Young, Hip…And Driving a Buick??

For the last few years, GM has been paying Tiger Woods a gazillion dollars to appear in ads promoting Buick. The idea, I suppose, is that people will think “Hey, Tiger is cool and suave and hip and successful, and if he’s saying I ought to buy a Buick, that’s good enough for me.” Apparently, it's not happening. The brand remains stagnant, and the average age of Buick drivers is mired at 63, which is more than double Tiger’s age. Why aren't all those promo dollars working? I can think of two reasons: One, despite the obvious appeal of high profile stars like Tiger, LeBron James, 50 Cent, and Elle Macpherson, the reality is, to quote advertising guru Marian Salzman, “People are becoming far less susceptible to the power of celebrities who are seen as shills for a brand.” Two, there’s the old “putting lipstick on the pig” problem. Glittery marketing lipstick won’t change a sow into an eagle any more than it will change an unexciting drab product into a killer “gotta have it” product. That’s the problem with Buick, and apparently, even Tiger can’t change that perception. And that’s pretty remarkable when you think about how he’s managed to change the general perception of golf. A Buick owner’s average age is 63? Heck, when I was growing up, we looked at golf as a game played only by people who were 63, or maybe 163. Tiger’s made golf cooler and younger. If even he can’t make the languishing-for-years Buick cooler and younger, perhaps GM ought to dump the entire Buick brand and focus on something new rather than on trying to dress it up. Remember that old Dakota Indian saying--If you find yourself riding a dead horse, the best strategy is to dismount.There’s always a place for innovative marketing (with or without celebrities). Good marketing will definitely help boost the revenues of a great product, like a Toyota Prius or an Apple iPod (or iPhone). But regardless of any supposed celebrity sex appeal, pouring money into star power marketing won’t compensate for an uninteresting or commodity product for long. GM, I suggest you put Tiger on some cool products. That’s how you’ll get your best returns.

Doing Something With the Data

I’m observing an executive meeting which has been considering avenues for penetrating the growing Hispanic market. The group has been poring over market research which has highlighted data about demographics, consumer attitudes, financial trends, and such. One vice president has called for the next round of research, in particular some “gap analysis”, and there seems to be a general consensus with his suggestion. The senior executive, who’s been quiet during this discussion, clears his throat. He’s not happy. His message goes thusly: How much more research do we need? We’ve been analyzing data for months. When do we start doing something with this data? Isn’t there some low-hanging fruit? Aren’t there some quick wins we can get in order to build momentum? If we have to do more research, can’t we do it at the same time that we’re launching some initiatives? His questions shocks the group, and take me back to two related incidents in two other companies. In one, an executive confesses to me the reason why his company is so risk-averse, slow, and unimaginative.: “We study a good idea until it becomes a bad idea.” No wonder earnings have been flat for the prior five years.In the second incident, an executive of a fast-growing $300 million firm tells me his success secret: “Ready. Fire . Aim”. His message to me is this: A lot of companies use Ready.Fire.Aim as a slogan, but we take it seriously. Sure, we get ready. We gather data—fast. We do due diligence—fast. We do basic planning—fast. Then we act—we fire. Then we quickly get feedback, spread it around, and use it to aim for the next round. I’ve written about the P40/70 rule in Break From the Pack. Briefly, it goes like this: Imagine the total universe of data that’s available for a decision. If you gather less than 40% of that data, your decision might be premature, even reckless. But if you keep on gathering data after the 70% level, you’re increasing your risk. It’s not just that your returns on your research dramatically diminish after 70%, it’s that you’re vastly increasing the probability of analysis paralysis in your corporate culture. Optimally, you want to gather sufficient data to be in the 40-70% arena, and then combine that knowledge with your experience, hunch, and gut—in order to finally make a decision and get the ball rolling. The executive in the meeting I described above instinctively knew that his team had already passed the 70% level, and that’s why he spoke up. The cool thing was that the group responded. Energy spiked up. Focus heightened. Projects crystallized. Goals and timetables emerged. The vibe in the room was a lot more satisfying and productive than had the group left the meeting with the charge of “Let’s study it some more.”
Posted by Oren Harari at 11:20

Trouble in TaxiLand

So Avis is now offering a nifty new service. In a test program in 10 major cities, you can book—are you ready for this?—a chauffer with your rental car. In fact, as long as you give Avis 24 hours notice, you can actually have a chauffer pick you up at the airport in the car that you’ve rented. Avis is teaming up with WeDriveU, a San Mateo, California-based company which has been supplying chauffers for companies for two decades. The price? An additional $30 an hour, with a three hour minimum. Pretty cool. Innovative. Groundbreaking. Very nice feature for customers who choose to partake. What tickles me the most is that after the minimum three hours, you can dump the driver and continue driving the rental car yourself! Of course, the entrenched players in the taxi and limousine industries have gone ballistic on Avis, screaming “foul”, “unfair”, “illegal”, take your pick. That’s not surprising. I’ve often told my clients that they’ll know when they’ve truly been innovative when customers are delighted and competitors are furious. But what intrigued me was how predictable the immediate response of the traditional livery transportation companies is. Instead of huddling managers together to figure out how to one-up Avis by improving the customer experiences provided by taxis and limos (better and newer eservices, more options, faster response-times, more flexible pricing, better use and availability of new technologies, etc. etc.), they’ve resorted to the tried and true loser of a strategy: run to the regulators and the lawyers. Anything to stop Avis and preserve the comfy status quo. It’s an all-too-common kneejerk response: In the face of innovations from an “outsider” (which is often the case), throw your weight with regulators and lobbyists-- like Big Steel has done. Or invest in attack lawyers--like Big Music has done. The result is inevitable decline. To be sure, companies must aggressively litigate when competitors do something blatantly illegal. And they are prudent to support professional associations that exercise political influence on their behalf. But when they rely on political and legal force for competitive advantage, they are doomed. Emphasizing legal and protectionist strategies drains a company of the vision, resources, and urgency to challenge and reinvent itself in the face of new competitive realities. In today’s global free-market environment, trying to build a legal and regulatory fortress to protect the status quo is a fool’s gambit. You can’t manage for steady state any more. Value migrates forward regardless of whether you’re in the new game or not. Ironically, Avis’s new initiative might help build everyone’s businesses, including taxis and limos, if more customers start getting comfortable with the idea of letting someone else do the driving. But either way, the first salvos against the old order have been fired. Big changes are coming. As for me, corporations that invite me to speak at their conferences often send a town car to pick me up at the airport. It’ll be interesting if one day a mid-sized Ford rental sedan with driver will come get me. And it’ll be doubly interesting to see how I fit my 6 foot 6 inch frame into the back seat. Hmm, maybe I’ll take that taxi after all…..