Brand Autopsy

Conducting a Marketing Physical to Ensure Brand Health

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NOTE: The post is meant more for attendees of the In-HOWse Designer Conference (Austin, TX).

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On Monday, I delivered a presentation titled, Conducting a Marketing Physical To Ensure Brand Health.

The following is the presentation description that appeared in the Conference materials ...

It's time to give your business a marketing physical. This may sound strange, but it's just like going to your own doctor and getting a physical for yourself. The doc takes your vital signs, asks probing questions, and conducts a few key exams. You learn what may be affecting your health, and then you adjust your day-to-day life based on the results in an effort to ward off serious illnesses.

Why not do the same for your brand or business?

John Moore shows you how to conduct your marketing physical to diagnose and treat common marketing ailments like anemic sales, poor brand complexion and marketing obesity.

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To view the slides, simply click the forward button below:

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RSS Readers ... click here to view the presentation.

Chrysler’s Addiction to Discounting

Last summer I introduced the Brand Autopsy Discount Detox Center in response to the Employee Discounts for Every One (EDEO) epidemic wrecking havoc on the automaker industry. I even shared Brand Autopsy’s proprietary Marketing Intervention Guidelines to be used by empathetic marketers wanting to reach out and help their fellow marketers inflicted with the EDEO disease. The Center for Marketing Disease Control & Prevention did manage to contain the EDEO Epidemic. But that was then and this is now.

Now, we hear Chrysler is jonesin’ to reduce its bloated inventory of cars and is getting back on the juice. Yes … sadly Chrysler is using again.

Advertising Age is reporting that early next month, Chrysler will begin offering prospective customers the same discounts their employees enjoy. The Circle of Addiction continues!

It pains me again to see a business return to using addictive discounting tactics to drive short-term sales. As a marketing doctor with Brand Autopsy, I’ve seen far too many businesses overdose on discounting. And once these businesses OD on discounts … they never seem to recover and regain the marketing vitality they once enjoyed.

I am begging readers of the Brand Autopsy blog to show tough love and confront this matter head-on. If you know anyone in the DaimlerChrysler Marketing Department, I hope you feel it in your heart to conduct a Marketing Intervention NOW . . . while we still have time. You can read the complete Brand Autopsy Marketing Intervention Guidelines here but the basic guidelines are posted below. Let’s work together to save our fellow marketers from the hellfire that awaits when discount addiction overcomes a marketer.

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While it is best to use a trained marketing interventionist to help you develop the intervention strategy, you can conduct the intervention yourself. The following Marketing Intervention Guidelines from the Brand Autopsy Discount Detox Center will help you design and conduct your intervention.

Bring together a minimum of three and maximum of eight people who are important to the business and to the marketer in particular. The best marketing intervention groups have a broad mix of people including some from outside the company such as customers and vendors.

Set up a planning meeting with all participants to discuss the intervention. Be very discreet in all your actions so as not to alert the suffering marketer.

Each group member is to write a letter to the addicted marketer listing how they may have helped to enable the addiction and all the negative consequences caused by the marketer’s addiction. Each letter should close with a statement asking the marketer to seek treatment for their addiction.

Rehearse the intervention with all the group members. And at this meeting, set a date, time, and place for the actual intervention to occur. You will also need to create a plan to bring the addicted marketer to the intervention as well as choose a treatment center. If the chosen treatment center is out-of-town, then you will need to make necessary travel arrangements.

The intervention group will need to identify objections the addicted marketer may use to avoid or postpone treatment and then formulate appropriate responses.

Plan to be at the intervention location 30 minutes before the addicted marketer is expected to arrive.

At the intervention, confront the addicted marketer by reading your letters aloud, editing out anger, blame, and judgment. Read the best, most heartfelt and tender letter last. (Usually a letter from a concerned customer cracks any addicted marketer’s wall of denial.)

After the intervention, call the admissions staff at the chosen treatment center and let them know whether or not the addicted marketer has agreed to treatment.

Collect all letters and send them to the addicted marketer’s counselor at the treatment center.

Click here to read the following sample Marketing Intervention Letter (.pdf).

Incentives are an Insidious, Confusing Carousel

During the New York International Auto Show this past week, Nissan’s CEO, Carlos Ghosn, made an impassioned plea to the auto industry to wean themselves from their addiction to discounts and incentives. Ghosn is quoted as saying, "Incentives are an insidious, confusing carousel that no one seems willing to get off.” He went on to say, "You'd be hard-pressed to name another industry so reliant on discounts." [SOURCES: NY Times article and CBS Marketwatch article]

Unfortunately, the discount addiction afflicting automakers hasn’t improved much since Brand Autopsy first made public the EDEO (Employee Discounts for Every One) Epidemic. While the EDEO discount programs may be dormant, they have been replaced by other dangerous discount deals. It has been reported the auto industry discounted, on average, $3,200 per vehicle sold in March 2006. (Oh my.)

Just maybe … this one courageous act by an auto executive will break the Circle of Discount Addiction that automakers are endlessly addicted to.

With Ghosn’s courageous words, the walls of denial are showing initial signs of crumbling, which may lead to finally breaking the Circle of Discount Addiction. Or, maybe the auto executives are too far down the destructive path of discount addiction that they cannot imagine operating in a business environment without it.

In an earlier post, I touched upon the difficulties discount addicted marketers face when trying to break the Circle of Discount Addiction …

"It’s very hard for the discount addicted marketer to maintain any semblance of a normal business life when he’s reached this point. Problems at staff meetings and at off-site business retreats start to intensify and clashes with the legal department over marketing verbiage in advertising collateral become more common.

Faced with these devastating situations, the discount addicted marketer makes a promise to stop using low price marketing schemes. The promise by the marketer may be sincere and perhaps the marketer has come to accept he has a problem and has a desire to stop. Unfortunately, the marketer goes into fiscal withdrawal soon after the last discount tactic expires and unable to withstand the pain, the marketer starts to use again.

Following the broken promises, the discount addicted marketer once again retreats deep into denial. He will use low price marketing schemes less, he says, but he doesn’t have to stop because he doesn’t really have a problem. The circle of discount addiction continues.”

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It pains me greatly to see an industry suffer so mightily from abusing low price marketing schemes. As a marketing doctor with Brand Autopsy, I’ve seen far too many businesses overdose on discounting. And once these businesses OD on discounts … they never seem to recover and regain the marketing vitality they once enjoyed.

GM is in Deep Denial

General Motors (GM) began its latest discount addicted ways in June with the announcement of its Employee Discounts for Every One (EDEO) pricing scheme. At the time, GM sincerely promised the discount would be short-lived and end on August 1. But GM broke its promise and extended the EDEO pricing scheme to September 6.

And now … GM is breaking its promise again. The automaker now tells us their EDEO pricing scheme will end on September 30.

The Brand Autopsy Discount Detox Center has seen this unfortunate marketing behavior before and believes General Motors is in DEEP DENIAL.

General Motors is addicted to discounting.

Addiction to any marketing activity is defined as being the continued use of marketing tactics despite repeated negative consequences. The Circle of Discount Addiction [see below] demonstrates the stages every marketer experiences when abusing low price marketing schemes.

When discount addicted marketers begin compulsively using low price marketing schemes they experience denial.

The meaning of denial is simple. The discount addicted marketer denies he or she is addicted to the marketing tactic in question. These marketers fail to grasp the dangers of working in a business environment where after the “HIGH” of a high volume/low-return sales cycle comes the “LOW” of a low-volume/low-return sales cycle.

Everybody around the discount addicted marketer knows what the problem is. Everyone that is, except the marketer.

If an addicted marketer does finally attempt to stop using the drug of discounting, he is likely to experience withdrawal symptoms.

In the case of low price marketing schemes, withdrawal without proper marketing supervision can be debilitating for the business, and in some cases, fatal to the brand. When a marketer tries to stop abusing discounting cold turkey, the fiscal withdrawal symptoms can be so painful and potentially devastating to their career that the marketer quickly returns to activating another round of deep discount marketing tactics.

Discount addicted marketers soon reach the point of maintaining their discounting habit. At this point, the marketer needs to constantly include a discount tactic in his marketing plans to feel “normal.” And at any given time during the fiscal year, the marketer has some level of discounting active in the marketplace. The marketer literally cannot function without it.

It’s very hard for the discount addicted marketer to maintain any semblance of a normal business life when he’s reached this point. Problems at staff meetings and at off-site business retreats start to intensify and clashes with the legal department over marketing verbiage in advertising collateral become more common.

Faced with these devastating situations, the discount addicted marketer makes a promise to stop using low price marketing schemes. The promise by the marketer may be sincere and perhaps the marketer has come to accept he has a problem and has a desire to stop. Unfortunately, the marketer goes into fiscal withdrawal soon after the last discount tactic expires and unable to withstand the pain, the marketer starts to use again.

Following the broken promises, the discount addicted marketer once again retreats deep into denial. He will use low price marketing schemes less, he says, but he doesn’t have to stop because he doesn’t really have a problem. The circle of discount addiction continues.

Obviously a circle has no beginning and no end. With effective treatment; however, the circle of discount addiction can be opened at any point and remade into an upward curve of recovery. The process is simple but the work is hard.

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adapted from the Circle of Active Addiction

The EDEO Epidemic

The Center for Marketing Disease Control & Prevention (CMDC&P) has just declared a Marketing Epidemic.

The Employee Discounts for Every One (EDEO) marketing virus is no longer contained to just automakers. CMDCP Fields Agents have reported numerous employee discount virus outbreaks affecting national, regional, and local retailers. The widespread outbreak of the EDEO marketing virus has forced the CMDC&P to declare a marketing epidemic.

However, this strain of the EDEO marketing virus has mutated slightly. The EDEO marketing virus affecting automakers lasted for months on end but this new strain lasts only weeks, sometimes just days, and is generally focused on select products only.

For example, FCMDCP Field Agents have filed the following reports:

CompUSA offered employee discounts on select laptop and desktop computers for only two-days

Bealls Department Store offered its customers a 30% OFF employee discount for one day earlier this month

Moana Nursery in Reno, NV, recently offered its 30% OFF employee discount to customers for five-days only

Phoenix AZ-based Condor Golf retailer is currently offering its customers employee discounts ranging from 10% to 30% OFF regular retail priced items
SOURCE | Wall Street Journal article

Short of mandating a moratorium on discounting, The Center for Marketing Disease Control & Prevention is urging all retailers to exercise extreme caution when designing marketing programs to increase sales.

While the CMDC&P is working on a marketing vaccine to eradicate the EDEO marketing virus, the Brand Autopsy Discount Detox Center is once-again making available its Marketing Intervention Guidelines (read below).

The following Marketing Intervention Guidelines from the Brand Autopsy Discount Detox Center will help you positively confront a marketer who is severely dependent and is unwilling or unable to see the severity of their addiction to discounting.

Bring together a minimum of three and maximum of eight people who are important to the business and to the marketer in particular. The best marketing intervention groups have a broad mix of people including some from outside the company such as customers and vendors.

Set up a planning meeting with all participants to discuss the intervention. Be very discreet in all your actions so as not to alert the suffering marketer.

Each group member is to write a letter to the addicted marketer listing how they may have helped to enable the addiction and all the negative consequences caused by the marketer’s addiction. Each letter should close with a statement asking the marketer to seek treatment for their addiction. [Sample Letter PDF]

Rehearse the intervention with all the group members. And at this meeting, set a date, time, and place for the actual intervention to occur. You will also need to create a plan to bring the addicted marketer to the intervention as well as choose a treatment center. If the chosen treatment center is out-of-town, then you will need to make necessary travel arrangements.

The intervention group will need to identify objections the addicted marketer may use to avoid or postpone treatment and then formulate appropriate responses.

Plan to be at the intervention location 30 minutes before the addicted marketer is expected to arrive.

At the intervention, confront the addicted marketer by reading your letters aloud, editing out anger, blame, and judgment. Read the best, most heartfelt and tender letter last. (Usually a letter from a concerned customer cracks any addicted marketer’s wall of denial.)

After the intervention, call the admissions staff at the chosen treatment center and let them know whether or not the addicted marketer has agreed to treatment.

Collect all letters and send them to the addicted marketer’s counselor at the treatment center.

Asian BOGO Flu Epidemic

Ian McKee, from the Power of Influence blog, commented on our Marketing Intervention Guidelines posting expressing his concerns about the discountitis epidemic in Singapore.

The Brand Autopsy Discount Detox Center is aware of the Asian BOGO Flu epidemic having read about it in the fictitious Journal of Meaningful Marketing. Our hearts go out to those customers, businesses, and marketers in Asia affected by this virulent strain of the far too common BOGO Flu.

The “Buy One, Get One Free” discount disease has been around for decades. The antidote we administer to defuse this discount disease is an accounting mindset change. Companies most susceptible to the BOGO Flu financially account for redeemed coupons at the cost-of-goods-sold (COGS) and not at full retail value. The financial impact to a company is considerably less when they account for discounts at the COGS level.

For example, suppose you are a marketer at an Espresso Café offering the following coupon: Buy One Latte (12 fl oz.), Get One Free (equal or lesser value). The COGS of preparing a 12 oz latte is around 30 cents while the retail cost is close to $3.00. If 1,000 BOGO coupons are redeemed, the financial hit for a company accounting for the coupon at the COGS level is $300 versus a much larger financial hit of $3,000 if accounted for at full retail value.

A $2,700 discount discrepancy for 1,000 redeemed coupons is serious money.

Once discount addicted marketers are made aware of this discrepancy, they realize the fiscal affect of their discount disease. Following completion of their discount detox treatment program, these marketers return to their companies and begin advocating accounting for any and all discounts at full retail value and not at the cost-of-goods-sold.

The Brand Autopsy Discount Detox Center will gladly share our marketing antidote to the Asian BOGO Flu epidemic with the Asian Business Health Organization (ABHO). Anyone have a contact at the ABHO?

Marketing Intervention Guidelines

We are humbled by the overwhelming response to the Brand Autopsy Discount Detox Center (B.A.D.D.C.). Since we announced the formation of the B.A.D.D.C. a few days ago, we have received inquiries from concerned businesspeople around the globe seeking treatment for discount addicted marketers.

As a public service, the Brand Autopsy Discount Detox Center is making available its Marketing Intervention Guidelines for concerned businesspeople wanting to conduct a marketing intervention.

A marketer who is severely dependent and is unwilling or unable to see the severity of their addiction to discounting needs a marketing intervention. In a marketing intervention, a group of concerned co-workers, marketers, and others confront the discount addicted marketer. Each person in the group writes a letter stating exactly how the marketer’s addiction to discounting has negatively affected their life. In this letter, they share their love and concern for the marketer and ask that they seek treatment. The marketer is told, in a loving, gentle and supportive way, they are not the problem, but the discount illness is the problem.

It is difficult for the marketer’s wall of denial to hold up under all of this love and most of the time, the marketer will agree to go into treatment. If the marketer refuses, the truth has still come out and this often leads to treatment at a later time.

While it is best to use a trained marketing interventionist to help you develop the intervention strategy, you can conduct the intervention yourself. The following Marketing Intervention Guidelines from the Brand Autopsy Discount Detox Center will help you design and conduct your intervention.

Bring together a minimum of three and maximum of eight people who are important to the business and to the marketer in particular. The best marketing intervention groups have a broad mix of people including some from outside the company such as customers and vendors.

Set up a planning meeting with all participants to discuss the intervention. Be very discreet in all your actions so as not to alert the suffering marketer.

Each group member is to write a letter to the addicted marketer listing how they may have helped to enable the addiction and all the negative consequences caused by the marketer’s addiction. Each letter should close with a statement asking the marketer to seek treatment for their addiction.

Rehearse the intervention with all the group members. And at this meeting, set a date, time, and place for the actual intervention to occur. You will also need to create a plan to bring the addicted marketer to the intervention as well as choose a treatment center. If the chosen treatment center is out-of-town, then you will need to make necessary travel arrangements.

The intervention group will need to identify objections the addicted marketer may use to avoid or postpone treatment and then formulate appropriate responses.

Plan to be at the intervention location 30 minutes before the addicted marketer is expected to arrive.

At the intervention, confront the addicted marketer by reading your letters aloud, editing out anger, blame, and judgment. Read the best, most heartfelt and tender letter last. (Usually a letter from a concerned customer cracks any addicted marketer’s wall of denial.)

After the intervention, call the admissions staff at the chosen treatment center and let them know whether or not the addicted marketer has agreed to treatment.

Collect all letters and send them to the addicted marketer’s counselor at the treatment center.

Click here to read the following sample Marketing Intervention Letter (.pdf).

The Brand Autopsy Discount Detox Center

Unfortunately, General Motors' discount detox didn’t last long. The automaker was to have ended its EDEO (Employee Discounts for Every One) pricing scheme on August 1. However, the urges and the cravings to discount were to strong for the company to resist. General Motors has decided to continue its addiction to discounting in order to increase sales. Yep, GM has again extended its EDEO pricing scheme.

It pains me greatly to see a business suffer so mightily from abusing low price marketing schemes. As a marketing doctor with Brand Autopsy, I’ve seen far too many businesses overdose on discounting. And once these businesses OD on discounts … they never seem to recover and regain the marketing vitality they once enjoyed.

So sad … so very sad.

That’s why I am introducing the Brand Autopsy Discount Detox Center.

The goal of the Brand Autopsy Discount Detox Center is to rid businesses of toxins accumulated by rampant abuse of discounting pricing strategies. The first step of discount detox is immediate withdrawal from any and all discounting activities. Once a business has stopped using discounts, fiscal and behavioral withdrawal symptoms may follow.

The nature and severity of the withdrawal symptoms vary greatly depending on the discounting activities used as well as the frequency of use. These days there are very few businesses using one discount tactic exclusively. It is common to see businesses in discount detox that abuse couponing, zero-down/zero-percent financing deals, and rebate programs. Discount detox is a process that applies to any business addicted to using low prices to drive sales.

Discount detoxification is performed in many different ways depending on where a business decides to receive treatment. As a highly trained detox facility, the Brand Autopsy Discount Detox Center incorporates counseling and therapy during all phases of the detoxification process to help with the fiscal and behavioral distress afflicted businesses may experience.

Detoxification at the Brand Autopsy Discount Detox Center covers all aspects of withdrawal and purification from discounting activities. The removal of residual discount tactics is a key goal in the Brand Autopsy’s proprietary discount detox process. Without this process, residual discount tactics can remain in a marketing department of a business and cause cravings for years after discounting activities have supposedly ceased. A vital step in a successful discount detox is flushing out these accumulated toxic residues so that the business no longer experiences unwanted adverse effects from the discounts they have used.

If you know of any business suffering from addiction to discounting, please consider contacting the Brand Autopsy Discount Detox Center – we are here to help.

EDEO is the new EDLP

We’ve all heard of EDLP -- Every Day Low Prices. Now, thanks to General Motors, we have EDEO (Employee Discounts for Every One) to add to our marketing vocabulary.

Faced with sluggish sales and rising inventory, General Motors decided to ditch its four year-old discount strategy of cut-rate financing combined with huge rebates for a less convoluted approach. Beginning in June, GM began offering customers the same price its employees pay for a new GM-made car.

GM’s Employee Discounts for Every One program offers customers an attractive selling price for a car anywhere from 3% to 6% below the dealer’s invoice. No haggling necessary with the EDEO pricing strategy since customers are able to buy GM cars at about the same price the car dealership does. (Car dealers are able to eek out a profit because GM will rebate dealerships around $1,500 per vehicle sold.)

For the month of June, GM increased sales by 47% and boosted its market share nearly 7% from the month prior. (Yowza!)

I cannot argue with the success of the EDEO program. However, all GM has done is trade the deep discounting of low financing and big rebates for a different discount with a different, albeit more compelling name.

For long-term vitality, General Motors and the entire car industry must overcome their addiction to discounting. Profit margins will continue to suffer, the equity of brands will continue to erode, and worst of all … consumers will continue to be trained to only buy a car on deep discount.

Seth Godin said it best in PURPLE COW, “Cheap is the last refuge of a product developer or marketer who is out of great ideas.”

No matter if you sell a car under an EDLP or EDEO pricing strategy … it’s still going the cheap route to motivate people to buy it. Aren’t we, as marketers, too smart, too savvy, and too damn creative to fall for this low price trap?

(Please say yes. Otherwise, I may have to change my livelihood.)

SOURCES:

USA TODAY | article | 06.29.05

Wall Street Journal | article (sub req’d) | 06.07.05

Wall Street Journal | article (sub req’d) | 06.20.05

Wall Street Journal | article (sub req’d) | 07.05.05

Austin American-Statesman | article (reg req’d) | 07.06.05

Wall Street Journal | article (sub req’d) | 07.06.05