Ben Wise on Branding

Watching the world through the lens of the brand

Archive for June 2010

Customers Divided

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It is often mistakenly assumed that rich consumers spend more money across the board than the less affluent. It is at your peril that you believe this piece of conventional wisdom.

What is actually happening is a division within each individual consumer. Essentially, consumers are deciding what is important to them and what is not. People are then paying premium prices for those items they deem important, and cutting back in other areas.

This is why you see so many fancy cars in the parking lot outside a Wal-Mart!

Here is a quick example. Some people take great pride in their clothing and are willing to spend more money to have the latest fashion. They have identified clothing as a high priority in their life. These same people might decide that fresh food is far less important, and pick up pre-made meals from Wal-Mart. If Whole Foods (an upscale grocery store) targeted these consumers, it would be a waste of their time.

What does this mean for your business?

Segmenting your consumer base is one of the first steps in marketing campaign. There is certainly benefit to doing this on a demographic basis, but you can’t stop there. Chasing everyone within your target demographic will spread your resources too thin. Some additional research to find out the attitudes and behaviours within your target demographic will vastly improve efficiency, your bottom line, and the strength of your brand.

What do you think? How do you understand the behaviours of your consumers?


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June 25, 2010 at 4:40 pm

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Do Customers Mean What They Say?

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In the past year or so, an Organic food grocery store opened in a location I regularly pass by. Unfortunately, they have now closed-up shop and are being replaced by a…wait for it…Dollarama. These are two businesses that could not be more opposite.

Organic food is a high-end premium product, while the Dollarama- well, let’s just say isn’t.

What are consumers loyal to?

I find this fascinating as it perfectly demonstrates the difference between stated intentions and actual behaviour. I’m sure that market research would show the area to be perfect for an upscale grocery store and that most respondents would say how important organic is to them.

But when push comes to shove, consumers aren’t willing to part with their hard-earned cash for organic food.

More than almost anything else, consumers are (or should be) loyal to themselves. Consumers are selfish, always looking for brands that best meet their true needs. While stated desires may show a willingness to sacrifice (ie spend more) for organic products, actual behaviour proves this is not the case. At least not on a scale that makes a physical store financially viable.

The key to success for brands is in finding a value proposition that addresses stated as well as actual needs.

What do you think? Are your customers stated intentions different from their actual behaviour?

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June 7, 2010 at 10:28 pm

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Why Google Is Dropping Microsoft

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A couple of days ago, Google announced that they are phasing out Windows from the business operations. The reason? Security.

I don’t buy it!

This article from ComputerWorld does a great job explaining why security isn’t really the issue for Google. Basically, when hackers go after a company, they choose the company based on something other than their OS. Not to mention that the vast majority of the world’s largest companies find Windows to be secure enough for them.

So Why is Google ditching Microsoft?

The obvious reason is that Microsoft is increasingly coming into direct competition with Google – search engines, smart phones, web browsers. Before the end of the year, you’ll be able to add operating systems to that list. But what has changed to prompt the sudden shift?

Google’s next big push is getting computer users to embrace the cloud as their main source of software, particularly for enterprise users. This means moving from Microsoft’s highly lucrative Office suite to a cloud based solution. While Google Docs has been around a while now, it still isn’t perceived as a strong enough software package for enterprise users.

Google Is Leading By Example

Google’s move away from Windows and MS Office shows that there are other solutions viable solutions available to large enterprise customers. The interesting part is not that Google has switched, but it will be watching who follows suit.

What do you think? Why is Google dropping Windows?

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June 2, 2010 at 5:14 pm

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Growth Through Word-Of-Mouth

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It is no secret that word-of-mouth is one of the most powerful marketing tools for brands (assuming people are saying good things!). The most obvious way to get good word-of-mouth is to provide a product or service that is worth talking about. Be remarkable. In Seth Godin’s words, be a “Purple Cow”.

But when put into practice, there are strategies to maximize the power of positive word-of-mouth. I’m not talking about the obvious things like providing easy ways to share, like a ‘share this’ link on an e-commerce site. That is a tactic, not a strategy.

The strategy for word-of-mouth is about who you target. The trick is to target niches that are naturally adjacent to each other. Adjacent niches are ones that:

  1. Desire similar benefits,
  2. Talk to each other regularly
  3. Trust recommendations from each other

Without targeting adjacent niches, your brand will be forced to build its reputation and brand equity from scratch for each new market.

If you are a baker, your first niche could be selling to local restaurants. An adjacent niche would be locally owned supermarkets. Both are looking to provide customers with delicious cakes, and local business owners (that aren’t in direct competition with each other) are likely to talk to each other and trust one another. From there, the next niche could be supermarkets in a neighbouring town. Soon enough, you will build up a reputation and develop the critical mass required to launch your brand on a much bigger scale.

Some brands are already big enough that they don’t need to bother with niche marketing. But for the rest of us, targeting adjacent niches can leverage word-of-mouth and bring much faster growth.

What do you think? Does your brand have any adjacent niches that could leverage word-of-mouth for faster growth?

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June 1, 2010 at 6:12 pm

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