A moment of truth is that one magic moment where a company is evaluated – fairly or unfairly for the way its products perform, the way it interacts with the customer, the way it delivers its service or any instant that consumers come across a product/service.

I will always remember a speech given by Tom Peters (Passion for Excellence) where he was emphasizing a moment of truth by using a quote from an airline executive. The executive said ‘Tom, when passengers see a coffee stain on the tray table in front of them, they automatically assume that we have engine troubles.’
A bit extreme but if you follow the logic from the passenger’s point of view, the passenger is thinking ’ Well if they can’t at least take the time to clean the coffee stain, I hope that they are taking the time to service the engines…?’

Another example of moment of truth is when a fellow Romanian steps out his car to help you push your car out of the snow during our last snow storms. You certainly did not expect it but it gave you a renewed reminder on how hospitable Romanians can be when things are not going well.

Here’s my example. Someone very dear to me received this sms for an outstanding balance on her bank card:

Cod IDclient XX8644YY: La 06/02/2012 suma datorata este 67.41 RON. Restantele se raporteaza Biroului de Credit.

In English the translation is: Client code: XX8644YY, as of 06/02/2012 you have an outstanding amount on your bank card (owed to the bank). Unpaid sums will be reported to the credit bureau.

Context: Yearly fees were accumulating on the card which had not been used for quite some time principally because my friend has other cards and her main banking was done with other banks.
I assume that banks know that clients have multiple cards and accounts.

Assessment: First of all, total lack of politeness. No ‘Dear Mrs’…or ‘we would like to raise to you attention’…
Second no explanation – we go straight to the credit bureau.
Third: No warnings; this came ‘out of the blue’. No emails, no attempt to call and perhaps enquire as to why this was left unpaid or inactive. Perhaps there was some confusion; who knows what can happen when we call customers to get information or feedback!

I sound cynical (my Canadian heritage) but I am mostly disappointed as a marketer!
This bank which will remain nameless spends a tremendous amount of money on Above the line (ATL) advertising in TV, Print and outdoor with 3 Romanian sport figures.

I mean the visuals are nice, creative, welcoming, and frequent and judging by how long these 3 celebrities have agreed to promote the bank, I assume that the campaigns are working. In fact my friend held on to the card (albeit inactive) for that very reason…it had a celebrity on the card. Now that is powerful Marketing.

Result: My friend was upset with the message and she was not aware that the card had become inactive (I mean the last time I checked, we were all too busy to check to see how ‘active‘ we have been with some of our bank cards right!?). This whole matter was unbeknownst to her. She proceeded to call the bank and cancel the cards, rather…all cards, if this is how they treat customers. Ouch!

The solution:
All touch points and customer facing departments have to be in unison, like a classical music symphony. They need to follow the same music, the same beat and the same song book. Product Managers and Marketing communications folks busy trying to get new customers need to be attentive what the customer care staff or retention/loyalty or collections teams are sending to the customer via SMS. This is inexcusable.

Don’t spend money by swaying customers with nice ads with powerful icons unless you as marketer have complete control of all touch point messages. We don’t expect Marketing to actually make collection calls however any message, let me repeat ANY message to customers has to be consistent with the brand and what you are conveying to the market.

All customers bring value even if their revenue seemed insignificant. The value they bring is how well they will refer you or speak about how they were treated by your company even if the relationship between your company and the customer had to end. Do it gently.

Your homework
As the marketing leader emphasize upon your peers that interact in some way or another with customers such as Sales, customer care, retention/loyalty, collection, PR and operations that all messages to customers, have to be consistent. Get your team to collect all messages (‘canned’ or pre preprogrammed) that were sent to customers in the past and insist that all need to be reviewed by Marketing.

This may be a long laborious task but well worthwhile the time – you may uncover other ‘shockers’.

As the lead Marketer, make it a point to continuously communicate to all your peers that Marketing owns the messages to customers. By rallying your organization with this precious yet effective direction you will be on your way to ensuring that those moments of truth are fair ones.

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Successful global brand requirements:

1)     Talent/Quality

Any product or service (let’s call it ‘product’ for brevity) needs to be top quality or at least needs to be perceived as having unwavering quality. Think of Mercedes or American Express. These companies like others have demonstrated time and time again that quality makes the customer come back.

2)     Energy/Sustainability

Your product has to be number one in the ‘hearts and minds’ of your customers that means you need to constantly push away the competition regardless what they throw at you. Nokia which was the best mobile phone company in the early 2000’s slowly ‘got their lunch eaten’ by Blackberry. Now BlackBerry is getting kicked by Iphone. ‘You snooze…you lose’.

3)      People; Let me be more specific: Management, team members, partners and suppliers.

It’s all about people.  You get the best leader in charge of an organization and magic   happens. If you have a tyrant at the head of an organization – you have chaos.

Suppliers can become your most important ally. John F. Love in ‘Behind the arches’ paints a dramatic look on how McDonald’s transformed ‘Mom and Pop’ suppliers into multi-million dollar firms.

4) Marcomms (Marketing Communications), Managing media/Social media initiatives.

This is where the marketing purists do their mixing: the classic and the new; conventional and social media. Be careful however. Social media is not the panacea for all Marcomms. Classical media (TV, print, radio and outdoor) still carry a lot of weight.

5)     New Product Development (NPD)  and Determination

Take a look at how many times Samsung is launching new products and that will indicate the type of momentum and dizzying pace it takes to stay alive in a market where customers want more speed/features/ time savers and benefits.

6)     Luck

In a recent interview Johnny Depp told Larry king that industry experts referred to Depp’s first 20 years of his acting career as ‘ Box office poison’. Then he was offered the role in Pirates of the Caribbean. Depp said ‘Yes I was lucky at that moment but I also knew that if someone gave me the ball… I had to run with it ‘. Luck plays a vital role in business. Question is: Are you ready when luck comes your way?

7) Pride. More on that later.

So how does Inna stack up?

1)     Talent/Quality

In an age of music artists that can fake their way to the top, I can assure you this lady can sing. She sings live every moment that she can including live radio interviews (not to mention in 4 languages: Romanian, English French and Spanish). She’s been singing since she was eight years old and still continues to improve herself.

2)     Energy/Sustainability

Remember the last time you had a cold/flu? You felt miserable, calling in sick at work and you just wanted to sleep. When you have on average 12 concerts in 12 different countries per month – you can’t ‘call in sick’. In fact you have to sing even with a sore throat. With jet lag, meeting fans, TV/radio interviews, red carpet appearances, meeting fans before the show, sound checks, hair, make-up, performing the show and still meeting fans backstage after the show…’this life isn’t easy’. Inna has more energy than her whole team combined. She cherishes meeting fans after the show, signing autographs and genuinely takes an interest in all of them. She sustains this energy by continuously pushing herself. Here lies the secret of keeping the competition at bay.

3)     People

Inna’s Manager is Lucian Stefan. In his twenties, this fellow has the abilities and competencies of a multinational CEO twice his age in my opinion. Lucian has created the right environment and hired a small team to support him including Marian Dorobantu, Creative Director.  By team I also mean stakeholders/partners such as Play and Win who are extremely talented: They do the composing, lyrics,  production, mixing and the mastering (quite rare) since in the US only one company/entity will do one of these activities – not all four.

Roton is the music label and the core team also includes 4 main suppliers; Edward Aninaru (Photographer),  Maria Andrei (Stylist), Camelia Negrea ( Hair) and  Andra Manea ( Makeup)…4 vital components to make a singer  look/feel her best.

4)     Marcomms (Marketing Communications), Managing media/Social media initiatives.

I can’t possibly list all the things they have done in this area however Social media played an important role:

Facebook: 4,005,257 fans or more fans that Gwen Stefani, Nicole Scherzinger and Nelly Furtado. Lucian through his PC skills has mastered the FB Page.

Twitter: Inna does her own Twitter message – clear enough!

As a result fans have created a multitude of FB pages and Twitter address with the name INNA.

Youtube: As you would expect this has been a critical element for a music artist. Lucian would upload all kinds of Inna video moments as well as teasers of songs, albums as well as really cool moments arriving in new countries. Her first song  ‘Hot’  has in excess of 110 Million views on YouTube.

Now I’ll be the first one to say to ‘don’t bet all your horses ‘on social media (SM). Classic media like print is also responsible for Inna’s popularity. In her case getting two covers in FHM magazines led her to other significant covers such as Elle, Viva and Forbes magazines.

SM + Classic Marcomms led to endorsements with Microsoft and Pepsi. My suggestion is to really look at this artist as a possible endorser for your products/services.

I will skip New Product Development (NPD) and go straight to pride…my favorite topic.

When Inna lands in a new country she says 2 things:

1)     My name is Inna and,

2)     I’m Romanian

Not to make this a political tangent but I want to reach out to my fellow Romanians. It is clear to me that Romanians have this ‘thing’ about being assertive (or lack) about their nationality.

Ok Romania has had bad press in the past in other countries as well as its nomadic people. I am the first to say: So what?

As a proud Canadian we also have issues as a nation.

When I speak to investors I tell them about the abundant IT talent in Romania, English skills, tireless and diligent Romanian employees not to mention EU status and funding opportunities Having lived in 9 countries, I see Romania’s huge talent.

Back to Inna and my message. Like Inna,  ‘Be a proud Romanian’ and that enthusiasm and pride will become contagious. Inna has diligently used this in her favor.

Pride is the key word here.

Still not convinced? Check out this Youtube video: http://www.youtube.com/watch?v=hUMLYdPQpgc and help me understand this question:

How can a Romanian have so much influence and reverence in a country like Mexico – a country that still had not commercially sold her songs until the time she landed for the first time?

I have had the pleasure of working with Inna’s management recently and what I discovered was truly amazing.

When you combine talent, energy, the right people, the right Marcomms, NPD, a bit of luck and lot of pride any Romanian brand can compete globally…just ask Inna!

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I mean let’s face it reading about Marketing Research (MR) is about as interesting as watching paint dry! And Market Research is for well… researchers right?  Not true.

Market research is one more weapon in the Marketing leader’s arsenal that when properly used can make a big difference.

In my ongoing attempt to make Marketing fun yet useable in your day-to-day activities let’s start with a few definitions:

First, textbook definition of Marketing Research (MR);
Systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company.
Ok, no revelations here but I like the word systematic – more on that later.

Not all MR firms are created equal. You should know that there are different types of research firms to help you:

1) Specialty-line marketing research firms: These are the ones that conduct Field interviewing services.

 
2) Syndicated-service research firms: Such as Mercury Research, TNS Gallup, Business Monitor. They prepare industry wide studies (ex. Omnibus) that any players in a particular industry can buy and get a barometer of what is happening.

 
3) Custom marketing (or bespoke) research firm: Examples like IDC Research. With these firms you can ask to find out any information you want, for example “How many pickles per week do obese teenagers consume in Cluj (silly example to make a point). On a more serious note, I was involved in a research project where we had to determine how many large telecoms operators (Orange, Deutsche Telekom, Telefonica, etc) would use a fiber optic cable for data purposes if it was deployed across Russia (hint: that is a pretty long, expensive cable and a bit tough to install in some frozen parts of Russia).

 
Primary Vs. Secondary data (Marketing buzz words): That one is easy.  Primary data is when you plan to get information through a research firm; this data is paid for, confidential and remains yours. Secondary data can be found on the www and is also referred to as “Desk research” since its free available information on a particular topic (article, white papers, industry reports, etc).
Marketers collect primary data in 4 main ways:
1) Observation. Xerox used to film users to see how easy it was to find the “print” button on a copier machine. Ever notice why the “print “button is big and green now?

 
2) Focus groups (also referred as qualitative data) .This is cool and I strongly suggest that if you are NOT in Marketing that you participate as a listener behind the two way mirror. Essentially a moderator interviews 6-8 people (paid to attend and to give their opinions) to discuss their views on a products. In many case INSIGHTS  are revealed which is another  MR tool. I call these insights the A-HA! moments. The A-HA ! moment is when you hear a customer describe a situation or need from your product or service that you had not realized in the past – sort of a new way to use your product in everyday use.

 
3) Surveys, referred logically as quantitative data. Normally sample sizes are approximately 1200 people with an interviewer conducting a face to face interview or at times using a computer (CATI) or the web to interview people to get their opinions.

 
4) Behavioral data. Tesco in the UK through their card memberships and store scanning data can develop a campaign to get you back in the store and buy something based on your  past consumption behavior – that is a really cool too.
OK, so I’ve described some of the basic tools and concepts.

 
Here is where I get the attention of both Marketers and non Marketers:
There are times when Market Research cannot /will not help you:
1)    “Analysis Paralysis”. You spend too much time on getting/reading/digesting the data that you cannot make a decision. You often hear ”Well I don’t  know… after all the research told us that we should not go into this business or market “. Solution: Use the research for what it is; additional information about the market and opinions of users. Remember research does not make decisions, leaders make decisions!

2)    Poor framing of the problem. What was the purpose of research in the first place? Anybody who was read the story and fiasco of New Coke knows that the researchers “asked the wrong question” (see Exponential Marketing, Paul Garrison). It was not a matter of asking if people wanted to change the taste of Coca-Cola but rather asking people what Coke represented for them. Because they were asking the wrong questions this lead to a dramatic change in their strategy and almost killed Coke in the process.

 
My suggestion is here is that you need to really sit down and frame the problem carefully. I tell my clients (CMOs) to invest the time in preparing and getting involved in the brief. Only from there can you define a proper brief for the MR firm to get the data you need.
When you invest this time at the outset, you become crystal clear as to what you want and this makes it easier for the research company to find the answers you seek. Besides a few minutes in brief preparation time can avoid damage control in hours/days of research that comes back meaningless (and costly).

 
3)    Poor execution. OK you found the best research method, the MR firm and you have spent time preparing the brief.  Then the results come in and your  MR team tells you with a great deal of pride…”look at all the important data” as they plop the research on your desk. You have a natural interest to read it and you think to yourself ‘Hold on here…what are the conclusions?” Once again the team tells you …”Well look at the Executive summary”!

 
The next logical question you need to ask the team as a leader is SO WHAT?
The team has to understand that just getting the job done technically is only a part of the execution. They need to read/ understand/process and suggest to the Marketing leader what the company needs to do next. Now that is what I call value add and empowering the team.
Suggestion: Tell the MR team that they have to “live” and understand this new information so much that they have to defend or confirm the direction that this new data is implying.
If they cannot defend the direction then this means a) they have not been empowered to do so or b) they feel that their job as a research team has been completed. In both case this is the wrong answer.

 
I promised you earlier that I would come back to the word “systematic”. All that means is that you have 1) a method, 2) the MR resources, 3) your involvement, 4) uncovered insights or A-Ha moments, 5) a plan to execute.
Market Research seems terribly simple to a point where you may feel to put it on Auto-pilot.

However the more time you invest in it, the more you get out of it. At one point when you discover that cool A-HA! moment that can seemingly kill your competitor you will look back and say to yourself…”You know Market Research was fun after all”.
Did I convince you?

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This guy killed the product and Blackberry. He also reminded us that Nokia once a leader in the mobile handset business has “given away their business” to Apple with the Iphone.

I remember a few years back I missed out on an opportunity to meet Jorma Ollila, then CEO of Nokia. This guy was God! He was invited to all the high level, prominent world conferences as a speaker and meeting him was akin to meeting the Pope if you were in telecoms (well OK… not like meeting the Pope but close). Nokia was on top of the world in the early 2000’s where they commanded at least 60% world market share. Then a little company from Canada called RIM was building steam on the market with the Blackberry and it was hailed as the next best thing and you were missing out if ” you did not have a Blackberry “. Today the table has changed once again: I mean do you know anybody that does not have an IPhone?

Product development and a philosophy of being customer obsessed are key in the smart phone business as you can see. Apple commands now 26% of the app phone market (i.e. IPhone applications) which is the result of 75 million slaving fans and a bottomless app store.

In my MBA classes we talk about “Gaining momentum – the Larreche prescription”. Larreche maintains that momentum is something that can be created by companies and once achieved can be maintained by pursuing a creative marketing approach. Apple, Toyota, Nintendo and Skype have all entered the virtuous circle of continuous growth – “the momentum effect”. A company that “systematically place customers at the center of its thinking and thrives to attain ambitious goals will be able to harness the power of the momentum and deliver exceptional growth.”( J.-C. Larreche, 2008 the momentum effect: How to Ignite Exceptional Growth).

I could not agree more.

Where are you sitting right now with product development for your firm and more specifically is the customer the main focus for what you are trying to create, build and sell?

I want to cover the importance of being competitive and aggressive about product development. In my next article I will talk about the actual phases of NPD (New Product Development) but I can’t do that until I raise (read, remind you of the) importance of:

1) Why you always have to be in the right zone of developing enough products,

2) Making sure the customer is at the focus of what you develop and,

3) Kill a product when it has reached the end of its life cycle.

I don’t care what industry you are in. Customers have become used to “new and improved” and unfortunately for you they expect it. Are customers rational when it comes to buying new products and knowing which product is best? Answer: No. Larreche also tells us that they are not always strictly rational: Their perception is their reality.

Perception is what drives them.

If your products have not had a “face lift” or change and your competition offers something better or perceived better, the customer “will walk” in other words he/she will change products.

Lifestyles have changed and are getting faster .People are more are more time constrained and want immediate results. Does your product offer this better than the competition?

As well, your competitors are probably persuading even loyal customers to come over based on better prices. NPD is another reason to help you get away from the “price trap”.

Have I got your attention now and are you motivated to do something about NPD?

Here are 10 ways to find great new product ideas:

1) Run informal sessions with customers

2) Make customer brainstorming a part of company/plant tours

3) Survey your customers

4) Allow time off for technical people to putter on pet projects

5) Undertake ‘fly on the wall’ research from customers

6) Use iterative rounds with customers

7) Set up a keyword search to scan trade publications

8) Treat trade shows as intelligence missions

9) Have employees visit supplier labs

10) Set up an idea workshop

Notice how often I mention often the word customer here?

As a benchmark Toyota employees generate 2 million ideas per year or 35 suggestions per employee (er…that is 3 idea per month!). Are you encouraging the same in your firm?

On a closing note, Bob Bowles one the best NPD gurus I know in telecoms came to help me with my former employer, essentially a company that could not compete.

We wanted to get NPD off the ground and to become a credible player in the telecoms business, but ironically we found that the team had all the right ingredients. We just needed a structure, a process and the need to ignite the obsession of being customer focused.

The rest is history since my former employer is now competing and generating new products with the same intensity as established industry players. It worked!

NPD starts by having the right mindset regardless if you are a 1 person organization or 5000 people organization. Customers want products that satisfy their needs – all the time.

Use the ideas above to optimize or kick start your NPD approach. In my next article I’ll go over NPD structure and process.

In the meantime get the Idea generating machine going!

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Def: Identify and selectively target prime groups of customers and potential customers, to understand their preferences and to respond with different marketing strategies that are appropriate for each chosen segment.

Case: Market sizing and segmentation

You are the new CEO of Kool Concept, a new residential real estate developer, a greenfield project in the heart of Cluj, Romania. You can basically build whatever you want however you must address potential demand and meet revenue and KPIs (Key Performance Indicators). To be successful your residential concept also needs to incorporate other elements to attract residential owners: Offices, large employers, schools, retail, professionals, fitness centres, public transport etc.

The research company you hired came up with an extensive research and analysis on the addressable market in Cluj:

–     You know that there is an annual demand in the city of Cluj to build approximately 14.000 housing units annually.

–     Very few people live in houses currently, but there is high demand for single-family residences. Nearly 35% of those who intend to purchase a residential property would like to purchase a house.

Residential market segmentation

Income is the most critical predictor of ability to pay for say, high-end housing. You assumed the target market for housing in the Kool Concept development is concentrated in the segment >1.100 EUR/ month net income. In Cluj county, there are currently 7.800 households meeting this definition. Ten years from now this is expected to rise to over 20.000.

The research company combined income and social class with other factors to create a more complex, needs-based segmentation to help illustrate demand. This analysis delivered the following five segments:

• “Young Rich Kids”: Both young and successful entrepreneurs or children of wealthy parents who are studying in Cluj.
• “High potential students”: Students or recent graduates who have an above average level of interest in real estate and improving their living conditions
• “First Time Home Buyers”: Young adults in their mid-20s or early 30s, they have generally started their first home with a partner. Many have young children,  socially and physically active, have cars, are online and sophisticated consumers:
• “Happy families”: Middle-aged families in their 40s, married with older children at home or who have begun to move out of the house. Significant household equity, 80% of those want to buy a house, but only half intend to get a mortgage. Less active than younger segments, fewer tendencies to go out.
• “Empty nesters”: Older couples in their 50s/60s whose children have moved out, accumulated wealth and want to buy a place to enjoy their twilight years. Currently own a place, typically larger, with 3 – 5 rooms. They do not go out to bars and restaurants but enjoy culture, sports matches, having friends over, etc: 
• “Foreign expatriates”: Upper managers of current and future investors in Cluj will be present in the city for 2 – 4 years and will demand the highest quality housing.
• “Repatriate Romanians”: Roughly 2.5m Romanians have left the country since 1990. You estimated this could total 3.000 – 5.000 individuals over the next decade.

So what?

Now that your research generated what is called “Primary” data – data that has been researched and paid for (whereas “secondary” data is what you find in reports or the web, usually free), you now know that there are different categories or “segments” of customers to address and target.

Then what?

Once you have done the research and identified the clusters, the next task is to target the right product/message with the best media – this is called  „hunting with a telescopic sight “  vs. using the shot gun approach.

At my last employer ( Romtelecom) once we knew our segments, we targeted them with laser precision by offering them a product which we instinctively knew they would buy.

Results:

My direct mail (DM) campaign gave me a 12% success rate ( unheard of in the business) versus the usual  2-3% success rate.

Why were we succesful?

1)   We shocked  the segment since they had never received an offer from Romtelecom.

2)   They were targeted –almost a perfect fit  with the new product (hint:  I could see their consumption behavior based on their current usage).

3)   Our media or advertising campaign was incredibly cheap. Instead of using TV, radio or print, we used envelopes, stamps/courier service and a few follow up calls from the call centre.

All this because we did a bit of research, grouped customers with cool descriptors called segments, made a few assumptions and tested a different approach.

Ta Dah!! There lie the benefits of Segmentation!

Now I also need to admit that our product was indeed what they wanted.  How did we know that?

Well because all that research that we had commissioned in the first phase indicated to me what they were interested in buying. All we had to do was to “action” the research with a real campaign.

Q. Cost of Segmentation research.

A. Approx. 60K Euros. Regardless of company size (big or small) the process is the same and so are the results.

If your business is small then you need to use www research (web). The people in your team are critical. Any good Research Analyst will understand Segmentation even if they have never really prepared one. This was the case with my team – we learned from each other.

 This segmentation discussion was more in line with the classical approach which stands the test of time.  I would need another article to explain newer approaches to getting primary data through “permission based” or “inbound” marketing”   techniques in order to gather info about segments.

On a closing note, when Jim Hubley our CEO first told me “Paul…Set up segmentation for us” I said  “of course Jim “  walking away and not having a clue how to do this.

After a few months building the team, setting the direction, getting buy-in as well as convincing top management the merits of Segmentation we were able to deliver a 12% sales rate on our Direct mail campaign!

So as you can see it took time but it was an investment in people, processes and getting a better understanding of customer segments which enabled us to become more strategic in our approach.

It paid off…Happy hunting!

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