HMV – How Much Value?

News is out that HMV is on the rocks. The share price fell a massive 29% in one day after the group reported like for like sales for the first half of the year fell 11%.

To add to this, HMV is already whining about the cold weather likely to hamper their Christmas sales. This is the key period of the year for any retailer and it looks like shareholders shouldn’t expect any better for the future.

I have to say that I am not very surprised. For a long time I have been talking about how little is being done by the traditional music stores to adapt to the changing market. As long ago as 2007, I guest blogged on David Taylor’s brandgym site about Zavvi , and most of you will remember them going into administration in December 2008.

I blogged that when they took over from Virgin, they just changed the name and nothing else with what I like to call “a hope and pray” strategy. Why did they think Richard Branson was divesting the business? In my opinion because he knew when to get out of a declining business (music and DVDs purchased in store).

HMV are of course now suffering the full force of this declining business and are finally addressing it by changing into a broad based entertainment group, diversifying into live music and events as well as clothing (not sure about this one). But it is all a little too late for me. In addition, they are not addressing their core business: purchasing in store.

A couple of years ago they could have participated in the revolution for delivery of books and music. With such a hugely well known and well respected brand name, they could have shaped the market.

First, they should have been a leader online but they have been trounced by newcomers such as play.com and the might of apple’s itunes. They have only recently relaunched their own digital platform.

And they have done nothing to fill the gap that internet just can’t do as well as in store: experience.

Where are the interactive pods that let me search online for music and then let me download straight on to my mp3 player? Where is the jukebox where I type in names of bands I like and proposes me ones I might like, Where are the pods to play new xbox and wii games so I can try and then buy. Where is the experiential pop ups outside their own stores to get people to interact with their products, sign up or maybe some into the store to see what else there is. If you can get people into your store then they might actually buy.

There are loads of teenagers hanging around town centres with nothing better to do. HMV could have been a mecca for music lovers with events and trials.

But no, they stack CDs and DVDs in rows and you can browse and then pay. Whoppee do.

HMV you have got to invest and catch up quick or you’ll be left with a nostalgic brand name and not much else.

Monkey or Northern Folk?

The Tetley Folk are back on our screens after an absence of 8 years. Remember Gaffer, Sydney, Archie and Clarence? They featured in Tetley Tea ads for some 22 years before their disappearance, friendly Northern folk promoting 2000 perforations.

Well they’re back in an advert currently running. They are awakened by a drop of the famous tea spilt by a hapless intern in an office (not quite sure about that bit of the story).

In any case Tetley have been steadily losing market share to Unilever’s PG Tips. That’s the ad with the monkey and Johnny Vegas. Very creative ads from both sides, clearly the meerkat is getting the agencies on the animal trend again.

Of course PG Tips had the chimps for many years, so this brand is no stranger to using acting animals even if the latest actor is a stuffed one (must be a hellava lot easier to work with).

So are you swayed by the northern folk or the monkey?

Or are you only interested in a good cup of tea?

It’s an interesting study of product v brand. Of course in such a competitive environment, and dealing with a commodity product such as tea, it is very important to create some differentiation. Nothing wrong with a bit of emotional branding to keep awareness high.

I think it’s a great idea for Tetley to remember what they are about, brands are too quick to throw away great ideas because the marketing team feel like a change (see my blog post on M&S). Remember what makes your famous is mantra from David Taylor (see his excellent blog).

However, in this war of the clever ads, the PG Tips team and the Tetley team mustn’t forget that, for a lot of people, tea is all about the taste. Innovation is key. When triangular tea bags were introduced this was a stroke of genius, allowing the tea to diffuse better in the water.

Consumers are more likely to switch brands for the promise of a better taste, rather than because they have a penchant for cartoon characters.

So the spin is great but let’s not forget that product differentiation and innovation must also be high on the marketer’s list.

Two rules to disappointment your customer

It’s not easy to get good customer service. Goodness knows, most of us would be shocked to find it.

I am fully expecting to queue for ages at the bank, I am fully expecting to have my phone query re-routed 5 times, I don’t flinch when shop assistants look down on me.

Our expectations as customers are really quite low so this actually leaves bags of opportunity for a brand to do better than average and really shine. On the flip side I have one rule for you to be sure to follow if you are really looking to disappoint your customer.

Rule One: “Over promise”.

I recently sent my iphone for repair. The screen was smashed, I didn’t even drop it but all iphone owners will know how sensitive the little blighters are. Not having taken out apple’s extortionate insurance, I decided to send it to i-phone-repairs.co.uk They looked quite reputable, had done a really good job on their web site. Lots of reassurance I was in the right place.

More importantly they offer a 24 hour repair process. Pretty important when your phone is integral to your business. It’s the main part of their proposition.

So of course you can guess that it is still there 7 days later.

They have quite a good email alert process that lets you know the different stages that the phone is going through. So I had the alert that they had received the order and then another for reception of the parcel but nothing since.

So to be really sure to disappoint your customer further and potentially they make sure they tell everyone about it is to then follow the second rule to ensure extreme disappoint which is

Rule Two: “under communicate”.

In other words, don’t bother telling your customer what is going on. Don’t explain under any circumstances what’s gone wrong in the process, just hunker down and hope it will all go away.

Another good example of this rule in practice is demonstrated by most airlines. They pride themselves on never letting their customers know that the flight will be late and by how long.

So you see how it works?

1) Over promise
2) Under communicate

If on the other hand you want to make your business shine and stand out from the crowd, gaining valuable referrals & recommendations, creating a new customer base and saving you marketing money:

1) Underpromise and excel by doing better
Such as how vistaprint tell you it will take 21 days to send you their business cards but they always seem to arrive in less than 10 days

2) Communicate regularly

If by any chance there is a problem with an order or you’re late replying to a client, let them know. Send a little note and you will be surprised how much people appreciate it.

Getting personal in Le Touquet?

There are more than 7000 chambres d’hôte in France and I have just got back from one in the very swish seaside town of Le Touquet in Northern France. It’s less than an hour from Calais and boasts expansive sandy beaches as well as being a destination for well-to-do Parisians on a weekend break.

What a great idea the chambre d’hôte is! It’s a personal service in a way that a hotel can never be. Rooms tend to be different from the standard box we can expect from a hotel, more like a home. You can get local advice on what to do and where to go without visiting an intimidating tourist office with its line of leaflets and fierce looking ladies behind the counter.

There is the opportunity to cater for families. Your standard hotel rooms tend to cram 2 extra singles into a twin room to make a so-called family room and that’s if they offer it all. Despite a family of 5 being commonplace in France you can forget it the larger family at a hotel.

Breakfast is included and is often copious. We had to go to the local restaurant that our owners also ran which wasn’t terribly convenient but certainly good quality. Our lovely host also sent us away with a terrine de lapin (rabbit terrine) and 4 strawberry cakes that he had spotted my daughter eyeing up.

So what is the message? Personal touch, convenience, good information, offering something difficult to get elsewhere and going the extra mile. Sounds like a good recipe for a brand.

We stayed at le Clos des Chenes

Tiger teaches us that it’s all in the head

Tiger Woods has just completed the WGC-Bridgestone Invitational at 18 over par, his worst performance as a professional. I bet he was doing better when only 4 foot high. 1I have very little sympathy for Tiger Woods but I do think his precipitous fall in competitive ability, in less than a year, teaches us something very interesting.

Lots have been written about the PR side of his fall from grace, and a equal amount of lines about how the media and fans have reacted to it. However what I find interesting is that it shows just how much his ability to be an outstanding golfer is all in his head.

He can’t just lose the ability to hit a golf ball into a small hole overnight, can he? Just as you or me don’t just suddenly lose the ability to ride a bike or play a decent game of tennis. Not unless there is some physical reason.

The reason why Tiger played so badly this week was because mentally he is a broken man and this has a direct impact on his ability to hit a ball with a club. Tiger says "I need to hit the ball better, I need to chip better, I need to putt better. It has been a long year."

This is a great illustration of the fact that in sport, as in our everyday lives, we are very much governed by how we feel, what mood we are in, by the interactions we have with other people in our day and how positive we feel about those. We are emotional beings and we may think that if we have learnt it, we can play golf to the same standard every day but this is not true.

When it comes to making decisions about a purchase, it is exactly the same. We are not robots, we don’t make purchases in a logical way (we like to think we do), we EXPERIENCE them.

We make a lot of decisions based on how we feel about the product we are evaluating. We weigh it up on attributes but also on how it is presented, how we are treated when enquiring about it, how much we might value the brand and what it represents.

If the girl at the counter has a miserable face, it matters. If the web site makes buying easy and seems friendly, I might buy something extra. We take it all in and make a judgement. Faced with a very similar product but a better environment or a better member of staff we will go with the one we like.

It’s the heart that rules and not the head. Tiger has lost his heart and that is what is making him only average.

Toyota Swagger Wagon

As Tony Hayward departs BP and the oil spill might finally be plugged, it looks like the media will have to find some a new brand to bash. Toyota, for one, must have been relieved when their turn was over and BP took over the lime light. A global recall of 9.4 million Toyotas due to unintended acceleration is certainly top of the hit list of PR disasters for the year, along with golfer’s hero Tiger Woods.

"All the Toyota vehicles bear my name," Mr. Toyoda repeatedly lamented at the time, except someone in the marketing department seemed to have misspelled it a long time ago and never fixed it.

As an aside, a forth brand is also in trouble today. Ferrari, another automotive heavyweight appears to think that it is far too big and important to follow the rules. Currently they are attempting to convince us that it did not fix the latest Grand Prix race by ordering Massa to give way to Alonso. Shame on you Ferrari, I don’t believe a word of it and I bet most of your customers don’t either. Trust issues anyone?

Anyway, back to Toyota. What do you do when your brand is in tatters?

Rebuild it slowly but surely, concentrating on the products would be my answer.

Get back to the roots and look at what makes the products great and start communicating on this. Stay well away from any fuzzy brand statements and make sure your customer service is exemplary. People are much more likely to evaluate your brand based on their actual experience and touch points than anything they see on the media. This includes positive and negative. Yes there is no denying that the negative is more difficult to shake off but nevertheless this rule still holds true.

Less people might walk into the showroom but if you make the experience fantastic for those that do, and show them real product benefit, then they will purchase, they will come back and they will tell their friends.

As well as this, I think having a bit of a laugh at yourself is always a good move when you have made a major gaffe. Which is one of the reasons why I think the video launched by Toyota in the US to promote its Sienna Minivan is so genius. The video currently has nearly 5 million views.



It is clever because it is engaging, funny, pokes a bit of fun at station wagon families that might drive the car but overall is very memorable.

Memorable for the right reasons which goes a small way to start re-building that lost brand equity. Not everybody will find it funny but it will certainly be talked about. It is already doing the rounds in the social media space and is in the top 5 videos in the US charts.

As part of the series there are other videos which also manage to display product features of the car like the smart Key or dual power sliding side doors. It reminds me a bit of the Clio adverts that poke gentle fun at the French heritage of the car and we know what a huge success the Clio has been.

Although profits are looking better for Toyota as they are expected to return to black for the April-June period (according to the Nikkei Daily), Toyota still has underlying issues that date back, even before the recall. Share of market in Europe is declining and the South Koreans are taking over. So there is still a lot of work to be done for Toyota to find their competitive edge again.

However in the meantime I am liking their style and not ashamed to admit that the Swagger Wagon looks pretty cool for a mum with 2 kids!

O2 puts a limit on the unlimited

The news has broken that O2 are going to start limiting the data on our iphones, basically meaning that we have to start watching our emails, internet use and downloading using the iphone. Up til now, all iphone packages included “unlimited” data downloads (within reason) so we have all been happily checking our mails up and down the country, using our apps to find a cash point, and sharing our score in the latest game we are addicted to. I am loving it.

With 10 hours of calls (that I have never got close to) and unlimited texts, I loved the fact that I never have to think about my phone use. In a cluttered and difficult world where you should be switching your supplier for everything from energy to savings accounts every 5 minutes to get the best tariff, it was really soothing to never have to worry about the mobile.

I think O2 are a very clever company in so many ways but limiting data is such a bad idea because it goes against the wishes of the vast majority of their customers.

Having been a customer champion for many years, genuinely working on customer service and being the first to give existing customers deals just as good as for new customers, O2 have shown themselves to be in tune with people’s needs. More recently their ad for broadband, “Niggles and narks” clearly taking on board the general moan that you can’t get any decent customer service when it comes to broadband. Ads all designed to put O2 firmly on the side of the customer.

Then Ronan Dunne, O2’s chief exec announces in his blog that data will be limited for new contracts. Apparently 97% of us won’t be affected, only 0.1% of us are using data over the new limit.

Yes I will be affected, Ronan, because I now have to think before using my iphone. It spoils my enjoyment. It's like when I'm in France and I have to switch to "no data roaming". I feel a bit bereft.

He also claims that it is for our own good. Because why should we pay for that top % using a lot more than us? News for you, Ronan, currently I am not.

This is not a decision based on customer insight.

The reason that this decision has been made as far as I understand it and with the help of a very insightful article from the Guardian is that 0.1% of people are abusing the “no limit”….and the company can’t work out how else to stop them and / or make them pay.

This is sort of thing I would expect from Talktalk. Not the customer-loving O2 brand. I beg you to reconsider. Maybe Orange has a great opportunity to jump in with a message that they won’t charge for data? I would be up for switching.