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Jul 15th, 2010 by Fred Burt

The opportunity in complexity

It should come as no surprise that Siegel+Gale would laud a report from IBM called “Capitalizing on Complexity” and bear it aloft like some conquering hero. This report is essential reading, it really is. In a survey of more than 1500 chief executive officers from 60 countries and 33 industries, IBM found that, now more than ever, CEOs foresee the challenges of complexity ahead of them and are deeply concerned about their ability to address it.

The complexity issue is more than a customer inconvenience, it is a pronounced business-wide phenomenon, and those able to master it will gain a significant competitive advantage.

At the risk of sounding self-congratulatory, this is something Siegel+Gale has communicated for over 40 years. It is, however, reassuring that some big voices are joining us. I’d be interested in your views on this report, but to start the dialogue, one specific thought struck me.

IBM suggests that “the trick is keeping complexity ‘behind the curtains’”. This seems to imply that some degree of operational complexity is unavoidable. Maybe, but the process of simplifying should first address the root causes of complexity not just mask the symptoms. Our Simplification practice, for example, designs complex, information-heavy interfaces (both digital and print) to be easier, more useful and more intuitive for customers. We would classify these as symptoms of something more profound. Increasingly, we are pointing our clients towards opportunities in the internal structures, systems or processes, many of which are contributing to the external complexity problem seen in their customer communications.

And, more often than not, the problems experienced by one brand are similar to those faced by its competitors. For example, we have lost count of the number of financial services brands that cite legacy systems and siloed internal structures as key contributing factors to incomprehensible customer correspondence. Indeed, it’s time to face the monster of complexity head on.

Businesses today need to look behind the curtain at the complexity lurking there, no matter how nasty it may be, because that’s actually where the opportunity lies. “Building advantage will be the outcome of managing complexity better than our competitors”, says Julien Segal, CEO of Caitex in Australia.

As IBM makes clear, in the coming months it will pay to simplify.

Fred Burt is the managing director for the Siegel+Gale London office.

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Jun 7th, 2010 by Fred Burt

Saving through simplicity

It came as no surprise in a leaked letter to suppliers that the Central Office of Information (COI), the UK government’s department for marketing and communications, is cutting its spend on marketing by “at least 50%”, slicing in half the £540M spent last year.

In an article by Brand Republic, the COI confirms the cuts that will take place during this financial year.

Helpfully the COI has outlined criteria for those marketing initiatives that are likely to survive the chop. In his letter dated June 2nd, Peter Buchanan, CEO of the COI, suggests that marketing initiatives likely to remain are those where:

  • “The government has a duty to provide people with information e.g. changes to legislation or public services”
  • “Providing the public with information is critical to the effective running of the country e.g. information about paying taxes, recruitment of armed forces”
  • “There is unequivocal evidence that campaigns deliver measurable benefits relating directly to immediate public health and safety”

Siegel+Gale’s work in simplification has, of course, always been focused on these criteria.

The provision of essential information needs to be clear, needs to elicit a ‘right the first time’ response, and should be understood by the public at large. Plain English coupled with clear, well-designed documents are central to the provision of this information being effective. This is where the effectiveness of clear communication really counts. You can remind me as much as you like to pay my taxes, but if the self-assessment form is difficult to complete, then the overall business objective—the prompt, accurate payment of taxes—will not be met.

Effectiveness goes beyond just getting the message across; it is about eliciting a response—a response that has a business benefit. Central to all our simplification work is a significant amount of ROI modeling. The UK government has to look at the total cost of the service it provides and be relentless in learning how to reduce the costs associated with inaccuracies, delays or failures to comply that can often result from poorly designed communications.

To site an example, if you called HM Revenue & Customs (HMRC) the week before the self assessment deadline because the form was unclear, you were among thousands. Each call had a cost. Each call reduced today is a saving. When there are 29 million tax payers in the UK the scope for saving is significant.

And evidence is critical. We have developed state of the art research tools that produce quantifiable, reliable data to show the impact that an information design change in a document, form, or statement can produce. This is essential to establish before implementing change. We talked to one government source recently who said it cost over £100,000 to make even the most minor change to any printed document. Without supporting data, it will be hard to convince a civil servant—more so in these times—that change is necessary, no matter how apparently obvious the benefit.

The UK government needs to save money, and simplifying its communications with the public will be key to initiating this process.

Fred Burt is the managing director for the Siegel+Gale London office.

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May 7th, 2010 by Fred Burt

Simple choices

I, along with the rest of the UK, experienced the exhilaration of voting May 6th as the country went to the polls in our general election. The whole nation has been watching this election closely as, for weeks, the predictions have pointed to the hung parliament that we indeed have got.

As it became clear that no single party was going to be elected, the parties, the constituency candidates and the leaders were all scrutinised like never before. But as I walked to our local polling station last night I thought about the brand effect. In spite of all the information that we have looked at—all the debates we have watched, all the assessments of policy, personality, track records, promises, and values—in the moment of choice we have to synthesise everything down and cast our vote. I tried to weigh up all the strong rational reasons for one of the parties, but ultimately chose another option, based on a sense that they were more fit for government in general than for any specific policy reason.

What happened here, I thought? Surely policy detail should matter most, right? Well, yes, but—in the moment of choice, the moment of truth—to borrow A. G. Laffley’s term, policy detail came second to a more powerful, more simple driver of choice.

In elections, as in life, we can’t take in all the data. We have to take short-cuts. We latch on to the shortlist of issues that matter most to us, screening out the mass of issues that we judge to be inconsequential. Often we choose the option that represents our value set the most. And sometimes, style trumps substance because the substance is just too complicated, confusing or undifferentiating to help us make the choice we have to make.

Put another way, when the choice is not clear, the human mind breaks down information and simplifies it to aid in our decision-making.

Of course this is also how we make brand choices everyday. There are some drivers of choice which override others, and often it is the irrational or emotional drivers which trump functional factors. This is the natural process of simplifying which we have to go through in order to make choices rather than being overwhelmed by a mass of information.

We can’t function without simplifying. The brands that help us do this are more likely to win our vote.

Fred Burt is the managing director for the Siegel+Gale London office.

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Apr 6th, 2010 by Fred Burt

Amen to Augusta

With the Masters fast approaching, I thought I’d write a quick thought that does NOT touch on the Tiger factor.

Augusta is one of the great destination brands of sport. It is one of those venues that can have ‘the home of [insert world class event]‘ appended to it. But even great sports or event destinations need to create a little extra sizzle, and one of the tactics they deploy is the ‘place within the place’. At Augusta it is Amen Corner. More than just a stretch of holes with a quaint name, this has become the pivotal point of many a championship, and as such gets that extra audience attention whenever players are there.

At Wimbledon, we have Centre Court, of course, but more recently Henman Hill. This is where the paying public who couldn’t get Centre Court tickets watched the big matches (and specifically Tim Henman on his inexorable path to semi-final exit) on the big screen. Wimbledon, you see, is not for just the well-heeled elite, it is for everyone.

There is the Grand National, but within this is Becher’s Brook, the notorious and controversial fence in the UK’s most gruelling horse race.

These areas of extra focus ideally need to have folkloric significance, highlighting a particularly important moment or area of the event, and emphasising a real point of difference that confers a broader sense of uniqueness. And like all good folklore, it can be written to the advantage of the event owners. Wimbledon has to be more democratic so we have Henman Hill. Aintree has to be dangerous so we have Becher’s. These points of focus act, in effect, like strategic sub-brands.

So by the time we all tune in to watch Tiger come through Amen Corner later this week, let’s pay homage to a well-managed sub-brand in the Augusta portfolio.

Fred Burt is the managing director for the Siegel+Gale London office.

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Mar 26th, 2010 by Fred Burt

The new rules of engagement for global brands?

The New York Times wrote recently on the changing landscape of business as emerging economies become more dominant (“Developing Nations Setting Torrid Pace for Mergers”, 3 March 2010.) We’re seeing this is having a profound effect on brand management, but, interestingly, the effect is very different for consumer brands versus B2B brands.

Let’s start with consumer brands. In China, for example, Starbucks is enjoying a honeymoon period as a new brand in a market that is being exposed to these brands for the first time. But Starbucks has endured some painful lessons about the vagaries of local trademark law in Russia and China.

The general consensus at Siegel+Gale’s office in China is that Starbucks is relying on its current position at its peril. “Globalness”, per se, is becoming less of a point of competitive advantage for consumer brands as consumer markets become more informed, and the trust put in the veneer of big brands is not as unquestioned as it once was. Don’t assume that being a global brand provides the ‘easy choice’ for consumers and will give you a sustainable business advantage. Pursuing globalness for global’s sake is a mistake.

This also brings up an interesting question about the real value of global consumer brands. They certainly provide value, but is this more about operational efficiencies than end-consumer benefits? Starbucks’ success in China will be based less on its attraction as a global brand and more on its ability to create a unique experience that is relevant in China–even if that means being significantly different in China.

In B2B there appears to be the opposite effect. As business in general becomes more global, businesses need to be known for their ability to help the customers address global business needs. One investment-banking client of ours based in London pointed out how international their client base is now, and how international their outlook is on the investment world. Our client’s location in London is about client management rather than market proximity: being ‘in London’ rather than ‘from London’ is what it is about, and Britishness is a fading asset in this case.

Successful global B2B brands will be able to piece together global solutions while making local resource available when needed. This may be as much about taking advantage of local talent rather than just covering a market. For example, Nokia located its global design capability in London to tap into the world-leading design community here rather than just to have a London full-service office.

In the coming weeks Siegel+Gale will be writing more on this subject. But for now, we’d welcome your views on what the future holds for global brands in B2C and B2B.

Fred Burt is the managing director for the Siegel+Gale London office.

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Feb 2nd, 2010 by Fred Burt

Law firms failing to stand out

Law firms may well be the last bastion of the unbranded. Consider these statements, found on the websites of some of the market leaders:

+ “one of the world’s leading law firms”
+ “a world-class international law firm”
+ “one of the most prestigious law firms in the world”
+ “our people are our difference”
+ “a commitment to delivering high quality service”

Any of the firms we reviewed could claim any of these, and that’s the point. None stand out.

Let’s be clear, there is a sense of tiering that separates Magic Circle law firms from the rest in the UK. Most qualify for this elite club on the basis of being big. But big is a precarious leadership claim. Reed Smith has proven how easy it is to become a top 15 firm from nowhere in 5 years. The merger of UK-based Lovells and Hogan & Hartson, the US law firm, is seen as just the start of industry-wide consolidation. It will be interesting to see whether the new Hogan Lovells brand will be launched with a clear sense of the organisation’s unique points of differentiation. It will be a shame if this incredible opportunity becomes a naming exercise following the path of least resistance.

Marketing has long been seen as beneath many law firms, overly commercial in a business that is about relationships and service. But branding is, of course, much deeper than marketing. The firm’s brand should clearly reflect the philosophy behind the business and the firm’s way of working, both of which should provide means to the end of ‘leadership’, ‘world-class’ and even ‘prestigious.’

This clarity of purpose will deliver real business results. When shortlisted among their peers, they should be winning more often. When recruiting graduates, they should be attracting the best, for whom their culture is distinct and ‘for them.’ When discussing fees, they should be able to maintain a premium because their added value is clear. This has to be a priority of any Managing Partner or CEO, particularly if the leaders in the industry want to emerge from recession and command premium pricing again.

I met this week with a management consultant who specialises in dealing with senior management of US and UK law firms. He wholeheartedly agreed that law firms overlook their brand at their peril.

Goldman Sachs and McKinsey have shown how a single-minded approach to their positioning relative to their peers can set them apart and drive real, long-term business value. So the question seems to be: which of the law firms is going to step up in order to stand out?

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Jan 25th, 2010 by Fred Burt

From Russia, without love

Two years ago, investors were falling over themselves to invest in Russian businesses. Russia’s economy was booming, luxury brands were developing super high end products explicitly for the Russian market, and Moscow boasted more millionaires than any other city in the world, barring New York.

How times have changed. All the talk is now of India and China, and Russia’s businesses, as reported in the FT here , choked of capital, are looking to non-Russian markets for funding.

The problem is what one analyst has described as “the Russian risk factor.” While probably not widespread, much of the word on the street in London last year was that Russian businesses were arrogant and secretive, and that it was commonplace for armed guards to be there as much to intimidate investors as to protect the personal security of the oligarch class.

It would be wrong, of course, to label all Russian businesses as crooked, but they will need to work extra hard to overcome the prejudice that has been formed in recent years. For instance, plenty of them still wear the clothing of Soviet-era enterprise, so presenting a fresh face would help. However, beyond that Russian businesses need to demonstrate both transparency in their operations and a clear sense of sustainability, given that many of the businesses looking to list are mining or chemical groups.

Comparing Alrosa to De Beers, for example, shows just how far Russian heavy industrial businesses have to travel. De Beers’ ‘A diamond is forever’ campaign was brilliant, and showed a keen understanding of how influencing perceptions throughout the supply chain can enhance the value of its business. De Beers also understands how much scrutiny its mining activities are under from international investors concerned about the long-term impact of mining on communities in Africa.

On its website, Alrosa’s historic highlights end in the year 2001 and its photo arhive [sic] is empty, both of which hardly bode well for the company.

This is a classic corporate brand issue. Russian businesses need to consider how they need to be seen the marketplace and what their corporate brands need to stand for to make the most of their fundraising initiatives in the coming months.

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Jan 2nd, 2010 by Fred Burt

Clarity for competitive advantage: a business opportunity

There was further coverage this weekend in the UK in The Times of the systematic sharp practice shown by the large UK utilities, in this case British Gas (Buyer beware or be fleeced, TimesOnline, January 2, 2010). In essence, the trick goes something like this. Write a polite letter informing customers that there will be some changes to their account, keep the terms vague or obscure, and tell them that everything is OK and that they don’t have to do a thing.

The sting in this tail is that British Gas was, in fact, proposing to hike the customer’s gas rates up by 42%…and then when they were challenged by the customer, they instantaneously reduced the price raise down to a mere 0.4%, calling into question just how ‘necessary’ the price rise was in the first place. Indeed, it raises the wider question of whether British Gas has been getting away with unnecessary 40%plus rises across a wide and unsuspecting swathe of its customer base.

This is, of course, terrible practice and relies on customer ignorance and inertia on the one hand, and a lack of a decent alternative on the other. The journalist concludes that the only way around this is to switch and switch frequently.

However, this situation provides a huge opportunity for British Gas’s competitors. Tell the customer what they currently pay, what they’re going to pay, why the changes are occurring and what they need to do next. As consumers become more and more aware of just how much they are being gouged they will look to a more trustworthy alternative. If one of British Gas’s competitors can be consistently clear, they will be the warm embrace that customers turn to.

In fact, Ofgem, the regulator, could be stepping in here. Require the utility companies to be transparent and let’s see whether they try and get away with raising prices by 40% plus at a time. The Financial Services Authority’s Keyfacts initiative has started the process of requiring financial services providers to be clear and easy to compare. Why not introduce similar requirements for utilities, which surely must be simpler to implement. This has got to be in the interest of the customer.

In the meantime, the opportunity remains clear for the utility providers: clarity for competitive advantage.

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Dec 29th, 2009 by Fred Burt

As good as your word in 2010

Language has become slippery, tricky, legally grey, politically charged, deliberately unclear.

Which is exactly why the word, written and spoken, is a huge opportunity for brands. The world is crying out for clarity in language. No hiding, no wiggle room, no deliberate grey. Black and white, please.

2010 has to be the year when businesses, private and public, big and small, look to re-establish trust. Clarity will be key, and the word will be the means to deliver this clarity.

But being clear is not easy. It requires discipline, hard work and, in case we forget, a proposition that really motivates your audience.

We will be working for many utilities, financial service providers, telecoms and public sector clients this year. Our primary task will be to make their statements, websites, bills, and other information-rich interfaces more effective.

But actually, we’ll be giving them the ultimate proof point that they mean it when they say to their customers they are going to be more open. That they’re as good as their word.

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Sep 29th, 2008 by Fred Burt

Branding in a Climate of Fear

It’s an interesting time to be in retail financial services. Those of you in the US (which I know is most of you) will be aware of the recent big-name casualties, but in the UK we have a mini-version of a banking collapse.

To recap, Lloyds TSB and HBOS, the fourth and second largest mortgage lender respectively, entered into what felt like a shotgun marriage last week. Earlier in the year, Northern Rock went bust and was bailed out by the government. And this weekend, Bradford and Bingley, the eighth largest mortgage lender, is also rumoured to be lined up for part-nationalisation.

What does all this mean for us as brands observers? On the one level, it threatens to introduce an alarming level of commoditization of brands. Bradford and Bingley savings customers, allegedly, are going to be ‘transferred’ to an as-yet-undetermined other.

Will customers protest and leave? Probably not, because the perceived differences between banks and building societies is, sadly, minimal. But banks are complacent at their peril. Our experience of big brand change, whether this is a merger, a re-brand or a takeover, suggests that customers in traditionally low-interest categories, take the moment of change as an opportunity to reassess their provider. And this is probably the greatest ‘moment of change’ for retail financial services in living memory.

This perceptions shift is not just change driven by everyday commercial factors. The fabric of the system itself is at risk and the customer is scared. After all, it’s not just small institutions getting in trouble here. And as politicians around the world know only too well, fear is a potent driver of preference. The brands that can be seen to be tackling this fear head-on will be the winners.

So, with the retail customer is uniquely sensitized and likely to be more open to switching than at any time, what can brands do to capitalize on this?

Smaller bank brands have to reassess their positioning when a customer has had his or her confidence fundamentally undermined. Why should I stick with a small bank when it could be at higher risk of collapse than a bigger, safer bank? Localness, customer service, the backing of a bigger institution are all good start points. In essence, they need to find a relevant point of difference that will counter the potential perception that bigger is safer.

Bigger brands need to ‘get boring’ and remind the customer why they are to be trusted. For the moment, trust and reliability are valuable currency.

Of course, whether the lesson throughout this is learned for the long term and we prevent ourselves from over-stretching into unmanageable levels of debt again remains to be seen. But while there is a climate of fear, bank brands have a unique opportunity to grab market share and set themselves up for when the good times roll around again.

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