With marketing it is never just one thing

Marketing Gurus have simple and universal solution to your business problems. Perhaps, too simple. There is always one simple answer that broadly applies to all businesses. Whether the business is small or a large enterprise, whether it is a startup or a well established player and regardless of market conditions they recommend their one solution.

Based on the guru you pick or the point in time we get many such simple one size fits all edicts

  1. Tell better stories, because all marketers are liars storytellers
  2. Increase your price by 1%
  3. Keep your existing customers because 5% increase in loyalty increases profits by 75%
  4. Enchant your customers
  5. Generate remarkable content and just do inbound marketing
  6. Launch products like Apple does
  7. Give your product away, because free is free marketing
  8. Streamline user experience across all touch points
  9. Appoint women board members because organizations that have women board members saw 46% growth on return on equity
  10. To be fair I should add – Have two (or three) prices because if one price is good two are better (that is me indeed)

But in the real world, when you are facing declining revenue, changing market conditions, ever changing competitive field, technology disruptions and changing customer needs these one size fits all simple solutions woefully fall flat.

There is never just one thing any brand can do that can magically turn the business around.There is no glass to break to deploy the emergency solution.

You wouldn’t take the same prescription from your doctor because he recommended it to previous 100 patients, would you? In fact we do not even know what the problem really is before we can start to talk about solutions.

Take for example this struggling winery featured in The Washington Post case study:

Clos Du Val, a maker of fine Bordeaux wines found itself in troubled waters despite thirty years of success in the market. While the market was growing their sales fell. Analysts (Gurus) blamed the company for clinging to status quo and not changing when the customers’ taste changed. They were stuck in the middle between brands with bigger marketing budget and the nimbler boutique wineries.

Try applying any one of the popular solutions. Nothing fits.

Where would you start?  The marketer hired to fix Clus Du Val, Ms. Brooke Correll started with analysis and data collection to understand what the real problem was.

Correll set out to determine whether the “California wine with a French accent” had what it took to get back in the game.

It is the starting point of understanding the strengths and weaknesses and testing hypotheses.

She canvassed all constituents. She talked with distributors, retailers, restaurateurs, wine reviewers and consumers to assess the health of the brand.

You can’t test a hypothesis with made up data, by wishful thinking or by selective evidence seeking based on availability and convenience. You need to seek data from all stakeholders in the value chain, easy to access or not.

She conducted a quantitative pricing survey among peer Napa wines. She held interviews with its directors, management and sales force.

You can’t just worry about your products and your customers. Customers have choices. There is competition for customer’s wallet. It is not as simple as raising prices by just 1%. It requires quantitative studies to understand customer segmentation, their buying behavior and prices they are willing to pay – not just for your products in isolation but in the presence of all other choices they have.

Only after this data collection and analysis phase does a solution begin to emerge.

Clos Du Val simplified the product portfolio and took a long overdue price hike on the top tier. It unified the look of its labels to an updated version of the widely recognized terra cotta original. It created consistent brand imagery at every consumer touch point: a new Web site, a renovated tasting room, upscale branded merchandise and revamped wine clubs. Added PR component with product placements in shows like The Sopranos.

These actions would not have been possible without the initial diagnosis phase. No one action by itself would have been enough as well.

The results? With any turnaround, the results are not going to materialize overnight. It took them 18 months to turn around.

Still in love with simple solutions from Gurus for your difficult business challenges?

Note: I must note that we still do not know what other factors were at play in the turnaround. It is still likely we ignored other shifts in the marketplace or just plain luck in the Clos Du Val turnaround. After all any success story is laden with hindsight and narrative biases. But the recommendation to start with a clear understanding of your problem then define a comprehensive set of solutions remains true.

Should Publishers Allow Kindle Text-To-Speech

With Amazon Kindle there is a feature that has not been available before, Text-To-Speech. Publishers are not happy about this feature.One of the Kindle eBook publisher, Random House, has turned off Text-To-Speech for all its eBooks. Opinions on this are divided. Kindle readers are most likely to think that they had already paid for the book and hence they should get the Text-To-Speech feature. Amazon would like this as well as a value added feature for its $300 device. Should Kindle Text-To-Speech be allowed? Are publishers just being unreasonable? For these we should look at what we pay for a book.

Suppose you bought a hardcover book from a local bookstore. You pay just the price of the book and  read it when and where you want and as many times as you want. You can annotate, bookmark, refer back or even tear off pages you like and archive it.

It just happened you were not able to read it yourself, so you hire someone to read it to you. (Hold on to your question “why did this person not buy audio book?”).Everyday for an hour this person comes to your place and reads the book until it is done.When something was not clear or you wanted to listen again you ask them to go back and re-read the those sections. Anytime you like a section you ask them to bookmark it and also add a Post-It note with your comments on it. You also ask them to flip back to previous chapters and selectively re-read. When this person is done they leave the book with you, which you can thumb through to refer bookmarked sections. You pay about  $X/hour for this service.

One day this person says she cannot come in person to read for next few sessions but can read it over phone to you. You get all the benefits of the previous case except that you do not have the book with you, have to take your own notes and it is done over phone. You would expect to pay less than $X/hour for telephone reading.

Sometime later the same person says that they cannot make the appointed time but will record their reading and send it to you. You can tell this person beforehand your specific needs, reading speed, annotations etc. You lose many of the benefits of previous cases but gain the convenience of hearing it anytime and anywhere you want.

On the other hand you simply can buy the audio book, that is mass produced and lose personalization and customizations you had with your own reader. But you do not pay a separate fee for someone else to read the book, you pay one price for the audio format.

This brings us to what I call the three C’s of  what you pay for the book:

Price of a book  = Content   + Consumption  + Convenience

Content: Is the information content of the book, be it ideas or the story. These days even the most popular books are discounted heavily. Unless you are buying an esoteric topic or a college text book, the price paid for content is almost the same and negligible for most books.

Consumption: This is how you consume the book and what you pay for the method of consumption. This is determined by the formats the book is sold, for example, printed book, eBook, audio book. The price component for consumption varies by the format.

Convenience: This is the trade-offs between benefits and deficiencies of the different methods of consumption. With each format you gain some and lose some.

You can see that Consumption and Convenience are interrelated and we can simply call these two as Convenience.

Since content is all normalized  we can say that what you pay for a book is  for convenience.That is each format has a different value proposition and it is different for each customer segment. If all  a reader pays for is convenience then the publisher should be able to charge you separately for each method of consumption. This is the reason you see hardcovers, soft covers, eBooks and audio books all sold separately.

Coming back to Kindle’s Text-To-Speech, this offers the ability to add a new method of consumption that offers some of the benefits of the new method but without paying  it.  This is the root of the conflict between Amazon and publishers. To me it makes perfect business sense that the publishers do not like what they see as value destruction (by giving it away for free). Actually the additional value is all captured by Amazon in the price of the device.

A better reslolution for this argument is that this Text-To-Speech feature must be unbundled and  priced separately so that the publishers can capture some of the value they add. Amazon can either pass on this additional charge to its customers or decide to eat the cost since they capture considerable value by selling the device.