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Be Special to Your Customers

Be Special to Your Customers

There are only two things you need to know: Don’t compete with China on cost, and don’t compete with Walmart on price. And if you’re not competing with Walmart on price and China on cost, then you have to start going up the value chain and start doing something that’s worth being paid more money for.

In the last three years, the short space of three years, 60,000 foreign-owned factories have been opened in China. That’s a new factory every 26 minutes. And in the course of those same three years, 600 foreign-owned labs have opened in China—200 a year, or one every 43 hours. Good luck competing with China on cost. In Bentonville, Arkansas, Walmart has in its files 460 terra bites of data—twice as much data on its customers as exists on the entire Internet. Good luck competing with Walmart on price.

Make Customers Fall in Love with Your Business

'The Customer Service Revolution' by John R. Dijulius III (ISBN 162634129X) A focus on cost-cutting and efficiency is how many organizations weather a down-turn, but this approach will only ultimately render them obsolete. Only constant pursuit of innovation can insure long-term success.

The CEO of the Intercontinental hotel group was fired recently. He was an accountant. And I’m sure this guy did a brilliant job of shaping up the cost structure, but it’s a new world. The chairmen who fired him said they are now in a new phase of business where the group will be a franchising and management company and brand management is central. Intercontinental will now have more to do with brand ownership.

General Erick Shinseki, retired Chief of Staff of the U.S. Army, said, “If you don’t like change, you’re going to like irrelevance even less.” During the six years that General Shinseki ran the army, he brought about more change than had occurred in the previous 75 years, and yet he was fired by Don Rumsfiled for not going fast enough!

I’m all in favor of having boring people in charge of organizations if the times are boring. But in freakish times, we need more freaks running our firms.

One of the offenses against gyrating is for a whole set of vaguely confident companies to merge with other companies saying, “Size is our defense.” Well it never has worked, and it never will work. Sears plus K-Mart is not keeping Walmart’s Lee Scott awake in Benville, Arkansas. Such a merger is called a horizontal double-dummy.

Create a Memorable Customer Experience

Most giant firms have never performed well. Forbes went back 87 years to see how the Forbes 100 had done. The answer was pathetic: 61 dead, 39 alive, and of the 39, only 18 were in the Fortune 100, and those 18 had underperformed the stock market by 20 percent. Only two of them had out-performed the market—GE and Kodak, and now we’re down to one, GE.

'The Customer Rules' by Lee Cockerell (ISBN 0770435602) What’s interesting to me is that GE is the most disorganized of that set. Not undisciplined, but disorganized. Trust me, the guy running the appliance division in Louisville, KY, could not find GE’s headquarters on a map. They send him to Louisville and say, “Make some money, dude, see ya in five years, if you screw it up, you’re outta here.” Size is over-rated.

Dick Kovacevich, CEO of Wells Fargo, said, “I don’t believe in economy to scale. You don’t get better by being bigger, you get worse.”

In 240 industries, the market share leader is the return on asset leader in only 29 percent of the cases. Nick Negroponte, head of MIT’s media lab, put it this way, “Incrementalism is innovation’s worst enemy.” In a time of non-incremental change, if you are working on making it a little bit better, you’re not working on blowing it up.

If you’re the leader, you don’t want to known as the King of the Tinkerersthat’s playing around while the world is flipping upside down. Roger Enrico, chairman of Pepsico, said, “Beware of the security of making small changes to small things, rather, make big changes to big things.” Good advice.

ISIT is blowing up every industry. We all live in a Dell-EBay-Walmart-Google world. What’s required, then, is absolute reinvention of the enterprise. Ray Lane ran Oracle for 10 years as president. He said e-business is about rebuilding the organization from the ground up. Most companies today are not built to exploit the Internet. Their processes, approval, hierarchy the number of people they employ—all of that is wrong for running an e-business.

People who have not been investing heavily in ISIT in the last five years are stupid. I watched it with Sysco, the company that distributes food to hospitals, schools, and factories. When everybody else was shutting down their ISIT investment five years ago, Sysco doubled their investment. Their chairman said, “I’m betting that I can reinvent the company, this entire industry, and get a 15-year jump on the competition.”

And they’ve done it! Sysco just bulldozed the entire industry and has grown from about $15 billion to about $35 billion dollars in five years.

Forest Gump, the father of outsourcing, said, “Don’t own nothing if you can help it. If you can, rent your shoes.” Forget outsourcing; let’s talk about best sourcing. Only an idiot would work with anyone who is not the best in the world. Several firms now even rent CEOs, so I’m not even sure we need these. There is no excuse for not working with the best.

If There’s No Perceived Difference for Your Customers, You’re Dead.

In the age of ISIT, the customer relationship is going one-to-one. Mass media is dead. Narrow-cast and one-to-one is the answer. Over the next 10 years, narrow cast will grow at 14 percent a year, mass media at 3 percent a year. To use CRM right, you have to blow up the organization and re-imagine everything you’re doing. It’s not a tool for getting a little closer to your customer; it’s a tool for revolutionizing the way you work with your customer.

'The Service Culture Handbook' by Jeff Toister (ISBN 0692842004) I love books, and I used to love going into bookstores. Now I love something else—Amazon.com. I have never met a living human being from Amazon, and probably never will. But I know this: any book I order will be on my desk tomorrow.

As Paul Cole, who ran the CRM practice of Cap, Gemini, Earnst, and Young said, “CRM is not about a pleasant transaction; it’s about a systemic opportunity to rethink the entire enterprise so that we can take advantage of every resource in the system to enhance the customer experience.”

I started blogging last year, and my life has changed. Blogging is short for “web log” and it says that the website becomes, not a place to process information, but a place to have intimate conversations. The web at its best is about conversations and portals.

I like what Home Depot is trying to do. Bob Nardelli discovered a mess when he arrived at Home Depot. Basically he said, “I want people to fall in love with the orange box, and know they’ll be taken care of. Their home electronics center, their chlorine in their pool, their home improvement projects—it’s all in that portal called, ‘Trust in the orange box.'”

We’re seeing a white-collar tsunami in professional services, as contract forms and advice are available on the web. I get mad when I hear, “But we have to protect the unsuspecting consumer.” That’s baloney. I am not an unsuspecting consumer, I’m a human being with a brain who can access health information on the web that is better than what my doctor offers. I’m not smarter than my realtor, my lawyer, or my doctor, but I’m a lot smarter than I was 10 years ago—and getting smarter every day. The conceit of gurus and doctors is, “You’ll listen to me because I wear the white coat.” What that means is, “Pay me a lot, I know some special stuff.”

What’s So Special About You for Your Customers?

I don’t deny professionalism, but I’m saying, “Don’t ever talk down to a customer.” Most young people are patrolling 50 websites. They’re not saying, “Let’s check out Lending Tree.” They’re saying, “Let’s check out Lending Tree and 100 others.”

It’s a new world order, regardless of the industry. Extremely good work is no longer enough, because the world is exploded with people doing extremely good work. Experience buys you nothing. It’s the price for entry. But it doesn’t make you special.

What is special about you? I don’t think excellence or being best is enough. Sears was best; Walmart was different. Compaq was best; Michael Dell was different. That’s the point of uniqueness.

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Posted in Business and Strategy

Quotations from Starbucks Founder Howard Schultz’s Book “Pour Your Heart Into It”

Howard Schultz‘s Pour Your Heart Into It touches on the best management and business practices and the techniques that Schultz used to found and lead Starbucks to the international coffee corporation it is today.

Starbucks has become an emblem of the current specialty coffee movement and a “hip” lifestyle. Starbucks coffee bars have opened in small towns and major cities alike, first in America, then around the world.

Starbucks Founder Howard Schultz

“Pour Your Heart Into It” Chapter Titles and Lead Quotations

Starbucks is a international coffee house chain with more than 17,000 stores. Founded in 1971 to roast coffee and sell it straight to drinkers at branded shops, it was only a regional company until Howard Schultz purchased it in 1987.

  • Chapter 1: Imagination, Dreams, and Humble Origins
    “It is only with the heart that one can see rightly. What is essential is invisible to the eye.”
    Antoine de Saint-Exupery in The Little Prince
  • Chapter 2: A Strong Legacy Makes You Sustainable for the Future
    “A hundred times every day I remind myself that my inner and outer life depend on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received.”
    Albert Einstein
  • Chapter 3: To Italians, Espresso is Like an Aria
    “Some men see things as they are and say ‘Why?’ I dream things that never were, and say ‘Why not?'”
    George Bernard Shaw, often quoted by Robert F. Kennedy
  • Chapter 4: Luck is the Residue of Design
    “Whenever you see a successful business, someone once made a courageous decision.”
    Peter Drucker
  • 'Pour Your Heart Into It' by Howard Schultz (ISBN 0786883561) Chapter 5: Naysayers Never Built a Great Enterprise
    “We judge ourselves by what we feel capable of doing, while others judge us by what we have already done.”
    Henry Wadsworth Longfellow, Kavanagh
  • Chapter 6: The Imprinting of the Company’s Values
    “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”
    Martin Luther King, Jr.
  • Chapter 7: Act Your Dreams with Open Eyes
    “Those who dream by night in the
    dusty recesses of their minds
    Awake to find that all was vanity;But the dreamers of day are dangerous men,
    That they may act their dreams with open
    eyes to make it possible.”
    T. E. Lawrence (of Arabia)
  • Chapter 8: If it Captures Your Imagination, it Will Captivate Others
    “Whatever you can do, or dream you can, … begin it. Boldness has genius, power and magic in it.”
    Johann Wolfgang von Goethe
  • Chapter 9: People are nor a Line Item
    “Wealth is the means and people are the ends. All our material riches will avail us little if we do not use them to expand the opportunities of our people.”
    John F. Kennedy, State of the Union address in January 1962
  • Chapter 10: A Hundred-story Building First Needs a Strong Foundation
    “The builders of visionary companies … concentrate primarily on building an organization—building a ticking clock—rather than on hitting a market just right with a visionary product idea.”
    Jim C. Collins, Built to Last
  • Chapter 11: Don’t Be Threatened by People Smarter Than You
    “The best executive is the one who has sense enough to pick good men [and women] to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.”
    Theodore Roosevelt
  • Chapter 12: The Value of Dogmatism and Flexibility
    “The only sacred cow in an organization should be its basic philosophy of doing business.”
    Thomas J. Watson, Jr. “A Business and Its Beliefs,” quoted in Built to Last

How Starbucks Became Successful

  • Chapter 13: Wall Street Measures a Company’s Price, Not Its Value
    “There are only two guidelines. One, what’s in the long-term best interests of the enterprise and its stakeholders, supplemented by the dominant concern of doing what’s right.”
    Robert D. Haas, President, Levi Strauss & Co.
  • Chapter 14: As Long as You’re Reinventing, How About Reinventing Yourself?
    “The difference between great and average or lousy in any job is, mostly, having the imagination and zeal to re-create yourself daily.”
    Tom Peters, The Pursuit of Wow!
  • Chapter 15: Don’t Let the Entrepreneur Get in the Way of the Enterprising Spirit
    “No organizational regeneration, no national industrial renaissance can take place without individual acts of courage.”
    Harvey A. Hornstein, Managerial Courage
  • Chapter 16: Seek to Renew Yourself Even When You’re Hitting Home Runs
    “To stay ahead, always have your next idea waiting in the wings.”
    Rosabeth Moss Kanter
  • Chapter 17: Crisis of Prices, Crisis of Values
    “It is by presence of mind in untried emergencies that the native metal of a man is tested.”
    James Russell Lowell, “Abraham Lincoln,” in North American Review, ]anuary 1864
  • Chapter 18: The Best Way to Build a Brand is One Person at a Time
    “What comes from the heart, goes to the heart.”
    Samuel Taylor Coleridge, Table Talk
  • Chapter 19: Twenty Million New Customers are Worth Taking a Risk For
    “Security is mostly superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing.”
    Helen Keller, The Open Door
  • Chapter 20: You Can Grow B1g and Stay Small
    “The fundamental task is to achieve smallness within large organization.”
    E. F. Schumacher, Small is Beautiful: Economics as If People Mattered
  • Chapter 21: How Socially Responsible Can a Company Be?
    “The evidence seems clear that those businesses which actively serve their many constituencies in creative, morally thoughtful ways also, over the long run, serve their shareholders best. Companies do, in fact, do well by doing good.”
    Norman Lear, Founder of the Business Enterprise Trust, Quoted in David Bollier’s Aiming Higher
  • Chapter 22: How Not to Be a Cookie-cutter Chain
    “Art is an adventure into an unknown world, which can be explored only by those willing to take risks.”
    Mark Rothko, In The New York Times, June 13, 1943
  • Chapter 23: When They Tell You to Focus, Don’t Get Myopic
    “If you can keep your head when all about you
    Are losing theirs and blaming it on you,
    If you can trust yourself when all men doubt you,
    But make allowance for their doubting too; …
    If you can fill the unforgiving minute
    With sixty seconds’ worth of distance run,
    Yours is the Earth and everything that’s in it,
    And—which is more—you’ll be a Man, my son!”
    Rudyard Kipling, “If”
  • Chapter 24: Lead with Your Heart
    “Leadership is discovering the company’s destiny and having the courage to follow it. … Companies that endure have a noble purpose.”
    Joe Jaworski of the Organizational Learning Center at Massachusetts Institute of Technology (MIT)

Starbucks Founder Howard Schultz's 'Pour Your Heart Into It'

Selections from Howard Schultz’s Analysis of Starbucks’ Spectacular Success

Schultz sponsored Starbucks as the “third place,” distinctive from home and work. Many of its shops have comfortable padded chairs and sofas. In recent years they offer free Wi-Fi for customers who want Internet access for their computers. Some Starbucks are in shopping malls, bookstores, supermarkets, college campuses, and airports. Baristas mix a range of coffee drinks.

  • “When you really believe—in yourself, in your dream—you just have to do everything you possibly can to take control and make your vision a reality. No great achievement happens by luck.”
    Howard Schultz
  • “I believe that the best way for an entrepreneur to maintain control is by performing well and pleasing shareholders even if his or her stake is below 50 percent. That risk is far preferable to the danger of heavy debt, which can limit the possibilities for future growth and innovation.”
    Howard Schultz
  • “It’s one thing to dream, but when the moment is right, you’ve got to be willing to leave what’s familiar and go out to find your own sound.”
    Howard Schultz
  • “Whatever your culture, your values, your guiding principles, you have to take steps to inculcate them in the organization early in its life so that they can guide every decision, every hire, every strategic objective you set.”
    Howard Schultz
  • “Every step of the way, I made a point to underpromise and overdeliver. In the long run, that’s the only way to ensure security in any job.”
    Howard Schultz
  • “If you want to build a great enterprise, you have to have the courage to dream great dreams. If you dream small dreams, you may succeed in building something small. For many people, that is enough. But if you want to achieve widespread impact and lasting value, be bold.”
    Howard Schultz
  • 'Onward How Starbucks Fought for Its Life' by Howard Schultz (ISBN 1609613821) “Treat people like family, and they will be loyal and give their all. Stand by people, and they will stand by you. It’s the oldest formula in business, one that is second nature to many family-run firms. Yet in the late 1980s, it seemed to be forgotten.”
    Howard Schultz
  • “While Wall Street has taught me a lot, its most enduring lesson is an understanding of just how artificial a stock price is. It’s all too easy to regard it as the true value of your company, and even the value of yourself.”
    Howard Schultz
  • “At a certain stage in a company’s development, an entrepreneur has to develop into a professional manager. That often goes against the grain.”
    Howard Schultz
  • “Whatever you do, don’t play it safe. Don’t do things the way they’ve always been done. Don’t try to fit the system. If you do what’s expected of you, you’ll never accomplish more than others expect.”
    Howard Schultz

The Recipe to Starbucks Success

The name Starbucks is borrowed from the first mate of the whaling ship in the Herman Melville novel Moby Dick. The logo for Starbucks is also nautical, a siren who in the original image had a mermaid’s tail.

The first Starbucks location opened in the United States, in Pike Place, Seattle in 1971 and the company developed globally with a brand recognition that has been compared to the longer standing, brand-distinctive McDonald’s Fast-food Empire.

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Posted in Business and Strategy Leaders and Innovators

The Gift of Customer Loyalty Begins with Employee Loyalty

Customer Loyalty Flourishes

Employee and customer loyalty are one in the same. The gift of customer loyalty begins with employee loyalty. Nurtured and directed employee loyalty will create worlds of energy, inoculating against the apathy and distrust endemic in many organizations. It can also result in synergy, the energy-laden connection that emerges in a group channeling momentum toward the common good. Trust, added to the mix, instills confidence, which helps employee loyalty grow, and customer loyalty flourish.

Employee & Customer Loyalty Case Study: Sam Walton and Wal-Mart

At the time of Sam Walton’s death in 1992, Wal-Mart had annual sales of $44 billion. One out of every five retail items purchased in America came from a Wal-Mart store. His personal fortune exceeded $23 billion. Sam once said: “There is only one boss: the customer. And he can fire everybody, from the chairman on down, simply by spending his money somewhere else.” When asked how Wal-Mart was able to grow so fast, Sam replied, “The answer is always the same-people. Not only the right kind, but interested, dedicated, enthusiastic, and loyal people. That makes our company exceptional.”

Southwest Airlines Customer Service

Employee & Customer Loyalty Case Study: Herb Kelleher and Southwest Airlines

Southwest Airlines devotes a considerable budget to celebrating its employees with parties, banquets, gifts, birthday cards and outings. Accountants have told Herb Kelleher how much money he could save if he didn’t budget for these activities. His reply: “Southwest Airlines has the fewest customer complaints in the industry. How much is that worth?”

Kelleher believes that the front office is there to support the employees. He said: “Southwest has its customers, the passengers; and I have my customers, the airline’s employees. If the passengers aren’t satisfied, they won’t fly with us. If the employees aren’t satisfied, they won’t provide the product we need.” Southwest employees make flying a fun experience. They try to surprise and delight the customers.

Employee & Customer Loyalty Case Study: Nordstrom Rules

Nordstrom leaders also inspire employees with actions and directions that are surprising. For example, the Nordstrom Handbook says: “Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.” And Rule 1 simply reads: “Use your good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division manager any question at any time.”

The founders of Nordstrom maintain what they call a “worshipful relationship” with the customer, resulting in delighted customers, enthusiastic salespeople, and high profits. They actively practice “doing virtually anything possible to please the customer.” The founders also do virtually anything possible to please their employees.

The Gift of Customer Loyalty Begins with Employee Loyalty

Employee & Customer Loyalty Case Study: Ritz Carlton: Discovering what customers savor

A few months ago, I was involved in a seminar in Pasadena at the Ritz-Carlton Hotel. During lunch I asked my waiter for a burger and a chocolate shake. When he let me know that they didn’t offer milkshakes, I setfled for a glass of water. I was surprised when a chocolate shake arrived with my hamburger. Manuel Avila, my waiter, on his own initiative, found chocolate ice cream and cold milk in the kitchen and created a shake. Manuel felt free to exercise initiative on my behalf because of the positive creative examples set by his leaders.

When Employees are Cared for, They Care for Customers

The way employees treat customers reflects directly on the way they are personally treated. Many employees are truly loyal. The question is; how do we retain and increase our loyal employees, thereby increasing our customer loyalty base?

The way employees treat customers reflects directly on the way they are personally treated. How can you emulate these four cases to improve loyalty in your organization?

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Posted in Business and Strategy

How to Create a Personal Leadership Brand

How to Create a Personal Leadership Brand The pressures of work are constant. In a world of discombobulated messaging, you can communicate with more impact and integrity by engendering a personal leadership brand. Personal branding can increment mindshare among audiences as much as branding for products can increment market share.

What rate of return do your speeches, interviews, and visits with customers and partners generate? What impact do these efforts have on your bottom line? A high Return on Communication means that with every interaction, you meet one or more strategic objectives, deliver clear messages that people understand and remember, and enhance your brand and the company’s brand. Executive branding ensures that the time and money you spend on communication translate into desired business outcomes.

Senior executives often communicate without making much of an impression. Either they don’t say anything memorable, or they are remembered for all the wrong reasons-a bad media quote, poor slides, annoying body language. Worst case: their communication is mistrusted and misinterpreted, achieving exactly the opposite of what they intend. High turnover rates and a paucity of effective leaders suggest either that there’s no correlation between studying leadership and leading or that the scientific approach could benefit from a bit more art.

Personal Branding Building a brand is about creating value for other people. The business reasons for executive branding are pellucid: the CEO’s reputation accounts for about a moiety of the reputation of the company; the CEO’s personal brand impacts employee allegiance and resilience; and a brand is the premium that shareholders are disposed to pay for the stock or the product. No bellwether can leave to chance the way that he or she is perceived.

While many leaders know how to brand companies and products, few know how to brand themselves. Why go to the trouble? Let’s look at what personal branding can do for you:

  • Differentiation: A personal brand differentiates you from others, enabling you to stand out and be memorable.
  • Consistency: A personal brand ensures that you are consistent-reliably the same in situations, which creates trust. People know what to expect of you, and you communicate from the same platform, whether announcing good news or bad news.
  • Clarity: When you have a brand, you stand for something. Your brand leverages the power of clear non-verbal messages, and helps determine the verbal messages you want to convey.
  • Authenticity: Personal branding allows you to speak with authenticity. Your brand communicates who you are. When leaders speak with sincerity, they are much more persuasive than when they speak the party line.

There’s been an increased interest in leadership presence over the last few years, perhaps because simply being present has become one of the chief executive obstacles in our highly distracting 24/7 culture. The spread of highly injuctively authorizing, even invasive, technologies is no doubt partly to inculpate. But many organizational cultures have in effect become toxic, which is a designator of pristinely human failure. If we can’t muster up the presence of mind to recognize this state of affairs, we have little chance of learning better leadership.

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Posted in Education and Career Philosophy and Wisdom

Marketing Demographics by Age

Marketing Demographics by Age

Companies seeking long-term business growth can find it by emphasizing the earning power of young workers, near-retirees, and women.

We all want to be treated equally and fairly during the buying and service process, regardless of our age. Let’s examine how you, as a service provider, can give exceptional service by understanding the needs and values of each age group.

Marketing to The Veterans

Marketing to The Veterans These people were born before 1943. Their beliefs and values include: Everyone should adhere and conform to the same rules, regulations, and policies. Those who are older or in positions of authority automatically deserve respect. Patience is an important virtue. The bigger the better. Personal pleasure is secondary to job responsibilities and tasks.

To win them over as a lifetime customers, make them feel special by remembering their name. Honor them by calling them Mr. or Mrs. or Sir and Ma’am. Thank them for their patronage with a personal note. Add a personal touch, and show genuine interest in them as a person.

Marketing to The Boomers

Marketing to The Boomers These people were born between 1943 and 1960. Their beliefs include: If it’s not working, either fix it or move on and find something better. They value personal growth, health, and wellness. They are optimistic. They believe they are the star and deserve center stage.

To keep them as lifetime customers, provide service that treats them as individuals, not just clients. Be personable. They value personal relationships that grow with time. Be solution oriented. If you can’t fix something, be honest; and then offer alternatives. Boomers value their time and want solutions now. Don’t tell Boomers what they can do.

Marketing to Generation X

Marketing to Generation X Baby Busters or 20-somethings were born between 1960 and 1980. They have a need to be self-reliant. They value family and friends. They tend to be informal and look for fun in every situation. They treat everyone as an equal regardless of “rank” but tend to be skeptical. They have respect for knowledge and technology.

If you want them to do business with your company, show interest in their family and friends, and admire their children if they are tagging along, or their pictures are prominently displayed on their desk. Treat them as equals. Approach situations in a relaxed and informal manner. Let them ask questions and seek information. Show that you have nothing to hide. Use technology to demonstrate your product and services.

Marketing to The Nexters

Marketing to The Nexters Generation Y or the Internet Generation were born between 1980 and 2000. They tend to be optimistic, street smart and very computer and technology literate. Achievement oriented, they are also strong believers in civic duty. They learn flexibility early since many come from divorced families.

If you want these customers to do business with your company, appeal to their strengths. These young people like to spend money, and they are more likely to purchase your product if your business donates to non-profit organizations. Also, appeal to their technical shrewdness. If it makes life more convenient, easier or is the latest in technology, they will probably want it.

Conclusion: For successful marketing by age-demographics, consider each age group and customize your service

Service providers can give exceptional service by understanding the needs and values of each age group. I give these guidelines to assist you in providing the best possible customer care, but nothing will ever surpass kind and equal treatment to each and every customer you serve.

Learn to present information in a different manner to appeal to core values, which are different for each generation.

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Posted in Business and Strategy Management and Leadership

Starbucks CEO Howard Schultz Calls It a Day

Starbucks COO Kevin Johnson is the right replacement for CEO Howard Schultz

Starbucks CEO Howard Schultz has called it a day, and that’s causing some investors a bit of worry, primarily because the coffee giant struggled the last time Schultz left in 2000.

Starbucks COO Kevin Johnson Replaces CEO Howard Schultz

Kevin Johnson, the current president and chief operating officer of Starbucks, will take over as CEO. Johnson is a 30-year veteran of the tech industry held senior leadership roles for 16 years at Microsoft and a five-year stint CEO of Juniper Networks.

Johnson’s consumer technology background is impressive and is a key asset for Starbucks in expanding the company’s already-leading digital platform across channels and geographies in the years to come.

Former Starbucks COO Troy Alstead Quit in January 2015

When Starbucks’ longtime COO Troy Alstead quit, Schultz wrote, “Looking back on the 23 years we spent together side-by-side as Starbucks colleagues, I can recall so many memorable moments and accomplishments in which Troy can take pride in a job well done. Troy is a beloved Starbucks partner and has played an invaluable role in our growth as an enterprise and in the development of our culture as a performance-driven company balanced with humanity, which is unique for our industry. Troy’s humanity and humility will be missed and we wish him the best.”

Starbucks' Premium Roastery and Reserve Stores

Schultz Focused on Sustaining Revenue

For the last several years, Schultz focused on sustaining revenue growth by moving beyond his coffee house roots. In 2012, he purchased Teavana as another brick in the road, which has encompassed instant coffee, energy drinks, juice, a single-serve brewer and food to sell in its shops and in grocery stores. In 2013, Starbucks and yogurt-maker Danone, declared a plan to cooperatively create an assortment of specialty yogurt products in contributing Starbucks stores in 2014 and in grocery channels in 2015 as part of the coffee chain’s growing Evolution Fresh brand. With cafe-like atmospheres and a brand that evokes a high-quality customer experience, Starbucks appreciates pricing power benefits over nearly all specialty coffee peers. This will be expanded by the development of the Starbucks Reserve sub-brand to deliver exclusive, higher-end coffee blends.

While Schultz’s forethought and attention to customer experience have been significant motives that Starbucks has established one of the widest-moat and most consistent growth stories in the global consumer coverage universe, Starbucks has one of the deepest benches in the consumer sector. While most of the focus is technically on new CEO Johnson and his wide-ranging consumer technology background, Schultz will still be immersed with the development of Starbucks’ Premium Roastery and Reserve stores.

'Onward How Starbucks Fought for Its Life' by Howard Schultz (ISBN 1609613821) Don’t liken Schultz’s switch to that of 2000, when he undertook the chairman role and assigned Jim Donald as CEO. Schultz ultimately returned as CEO in 2008 in the wake of disappointing sales figures and a “watering down of the Starbucks experience”. In his turnaround memoir Onward: How Starbucks Fought for Its Life without Losing Its Soul, Schultz wrote “The merchant’s success depends on his or her ability to tell a story. What people see or hear or smell or do when they enter a space guides their feelings, enticing them to celebrate whatever the seller has to offer. Intuitively I have always understood this. So when, in 2006 and 2007, I walked into more and more Starbucks stores and sensed that we were no longer celebrating coffee, my heart sank. Our customers deserved better.”

How Starbucks Became Successful

How Starbucks Became Successful

Brand, channel, and technology advantages have positioned Starbucks for a long runway for growth:

  • Starbucks coffee is robust, and people get used to the taste, making it difficult for them to be content somewhere else, either to coffee chains such as Dunkin’ Brands, Tim Hortons, or McDonald’s. Joh. A. Benckiser’s amalgamation of Mondelez’s coffee properties (D.E Master Blenders, Peet’s, Caribou, Einstein Noah, and Keurig) are emerging as Starbucks’s noteworthy competitors. Despite the tenacity of the legend, Starbucks doesn’t really burn its beans. Nonetheless it uses two tablespoons of coffee per 6 ounces of water, which is beyond a lot of other places.
  • Decades ago, in many markets, the only place a customer could get a cappuccino was a restaurant, and there indeed weren’t any flavored or distinguished coffees anywhere. Starbucks was the pioneer in bringing those to the masses. There’s countless brand loyalty they’ve built up over the years. As good the coffee beans are a good amount of training goes in the way they make specialized drinks. Wet, dry cappucino, lattes in perfect ratios of coffee, milk and foam.
  • Starbucks has been known for being pretty generous to its employees, together with presenting full benefits to those working as a minimum 20 hours per week. That made customers feel good about buying coffee there.
  • Customers appreciate the consistency of Starbucks products. A customer can go to a Starbucks pretty much anyplace in the world, and know what they’re getting. A grande vanilla latte will be on the menu and taste the same whether in Seattle, New York, London, Istanbul, or Moscow.

The Recipe to Starbucks Success

The Recipe to Starbucks’ Success

Yet same-store sales have been decelerating, however from very high levels, and the company ran into difficulty the last time Schultz stepped back from the CEO role. Regardless of impressive growth plans, and commodity cost and foreign currency volatility, Starbucks can endure a 40%-45% dividend payout ratio over the next decade.

Some analysts and investors aren’t worried about the management change. Wells Fargo’s Bonnie Herzog acknowledged that while Schultz’s departure is “a loss, in our view the show must (and will) go on” and added, “While we acknowledge that Schultz is without question one of the strongest and most visionary leaders in the consumer/retail world, we believe the succession planning put in place several years ago assures the recent exceptional performance will likely continue.”

Starbucks Future Strategy for Invigorated Growth

Starbucks Future Strategy for Invigorated Growth

Speaking of how Starbucks’ invigorated food and beverage menu and store reformats have uplifted the Starbucks customer experience, pierced new markets and times, and enhanced unit-level productivity metrics, Herzog also wrote,

The leadership change announced today has been a long-time in the making, starting nearly 3 years ago with the shuffling of the senior leadership team, and subsequent promotion of Johnson in early 2015 to the role of President/COO. We believe that Johnson is a very capable leader, with strong experience working side-by-side Schultz for the past two years. Importantly Johnson has an exceptionally good relationship with Schultz, which should keep Schultz sufficiently removed to allow Johnson to lead effectively given his trust in Johnson, while also remaining sufficiently nearby to ensure the ship remains on course… We believe Johnson’s technology background positions him well to ensure SBUX’s mobile and digital initiatives—key to SBUX’s long-term success, in our view—will remain a primary focus of the company. Importantly, Schultz will remain focused on his ongoing efforts to premiumize the SBUX brand and experience through Roastery and Reserve stores, which should support accelerated innovation and allow the broader store network led by Johnson to continue to thrive.

Investors are also cheerful about Starbucks’ mobile, digital, and loyalty program collaborations across the various business lines, affiliations with Spotify, New York Times, and Lyft, and new payment technologies. Starbucks’ worldwide opportunities are undisputable–particularly in China, India, Japan, Brazil, and Eastern Europe–and Starbucks will apply its best practices from the U.S. to accelerate its growth aspirations.

Starbucks has organized an investor meeting next week, during which its leaders are expected to release news on current and future initiatives.

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Innovate Around Your Brand

Innovation

The world is filled with brands and products competing for our attention and our dollars. It can be mind-boggling. That makes breaking through the clutter a never-ending battle. So, how can we stand out and own a share of the consumer’s mind?

The answer is through innovation the constant challenge to the status quo, the relentless, restless search for something new and better. Companies grab market share and reinforce positions with fresh ideas that create fresh profits.

Innovation is the life-blood of any industry. And yet, as the economy cooled off, so did funding for innovation. The focus turned from the “next new thing” to the quarter’s earnings. But we have not turned our back on innovation. In fact, innovation is happening at a fast and furious pace.

Our consumers have always wanted choices, and we have always responded. Today, as consumers’ tastes change and their desire for variety, wellness and convenience grows, we continue to respond. Just look at some of the great examples of innovation in our industry. Whether you’re taking about Red Fusion, Mr. Green, Pepsi Blue, Simply Orange, or Vanilla Coke, we’re giving consumers a rainbow of new choices in colas, flavors, juices, nutritional beverages, waters and sports drinks.

When you add 25,000 other product introductions a year from other industries, you know how many consumers feel bombarded.

This brings me to the question we must ask about innovation, about any new product, package, or service we introduce: What is its value? And is it meaningful? To me, that’s an easy litmus test. Meaningful innovation is sustaining. It stands the test of time because it continues to add value.

The problem with the dot-com companies wasn’t a lack of good ideas. Webvan and pets.com were great ideas. But they didn’t have the right business models to support the innovation and sustain long-term value.

Innovation isn’t all about flash and sizzle. Innovation is very much about substance. And that’s the foundation for our vision for innovation: Innovation must be a “difference engine.” It must make a real difference and drive real growth. And for innovation to be worthy of our investment, it must add value to our brands and create long-term value for everyone touched by our business. When there isn’t meaningful innovation, we lose momentum. When we innovate around trademark Coca-Cola, our growth accelerates.

Through our emphasis on innovation, we’ve learned five key lessons:

Innovation comes from listening and from understanding consumers.

Consumer relevance drives everything. To be relevant, we must be observant and understand what’s important in our consumers’ lives.

That’s how Red Bull did it, starting in the early ’80s, when its founder noticed the popularity of a new beverage while on business in Asia. He brought a few samples back to Austria and created not only a brand, but also a new beverage category—energy drinks.

At Coca-Cola, we used to think about painting the world red. Now, we think about painting the world relevant. Vanilla Coke is turning out to be very relevant. It reminds older consumers of simpler times, when they stopped by the soda fountain after school for a soft drink and some fries. And for younger consumers, it’s giving them a distinctive new taste and new look with its Coca-Cola trademark packaging.

Connection with consumers in relevant ways got us off to a great start with Vanilla Coke. We attracted more than 7 million new drinkers and sold more than 60 million cases; and when we learned that many consumers wanted a diet version, we created Diet Vanilla Coke. If you’re listening, your consumers will tell you where to look for innovation.

Brands, not products, create sustaining value.

And innovation builds brands. Brands are made in hearts and minds because brands provide two things that products can’t—time and trust. Brands deliver both by making choices easier and more reassuring. Great companies create and sustaining great brands through innovation.

  • Harley-Davidson, one of America’s great brands, stirs passion in it riders, dealers, and employees. And it translates that passion into profits. Since going public in 1986, its shares have risen 15,000 percent. Forbes named Harley-Davidson “Company of the Year” last year because in its 100th year of industry leadership, Harley Davidson flexed its innovative muscle—a motorcycle with a liquid-cooled engine that revs the bike higher and hotter in each gear and makes you go faster. It was a giant step for a company that made only air-cooled engines for 100 years. It also helped Harley appeal to the audience it was after—young, urban, hip Americans and Europeans.
  • Another innovation-driving brand is PowerAde. After living in the shadow of a formidable competitor, we gave it a complete makeover—new formula, graphics, advertising, and flavors. Now, it’s a serious contender, driven by an innovative consumer proposition—real power.

You really aren’t committed to innovation unless you’re willing to fail.

Thomas Watson, IBM’s legendary chairman, once said, “The fastest way to succeed is to double your failure rate.” Inventors know that failure is a prerequisite to “eureka” moments, but in business we have a hard time with that.

Does anyone remember New Coke? We sure do. New Coke was a lesson. When consumers turned their backs on New Coke, we were reminded of the deep emotional relationship consumers have with great brands. Brands should cherish those relationships. It’s a lesson we value, and one we’ll never forget.

Our former CEO, Roberto Goizueta, used to say: “You can only stumble if you’re moving.” Innovation is about moving, hopefully forward, but occasionally, a few steps to the rear. Often innovation takes us into uncharted territory, where risk goes up. And that’s good. The key is to keep moving.

Innovation is more than products and packaging

Innovation is more than products and packaging—it’s everything and everyone.

Innovation permeates everything—operating strategies, tactics, systems, supply chains, information technology, distribution, and marketing.

When it comes to marketing, there’s always room for innovation. We found a new opportunity with the series “American Idol.” The innovation was in how we integrated the consumer messaging. In addition to customized advertising, Coca-Cola played a role within the framework of the show—in the Red Room, with the Red Couch, and with product placement. The show became a blockbuster hit, leading to an innovative marketing strategy.

If innovation is all-encompassing, it should be done systematically. In other words, define the problem and solve it. What are the objectives? Who will do the work? How will we measure success? Innovation is everyone’s business. At Delta Air Lines, a menu planner noticed that most people never touched the lettuce leaf under their salads. Her suggestion to eliminate the lettuce leaf saved Delta $1 million. A good idea is a good idea—no matter how small it seems.

In Coca-Cola North America, we’re trying to build a culture that encourages innovation through the same sort of observation and curiosity. Our goal is that every employee starts to think about ways they can do their job better—more efficiently, more productively with greater innovation. In such a culture, companies leverage their people and assets to their fullest. One example is our “good answer” program, created to help our Fountain customers handle their customer calls. Our “good answer” team now receives phone calls, emails and regular mail from consumers on behalf of a growing number of our restaurant customers. In addition to responding to the consumer’s issue, they also provide an analysis of the calls to help the operator make better decisions about their menus, facilities and service.

Coca Cola Brand

We must apply innovation to our social contract with communities.

This lesson is bigger than brands, packages, and marketing campaigns. It’s about our reputation and our image. We’re all under constant scrutiny these days regarding the ways we affect our communities. And the focus is intense in two places—the environment and obesity.

Soft drink packages are already the most environmentally friendly recycled consumer packages. We find creative ways to increase the recycled content we use in packages. During the Salt Lake Olympics, for example, our people created a recyclable, biodegradable cold drink cup from renewable resources.

The obesity issue is complex because it’s not just about what you consume—it includes a healthy and active lifestyle. We recently launched an innovative program called “Step with It” in cooperation with the National Association for Sport and Physical Education to increase physical activity in schools.

Pepsi formed an alliance with respected health, nutrition and exercise experts to educate and encourage Americans to reduce health risks through informed choices and an active lifestyle.

Conclusions

We need to be just as innovative in the ways we protect and sustain our business as we are in the way we market and sell our products. These five lessons are our guiding principles—an imperative to continue to delight our consumers with innovative brands, packages, and business systems that create value. When we’re creating the next great innovations, we’re creating sustainable value, and we’re leaving our businesses, communities, and industry a little better.

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Process of Building a Personal Brand

You already have a personal brand. What do people feel when you walk into the room? And what do you want them to feel? With successful branding, your key audiences think about you the way you want them to think.

The branding process has four steps.

Consider the corporate brand

The more senior the executive, the closer the fit needs to be between corporate brand and personal brand. CEOs should consider themselves an extension or an embodiment of the corporate brand. What does your corporate brand stand for? How does your CEO’s brand fit within it? If the branding does not fit, the CEO’s tenure will likely be short. Successful branding does not mean that the CEO needs to layer another persona over his or her own. Nor does it mean that the CEO needs to be conventionally charismatic. The branding of many CEOs is modest, low key, and but their personal brand stands for something that key constituents relate to.

Some CEOs have star power and are extremely media-genie. In this case, the challenge is to ensure that the CEO’s personal brand contributes to the corporate brand rather than distracts from it. The spotlight is put on the mission of the company, rather than on the personality of the CEO.

Articulate your personal brand

How do you identify and articulate your personal brand? Consider using archetypes-themes that tell a story. All business communication involves the telling of stories. An annual report is a story. A press release is a story. Archetypes tell the maximum story with minimum effort. We have all certain archetypes within us. In personal branding, focus on one or two major archetypes that explain your core motivation and strategies. For example, President George W. Bush is most effective when he takes on the Regular Guy persona. Al Gore is a Sage brand. The ability to make each person feel heard is the hallmark of a Lover brand and Bill Clinton personifies this. Hillary Clinton, on the other hand, is a true Ruler brand-fully in control.

In business, Apple Computer is an Outlaw brand (” Think Different“), and its CEO Steve Jobs is a Creator/Outlaw brand. The close alignment between the company and its leader works well. Another Outlaw brand with a flavor of Warrior is Hong Kong entrepreneur Richard Li, whose career was built on taking risks and turning away from convention. Oracle Software is a Warrior brand, as is its CEO, Larry Ellison. Executives who work in healthcare often exemplify the Caregiver brand.

What archetype is dominant for you and your company? When coaching executives, we use assessments and questions to uncover an executive’s dominant archetype, the basis of his or her personal brand. To discover your archetype, ask yourself: What do I value above all else? What do I represent? What is unique about me? What is my call to action? What is my greatest fear? What story am I living?

Adjust your brand

Once you have articulated your brand, check for congruence. Ask others, “Does this brand evoke me?” You should get agreement from your audiences. Is your brand aligned with your actions and words? Are your actions aligned with your desired branding? Are there conflicts within your archetypes? For example, if you have a strong Regular Guy streak, you probably fear standing out. Does this prevent you from stepping into a Ruler role when your leadership calls for it? Or does the Lover aspect of your personality conflict with the Wnniors need to achieve? Finally, ask yourself: Is this really who I want to be? How can I aim even higher? What quirks of mine can I incorporate into my branding? Most of us spend our lives trying to conform. This is a chance to celebrate our uniqueness.

Live your brand

As you implement your brand, you will find that you have some clear strengths and liabilities. Your brand will alienate some people, and that’s okay. Strong brands don’t try to be all things to all people. Each archetype presents both opportunities and traps. A Warrior leader can be powerful, but may not create a nurturing work environment.

A Creator leader can be invigorating to follow, but may not be a structured thinker. Your strategy should be to mitigate your liabilities by flexing your behavior to meet the needs of the people and groups who are important to your business. For example, if you deal frequently with Ruler archetypes but are not a Ruler brand yourself, you will need to learn certain strategies and skills. By noticing your impact on your key audiences, and by stretching your skill set, you become a stronger, more flexible brand. Successful leaders who live their personal branding exercise a paradox. They are both deeply steeped in their own personal identities and deeply flexible toward their key audiences. Leaders who are good at both elements are authentic (true to themselves) and influential (powerful with others).

A Brand is A Promise

Remember: a brand is a promise, one that you make and fulfill, over and over. What promises are you and your company fulfilling? Fulfilling the business promise through effective communication yields a high Return on Communication.

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The Cowboy and Masculine Trademark of the Marlboro Man Brand Image

Research has proved that when products are in effect equivalent, people go with what’s familiar, even if the product is only familiar because they know its name from advertising and recognize the brand.

'Twenty Ads That Shook the World' by James Twitchell (ISBN 0609605631) According to James Twitchell, author of “Twenty Ads That Shook the World”, the key insight that shaped modern advertising came to cigarette manufacturers in the 1930s. Twitchell’s book is subtitled, “The Century’s Most Groundbreaking Advertising and How It Changed Us All.”

During market research, cigarette manufacturers ascertained that smokers who taste-tested several cigarette brands without recognizing which was which couldn’t tell them apart. So, if any manufacturer wanted to sell more of his specific brand, he was either going to have to make it distinguished or make consumers think it was distinctive, which was significantly trouble-free. That insight give birth to the practice of selling a product by associating it with a glamorous lifestyle.

Marlboro is one of the best successful examples of changing the consumer behavior through a complete gender re-positioning. Ad agency Leo Burnett’s brilliant campaign made Marlboro one of the most valuable brands of all time. By creating the “Marlboro man,” Burnett transformed what was seen as an very feminine brand of filter cigarettes into a rugged, sexy masculine one in a matter of months. The image of the “Marlboro Man” projected rugged manliness in an effort to position Marlboro as a filter with flavor.

The Marlboro Man was first conceived in 1954. As the all-American cowboy, he was rugged and he was cool. He was the epitome of masculinity.

Back then, Jack Landry, the brand manager for Marlboro at Philip Morris said,

In a world that was becoming increasingly complex and frustrating for the ordinary man, the cowboy represented the antithesis—a man whose environment was simplistic and relatively pressure free. He was his own man in a world he owned.

Leo Burnett experimented with other ‘Marlboro Men’—ball players, race car drivers, and tattoo-covered hunks. They were all successful, but it was the cowboy that really “shook the world.” The macho spokes-model traveled the world. He crosses cultures and translated ideas of masculinity in a nonverbal manner, and became one of the most famous icons of all time.

In 1955, when the Marlboro Man campaign was launched, sales were at $5 billion. By 1957, sales were at $20 billion, representing a 300% increase within two years. Philip Morris easily overcame growing health concerns through the Marlboro Man campaign, highlighting the success as well as the tobacco industry’s strong ability to use mass marketing to influence consumers.

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The Secret of Creating Winning Brands

The Secret of Creating Winning Brands

Brands are a company’s most valuable asset. It is critical that companies have to value brands as strategic assets. They have never been more important than they are today. Media and social networking are becoming very complex.

In today’s fast-paced world of business, companies need to be consumer-centric, risk-inclined, nimble, opportunistic, and prepared for contingencies. Today’s brand identifiers are required to assume new meaning and context quickly and be potent in significance.

Consider these four techniques that he savviest brand managers have adapted to create a winning brand.

  1. Reflect on what should spring to mind when customers hear about your brand. Prudent branding is more about associating an identity with a strong and coherent significance. Polish up the intent of your brand to separate your company and its products from the rest of the pack. Belief and brand loyalty are no longer precursors of business success. Take account of points of differentiation.
  2. Winning Brands The branding process is no longer linear and consistent. Enhance the branding to promise value and ensure that it resonates with the organization’s best prospects. Diluted and weak branding results from trying to be cater to the needs of many a variety of customer.
  3. Integrate all your forms of communications and your messages to ensure that all channels interact with the customer consistently. Inventory all the current marketing communications to understand points of discrepancy in branding communications. Our forms of communication must directly reflect the quality and value your company deliver to our customers. Therefore, fashion all messages with the customer’s experience in mind.
  4. To work at the success of your brand image, broadcast your branding strategy to all employees to ensure that every element of your company remain authentic not only to your brand, but also to the people, products and services that it represents.
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