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Undercover boss

After readining the article “The Last Mile: Using Behavioral Inights to Create Value”, I realized how true I believed this sentence was: “Leaders spend too much time on ‘first-mile’ issues like strategy, and too little time on the ‘last-mile’ where consumer decisions are actually made. 

As a marekting consultant for almost 4 years in Peru, I used to work side by side with CEOs and top management and they almost never new what their customers were like or what the experience of buying their product or service was all about. I remember getting into several conversations where we asked the leadership team to go and act as a customer or spend a couple of hours talking to customers in their stores. We got the idea of the tv show “Undercover boss” where famous CEOs worked as regular cashiers, baristas, waitresses, etc. After they did that, the conversations about change and about what needed to be done to increase service quality or improve sales was way easier. 

I understand a CEOs time is super valuable but it is really important to act one in a while as the person that interacts with the customers. Being undercovered for one day can shed a lot of insights about what tiny things need to improve in order to have a better customer experience. 

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Creating brands that matter

In today’s world, where stereotypes and biases run most of the social spectrum and advertising has the power to perpetuate social prejudices, I believe corporations have the need to create brands that matter, that have real content and that have a clear stand on today’s issues.  

Being authentic in things that matter it’s not necessarily the easy way out. For the advertising industry it’s easier to misrepresent women in cleaning products ads, or portray racial stereotypes in personal care products ads. At the end, we’ve been living in a certain context, and some things have never been questioned. Also, those types of ads have seem to work and it’s necessary to acknowledge that the existence of certain products, such as Fair & Lovely, do respond to a real need, but it’s important for companies to dig deeper and see if that need is embroidered in gender stereotypes, racisims, or other social injustices.

As I see it with Fair & Lovely, there’s a real opportunity to redesign its approach and repurpose its value as a lot of other cosmetic and personal care products have done. The value of the brand and the loyalty that results from being in the right side of history are way more important on the long run.

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Advertising wine: Concha y Toro

The “Concha y Toro” case makes really clear how hard building a wine brand can be. Specially because much of the value that a wine gets its based on where it is from, or country of origin, and not necessarily on the quality of the product itself. In that sense, French wines are usually perceived to be better than Chilean wines, because France has a set of positive attributes associated with the country: chic, classy, romantic, etc. Also, because regular customers don’t really know about wine, they based their decisions on what other people say or ordered, or what a sommelier may recommend. This makes brand loyalty more and more difficult and actually the challenge for Concha y Toro goes beyond choosing between a “bottom-up” and “top-down” strategy.

Just analyzing Concha y Toro itself, it makes more sense to choose a “top-down” strategy because it doesn’t hurt profit margins and also having higher prices will help build a higher quality reputation. But also, because Concha y Toro’s priority is to capture share in global markets, it also needs to work on building the “Chilean” brand alongside other wine producers and the wine association Viñas de Chile. To differentiate themselves from the Old World producers, Chile needs to position itself as new and edgy and not “boring and safe” in order to lean on the value reputation of one the most valuable attribute in wines: country of origin.

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Nudging

Contrary to what people think or companies usually do, incentivizing behaviors by either financially making people choose certain options or restricting their freedom of choice altogether, may not be the best course of action for changing human behavior. For example, applying a tax to junk food in a cafeteria to make people stop buying unhealthy food may not be as effective as placing healthier food at eye level and within arm reach while making junk food less likely to be chosen, such as placing them on higher, harder-to-reach shelves, etc.

Research has shown that few easy and cheap interventions in the environment disproportionately influence behavior without significantly changing financial incentives or restricting freedom of choice. This practice is called nudging and means a “deliberate change in choice architecture with the goal of engineering a particular outcome”.

Even though nudging looks like just silly obvious changes, it actually works because it depends on subconscious choices where people are driven almost by inertia and in the long term, this can create new behaviors. For example, if you want people in a cafeteria to eat less food, instead of charging more for the food just offer smaller plates. Simple, right?  

It is actually so simple, that it sometimes feels a little sneaky to use these technique, which is the real downsize of nudging. Choice architecture could easily be perverted and manipulated to choose and outcome that’s only good for the choice architect and not so good for the decision-maker. This is why is important to remain ethical and nudging people to choosing the best option for them.    

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Intel case

Launching “Intel Inside” was Intel’s major step towards building a strong umbrella brand that could span successive generations of products. Even though Intel is primary a B2B company, the advertising was designed to explain end users why having “Intel Inside” was so important and they positioned the message around two major attributes: safety and leading technology. Intel partnered with OEMs and convinced them to put Intel’s logo in their ads and on their computers. By the end of 1991, 300 OEMs were part of the program and it was believed to significantly contribute to the overall success of the company.

Part of the reasons why the Intel campaign was so successful was the coherence between the message and the performance of Intel’s products. As Pollace (head of Intel’s worldwide marketing) recalled, “You can’t pull off a campaign without substance to back you up”. This was well ingrained in the business model and Intel was pressured to keep creating ever-faster processors over the years. In order to ensure achieving overwhelming performance and remaining ahead of the technology curve, Intel began doubling up on its R&D and instituted overlapping development cycles in 1990.

By 2002, the role of marketing within Intel had grown and required a reorganization of the company to better align its products roadmap with its marketing roadmap. Cross-functional teams were instaured where marketing analysts worked to identify consumer needs while engineers worked to developed those needs into product features. Even though Intel changed in many ways, the one thing that did not change was the company’s brand image. The core values of the company are still the same and this consistency has been crucial to keep building one of the most important brands in the world.