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Graham - How to get it wrong in business

Thursday, April 15, 2004

It's easier than you think

By John Graham

The Internet retailers are doing it right. Email your order at 10:22 p.m. tonight and it arrives in two days. And delivery is free. That's doing it right.

Radio Shack is doing it right, too. They've dropped the irritating "Can I have your name and address?" with every sale, even if you are buying a battery.

Walk through the door of any of Radio Shack's 7,000 small, local stores and trained people are ready to answer your questions, get what you want and send you on your way in record time. Why get stressed with parking problems just to get to a big box retailer where there's no one around to help you find what you need?

While doing it right deserves applause, doing it wrong deserves even more attention. See what's going wrong may help to get it right. Here are just a few examples:

Confusing personal opinion with fact

We all have a right to our opinions, but acting as if opinion is fact can hurt a business. "No one looks at direct mail any more," the vice president snorted, as if the idea of a direct mail campaign was preposterous.

How many times a day do we run into those who honestly believe what they view as fact is nothing more than personal opinion. "No one opens mail. Direct mail is a waste of money," growled the VP of sales. As far as he was concerned that was a fact.

Even so, a recent Ad Age survey of marketing professionals indicated that when it comes to return on investment, no media comes close to the power of print advertising and direct mail. Direct mail was favored more than two-to-one over the second-best medium, the Internet.

Far too often research is ignored and even irrelevant. Personal opinion is the deciding factor.

Marketing should make sales

"What we need are sales," blared the sales manager to the marketing consultant, as if to say that marketing was failing to dish up deals for the sales force.

That's exactly the way sales-driven organizations often see marketing. Some years earlier, the consultant had called this same company one morning seeking a replacement for a particular piece of office equipment. Within two hours it was delivered, installed and paid for without any reference to price.

Because the focus was on getting the sale, no one in the company bothered to welcome the new customer or say thank you for the business. No one took time to understand the company's needs. The dealer made no effort to let the customer know what it sold.

In fact, there was no further contact, other than sending a calendar a year later. Yet, over the next dozen years, the consultant's company purchased more than 20 pieces of equipment sold by the dealer-but from other sources.

Could a marketing program have delivered more sales from that customer? Absolutely. And many other customers, too.

It isn't the next sale that builds sales. It's creating a customer who wants to continue doing business.

Inflate for effect

The law actually allows for puffery in advertising. Such unsupported claims as "the world's best hamburger" or "the Earth's most comfortable shoes" are acceptable.

How many companies get themselves on the "fastest growing companies" lists without the benefit of corroborating data? No one is going to be sued if the figures just happen to be inflated.

Is it all only a matter of degree? At times, but not always. While advertising puffery is accepted by law, there's a more devious side that isn't. The depressing business revelations of the past few years testify to what we might call "The Lying Spirit of Business."

As has been demonstrated so often over the past several years, those who lie to the government, their bankers, accountants and shareholders, also deceive their customers and employees.

In the same way, a salesperson making inaccurate or exaggerated claims regarding the performance of a product may make a sale, but rarely makes a loyal, trusting customer.

Confirm your prejudices

Some business executives hire competent consultants to solve problems and then turn around and hand them the solution. Marketing is a good example.

The owner of a business was initiating a new venture and engaged the services of a marketing firm to develop the corporate identity and marketing materials. At the first meeting, he "shared" his marketing insights. Everyone listened attentively. While he said he wanted a creative, distinctive approach, there were strong indications that he was highly opinionated and rigid.

Three painful months later, the creative work presented to him had been revised to the point where it looked exactly like the picture he painted at the first meeting.

A clever, innovative program that could have differentiated his company's services had become run-of-the-mill, perhaps worse.

It's a clear case of never taking advice but always expecting others to take yours.

Offers that don't grab the customer

Far too many so-called "special offers" or "value-added" benefits are neither special or valuable -- at least to customers. They fail at the very point where they should succeed -- at capturing the customer's attention.

Bundled software packages in the early days of selling PCs are a good example. Consumers learned quickly that the dozens of programs were little more than a hoax. The marketers' learned their lesson. Today's computer offers deliver software that meets customer needs.

Such fakery sends the message that the company is playing a cheap con game and has no serious interest in satisfying its customers.

Dismiss public relations as puff and fluff

Much PR is worthless, primarily because it has no purpose. A primary objective of PR is to influence how a company's constituencies think and feel about it.

Following the announcement of the sale of Fleet Bank to Bank of America, there were noisome rumblings in the Northeast where the historic and venerable financial institution had its roots. The idea of selling Fleet did not go down well.

It didn't take long for the public relations efforts to begin. This included a page one article in the Boston Globe's business section on the soon-to-disappear Fleet CEO. It opened with him walking the beach near his Nantucket home, ruminating over the possibility of selling the bank and coming to the conclusion that it was inevitable.

It went on to describe how he analyzed the possible merger suitors and made the decision to take the lead in seeking the best buyer to protect shareholders, employees and the region.

The piece ended with the Bank of America and Fleet CEOs sharing what was pictured as a near sacred moment as the one from Bank of America said, "Today, Bank of America truly becomes Bank of America."

Schmaltz? Perhaps. To be sure. Brilliantly crafted? Yes. Factual? We would assume so. Full of spin? Undoubtedly. Effective at influencing how readers feel about the merger and the Fleet CEOs decisions? Absolutely.

Companies have a right to tell their story as effectively and persuasively as possible.

An inability to be consistent

Allowing external circumstances to determine a company's actions is painfully common. Many auto dealers base the next month's advertising budget on last month's sales figures. If sales are up, they spend more, If not, they cut back. That's it. Nothing else is taken into consideration.

Such inconsistency is detrimental to successful marketing. "People who starve their brands now will be paying for it in the future," said Kevin Lane Keller, a marketing professor at Dartmouth's Amos Tuck School of Business.

Specifically, he was discussing the role advertising plays in influencing choice. Even though customers may not be making purchases at the moment because of reduced spending in a slow period, that's exactly the time to maintain and strengthen brand relationships.

The history of too many companies is strewn with the remains of initiatives because of a lack of will. According to Oscar Wilde, "Consistency is the last refuge of the unimaginative." Perhaps. But inconsistency is the destiny of those who can't grasp the value of marketing.

Failure to understand branding

With an endless array of articles, books, seminars on branding, why does it appear to be so misunderstood? How many company presentation folders go out the door to customers and prospects filled with brochures and sell sheets from manufacturers?

The old saw, "You know us by the companies we keep," lingers on, as if it expresses some deep insight. Somehow or other, we seem to think that basking in the sun of "big names" sends the right message to our customers.

That's naive thinking, at best. It worked in the bygone era of "protected territories." But not today. To depend on someone else's brand as the basis of your business is to entertain trouble.

Unless customers come to want to do business with your company because of the way they understand and appreciate the value you bring to them, there's no reason to do business with you. They can go somewhere else and get the "name brand."

You can put it to the test: If price is a problem, so is the branding.

John R. Graham is president of Graham Communications, a marketing and sales consulting firm in Quincy, Mass., 02170 (617-328-0069;j_graham@grahamcomm.com. The company's Web site is www.grahamcomm.com.


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