Over the 2010 holidays, I had the privilege to interview Al Ries, who is an international marketing expert and author of 12 books on marketing, advertising and PR (The 22-Immutable Laws of Marketing, Positioning, The 22-Immutable Laws of Branding, Marketing Warfare, The Fall of Advertising & The Rise of PR, War in the Boardroom, among others). Al is also an internationally renowned speaker and consultant to many of the mega brands and corporations.
In this interview, Al shared many insights that I am excited to share with all of you. I separated the interview into three parts and below we start with part 1. If you wish to read parts two or three, click on the following links:
Marsha Friedman: Al, I have to tell you that I’m so excited to be able to finally talk to you. I’ve been such a huge fan of yours starting out with your book Positioning in the early 80s.
Al Ries: Thank you.
Marsha Friedman: The first thing I wanted to talk about has to do with “the law of focus” from your book, The 22-Immutable Laws of Marketing. One sentence that jumped out at me is your point about having the ability to think like a prospect. I find that to be the biggest problem with many marketing people. They miss the importance of thinking like their prospects think, which is the exact viewpoint you need in order to write successful marketing pieces.
Al Ries: Essentially, this gets right back to the first book you mentioned, Positioning. Here it is, thirty-five years later, and people are still doing the same thing. They think of marketing as communication; “I’m communicating something about my product or service that makes sense.” But what we’ve been saying for years is that’s not the way to look at it. You have to reverse the process. You have to start with the mind of the prospect and you have to think about what’s in their minds and relate what you are doing or what your product has to offer, to what’s in their minds.
Hopefully, in the best of all possible worlds, you look for an open hole in their minds. Almost invariably, the big successful brands are the ones that are not necessarily terrific at marketing or anything else, but they find a hole and fill it. A perfect example of this is in the category of energy drinks. The first energy drink was Red Bull.
But before Red Bull came along, there wasn’t even a category called “energy drinks.”
And that brings up another point; consumers are more interested in categories than brands. Yet, what do most marketers want to talk about? They want to talk about their brands. “Hey, our brand is terrific!” “Our brand is this; our brand is that.” But, most consumers don’t think in terms of brands. When they order something in a bar, they don’t think brand. They think category, “What do I want to drink? Do I want a beer? Do I want a coke? Do I want a gin and tonic?” In other words, they think category first. They think, “I want an energy drink.” Then they ask the bartender for a Red Bull.
So a lot of this has to do with thinking like a consumer, and filling holes in people’s minds. Telling them, in a sense, what they DON’T know as opposed to what they DO know.
Marsha Friedman: That’s a great point. And, when not understood by marketers, companies can go miles off message of where they need to be and fail miserably.
Al Ries: Think about it from the PR point of view. I mean invariably your clients tell you we got this product, we got this service and we want you to publish it and we want you to do this and we want you to do that. The best stories often are, if you think about it, from the customer’s point of view, what are they looking for? If you can figure out what they’re looking for, it’s easy.
Marsha Friedman: Exactly, and that’s the education we frequently go through with clients; getting them to understand that the media doesn’t care what their business or product is. The media’s interest is in serving their public: their listeners, viewers and readers. Their need is to provide information that’s entertaining and informative to their audience in order to keep them tuned in.
Al Ries: The media is filling a hole on the page for the consumer, while you’re filling a hole in the mind. It’s the same thing.
Marsha Friedman: That’s exactly right. Another point I wanted to bring up is the lack of understanding too many business owners have about the importance of marketing, particularly with small to mid-size companies. It seems they become so focused on their products and for a variety of reasons, perhaps lack of education about marketing as a primary one, they lose sight of the need for marketing to occur as a continuous activity for the company’s survival and success.
Al Ries: Here’s why they do that. Everything about running a business, especially a small business, is very, very short term. In other words, I buy stuff today and sell it tomorrow or the next week. I hire a person today and pick up the phone and get something done or build something. I mean they’re very, very short term, but marketing is long term. Nothing happens right away. I mean you could have the very best marketing in the world. You won’t see any results in the first week or the first month, really. It sometimes takes years and years, and most companies just don’t have the patience to deal with marketing because it is long term. Now some of the best marketing campaigns, like the ultimate driving machine, are thirty-five years old, for goodness sakes. Thirty-five years old and most of the successful programs have been around like forever. Nike’s “Just Do It!” How many companies have the patience to run a marketing program for two or three or four decades? I mean people change. For one thing, they lack patience.
Marsha Friedman: Exactly! I think perhaps in today’s world where everything moves fast (fast food, fast everything), long term marketing just doesn’t fall into that state of mind.
Al Ries: Well think about one of the trends that’s taking place in business today and it’s a very, very strong trend…coupons and discounts. Grouponicus, for example! Groupon is enormously successful. I mean…they turned down an offer for six billion dollars!
Marsha Friedman: I know. I just saw that.
Al Ries: They’ve been in business for years. That’s typical short-term thinking with long-term consequences. Now in the short-term, coupons will work. I mean short term you have a coupon deal and next week you have lots of customers, but what happens in the long term? Whenever you get a coupon deal, you have business in the short term, but in the long term, the customer just waits for the next coupon. Look at Macy’s. They’re running 50% off deals, right? They might have big crowds and they might rack up a lot of sales, but next week or the week after, who’s going to go to Macy’s unless they have a sale? It’s crazy, so in a sense, while it works in the short term, it’s a little like cocaine. You get a short term high, but a long term low. So if you don’t look at the long term consequences of what you do—and this holds true in your personal life too—you’re going to be in deep trouble if you treat marketing as a short term phenomenon. What can I do today that will make sales tomorrow? You’re going to do exactly the wrong thing; you’re going to be into coupons. You will have to be into all sorts of stuff that doesn’t really make sense in the long term.
Marsha Friedman: Al, I love it. I think that’s such a critical point for people…business owners…to understand. How do you feel when companies have high prices, then they slash them because they’re low on cash or cash flow, only to bring them back up. What are your thoughts about that?
Al Ries: Well let’s look at the industry that has done that the most. I mean not so much short term, but they play what we call in the retail business “the high/low” game. In other words, high prices today and then we can have a big sale tomorrow. We have lower prices tomorrow then we jack them up. We see this a lot in the airline industry.
The airline industry, over decades, has been practicing high/low pricing. In a sense, where they have competition (let’s say a regional area), they have low prices. Where they have no competition, they have high prices. Has that worked for the airline industry? No. The four largest airlines in America have all gone bankrupt.
But, the one airline that has been consistently profitable for the last thirty-five years has been Southwest; they’re basically like a little Wal-Mart. They have low prices, but they don’t jack up the prices so they can have discounts and coupons. They have everyday low pricing. That’s a long-term strategy that works better than the short-term strategy of low prices today and high prices tomorrow.
The reason that high/low doesn’t work is you educate your consumer to wait for the low price. In a sense, the consumer feels the low price is the regular price and the high price is the rip-off price.
Now the airline and other companies feel exactly the opposite way. They feel the high price is the regular price and the low price is the discount price. So consumers and companies don’t see eye-to-eye on these things; consumers don’t think that way.
~~~~~~~~~~~~~~ End of Part 1 ~~~~~~~~~~~~~~~~
I certainly found Al’s comments illuminating; I hope you did, too! Next week we’ll continue where we left off with part 2, and learn more of Al’s insights.