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VEHICLE FOR GROWTH

When Henry Ford started making cars, few people had them.
Ford knew that cars were only bought by the rich.
So obviously his strategy would be market growth, not market share.
In 1908, the average car cost over $2,000.
So he launched the Model T costing just $800.
People who’d never even considered owning a car could now afford one.

Ford aimed to grow the market amongst non-owners.
The cheaper he made the cars, the more people could buy them.
It became a constant struggle to get costs down, and down.
By 1911, he realised production was one of the main costs.
If he could make the cars faster he could sell them cheaper.
But current assembly techniques were just too slow.
Ford needed to think creatively.
Think in a way other car manufacturers weren’t thinking.
So he looked outside factories and industry.
He looked at meat-packing plants.
In meat-packing plants the carcasses are loaded onto an endless belt.
The employees stand where they are while the carcasses come past.
One man takes out the innards, that’s all he does all day.
One man cuts off the limbs, that’s all he does.
One man separates the various cuts of meat, that’s all he does.
Nobody has to move, they do one simple job over-and-over.
Henry Ford thought, what if I did that in reverse?
Instead of using a conveyor belt to take something apart, I could use it to put a car together.
The Ford production line was born and the speed of making a car was halved.
Along with the cost, which Ford cut to to $360.
Model T sales rose to a quarter of a million.
Another huge cost in auto manufacturing was employee churn.
The work was dirty and badly paid.
In one year, Ford alone hired 53,000 different staff for 14,000 jobs.
This meant the constant cost of retraining, plus the lost production.
Again Ford needed to think creatively.
And in 1914, Henry Ford did the unthinkable.
He doubled his employees’ basic wage from $2.34 to $5 a day.
Every other manufacturer thought he was insane.
But none of Ford’s employees now wanted to leave.
He saved the cost and the time of constant retraining.
And, as Ford explained, he turned his 250,000 workers into customers.
They could all now afford to buy cars.
And the one car at a price they could all afford was the Model T.
By 1916, Ford sold half a million Model Ts.
By 1922, he cut the price to $269 and had half the entire market.
By 1927, when the Model T finally stopped production, he had sold fifteen million cars.
Henry Ford had turned America into a country of car owners.
He saturated the country, and the market, with automobiles.

He not only built the cars, he built the market.

 

 

 

DON’T TAKE IT SO SERIOUSLY

Adam Garone is from Melbourne.
In 2003, he was having a drink in a pub with his mates.
They were laughing about ridiculous 1970’s fashions: huge platform shoes, flared-trousers, flower-pattern shirts, long droopy moustaches.
But however ridiculous the fashion was, it always made a come back.
Except moustaches.
Sure, people grew beards, or goatees, or soul-patches.
But old-fashioned moustaches just looked too ridiculous.

Then, as things will over a few beers, this ended up as a challenge.
They challenged each other to grow moustaches.
When their other mates heard, they wanted to join in, too.
So Adam organised it amongst thirty of his friends.
He made rules, turned it into a race, and had prizes for the best and worst moustaches.
The main rule was, see what you could grow in a month.
The competition was such a success they decided to do it again.
This time they chose November.
And they collapsed the words ‘moustache’ and ‘November’ together.
And renamed it Movember.
But rather than waste it, Adam decided to do it for a charity.
Raise money by getting people to sponsor the moustache growers.
And because it was moustaches, it would have to be a male charity.
He found prostate cancer killed as many men as breast cancer killed women, it was a perfect fit.
Woman had lots of sponsored fun-events for breast cancer.
This would be the first sponsored fun-event for prostate cancer.
So he met with the prostate cancer charity and asked if Movember could partner with them.
They said no.
They said they wanted to be seen as a serious charity and such a silly stunt could make them look trivial.
That year Adam Garone got 450 men to grow moustaches and raised $54,000.
Which he donated to prostate cancer research.
The next year he got 9,000 men to grow moustaches and they raised $1.2 million.
Which he donated to the same charity.
The year after that, 56,000 men grew moustaches and raised $6.7 million.
By 2009, 450,000 men had grown moustaches and raised $77 million.
By 2011, men from 14 different countries had grown moustaches and raised $126 million.
Now, that very same prostate cancer charity that refused to partner with Movember were knocking on his door, ringing his phone, writing emails, desperate to be partners.
Movember became so huge that Adam Garone had to give up his day job to run it.
None of which would have happened if he’d listened to the people running the charity.
Because what they knew about was conventional wisdom.
But Adam Garone didn’t know about conventional wisdom.
He knew prostate cancer needed research, and research needs money.
And how you raise money is by lots of people joining in.
And people want to join in with things that are fun.
So, having a laugh wasn’t such a bad place to start after all.
By 2014, Movember had raised $300 million worldwide to fund research into prostate cancer.

That’s a lot more than the people who wanted to be taken seriously.

I HEART MEMES

Susan Blakemore wrote ‘The Meme Machine’.
She says a meme isn’t simply something that occurs on the Internet, like LOL-cats or hashtags.
In Wikipedia it’s defined as follows:
“A meme acts as a unit for carrying cultural ideas, symbols, or practices that can be transmitted from one mind to another through, writing, speech, gestures, rituals, or other imitable phenomena.”
Put simply, a meme is something that catches on.
Susan Blackmore gives an example of a meme in everyday life.
She shows a photo of a toilet in a backpacker’s hostel in Malaysia.
The toilet is very basic of course, tatty, well worn, but clean.
We don’t notice anything unusual until she points out the toilet roll.
The corners of the first sheet have been folded over.
She shows various photos of the same thing, the first sheet of toilet paper with the corners folded.
In a hostel in Shanghai, in a toilet on a Japanese train, in an outdoor toilet in Thailand,
Why is it happening everywhere, what does it signify?
Well to most of us it signifies that we will be the first person to use that toilet since it was cleaned.
But when did that become a sign?
Personally, I first noticed it several years ago.
At home, we had a cockney cleaning lady called Carole.
Her sons paid for her to have a holiday in a nice New York hotel.
Carole noticed that every day after the cleaning staff had finished, they folded the corners on the first sheet on the toilet roll.
Carole had never seen that before.
But she liked it and remembered it.
She thought it looked professional even though it cost nothing.
When she came back, she began doing it to our toilet rolls.
It was Cariole’s way of signifying that she’d done her job: that room was now clean and ready to use.
I didn’t know it had caught on until I saw Susan Blackmore’s talk.
But that’s exactly how a meme works.
No one tells us what it means, but we see it and we get it.
We like it so we use it.
Then, other people do the same and it gets into the language.
Without ever being explained, or discussed, or taught.
Another meme would be the heart symbol.
We see it everywhere, especially on Valentine’s Day cards.
But in medieval times it was a heraldic device used on shields and banners.
At some point it became the universal symbol for love.
Then it was carved into trees.
And now, it even substitutes for the word itself: “I (heart) NY”.
The extended middle finger would be another meme.
It’s believed to be an ancient Italian gesture, indicating homosexuality.
Immigrants took it to New York with them.
It was adopted as a universal insult and spread across America.
And spread, via American films, across the world.
That’s what a meme is, a symbol that catches on and communicates.
That’s how semiotics works, that’s how language works.
That’s how all communication works.
If we want our work to catch on, we need to study memes.

Not assume it’s merely an Internet phenomenon.

BIG DATA v SMART DATA

A while back, a man went into a Target supermarket in Minneapolis.
He asked for the manager.
He said “I find this offensive. Your store has sent this leaflet, personally addressed to my teenage daughter.
Coupons for maternity clothing, nursery furniture, baby-clothes, baby milk, diapers.
My daughter is still in school, what are you trying to do, encourage her to get pregnant?”
It seemed like a mistake so the manager apologised.

A week later the manager still felt bad, so he called the man to apologise again.
This time the man was sheepish.
He said “Ah, there have been some things happening at home that I didn’t know about. My daughter actually was pregnant and she hadn’t told us”.
How did that happen?
How did Target’s mailing system know the daughter was pregnant before she even told her parents?
Like most stores, Target has an enormous amount of information on its customers’ purchases.
But none of that data is useful unless you know what to do with it.
So in 2002, Target hired a statistician called Andrew Pole.
Most customers’ shopping habits are well-formed and hard to change.
The only time they are vulnerable is during lifestyle changes.
Graduating college, moving house, changing jobs, marriage or divorce.
And the biggest lifestyle change of all is having a baby.
If a store can get pregnant customers to buy their baby goods, they’ll buy everything else there too, just for convenience.
But if they wait until the baby is born, it’s too late.
Because they’ll be bombarded with offers from all the other stores.
So Target needed to identify pregnancies before anyone else.
Andrew Pole spotted 25 purchasing changes during the various stages of pregnancy.
For instance: around the third month, women switch from scented soap to scent-free soap.
Around the 4th month, they begin buying calcium, magnesium, and zinc supplements.
Around the 8th month, they begin buying large packs of cotton balls and hand-sanitizers.
But this specific targeting created a problem.
Women began to feel uneasy about Target knowing so much about their private life.
They felt they were being spied on.
And this is where big-data needed creative marketing.
Andrew Pole disguised the contents of the leaflets they sent out.
They would still be full of baby-goods, but now there was a lawnmower next to the diapers, and a wineglass offer next to the baby clothes.
Lots of irrelevant offers amongst the baby-goods.
Now the women didn’t think they were being spied on.
Now they thought they’d spotted what they wanted in a leaflet full of lots of other money-off offers.
They weren’t interested in the other offers, but that didn’t matter.
They were just there to disguise the real offers.
Thanks to Pole’s statistical analysis, Target sales increased by 50%.
From $44 billion, when he was hired in 2002, to $67 billion by 2010.

We don’t need big data, we need smart data.

SHAKE THINGS UP

BBH won the Audi account, so John Hegarty went on a factory visit.
All car factories are pretty much the same.
Robots moving body panels around, partially assembled cars on production lines, men tightening screws with airline power tools.
A production line is a production line.

Looking for something different, John noticed an old poster on the wall, it featured the line VORSPRUNG DURCH TECHNIC.
John asked the guide what it meant in English.
The guide said it meant “Progress through technology”.
Something clicked in John’s head.
It wasn’t Audi’s marketing strategy, but somehow it just felt right.
Feelings are something we’re taught to beware of, they are random and subjective.
But John began to wonder what it was he liked about this line.
Why did it feel so right for Audi?
And he unpacked his intuition and inspected it.
Audi was German.
But nobody in the UK knew that.
If asked, everyone thought it was Scandinavian or Belgian.
John felt, rather than thought, this was a massive opportunity.
Audi was a German car but nobody knew it.
German cars had massive appeal for precision engineering, reliability, and quality.
Names like: Mercedes, BMW, Porsche, Volkswagen, commanded a premium.
With a few German words he could immediately brand Audi as a German car.
And John decided to put that line on the end of all the ads.
Of course he met a lot of resistance internally, from the suits.
A strap line that no one could understand made no sense, and anyway it wasn’t on strategy.
But John insisted on presenting it to the client, John Mezzaros.
Who said he understood and liked it, but he would have to research it: company policy.
So the line was researched and of course it failed.
Not merely because no one understood it.
But at that time, thirty years ago, people still remembered the war.
They didn’t like the idea of German language appearing on advertising.
So the line failed in research.
But then John Mezzaros showed that he was a different sort of client.
He liked the fact that it failed in research.
More accurately, he liked the reason it failed in research.
He said that unless they did something dramatic, things would stay as they were.
He said they needed to “shake things up”.
He accepted John Hegarty’s reasoning that Audi needed to be seen as a German car.
This was surely the highest profile way to do that.
With a line that would command attention by being controversial.
A line that would create debate, create free media, and lodge Audi, once and for all, in everyone’s mind as German.
So because of the two Johns, Hegarty and Mezzaros, that became the end line on every Audi press ad and commercial.
Audi became known for all the qualities associated with German cars.
Value perception went up, prices went up, sales went up.
And Audi is still BBH’s first and most successful client.

Great clients get great advertising.

ENTENTE CONCORDIAL

In 1977, Concorde began flying London to New York.
The big benefit was flying at double the speed of sound, more than twice as fast as any airliner.
So you got there in half the time.
The problem was Concorde was very expensive to run.
It was losing money.
It had been financed by the government and, as usual, they were looking for ways to cut costs and save money.
So they decided to scrap Concorde.

But British Airways didn’t want Concorde scrapped.
Concorde had become the symbol of their superior status.
Whether or not you flew on it, simply having it made BA the Rolls Royce of airlines.
They thought Concorde was vital to their brand.
So BA bought the Concordes from the government.
But they couldn’t carry on running them at a loss.
Obviously, they had to find a way to make them pay.
The best place to start is always information: researching the market.
And they found something that certainly wasn’t obvious.
They looked at who bought the tickets, and how they were bought.
Of course it wasn’t tourists who flew Concorde.
It was senior business people, for whom time was important.
But they didn’t buy the tickets themselves, their PAs booked it.
The insight was when the research was carried out separately, among the PAs and their bosses.
One of the questions asked was what they thought the cost of a ticket on Concorde was.
The PAs got it right of course, they booked it.
But the bosses all got it wrong.
They thought a flight on Concorde cost many times more than it actually did.
And they were perfectly willing to pay it, they were interested in saving time not money.
So British Airway decided they could put the prices up.
And when no one murmured, they put them up again, and again.
Still no one complained.
If their bosses insisted on Concorde, the PAs weren’t going to argue.
And their bosses weren’t going to save few quid by flying the slow, old-fashioned way with tourists.
The more it cost the more it represented a luxury service.
The sort of thing a top businessman needs to do his job properly.
Like a chauffeur-driven limo.
Something to separate the movers and shakers from the hoi polloi.
And of course, extravagant cost represented exclusivity.
This is called the Veblen effect.
Flying Concorde became a club, something they were proud to be in.
And so, for the very rich, Concorde became the way to travel.
Concorde began operating more and more profitably.
When BA first bought them from the government, the fare was pegged at the cost of first class on a normal airliner, £600.
Within a few years it had risen nearly tenfold, to £5,400.
It made Concorde more popular than ever.
Cheaper isn’t always the right way to go, chasing volume.
Yes, your income must cover your overhead or you go out of business.
But that doesn’t always mean cutting costs.

It might mean the opposite.

ENERGY BEATS TALENT

Aitthipat ‘Tob’ Kulapongvanich was a teenager in Thailand.
Tob had started a small business selling dried seaweed.
Everyone loved it, but he needed distribution to get trial.
How to get it?
Then he happened to see a TV programme, an American businessman was talking about his success.
He said the secret was a strategy of gorilla marketing.
And a lightbulb went off in Tob’s head, that was it: gorilla marketing.
In the town where he lived were lots of 7-Eleven shops.
Sometimes even two on the same street.
If he could get distribution through the 300 branches of 7-Eleven, he would be like a big gorilla, distributing his seaweed to everyone.
He managed to see the 7-Eleven buyer, Mrs Pu.
He persuaded her to try his seaweed, she said they would take it, on one condition.
They needed 400 boxes to distribute to the 3,000 branches.
This was a shock for Tob.
3,000 branches? He had thought they only had 300 branches.
The most boxes he could produce in a month was 280.
But he knew he must behave like a gorilla to do gorilla marketing.
So he said he’d do it.
The effort nearly killed him, but he and his staff just made it in time.
Then he visited as many of the stores as he could.
His seaweed depended on trial.
But it was just stacked up on the shelves, it wasn’t getting trial.
Tob decided, in food, the cheapest form of advertising is free trial.
So he began giving away free samples, but only to women.
If he gave it to men, they’d just eat it.
But if he gave it to women they’d share it, and they’d talk about it.
Reaching the most people possible, that was thinking like a gorilla.
And Tob’s gorilla marketing worked.
In 3 months, 7-Eleven sales went from 600,000 Baht to 2 million Baht.
Tob moved to a bigger factory, like a gorilla would.
Sales grew from 10 million Baht to 250 million Baht.
And Tob began to export to over thirty countries.
Including the UK, the USA, China, Mexico, Holland, Vietnam, Korea.
Sales are now 2 billion Baht a year, and he has 2,000 employees.
All thanks to a lecture he heard on gorilla marketing.
Just one small point.
When Tob heard the lecture he got it wrong.
It isn’t gorilla marketing, it’s guerrilla marketing.
They sound the same but mean completely different things.
Guerrilla comes from the Spanish word ‘guerra’ meaning war, and ‘guerilla’ means a little war.
Guerilla tactics are about doing the things the big guys can’t.
Guerilla marketing is about speed, agility, surprise, innovation.
Not about behaving like a gorilla.
But Tob didn’t know that.
He believed gorilla marketing was the secret, he believed it and it worked.
It worked because it gave him energy, and belief, and passion.
See, it’s not important to learn the correct things.
It’s not important to memorise what’s in marketing books.
It’s not important to be right.
It’s important to be excited and inspired.

Energy beats talent.

ENOUGH WORDS

In 1895, Emily Davison got a first class degree at Oxford.
Except she didn’t.
Because women weren’t allowed to graduate.
There weren’t any jobs for women, so they didn’t need education.
In fact the only job Emily Davison could get was a governess.
A sort of posh nanny.
Well, children were all women’s brains were capable of understanding.

Emily Davison wouldn’t accept this.
So in 1906 she joined the women’s suffrage movement.
Suffrage meant the right to vote, these women were ‘suffragettes’.
The suffragettes began with peaceful protest.
Writing petitions, interrupting meetings, writing letters, making speeches, but it was all words.
It wasn’t much more than a nuisance, it could safely be ignored.
It had been ignored for forty years.
Emily Davison knew being ignored was the worst possible result.
The cause had to be taken deadly seriously.
So she attacked politicians, she threw rocks at the Prime Minister’s car.
She refused to run or hide, she forced the police to arrest her.
When they arrested her she refused to eat.
She thought the cause needed a martyr.
If she died in gaol, that would highlight the cause of women who only wanted justice and equality.
But the authorities wouldn’t let her die in prison.
They decided to force-feed her.
When she heard them coming she smashed all the furniture in her cell and used it to barricade the door.
So they used hosepipes to flood her cell with ice-cold water.
She was willing to drown, she waited for the end.
But while she did they broke down the door.
They overpowered her, strapped her to a bench, and proceeded to force feed her.
A rubber tube forced into her mouth or nose.
The tube forced down her throat.
A funnel put in the other end of the tube and a cabbage-like liquid poured into it.
Meanwhile, she is gagging, choking, and vomiting.
For suffragettes this practice was like a brutal rape.
Emily Davison was force-fed forty nine times this way.
It was clear they weren’t going to let her die in prison.
So, when she was eventually released, Emily Davison got a train to Epsom for the Derby.
The Derby isn’t just a horse race, it’s almost a national holiday.
The entire country watches it, and everyone bets on the horses.
And this would be the first time the Derby had ever been filmed.
It would be seen all over the British Empire and the rest of the world.
The King and Queen would be there, their horse was running.
And, in the middle of the race, Emily Davison stepped out onto the course and ran directly in front of the King’s horse.
And a ton of thundering horseflesh smashed into her and trampled her like a rag doll.
Her skull and spine were crushed, her insides were mangled.
The suffragettes had their martyr.
They decided she would have a huge funeral procession.
The government banned it.
But hundreds of thousands of people lined the route.
And even the police, sent to stop it, took off their helmets and bowed their heads in respect.
Within five years, women were given the right to vote.

There is a lesson for us on Emily Davison’s headstone.
It simply reads “DEEDS, NOT WORDS”.

UNINTENDED CONSEQUENCES OF INTENDED ACTIONS

Rory Sutherland says the best way to make people perform charitable acts is not to appeal to their philanthropic nature.
It’s to appeal to their self-interest.
In other words: never mind anyone else, what’s in it for me?
Understanding that’s how people work is predatory thinking.

A great example of this is Arunachalam Muruganatham.
He lived in a small village in India.
He wasn’t educated but had an enquiring mind.
One day he saw his wife hiding something behind her back.
He asked what it was and found it was some dirty, bloodied rags.
The result of her menstruation.
In rural India this is a private, almost shameful, thing.
Not the thing people speak about, especially between men and women.
But Muruganatham had a simple, logical brain.
He asked why didn’t she buy the sanitary pads he’d seen in the shop?
She said they couldn’t afford them.
So he decided to make them himself, how hard could it be, they were just cotton after all.
He asked his wife to try the ones he made.
Which is when he found out that menstruation only happens once a month.
So he went to the local hospital, where they train female doctors.
He thought these women would at least be able to discuss it.
But he was wrong, and his entire village began calling him a pervert.
The gossip caused his wife to leave him.
So he got the bladder from inside a football, filled it with goat’s blood, and decided to simulate menstruation himself.
He wore the pad and the bladder, and squeezed out the blood as he walked or cycled around.
Even his mother shunned him, the villagers thought he was possessed by evil spirits.
But worse, his pad wasn’t absorbing blood.
He contacted the makers of the sanitary pads and found the cotton needed cellulose added to it to become absorbent.
He tracked down the machine for doing this, but it cost a fortune.
Out of the question.
So he designed and made his own machine, out of wood and wire.
Powered by a foot-treadle, like an old-fashioned sewing machine.
But getting local women to even discuss using it was impossible.
Very few women in rural India used sanitary pads, most used rags, or leaves, or ash.
So many reproductive diseases came from poor menstrual hygiene.
Yet even this wasn’t sufficient to get Indian women to discuss making sanitary pads.
But money was.
These women had to work, and feed families, for next to nothing.
Muruganatham explained that the cost of sanitary pads in the shops was SIXTEEN TIMES the cost of making them.
If they sold the pads for double, triple, even four times what it cost to make them, anyone buying them would still save 75%.
Money was an argument they could understand.
That was a discussion they weren’t ashamed to have.
And women happily began using his machine to make sanitary pads.
Now he has a thousand machines working in villages around India.
Each machine giving work to ten women.
Each woman making money to feed her family, to educate her children.
Eventually he was given an award by the President of India.
Seeing this, his wife, his mother, and his village apologised.
But Arunachalam Muruganatham doesn’t make a lot of money from his machines.
He says money isn’t the point.

He says “It isn’t poverty that kills. It’s ignorance that kills”.

SIMPLE DOESN’T LIE

John McGovern first played for Brian Clough at Hartlepool.
John McGovern liked to dribble the ball past opponents.
He kept it under close control.

One day, in training, Brian Clough called the youngster over to the touchline.
He dropped a ball at his feet.
He said “Run with that ball son, over to the corner flag, round the flag, and back here as fast as you can.”
McGovern did as he was told.
Keeping the ball ahead of him but always in control.
He kept it tight, all the way across the field and back to Clough.
Clough picked up the ball.
He said “Right now do it again without the ball.
Run over to the corner flag, round it and back here as fast as you can.”
McGovern didn’t see the point, but he knew enough not to argue.
He ran as fast as he could.
Arms pumping, legs pounding, feet flying.
He was round the flag and back in no time.
He waited, puffing.
Clough said “Now which was faster, you running with the ball or without the ball?”
McGovern said “Without the ball of course.”
Clough said “Right, now I want you to remember that because that’s how I want you to play.
Pass the fucking ball and run, don’t dribble it.
Pass the fucking ball and run. Have you got that?”
McGovern said it was the best lesson he learned in his career.
Embarrassingly simple, maybe.
Sure, Clough could just have said it.
But it stuck because it hadn’t just been said, it had been demonstrated  with all the subtlety of an air raid.
And that’s why it stuck with McGovern for the rest of his career.
And what about the rest of his career?
McGovern said he owed his career to Clough
He followed Clough when he went on to manage a little Second Division club called Derby.
Under Clough, Derby were promoted and won the First Division, the equivalent of today’s Premiership.
Making Derby the best team in England.
McGovern followed Clough when he went to Nottingham Forest.
Like Derby, Nottingham Forest were in the second division.
Like Derby, under Clough, they won promotion.
Like Derby, under Clough, they won the First Division.
Which made Nottingham Forest the best team in England.
Then little Nottingham Forest went on to win the European Cup.
Making them the best team in the whole of Europe.
And the next year Nottingham Forest won the European Cup again.
Making them the best team in all of Europe, two years running.
As McGovern said, Clough liked to keep it simple.
Because everyone understands simple.
Simple sticks in the memory
That’s why simple works.
Stupid people think complicated is clever.
Smart people know better than that.

They know you have to go beyond complicated to get to simple.

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