these real-world rapid prototyping and fabrication companies, like Z Corporation with their Z Printers, that are reforming the world of manufacturing:
- Z Corporation
- The Ennex Companies
- Geomagic, Inc.
- 3D Systems, Inc.
- Stratasys, Inc.

It opens fascinating thinking about how today's channels will be reformed in the new age of digital manufacturing. I, for one, don't see this as "armageddon" but rather as a reminder that "how you add value" will continue to evolve.

Posted by jcioban at 10:05 AM | Comments (0) | TrackBack

November 11, 2006

The Power of Channel Differentiation (And The Shifting of Power!)

If you have ever been in a Whole Foods Market, you know how hard the company has worked to create not just a unique experience, but a literal culture among its shoppers. The company's motto -- Whole Foods, Whole People, Whole Planet -- reflects a philosophy that goes beyond the selling of products to customers. They get above average prices for products from customers who are less likely to "sticker surf" than to simply "try something new."

The company has sheparded numerous organic brands to success by introducing them to the legions of Whole Foods loyalists. Simply by carrying a brand, Whole Foods delivers an implicit endorsement. Which is why a story in this week's Advertising Age about Pepsi's new Fuelosophy product -- a high-energy protein-rich beverage -- is so interesting. Aside from the fact that Fuelosophy doesn't seem very "natural" or "organic" (albeit all the ingredients are naturally occuring products), Pepsi was interested in introducing the product into the healthy lifestyle community without spending lots on advertising and marketing. Enter Whole Foods.

Whole Foods Market has such reach in the organic space that by sneaking onto the shelves at Whole Foods, Pepsi can see how the product performs in the marketplace without spending heavily on product advertising. Pepsi has worked hard to conceal its identity in the Fuelosophy line... there is no company mention on the packaging, the Web or any official company literature. The story is obviously big in the ad community where it is a case-study in new product launch strategies and brand management.

I find it equally educational from a channel differentiation perspective. It shows how a company in the mundane "retail grocery" segment, can identify and excel in a niche and then, in effect, become more powerful than the brands that want to sell through it. Compare that to Stop & Shop or Kroger's or other grocers. The brands doing the selling are more dominant than the retailer in the minds of most consumers. However, Whole Foods has developed its own local brand to the extent that it now is the powerful icon in the consumer's mind. They are not alone. For example, throughout Texas and sections of Mexico, H-E-B has learned that by obsessive attention to its customers, and careful management of its product offerings to reflect a Hispanic bias, it can differentiate from other grocers and dominate its markets. Again, H-E-B customers are part of the culture of the chain.

In my company, we often talk to dealers and emphasize the importance of knowing their strengths and building their brands. This story is a terrific lesson in why that is important.

Posted by jcioban at 3:58 PM | Comments (1) | TrackBack

November 6, 2006

5 Bumper Stickers For Small Retailers

I was reading an article in Inc. Magazine titled "Price Isn't Everything" (online here). The author, Ted Hurlbut (a retail marketing consultant), did a great job of making the case for not competing on price alone in today's hugely competitive retailing environment. In this article, he offered five "bumper stickers" for small retailers -- tidbits to remember based on the experience of many larger retailers (Sears, Federated, etc.) who have seen their businesses ravaged in recent years. The five take-aways were:

• If you compete on price, there will always be somebody who will be able to beat your price, unless you decide to give it away. And nobody can do that for long.
• If you run an ad this year, you’ll likely have to run an ad next year to have any hope of running an increase. And your prices will have to be sharper.
• If you think you can cut costs by cutting customer service, plan on cutting customers as well.
• Customers may go to the internet for product information, but when they need true product knowledge they will come to you.
• Customers will always pay more for customer service than for products. Products they can get anywhere, whereas customer service, true service, is a rare commodity.
• Quality never goes out of style.

The testimonial at the the start of this posting is for a retail company in Chapel Hill, NC. — A Southern Season. My sisters were always raving about it, and so, when in the area a while ago, I stopped in. To call it a retail store doesn't do it justice. The restaurant on-site had a waiting list an hour long...luckily they gave you beepers so you could shop (and spend) while you were waiting. Their wine selection, tea selection and coffee selection were all the largest I'd seen in any single store. They had demos all over, fantastic prepared foods, spectacular displays and seasonal sections that are continuously rotated throughout the year. Shelves were impeccably maintained, associates were everywhere, and checkout lines were efficient, well-staffed and friendly. In short, it was a staged experience, not a "store." People went there as a social event as well as wanting to shop. Think about other places like that...locations like FAO Schwarz in NYC. The store and the products are part of a self-reinforcing ecosystem. People don't walk in thinking about price...they walk in thinking about the experience. Increasingly frustrated consumers and business buyers are showing renewed sensitivity to this service-oriented mindset. We have been through a period of deep cost-cutting as companies sought to improve the bottom-line by reducing the cost of doing business. In the last year, many companies have refocused themselves on differentiated top-line growth as the way to improve the bottom-line. While there remains a sensitivity to price, increasingly time-pressured buyers are much more likely to seek out suppliers or retailers who can deliver "value" which means not just products...but the service to go with it. Or, they want an "experience" — shopping that goes beyond procurement. A great lesson for both retailers -- and the manufacturers who supply them products. How is "value" being created throughout the process of design, manufacturing, distribution, retail sales and support??? OR how are you working together to make the retail location a destination in itself???

Posted by jcioban at 10:19 AM | Comments (1) | TrackBack

November 5, 2006

12 Consumer Values: Themes to Do Business By

Take a look at David Armano's extremely interesting posting titled "12 Consumer Values for Your Wall" -- a wonderfully visual summary of research firm Social Technologies work exploring how to view a technology's worth to the customers expected to buy it.

The poster identifies 12 broad-based themes that Social Technologies researchers found are common in driving consumer searches for and selection of technology products and/or services. The themes:
- User creativity
- Appropriateness
- Intelligence
- Personalization
- Convenience
- Protection
- Simplicity
- Connectedness
- Health
- Assistance
- Efficiency
- Sustainability
give marketers another way of netting messaging to prospective buyers by distilling the essence of consumer motivations as opposed to being captivated by the bells and whistles that comprise the product. This simplication of values is an equally important concept in the B2B space where companies are even more prone to engineering "feature wars" and marketing arcane product nuances as opposed to talking about the simple values that a technology or service can deliver.

In some respects, this posting is a great lesson in "the more things change, the more they stay the same" since the lesson of "essential value" was presumably taught to us early in our marketing careers. However, it is also a subtle lesson in change, since values like "User creativity" (as seen in the myriad content creation and sharing technologies that are emerging) would likely not have been a top 12 value even a couple of years ago. Yet another example of rapid marketplace evolution — from engineering all the way to marketing and sales.

Great read and worthy printout for your office or cubicle wall.

Posted by jcioban at 11:22 AM | Comments (0) | TrackBack