Saturday, January 22, 2011

Gen Y - Conspire with your customers to make things happen

I find myself writing regularly about Gen Y and even the emerging Gen Z behaviours. Perhaps it's because I make a practice of trying to remember what a flawed dude I was in many respects as I passed various birthdays - a thing I think other boomers should do before ranting about 'no good' generations.

Why am I cracking on about it again? It's because we had a recent experience in our business that reinforced my view that Gen Ys do care about their retirement money and other things financial, whether they're deferred benefits or not.  It's just that they don't put up with crap, pumped-up complexity that the government and financial services sector specialise in constructing to ensure customer relationships are made as difficult as possible.

The experience I speak of was an initiative to visit one of our contributing employers over three consecutive weeks. Members of our team literally sat in the staff canteen one day in each of those weeks so staff could walk up and talk about sorting out their super. They weren't looking for advice, just happy to get it organised - generally to consolidate their money in a single fund.

The point is that most of these staff worked in a call centre - a notoriously transient workforce whose frequency of job change is reflected in the number of super funds various employers stick their money into by default. Significantly, most of them are at the latter end of the Gen Y spectrum.

If they were disinterested in what was happening to their money, we'd have had no appointments through the online booking form and no walk-ups when we got out there. Yet our two guys were flat out on each of the three days, stamping paperwork on the spot to confirm IDs, helping people to complete the relevant rollover form etc.

You're mistaken if you think Gen Y's obsession with interactivity is just confined to the online space. They welcome the opportunity to interact face to face. As social rearcher, Mark McCrindle, has noted many times, this generation values advice from mentors, even though it might not readily be apparent. If your business cares about doing their business with this generation, it just needs to show it values their business (and their generally smaller accounts) and break down the barriers to doing it.

Yes, Gen Y is arguably addicted to instant gratification. But if that's the case, don't sit in the office and whinge about it, get off your butt and engage with your customers in their environment - whether in their home or workplace, or online. You might be surprised at the experience. They just want to know how to get things done quickly and easily. What's wrong with that?

If the IT boffins and adminstrators are telling you that systems won't allow you to breakdown barriers to customer satisfaction and engagement, don't believe them. Conspire with your customers to find other ways to make things happen for them.

These customers are no different to any others. If you can give them a leg up to getting what they want, you may just find the key to a lifelong association.

Friday, January 14, 2011

Does product placement embed in my head?

I read an article the other day covering the 7 Network's decision to digitally place products in scenes throughout its top-rating Packed to the Rafters and Home and Away soapies. It got me thinking about the first time I can recall product placement and guess where it was? None other than American playwright, Arthur Miller's, Pultizer Prize winning play, 'Death of a Salesman'.

Why did this stick in my mind? I think only because in the school English exam I sat in the 70s I was asked what the use of the word 'simonise' signified. In the play, one of Miller's characters remarks that 'Willy used to simonise that car'. The correct exam answer was it was a word Arthur Miller had created to express the affection salesman, Willy Loman, had for his car. This was bollocks of course. The word was commonly used and derives from Simoniz, a brand of car polish launched in 1934 by George Simons. The reason I recall this product reference in the play was the deep disillusionment I felt about having to write crap in the exam rather than any favourable disposition embedded in me by Willy Loman.

So to 7's decision on product placement in these two shows, or placements in any other show or movie for that matter. I cannot see that digitally positioned packs of Kelloggs Cornflakes at the Rafter breakfast table, or a Fosters can down the pub in Summer Bay will convince me that I should try or reconsider these products. In fact, will I even notice them? As I peruse the supermarket shelves, will I be irresistably drawn to Cornflakes because Ben Rafter eats them? More likely, I'll be drawn to a product that tennis player, Pat Rafter, eats because he looks a thousand times better in Bonds than I do.

I guess it's all to do with alignment. I fit neither the Rafters or Summer Bay audience. Even though it envelopes me, suburban life doesn't fascinate me, and my prospects with babes down the bay started to diminish about 20 years ago. Problem is, I cannot really recall any product placement that has impacted me in any conscious way, except one - the Aston Martin DB5 in the Bond movies. Perhaps its appearance in no less than five movies in the years in which my testosterone flowed most freely has something to do with it.

I must investigate the psychology of product placement and how it really works. Luxury brands seem to indulge in this marketing pastime quite a lot, so perhaps has to be aspirational to work. With all due respect to the companies concerned, local cops chasing crooks in cars provided by Ford or Toyota just don't get me running to my local dealer.

I'll confess that I missed a great opportunity for product placement when the producers of the yet-to-be-released Mad Max movie contacted me about borrowing Ford vehicles to use in the shoot.

Sounded like a loony plot at the time and they did want to remove and replace panels from our pristine vehicles, so I declined. My worse brand promotion decision ever? Possibly, but perhaps it was good judgement because there were many fanciful chariots thrashing around the desert in that movie, but there was no readily identifiable auto brand that I could see.

Happy to hear from anyone who can present insights into the power of product placement. My mind is open, even if it's not retentive...

Friday, January 7, 2011

Gerry retreats from issuing consumer alert to web value

So what did Gerry Harvey achieve by joining Myer's Bernie Brooks in leading the charge in the ill-conceived campaign to promote a GST on goods under $1,000 bought on the internet from overseas? As Harvey Norman's share price plumbed new depths, his primary achievement was probably to alert the large majority of consumers who didn't shop on the net that there was good buying to be had on there.

Let's face it, the vast majority of Aussies don't tune in to the daily movements in foreign exchange, don't have confidence in buying remotely from overseas vendors and - surprise, surprise - seem to have made air-conditioned shopping centres the venues for regular village get togethers during the hot summer months (whether they buy anything in them is another question!). And I think Harvey Norman even has stores in many of these centres, doesn't it?

Another campaign 'achievement' was to damage his own personal brand, closely linked as it is to the retail colossus that carries his name. Hard for a guy who owns some of Australia's best thoroughbreds, the annual Magic Millions showcase on the Gold Coast and many other baubles to earn sympathy from  battlers who buy on the net to save money.

I wonder whether the retailers' GST campaign was inspired by the pre-election mining tax campaign, which seems to have gained more traction. If so, it failed to recognised a fundamental difference between the two issues. This is that the mining tax campaign focused on a single, politically sensitive issue - jobs. The GST campaign, by contrast, tried to build around job losses, but was derailed by a far more personal issue - big retailers wanted every little guy trying to save a buck to pay extra tax.

Less tax for miners to create more jobs versus more tax for individuals to save more jobs - it's an absolute no-brainer working out which one will gain public support. The retail campaign focused on tax and jobs, but in the rush to press failed to recognise where the point of hurt was.

Gerry is now taking a lower profile in the GST campaign, acknowledging it the communication was poorly executed, but that the campaign is still valid. Perhaps some retailers should glance across at what Bunnings is doing at the moment - reducing slow-moving and non-profitable lines, adjusting its inventory to make way for a move into high-value items like knock-down kitchens, carpet and so on. That's in anticipation of greater competition from the new Woolworths big box hardware chain.

Rather than moan in the face of competition, Bunnings is creating more reasons for people to visit its stores by stocking homewares supported by in-store advisory services. That's what retailing is about - convenience and a value-added store experience. They're things you find hard to match for less than 1,000 bucks on the net.

Thursday, January 6, 2011

Social media challenge for superannuation companies

Scored some merit points yesterday, being recognised as the only one of four Twitter-recommended super funds with an active account i.e. that offered any content. This either makes me a genius or a fool, I haven't yet worked it out.

What it does show is that people notice and talk about it when companies enter the social media space and do nothing with it other than secure the real estate. In this instance, the question was raised about brand promise and authenticity on the part of the companies that held inactive accounts. While I think this is a long stretch, there is no doubt that in the minds of those who use these channels, inactivity reflects a lack of engagement, or willingness to engage.

Of course, in financial services we can trot out the excuses about the legal and compliance constraints around engaging in this space, but the reality is that we'e the only ones who care about these issues. Consumers generally don't appreciate the constraints and, quite rightly, argue that if you're not able to deal with them, don't enter the social media space at all.

I recently wrote an article for trade publication, Investor Weekly, in which I said the only way to deal with social media and devise a strategy is get in and have a go. Choose a senior communicator who understands the compliance framework within which your company has to work and hand over responsibility to that person to experiment with social media.

There are many things you can do within that framework - pose topical questions about your business / industry, publish factual announcements prompting a call to action (a link to your website), provide links to helpful third party articles and websites and so on. These are just a few opportunities presented by social media that do not carry compliance risk.

I have a few other remarks on social media:
  • Be smart. Do not engage via social media channels with customer-specific issues. Simply refer any individual inquiries of this nature to your traditional customer help channels like your call centre or a relevant expert on your staff;
  • Be patient. For a low-engagement product like superannuation, your build of fans or followers will be slow but steady. You will also experience little interaction, but don't give up; and
  • Be aware. Add social media to your update check list. When you issue a media release, update your website or release a new publication, ensure that you also update your social media sites and, where appropriate, provide links back to the information. Remember that you have a 140 character limit for tweets on Twitter, so use a free facility like to abbreviate your link and save on character count.
Social media costs nothing more than commitment if put into the right hands.

Tuesday, January 4, 2011

Rediscovering service might be a retail solution

Big Aussie retailers are launching an advertising campaign in a bid to force the introduction of a goods and services tax on items costing less than $1,000 bought from overseas on the internet. Currently, these items are exempt from the GST applied to similar items sold in Australia.

The campaign is a furphy of the first order and the Federal Government is right to resist the call to tax these goods. In today's Business Spectator, Karen Maley, has summarised the relatively insignificant proportion of retail spending on internet sales. In addition, the dramatic improvement in the Australian Dollar relative to other currencies, particularly the US Dollar, has had a far greater impact than would the application of a 10% GST. As many consumers have noted already, the price differential between goods sold overseas and those sold in Australia is sometimes close to 50%, with the AUD at its current levels.

You have to remember that people are buying overseas despite the risks associated with goods being incorrectly delivered, or not delivered at all, and the issues associated with warranties that do not apply for even big brand products outside the country of purchase.

Rather than banging on about how unfair the application of GST is, the big retailers should focus on enhancing the shopping experience by providing knowledgeable and outstanding service. In most instances, this has been completely lost.

Case in point: My wife and I shopped for a barbecue yesterday. I am a frequent internet buyer, particularly of goods that I know quite a bit about. Bear in mind also that I usually buy online from Australian retailers or private sellers, as sometimes the price difference is insufficient to offset the added risk of buying off unknown overseas providers. But back to the barbecue.

I did research the internet first up and saw some cheap deals. But this was an item I thought I should see in the metal. I visited a small outlet, BBQs 'R' Us in Nunawading and one of the large retail outlets famous in the BBQ space. There was nothing flash about the small store experience, except the service and advice from Rachel. She really knew BBQs - even the difference in quality of the stainless steel used etc.

Contrast that with the 'big store' experience, where we interrupted a salesman's fly-past to ask about a BBQ similar to the one in the small store. "Is it on special?" Reply: "No. The specials are out the front." Nothing further offered, even though we had invited engagement on the BBQ we were standing next to.

The result, we phoned a deposit through to Rachel. Yep. Believe it or not, a Australian retail operator who had paid attention to what we were looking for and provided insights and great advice on what to look for. Indeed, she was so confident in her product that she welcomed us taking a look elsewhere. "You won't find better quality at this price," she assured us. She was right. We couldn't find better quality of product or service.

Herein lies the message for the big retailers. Don't shop around for the cheapest casual staff you can find. Invest in product training. Make sure the staff have more knowledge than I have when I visit the store. Train service providers rather than order takers.

The point is that shoppers allocate time to visiting your stores and there has to be a reason for battling traffic, finding parking and spending that time when it would be much cheaper and quicker to order on the internet.

And if margins are being squeezed, what's happened to the skills of 'upsell' and 'cross-sell'? These are outcomes that can only be based on in-depth product knowledge across competitor brands and vertically up and down product lines. If someone has to read the label on a television set to tell me how many HDMI connections it provides, they're merely doing something I could do myself. What's more, it's information readily accessible on the internet, so why should I visit a store?

The gift card challenge for financial services

Want a measure of brand performance? Consider counting the total redemption value of gift cards you sell at Christmas.

Based on a quick, but not necessarily representative, sampling of my family, Apple's iTunes cards streaked ahead of Osmosis cards (an Aussie retail chain specialising in cool surf attire) by some margin as the most popular brand among Gen Zs this Christmas.

Ask any tween or teen what they'd like for Christmas or a birthday and its a gift card for a favourite store or service. You see, gift cards are a form of empowerment for tweens and teens - a form of income that allows them to enjoy the shopping experience and buy things that they know their parents would never buy for them.

For the grandparents in our family, the gift card thing is just a reflection of laziness - a simple solution to the long tradition of hours spent trundling around stores carefully selecting presents that the recipient can return later, or begrudgingly wear or display (take your pick) whenever they drop around. They regard gift cards as soft option akin to just giving money when imagination fails.

But the kids think differently. My daughter fought long and hard going to a friend's birthday party recently that taking a present was something of an embarassment when she knew her friend would prefer a gift card. "I'll be the only one taking a present. How embarassing is that?" she argued.

With this passionate advocacy for gift cards, there's no doubt financial services companies will have to find a way to tap into the gift card phenomenon. Do you reckon a gift carded voluntary contribution into a superannuation account would be a red hot go?  Perhaps a $100 gift card to be spent with a financial adviser. Perhaps a $500 card to be used in home loan establishment?

Imagine the joy on a baby boomer's face at opening up one of these cards, beautfully packaged in a short-form Product Disclosure Statement with a pre-filled Application Form. It would create one of those priceless, unforgettable Christmas moments.