Outsourcing – the grass is always greener…isn’t it!?

Most of us, at one time or another in our corporate lives, will have been involved in a meeting or project where outsourcing to an external provider works its way to the fore, and becomes the desired option for the business, and for all the right reasons (you convince yourself).

Such a seductive idea – ‘we can rationalise FTE’, ‘we can make efficiency gains’, ‘we can reduce bad demand’ – after all, ‘they’re the experts at this stuff!’. The most tempting of the potential upsides though, will always remain cost.

Don’t get me wrong, in the right circumstances, for the right reasons, and executed in the right way, outsourcing is a hugely effective option, and can deliver great benefits.

1. The first benefit is flexibility; the insurer who can lean on an outsourcer through a weather event to increase their capacity is an insurer who will save money, and be able to offer assistance to customers in their hour of need.
2. The second is speed; the bank who wants to move in to a new international market can do it a lot quicker by situating themselves in the interim with an outsourcer with local market access and erudition, already set up with access to and knowledge of how to use their systems.
3. The third (and most alluring) is cost; the aforementioned bank and insurer are able to start up their new operations with very little cost compared to a totally new call centre based in the UK or abroad – a positive nod from the board would surely ensue.

Adding flexibility and speed to a business while reducing cost makes for a fantastic set of KPI’s, but this won’t happen if a focus on quality is lost – this is where Lexden come in as CX consultants. We ensure the customer experience isn’t impacted. We cover a broad church in CX, but cost rationalisation can kick-start freeing budget to fuel the CX programme. Our studies show over 50% of CX investment has little to no impact on customer commitment.

In May 2013, O2 extended its existing contract and outsourced all of its customer facing operation to Capita (yes, all), with the aim of saving a billion (yes, a billion) pounds over the next ten (yes, ten) years. This was a huge strategic move from O2 – they had lost direct contact with their customers, had committed to the board and shareholders to save £1bn, and were committed to one partner for ten long years in an environment of constant, accelerating change alongside ever expanding customer expectations.

Sounds like a recipe for disaster, doesn’t it?

Well, three years on it hasn’t gone too badly. In 2015, the partnership won three major industry awards dished out by the National Outsourcing Association: the Telecommunications, Utilities and High-Tech Outsourcing Project of the Year, BPO Contract of the Year and the CCA Excellence Award for Best Outsourcing Partnership. While not quite running at the £1bn run-rate, efficiency savings are being made, along with improved incident resolution speeds for O2 customers.

The positives aside, I can’t help but think about the lost opportunity cost of not having O2 culturally ingratiated staff, living and breathing the brand, cross selling and upselling to deliver the best results for the company they are a part of is unknown – we will save that for another day though.

We at Lexden interacted with two major outsourcers when researching a new UK call centre for one of our clients, who wanted to rationalise their customer service offering, to realise synergies in both sites and roles. An interim move to a call centre elsewhere in the UK, while they found their feet and set themselves up in the area for the long term was a very appealing option to them.

Having Programme Managed similar projects in the past, it sounded to me like the kind of project that any outsourcer would bite our hands off for, but the difference in appetite was simply stunning. I’ll get to the punch line later, but a very helpful member of staff from one organisation acted quickly upon my email inquiry.

Within a few hours, I was on a conference call with her, and two of her colleagues, so they could understand my requirements (an understanding of their bespoke offering, some case studies, and an analysis of the best place to establish a call centre in the UK). Both were delivered in the next few days, and we were able to confidently go back to our clients and present them tangible tactical and strategic options.

As a result, whether it’s on this project or the next, we now have a healthy relationship with them, and would have no hesitation to recommend their services to our clients going forwards.

The next outsourcer however beggared belief. An off day maybe, but I emailed them, and didn’t hear back. I then rang them three times, on the number on their website, at 9.06, 9.23 and 9.45, and on all three occasions they failed to answer the phone, and didn’t get back to me when I left a message on their answerphone.

The one thing I would have expected them to be able to do would be respond to a customer over the phone or on email!

To be able to value something you need to experience it first. On this encounter, it’s fallen short. While my experience may not consistent with the standards they set, it has left an impression. These human interactions along with the business capability score-card is what we will use to assess suitability at this stage.

As independents, at the outset we have no allegiance to any vendor. But the experience delivered through engagements which lead to appointment are critical contributors leading to preference.

Posted by James Edmonds, Senior Consultant, Lexden

Lexden helps deliver effective customer experience strategy and solutions for clients seeking sustainable profit from customer experience.

If you like what you’ve read please sign-up to Lexden’s ‘Customer Experience’ Update for monthly ideas, inspiration and insights to improve your customer strategy endeavours. 

The price of a doodle and squeak

A dark dark night and a screaming baby. It is 3am. You know the little one needs a dose of Calpol but you have just dropped it on the floor. How much would you pay for another bottle at that precise moment?

Or, perhaps, how much for a flatbed on an overnight flight before the most important interview of your life? Is a £1m bonus for someone who has built a new management team, given the business positive PR and added £15m to the bottom line worth it? A short term, Wonga loan to pay for car repairs after the bank has refused an increased overdraft may be cheap if your car is integral to your life.

As a buyer, value depends on what is important to you-generally and also at that specific moment.

As a seller, the key thing is to think deeply about these buyer motivations and incorporate them into your price conversation.

But one thing is always true: if the seller makes the primary focus the number (price), it means the buyer will not be encouraged see what really matters (value).

Two people and two stories with two different, unordinary ways to highlight the value of their product…

Picasso, in the autumn of his life, was enjoying a glass of wine at his favourite bistro in Paris. At this point he was approached by an elegant, middle aged Parisian woman who recognised the artist. She flattered the ladies’ man and asked that he should draw a portrait of her, to which he reluctantly agreed.

Taking a napkin and pen, he started sketching. A short time afterwards he was finished and handed his work to the lady. She was thrilled and asked him what she should pay him. Picasso answered 50 francs-an enormous sum at the time. ‘But that is outrageous’, replied the woman, ‘it has barely taken you five minutes’. ‘No mademoiselle,’ he replied, ‘it has taken me a lifetime’.

A gentleman owned a large Victorian house in Manchester. With period features, it also had the original flooring throughout with one annoying, squeaky floorboard in the master bedroom. Despite engaging several reputable builders, they had all failed to fix the offending plank. However, he had had a recommendation from his local greengrocer who insisted the carpenter in question would fix things.

A grey haired chap arrived in a clapped out van, overalls which had seen better days, and a bag of tools which looked the oldest of all. A man of few words, he enquired about the problem and made his way up to the first floor bedroom. The homeowner pressed his foot down to demonstrate the offending noise. With a short nod, the carpenter went over to the window and looked up and down the street. He looked around the room. He then walked back, lay face down on the floorboard and breathed in deeply. Finally, he walked up to the second floor and sat and listened quietly on the steps.

At this point the homeowner was seriously wondering why he was wasting his time. Before he could say anything, the carpenter rose and walked back into the bedroom. He took a large nail and hammer from his bag and knocked it straight into the floorboard. Bang. He then pressed down. Squeak. The homeowner was not surprised-the others had tried exactly the same thing. The next moment the carpenter walked right across to the other side of the room, far away from the squeaky board. ‘Now what is he doing?’, he thought. Taking another long nail, he knocked it into the floor with a single large tap. He walked back to the floorboard and pressed down. No squeak, no noise.

As he put his hammer back in his bag the owner thanked him and asked the carpenter what he owed. The old man replied that it would be £100. “But you have only hammered in two nails! How can it cost so much?” The carpenter took a dog eared pad, wrote an invoice and handed it over:

Cost of materials: £1
Knowing where to hit them: £99

I bet we all wish we could describe our own products and services in such a way.

It is not easy but our chances can be improved: we have to ensure our energy is focused less on the price we want to charge, and more on the value our product gives.

Which means it should be as easy as hammering a nail into a piece of wood. Or sketching a doodle on a napkin.

Lexden is a Customer Strategy Agency | Putting your customers at the heart of the decision

We work with brands to attract and retain happy customers | We achieve this by helping them to understand what makes their customers tick, building memorable customer experience strategies and creating engaging customer value propositions.

If you like what you’ve read please sign-up to our monthly ‘Putting Customers First’ newsletter. Or for a discussion on how we may be able to help you, contact christopherbrooks@lexdengroup.com or call us on M: +44 (0) 7968 216548. You can also follow us on LinkedIn Facebook,  and Twitter @consultingchris.

Unordinary Thinking No. 42 – Cross-selling in the drugs business

I have never quite figured out in my own mind whether I think selling drugs is difficult or easy.  Difficult because of tricky supply side issues such as sourcing, shipping and dealing with unscrupulous characters or easy because of plenty of demand and income which the government chooses not to tax.

Okay, so perhaps I do not mean that sort of narcotic.  I was actually thinking of prescription medication which we all have to buy (hopefully not too often).

I heard a great story from an FMCG seller friend of mine recently.  He told me about the trouble faced by a successful pharmacist client of his when he expanded his store network.

This chap had grown his business from a single shop to four through a combination of hard work, good locations and a forensic understanding of what his customers desired.  With this successful track record behind him, when the opportunity came to acquire a new store location he grasped it.  Why would it not be a success?  After all, he had spent over 12 years running his pharmacies, honing his proposition and working out what worked and what did not.  It was simply a case of taking this expertise and knowledge and applying it at the new location.

Except this time it did not work.  In fact the new pharmacy performed poorly from a sales and profit perspective.  Income from prescriptions was on plan-only to be expected given the new store’s proximity to the town’s general hospital. It was the cross-sales from high margin, impulse purchase areas such as soaps, toothpaste and hair dye which were causing the problem.

The pharmacist could not understand it since he had previously been immensely successful through following the same retail formula in all four of his previous stores.  He was replicating his established model such as store layout, stock selection and staff training.  He looked closely at his customers and confirmed that they were very similar in terms of demographic to those in his other pharmacies a mile away.  But they were simply not buying products in the way he expected or wanted.

So he went back to what had made him successful in the first place.  He went back to his customers and started closely observing and examining what they were doing when they were in the pharmacy.

And what did he see?  He saw focused, task oriented individuals striding through his front door and to the back of the shop like Usain Bolt striving for the 100m tape.  Because they were coming straight from a hospital appointment, customers were preoccupied with getting their new medication and would march directly to the dispensing counter at the back.  Once they had been served however, their whole demeanour changed as they visibly relaxed and wandered back through the shop, looking at the products on the shelves but not stopping to purchase anything.

He immediately understood.  Once the customers had received their prescriptions they mentally ‘checked out’ of the pharmacy as their mission had been accomplished.  They also physically put their wallets and purses away and, hence, their likelihood to purchase became less.  It was clear to him that he needed to reimagine a new environment, more in tune with this particular customer scenario.

The answer, in common with many unordinary solutions, was simple and obvious in hindsight.  Through the experience of his established stores, he knew how to maximise cross-sales by presenting the right types of product as the customer walked through the door (in a similar way to how supermarkets always have the fruit and vegetables in the first aisle).

So he shut the pharmacy for two days and turned the shop around-both physically and financially.  By mentally envisaging the dispensing counter as the front door, he reconfigured the shop as if a customer had just entered it once they had received their medication.  He placed the products he knew would appeal to customers right in their eye line once they had their prescriptions-or while they were waiting.  Hence he provided a solution more congruent and in tune with how his customers were feeling as they came into this particular pharmacy, with a corresponding increase in cross-sales.

Going back to the customer, applying some creativity, and using the available resources (prior insight about his customers) to help solve the commercial problem.

So perhaps selling the drugs is always the easy bit.  It’s the cross-sell that the drug dealers might want to think about.

 

Lexden is a Customer Strategy Agency | We put customers at the start and the heart of marketing strategy

We work with brands to attract and retain happy customers | We achieve this by helping them to understand what makes their customers tick, building memorable customer experience strategies and creating engaging customer value propositions.

If you like what you’ve read please sign-up to our monthly ‘Putting Customers First’ newsletter. Or for a discussion on how we may be able to help you, contact christopherbrooks@lexdengroup.com or call us on M: +44 (0)7968 316548  . You can also follow us on LinkedIn Facebook and Twitter @consultingchris 

Taxis, typos and one question

I need your help to settle an argument.

Here is the real life scenario. I am currently working with a client in the incredibly fast moving arena of businesses being able to accept payments from customers. Bear with me; I know it might sound strange but it is surprisingly interesting. It is the world of contactless payments, Google wallets and paying for things using your mobile phone. And it is a world where technology is moving so fast that it is effectively impossible to keep up, whilst figuring out at the same time how to provide the best solutions for customers.

The only way I know to approach these tricky commercial problems is to talk to customers. Hence my conversation with a London cabbie yesterday. I asked him whether I could pay for my journey by card instead of cash (rather than stopping at an ATM).

Cabbie:  “Naah sorry-it costs too much. It would be useful like, but then I’d have to charge you an extra 10% and that’s not right is it? So I don’t bother.”

Me:  “Have you heard about these newer companies which give you a bit of kit you can plug into your phone and which allow you to accept card payments from passengers? It costs about 3% per transaction”

Cabbie:  “Funny you should say that. A geezer gave me this earlier today.”

In the amazing way London taxi drivers do, without taking his eyes off the road for an instant, he reached down next to him and passed a leaflet back to me. It described a mobile payment device from a German company called payleven, with whom I am familiar. Here it is:

Two things about the leaflet I wanted to point out:
1. The missing apostrophe in the headline
2. Three spelling mistakes in 27 words in the “what we stand for” section.

The argument I want your help with is this: to what extent is a consumer’s likelihood to buy a (new) product or service impacted by the presence of small, completely minor errors or mistakes in a customer facing part of a proposition such as a leaflet or brochure?

Of course, in the context of a whole business, these are relatively small mistakes and explainable. “It was the agency’s fault.” “We spotted the mistake early and only 50 leaflets were actually distributed.” “I am terrible at spelling.” “These things happen. “  I am not talking about this. Whatever the cause of the mistakes, I want to ascertain their impact on a potential customer’s attitude to buying from, in this case, payleven.

I’ll nail my colours to the mast. When I see things like this I come over all queasy. I really don’t like it. My view is that if, for whatever reason or excuse, a customer sees something like this it has a fundamental and overwhelming negative influence on their likelihood to purchase. And in a new area such as mobile payment acceptance, where we have the incredibly challenging job of trying to get consumers to change their behaviour and adopt new technology, the negative impact is amplified. My mind (as well as my heart.  And gut.) says: if payleven have not paid sufficient attention to this, why should I believe there are not similar errors in their clever coding which means, for instance, that my card details are not as protected as I might like?

But I am genuinely open to the fact that it may not have such a big impact.

Innovative, tech based companies such as payleven, Wonga, Metro Bank and Funding Circle are trailblazers. Because of how they have redreamed(?) what a BAU customer experience can be like in financial services, they are amongst my favourite types of company.  And also because, by demonstrating to customers what ‘good’ can look like, they are compelling incumbent bigger players to up their own game-which they are doing.  The new boys and girls have been the catalyst for the launch of great things like Barclay’s Pingit, CommBank’s Pi and more from the likes of Visa, CaixaBank and others.  The innovators are shaking up industries, providing propositions with the customer experience as the champion and I think they are tremendous. Yes, even Wonga (as I have previously written about here and here).  And because of this, I think there may be a genuine reason to judge these types of organisation from a less harsh perspective. They have to do so many things so quickly, fighting so many battles on so many fronts, that we may need to be a bit forgiving if we are to see them thrive.

We all make mistakes. It is not about that. It is this: it does not matter if you are a massive bank with years of history or a start up trying to get to profit as quickly as possible. The essential truth is that it is still about getting customers to buy your stuff. And whoever you are, a business needs to forensically understand what helps this and what stops it.

Given the nature of what I have written about, I suspect some of you with time on your hands may be inclined to look over this post and spot any mistakes from the author. I have tried to ensure they are minimal but I have added at least one (there may be others) deliberately for the sport of it. However, in return, please help me settle the argument by answering the question below:

Please vote and we’ll send you the results (along with the deliberate mistake, if you are interested).

Posted by Ajai Ranawat

Lexden | We work with brands to attract and retain happy customers | We achieve this by helping them to understand what makes their customers tick, building memorable customer experience strategies and creating engaging customer value propositions.

If you like what you’ve read please sign-up to our monthly Putting Customers First newsletter | Or for a discussion on how we may be able to help you contact christopherbrooks@lexdengroup.com or call us on M: +44 (0)7968 316548 |

You can also follow us on LinkedIn Facebook and Twitter @consultingchris

Choosing to annoy your customers

Making decisions about how you treat your customers, operations, products and marketing is what businesses have to do.  Here are some real life decisions businesses have made from a mini survey of the 6 people who sit around me:

1. The gym who charges 50p to weigh yourself
2. The airport operator who charges £1 to buy a ‘pack’ of two plastic bags for liquids
3. An emergency glazing company who quotes for replacing the glass, comes round as agreed at 10pm at night, and then says they cannot replace it in the dark because of health and safety-but insists that the full cost of the visit is payable
4. The mobile operator who, after a tariff change, does not mention that you will now have to pay for voicemail which had previously been free
5. The insurer who increases your premium quotation by 37% despite there having been no claim-and then immediately reduces it when you say you are going to shop around
6. The weekly lifestyle magazine costing £1.60 which bundles another publication with it and charges you £2

Two things are for sure.  Number one is that these are all deliberate decisions.  Number two is that they will annoy customers.  The business has, presumably, chosen that revenue or cost considerations should trump any effect on the customer (and how many other potential customers they will tell).  These are probably the same types of business who say ‘our customers are important to us’ or ‘we are customer centric’.

Businesses doing things like this should at least make sure they are measuring the original business case for it.  Making sure they add up the masses of incremental revenue they get and what they think it is doing to the bottom line.

Because there are other corresponding, relevant metrics to incorporate into the analysis:

• Lower customer satisfaction scores
• Increased customer attrition and lower loyalty
• Lower net promoter scores and people recommending to others
• Increased negative conversations about the brand on social media and real life
• Customers preferring competitors
• Brand equity dashboards

Much of the energy in proposition development focuses on fixing the hassles which customers have to endure.  This is absolutely right and increases the likelihood of being able to offer something which resonates with customers and they will buy.  However, at least as important-and possibly more emotive-should be a focus on removing the irritants.  At Lexden, when we work with clients to develop customer propositions, we always ensure that there is a separate exercise which concentrates on identifying these annoyance factors and challenging the commercial reasons for them.  There is rarely a credible rationale.  Fixing these are the quintessential low hanging fruit clients love to find.

So annoy your customers by all means if you want.  But at least do it deliberately and for enough financial gain to counteract the inevitable corresponding negative effects on your customer metrics.

And call yourself ‘bottom line focused’ or ‘driven by the numbers’ if you want.

But don’t call yourself customer centric.

 

Lexden is a marketing strategy agency which creates unordinary propositions to motivate customers and deliver commercial advantage for brands.

For more information please contact christopherbrooks@lexdengroup.com , or call us on M: +44 (0) 7698 316548. And you can follow us on LinkedIn Facebook and Twitter @consultingchris .

Who we work with…

Guest Blog – Sorry, you’ve got the wrong number

We had record numbers of views of a blog we published a few weeks ago: Three cheers for Wonga 

I was really happy to subsequently be asked by Wonga to write a guest post about “anything I wanted”.  Never had that before.

It really feels that the marketing success story of Wonga is being drowned in the hyperbole and groupthink perpetrated by MPs and the like.

The fact that 92% of existing customers would recommend Wonga to their friends is, I feel, an important part of the debate.

So that’s what I wrote about-a financial services customer proposition which gives customers what they want and the type of thing which the banks and existing players should be emulating.

Here it is…(sorry about the scary picture)

http://www.openwonga.com/blog/view/sorry-youve-got-the-wrong-number

 

Lexden is a marketing strategy agency which creates unordinary propositions to motivate customers and deliver commercial advantage for brands.

For more information please contact christopherbrooks@lexdengroup.com , or call us on M: +44 (0) 7968 316548. And you can follow us on LinkedIn Facebook and Twitter @consultingchris 

Who we work with…

Three cheers for Wonga

A round of applause for Wonga please.  Seriously.  They have bought the concept of borrowing relatively small sums of money for relatively small amounts of time into the mainstream through their brilliant advertising and sponsorship of one of the most popular football clubs in the country.  And with this, they have put the issue of how so many people in this country have to live their (financial) lives on a week to week and sometimes day to day basis onto the football pitch both metaphorically and literally.  That’s not just something which should interest Wonga or Newcastle United-it should interest us all.

From a customer proposition point of view Wonga have used technology effectively, communicated smartly and executed brilliantly.  If someone chooses to use Wonga, they can get money into their account in 15 minutes if they are approved.  Since speed of access to funds is often a key consideration for all customers, including Wonga’s, they have delivered on that promise very effectively.  Financial providers such as our high street banks and insurers could learn plenty.

Errol Damelin and his team provide a needed service which people can choose to use and which forces us to confront an important aspect of living in Britain today: for many people, it is about living their life by cashflow rather than interest rate.

But the whole Wonga debate is boring.  And that’s because it has not been a debate.  All I see and hear is masses of sanctimonious, bandwagon jumping dialogue, tweets and discussion.  I don’t have a problem with people thinking, if they desire, that the product and service Wonga offers is dodgy/wrong/immoral/evil.  Not at all.  It’s just that nearly all the commentary has taken this standpoint and centred around the three letter acronym APR (I’m not going to bother to explain it because, it seems, we all know exactly what it means) which Wonga must quote to comply with existing consumer credit laws.  Even aside from the fact that nobody ever pays the 4000% APR people bandy about, the debate has been depressingly one dimensional.

If people have a problem with Wonga’s (completely legal) product and services, where’s their corresponding discussion about the market failure which means thousands of people are using this, apparently devil inspired, company’s loans?  Why are they choosing to use Wonga instead of going to their thoroughly trustworthy high street bank for a thoroughly reasonably priced overdraft with thoroughly reasonable penalty fees?  Could it be because Wonga provides a realistic (and whisper it) valued alternative for these people?

Where’s the discussion and reasoning about why one of Wonga’s predecessors as sponsor of Newcastle United, Northern Rock, was different to them?  Who is explaining why offering a 120% mortgage (at oh so reasonable APRs of 5 or 6 per cent) to thousands of people who now have homes worth less than they paid and who struggle to make their monthly payments has caused so much less damage to society than a £300 loan will cause?

Where’s the discussion about the fact that hardly anyone (that includes us, Guardian readers) really understands what an APR is, how it is calculated and what compound interest really means?  Where’s the discussion about how we need to come up with different, innovative ways for all lenders to clearly communicate how much a loan is likely to cost in terms that people actually understand rather than percentages which they don’t?

Where’s the discussion about why Newcastle United have to suffer the moral indignation of signing a deal with an organisation who legally lends money whereas it is perfectly fine for Aston Villa to have Genting Casinos on their shirts?  Is it because people going into these gambling establishments only ever walk out having made a tidy sum for themselves?  Or do some lose money they did not have and end up getting into financial difficulties?

The problem of debt and its associated knock on effects is a very serious one for our society, as is evidenced by the work of people such as the MP Stella Creasy.  It’s a serious issue and it requires a serious, measured, rounded debate which goes beyond the groupthink and opproprium of ‘legalised loan sharks’, ‘scum’ and ‘disgraceful APRs of more than 4000%’.  A discussion which does not progress beyond the hanging, drawing and quartering of Wonga and into the related issues and about the availability of realistic, fair options for people who, every single day, have to live a life of constraints (not just financial) is not a worthy one.

So come on Stella et al.  Wonga have kicked the ball to you.  Pass it back and have a proper debate.

Lexden is a marketing strategy agency which creates unordinary propositions to motivate customers and deliver commercial advantage for brands.

For more information please contact christopherbrooks@lexdengroup.com , or call us on M: +44 (0)7968 316548. And you can follow us on LinkedIn Facebook and Twitter @consultingchris .

Who we work with…

Unordinary Thinking No. 28 – Beer is the answer

How do you make a healthy soft drink for kids?  Start with beer.

We regularly find that unordinary thinking or unordinary propositions come about when the individuals in question have nowhere to go, nothing to lose or nobody else to turn to.  It comes about because they just cannot keep doing the same thing they have always done and expect a different outcome.  External circumstances mean they have to do something different if they are to survive.  But it is also about leveraging, squeezing and thinking differently about what you already have.

German beer is famed and feted for its high quality and taste and it is taken very, very seriously.  Ancient purity laws mean that any brewery in Germany must always conform to strict guidelines and parameters when it produces its beer-they are legally obliged.  They are not allowed to put any artificial flavours or chemicals into their drinks and everything must be the result of the natural raw ingredients and the process of fermentation they have been following for hundreds of years.

In the mid eighties, the Peter brewery in the small town of Ostheim vor der Rhön (population: 4000) was facing major problems.  Although it produced great beer, so did many others and they were continually being squeezed by the major German beer brands.  It was a classic David vs Goliath situation which we like to write about.  Closure and bankruptcy of the family run brewery was a very real threat and they knew they had to do something different if they were to survive.  They did not shrink away with small thoughts-their idea was to invent a brand new beverage category: health drinks.

Their master brewer, Herr Leopold, thought that he could find a way to use the fermentation process which he had been using his whole working life to produce a non alcoholic, carbonated drink which would be made according to the same stringent standards and rules as his beer.  Unlike existing fizzy drinks with their e-numbers and additives, his would only be made out of malt, water, sugar and natural fruit essences.

And he did it.  It took 8 years of experimentation, trials and failures in the bathroom he used as his laboratory, along with virtually all of the brewery owner’s money.  But he did it.  He discovered a process and strain of bacteria which meant that instead of the sugar fermenting into alcohol, it turned into something sweet and non alcoholic which could be used in a soft drink (it’s about the gluconic acid, apparently).  Bionade was born-a fun, carbonated drink with nothing unhealthy in it and with a target audience of children.  It was a drink that reimagined fizzy pop.

Bionade was first sold in 1995.  It is hard for us to think that far back but, in those days, there was no health drink market.  There were natural juices of course and sugary, additive laden fizzy drinks but very little in between.  It took considerable bravery for Leopold and Peter Kowalsky, the MD, to pursue this course 17 or 18 years ago where no health drinks market existed.

In today’s world of fruit smoothies and pomegranate cordial, it is easy to think that a healthy fizzy drink is somehow an ‘obvious’ product.  But it was not.  It is important to remember that it is courage, ingenuity, hard work, skill and knowledge which has taken Bionade to over 20 countries, including Australia and the US, and annual sales of over 200 million bottles a year.  It might have started with beer, but it is ending with a fizzy, healthy bottle of fruit pop.

 

Lexden is a marketing strategy agency which creates unordinary propositions to motivate customers and deliver commercial advantage for brands.

For more information on how we can help you, contact christopherbrooks@lexdengroup.com , or call us on M: +44 (0) 7968 316548.  And you can follow us on LinkedIn  Facebook and Twitter @consultingchris.

Unordinary Thinking No. 25 – Darning socks

Sewing is not something I have ever given much thought to.  That is until I read a really nice story about sewing machines (which, I might add, is not something I normally do either), which illustrates the idea of unordinary perfectly.

Jo-Ann Fabrics, a retailer in the craft and fabric space, wanted to sell more sewing machines.  Presumably this is no different to any of their competitors or, indeed, any organisation. After all, when in business is it not about selling more things to more customers more frequently?

Where Jo-Ann Fabrics approached things differently to others in in a simple premise: they actively pursued a strategy to understand their customers and what would work for them.  Now, don’t just skip over that last sentence.  Read it again.  It is definitely unordinary for an organisation to pursue active strategies and tactics to get under the skin of what their customers do and what motivates them.  Most organisations talk about it; very, very few do something about it.  The important point is to know how simple it can be to do.

Jo-Ann Fabrics used their website as a mechanism to understand what would appeal to their customers.  They did this by making the website a test and learn laboratory whereby different customers would automatically and randomly be shown different offers, website designs and tone of voice.  They looked at what customers actually did, rather than what they said they might do in a focus group.  From this, and following through to which customers purchased (or did not), they were able to gain insight about which overall propositions were most successful.  This, in turn, enabled them to think deeply about what was motivating their customers in order to hone how they communicated with them.

This led to quite a surprising offer for customers.  A deal which, on the face of it, sounds pretty dull and not very good:  Buy one sewing machine and get a second one at 20% off.  However this deal was successful-and not just in selling more machines.

But why? Well, at some level, customers evidently found the prospect of saving 20% on a second sewing machine worth having. However, generally, customers are not going to want two sewing machines and 20% is not exactly an awe inspiring discount.  The point is the offer acted as a catalyst for these customers to talk to friends, relatives and colleagues, any of whom may or may not have been in the market for a sewing machine.  It is no different to the classic ‘member get member’ schemes which you see in all sorts of industry but are often not very successful (certainly the ones I have seen in banks).  So why was this one successful?

I think it comes back to customers’ more deep seated reasons for pursuing a hobby such as sewing.  Making curtains or repairing clothes fits very much in a nurturing emotional space for people.  It relates back to the ‘gatherer’ role of our prehistory and because this is so deep rooted in our psyches, connects at a far more emotional level than the pure rationality of ‘20% off’.  What this means is that people really want to connect with others around this type of activity.  They want to share with others what they get out of it and they want others to (emotionally) benefit in the same way that they do.  It’s why you see sewing classes and clubs.  At Lexden, we have repeatedly seen with certain audience types that craftsmanship, in the form of activities like sewing, often has a significant place in their lives.  And these people often interact very closely, and have strong influence, with others who hold similar values to themselves-a lot more so than for other audiences.

When you know the above, deciding how to communicate with these people in a way that will resonate with them is much simpler.  It will just ‘feel right’ to them.  So when Jo-Ann Fabrics put this understanding together with an offer they had already observed working, the commercial benefits were multiple.  They had people finding time in their busy lives to have conversations about Jo-Ann Fabrics and about their sewing machines.  They had multiple amateur salespeople closing deals for more products.  They tapped into a pool of brand new seamsters who may not have even realised they wanted to have a sewing machine.  They have converts who will come back to buy more fabric, buttons and cotton thread (okay, so this is where my desire to know about sewing starts to diminish).

Looking at customers from a different startpoint, in order to get to a different result.  Incorporating a deep seated understanding of what makes customers tick.  An obvious and simple solution (in hindsight).  All stitched (sorry) together to give multiple benefits to the organisation.  Pretty unordinary.

Posted by Ajai Ranawat

Lexden is a marketing strategy agency which creates unordinary propositions to motivate customers and deliver commercial advantage for brands.

For more information on how we can help you, contact christopherbrooks@lexdengroup.com or ajairanawat@lexdengroup.com, or call us on T: +44 (0)20 7490 9123.  And you can follow us on Twitter @consultingchris.

Can crime be inspirational in marketing?

We work with service brands to help them build better propositions for their customers. Part of the what we do involves ideation type activities to find more engaging ways for brands to resonate with customers.

Using creative activities, the sessions are structured so that clients arrive at new and unordinary outcomes. One of my favourite parts of the job is to hear the exciting ideas generated during these sessions. To  achieve this we spend time at Lexden honing the creative activities we use in the workshops to achieve results.

So when I come across examples of propositions in market which are different to the norm I will take a step back and consider how their process might have worked to allow them to get to somewhere new.

One area I always feel must be challenging to arrive at ‘out of the box’ solutions is crime prevention, given the seriousness and the public scrutiny of the subject matter. But as these examples show, it is possible to arrive at some very unexpected solutions.

Fashion defence

Japanese designer,  Aya Tsukioka created a dress which doubles as a Coca Cola vending machine should the owner feel threatened and want to blend into the background.

Bonkers, perhaps. But I believe it’s an idea which has only been conceived because of the type of contributors involved. When running ideation sessions it’s important to make sure the invitation list is wide reaching and includes those you wouldn’t normally turn to for solutions but have insight into the subject in hand.  

In financial services I find people from risk are very good at idea generation if given encouragement. Give these renegade types (the non-marketers) the tools and permission to run off in unordinary directions and they will often surprise you with the territories and solutions they get to.

Miss Tsukioka said: ‘It is just easier for Japanese women to hide. Making a scene would be too embarrassing.’ She added: ‘These ideas might strike foreigners as far fetched, but in Japan, they can become reality.’

From DC to Brazil

Andre Luiz Pinheiro, a retired police officer, has been drafted in by the police to the Brazilian city of Taubate. In a city where the murder rate is 12 times that of London they have turned to fiction to change the crime facts.

Andre is Batman. Batman is Andre. And he is inspiring children to consider an alternative life than crime, “I am fighting crime in a preventative way by helping these children to avoid becoming criminals.”

It’s a long term strategy which has the full support of the police. They were looking for symbols of good that they could leverage and help inspire children.

Batman fits ‘the bill’.

Imagine how that would have sounded when it first came up in the ideation session! To let these ideas live a little, it’s important to forget the world in which you inhabit sometimes and think about your audiences world in order to see what the outcome might look like – as they would have done here. Is it working? Time will tell.

Crime can backfire as a creative territory

But as this Sony example shows, using crime as an entry point for something as escapist as entertainment is more challenging to pull off.

When Sony launched The Girl With The Dragon Tattoo on DVD they decided to style the DVD to look like a pirate copy.

I have seen the Swedish original and assume the piracy theme is meant to link more to the crime genre rather than the film itself. But either way it was intended to make the film stand out.

And it did, but not in the way intended. Those renting the DVD thought the shoddy looking production was really a pirate copy and not a gimmick. So rather than enjoy the film, thousands returned it to their DVD rental store for a genuine replacement. Only to find out it was genuine. Do you think that enhanced their enjoyment of the film? I assume not.

It also highlights how some territories don’t work so well when creating ideas for products or campaigns. Whilst an interesting idea, if the agency had run a ‘de-risk’ activity after the idea was conceived they would have spotted this potential flaw, looked into it further and canned the idea. The de-risk activity is an important post-idea generation exercise often overlooked. 

So there is much to learn from crime when it comes to idea generation. I hope these examples inspire you to push your ideation sessions a little further.

My point is this; as long as you start with a customer’s motivations and end with customer betterment, by leveraging a brand’s advantage and validating the viability of any solution, then what you do inbetween needs to break the rules in order to be authentic and stand-out.

Lexden is a marketing strategy agency which achieves cut-through propositions for our clients. To do this we look beyond the familar towards the unordinary. To find out more about what we do and if that might be of interest to you please visit our website lexdengroup.com

Or contact christopherbrooks@lexdengroup.com or ajairanawat@lexdengroup.com, or call us on T: +44 (0)20 7490 9123.