Friday, January 29, 2010

Loyalty in a promiscuous world!

When I was young (how distant that seems) we had one scooter in India, the Bajaj Chetak. One waited seven years to get a scooter (and one was branded as fortunate by one’s envious neighbors if it was allotted) and sold it seven years later for the price at which one bought it for! You waited 4 years to get a white Premier Padmini and promptly booked ones next one so that one could get it 4 years later! Thankfully times have changed for the consumer and one has over 700 models of cars to choose from. If one wants to buy a pressure cooker today in India one can choose from 250 brands. Yes today as I have choice, I find that I am hardly loyal. Many of today’s consumers seem to exhibit the roving eye of a Shane Warne of yesteryear or Tiger Woods of today. Is there a truly loyal customer? One wonders. Instead of needless conjecture let us look at what brands and companies are doing and let’s figure out whether it is working.

The myth of the loyalty program

Airlines, retail chains, credit card companies, hotels…. all of these have loyalty programs that are run with varied degrees of success. They remember our birthdays, our anniversaries; remind us when we have not visited the store for some time… I was the first citizen of India’s first retail chain. I shall not name it as it is widely recognized as a leading light in marketing practices! So much for our judgment! But let me cut to the chase. My name is Sridhar Ramanujam which even I recognize is a mouthful. There is little that we can do about our names unfortunately, unless we are in politics and believe in numerology. But I am digressing. Perhaps as a consequence of the strangeness of my name I have received over 70 mailers addressed to Sridhar Raitanujam! Each one of these mailers would make me wince! As one of my less sympathetic friends said “they probably know you love curd (raita) that is why they are referring to you as Raitanujam”. Small comfort! Marketing is all about execution, not lofty statements and the least a consumer wants is for the company to spell his or her name right! Though in the same breath I must compliment Jet Airways (my former favorite) for sending me a mailer with an intriguing caption that read “Now we see you, Now we don’t” referring to the fact that I had not been using the airline for a few months. (Of course I say former favourite because Jet is systematically messing up its brand, with its Jet Konnect, but that is not the brief for this piece). The biggest problem with all these loyalty programs is that they have limited success and quickly disintegrate into distribution or expectation of freebies thereby diluting the brand’s equity. What is the difference between one brand’s loyalty program and another’s? With everyone bending over backwards to offer the same, loyalty programs have become a bare minimum, or a hygiene factor and hardly a differentiator.

It is all about the “Wow” factor

Sometimes it is not a bad idea to revisit the basics. One of the most abused words in marketing is ‘customer delight’ where the customer is floored by something that she does not expect from the service provider. In fact she is so thrilled by the experience that she tells the whole world about her experience. Let me share an anecdote that I heard somewhere. A customer was trading his car for another car. He drives out of the dealer outlet in his brand new car and switches on the radio. To his delight the radio in his new car is programmed exactly in the same way his old radio was – the first channel being the weather, the second the news, the third rock music… Can you imagine the happy surprise that the customer must have experienced? The key thing to be remembered is that it is not done by some major company executive with a strong sense of service but by a committed mechanic who wanted to excel at what he was doing. The challenge of course is that in most organizations service excellence is the outcome of a few outstanding individuals and has not been institutionalised.

So what does this mean for companies and brands?

The customer is changing dramatically and her expectations are being fuelled not only by the increasing affluence but by her own spiraling aspirations.
Companies are spending too much time on building expectations and too little in delivering them.

How much time and effort is being spent on training employees to deliver the “wow” experience?

How many companies spend time on understanding the ‘life time value’ of customers and what are they doing to hang on to their customers for dear life?

As always all these questions are probably easier to ask than to answer but companies must realize that customers are the very source of their business. Let me end with a quote by Mike Clasper who said “I would label the consumer of 2025 in three ways: more demanding, wiser and more worried."

Are you ready to serve tomorrow’s demanding customer today?

Ramanujam Sridhar is the CEO of brand-comm and the author of ‘Googly. Branding on Indian turf.’

Image Source: Shaira Vincie

Thursday, January 28, 2010

Beware the aura of IPL

Some of the glitz and glamour is bound to pall, given that there's much cricket from around the world being beamed into living rooms in India..

Stars all:The owners of the teams, Ness Wadia and Preity Zinta (Kings XI Punjab - left, extreme right), Shilpa Shetty (Rajasthan Royals – second from left) and IPL Commissioner Lalit Modi (second from right).

Australian cricket dominated pretty much all opposition it came up against from the mid-'90s till the end of 2006 at least, thanks to two outstanding champions, Glenn McGrath and Shane Warne. It would be difficult to find two more dissimilar individuals in one team, but they had one thing in common — both were champions. Batsmen came to grief against these two, who often bowled their team to victory in tandem, more often than not because opposing teams ended up playing more than mere bowlers but battled the strength of their collective auras which combined to make the Australian team almost impossible to beat. Batsmen, thanks to the benefit of TV technology, had nightmares of the Gatting ball (or the ball of the century as it was branded) whenever the blond leg spinner came to bowl. They unearthed demons that were non-existent and played for drift that seemed larger than life and lost their wickets with surprising ease. As for McGrath, his annoying ability to deliver ball after ball on the same spot added as much to the pressure as his in-your-face displeasure if the batsman had the temerity to hit him for four.

Whilst there is no denying the phenomenal ability of these two bowlers, their success, in no small measure, was due to people sitting in the commentator's box and the media enclosures who aided and abetted the batsman's downfall with their analysis till paralysis of the bowlers' collective and individual abilities. Batsmen predictably ended up making horrendous errors of judgment and finished up looking silly, like Atherton often did, to the obvious delight of Aussie fans. When I looked at the recent IPL auction, with Kieron Pollard being bought for a staggering $750,000, I just wondered if there was a similarity between what happened on the cricket field earlier and what is happening now under the hammer and also analyse what has generally been happening with IPL since its inception.

Giving IPL its due

Make no mistake about it, India runs the cricketing world, much to the chagrin of some of our less fortunate cricket boards. India has the eyeballs, the sponsors, the money, the ability to brand and sell anything, including the weather forecast that precedes cricket matches, and just about everything that makes the world go around and everything that can make its detractors go around the bend. Often enough, India has made no bones about its clout and has blatantly flaunted it. But even diehard critics and the prophets of doom have had to concede that the IPL has been a marketing coup that showed the entire world a thing or two about sports marketing. It is a real concern though that IPL may hasten the demise of test cricket, but let us resist the temptation to set the cat amongst the pigeons just yet and stay with the marketing of IPL. IPL demonstrated the ability of its creators to build a brand in a very short period of time, create and deliver value even as it commanded a phenomenal premium for its offerings — whether it was television rights, franchisee bids for the teams or its ability to make players from all over the world drop everything and come running to India. Interestingly, some of them, such as Collingwood and Owais Shah who were constantly complaining about player workload, did not even get a game despite travelling halfway across the world!

It's a brand new world

Kieron Pollard, who was sold for $750,000, to Mumbai Indians
IPL has been all about brands, sponsorships and celebrities of varied hues. It has seen the emergence of unlikely businesspersons in people such as Shah Rukh Khan, Preity Zinta and Shilpa Shetty from the world of entertainment, a charismatic business leader in Vijay Mallya entering cricket, Nita Ambani and a range of companies from media, infrastructure and cement, all of whom have forked out enormous amounts of money. It has also seen some of the office-bearers of the BCCI as owners of teams which might upset the purists but in Indian cricket, as we all know, anything goes, including the obnoxious behaviour of people such as Sreesanth and Ajit Agarkar. The bidding for the players has been a high-profile event where ordinary mortals such as you and I can witness how the rich and famous bid huge sums of money for the superstars of the T20 stage just the way they might bid for thoroughbreds! The IPL, quite simply put, is a heady mix of entertainment, glitz and glamour, with some cricket thrown in somewhere in the middle! But it is working or has been working for the people involved, including teams from Australia and the West Indies who have come to India, won and made an enormous amount of money in the bargain? Of course, if media reports are to be believed, the winning team from New South Wales has not been paid, but should we waste our time with needless details such as these?

Get ready for the next edition of IPL

The next edition of IPL will hit not only Indian grounds, Indian crowds, and global television audiences but also an online audience through YouTube. One of the characteristics of the IPL brand has been innovation even if one were to ignore the strategy break which was a poorly disguised attempt to sell more commercial time! Who knows, there may soon be pink balls! But in all fairness the brand has tried to innovate constantly and really showcased the enormous marketing acumen of the people who have been the brains behind this amazingly successful venture. They have been able to smell money anywhere!

A word of caution

Having spoken of IPL's tremendous strengths and offerings it is perhaps worthwhile to sound a word of caution to people who are placing enormous bets on the event and continue to do so. Clearly they are being carried away by the moment as they seem to be awestruck by the aura of IPL and are not placing as much emphasis on the possible return on investment that they seem to be making without so much as batting an eyelid! Starting from the franchisee bids for the teams, IPL has been all about premium pricing. Franchisees too ended up paying phenomenal sums of money, not only for the players, but for Indian stars with iconic status, many of whom will certainly not play for their country in the T20 format of the game.

The pricing for the television spots has been extremely high and some of the initial sheen, in my view, at least, is bound to wear off thanks to the phenomenal amount of cricket that is being played across the world, all of which is being shown in India, including the KFC big bash. But my biggest bone of contention has been the often reckless manner in which team owners have been buying cricketers. Many of the big-ticket items have been poor buys. Names such as Andrew Symonds, Kevin Pietersen, Andrew Flintoff, Kieron Pollard and even Shane Bond come to mind. Shane Bond is an amazing cricketer, with an astoundingly straight action amidst a generation of varying degrees of crookedness, but to pay what he is being paid for delivering four overs defies logic. Whilst I am happy for the benign policeman whose pension must be adequately provided for, I have nothing but scepticism about the outcome which might turn out to be a worse buy than the highly priced Ishant Sharma. I wonder if teams and their owners are succumbing to the aura and the excitement of the moment, the glare, the media attention, all of which does not make for sensible decision-making.

A prediction about the IPL ahead

Soon it will be IPL time and old foes will lock horns again, some of them with reconstituted teams. Younger legs will replace more tired ones and a new lot of retired and ICL players will make their debut, such as Damien Martyn and Shane Bond. The Pakistanis will be missing and have left no one wondering about their displeasure. Only the retired Australians will be here. But it is just preceding the T20 World Cup and just after a crowded season where everyone was playing everyone else. The Under 19 World Cup is happening in New Zealand and many young Indians will soon be tempted with money, big money. Yes, it is all waiting to happen. But my suggestion to people who are going to put their money where their mouth is, is to keep their hands carefully inside their pockets. Evaluate every opportunity with the care that it deserves. IPL is McGrath and Warne several times over in the magnitude of its aura. Bring back old fashioned Yorkshire wisdom to your decision-making lest you play a shot that Geoffrey Boycott would brand as “rubbish”.

(Ramanujam Sridhar is the CEO, brand-comm, and the author of Googly. Branding On Indian Turf".)

Friday, January 15, 2010

Learning from the Idiots

3 Idiots as a marketing phenomenon..

Aamir Khan is no idiot. Well, that certainly seems like a `no brainer' but let me clarify based on my own experiences. Nearly two decades ago (although it seems like just yesterday), I used to be the head of the Southern operations of a large advertising agency and TI Cycles was one of our best, if not one of our largest, clients. One day we got a call from the client asking us if we could come over to discuss something. Agencies are normally pretty good at obeying instructions, so we promptly landed up at the client's office. There were two young men from Bombay (as the city used to be called in those glorious days) nattily dressed as MBAs usually are, making a slick presentation on `in film' placement. They were describing a scenario with great gusto.

The film, they said, was about two schools in a hill station. One was a government school where ordinary people studied, including the hero. The second school was the upmarket, private school with rich (read spoiled) kids. The two schools were bitter rivals and the high point of their academic life was the annual sports day, which featured a cycle race as the show piece event. Here the pitch got interesting, as they said the film would feature the BSA SLR (the brand made and marketed by TI Cycles) which the hero would ride. He would win the race against the 16-gear sports bike ridden by his rival, a snooty kid from the elite school. The bike would be featured prominently in this climax scene with logo shots, tight close-ups showing the features of the bike . the works. The heroine would hug the hero (and, if we wanted, the bike) after the race.
You get the picture! They offered this package for Rs 5 lakh, I think (though my memory for numbers is no longer as reliable as it once used to be). The client baulked and sought our opinion. Now agencies are extremely protective of their turf (read budget) and this was money going straight from the overall advertising budget. So we hemmed and hawed and the client declined. That movie was Jo Jeeta Wohi Sikandar, one of Aamir Khan's earliest hits. Simply put, we had missed a wonderful opportunity. But I realised even then, though I had no idea how successful he would become, his ability to market and monetise ideas.

Learning from filmi types

Gary Hamel, the renowned management guru, was of the view that companies are better off looking `outside' of their industry if they are to learn rather than look at their own peers and competitors. As we tend to look down at the creative ability of Bollywood, we often underestimate their great ability to come up with marketable ideas and their capacity to create excitement around the films they produce. I realised the wisdom of this statement again when I saw Aamir Khan's 3 Idiots which, incidentally, has been shot at the IIM Bangalore campus, an institution that has made a tremendous difference to my career. Let me quickly reassure you, dear reader, that I am no film critic and my observations will be restricted to the tremendous marketing initiatives and learning that the film provides.

Hype - a double-edged sword?

We live in a world of hype and nowhere is it more in evidence than in Bollywood and Kollywood! Yet one has seen instances where the films do not match up to the tremendous pre-release hype and end up as flat as last season's beer. In films, marketing and life, if one may add, success is all about delivering expectations. 3 Idiots was no exception to the pre-release hard-sell and publicity. The build-up was phenomenal. Hype can and often is a double-edged sword, it is like good advertising for a bad product as it can make the product go downhill faster. But thankfully in the case of 3 Idiots, the film was interesting, justifying all the pre-launch publicity. But there is more.

Excitement is the name of the game

3 Idiots did many of the usual things that films do prior to their launch. There were promotions on TV, star appearances with the stars walking the ramp, appearances at showings of the film (nearly causing a riot in Bangalore), online contests, game shows, invitation to three school officials from a small village who took their first flight, to seat butts in multiplexes so that people could photograph themselves like the protagonists in the movie, to customised merchandise designed by Pantaloons.

Now while it is quite easy to create excitement, more so for films in a film-crazed country, the challenge is to sustain it. 3 Idiots certainly was able to do it. The greatest news-making event (though I am not sure if it was planned) was the controversy regarding Chetan Bhagat and his book Five Point Someone on which the film has been based. I have something in common with Aamir Khan (finally) as I too have not read the book but then I am hardly a hero!
In case you have not been reading the papers or watching TV over the last few weeks, the bone of contention was simple. Chetan Bhagat believes (perhaps rightly) that he has not got the credit he deserves for the film as his name came at the very end. The producers believe they have paid him the money and adhered to the terms of the contract. Given the track record of film producers when it comes to authors in the past, this is, perhaps, not unexpected. Without going into the rights and wrongs of this, I will just borrow a phrase from Vir Sanghvi's column where he gave the example of Slumdog Millionaire and unlike the people involved in that project, in the case of 3 Idiots the producers acted without `grace'. But the audience was titillated with people taking sides, writing about it in blogs and giving television interviews. Not surprisingly, Chetan Bhagat's books flew off the shelf. I am reminded of what a wag had to say about the highly visible Vodafone campaign when it was first launched: "It increased the price of pugs in Mumbai, definitely." The media had a field day, particularly when the producer who lost his shirt at a press conference told an inquisitive journalist to "shut up!" Oh, did the film get publicity or what!

The power of public relations

Producers are getting smarter at promoting their films as we know. Recently the film Paa had slides in multiplexes with lines like "If you don't switch off your mobile phone I will tell Paa," and another which said "If you don't stand up for the national anthem I will tell Paa." Cute! Evidence too, of the value of integration that agencies can be good at. Yet I do feel that agencies do not realise the potency of public relations as a discipline and what it can do for brands. The publicity that 3 Idiots has generated has been phenomenal. Everyday there has been a talk show or a feature on one aspect of the film or the other. Is the quality of our education bad? Does it prevent our children from being innovative? Does it encourage mugging? All these thoughts that were aired in the movie were discussed in the media and people got involved.

Everybody had a point of view; after all, all of us have been to school and watch our children struggle, don't we? The film has ragging scenes which, in my opinion, eulogise ragging, leading to the discussion on whether the film encourages ragging and if films such as these should be permitted? Throw in the earlier controversy about Chetan Bhagat and whether authors get a raw deal and you get the total picture. The film has not been off media for a single day and has constantly created interest, involving them and engaging them. Fantastic!

Engage, not merely integrate

Today we live in times of clutter and that, as we know, is an understatement. The old rules of the game "let's try to reach the consumer in as many ways as possible through integration", may not do. The mantra has to be customer engagement and the film is certainly an example of what savvy marketers can do and mind you, they are talking to every single Indian, not some niche audience where it is probably easier to create a strategy.
Yes, all around us are examples of failure and success, at times from the unlikeliest of sources. But are we ready to notice them?

(Ramanujam Sridhar is CEO, brand-comm, and the author of Googly - Branding on Indian Turf.)

Image Source: StoryFlakes

Monday, January 4, 2010

Not a memorable year for advertising

The advertising industry seems to no longer have an affinity for storytelling. As advertising moves down the value chain, inventive marketing is taking charge..

On a wintry morning in Bangalore as I sit wondering how advertising and marketing were in the year gone by, my mind wanders as it usually seems to do on wintry mornings (and just about any time). This time my undisciplined mind went to a commercial of the early Nineties for Band Aid, made by Johnson & Johnson. A kid has hurt himself playing football and his father who is a doctor (incidentally the model looks amazingly like Bhaskar Bhat, Managing Director of Titan Industries) tells him of the need to use Band Aid and how the injury should not be left open and the boy repeats the messages mechanically, his mind obviously on something else. Both of them leave the frame and as we expect the commercial to end the boy comes darting back into the frame and shouts, ‘ Bhoolna math match jeet gaya!' (‘Don't forget we won the match!').

Strikingly, perhaps the most significant recall factor of 2009 for me is the fact that India is the No. 1 test team in the world and was also the one-day leader for approximately 24 hours! Of course, being the karma yogi that I am, I shall resist the temptation to talk about the BCCI and its enormous capability to botch up anything and its phenomenal foresight in scheduling a colossal number of two test matches in the next 12 months for our all-conquering team. I shall stay with the yearly review that you are so patently and ardently (!) waiting for!

The mother of all crises!

The US and the Western world would like to forget 2009 in a hurry and wish it would end soon but the happenings in September 2008 spilled over for most of the year and had far-reaching implications for many countries, including India. Let me stay with the impact on advertising during the year that is chugging to a painful close. I think the year served more than ever to remind us of the fact that the truly Indian agency is a rarity and every second agency is part of a global network. The headquarters of global agencies panicked, and how! It is fair to say that India in real terms was not as badly affected as the rest of the world. But this did not prevent extreme reactions.

Many years ago I went to Hong Kong for a DDB Needham global conference and country after country presented. The order was usually North America, UK, France, and Germany and somewhere towards the end was India. India was not in the picture. Thankfully that has changed; India is much higher in terms of importance and visibility. But I wonder how many of the agencies' heads here in India realise that or, more critically, have the courage and the will to take on their global bosses? Although it seems a bit outspoken, I wonder if many of the agency bosses in India are in the last stages of their advertising careers and do not wish to assert themselves or take the trouble to educate their network partners on how we were not as badly off as the rest of the world and why the same cost-cutting strategy should not be adopted here.
India was administered the same medicine as the rest of the world, never mind the fact that it did not have the same degree of sickness. There was a ban on recruitment, travel, training … you get the drift? Agencies for once took their eyes off the headline and focused on the bottom line.
I daresay agencies treated talent in a harsh manner, to put it mildly, and let a number of people go. It is perhaps correct to say that the industry has alienated a whole lot of talent which was unable to understand or appreciate the steps being taken. In a sense it has been beneficial as it has spawned a few start-ups of disenchanted creative people who quite rightly want to do their own thing. Of course, agency heads, like their clients in the IT industry, kept parroting that they were only asking non-performers to leave and were improving the quality of their talent. I did feel sorry for the people in the advertising business, some of whom lost their jobs, forgot about raises and were not even trained during the year as all budgets were frozen.

The media struggles too

If advertising is ailing can media be far behind? Media has become the truly lowest common denominator and television is the primary offender as media woos eyeballs and revenue. Television seems to be going the David Dhawan way and we seem to revel in the era of ‘manufactured reality'. The Raakhi Sawant show is a case in point. People, it seems, are avidly switching on to things that you love to hate.
Thankfully, cinema, which people used to castigate readily, is moving up in creativity, technique and a lot of young talent is moving into it. What about news channels and their enormous capability at branding non-events as ‘breaking news?' I guess one of the commercials for the Hindustan Times where an anguished mother has a child in hospital thanks to defective medicine while an intrusive reporter asks her obnoxious questions best sums up the pathetic state of the channels.

About newspapers, the distressing trend of ‘paid editorial' is spreading like the AIDS virus. Recently when we were speaking about possible PR coverage for one of our clients, a prominent challenger newspaper, not the leader as one would suspect, asked “Why do you want PR coverage for this client? In any case they are not advertising in our paper, surely our readers are not the target audience?” I think the newspaper industry needs to step back for just a moment and consider its very reason for being. The world has enough products and services that are marketed mindlessly, often without the slightest consideration for truth, honesty and the consumer. Must the newspaper be just another product like these or must it stand for truth and fairness?

What about creativity?

The advertising industry seems to have lost its penchant for storytelling. Of course, the Zoozoos were a beacon of light in an otherwise dark and often depressing creative environment.
Mind you, this is not to ignore some isolated campaigns which still stood out from the clutter. But this has been a lean year for creativity as perhaps it has been for Ishant Sharma who was the greatest thing that happened to Indian fast bowling not so long ago.

There were very few campaigns that made one stand up and cheer as David Ogilvy would say, or make one wistfully say, “I wish I had written that.” There was the trend of some brands such as Idea Cellular and Tata Tea trying to tap into the social consciousness of the country, particularly of youth which may have some implications in terms of future possibility.

Some of the digital agencies used the freedom of the medium to provide outstanding creatives.
If one were to sum up the mass media creative, we probably delivered a plateful of advertising that one did not want. There was too much advertising and too little engagement, as an expert said, and advertising runs the risk of killing the reason why we are watching the media.
I think this is affecting the customer adversely. Have you ever tried to watch an interesting Hindi or Tamil movie on TV on Sunday? More than ever advertising needs to remind itself that at the best of times it is an interruption. People do not switch on the TV to watch the ads or buy a newspaper to see the ads, unless, of course, they want a job or wish to sell their apartment.

The advertising of today which tries so hard to be different is actually getting commoditised. While a good trend is that people from advertising have moved to films and are directing noticeable, popular films - the most visible of them being Balki and his second film Paa – clients too must realise that unless they give their agencies elbow room, the best of them will drift away to pastures where their creativity is recognised and rewarded and that will be disastrous for the industry as a whole.

Innovation the name of the game

Obviously advertising is moving down the value chain and is becoming more low-involvement as a career, which is in fact affecting the overall perception of the industry. Tata DoCoMo revolutionised the mobile services market with its per-second billing. Where is the innovation from advertising? I know that agencies will talk about roadblocks that they have created for Volkswagen and Hindustan Unilever. My take on this is slightly different. Are agencies being self-indulgent or are customers noticing these innovations that agencies are so proud about?
And as a prospective customer I am taken aback at the advertising for the Volkswagen Beetle here in India.

Will I pay over Rs 22 lakh after seeing this ad or even ask for a test drive? Is this aspirational? What a fantastic opportunity to work on an iconic brand! Has the opportunity been seized? I wonder. I remember seeing the room that Bill Bernbach used to work from in Madison Avenue.
It was like entering a shrine, so much was the aura of creativity around the man. The key question in DDB in those days whenever a campaign was being designed was to ask themselves the question on the lines of ‘What would Bill say?'
We have no way of knowing what Bill would have to say about the creativity of Indian advertising in 2009, but something tells me that the advertising legend who created campaigns which conformed to the 3 Ss of ‘simplicity, surprise, smile' might have for once been ‘stumped' for an answer!

(The writer is the CEO of brand-comm and the author of ‘Googly: Branding on Indian Turf.')

Image Source: NorthMediaHigh