The Start-Up Economy

2010 July 21
by Brendan Miller

I just finished reading the July/August issue of Inc. magazine.  The cover article is called “Bring On The Entrepreneurs—Our highly practical eminently doable, totally reasonable plan to revitalize the American dream and create thousands of new companies and millions of new jobs.”

I couldn’t agree more with the premise of the article, and when I saw Trillions of dollars being wasted on government funded bail-outs in 2008 and 2009 I thought this money should go to incent the innovators in our economy not the economic relics.  Young companies—those younger than six years old—provide the bulk of new jobs; in 2007 they accounted for 64 percent of them, according to a 2009 survey by the Kauffman Foundation that looked at start-up formation since the 1970s.

Here are a few of the highlights of the article:

Tap The Best and Brightest—Wherever They May Be.

One of the greatest sources of entrepreneurial successes in the U.S. has been the steady stream of immigrants who come here to find opportunity.  Unfortunately, an overly restrictive immigration system fails to reflect that.  The solution: a new visa program aimed at attracting foreign-born entrepreneurs.

Cut Graduates Some Slack

Average debt levels for graduating seniors with loans has risen to $23,200.  In 2008, 10 percent of four-year college grads owed more than $40,000, up from 3% in 1996.  What can be done?  In 2008, the government began offering breaks to students with federal-loan debts who opt for public-interest work—allowing them to walk away from their debts after 10 years, compared with 25 years for recipients of some other federal loans.  Entrepreneurs should get the same kinds of considerations.  Let grads who start businesses postpone loan payments for a few years while they get their ventures off the ground.

Bank the Unbankabkle—With Microfinancing

Over the past few years, many mainstream banks have beefed up loan requirements or significantly cut back on small-business lending.  Nonprofit microfinance lenders have come to play an ever more important role in bridging the funding gap.  Cities and states should embrace these kinds of programs.  Most federal money goes to banks and heavily regulated institutions, rather than nonprofits.

You can read the entire 16-point plan on the Inc. website.  The point is that the old model is broken.  The U.S. is quickly losing its place in the world as chief innovator due to poor public policy.  It has been funding and investing in failures instead of new successes and innovations.  Why not take the focus this administration has put on innovative green technology and put it on innovation in the economy in general (How about a Start-up Czar instead of Green Jobs Czar?)?   I believe a new wave of entrepreneurship and pioneer thinking can transform not only the American economy, but also the world economy.  Remember the roaring 90’s?  Let’s do it again.

Creating a Brand Story That Resonates: Part III

2010 June 11
by Brendan Miller

See creating a Brand Story Part I and Part II

Always Be Rewriting – Robert McKee is considered to be the father of modern-day screenwriting.  His “Screenwriter’s Bible” and “Story” Seminar have inspired thousands of screenwriters.  Many Hollywood writers credit McKee as their mentor.  McKee is known for his 10 Commandments of Screenwriting, and his 10th and final commandment is “Thou Shall Rewrite.”

The great part of writing a brand story is that it is essentially always in “rough draft” mode and at anytime you can change the script or plot.  In essence, it is never too late reinvent yourself.

Ten years ago Burger King was an “old” brand that consistently underperformed its category. The essence of its message was “flame-broiled is better, have it your way,” and this was quickly becoming irrelevant to its consumer base.  The burger giant recognized that their message was just not resonating with their 18-35 core audience.   BK reshaped its brand, tapping into its roots and embraced new product innovations.

They evolved the “better quality burger” approach into a little-bit wacky, sometimes politically incorrect positioning in which it almost tells the consumer, “we know its fast-food, and we know you don’t want a salad, it’s a little greasy, but come and get it anyways.”  Coupled with courageous advertising and marketing campaigns, BK’s new approach put them back on the map differentiating themselves even more from Wendy’s and McDonald.

Your brand story is not only what sets you apart; it also serves as a lighthouse to attract your ideal customer.  With a clear brand message and authentic brand story, you leave them confident, inspired and loyal.  The brand story process will help you better develop brand communications that differentiate you from your competitors and emotionally resonate with your target audience.

Creating a Brand Story That Resonates: Part II

2010 June 10
by Brendan Miller

In its simplest form a good story is about a character who wants something and overcomes conflict to get it. Beyond that you need to channel your high school rhetoric class and look again at the elements of plot, conflict, back-story, theme, and setting before you start writing your brand story.  This process will help you better develop brand communications that differentiate you from your competitors and emotionally resonate with your target audience.

In addition, every brand story should includes the following elements:

Great Stories Have Memorable Scenes – In Rocky, his cousin takes him into a meat locker so he can punch giant slabs of beef, and in Titanic Jack and Rose hang off the bow of the ship with the wind in their hair.

Brands create memorable scenes through meaningful consumer experiences.  A few years ago, Subway shook up its popular “Jared” campaign by putting him on the road.  A double-decker bus crossed the country giving consumers the opportunity to interact with the brand and have some fun taking pictures in Jared’s old size 46 pants.  Brand experiences can allow you to create interactive memorable scenes with your consumers.

Furthermore, look to your past innovations or prototypes that are now sitting in a closet somewhere that can tell a memorable story for you.  Bill Bowerman’s waffle iron may tell the most compelling brand story in the history of brand stories.  Imagine his wife’s horror when he started pouring urethane on to it one morning instead of batter.  His waffle iron launched a revolution.

There’s Beauty in Tragedy – When writing your brand story don’t leave out your mistakes, your blunders, and your failures.  It gives consumers the opportunity to connect with their own story.  Audiences love the honesty that comes with the open admission of failure, as well as the integrity that comes with reflecting on why things went wrong.  Apple’s failure through the non-Jobs era of the 1990’s actually contained advances that helped with their revitalization later on.  Many marketers might not want to tell that chapter of their story, but their story would not resonate without it.

In his book “Building Brand Authenticity: 7 Habits of Iconic Brands” Michael Beverland says “…marketers are urged to tell stories of customer-driven orientation, careful targeting, and innovation success.  In contrast authentic brands celebrate failures and admit when they were lucky.  These activities provide the brand with a rich history and more importantly a story that reflects our own humanity and desires.”

Creating a Brand Story That Resonates: Part I

2010 June 9
by Brendan Miller

Part 1 in a 3 part series.

I often find it interesting when talking with challenger brands and start-ups when I ask the question “what’s your story?”  I often get the well-rehearsed 30 second elevator speech.  That works for the quick pitch when networking and talking on the phone with investors, but from the consumer standpoint it most-likely isn’t compelling or emotional enough to trigger a second glance.

As consumers one of the primary ways we make sense of this world and our place in it, is through stories.  They capture our attention, change the way we think about the world, and give us hope.  The same is true of brands.  Brands are the stories that connect consumers to the people within the company and they give meaning and purpose to the consumer’s product consideration and purchase.  Stories unite enterprise and consumer and overtime they should grow and change with customer needs and changing markets.  Furthermore, in today’s social media environment stories should engage consumers and promote a two-way dialogue, loyalty, and repetition to increase long-term profitability and growth.

But, what are the elements of a good story?  What if your brand story used some of the same script structure of a successful blockbuster like Braveheart or Titanic ?

We’ll explore more in part II and III

A Social Media Plan Does Not Make A Marketing Plan

2010 May 11
by Brendan Miller

I’ve written about the benefits of social media for start-ups and challenger brands plenty on this blog over the last year.  I’m a big believer and personally use and encourage early stage companies and small businesses to put social media to use on a daily basis.  There is no doubt  it has forced marketers to change how they think and approach the marketing mix.  When put to use properly it is a way for challenger brands to get a leg up on the competition.

Several times over the last few months I’ve heard from some start-ups and early stage companies that are betting much of their future success on the power of social media.  In many cases I  believe they may be over-relying on social media.  They talk about going “grassroots” and being “viral”  and “authentic,” and significantly decreasing their paid ad spend.  It all sounds great on paper, but I have to ask myself  “who is going to care?”  It is great that you have 700 Facebook fans, and 4000 followers on Twitter, but that does not make a market.

I believe a Social Media strategy should not replace anything in your current marketing plan.  You need your marketing mix to create awareness, leads, prospects, and customers and your Social Media plan should enhance and add to the effectiveness of all these efforts.  It should be put into place to create conversations and transparency through-out the purchase process.  It builds trust and customer service.  When it does create new leads, referrals, and awareness (and it will eventually) I think of it as icing on the cake and an investment in your brand that pays dividends.

Profiting from a Little Disloyalty

2010 April 14
by Brendan Miller

In order to stay ahead of their larger and more well-funded competitors Challenger brands  need to think more unconventionally in every part of their business.  Could your business profit by encouraging your customer base to try other competitors?  Sounds absurd, but that is just what a group of coffee shops in Toronto are doing.

Toronto’s first disloyalty card launches next week, promising to send patrons on a tour of seven independent coffee shops.  The goal to promote quality coffee and community, is the brainchild of the newly formed Toronto Coffee Conspiracy.

Once the business card-sized wallet cards are printed, you pick one up at your regular coffee shop (there will be about 500 per store) and that will be marked as your starting point.  Then you visit the other six spots, buy any coffee that’s on the menu (brewed or espresso based), and get the card punched. When you’re done, you return to your starting point for a free coffee.

I was recently talking with a Coffee shop owner in Little Rock and he mentioned to me that Starbucks was voted the best coffee in town in their local newspaper survey.  Most coffee connoisseurs in Little Rock could probably point you to 5 other local coffee houses who had better coffee than Starbucks.   It is most likely that Starbucks got the vote because of its high awareness and a lack of strong awareness for independents in Little Rock, or possibly Starbucks is brewing better coffee in Little Rock than anywhere else in the country.  None-the-less his shop and market segment (independent coffee houses) could benefit by developing a stronger coffee culture in their marketplace.

Can your business profit from a little disloyalty?  Challenger brands can heighten the awareness for their market segment by partnering with competitors if done correctly.  It’s tapping the power of group action and appealing to the mavens and your early adopters to drive larger market acceptance and a more robust culture for your niche.  Could you successfully leverage group action and your competitors to overcome a dominant player in the market?

It’s Time To 86The Word “Hispanic” from Our Vocabulary

2010 March 31
by Brendan Miller

I’ve been in countless meetings, and I’m sure you have too when the subject turns to targeting or segmenting the “Hispanic” market,  or I’ve heard “we have a Hispanic Marketing program.”  This conversation always tends to annoy me because we don’t say let’s target the “Anglo-European” market or rarely do you say let’s target the “African-American” market (I think political campaigns are the worst offenders of this).  I look forward to the day when marketers and demographers, politicians, and the media stop labeling people with such a broad brush.

“Hispanic” is more often than not considered a race among many U.S. citizens (It isn’t.) A Puerto Rican man in the Bronx even refused to fill out his Census form because the term “Hispanic” was not considered a race, something he considered plain offensive.

I think the 2010 Census took a positive step forward on question 8 by offering “Hispanics” or those of Spanish origin to list a more specific country of origin.  My wife is Argentinean.  In America she usually gets lumped into the “Hispanic” crowd, but her background, culture, and family history identifies more with Italians.  It just so happens that she speaks Spanish because she grew up in Argentina.  She fills out government forms saying she is White.  After all you wouldn’t expect an Italian American to fill out a form saying they were Hispanic.  Why should a Argentinean-Italian who happens to be an American citizen fill out a form saying they are “Hispanic?”  America’s vast cultural mosaic is too complicated and diverse to even bother labeling anymore with these over-simplified labels.

In question nine of the Census many Americans found an easy way out: Taking advantage of the 19-character free space box under “race,” many chose to spell out the word “mestizo, indicating the mixed nature of their heritage.  I look forward to the day when everyone recognizes that we are all “mestizo” or we can just put on a form “American,”  and be done with it.

The New Consumer Consciousness

2010 March 24
by Brendan Miller

I’ve posted on the how the recession is changing the face of consumerism in America in the past (see More of Less, and Meaning of Value in this Economy).  Ogilvy/Communispace just did a study that surveyed 1200 U.S. consumers and qualitatively explored topics with 694 online community members that analyzes the effects the recession has had.  The findings confirm that American’s outlooks, hopes, and clarity has changed  You can download the full study here

So how Are consumers emerging from the great recession?

First, let’s look at some key indicators:

  • We are getting paid less, not more.  Middle-class families earned less by the end of 2008 than they did in 1999 when adjusted for inflation (NY Times 1/10).
  • 1 in 4 mortgage borrowers are under water (WSJ 11/09)
  • 10% is the official unemployment, but Real Unemployment is 17.5% (NY Times 11/09)
  • American’s are saving more.  Savings increased more than +6% year-over-year (WSJ 8/09)

A new consumer consciousness has awoken and consumers are more aware than ever about the products and services they are purchasing.  What they are doing with this new found awareness is diverse.   The choices we are making are definitely more deliberate. Our newfound clarity has helped to align choices with values.

Here are just a few takeaways:

  • People are discovering new ways to explore the world, appreciate their lives, and to reconnect with values.  American’s are reconnecting with what they can see and feel that is local and tangible–themselves, their family, and community.  Respondents said Main Street (49%) was the most important indicator for them to pay attention to for gauging a recovery.

Much has been written about how Groupon.com popularity has soared due to the fact that consumers are looking for great deals in this economy and the new power of crowd-sourcing.  However, connecting with what is local and tangible is a major driving force behind Groupon’s success.  In an out of control economic situation making choice that are local gives consumer a sense of order and control.

  • Self-Reliance is the new insurance policy.  Americans have developed a new sense of planning, analyzing, and delaying gratification that has become part of who they are.  They like to see themselves as strong and capable in the midst of all this economic dysfunction.  56% of American’s would rely on themselves to get the country back on track vs. the Government (33%) or Financial Institutions (11%).

Brands need to align with this can-do attitude and be helpful to their quest for something better.  American Express and All State have tapped into this consumer insight with their latest campaigns.  American’s are inherently optimist even if they are not thinking optimistically at the moment.  On a political level the National Tea Party movement has captured this feeling that we need to rely on ourselves vs. government and large corporations.  Brands that offer consumers empowerment and independence will win this battle.

  • The reincarnation of the American Dream.  The dialing down of ambitions and the traditional pursuit of happiness–which is bound up with accumulation material wealth–is being relinquished in favor of the pursuit of PEACE OF MIND.  Consumers are achieving this goal by adopting sustainable living habits for the long-term.  Not only when it comes to the environment, but also making choices that do not bankrupt our health, fiscal resources, or values.

While this recession may have given rise to more cynicism, doubt, and confusion, it has also been the springboard for Americans to develop new appreciations for intangibles, and to reconnect with what they think is important.  Brands that will be successful will offer durability, authenticity, transparency rather than corporate, one-size-fits-all, protect the profits at all cost mentality.

Why You Shouldn’t Connect All Your Social Media Accounts

2010 March 17
by Brendan Miller

There are all these great API’s out right now that make it really convenient to connect your Twitter account to your Linkedin account and your Facebook account.

Quite simply, I think this is a huge annoyance.  When I log into Linkedin I don’t want to see that your having a hot dog at Mustard’s Last Stand or going for a run with your dog.  I’d like to know that you got a new job, promotion, or landed a new client.  Furthermore, seeing a bunch of Twitter symbols on Facebook and Linkedin says that you didn’t customize the message to your particular audience.  Each of the Social Media sites have their own unique purpose and a user should use them for that purpose.  Linkedin for Colleagues, Facebook for Friends, and Twitter for the world.  Carry on conversations that are appropriate to the channel your engaging and you’ll find your use of social media more fulfilling and productive.

That’s my rant for the day.  Until later.

Coupons Drive Incremental Sales

2009 November 11
by Brendan Miller

MediaPost had an interesting post today about the importance of couponing especially in today’s economy.  Digital couponing has risen dramatically in the last 12 months because consumers are more concerned with saving money than they were in recent years.
According to one study that was cited recently in MediaPost and published by ICOM, one out of three consumers report using more coupons than just one year ago.  About half of males 18- to 34-years-old reported comparison shopping, with as much as 38% actively searching for coupons.
The big question that surrounds coupons in general, is whether the use of them cannibalizes an existing consumer base by driving them to buy your product at a lower price when they were going to buy it in the first place or whether they attract new consumers to your brand and increase market share.
According to a study from Coupons.com that was published in Q3 2009, online coupons do indeed drive new incremental sales, with as much as 40% of redemptions coming from new or lapsed buyers.
That sounds pretty good, but the other side is 60% are using the coupon when they probably would have bought the product anyway.  I don’t think brands can’t sweat that too much though especially with where brand loyalty is at these days.  59% of consumers say will sacrifice brand names for a generic brand.  Just think of the 60% as a continuing investment in brand loyalty in a tough economy.  Marketers need to continue to follow this trend in regards to their own brand.  If the data begins to trend that consumers will not buy a product without a coupon the brand is definitely seen better days.