Positioning for Professionals - Exploding Myths Part 2

What is Papa John's doing? Or is that Papa Johns without an apostrophe?!? Mark and Lorraine dive in on this topic before they get to Positioning for Professionals, a book by Tim Williams that discusses how positioning works for professional service firms. The positioning duo walks through the next six myths about positioning that many service firms claim keep them from differentiating themselves. This episode covers the next six myths: 5) Bigger is better;  6) Brand is only about advertising; 7) There are general markets; 8) Branding costs money; 9) All growth is good growth; and 10) Efficiency is king. The positioning gurus explode these myths with a few brand examples, a tad bit of wit, and some critical maxims to keep with you as you operate your organization. 

Spend 30ish with Mark and Lorraine as they talk all things marketing, advertising, and positioning.

Transcript

Mark Vandegrift
Welcome to the latest episode of the Brand Shorthand Podcast. I'm your host, Mark Vandegrift, and with me is the amazon of advertising, Lorraine Kessler. Lorraine, how you doing today?

Lorraine Kessler
All five foot four of me. I was considered an Amazon in my family of small Italians. 

Mark Vandegrift
It's what's in your brain about positioning Lorraine. That's what made me think about that.

Lorraine Kessler
It goes to say that all positions are relative, Mark.

Mark Vandegrift
That's great. Well, we are back today to continue our topic of exploding myths in the area of marketing, advertising, and positioning. And Lorraine, I just wanted to ask before we get going on our topic here, did you hear about John Schnatter of Papa John's Pizza and what he recently did?

Lorraine Kessler
Yeah, and he and the board, whoever kicked him out from being CEO a few years ago, in the wake of when he stepped into the NFL controversy over kneeling players, John did not like that and was very outspoken about it. Of course, Papa John's back then, what was that about 2015, I think? 

Mark Vandegrift
I think ‘18.

Lorraine Kessler
‘18, okay. Was very public about his disapproval of that. And they, of course, Papa John's advertised quite a bit with the NFL. And that became a big controversy that he took aside. And so the board forced him to kind of step down as CEO. And now it's continuing with some other claims and some other snafus over racism and some things that he said. And they've gone back and forth. 

The problem here is, aside from the political issues, is what we just talked about, I think in a couple of podcasts ago about like when the CEO of Kellogg's, right, basically told people dealing with rising food prices and having 11% more of their money going to try and feed their family, we'll just let them eat cereal for dinner, you know. 

Mark Vandegrift
Let them eat cake!

Lorraine Kessler
Which, you know, yeah, so I could just imagine being the brand manager at Kellogg. I don't need enemies when my CEO says things like this. 

When the personnel, you know, Papa John's better ingredients, better pizza, had one of the clearest positions, Jack Trout, our friend and mentor gave it to them in a meeting with John early on. And they have had tremendous success with that differentiating idea. Very simple idea, very believable idea, not hard to communicate, not hard to understand. 

But over the years, John, is allowed success to go to his head and he's become kind of the brand.

They don't want to hear this stuff. They really don't care about it. So it's a total distraction. And it's just another example of, you know, let's just shoot ourselves in the foot and have our CEO do it for us, right?

Mark Vandegrift
Yep. Well, I think you can definitely handle that if the CEO rides off into the sunset within the good graces of its audience, like an Orville Redenbacher, then you can kind of immortalize him. But in this case, I don't think that's going to happen. Did you hear what they did to change the name? They took the apostrophe out of Papa John's to distance themselves from John.

I'm like, what does an apostrophe have to do with anything?

Lorraine Kessler
Yeah, yeah. Like there's plural Johns, like a whole family. It's not one person. It's not one John. It's a whole family of Johns. I saw that. I thought it was a typo. And the fact that they even announced it as a kind of rebranding is just, it's mind-numbing. Mind-numbing. Big brands, big trouble. If Jack Trout right now is just rolling in his grave. I know.

Mark Vandegrift
Well, I'm sure he and John would get in a room and just, they, they’d probably kibitz and say, this is the worst thing in the world, but John doesn't have anything to do with it anymore. 

So who knows, but let's get to our topic here of exploding positioning myths. the first last week was the better company product or service wins. And then number two, the myth, the second myth was: my business is a commodity which is also just a myth and untrue. 

Lorraine Kessler
All of which we're debunking. These are all debunked.

Mark Vandegrift
Yes, all of which were debunking. Myth number three was: competition is to blame for commoditization, which is not true. And then the fourth myth we covered last week and exploded isL “we're not a brand.” And as we discussed, everyone, every company, every service, everything is essentially a brand. Once it gets a label and gets filed in the mind somewhere. So we're going to pick up with myth number five this week. And Lorraine, I will let you take that one.

Lorraine Kessler
Yeah, I mean, this is the myth that people have that: bigger is better, right? That our whole goal is to get bigger and bigger and that size is the determinant of success. And the key is that size is not a strategy, right? Focus is. And sure, if you have size, you have more resources and you might be able to wage a more hefty marketing war, but that doesn't mean it's the best strategy for profitable growth. It could be growth with very little profit or no profit. It could be that it just isn't growth at all. You hit kind of a saturation point. 

The basic thing is that focus is the secret to success, not size. So the better way to expand is by narrowing. So, and what do we mean by narrowing? It means that you, I mean, think about the sun, right? The sun's a great ball of energy, but it diffuses its light across a wide, wide area so we can walk around in the day and not be zapped, right? Like ants under a magnifying glass. I'm sorry if anybody did that as a kid. I didn't, but I didn't know about it. 

But a laser is a very low energy form of light, right? But it's extremely focused and it can bore a hole through a diamond or it can cure a cancer because it's so powerful, it's so focused. And that's how I think companies should think about their business, not trying to be all things to all people or going too broad, but finding out what is the one thing that you can focus on and mass your resources on that front. 

And if you're going to have a much greater chance of breaking through and establishing something long-lasting and memorable. So you're going to be able to burn a brand into the brain much better by doing that. And we see that these brands that are focused, there's many ways to do that, right? You could be geographically focused. You could be focused on one category. You could be an expert in one type of clientele or one kind of category. The specialist always wins against the generalist. 

So there's there's a lot of ways to win, but what happens when you focus is again, you get the maximum impact of your resources on that front. And you also narrow your competitors down, which is an advantage too, because it's a lot easier to put them on their heels if you're really putting your focus on a particular area. 

And so we see that, you know, I remember the great story when I started in this business, I read the book by Andy Grove, Only the Paranoids Arrive, and he was the CEO of Intel. And at that time, they were doing lots of different things for computers, as I recall, and I'm not specific in all the details, but he decided, and it didn't seem like this made sense, it seemed counterintuitive, that they needed to focus only on microchips. 

And I'll never forget the story he told in the book that he and I think another executive were debating because they felt they were too diffused. “What do we do? And do we only focus on microchips or do we do this and keep trying to do all these other things?” And he said to the other executive, “let's say we were both fired and we walked out of here. What would the next CEO do?” And they answered the question, “he would or she would only focus on microchips.” Then why don't we do that? So I think that's the kind of ground zero thinking you have to have to kind of get back to what focus is all about.

Mark Vandegrift
That sounds a lot like A.G. Lafley's book where to play. Yep.

Lorraine Kessler
Yeah, what a great book. I'm glad you mentioned that people should really pick up “Playing to Win” by A.G. Lafley and how he came back, went into P&G and applied a lot of this thinking. What can we be really great at in a marketplace? Where can we play to win? Will we dominate a sandbox and et cetera? So anyway, size is not the determinant of success. In fact, size can end up creating problems. 

Look at Boeing, right? Boeing is now going into space and they're trying to expand, but they have a problem of focus, right? They have a culture that's been so about eating up and growing size-wise that they've lost a sense for what really matters in their industry and how to make air travel safe for passengers. So just another example.

Mark Vandegrift
Well, I like what you said is the best growth strategy, whether you're in a good economy or bad one is to decide what not to do. And sometimes using the negative of this is better for people because our tendency is just to try to do everything. So managing to what not to do is really a good focus. 

You know, of all places, it probably be would be unexpected, but from our web department, I was given some very good knowledge a long time ago. And that is you can really go into any technology, but you really should not go into every technology. And so, you know, we focused on certain programming platforms, certain languages, and only certain CMSs because if you try to be all things to all people, you have to hire a thousand people because nobody can know all those technologies. So as we've carved out our niche in the web world, specifically with our developers, they always remind me, okay, if we get someone that asks to do this, it's probably best if we just say no. And that's always a good reminder from them when it comes to doing this. So we get lessons from unexpected sources sometimes, right?

Lorraine Kessler
That's great. And we've gone through discussions, you recall them in the past, where we were headed towards diffusion and trying to be either being too specialist and becoming a digital agency. There was that conundrum. And should we have a web agency and we give it a different name? And we had to go through this, but I love what you just said. And that is AG Lafley, decide what you won't do what you can't do because it will only detract from what you should be doing or can do better than anybody else in the world.

Mark Vandegrift
Well, myth number five is, or number six, I'm sorry, is: branding is only about advertising. So positioning is a pretty radical strategy. We get that. It goes to the core. But unless you know what the brand stands for, what you want it to stand for, you cannot make effective decisions about how to run your business. 

So, you can't just think that if you put an ad out there that and say we're different in this way and not act like that, then you've immediately disconnected not only your company, but also your employees and then the people that service whoever bought into that promise or that difference. And so all of a sudden it becomes something where branding and positioning, which go hand in hand, is core to the anatomy of the company. 

So that's why we say positioning is a business strategy more so than just a marketing strategy, because it impacts the entire organization. So, when you ask or you think through critical questions, they might be things like this. 

What services or what capabilities should we support and develop based on our difference or who are our best prospects? Who are our best clients? How should we be structured? It even has to do with what your position could be. What should you be doing more of? And of course, as we just said, what should you not do or be doing less of? What kind of business partnership should we have? What kind of knowledge and expertise do we need to build with our associates? 

So for us, you know, positioning training is an ongoing thing. We have some interns starting here soon. And one of the very first meetings we have is drilling them with this understanding of what positioning is at its core. Whatever your company stands for, you want to make sure your team members, your associates, your employees know what that difference is and how to communicate it. 

Otherwise, you're always backing up. You advance, you advance, and then you take two steps back because you had a new employee who went out there and couldn't properly express the position of the company. Okay. Now, all of those questions had nothing to do with advertising. You know, again, this, this myth is that branding is only about advertising. I haven't even asked an advertising question yet.

But then you do get to advertising. That is what should our advertising say? What should our advertising look like? What should our public relations be? Because advertising and public relations are not the same. What should our selling be like, or what should our sales tools look like? So, these are all things that go outside of advertising. So, thinking that branding is just this small portion of your organization is really a big myth. And... I am here to (pssssh) explode it.

Lorraine Kessler
Yes, exploded. I like that. We should probably do that. So we're going to explode the myth of the general market next, right? And we've said this and we've said it in different ways in just the last few. So there is a little bit of repetition and overlap in some of these, but that's okay because you have to say things in different ways, the same thing in many different ways for some people to click in. We know that.

So the idea here is that the essence of positioning is sacrifice. There are no general markets, right? You deliberately have to cultivate a narrow line somewhere. That depth is more effective than breadth, right? So this goes back to what we're talking about. Size is not the determinant of success, focus is. There is no general market, all right? So I'm gonna have people say, well, there's general stores like Walmart, right?

But look at where they focused: low price, right? They weren't just a general store that tried to serve all price segments or all customers. They set out to serve a particular customer. Today in our market, we have one called Meijer. How is Meijer different than Walmart? They're kind of general in terms of their merchandise. They have food and they have products and hardware and home goods and things like that. They are primarily a grocery store with the other stuff added on. Their understanding of grocery is preeminent and is invert to what I think Walmart. Walmart now is groceries, but that's not where they started. They started as kind of the dry goods and added food. So there still is a focus, but you know, be careful. Don't get too general with anything. 

So, you know, that's really, we know that the specialist wins, the person who has greater expertise in a certain area tends to win, right? If I'm a hospital and I'm looking for an agency, we know that unless we had hospitals and a lot of healthcare credentials, which we do, but let's say we didn't, we stand a very slim chance winning against a healthcare expert who's only focused on healthcare marketing.

It's just the way that that works. So, explode the myth. There are no general markets. Even if you're going to have general categories of goods and services, you've got to find a segment that you're going to win with, right? And how, whether that's a price segment, whether that's a lifestyle segment, whatever that is.

Mark Vandegrift
Well, and that really plays true in the world of web. We saw that really bump up as a positioning value once the web came around, because as we're shopping on the web, what don't we have yet? We don't have trust. And so I always call it that “trust bump” that if it's obvious on your site that you're a specialist in that area, that almost automatic automatically engenders me over someone that is trying to sell all things.

I believe that that specialist is going to offer a better product than if I were just to go find it on Amazon. If I care about the quality, that's probably why I would make that decision. Good. 

Well, myth number eight is that: branding costs money. Let's explode that one. Branding makes money. And I always like to start with Peter Drucker's comment, which is that a customer, a business can only create a customer in two ways: one is innovation, two is marketing. Well, if you create a customer, that means what? You make money. So, if innovation and marketing make money, then you need to do one or two of those things. Better to do both. So, branding actually makes money. It doesn't cost money.

We have to get this through clients minds. And what we find is that even on our proposals now, we don't say cost, we say investment. Because if what we do for our clients is not making them money, then we should quit doing what we're doing for our clients. Because no one wants a marketing expense that produces nothing. 

So, the investment that companies make in branding is not just to sell more, but ultimately to decrease the customers sensitivity to price, which goes back to last week when we talked about commodity markets or commodity products. 

So yeah, I would say it could be argued that the default position of branding is not to increase sales, but rather to increase profits and let that sink in for a few people. I'll say that again, because I think it's pretty significant. It could be argued. Let me see if I say this the right way. It could be argued that the default position of branding is not to increase sales, but rather to increase profits. 

And, you know, profit is a direct result of protecting the pricing integrity through powerful brand differentiation. You know, we always show the, the market capitalization of companies like Coke and what a difference it is between what their books value them at and then what their market cap is. And that whole gap in there has a lot to do with their brand. We like to call that goodwill or a lot of things, but it has value that companies are willing to pay for.

Lorraine Kessler
Yeah, and I used to like what I would teach our new associates about positioning. And I would say, let me put a scenario out there. Let's say Coca-Cola woke up tomorrow and all of its manufacturing plants were bombed out. They were all destroyed through a terrorist act. Could they rebuild?

Mark Vandegrift
Mm hmm. That's a great way to look at it.

Lorraine Kessler
And, and conversely, if they woke up tomorrow and their brand got associated with something abhorrent in the world, could they rebuild? And it's a pretty obvious answer. The brand is more valuable than the physical structures and facilities, right? So, I mean, that's most people don't get to that level, but it's important to know, what you said before that one of the default positions of branding is it desensitizes the customer's sensitivity to price. It's the only reason why Starbucks could charge $5 for a five-cent cup of coffee, right? It's the only reason. People wax on about, well, no, no, how much better the quality is. It's all perception, quality perception, that drove what people say about the coffee and the product.

So yes, this is a really important one. Think long-term. A brand pays dividends because the sales that you do accrue end up being profitable sales, not just sales.

Mark Vandegrift
Yep, very good. Okay, I'll let you take myth number nine.

Lorraine Kessler
Well, this is kind of goes back to our other thing about, you know, bigger is not better growth for growth sake is just not a good goal, right? I mean, some people think: all growth is good growth. That's the myth that we're exposing. No, it isn't. There are of course different types of growth, growth in sales, growth in market share, growth in market penetration and so on. However, the only growth that really matters is as we were just talking profitability.

It's easy to grow sales and market share and still be unprofitable, right? Now, unless that's your strategy, like Jeff Bezos, where he convinced his constituents, his investors, I'm not going to see profit for 20 years because this is such a new and big idea and so differentiating. It's actually going to change the way people… the behavior of people and how they buy. That's a pretty huge ambition. 

But for most, what I always think about is all those no-name products that are at the cash register. When you're checking out of the store and you don't know the name, but you throw it in your basket because maybe you need rubber bands or you need a candy and you don't know the name, but okay, it was there. These impulse products, I don't think they add up. So, you better be prepared to keep producing that stuff day in, day out without having a lot of money to do anything else will produce that product and get it into a chain. I don't think that's, that's like being a hamster on a wheel, right? I don't, you don't get what, what the book good to great, Jen Collins book talks about the flywheel where you start pushing and you start hitting maximum force. And as you get that thing going, the flywheel, you can stand back and it's going to go on its own. And that's what branding does for your business.

So, and the other part of that is undisciplined growth is usually an unsuccessful strategy that leads to this idea of profitless prosperity, right? I'm just continuing to sell things, but I'm not able to do much with that. I can't plan for the future and what have you. So I think that's a good myth to explore.

Mark Vandegrift
Good. Well, myth number 10 is one that I both cringe that it is not correct, but at the same time, I shout it from the rooftops because I'm a lover of efficiency. Am I not Lorraine? So the myth number 10 is: efficiency is king. Okay. 

I love efficiency. Don't get me wrong, but we run into efficiency deployed the wrong way over and over and over again. And guess where it comes from? Big brands. So just keep this in mind that your procurement staff is not king. And that's a good way to remember this is efficiency is king is a myth. The answer is procurement is not king. The goal of your company should not be efficiency, but rather effectiveness. 

You know, the easiest way to think of this is would you choose a doctor based on efficiency or effectiveness? “Oh great! He got me through in 10 minutes. My heart's missing.” Oops.

Lorraine Kessler
Yeah. Yeah. You missed that I have serious diabetes. Yeah.

Mark Vandegrift
So what's ultimately important is not how hard you try or how many hours you spend or don't spend, but whether you win the case successfully, right? Or you keep a client out of, let's say, tax trouble, or you make sure the heart is repaired, or you create more equity for your client's brand. 

I think the problem that we run into with this, “let's issue an RFP, go out and get the low price” is that companies are managing to cost now instead of managing to investment. And that goes back to the previous myth that I talked about. It isn't that brands are overpriced. It's that they're under-exclusive. And that is the hugest point here.

Price and differentiation are directly correlated. And it talks about commodity there. It talks about a lot of things. But if you're going back out and doing business based on just cutting as much cost as you can, then you're not creating value. 

And CEOs will argue till they're red in the face. Actually, probably the CFOs will argue until they're red in the face. But if you want to make more, you have to charge more. And if you want to charge more, you need a strong brand and you can’t have a strong brand without differentiation because again, if it's not that you're overpriced, it's that you are under-exclusive. You need to create and be the only.

Lorraine Kessler
This is a good one because I'm sure we'll get a lot of argument over this for just some of the reasons that you mentioned. Again, I would say it's a matter of emphasis, right? We're not saying be inefficient because inefficiency can cost you money and not lead to profit. But efficiency is kind of a skill you develop through learning, right? Through trial and error, through experience and then you learn to codify this is the most efficient path to do what? To be effective as possible. So the being effective is the end goal. The efficiency is kind of the tool that will enable that. So, they're not so much foes, as a matter of cause and effect, I think, and how you put them in the right order.

Mark Vandegrift
Well, and the emphasis on that one is King, right? The myth is efficiency is King. Well, efficiency might be the queen or it might be the 10 of diamonds. I'm not sure where it falls. It's just not, it can't lead or you're going to be upside down in your thinking, or you're going to be out of whack with your thinking.

Lorraine Kessler
Yeah. And this goes with, you know, we're in an age because of digital measurement, right? So, if all of your measures are about efficiency and not about effectiveness, then that's where this gets distorted. That's where the king takes over and now, you're on the wrong path. Yeah.

Mark Vandegrift
Yep. Exactly. Well, very good. Let's close up this episode of the Brand Shorthand. As always, we appreciate all those who have tuned in and if you haven't liked, shared, commented, or subscribed, subscribe, subscribe, to the Brand Shorthand podcast, please do. And until next time, have an amazing day.