Bright Ideas
A Holistic View
by Don Fogle on 11/04/11
Kraft Foods’ Senior Vice President of Marketing, Strategy, and Communications. The article, The Agency Sea Change at Kraft Foods, covers how the company has shifted nearly 20 brand assignments in recent years – primarily away from monolithic ad agencies to smaller ones.
While few of us have the budget of Kraft Foods; I think many of Ms. Anderson’s insights are relevant to marketing professionals employed by a company of any size, whether B2C or B2B.
When Anderson was asked what she seeks when doing business with a new shop, her response was noteworthy. A holistic view.
Based on my experience and interactions with fellow marketing professionals here in Austin, Texas, that is exactly what today’s marketing leaders need. A trusted partner who will come alongside them and be part of the team while developing and implementing creative ideas and integrated programs which generate awareness, grow sales and build strong brands.
In the article, Anderson emphasizes the importance of investing time to work with their agency partners in developing winning strategies that get results. Based on your experience, what is the best advice you would offer to get the most out of a client-agency relationship?
Netflix Dilemma Provides Great Opportunity for Marketing Discussions with Senior Managers
by Don Fogle on 10/26/11
Here is a headline you haven't seen in any business publication, lately: “Netflix Retains more than 96% of Customers in Q3”. Remarkably, it’s a fact. Yet, based on the media buzz, you would think the Netflix ship has already sunk. Despite price increases and several strategic and PR missteps, the company held onto more than 96% of their customers per their recent quarterly results. See page 1 of the Netflix Q3 letter to shareholders for details.
Further, Netflix has more than doubled their US subscriber base in the past two years, from 11.1 to 23.9 million. And I imagine many companies will gladly implement steep price increases if they were able to retain 96% of their customers in the process.
Yet, Netflix has stumbled badly and created a firestorm in their quest to boost profitability. Surely, if they had to do it over again, Netflix management would choose a different business and communications strategy. The company lost more than 800,000 customers in Q3 alone. That’s 800,000 angry individuals, sharing their displeasure with most anyone who will listen. According to The Wall Street Journal today, Netflix $4.2 billion market cap is approximately a quarter of what it was in July. Ouch. (The news media has done a fine job of reporting on the company’s various actions and for the latest news you can visit any number of sites, including CNBC.)
As a marketing and communications consultant in Austin, Texas, I think this hot topic raises several questions worth pondering. But first, an important disclaimer. I am not a Netflix customer, investor or advisor, so I am sharing my thoughts as an outsider.
While Netflix is headquartered in Los Gatos, California, the buzz surrounding the company’s current public relations and investor relations situation raises several important questions for Austin-area business leaders.
- Am I keenly focused on my customer’s needs and perceptions of my offering?
- How will a change in strategy or pricing impact the Voice of the Customer?
- Do I have a sound process in place for launching new product offerings?
- How can I increase profitability without infuriating my customers?
- What unintended consequences may result from my business decisions?
- In the wake of launching a new strategy, how will social media and the news media influence customer and investor confidence?
- Am I surrounding myself with knowledgeable marketing, communications and PR advisors?
There are many excellent business and management strategy books out there. I have read many of them and I imagine you have as well. Personally, I often turn to the Bible for wisdom as well. You may wonder what the Bible has to do with this present-day marketing dilemma. However, Proverbs 15:22 teaches that “Plans fail for lack of counsel, but with many advisers they succeed.” (NIV).
My takeaway from all this is that in today’s business environment, companies need to move fast. However, without trusted advisors helping you refine and implement your strategies, things can go wrong in a hurry. We should all learn that if a high-flying company with loyal customers and happy investors such as Netflix can find itself in a tight fix, anyone is vulnerable.
At Shine Strategic, we strive to help businesses develop and implement sound marketing strategies. If we can be of service to you and your team, please contact us.
In closing, I have a question for you. If you were consulting with Netflix management on next steps, what advice would you offer?
