At the beginning of this month, astrologists were predicting
turbulent consequences from an extremely rare conjunction of the sun,
moon and five plants in the constellation of Taurus. So perhaps the
recent outbreak of marketing sanity has more to do with what’s happening
in the heavens than with good judgment.
OK, that’s probably fanciful. It’s more likely to be a coincidence that
in the same week as this unusual planetary activity, Safeway came to its
senses and broke ranks with the rest of the pack by announcing it was
finally scrapping its loyalty card scheme, saving itself upward of
pounds 50m a year in the process.
The company will now focus on cutting prices. This is hardly
revolutionary stuff, but it is competitively sensible at a time when few
retailers can afford to throw money at schemes like this, which, Safeway
has admitted, not only do nothing to foster loyalty, but create an
avalanche of unmanageable data.
The next bit of evidence that heads are coming down from the clouds
appeared a few days later at BA. New chief executive Rod Eddington was
reported to be moving quickly to reverse two of his predecessor’s
decisions which had seemed to fly in the face of marketing wisdom.
The first is cosmetic, but makes a big statement. He is said to be keen
to replace all the multi-coloured tailfin designs with the version of
the Union Jack on Concorde. Love them or hate them, it has been
generally accepted that the ethnic tailfins have not enhanced what had
been quite a distinct brand image.
Even more fundamentally, he is softening the stance on the two-tier
marketing strategy which favours premium business class passengers over
what Bob Ayling called the backpackers in the economy section - sensible
at a time when an increasing number of companies are insisting that
their executives fly as cheaply as possible.
Making decisions like these takes courage. By their very nature, they
are an admission that what had been core elements of the marketing
strategy were wrong. Even braver, however, are those who refuse to be
overwhelmed by the fads in the market to begin with.
The frenzied and expensive rush by generally rational companies into
anything that displays their net credentials is a good case in point and
makes the exceptions stand out. The latter are not the head-in-the-sand
company leaders who think the web is just a passing fad, but canny
executives who keep what’s happening in proportion and whose marketing
sensibilities are firmly in place.
Take David Jones of Next. When he recently announced that the store
chain would reach pounds 12m in internet sales this year, and was
attracting 700 new mail order customers a week through its web site, his
accompanying remarks about the net pulled no punches. Pointing out that
these web sales had been achieved with an investment of only pounds
125,000, he questioned the comparative millions of pounds some retailers
are pouring into e-commerce. If your brand is already strong, and your
fulfilment systems up to scratch, why the huge investments when this is
basically a new method of mail order?
Good question. And one which is a reminder that companies can get caught
up in complex and convoluted marketing strategies that have more to do
with organisational interests than customer focus. When that happens,
they’d be just as well off using crystal balls.