Ad Expert Reveals The Worst Mistakes In Marketing: Rory Sutherland
Summary
TLDRIn this podcast transcript, the host discusses launching an apparel brand called 'DoAC Diary of a CEO,' sharing advice on delivering value to customers. Key points include the importance of excellent customer service, avoiding the hiding of phone numbers, offering delivery choices, and focusing on packaging as a brand statement. The host emphasizes the balance between brand marketing and performance marketing, advocating for investment in both areas despite the challenges in quantifying their impact. The discussion also touches on the broader implications of focusing too much on quantifiable metrics at the expense of building customer loyalty and brand engagement.
Takeaways
- 📞 **Customer Service Accessibility**: Always make your phone number easily accessible to customers for better service.
- 🛍️ **Post-Purchase Experience**: Focus on the post-purchase experience as much as the pre-purchase to avoid a 'world of pain' for customers.
- 🚚 **Delivery Options**: Offering a choice of delivery couriers can improve customer satisfaction and perception of your brand.
- 💰 **Loyalty Programs**: Consider implementing a loyalty program like Amazon Prime for repeat customers to encourage brand loyalty.
- 🎁 **Packaging Matters**: Pay attention to packaging and unboxing experience as it can significantly enhance perceived product value.
- 📈 **Scarcity Marketing**: Utilize scarcity to create demand and exclusivity, as seen with limited product runs.
- 🎨 **Storytelling in Products**: Each product should tell a story, enhancing its art-like quality and connection with the customer.
- 📊 **Balanced Marketing Approach**: Strike a balance between brand advertising and performance marketing for long-term success.
- 💡 **Invest in Non-Quantifiables**: Don't undervalue the importance of engagement and loyalty, which are harder to quantify but crucial for brand success.
- 🔍 **Long-Term Customer Conversion**: Focus on converting customers for life rather than just a one-time sale to build a sustainable customer base.
Q & A
What is the name of the apparel brand being discussed in the script?
-The name of the apparel brand is 'Doac Diary of a CEO'.
What is the relationship between the apparel brand and the podcast?
-The apparel brand 'Doac Diary of a CEO' is an extension of the podcast with the same name.
What is the main advice given regarding customer service in e-commerce?
-The main advice is to answer the phone and not hide the phone number, treating customers who have issues with the same respect as those who are purchasing.
Why is it important to offer a choice of delivery couriers according to the speaker?
-Offering a choice of delivery couriers is important because it allows customers to choose a service they trust, and if something goes wrong, they are more likely to blame the courier service rather than the company.
What is the significance of packaging and presentation in e-commerce according to the transcript?
-Packaging and presentation are significant because they are where a product first takes on a brand's personality and identity, and can influence the perceived value of the product.
What is the concept of 'cost reduction' criticized in the script, and why?
-The concept of 'cost reduction' is criticized because it often leads to poor customer service, such as making it difficult for customers to contact the company or minimizing the cost of delivery at the expense of customer satisfaction.
What is the speaker's view on the balance between brand advertising and performance marketing?
-The speaker believes in a balance between brand advertising and performance marketing, suggesting that optimizing the bottom of the funnel (performance marketing) should come first, but brand marketing is also crucial for long-term success.
Why does the speaker argue against focusing solely on quantifiable marketing efforts?
-The speaker argues against focusing solely on quantifiable marketing efforts because they believe it leads to underinvestment in valuable but hard-to-measure areas such as brand loyalty and engagement.
What is the meaning behind the limited runs of the apparel brand's products?
-The limited runs of the apparel brand's products are intended to create scarcity and exclusivity, which can increase demand and perceived value.
How does the speaker suggest measuring the effectiveness of brand marketing?
-The speaker suggests that the effectiveness of brand marketing can be measured indirectly through its impact on metrics like repeat purchase rates, customer forgiveness, and the ability to command a premium price.
What is the 'halo effect' mentioned in the script in relation to packaging?
-The 'halo effect' refers to the positive influence that high-quality packaging can have on the perceived value of the product inside.
Outlines
👕 Launching an Apparel Brand: Customer Service and Packaging
The speaker is launching an apparel brand called 'DoAC Diary of a CEO' and seeks advice on delivering value to customers. They discuss the importance of customer service, suggesting that companies should be accessible and not hide their phone numbers. The speaker criticizes the common practice of neglecting customer satisfaction after the sale, focusing instead on cost reduction. They argue for offering a choice of delivery couriers and enhancing the unboxing experience through careful packaging. The brand's apparel is presented as an extension of a podcast, with a focus on storytelling and limited availability to create scarcity and desirability.
🎨 The Art of Branding and Customer Engagement
The speaker emphasizes the storytelling aspect of their apparel brand, comparing it to art rather than mere clothing. They mention a previous successful tour where clothing was sold with a strong narrative component. The brand focuses on creating a connection with the audience, aiming for customer loyalty and engagement over immediate financial gain. The discussion touches on the broader implications of modern business practices, where there's an overemphasis on quantifiable metrics and underinvestment in building long-term customer relationships and brand loyalty.
📊 Balancing Brand and Performance Marketing
The conversation delves into the balance between brand advertising and performance or digital marketing. The speaker argues against the false dichotomy between the two and suggests that they should work in tandem. They reference the work of Lisbonette and Peter Field, suggesting a 60/40 split in favor of brand advertising. The speaker discusses the challenges of direct marketing for unknown products and the benefits of brand fame, such as customer forgiveness for product flaws and the ability to command a premium price. The discussion concludes with the idea that an obsession with quantifiable metrics can be misleading and that the true value of brand marketing is harder to measure but no less important.
Mindmap
Keywords
💡Apparel Brand
💡Customer Service
💡E-commerce
💡Packaging
💡Scarcity
💡Branding
💡Customer Loyalty
💡Performance Marketing
💡Brand Advertising
💡Conversion Rate
💡Repeat Purchase
Highlights
Launching an apparel brand called 'Doac Diary of a CEO' as an extension of a podcast.
Advice on delivering a product to ensure it is inherently valuable.
Marketers should focus on removing negatives as much as adding positives.
The importance of being accessible and not hiding phone numbers in e-commerce.
Customer service issues arise when deviating from the standard purchase funnel.
Critique of e-commerce practices that focus on cost reduction at the expense of customer satisfaction.
The mistake of not offering customers a choice of delivery couriers.
The impact of delivery choice on customer blame attribution.
The role of packaging in brand perception and the 'halo effect'.
The strategy of limited runs for apparel to create scarcity and demand.
The storytelling aspect of each apparel piece and its connection to a movie explaining its meaning.
The focus on the unboxing experience to enhance customer engagement.
The balance between financial gain and the joy of the creative process in product launches.
The broader brand play and audience engagement over immediate financial returns.
The overemphasis on quantifiable metrics in modern business at the expense of valuable but harder to measure aspects.
The slower measurement of customer loyalty compared to conversion rates.
The necessity of investing in brand marketing to support digital marketing efforts.
The idea that optimizing the bottom of the funnel should come first in marketing strategy.
The importance of repeat purchase as a marketing metric.
The challenge of quantifying the impact of brand on price elasticity and customer forgiveness.
The false dichotomy between brand advertising and performance marketing.
The recommended 60/40 spend ratio in favor of brand mass media expenditure.
The benefits of brand fame that are not directly sales related.
The limitations of big data in predicting future trends, especially after major events.
Transcripts
i want to get some rules um some advice
from you then so i'm i'm launching a
uh a brand soon and it's an apparel
brand and we've been working very hard
on it over the last year or so maybe a
bit too hard on it when it comes to
delivering that apparel brand to the
world and making it um it's actually an
extension of this podcast so it's called
doac diary of a ceo um what advice would
you give me as it relates to delivering
that product to the world to make sure
that it is inherently valuable and that
people you know
one one piece of advice in any form of
uh e-tail two two forms of advice
actually
uh the two mr and by the way i think
marketers spend too much time focusing
on the addition of positives
when a lot of time needs to be spent on
the removal of negatives uh one thing is
answer the phone
okay and do not hide your phone number
i i find that so what seems to happen in
most e-commerce is you have what you
might call the sales area which is
everything that happens
up to
and including
a point of purchase
and everything there is glorious and
attractive and you know and slick
okay assuming by the way you don't have
a weird question to ask
um but i would argue one um what then
happens is if something goes wrong with
your experience either the delivery of
the experience or you need to cancel
something
as soon as you deviate from that very
narrowly preconceived sort of purchase
funnel
you enter a world of pain okay and the
two things which are i think grossly
under underinvested in uh in terms of
e-commerce are one giving what what
tends to happen is once once the
marketing job is done because the person
has clicked buy
the responsibility for that customer is
now handed over to people whose metrics
are anything but customer satisfaction
their cost reduction how can we make
sure that nobody phones us up how can we
make sure that every phone call is as
brief as is feasibly possible and how
can we minimize the cost of delivery and
distribution now one of the things i
think is a grotesque mistake that most
ecommerce providers make not all of them
but many is not offering you a choice of
delivery couriers
for example
okay
now i know why they do that they want to
put everything through one delivery
courier so they can maximize their
rebates through volume economies of
scale
actually i think you know i think many
me two problems happen there one if you
don't get to choose how your items
delivered if anything goes wrong you
blame the company you don't blame the
delivery company or yourself if i'd
chosen to have it delivered by royal
mail and it went missing i'd blame royal
if they
insist that i have it delivered by you
know without singling out ups dpd
whatever and it goes wrong i blame them
um
secondly you know people have various
preferences
you know
your liking for every used to be called
um uh
hermes okay varies enormously depending
on which postcode district you're in
because if you have a very good local
driver it's incredibly good and if your
local driver is off sick it's a disaster
in some cases okay
um and by not resp not respecting the
the fact that the person is paying for
delivery should choose who delivers it
yeah strikes me as a fundamental failing
the business of hiding the phone number
so that anybody who has a problem is
effectively treated like a second-class
citizen so you have this very
characteristic thing which i think is a
problem with e-commerce
which is when it goes well it's
miraculously good
okay
but the second anything out of the
ordinary happens you enter a world of
pain
you know
and i think that is that's a fundamental
failing this is a customer service point
the importance of customer service right
a few people i mean selfridges self just
do it pretty well okay um other things i
do is i would offer a kind of amazon
prime equivalent where if you pay a few
pounds for delivery you get free
delivery for a year that seems to be a
you know fairly obvious brilliant idea
because why should loyal customers pay
you know inordinately more for you know
delivery than one-off customers do
um i think you know i i think you can
make an effort around how the thing is
delivered and packaged and presented
which some people do well and some
people don't bother to do it at all what
do you think the secret is there to
doing a good job with packaging and um
possibly there's a little bit of costly
signaling involved i mean if you order
something from selfridges um
the
inside of the box is actually yellow
with the selfridges logo on a kind of
shiny backdrop and there's a little bit
of tissue paper
okay
so you're never left um that will have a
halo effect on your perceived value of
the product by the way
you know i know we don't like it but
actually packaging is to some extent
packaging is where a product first
becomes a brand
it's where it first takes on a
personality and identity uh you know um
you know a kind of
an implied target audience
and so in in this thing now the
interesting thing is how are you going
to
uh what's your shtick do you have for
example scarcity is the clothing
available yeah so limited runs we
actually we actually sold some before
when i did a tour of the uk and you had
to come to the tour to buy it and every
single night on the tour we did nine
nine nights three nights at the london
palladium took it up another country
sold out every single night every single
item to the point that we sold the ones
on our backs yeah and we'll give them
away but um every single item sold out
and every single size on the tour so
this is like the second drop of it
everyone's well aware that the first the
first run of it all sold out um we have
a very limited line uh so we have a
limited amount of items again this time
and i think the key thing with this um
release is
we've just agonized over the story of
the piece so it's like it really looks
more like art than it does clothing and
we've worked with artists and there's
this big movie that i'm releasing with
every single item to explain the meaning
of the piece and then we've put a lot of
effort into the packaging the unboxing
experience so it is limited it will
honestly probably sell out in the first
day and um
i don't even think we're gonna make
money from it but that's not really why
i do it it's more because i just love
the i love the process but um
probably will you probably will make
money i mean merch is um i'm just really
not bothered by making money from it
it's not the thing in my life same with
a tour like i spent every penny i could
on on the bloody tour because it wasn't
really why i was doing it there's
probably more of a bra a wider brand
play yes to doing it which is like it's
it's bringing our audience closer to us
so it's maybe a lost leader in terms of
the financials but in the broader
engagement
no i mean this is this is actually the
great curse of a lot of modern business
given the title of your um podcast
which is that
people generally over obsess about
things which are immediately
quantifiable and under invest in things
which are valuable but hard to actually
put a figure on yeah and so things like
engagement or loyalty of course i mean
it's worth noting that customer loyalty
is much much slower to measure than for
example conversion yeah and so the
extent that money is invested in
performance marketing or the bottom of
the funnel relative to let's say wider
brand fame yeah it's a widespread
problem in the whole business world
which is that the money isn't
necessarily being spent in in the in the
channels it is because it's more
effective there but simply because it's
more it's easier to prove
that it has an effect the truth of the
matter is the world will always be too
uncertain for us to know who our
customers are in advance
and therefore since you know 97 of the
potential customer base aren't in market
at any given time and therefore won't be
uncovered by search or you know
remarketing or whatever
spending money on the 97 of people in
advance ahead of times
is still a very effective thing to do
the reason people do too little of it is
that it's hard to quantify on that
particular point then having worked in
the advertising industry this is a
conversation we have all the time with
clients which is so you'll meet a
certain type of client who is very uh
who's they're religious about the bottom
of the funnel they're really if it cut
if i can't track it and i don't know
exactly i won't do it i won't do it then
you'll sometimes meet the opposite
which is yeah someone who just loves to
spend on brand and i don't know they're
both wrong yeah i don't think they
should yeah i mean i mean mark ritz very
good marketing professor always talks
about the importance of both ism and he
says it's vitally important that when i
actually speak about the importance of
brand marketing
that you do not interpret this as
denigrating digital marketing in fact i
go a bit further and say the bottom of
the funnel in many respects is the thing
you have to optimize first
because there's no point in actually uh
if there's a bottleneck at the bottom of
the funnel if there's some constraint or
a problem or a failing uh you know if
you have very poor conversion okay
there's no point in spending money on
advertising because you'll just
introduce more people to a disappointing
experience you're wasting money so
you've got to get the back end and i
would argue the first thing in theory
you should optimize if you're being an
absolute purist is repeat purchase
because having gone through the expense
to acquire these customers and actually
that's the that's the metric that always
fascinates me because
we were talking earlier about electric
cars and i said the question about
electric cars isn't how many people are
buying them okay it's not what
percentage of the new car market in the
uk in july were plug-in vehicles
now only question worth asking really in
the long term is
does anybody who buys an electric car go
back to buying a gasoline car
because if the answer that is hardly
anybody then okay you don't know the
exact shape of the s-curve but you know
the growth is going to be pretty
spectacular and so the thing to
understand i think in a market is to
what extent does your uh product
actually convert someone to something
and then the lifetime so you'd start
with repeat purchase then you go to
conversion and then you'd work your way
up but what tends to happen is that
when people are obsessed are obsessed
with quantification of everything okay
it's worth noting by the way that all
big data comes from the same place the
past
all right so there's a limit to how much
big data particularly if you've had some
major event like a pandemic in between
how much big data can actually tell you
about the future in any case
um as david ogilvy famously said you're
not advertising to a standing army or
advertising to a moving parade
people are coming in and out of market
all the time
um and so
you're absolutely right you get some
people who are just fame junkies and by
the way i suppose there are brand
categories where that's appropriate if
it's sold through retailers you know in
other words if it's mostly sold in the
physical space you might you know you
might argue to an extent you know for
let's say a burger king or a mcdonald's
that's not a totally crazy position
although it is now because suddenly
they've got to think about delivery and
and whether people order through the app
or order through an intermediary because
it has a major bearing on their business
but but at the same time yeah i mean the
tragedy is this idea of this false
dichotomy between brand advertising and
what you might call performance or
digital marketing
as if you have to be in one camp or the
other where is the balance though and
how does one go about is it just
intuitive is it just there are figures
on this so if you look at the work of um
lisbonette for example in peter field
uh the ratio shifts a little bit but
generally they'll stipulate a figure
around about the 60 40 mark in favor of
what you might call brand mass media
uh expenditure because they have a
mutually beneficial relationship
obviously
my first 20 years of my life was spent
in direct marketing and actually you
know
because direct marketing was
unfashionable we spent a lot of time
denigrating advertising spend because
they got much bigger budgets than us not
necessarily rightly but they were also
you know much more indulged than we were
because they didn't have to prove
effectiveness down to the same sort of
level of statistical significance
but we came to realize pretty quickly
that actually
um
first of all there's nothing harder than
direct marketing a product that nobody's
ever heard of yeah and that every time
just to give an example every time
american express went on television or
advertised big in mass media
the response rates to direct mail would
not quite double maybe but they
increased pretty significantly you had
to work less hard and you had to work
it's that wonderful phrase which comes
from a book by
uh let me get his job right uh his his
name right um
i i think it's matt johnson who's just
written a book called um brands that
mean business and his wonderful line is
having a great brand means you get to
play the game of capitalism in easy mode
and that's
and what what is true is fame to some
extent
brings a load of benefits which aren't
necessarily sales related so for example
you can [ __ ] up and your customers will
be more forgiving okay uh
take the example of apple i mean on a
couple of occasions apple has produced
products which had fairly major flaws
which might have proved pretty fatal
to lesser brands you know the famous
phone where if you held it in the wrong
way it didn't make phone calls for
example
and
given the reality distortion field
around the apple brand people have
passed over those incredibly rapidly and
so
there are all you know people are less
price sensitive
that's not easy to measure by the way as
well it's very easy to measure the
extent to which something has an effect
on sales but the effect to which
something has an effect on price
elasticity and the extent to which you
can command a premium because it's a
great brand because it's a great brand
it's harder to measure because you don't
have the counter factual
you know when you sell something the
counter factual is that you assume that
you wouldn't have sold it otherwise
but if you sell something for a high
price
you can't in fact determine that without
your advertising you wouldn't have sold
it
for you know for that for that premium
price so it's to some extent this quest
for perfect measurement
to reduce marketing to a kind of
newtonian physics is a bit of a false
god
[Music]
you
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