Friday, October 30, 2009

Trade-Off, Required Reading for Marketers

Last month an excellent new book was released. It should be read by everyone involved with branding, advertising, and consumer behavior. The book is entitled Trade-Off , Why Some Things Catch on and Others Don’t. It is written by Kevin Maney who often writes for Wired, The Atlantic, and Conde Nast Portfolio. The book’s publisher is Broadway.

What struck me about Trade-Off was the elegant simplicity of the premise. Maney states that with virtually all purchases there is a constant tension between Fidelity and Convenience.

Fidelity basically sums up the quality of a consumer experience. You go to a rock concert knowing that the sound will not be as good as you get on a CD at home. But you go to see the band, see the lighting, the special effects, be part of the crowd, and perhaps most importantly to be able to tell people that you were there. All that rolled up together spells fidelity.

Convenience is pretty obvious. It is how hard or easy it is to get what you want. Sometimes you go to a concert to get the entire fidelity treatment mentioned above. But, often you chose a low fidelity but high convenience experience like listening to your favorite group on a digital music player that is stuffed in your pocket. Sound quality may be a bit problematic.

With most purchases we make “a fidelity swap.” And, this swap is to Maney largely the key to business success or failure. Is the business set up for fidelity or convenience?

Other factors that play into the “swap” are:

1) The Tech Effect—you had to expect this in late 2009! Improvements in technology can improve both fidelity and convenience. Boundaries between the two are real but they are always changing.
2) The Fidelity Belly—if you are not extremely high fidelity or convenient you fall into the fidelity belly which he calls the “no man’s land of consumer experience. The tech effect is always redefining the borders of the belly so you brand may get swallowed up or become passé with the consumer if you are not careful.
3) The Fidelity Mirage—this one is dynamite. Businesses often say that they can do it but achieving both high fidelity and convenience seems to be impossible. If you try to do both you waste lots of time and even more resources and almost always fail. Starbucks expanded to the point where they often had locations on either side of a street corner. They were commonplace (and their baristas did not seem as well trained to me!) and when the economy started to tank, did you really need a $4.00 cup of coffee and an experience that no longer felt special? Familiarity truly did breed contempt and they have closed many stores and are now retrenching.

Coach built too many outlet stores and opened 94 conventional units between 2004 and 2008. Maney states that a big part of fidelity is maintaining aura and identity, and that is especially true with fashion and accessories. Convenience dissipates the aura and allure. Coach has lowered prices, closed locations and appears to be clawing back but they must never again become the McDonald’s of luxury.

Amazingly, even Wal-Mart tried to do both. Remember when they went in to New York City a few years back? That was a complete departure from their heritage. Wal-Mart grew by being the one stop shopping place for people in rural areas. They never entered major cities until they had surrounded them by working far outside and then gingerly stepping in to suburbs. Their empire was built on letting rural people go to one store instead of a dozen.In New York, shops abound and they are close to one another. After they closed New York, they amazingly shot themselves in the foot again by stocking higher priced and more fashionable clothes than ever before. I remember seeing TNS Media Intelligence reports stating that they were advertising in Vogue! At lunch that same day, I stopped at a newsstand and cracked up when I saw their ad was actually there. They were trying for both fidelity and convenience. Wal-Mart wanted aura it seemed and had abandoned its roots. The campaign flopped and they killed the better clothing and came back with “Save money. Live better.” As the economy sank, they rose as everyday low pricing reigned supreme again.

4) Super fidelity or Super convenience—Maney does not hedge; this is the province of winners. Most products that are hits fall at either end of the spectrum thus avoiding the dreaded fidelity belly. Apple put the i-phone at the top of the fidelity axis and they conquered despite a high price and limited geographic availability. Wal-Mart is back on top in retailing by returning to being the high convenience winner making shopping for basics cheaper than anywhere else. So Wal-Mart has poor fidelity and the i-phone is not very convenient to buy. But would you want to own either franchise? Of course!

Another example is from our industry. NFL Football with spectacular production values is the highest fidelity program in sports television. ESPN (sans MNF and college basketball) provides convenience in sports. There is always something in sports to watch on their networks.

This is only the tip of the iceberg but what struck me is that Maney has put his finger on something very important. I cannot tell you how many times I have seen companies harm or destroy their franchise because they fell for Maney’s Fidelity Mirage. You cannot be all things to all people. Yet, people believe they can. This approach is an excellent filter to use to help with positioning, expansion and pricing issues.

Get your boss to read Trade-Off, your creative heads as well, and especially the account planners!

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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