Marketing Week 2011.10.06

retail
marketing
6 October 2011
3.95
www.marketingweek.co.uk
PEER PANEL
The
10m
tongue
...and how it is
helping Costa win
the coffee wars
Mike Nutley
The widening
gap between
data haves and
data have-nots
Trends
The growing
public appetite
for brand email
campaigns
Mark Ritson
RIMs Playbook
failed because
it tried to target
everybody
12 50 26
News 4-10
Opinion
Michael Nutley 12
Real-time capability is creating a digital divide
The Secret Marketer 16
Brands come together for hit promotions
Mark Ritson 50
Why BlackBerrys RIM is heading for a crash
The Debate 14
Fast fashion; rebranding; retail websites;
brand preference; real-time bidding
Cover Story
Costa Coffee
How research helps
this award-winning
brand get ahead
14
Feature
Customer service 24
Amazon retains top spot in this years list of
the top 100 brands for customer experience
Trends
Email marketing 26
How retail brands are winning the battle to get
their marketing emails through junk mail filters
Peer panel
Retail marketing 31
Are brands being served by their specialists?
Direct marketing index 36
Interactive resources 37
Point of purchase resources 38
Market research index 39
Promotional index 40
Marketplace 41
Recruitment 42
marketingweek.co.uk | 6 October 2011 | Marketing Week | 3
leader marketingweek.co.uk
this week
Customer service is something of a theme in this issue. Theres a dedicated feature
on page 24 and there are masses of tips in our retail peer panel on page 31 for
anyone looking to give their customers a bit of extra value.
But I want to talk coffee. Im a regular in a branch of Costa near Oxford Circus. I
go there sometimes for coffee in the morning before coming into work. Other times,
I go across the road to a branch of a coffee shop called Reynolds in Eastcastle
Street. There is little in my decision-making process that either the large corporate
coffee chain or the small, local business could exploit to swing my loyalty. The staff
in both places know me by sight so I can count on a cheerful hello and service is
good in both outlets.
Product-wise theres also little to split them in my humble opinion. I came late to
coffee. Ive only been drinking the stuff for a few years. Whats more (and get ready
to frown if youre Italian), my preference is for the simplicity of the black
Americano. So Im hardly a coffee-connoisseur. Costas coffee is, according to its
ads, officially tastier than that served at Starbucks, and Reynolds has a blackboard
outside its door boasting of its really
rather good organic coffee. Im more
than happy with both.
In fact my decision on where to
spend my money of a morning largely
depends on what I fancy eating for
breakfast at my desk whether a
Costa egg sandwich or a Greek
yoghurt pot with honey from
Reynolds. Like most people Im a
creature of habit.
I am a normal consumer, a
promiscuous coffee customer, and these are the challenges of the global coffee war.
Marketing Week associate editor Ruth Mortimer went inside the Whitbread-
owned Costa coffee chain to discover how it has been winning that war. Costa has
driven a 23% increase in worldwide sales in the past six months alone and is the
UKs third largest food and drink chain. It fights this war on the streets of our cities
every day and, with 700 of its 2000 stores abroad, also has an ever growing picture
of what customers want in China, India and the Middle East.
The secret to Costas growth? Insight. A head-to-toe look at the entire business
with every positive change based on customer insight. It doesnt matter if youre
not in the coffee chain business. You need to read this feature. It contains about a
hundred clues as to why our Marketing Week Engage Awards judges chose Costa
as Brand of the Year back in May. It might not win my business every day but there
are definitely reasons it shares my loyalty.
Mark Choueke, editor
The secret to Costas
growth? Insight.
A head-to-toe look at the
entire business with every
positive change based on
customer insight
Publishing director Sarah Gilchriest (6300) Editor Mark Choueke (6335) Associate editors (news) Branwell Johnson (4928), (features) Ruth Mortimer (4858)
News editor Russell Parsons (4924) News reporters Rosie Baker (6324), Lara OReilly (4084) Features writers Lucy Handley (6401), Michael Barnett (6326),
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editor Toby Rosenbloom (6331) Marketing community production editor Timothy Weissberg (4347) Art director Wendy Webb (4133) Designers Simon Ford
(4155), Philip Gibson (4135) Web production assistants Elizabeth Goodman (4946), Josie Allchin (4931)
Ad directors (display) Vicky Ridley (6414), (digital) Bal Bhogal (6734), (recruitment and services) Itisha Giri (4632) Assistant ad manager (recruitment) Paul Daoud
(6463) Business development managers David Butcher (6311), Amelia OHagan (6254) Display sales executive Philippa Daykin (6342) Agency sales executives
Victoria Wershof (6236), Soraya Lamari (6530) Client direct sales executives (recruitment) Joseph Mills (4888), Sophie Allen (6340) Classified sales executives
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Costas story has killer
insight for every brand
4 | Marketing Week | 6 October 2011 | marketingweek.co.uk
news
Coca-Cola will broadcast a live TV
programme during the London 2012
Olympics to try to inspire young
people to get involved in sport.
The drinks company is in talks
with broadcasters and production
companies to produce the
programme, which will feature
sport content, music and
celebrities. It is not yet known
whether the show will broadcast
online or on a television channel.
James Eadie, Olympic portfolio
director for Coca-Cola GB, says
the company will take inspiration
for the programme from its Coke
Zero Wayne Rooney Street Striker
Katy B and Mark Ronson: Campaign anthem will be released as a single
SPORT
Drinks company is planning a show that aims to inspire young
people with a mix of sport, music and stars. By Lara OReilly
Coke plots
live TV show
for Olympics
for more news go to
show, which has been broadcast
on Sky 1 since 2008.
He says: We see Coca-Colas
remit being to show people the social
side of the Gamesto give people
the opportunity to see how the
athletes are interacting and connect
that back to what we are doing.
The as-yet unnamed programme
forms part of Coca-Colas wider
global integrated campaign for the
Olympics, dubbed Move to the Beat.
An anthem to soundtrack the
campaign is being created by Mark
Ronson and Katy B, which uses the
sounds of Olympic hopefuls playing
sport such as a table tennis player
hitting a ball and an archer releasing
a bow from their arrow as the drum
beat and bass line for the song.
The song will feature in 60-second
ad spots that will air from 2012 and
will also be released as a single next
year. A 60-minute documentary
about the making of the track is also
planned for broadcast next year.
Sanjay Guha, marketing and
Olympics director for Coca-Cola
Northwest Europe and Nordics,
says the ad marks the first time the
company has fused music and sport
together.
We believe the Olympics is
magical and we want to bring that
magic to people by creating content
that has a legacy and makes a
difference to the communities that
we operate in, he says.
Other elements of the campaign
will include outdoor, in-store, on-
pack, digital and mobile activity,
including a campaign to invite
consumers to remix the soundtrack
and distribute their own versions of
the song.
The Olympic campaign also falls
in to Coca-Colas Open Happiness
strategy, which aims to draw on the
ethos of finding enjoyment through
lifes simple pleasures. The
strapline will feature in the TV ads.
By Rosie Baker
Fairtrade is to overhaul its
campaign strategy, targeting
different audiences at different
points in the calendar in an attempt
to attract year round support.
The not-for-profit organisation
wants Fairtrade to be not just
about a fortnight and will use the
annual Fairtrade Fortnight
campaign in 2012 as a launch pad
for a year of scheduled activity to
increase awareness.
The year-round activity will
include PR and online campaigns
as well as activity led by Fairtrade
brands such as Maltesers, Cadbury
and Cafdirect, which will have
more opportunities to demonstrate
their involvement.
Activity will be structured
around the four seasons, including
a summer push that will target
festivals and school ftes to
promote the full Fairtrade range,
and an autumn push.
It will also increase its activity
Fairtrade in
not just for
a fortnight
refocus bid
Step up: Fairtrade
will run year-round campaigning
around World Fairtrade Day in May
by joining forces with international
partners to focus on the links
between development and business.
The strategy includes a new
strapline Take a step for
Fairtrade which will be unveiled
at the annual Fairtrade Foundation
Commercial Conference this week.
The campaign is designed to
encourage consumers to take a
step-by-step approach to switching
to Fairtrade products across all
categories and throughout the year.
Fairtrade director of policy and
communications Barbara Crowther
says the concept aims to educate
people about Fairtrade alternatives
and encourage them to do one
more thing for Fairtrade.
The strapline will launch in time
for the next Fairtrade Fortnight
between 27 February and 11 March
2012.
NOT FOR PROFIT
The Co-operative Group is
undertaking its most extensive
piece of consumer insight research
with the aim of developing a
stronger brand message across all
its business groups.
The company, which has
divisions in retail, holidays,
banking and funeral care, is
hoping to find out what
consumers love about the Co-op
and what they love less. It will
then build its marketing and brand
strategy with these in mind.
Co-ops group marketing
director Gill Barr, who joined in
January, says: This is an
enormous company and we
participate in a lot of different
sectors. The Co-op brand is a
strong and powerful thing, but
there are still too many people
who dont understand why were
so different. We want to make
sure were getting the Co-op
message out in the right way to
the right people.
Co-op plans
customer-led
overhaul of
brandstrategy Far-reaching: Co-op spans sectors
Its a difficult job because The
Co-op is a legacy brand and also
because it has to be articulated
across sectors from funerals to
holidays, she adds.
The Co-op is also creating a
group brand director role to
oversee the brand on a strategic
level, working across all business
units and taking in all areas of the
marketing mix from operational
execution to brand strategy.
Barr says the role has incredible
strategic significance for the Co-
op as a brand and as an
organisation.
It is not thought to be a direct
replacement for the head of brand
role that was axed in a restructure
under former marketing director
Patrick Allen.
The brand director role will work
closely with the recently created
director of insight and planning
role, filled by former MasterCard
Advisors chief Neil Carden in
August, and report to Barr.
RETAIL
news marketingweek.co.uk
By Rosie Baker
Starbucks is introducing a range of
bread-free lunch options designed
to appeal to office workers to eat at
their desks as part of the chains
efforts to become more than just a
coffee house.
The company says the Grab and
Go Bistro Boxes reflect the
international tastes in the UK
market and their design has been
based on changing lifestyle
habits and the desire for more
bread-free options.
The range includes an antipasti
selection, cheese and oatcakes,
falafel mezze, cured ham hock and
potato and chicken and rice
noodles. Starbucks claims each box
contains less than 500 calories.
Brian Waring, vice-president of
marketing and category for
Starbucks UK and Ireland which
recently reported its seventh
consecutive quarter of growth
says: We believe it is really
Starbucks
brings out
bread-free
lunch range
Lunch box: Grab and Go range
important that our customers have
a wide range of tasty food that
complements our great coffee when
they visit us.
They told us that they wanted
different food options, such as more
bread-free products, which is why
the Bistro Boxes are so on trend.
The boxes will be available from
6 October in Starbucks UK stores
and follow the recent introduction
of a breakfast menu and Petites
range of mini-cakes. Starbucks
introduced a slightly different range
of Bistro Boxes in Chicago earlier
this summer.
FOOD AND DRINK
By Russell Parsons
A government-backed website
that makes it easier for parents to
lodge complaints about
advertisements, programmes,
products or services that sexualise
children is likely to launch before
the end of the year.
It is one of a number of changes
to the regulation and the
regulatory set-up that will be
announced in the final quarter that
will impact marketers across
several sectors.
The single platform was
recommended by Mothers Union
chief executive Reg Bailey earlier
this year as part of his
organisations review of the
commercialisation and
sexualisation of childhood.
Its creation was one of several
recommendations in the report
welcomed by prime minister David
Cameron.
It has been developed by trade
Single site
for parental
complaints
moves closer
associations and regulatory bodies
such as the Advertising Standards
Authority, the British Board of Film
Classification and the BBC Trust.
The proposed website will be
unveiled later this month when
regulators and industry bodies
are due to update the prime
minister on the progress they
have made in implementing the
recommendations. The launch is
expected soon after.
An update on the implementation
of Baileys call to restrict outdoor
adverts containing sexualised
imagery where large numbers of
children are likely to see them is
also expected this month.
Separately, the results of a two-
year review by the ASA will also be
published before the end of the
year and is likely to see changes
aimed at reducing the number of
complaints made by competitors.
Complaints made by
supermarkets against rivals about
misleading pricing have been on
the rise since the economic
downturn led to more focus on
price. Broadband providers have
also taken their grievances against
rivals to the regulator.
Complainants could be asked to
provide evidence that they have
tried to resolve differences with
rivals.
REGULATION
Growing investment in video and
social media by FMCG companies
helped drive online advertising
spend to a half-year high of
2.26bn, according to the latest
pwc IAB report.
Onlines share of UK ad spend
was 27% in the first six months of
2011, the report adds, up from 25%
in the second half of 2010. Online
ad spend which does not include
mobile ad spend increased 13.5%
over the same period last year.
However, the study claims the
whole UK advertising sector grew
by just 1.4% year on year in the
same period.
According to the IAB, growth has
been fuelled by an increase in
FMCG spend online. The category
now accounts for 14.5% of all online
DIGITAL
Onlines share of UK ad spend hits 27% in the rst six months of year, according to IAB report. By Charlotte McEleny
FMCG brands push online
ad spend to record 2.26bn
display ad spend, second only to
finance, which accounts for 15.6%.
Guy Phillipson, chief executive of
the IAB, says the continuing
increase in spend on video and
social media is helping to shift
brands focus from direct response
activity.
The internet is now about
entertainment. If you add up the
time spent online on social sites
(25%), games (10%) and video (5%)
then thats already 40% of
entertainment time.
Matthew Cullum, Heinz Soup
marketing controller, says social
media is where consumers want to
engage with his brands.
Soup can be an emotive product
and Facebook taps into that. Our
use of these channels doesnt
replace TV but it is a great
compliment to it because it allows
the consumer to spread the word
and they engage more than they
would with traditional channels
such as TV or radio.
Unilever vice-president of global
communications planning, Babs
Rangaiah confirms digital, and
particularly mobile, is key to the
FMCG giants brands.Were
driving digital hard because we
recognise its importance and that
this is an important time for it.
Facebook fan: Heinz uses social
media to engage with consumers
Year-on-year ad spend
Display advertising rose 18.5% to
510m, boosted by 100% growth
of online video
Search up 12.6% to 1.3m
Online classifieds increased 3% to
385m
Lead generation grew 20% to
26m
Source: pwc IAB
specific advertising campaigns.
An Orange spokeswoman says:
We will be co-operating
thoroughly with Ofcoms
investigation into customer
complaints of mis-selling against
the Orange mobile business.
The specific complaints raised
are already being thoroughly
investigated by the companys new
leadership team, which will take
swift and appropriate action to
ensure we, and the sales partners
working on our behalf, maintain the
best standards and practices for all
our customers.
Orange was the second most
complained about mobile services
MOBILE PHONES
Telecoms watchdog investigates Everything Everywhere-owned mobile network. By Rosie Baker
Ofcom is investigating Oranges
sales and marketing techniques
following customer complaints that
it uses misleading practices.
The investigation into whether
Orange has complied with its
obligations under Ofcoms rules
could include a look at the
Everything Everywhere-owned
networks call centres and in-store
point-of-sale communications.
Dishonest and misleading
conduct includes misleading
information around tariffs,
incorrect product or service
information or misleading claims
about free or discounted services.
If the watchdog finds that
Orange has failed to comply with
regulations, Ofcom can sanction or
fine the network.
An Ofcom investigation differs
from an ASA probe because it looks
at the networks general practice
and how it communicates with
customers, while the ASA looks at
Orange accused of breaking
sales and marketing rules...
Phones4U is facing censure from
the Advertising Standards
Authority (ASA) for the horror-
themed TV campaign it launched
last week to promote its deals.
The advertising watchdog has
received 185 complaints about two
ads that launched last week, both
featuring a scary girl character,
with the tagline Missing our deals
will haunt you.
The regulator says it is assessing
the complaints to establish
whether there are grounds for
launching an investigation.
Members of the public claim the
ads are unduly scary, unsuitable
for children, scheduled too early
and are frightening for adults.
Viewers have also flocked to social
networks and the comment pages
of MarketingWeek.co.uk to
complain about the ads.
A full-length 30-second spot was
preceded by five subliminal
messaging-style two-second blip
ads, designed as teasers to
...As concern
over Phones4U
horror-themed
TV ads grows
Phones4U: Next phase of campaign
Orange: TV ad for Film To Go campaign, which offers subscribers a free film download every week
promote conversation around the
new creative.
The spots have a Clearcast rating
of post-7.30pm, which Phones4U said
ahead of the launch ensures the
company does not break any CAP
codes about advertising to children.
Caspar Nelson, head of brand
communications at Phones4U says:
Advertising with impact always
generates debate. The amount of
negative feedback this campaign
has received is barely a drop in the
ocean. The response from our
target audience has been
overwhelmingly positive, so were
happy with the reaction so far.
G See the ad and join the debate at
MWlinks.co.uk/Phones4UASA
The most complained about
mobile services providers,
April to June 2011 (per 1000
customers)
3UK 0.14
Orange 0.07
T-Mobile 0.06
Vodafone 0.06
Virgin Mobile 0.05
O2 0.02
Source: Ofcom
provider in the second quarter of
2011 with 0.07 complaints per 1000
customers, up from 0.06 in the first
quarter and the final three months
of 2010 (see box, above).
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Insight 2/10:
Insist on proven VETERANS ...
The truth is medium-large ad agencies struggle to give value to small budget Challenger
Brands. On every level. When your deserving brand needs fewer but more experienced
veterans, you'll get too many juniors. And the occasional management person popping
in [and out]. Beware. Expensive mediocrity. Look for a 30yr+ veterans-only agency to
benefit from. See Marketing Week next week or web below...
e occasional management person popping
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At l ast , af f ordabl e TV advert i si ng
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Call Andrew Mitchell on 020-8847-3776 or 07989-839927 or email mitchell@tvlowcost.com
10 wise INSIGHTS for Challenger Brands.
GOOD CAUSES
Appointment comes as Richard Desmond launches rival. By Lara OReilly and Russell Parsons
National Lottery operator Camelot
has drafted in former Channel 4
boss and Unilever marketer Andy
Duncan to develop its UK brands
and online business.
The appointment comes as rival
lottery operator The Health Lottery
vows to revive the tired
category.
Duncan will be Camelots first
managing director. He joins in
November and will be responsible
for operations including
marketing, sales and insight for
UK brands including Lotto,
EuroMillions, Thunderball and
Scratchcards. Marketing director
Richard Bateson will report to him.
Duncan says there is strong
potential to develop the already
robust brands further. He adds the
growth of digital platforms will
also be important for Camelots
success.
National Lottery sales have held
EuroMillions:
One of the
brands
Duncan will
aim to grow,
including
through the
use of digital
platforms
Camelot hires Andy Duncan
to give brands shot inthe arm
up well despite falling disposable
income. Ticket sales across all
channels grew to an all-time high of
5.8m in the year to 31 March.
Camelot says Duncans
appointment enables chief
executive Dianne Thompson to
focus on international growth.
Duncan is currently chief
executive of luxury car dealership
HR Owen. Previously, he spent five
years as chief executive of Channel
4. He held several senior roles at
Unilever including European
Sega is to sponsor Skys The
Simpsons series as part of a
strategy to promote its latest Sonic
the Hedgehog game as a
Christmas stocking filler for boys.
The Simpsons was chosen
following a substantial research
project by Sega that found it was
the programme that resonates
across the widest demographic.
Sega hopes that 40% of boys in
the UK will see the sponsorship
idents more than 60 times. The
gaming company is also hoping
the campaign will appeal to
parents, girls and female gamers
as it looks to promote Sonic
Generations.
Sky claims that an average of
342,000 people watched The
Simpsons during its 22nd season,
with 753,000 viewers watching the
top performing episode. The
broadcaster also claims that more
than 17 million people say they
saw The Simpsons on Sky 1 in a
Sega aims for
Christmas lists
with Sonics
Simpsons deal
Sega: Targeting boy gamers
six-month period in 2010.
The sponsorship marks the
longest campaign Sega has
delivered for the Sonic franchise,
which like The Simpsons, found
fame in the Nineties.
The Simpsons does not currently
have a sponsor. Previous sponsors
of the programme on Sky 1 have
included Dominos Pizza, Bing,
Currys and Change4Life.
GAMING
category director of its foods and
beverages division.
Meanwhile, the Richard
Desmond-led The Health Lottery
launches this week, backed by a
20m awareness campaign that it
hopes will reach 98% of the
population.
Former Kraft Foods head of
marketing and now The Health
Lottery chief executive Martin Hall
told Marketing Week it was not
possible to secure any more media
space to promote the draw.
He adds that The Health Lottery
aims to be the biggest lottery
terminal network in the world,
with consumers able to purchase
draw tickets from more than 40,000
retailers.
It is not about stealing share from
The National Lottery, he says, but is
designed to grow the tired lottery
category.
Camelot says it has co-existed
peacefully with society lotteries for
many years now and hopes to
continue to do so in the future.
The Health Lottery aims to raise
money for health-related causes in
local communities. It will operate as
a series of 51 lotteries, each
representing a local authority area
in Great Britain. Each ticket sold
sees 20.5p donated to good causes.
In last weeks feature, Customer
titles explore online engagement
we credited the wrong publisher
for its work on Standard Life. The
correct publisher is Forward,
which produces Standard Lifes
MoneyPlus magazine.
medianews marketingweek.co.uk
MAGAZINES
Womens weeklies prop up declining sales by engaging with readers online. By Lara OReilly
Magazine brands looking to build
up a more engaged following on
social media should link back to
their offline product, despite
dwindling print readership,
according to a report.
Qualitative analysis by Ipsos
Mori of seven of the UKs biggest-
selling womens weeklies suggests
the brands that ask for feedback on
their magazines or pose questions
based on topical news stories were
the most likely to have the highest
number of likes, comments, replies
and retweets.
Magazines that retweet or reply
to their fans also increase repeat
interaction, which Ipsos Mori says
will help them to become readers
long-term brands of choice.
However, the number of
Facebook fans or Twitter followers
a magazine has does not
necessarily reflect the amount the
audience engages with the brand
Print titles use social media
activity to generate loyalty
on the social networks, according to
the study.
The report found that although
Northern & Shells OK! magazine
has more than 179,000 fans and
followers across Facebook and
Twitter, its fans engage with the
brand less than Bauers More!
audience, which had a social media
audience of 137,000 at the time of
the analysis in August.
More!s Social Heat Index the
relative score averaged between its
audience size, number of posts and
interaction from fans across
Facebook and Twitter was 71.2%,
compared with OK!s 53.4%.
In June this year, More! co-created
The direct marketing industry has
called on new postal services
regulator Ofcom to overhaul the
regulation of business mail.
The broadcasting and telecoms
watchdog effectively replaced
Postcomm on 1 October. It will
publish proposals on the framework
for economic regulation of post
later this month. The consultation
is likely to look at price controls,
VAT and whether a universal
service is financially viable.
Alex Walsh, head of postal and
environmental affairs for the Direct
Marketing Association, says that it
is essential that Ofcom recognises
the role direct mail plays and
introduces curbs to stop Royal Mail
abusing what he alleges is its
monopoly position.
He adds: There must be some
checks and mechanisms that
prevent the abuse of Royal Mails
monopoly. The abuse of a
monopoly position by excessive or
DMA in call
for review
of business
mail rules Ofcom: Full review of services
unjustified price increases or
detrimental changes to terms and
conditions would drive those all-
important business users into using
other media.
The DMA led the protest earlier
this year when Royal Mail was
cleared to increase the price of
business mail by up to 19%.
TNT Post has reiterated its call to
end the uncompetitive exemption
Royal Mail enjoys from charging
customers VAT on business mail.
The switch to Ofcom follows the
passing of the Postal Services Bill,
which laid the groundwork for the
merger and possible restructure of
Royal Mail in order to make it
attractive for sale.
Royal Mail says it wants to see
a major new approach that will
end what it has previously called
the regulatory stranglehold
that it claims sees it lose 2.5p on
every letter it delivers on behalf of
its competitors.
POSTAL SERVICES
BT has overhauled the brand
identity for its pay-TV service BT
Vision as it looks to increase the
number of subscribers.
A new logo and colour scheme
has been created to wrap around
its variety of entertainment, sport,
film, music and childrens channels,
which aims to make the service
express more personality.
The new design centres around
a triangle-shaped logo, which
represents the v in BT Vision and
also symbolises a play button.
The service was launched in
2006 and set a target of acquiring
between 2 and 3 million customers
by 2010. However, the service
currently has 600,000 subscribers,
which compares to more than 10
million Sky customers in June 2011
and 3.8 million Virgin TV viewers.
BT hoped to significantly
increase the number of Vision
subscribers last year when it
secured a deal with BSkyB to offer
BT unveils
new identity
for pay-TV
offering
New logo:
BT Vision
More: High Social Heat Index
two Sky Sports channels on the
platform. BT promoted the deal by
launching a 30m marketing
campaign.
Michael Barry, director of TV,
programming and creative at BT
Vision, says the new visual identity
is a big step forward in
establishing a true identity for our
television service.
He adds: It allows us to build on
existing BT brand awareness, with
more than a nod to the world of
entertainment.
The new BT Vision design was
created by ManvsMachine and
Proud Creative.
Separately, in-house creative
division Sky Creative has produced
a new logo and idents for Sky 3D, to
capture the channels depth and
diversity of content by blending
together all the colours of the
companys flagship channels.
TELEVISION
Social network interaction vs print circulation
Social media Interaction Circulation
audience score (%)
Heat 251,000 81.8 326,677
More! 137,000 71.2 170,033
Grazia 85,000 58.4 219,741
OK! 179,000 53.4 473,167
Closer 16,000 43.1 459,693
Look 95,000 41.5 300,161
Hello! 30,000 16.3 413,167
Sources: Ipsos Mori (August 11) and ABC (June 11)
an entire print issue with its
Facebook fans to celebrate hitting
100,000 followers.
Of the seven womens weeklies
analysed, Bauers Heat was the
brand found to have the most
engaged audience, with a score of
81.8%. Heat had a social media
audience of more than 250,000 at
the time of the research.
The womens weekly magazine
sectors print circulation declined
8% year on year to 7.5 million
according to the Audit Bureau of
Circulation report for the six months
to June. Bauers Closer magazine
took the most substantial hit year on
year, down 22% to 326,677.
attitudes are being shaped as much by the
response to the TV ad in the social space as by
the TV ad itself.
So if the first stage of the data problem was
collecting it and the second was integrating it,
the third stage, the one companies are now
beginning to perceive, is being able to update
and call on that data in real time. And of course,
each level of complexity adds another level of
cost, which is where the divide is opening up.
The implication of this divide is that it
becomes harder for small and medium-sized
companies to compete in these more targeted,
higher return areas of advertising. Big
organisations, with big data management
budgets, can do it. Smaller ones will struggle to
afford it.
This may turn out to be a temporary blip
rather than a permanent state of affairs. The cost
of processing will continue to fall as the market
grows. And for many companies, the challenge
of the 360-degree customer view will continue to
be the most pressing. But when the most
important component of relevance is timeliness,
marketers will ignore the fourth dimension of
data at their peril. G
digital marketingweek.co.uk
michael nutley
Is your brand a data have or
have-not? Time will tell you
internet advertising, and as a result, everyone
has access to far more data than ever before. But
what Swindell was talking about was not so
much the amount of data available to individual
marketers, but their ability to make use of it.
The American writer Dorothy Parker once
quipped that the rule for making jokes in
conversation was better never than late, and
were finding that this is also true of online
marketing. Its become common practice to
target car insurance ads at people whove just
bought a car, or to place ads for investment
brokers at the end of share tips rather than
before them. But timing is much more sensitive
than that.
Take retargeting, for example. It works by
targeting people who have browsed an e-
commerce site but not bought anything from it
with ads for the things they looked at. Because
youre advertising to hot prospects, the returns
can be spectacular. But, like any form of
targeting, it has to be done carefully or it starts
to annoy people. One of the key parameters
turns out to be the time between the initial
browsing and the follow-up ad being served. Do
it promptly and people see it as a useful
reminder; leave it too late, or carry on for too
long, and it becomes at best irrelevant because
the person may have bought the item elsewhere
and at worst damaging to peoples perception
of the brand.
The retargeting example also highlights
another aspect of the problem, which is the need
to marry up data from a number of different
sources. This issue is well-recognised; its the
much-discussed need to have a 360-degree view
of the customer, and its the force behind the
breaking down of the silos that have built up
within companies around the different online
marketing platforms.
This is a challenge, because there are so
many types of data, coming from so many
different sources. There are response rates to
online advertising; open and click-through rates
for emails; clicks on both paid and organic
search terms; browsing and purchasing
behaviour on the website; and sentiments
expressed in social media.
But the challenge might be better described as
the need for a four-dimensional view of the
customer, because of the speed at which
peoples status can alter. Its the people whose
systems dont allow them to respond to those
changes quickly enough that Swindell describes
as the data have-nots.
To make things even more challenging,
quickly enough in this context is coming to
mean close to real time. This is another impact
of social media. The days of being able to do a
data run overnight and merge different sources
of information have gone, because customers
ata is the great obsession of
interactive marketing. At first,
unprecedented measurability
was the great claim of internet
advertising. More recently
battles have been fought over
how much data people are prepared to share
with marketers and on what terms; and in recent
years weve seen the rise of new forms of
targeting based on new ways of collecting and
manipulating data. But only recently was it
suggested to me that not every marketer has
equal access to data.
Interviewing Eddy Swindell of email
marketing provider ExactTarget for last months
Digital Strategy supplement, he said that
theres a divide being created in the industry
between the data haves and the data have-nots.
At first this seems counter-intuitive. After all,
the ability to know who has seen an online ad
and how they responded to it is the basis of
Timeliness is becoming the
determining factor for
online success, but the data
systems required to achieve
it are creating a digital divide
One of the key parameters of
online targeting turns out to be the
time between the initial browsing
and the follow-up ad being served.
Do it promptly and people see it as
a useful reminder; leave it too late
or carry on for too long, and it
becomes at best irrelevant
(because the person may have
bought the item elsewhere) and at
worst damaging to peoples
perception of the brand.
D
Michael Nutley is a writer and consult-
ant specialising in interactive media
michael.nutley@blueyonder.co.uk
We would say
that. So heres
what other
people say...
John Brown
immediately understood
our message. Their
great design and
inspiring content
allow us to share our
passion for print and
meaningfully engage
with our customers
Eric Van den Bruel
Marketing & Product
Development Director
Sappi Fine
Paper Europe
The UKs no.1
content agency

magazines online catalogues mobilewww.johnbrownmedia.com
Contact: Andrew Hirsch 020 7565 3205
the debate email us at mw.editorial@centaur.co.uk including your name and address
Laura Snoads article about
rebranding (MWlast week)
rightly points out the importance of
gaining support from staff,
stakeholders and audiences along
the transition trajectory, but what
about the need to involve the
agencies more closely?
Agencies must be given the
opportunity to get under the skin of
the brand, otherwise you will end
up with more examples like the
failed Coco Pops rebrand when
public outcry forced Kellogg to ditch
the new Choco Krispies moniker
after less than a year.
A successful rebranding involves
overhauling a companys goals,
message and culture, not just
changing a name or a logo.
Closer collaboration between
agency and brands in the process
is intrinsic to effective creative
invention.
David Wood
Creative director, Iris Associates
Laura Snoads advice on rebranding
(MWlast week) is good practice not
just for brands, but agencies too.
Although both camps should en-
sure their activities are faithful to
the new image they want to proj-
ect, this is too often an after-
thought, leaving a business open to
criticism about its claims.
The obvious example is the
green rebrand, whereby a com-
pany will project an image of sus-
tainability that its practices dont
live up to. The planning around a
rebrand must be integrated across
a whole business, and not just fall
to the marketing department.
To be successful, it requires all
departments to become brand
advocates who believe in, practice
and can prophesise the values.
Danny Turnbull
General manager, Gyro Manchester
@
The research cited by Richard
Madden (MW22 September) is
as useful as a chocolate teapot.
Certain brands are useful? No
sh*t Sherlock. This is as helpful as
research that says a certain brand
is cool, likeable, desirable or
trustworthy. So what?
The key issue is why. What are
the neuro-psychological drivers that
lie beneath what really drives brand
preference? These wont be
uncovered via traditional research
techniques because people are
unreliable witnesses to their own
behaviour. Its disappointing to see
this type of research still being
peddled with a straight face.
Phil Barden
Managing director
Decode Marketing
@
The latest personalisation
technology available to retail
websites can make a real difference
to online revenues, helping
marketers to engage with
customers on a one-to-one basis,
boosting sales and customer loyalty.
Those marketers that get in ahead
of the wave to automatically create
engaging, targeted product and
service recommendations based on
real, multichannel customer
behaviour will see not only a
significant uplift in conversions but
also deliver that critical consistent
experience with brand and company.
Wayne Morris
UK general manager, Maxymiser
@
Keep premium
inventory out
of bidding war
I disagree with the view that
publishers should
increasingly trust real-time bidding
and deliver more premium
inventory through RTB suppliers
(Digital Strategy, 15 September).
Currently, RTB is an efficient
means for liquidating remnant
inventory, but it has not yet proved
itself to be effective at selling
premium inventory.
In other words, RTB suppliers
will undervalue premium inventory
and, for this reason, publishers
should exercise caution when
extending their trust.
Fundamentally, the price a
publisher commands for its online
advertising comes from the distinct
qualitative value it offers its
unique content, brand and image
as well as being able to control the
availability of its inventory. In an
auction-based environment, the
qualitative value is stripped away,
inventory availability is blown
open, and all thats left is an
essentially infinite supply of
indistinct, valueless impressions.
Publishers are better off
leveraging their brand, focusing on
selling premium inventory and
restricting the sale of remnant
inventory.
Jonathon Shaevitz
CEO, Maxifier
@
Agencies play integral part in
successful rebranding exercise
Rebrand failure: Coco Pops
Retail websites need to use
personalisation technology
But why are brands useful?
Fast fashion model gets
even more competitive
Whether fast fashion means
throwaway trends or quick
turnaround of product, one thing
is for certain is that speed is key
to the success of any high street
fashion outlet. Slow and steady
is not an option anymore.
Marketing Week looked at
Forever 21s extreme version of
fast fashion last week, which
sees the chain adding new
products and lines to stores
every day.
This kind of hyper quick
turnaround is becoming the
norm, particularly at the value
end of the fashion market.
Another retailer pinning its
success on the speed at which it
can react to trends and develop
its fashions is Internaionale.
The value fashion chain sits
alongside New Look, Primark
and Forever 21s youth
demographic and in the past 12
to 18 months it has rebuilt its
senior board, including a number
of former New Look
management with Anna
Andrews as head of design and
Claire Miles as head of buying,
and former Peacocks head of
ecommerce Fiona Fairweather to
lead the charge.
It now changes its window
displays, which marketing and
PR manager Elaine Kennedy says
are the companys advertising,
every two weeks, and is
constantly updating its stock.
In its previous form,
Internaionales problem was
that it just moved too slowly and
was behind all of its rivals in
terms of design, style and
fashion. But now it has been
dragged up to speed by the new
management, it hopes to be able
to take on the likes of New Look
and Forever 21 as a destination
for fashion, not as a discounter.
The fact that New Look has
had a shaky few months, which
has witnessed the departure of
both its group marketing
director Joe Irons and chief
marketing officer Nick Cross,
makes it a particularly
opportune moment for
Internaionale to be ramping up
its activity.
G For the full article, go to
MWlinks.co.uk/FastFashion
Rosie
Baker
Silver service:
Online brands
must match
their offline
competitors
Did you know?
1.15bn is the amount that will be spent
per year on outdoor advertising by 2020
Kinetic - source: Marketing Week July 14th 2011
Get the sharpest industry insight from
Marketing Week - the magazine that marketing
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Did you also know
Marketing Week is read by 10,000 more marketing
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source: Audit Bureau of Circulation audit period July 2010 - June 2011
*abc figures audit period july 2010-june 2011
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net circulation audit issue 30,267
average net circulation 30,431
For the latest news, views and jobs visit
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You can understand why large
corporates are obsessed with
bringing together their brands for
consumer-facing activity. With only
so much budget to go round, why
not pool together resources and see
if greater synergies can be achieved
via a multibrand template?
Better still, the sales team can
focus on executing fewer, bigger,
better or whatever the latest
internal operating mantra might be.
It all makes perfect sense from an
internal brand planning point of
view, but does such an approach
make any sense whatsoever to the
poor consumer?
When the biggest of them all,
Procter & Gamble, took the
multibrand path earlier this year,
the company claimed: The world
is changing and people want to
know who is behind the brand.
P&G added that purchasing
intent can increase 20% as a result
of consumers making a greater
connection with the mothership.
We can debate whether this is an
underlying consumer truth or
simply a case of corporate
arrogance of the highest order.
Either way, I suspect the ROI and
executional impact is a great deal
better when budgets are pooled.
On a related note, I have come
across a more creative multibrand
campaign from Walkers
and Pepsi, which have
joined forces for a Fire
and Ice promotion that
involves Jalapeno Fire
Doritos sold alongside
Pepsi Max Citrus
Freeze.
Crisps are
consumed with
soft drinks 58%
of the time, but
they are only
purchased together in
13% of cases. Fire and
Ice is designed to put
that right.
Retailers are
already doing meal
deals and connecting products, but
were integrating flavour
matching with huge
through-the-line support to
drive penetration in a
normally quiet period,
reads the trade release.
This is an admirable
campaign and if it helps both
of these brands secure off-shelf
display and salesforce excitement it
will have succeeded in achieving
more than just internal corporate
collaboration brownie points.
To further whet consumers
appetites, PepsiCo/Britvic is
running a prize draw to win a trip
to Las Vegas or Iceland. Those
fortunate enough to win either
holiday will no doubt be able to
enjoy a bumper gondola end-
clearance promotion as the back
end of the limited edition
promotional stock melts its way
through the system.
Top 5 most read on marketing week.co.uk
Top 5 most read on nma.co.uk
The week in numbers...
I suspect the ROI and
executional impact is a
great deal better when
budgets are pooled
Our man on the inside provides a view
from the top of the marketing tree
56m
94k
5.7%
The Secret Marketer
The estimated annual total of
people who see the London
Piccadilly Circus billboard, taken
over by Hyundai this week.
The number of new marketing
jobs since 2007 a 20% rise
according to EMR and the Office
of National Statistics.
Rate of ad spend growth for the
second quarter, down from 8.9%
in the first quarter of 2011,
according to Nielsen.
Health Lottery launch campaign aims to reach 98% of UK
www.MWlinks.co.uk/HLreach
EasyJets cheeky riposte to BA campaign
www.MWlinks.co.uk/EasyjetBA
Health Lottery launches to rival National Lottery
www.MWlinks.co.uk/HealthLottery
Asda and Sainsburys slam Tescos big price drop
www.MWlinks.co.uk/TescoPrice
Facebook unveils radical design overhaul
www.MWlinks.co.uk/FacebookChanges
Google Networks keyword targeting 8x industry standard
www.nmalinks.co.uk/GoogleKeyword
Facebook collects data on third-party sites when users offline
www.nmalinks.co.uk/FacebookThirdParty
Innocent launches social discounting campaign
www.nmalinks.co.uk/InnocentSocial
Sky tests localised online news and sports service
www.nmalinks.co.uk/SkyLocal
Google launches adwords for video
www.nmalinks.co.uk/VideoAdWords

cover story
costa coffee
P
h
o
t
o
g
r
a
p
h
y
:

P
h
i
l

A
d
a
m
s
osta Coffees chief coffee taster
Gennaro Pelliccia has an unusual
claim to fame his tongue was
insured for a whopping 10m in 2009.
The chain has put its money where
Pelliccias mouth is after enormous
growth over the last few years, including a
22.8% rise in sales worldwide over the last six
months to 351.3m.
Indeed, Costa is now the UKs largest coffee
chain and the third biggest food and drink chain
overall, with store numbers in Britain
outstripping even McDonalds.
While tongue insurance makes for good PR, it
also serves a business purpose. The brands
overall marketing director Jim Slater claims the
secret ingredient that sets his company apart
from its rivals is its commitment to insight-led
operations, development and marketing (see
Insight@Costa, page 21). Pelliccias tongue is
crucial because Costas research reveals that
consumers really care about the coffees taste.
Pelliccia and his tasting team are based at a
roastery in London, but insight feeds into every
aspect of Costas brand around the globe. With
nearly 1,300 outlets in the UK and almost 700
overseas locations, customer research is used to
guide everything from store design to new
product development. How the brand looks and
feels in China or India is different to how it does
in Eastern Europe or Saudi Arabia (see
International@Costa, page 20).
Weve combined our instinct with insight. I
cant even count the amount of times in the last
three years that we have changed the business for
the better based on insight, Slater admits. The
Marketing Week Engage Awards judges agreed in
May this year, awarding Costa the Brand of the
Year trophy for how it has transformed its
business through customer insight.
Playing the loyalty card
Indeed, it was customer insight that led the brand
to set up its Costa Coffee Club last year a scheme
that now has more than 6 million loyalty cards in
circulation in just 18 months. Head of insight
Caroline Harris says the loyalty scheme was set
up after research showed that 10% of coffee
customers overall made up 50% of Costas visits.
This, she claims, is not only an issue for Costa
but is true of the whole coffee shop market. We
were surprised by the promiscuity, she admits.
The 10% that were our best customers might
also be Starbucks customers.
Costas research also told Harris that
convenience of location was so important to
coffee drinkers that the company needed an
incentive for people to seek out Costa above and
beyond its competitors. A new loyalty scheme
was seen as the answer.
Although the company had previously used
prepay cards that customers could load cash on
and spend in store, consumer insight indicated
that UK shoppers prefer points collection schemes,
such as Nectar and Boots Advantage Card.
After testing the scheme in various formats in
Scotland, the new Coffee Club card was launched
nationwide in the UK last spring. Back in April,
when just 1.2m cards were active, Costas parent
company Whitbread claimed they were being
used in 41% of all transactions, with cardholder
spend 6% higher than for non-cardholders.
Slater will not give away details on how the
6 million cards are performing, but claims:
When someone becomes a card holder, their
frequency of visits and spend-per-transaction
increases. The Costa Club was a risk for us that
has paid off handsomely.
The loyalty scheme is also set to be rolled out
to international markets. Costa is in talks with its
franchise partner in the United Arab Emirates
about how it can develop a similar loyalty scheme
to the UK version, while in China a different style
of loyalty scheme is being examined.
Head of international marketing Mita Padhi
explains: What is really important to Chinese
customers is status, so perhaps we would use a
tiered system, rather than a points system. So if
you have a certain amount of activity, then you
are a red member, then more activity could
make you a gold member with VIP rewards.
We are going to test that proposition. So far,
our research tells us the tiered system is much
more compelling for the Chinese customer as
C
cover story costa coffee

Costa coffee comes with
shot of customer insight
Costa Coffee, the Marketing Week Engage Awards
Brand of the Year 2011, gives Ruth Mortimer
exclusive behind-the-scenes access to how research
fuels its rapidly expanding global operation
they like that instant reward and the status
that makes them feel good about themselves.
Loyalty works in every market in some form.
New product development
Aside from loyalty schemes, Costa is also
hoping to attract more visitors to its stores with
the launch of several new products, including a
new drink called Costa Light and brews that
people can share. Costa Light is made from a
single shot of espresso frothed with skimmed
milk. With fewer than 80 calories, it is aimed at
people who are watching their weight or want to
avoid drinking too much caffeine.
This was developed from the results of a
project looking at how we could be innovative
with coffee, along with research looking at
where our gaps were, Slater explains. During
our focus groups, the calorie bank came out,
where people trade off something perceived as
good for something perceived as bad.
Marketing Week (MW): Are your
international customers similar to your
client base in the UK?
Mita Padhi (MP): Costa has 700 outlets
outside the UK, in China, the Middle East,
Russia and Eastern Europe. Through several
rounds of insight and segmentation, we have
discovered that the customer in the UK is very
different from our consumers in other parts of
the world.
In the UK, the average consumer age is 44.
But in the international business, its just 28.
That difference means that you need to have a
stronger digital marketing presence in many
other countries because these young people
are social media advocates.
MW: Which global markets are most and
least like the UK?
MP: The most similar market to the UK is the
United Arab Emirates. Its a very mature coffee
drinking market and there is a lot of competition
from Western brands. Its not just Starbucks,
there is Caff Nero and Coffee Bean & Tea Leaf,
which is huge in the US. People in the UAE drink
coffee as frequently as Brits, their spend is
also the same and their habits are similar.
The markets least like the UK are probably
China and India. The majority of both
populations is under 25 and aspiring to be part
of Western culture. They are looking for a
place to hang out. Its a tight-knit community,
where people live at home for longer, so they
need a place to go with their friends. A coffee
shop becomes that place to socialise.
Takeaway sales account for probably less than
10% of the business.
MW: How do you market the brand in China
if it is so different from the UK?
MP: If you go to any Chinese shopping mall,
there are Gucci and Prada stores. Im not
saying we are like Prada as a brand, but we sit
next to its stores in some malls. So we have to
be accessible but also premium. One of the
phrases we used in our marketing last year
was everyday affordable luxury.
This affects store design it has to speak to
that younger demographic using the outlets to
socialise. It needs to be a bit more funky, cool
and vibrant in its colour palette with soft
seating. We cant put UK store designs in, say,
Shanghai because thats not what people are
looking for.
We also have to have a whole digital
strategy there not just Facebook, but how
you talk to people on their mobiles. Blogging
is huge in China, so we need to make sure we
have the right messages and sentiment. That
is a priority given the young target audience.
MW: What is the market like in India?
MP: Our consumer insight tells us that
savoury snacking is vital for the Indian
market, whereas in the UK, its more about
cakes and pastries.
In India, the food is the difference between
a store making money or not. It is such an
important driver for customers there; it can
play an equal role with the coffee.
MW: How do you adapt Costas food offering
in other international markets?
MP: We offer people a premium Western coffee
shop food selection. We have category A
products, which appear everywhere. So every
market will have, say, a blueberry muffin, a
chocolate muffin, a croissant and a panini.
These are the products that establish your
core range.
Then we have category B products that are
regional such as haloumi panini. In China,
people like the fact that we serve Western
food, but some customers prefer familiar
flavours, so we might innovate by producing a
Szechuan chicken panini.
Category C products, meanwhile, are
bespoke for each individual market, such as
Chinese mooncakes these little cakes are
given as gifts and we sell 175,000 a year.
MW: Which are your biggest competitors on
a global scale?
MP: Our number one competitor is Starbucks. In
China, it was there 10 years before us but it isnt
in India yet. There is a regional player in India
called Caf Coffee Day, which is expanding into
Europe, that has become synonymous for many
Indians with a caf experience.
The quick-service restaurant brands come
into it too, such as KFC and Subway.
McDonalds McCaf brand is also growing
rapidly in Europe.
Mita Padhi international marketing director

international@costa
The company is using the tagline Costa Light.
All the love, none of the handles to market the
new drink. It has also launched the Costa Light
Comedy Challenge competition to find new
stand-up talent. The latter initiative follows a
survey the brand ran showing that Brits are shy
about telling jokes.
Costa head of UK marketing Kevin Hydes says
the Costa Light campaign focuses on mass
awareness, rather than targeting any specific
group. We are not marketing this as a product for
women. It is as accessible for men, who are just
as conscious about calories these days, he says.
Slater adds that because the brands baristas
make Costa Light by hand using Italian espresso
machines, it is not an innovation that can be
copied by rivals with push-button coffee systems.
Costa Light follows on the heels of the brands
main product innovation last year, the Flat White
a milky coffee style popular in Australia and
New Zealand.
Costa credits the Flat White with pushing up
sales 7% at its branches in its first three months
on sale. Neil Campbell, international operations
excellence director for Costa, who previously
handled operations in the companys UK stores,
says this type of new product development also
helps improve staff morale.
Whether its Flat White or Costa Light, our
teams want to know what we are doing to keep
them number one. They know their part in how
they treat the customer, but they also want to
know our ideas.
Marketing campaigns
The ideas that Slater and his team base
marketing campaigns on for new products are,
like everything else, the result of consumer
insight. Costas most-famous ad campaign to
date is one claiming that seven out of 10 people
prefer the taste of its cappuccino in blind taste
tests to Starbucks or Caff Nero.
insight@costa
Caroline Harris
head of insight
Everything we do is
underpinned by customer
insight. It informs our strategy
and validates our instinct. From
continuous studies in the UK and seven key
international markets, we can understand the
consumer hierarchy of needs, how we perform
against those and where our competitors sit.
Four years ago, the insight team was just
me. But we made the decision to bring
everything we know about the customer
together in one place and now a global
insight manager, who is responsible for
international projects, a location and
planning manager, who does all the science
behind where our stores go, and a customer
service manager all report to me.
We use segmentation models to understand
our customers. We can drill right down to
individual stores and understand, for
example, what proportion of our visitors are
what we would call relax visitors or
recharge visitors. Underneath these two
headings, we then have eight individual
segment profiles, such as commuter.
However, these are not mutually exclusive
someone can be a commuter during the week,
but a more relaxed customer at the weekend.
This data lets us understand segments
where we overindex and underindex. We can
also overlay our Coffee Club data and EPOS
till data to understand if a stores customer
base is relax or recharge. Then we can
make sure the service and design match the
needs of those customers.
A good example is our store in Farringdon,
London. It is by the train station and its
design used to be one till, one coffee machine
and lots of comfy chairs. But we realised it
was a recharge store, so we put in two tills,
two coffee machines and took out the chairs.
Its all about making the right store for the
right people in the right location.
Gennaro Pelliccia:
Chief taster works on
Costas new product
development
c
The campaign arose from insight showing
that consumers didnt realise there was any
difference in taste between the three main coffee
brands in the UK, says Harris. Because that isnt
true, we had to educate people about our product.
Although Starbucks has challenged Costas
comparison ads, the Advertising Standards
Agency has refused to uphold its complaints.
Slater comments: We decided to be pretty
aggressive and agitate the market. I think we
can now paint a more emotional picture for the
brand over time.
Since the seven out of 10 campaign, Costa
has gone on to run its first TV ad featuring
monkeys trying to make the perfect cup of
coffee. The company also emails targeted
promotions to Costa Coffee Club members.
Im always looking for how we will make more
cash on an ongoing basis, says Slater. However,
head of insight Caroline Harris is my voice of
reason because research shows us that customers
dont want contact more than twice a month.
Learning when marketing isnt appropriate is
as important as when to put yourself in front of
customers, claims Slater.
Motivation and training
But marketing is not just an external process.
Operations director Campbell says that
communicating brand messages to Costas
18,000 staff in the UK can be a complex process.
The company must package an intricate
marketing message for its consumers so it can be
understood and communicated by every barista,
even if they only work a couple of shifts a week.
Most motivating for staff, claims Campbell, are
the rapid promotions on offer for young baristas
that are keen to rise up in the business. People
are able to achieve store management positions
in around 18 months to two years.
These are the most important people in the
business, says Slater. They meet the customers.
We want to breed a self-starting, passionate
culture. We see it time and again when people
come into the business and move up.
costa in numbers
22.8% Rise in total sales to 351.3m in
the six months to August 2011
145 The number of new stores opened by
Costa in the first half of 2011
300 Costas predicted number of worldwide stores
opening in 2011/12
70% The percentage of shop managers who have
risen from store employees
10mThe amount for which Costas chief coffee
taster Gennaro Pelliccia has his tongue insured
Marketing Week (MW): Why are you moving
into the self-service coffee machine market
with Costa Express?
Kevin Hydes (KH): The premium self-service
coffee market is pretty young. There are about
2000 self-service units out there at the moment.
We spotted an opportunity because we cant
reach consumers in some of the locations where
they want coffee, so this allows us access to
places we couldnt get to before.
We bought Coffee Nation, which had about
45% of the self-service market share. We think
the market in total can reach about 14,000
locations over the next seven or eight years.
MW: Costa prides itself on its hand-prepared
coffees in store. Doesnt this concept clash?
KH: We want to reach people where we cant
have a full store experience. We see potential
in hospitals, stations, universities and so on.
Chief taster Gennaro Pelliccia has worked on
the product a lot, so we can make sure it lives
up to the taste we expect.
MW: As well as launching Costa Express, you
are using greeters at some of your stores. Why?
KH: We are testing this host role at some of our
stores to support the customer journey.
Queues come with negative connotations, so
we need to make things as easy as possible.
The greeter can direct people in the store, or
take food from people in a queue and get it
grilled, speeding up that process.
Ultimately, the host acts as the voice of our
brand, so its important to give people a good
experience. Sometimes people will want to
chat about their weekend, while others just
want to get a coffee as quickly as they can.
The host has to pick up on that.
We have been testing this since the start of
the year in 15 locations, mostly in London
during busy periods. We have tried it outside
London on peak shifts to aid the process, but
on a quiet Wednesday afternoon, it isnt
necessary. That might feel a bit awkward.
MW: You have also launched Drive Thru
stores in the UK. Will we see more of these?
KH: Convenience plays a big part in coffee
choice. Drive-thru coffee is massive in the
States. In the UK, we are familiar with roadside
coffee from service stations, so it felt natural to
look in that area to build our business.
We built full stores with drive-thru elements
attached, while we try to see what the
appetite is for this. Were planning to open six
this year and weve got three open already.
Our mix of sales ranges between 25% and
40% coming through the drive-thru element.
These outlets can break even just through
their store sales, so the drive-thru sales are on
top. Its a very low risk strategy.
innnovation@costa
Kevin Hydes head of UK marketing
The opportunities for staff to move around the
business are even more rewarding now the firm
is growing internationally. Campbell explains
that some Polish employees of Costa are now
asking to go and run stores in Poland, where the
company has bought local firm Coffee Heaven.
The career opportunities are also on offer for
senior employees. Slater, who is currently
undertaking the Advanced Management
Programme at Harvard Business School, notes:
Its important for me to be taken seriously at
the boardroom table and understand whats
going through the mind of the finance director or
operations director, so I can contribute fully.
Despite hoping to learn new skills in the US,
Slater already talks about his marketing role as a
general management function. He sets out
three levers that he sees himself as pulling
the customer (informed by insight); the people
(all staff); and shareholder value (making money
for the business).
Ultimately, says Slater, the belief that everyone
needs to run the business together is what has
been driving Costas success. He says: There
are places where tension exists with marketing
and other departments. In some companies,
everything is siloed and you hear about people
having fights with the sales guys. Weve worked
really hard to smash that away and blur the lines
so everyone has the same agenda. G
You can have the best
marketing ideas in the world,
but if the guys in your stores
dont buy into it, it just wont
work. We discuss what we will do with the
marketing department and how our store
teams will take it. Most of the marketing gets
to store level, which means the in-store guys
know about campaigns and what they are
expected to do.
Our teams enjoy taking part in some
product initiatives, like the Flat White,
because they see it as a credit to them and
their ability to make good coffee. Its seen as
recognising that they are the only baristas
that could deliver this consistently around the
UK. Any business that has both full and part-
time members understands the importance of
delivering consistent experiences.
We have a recognition culture for store
teams. About 70% of our store managers have
come up through the ranks. We focus on
consistency and good performance. We talk to
teams about the speed of service for the guy
thats in a rush. Or chatting to that friendly
lady who wants to talk to us.
We dont have email access in our stores, so
we need to talk to people a lot. We bring the
teams together at a conference and then the
messages cascade out from there. But that
means making sure we get every message
right from the start so we can be very clear
about what we ask them to do.
c
implementation@costa
Neil Campbell international operations excellence director
SEB JOSEPH.
Insight does not just feed
Costas commercial strategy,
it also drives the creative
strategy. Karmarama chief
executive Ben Bilboul, who has worked
with Costa since 2006, says that along with
insight, the brands advertising is built
around innovation and challenging category
expectations.
The agency was tasked with helping the
chain win the high street coffee wars by
building preference in a market that was
traditionally convenience driven. Bilboul
explains: Our focus was how we build
preference for Costa Coffee.
Although we used customer insight to
evolve the campaign, we also needed to do
something creatively that would challenge
peoples preconceptions about coffee.
The resulting seven out of 10 campaign
was heavily investigated by the Advertising
Standards Agency following complaints
from Starbucks, but these were dismissed.
Once we realised we were going to base
the concept around coffee credentials, there
was no point in watering that message
down, says Bilboul. Thats why we went
for protest-style print ads and a provocative
but fun TV spot.
The TV ad featuring monkeys (above) drew
criticism from some animal charities. Bilboul
maintains the brands creative strategy
needs to keep its challenging nature,
especially as Costa is the first in its market
to advertise on TV. Using TV allowed the
agency to dramatise the campaigns concept
in a way that print ads couldnt, he says.
He notes: The best challenger brands are
thought-leaders they set the agenda. By
focusing its advertising strategy around
building preference, Costa has done that.
To read about how Marketing Week Engage
Awards 2011 Agency of the Year Karmarama
developed the creative behind Costa Coffees
latest Costa Light campaign and more, visit
the Pitch blog at MWlinks.co.uk/Pitchblog
c
CREATIVE
VIEWPOINT
bringing agency expertise to marketers
Italian job: Baristas (far left)
make Costa Light by hand
using espresso machines
brought in from Italy
Monkey business: Costas
first TV ad features
primates failing to make
the perfect cup of coffee
because only baristas
will do
the product and has helped Krispy Kreme come
tenth in this years top 100 brands for customer
experience, according to Nunwood. Online retailer
Amazon retains its top spot for the second year
running just ahead of John Lewis (see league
tables, right).
Delivering great customer service might not
be as sexy as launching an advertising campaign
or crowdsourcing your creative via Twitter, but
people spend more time in a brands stores than
they do engaging with your latest TV ad.
Along with Krispy Kreme, food brands Millies
Cookies and Greggs are also doing particularly
well for customer service, at joint sixth and
eighth place respectively in Nunwoods list.
For Denby, consumer confidence in the
product is key to Krispy Kremes success. Millies
Cookies is also looking at how it can differentiate
itself from others in an increasingly competitive
treat market.
More coffee shops are opening which sell food
and sweet treats and have nice seating areas.
Weve had to look at our proposition and make
reat customer service is the
ultimate brand experience.
Consumers on the receiving end
of a positive retail experience
may spend more than they
intend, come back for more and
tell their friends.
But how do you control customer service
when you dont actually have your own sales
staff in a store?
This is an issue that Krispy Kreme UK chief
marketing officer Judith Denby has to deal with
as its products are sold in many Tesco stores as
well as standalone shops.
We try to make the Krispy Kreme experience
more than just the doughnut, she says. Krispy
Kreme does not staff the concessions, but we
control as much of the sales process as we can.
We deliver the doughnuts early in the morning,
stocking the cabinet and merchandising it
ourselves three or four times a day.
We control what we sell and how it looks and
it is presented to the customer as closely as
possible [to being a Krispy Kreme shop] when it
is not in our store.
This aids the brand in offering more than just
The brands that
run rings around
their rivals
G
feature customer service
This years list of the top 100 brands for
customer experience, shown exclusively to
Marketing Week by consultancy Nunwood,
highlights the rise of the smart consumer
and smart retailer.
By Lucy Handley
sure that it is compelling. Companies like Krispy
Kreme are going into cookies so we are thinking
hard about what makes us special and unique,
says Millies Cookies chief marketing officer
Justine Noades.
Delivering a personal service, whether that is
making a customer feel like an individual or
customising products, is something that
Nunwood strategy director David Conway
identifies as vital for doing well in customer
service and is what Millies is looking at (see
Millies Cookies box, above right).
The Nunwood list also highlights the rise of
the smart consumer who heavily researches
and compares their purchases and the smart
retailer meeting their needs through a higher
level of customer service.
At the top of the list, Amazon which
launched iPad rival Kindle Fire last week and
John Lewis are both known for their customer
service. John Lewis encourages consumers to
interact with the brand through well-trained
store staff, while Amazon avoids the need for its
customers to have direct contact with people
through making returns easy to do online.
Amazon says the best service is no service
feature customer service
that is part of frictionless service. Every time
someone contacts Amazon, it uses that
communication to find out what has gone
wrong, claims Conway.
There is a really strong emotional connection
to Amazon, which for an online retailer is quite
extraordinary. The people surveyed say they
love it because of the breadth of the product, the
recommendations and the fact the brand delivers
goods on time or early, he notes.
Amazon also allows people to compare the
prices of products and find cheaper options, as
external sellers can sell second-hand goods to
Amazon customers for less than the new price.
Conway says this trend of easy price and service
comparison is part of the rise of the smart
retailer and smart consumer.
The organisations that recognise there is a
new generation of interconnected consumers who
will happily stand in a shop and compare prices on
their mobile phones have done well in the
research, he says. They are equally smart
themselves, employing staff who are able to
communicate with that smart consumer.
Amazons new Checkout service, which allows
customers to access their Amazon account on
another retailers website, is another example of
smart retailing. People dont have to type in their
address or credit card details twice, making it
easier and quicker to make purchases.
We see Checkout by Amazon as a natural
extension of commitment to customer service
and security, said Marc Woodall, ecommerce
operations manager for watch and jewellery
websites The Watch Hut and The Jewel Hut,
when the service was launched in March. Our
customers trust Amazon and we trust theyll
shop more when they use the Checkout facility.
Being a smart retailer isnt limited to online or
technology-based brands. Beauty brand Lush,
number 12 on the list, does well because of its
knowledgeable staff, claims Conway. Lush has
come from nowhere to a very high position.
Consumers talk about the knowledge and passion
of the staff. They know every detail of the
products they sell and use them themselves.
Hi-fi, home cinema and TV retailer Richer
Sounds has also done well this year, jumping
from 99th place in 2010 to 11 in this years list.
Conway explains: Its staff are willing to talk
about products in a way that shows they know
a lot about the subject and are able to identify
the customers needs.
He attributes this leap to an increase in
consumers researching product and service
recommendations online before going into a
shop. People find that the Richer Sounds staff
are concerned about meeting their needs rather
than selling the most expensive item, he says.
Brands typically break into the top 100 by
looking at the total experience of a customer.
Airlines Virgin Atlantic and Emirates appear at
positions three and four respectively, both rising
several places since last year.
Virgin is starting to occupy the territory that
British Airways used to a flagship British brand
that people can be proud of. In the survey, Virgins
staff are generally felt to be fantastic, says
Conway. BA is at number 54 this year, up from 60.
He adds that Virgin has become a customer
service case study for other brands aiming to
humanise their operations. Its in-flight staff are
taught to make a show of speaking to children
or holding babies, so that other passengers can
see what a good job they are doing.
Conways final strategy for success is to look
at the whole of a customers journey and avoid
experience myopia. He says that all
businesses need to take responsibility of the
entire end-to-end customer experience rather
than just their section of the sale.
Looking back to the top-ranking example
from 2011, he notes: Amazon rectifies
problems whether caused by it or through
third parties the brand owns the total
customer experience. G
Methodology
Nunwood carried out 7,300 interviews with
a representative sample of UK consumers over
three days in mid-September.
People were asked to specify which
companies they had interacted with over the
last six months and then to rate brands in
terms of the extent to which they met their
particular needs, were easy companies to deal
with and how much they met or exceeded
expectations.
The answers to these questions were used
to create an index out of 10 which was then
used to build the league table. On average,
each respondent rated 18 brands.
League tables
The customer experience top 10
2011 2010
1 Amazon 1 Amazon
2 John Lewis 2 First Direct
3 Virgin Atlantic 3 Waitrose
4 Emirates 4 M&S Simply Food
5 Marks & Spencer 5 John Lewis
=6 M&S Simply Food 6 Virgin Atlantic
=6 Millies Cookies 7 Marks & Spencer
8 Greggs 8 Nandos
9 Hilton 9 Asda
10 Krispy Kreme 10 TGI Fridays
Source: Nunwood
Go to MWLinks.co.uk/customerservice for the
full top 100 lists for 2011 and 2010
Millies Cookies
Justine Noades, marketing director at Millies
Cookies, joint sixth on Nunwoods list of the
top brands for customer experience, says it
runs mystery customer programmes 13 times
a year to see how it is doing in terms of
service. However, real-life customers rather
than professional mystery shoppers are used
for this programme.
We want to improve the overall brand
experience, she says. We have found that
what people love about Millies Cookies is
the variety, choice, personalisation and the
fact that we dont come across as a big
corporate brand.
Millies is part of SSP, which also runs Upper
Crust and Caff Ritazza, but each separate
brand has its own team, so there is less of a
corporate feel. While a focus on service seems
to be working for Millies Cookies, Noades
says she is developing a project to identify the
brands core DNA for the 118 UK stores. She
is looking at three brand values of variety,
choice and personalisation and how these can
be improved further. Once these are in place,
the mystery customers will help show how
the brand is doing.
Personalisation is important to Millies, says
Noades, so it offers a customised icing service.
For David Conway, strategy director at
Nunwood, making people feel like individuals
is important. People make informed decisions
and demand customisation. This is the
opposite of conventional retailing where
standardisation and commoditisation are key
to commercial success, he says.
Millies is also looking at whether there are
certain characteristics it should be looking for
when hiring staff.
We are looking at things like recruitment
policies and whether there is a side to that
which is about recruiting a certain type of
person for Millies, says Noades.
She is working on a communication plan for
the brand but wants to get the store
environment and other aspects right before
any money is spent on above-the-line
marketing.
There is a lot to make sure we get right,
first in terms of the store environment, the
point-of-sale marketing and the product range,
for example. We are looking to innovate in the
next six months and also want to up our
digital and social media presence, developing
our website further.
Retail brands are making best use of technology
to achieve high open and response rates for
email campaigns, according to new research.
By Michael Barnett
Consumers think brands are getting better at
email marketing, but the window for grabbing
their attention is relatively small, according to the
results of an annual email tracking study, seen by
Marketing Week.
The research of 1,800 consumers, commissioned
by the Direct Marketing Association and carried
out by fast.MAP, reveals that 23 out of 24 brands
in the survey have improved their email marketing
in consumers eyes since 2010. The biggest
improvement is achieved by Argos, with a seven-
point increase in the percentage of people who
say it uses email to good effect.
The only brand to slip backwards is
Somerfield, which was taken over by The Co-op
in 2008. However, its score decreased by less
than one percentage point.
The publics attitude toward brands email
communications is progressively improving, says
Dela Quist, chief executive of email consultancy
Alchemy Worx, which contributed to the study.
Consumers view the emails that they sign up to
very differently from the general white noise that
is out there, he says.
This tallies with the findings of this years
Email Attitudes research done by Digital Strategy,
part of Marketing Week, which shows that while
marketers are sending more emails than they did
last year, open and click-through rates are
increasing (Digital Strategy September 2011).
Brands make
emails land on
welcome mat
trends email marketing
John Lewis head of online marketing Emma
McLaughlin says the improvement owes in part
to the use of increasingly sophisticated
technology. Software can now adjust the
frequency of emails according to how often an
individual consumer opens or clicks on them and
can segment customers so that messages can be
targeted to the right people. She adds that
emails can therefore be made more personally
relevant and customers responses have
improved as a result (see the Frontline, above).
Alistair Daly, chief marketing officer of travel
website On The Beach, also points to an
enhanced ability to clean email databases.
Brands email systems can detect when
messages are being forwarded to junk folders
and take those email addresses off the mailing
list, for example (see the Frontline, above).
Despite this improvement across the board,
there is still a limited amount of time when
consumers are receptive to emails, with 61% of
people saying they do not check emails at all at
work and 69% saying they spend less than two
hours a day on email at home. Consumers can
therefore afford to give only a limited amount of
attention to each message.
McLaughlin at John Lewis suggests this is
not necessarily a bad thing: We are sending
emails to try to prompt another behaviour, such
as clicking out of the email and onto the John
Lewis website. It is not about having them
dwell on the email.
Half of the surveys respondents say they
receive at least 20 emails from trusted brands
every week and 39% say they are signed up to
receive messages from 10 or more companies.
Quist of Alchemy Worx suggests that people
receiving a lot more than 20 emails a week from
brands are relatively rare, and that most are only
signed up to get the messages they know they
want and have time to consider.
If your inbox is inundated, it is not from the
brands that you trust. If you get 300 emails a
day, only about three will be from brands that
you signed up to.
The evidence we see is that people tend to
accept emails from one or two brands per
category. If you search for insurance, there are
100 different brands competing for your
attention at that point. That is competition. Our
hypothesis is that the inbox is a relatively
competition-free zone, he says.
Once a brand has made it into a consumers
inbox, therefore, it appears that half the battle is
won. Yet being one of the few brands in a given
product category to which a consumer
subscribes remains the marketers first hurdle.
There is still an imperative for brands to give
consumers a reason to sign up, and the
overwhelming message from the surveys
respondents is that a financial incentive is most
effective. The top three reasons given for signing
up to a brands mailing list are offers, discounts
and vouchers, while news and exclusive content
register fewer positive responses.
Quist suggests that respondents claimed
behaviour could underestimate the degree to
which recipients actually engage with emails
from brands, however. This is important, he says,
because incessant messages about discounts are
likely to lose their resonance, a point with which
McLaughlin at John Lewis agrees.
Quist explains: If you look at the sign-up
processes, most calls to action will say
something like sign up to receive special offers
and discounts. Very few people sign up because
they want to give brands the opportunity to sell
to them. The number one driver of open and
click-through is offers, but you cannot have
Alistair Daly
Chief marketing officer
On The Beach
I do not believe the finding that says 61% of
respondents do not check emails at work. I
wonder if they are giving that response because
they do not want to get in trouble with their
bosses. They may not book their holidays in
work time, but they are certainly searching
online and clicking on emails.
We have seen an improvement in open and
click-through rates this year, due to a more
accurate database. So if our emails are going
into spam folders after the second or third time,
we get that information back.
When we send out an exclusive offer with a
48-hour time limit, we get open rates of 50-60%
and click-through rates of 30-40%. In the travel
sector, open rates of 15-20% are the average.
Although our emails contain things like
weather reports or links to video content, what
is clicked on are the deals.
Email has one of the highest attribution rates
in other words, it really helps other channels.
Facebook is also good at doing that, but email
has doubled the scores for us compared with
Facebook. It is a very good channel to help other
channels deliver the sale.
Emma
McLaughlin
Head of online
marketing
John Lewis
Increased open and response rates are
connected to the relevancy of the emails to
the audience. Gone are the days when a
blanket email is all that a business will do.
Email is also starting to support things like
social media. We have started an email
campaign for people to rate the products they
have purchased.
We measure emails in three ways
relevancy, frequency and design. According to
our internal surveys, 72% of people find our
emails relevant. For frequency, we look at the
engagement of customers to decide how
many more they should be sent.
If you click through to browse the site or
click through to purchase you will receive
more emails and 86% of our customers say
they receive the right number of emails from
us. When you segment and make it more
relevant, you see the performance metrics
increase. Because we have our policy of
Never knowingly undersold, we use
vouchers and offers less. Sometimes we get
complaints from customers when we use
offers too much.
thefrontline
thefrontline continues on page 28

FMCG 1%
Other 6%
Financial 11%
Cinema and theatre 18%
Restaurants 19%
Travel 32%
Street retailers 43%
Supermarkets 49%
Online retailers 56%
Source: DMA/fast.MAP Email Tracking Study, October 2011
56%
of survey respondents
think online retailers
are good at email
marketing
Katie Sheppard
Director of marketing
and relationships
Match UK & Ireland
The nature of our business means we are
engaging with our customers on an emotional
level and our email marketing mirrors this
relationship. We are aware that consumers
receive a lot of emails so it is essential that
ours stand out in their inbox. It is a case of
quality over quantity and ensuring that emails
are well targeted and strike the balance
between informative and engaging, with a
strong call to action where appropriate.
We are always looking to improve the
service we offer. This includes refining our
segmentation and tailoring our offer as and
when we can.
We have tested geo-targeting and aim
where possible to be gender specific so that
the email reflects the members search for a
partner as closely as possible.
Special subscription offers are also
becoming increasingly important, especially
when it comes to engaging with consumers
looking for the best dating site. We have
previously used short-term offers such as
three days free, which entitles potential
members full use of the site at no cost.
Rachel Spiller
Direct marketing
support manager
The Co-operative
Group
We have been sending an increasing number of
emails to members over the past year, and we
have seen an increase in both our open and
click-through rates, probably due to us sending
out more offers-based emails. Competitions
have our strongest click-through rates.
The Co-operative Group has a number of
businesses and we have been trying to get
more and more of those on board to give
members exclusive offers.
We started off with Co-operative Electrical,
where we put promotion codes in the emails,
but for a lot of the other businesses that do
not have transactional sites we have
struggled.
Over the last couple of months, Co-operative
Food emails have included downloadable
coupons that are secure and personalised. We
have put a lot of investment into the software
that can allow us to do that.
But we are not just about offers. Our
members own a part of the business, so we
often send out communications inviting them
to events, which get good open and click-
through rates.
continued from page 27
thefrontline
one every day because brands sometimes
have to market at full price.
The findings of another survey conducted by
Alchemy Worx on behalf of a brand also suggest
that consumers attitudes to email are less
objective than they probably believe. Consumers
who give a particular brand a high net promoter
score (NPS) meaning they are likely to
recommend it to peers also tend to place high
value on the emails they receive from it and
underestimate the volume of messages sent,
Quist says. The reverse is true of consumers
who give a brand a low NPS.
Overall brand perception is therefore likely in
part to determine a consumers view of the
brands email marketing. Quist points to
Norwich Union, now Aviva, and says that when
the insurance brand generated a lot of negative
media attention after moving its telephone call
centres offshore several years ago there was an
upsurge in complaints about its email marketing.
Fifty-six per cent of consumers surveyed have a
positive overall view of email marketing by the
retail sector, followed by supermarkets (49%) and
high street retailers (43%), while only 1% say
FMCG brands do email marketing well.
Retailers are also among the most improved
brands over the past year, according to the
study. They dominate the top five on this
measure, with Argos, Tesco, Marks & Spencer,
Sainsburys and John Lewis respectively seeing
the biggest increases in the percentage of
people who think they do email well.
This is likely to be because retailers have more
reason to communicate with customers on a
regular basis. This has the twin benefit, according
to Quist, of giving marketers more data to indicate
which types of emails work best and making the
customer more willing to accept regular messages.
Retailers learn faster and they are able to
follow the money in a way that someone in a
business-to-business environment, publishing or
airlines, where purchasing is much less frequent,
cannot. Consumers engage with their email
programmes much less frequently.
They cannot send out a lot of emails in the
same way that a retailer does because the need
is not there. They have to work harder to get
engagement and they learn more slowly,
because the purchases happen less frequently.
For those brands seeking to catch up with the
retail sector, the watchword for improving their
performance is relevance. Brands now have
more technological tools at their disposal to
achieve it, and in terms of consumer sentiment
at least, these are starting to pay off. G
Exclusive content 21%
News 28%
Free delivery 34%
Vouchers 56%
Discounts 61%
Offers/sales 65%
None of the above 11%
Why do you sign
up to a brands emails?
Which industry
sectors do email well?
Which retailers do email well?
(Change in percentage points March 2010-July 2011)
65%
of respondents signed
up to emails because
of a special offer or
sales promotion
Argos 7%
Tesco 6%
Marks & Spencer 4%
Sainsburys 4%
John Lewis 3%
O2 3%
Dell 3%
Vodafone 3%
Currys 3%
British Airways 2%
Morrisons 2%
Boots 2%
PC World 2%
easyJet 2%
Homebase 1%
Virgin 1%
Specsavers 1%
Orange 1%
Ryanair 1%
McDonalds 1%
B&Q 1%
Dreams 1%
BMI 0%
Somerfield -1%
peer panel
retail marketing
Are you being served
by your specialist staff?
Ryan Cheyne
People director
Pets at Home
Lena Rose
Regional controller
for the South
Ann Summers
Paul Kendrick
Group development
director, JD Williams
(part of the N Brown
group, which also
includes High &
Mighty and Simply Be)
Richard Baylis
Head of retail
O2
Specialist staff such as style
consultants and nutritionists
are being hired by retailers to
lend an extra hand to
customers. A panel of experts
discuss how they add value.
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peer panel retail marketing
Marketing Week (MW): How do you use
specialist staff in your stores?
Ryan Cheyne (RC): At Pets at Home we have a
Specially Qualified Person (SQP) scheme for
colleagues who are trained to sell pet medicines.
About three years ago, a number of pet
medicines were deregulated previously they
were only availably by prescription from a vet.
To be able to sell these medicines, you have to
be a SQP. Being able to offer these products is a
key part of our being a specialist retailer.
Some of our colleagues also undertake a
two-day dog and cat nutrition programme, so
we can offer free nutritional advice. It helps
build relationships with our customers and
increases loyalty.
The key thing about being a specialist is not
only having products that general retailers wont
have, but having colleagues who know what
theyre talking about. We train all our colleagues
to a core knowledge level, such as the needs of
different pets that we sell such as rabbits,
guinea pigs, hamsters and fish, as well as ones
that we dont sell, like dogs and cats, as they are
still a key part of our market.
Lena Rose (LR): We train staff about all Ann
Summers products which is important because
they are specialist personal items. Our customers
need to feel confident that we have their best
interests in mind and will always sell them the
most appropriate items from our ranges.
Paul Kendrick (PK): High & Mighty stores offer
a personal shopping service, and our Simply Be
stores have style consultants who provide a one-
to-one service and are there purely to advise.
You can book these services or just walk in.
In High & Mighty, the store managers run the
service. It has a lot of high-end customers who
ask for help to organise a made-to-measure suit.
The Simply Be style consultants not only do
clothes fittings but shoe and bra fittings. They
have been trained in what suits different body
shapes, and can recommend not just products
available in store but from the wider N Brown
group [such as Figleaves.com].
Richard Baylis (RB): We introduced the O2
Gurus to our stores in 2010. They are there to
provide jargon-free impartial advice, whether
someone is an O2 customer or not. They also
offer tips on everything from the best games
available on your phone to changing the security
settings on your laptop. They aim to teach every
customer three things they didnt already know
about their technology. Remarkably, they nearly
always manage it.
MW: What specialist training must value-
added floor staff receive?
RC: Our core Steps training programme is
compulsory nobody can sell a pet until they
have completed step one. Step two builds on
that knowledge and after completing these two
compulsory elements staff get a pay increase.
Step three is when the added value comes in,
in terms of training our SQPs.
Because of our store structure nearly all are
in retail parks, trading from 9am to 8pm we
need a lot of specialists to cover these hours so
we have as many on the shop floor as possible
all the time. So although we invest a great deal
of money on training our SQPs, it is so valuable
to us and our customers, and we pay colleagues
with that qualification an extra 500 a year to
reflect their value. We have over 4,500 retail staff
and about a quarter are SQPs.
LR: We introduced the Ann Summers Academy
of Passion 18 months ago, focusing on service
and selling. Staff also get frequent and detailed
training on all our products with particular
attention paid to sex toys and bra fitting. These
items have a huge range of different features
and benefits so it is vital our store colleagues are
able to explain them. We are constantly
introducing new products so the frequency of
O2 Gurus are
there to provide
jargon-free
advice, whether
someone is an
O2 customer
or not.
Richard Baylis, O2
c
training is high to ensure all staff are up to speed
on the latest lines.
Our buying team are key to the training our
store colleagues receive as they have designed
the products and so they understand how each
one works.
We hold regular bra-fitting training sessions to
build knowledge of how each bra fits. We also
encourage our store colleagues to try the bras on
so they can talk from experience.
PK: In Simply Be, the style consultants are
recruited for their experience but they are given
additional training in terms of how our sizing
works, compared with competitors. They spend
a lot of time with our quality assurance division
and our buyers to understand the latest fashions.
On the High & Mighty side, we rely on the
longevity of our store managers, and the fact
that many are skilled tailors.
RB: All O2 Gurus attend a four-day residential
foundation course during which they receive
training on particular devices and operating
platforms from all the handset manufacturers.
They are trained in skills such as presenting,
problem solving and team working.
MW: What prompted you to put these
specialists in place and how do their roles
differ from sales assistants?
RC: The knowledge our staff have reinforces the
specialist credentials associated with the Pets at
Home brand. Our SQPs are regular colleagues
and will serve on the till like everybody else but
if a customer comes in asking for specific pet
advice they will be the one to talk it through
with them.
PK: Our first Simply Be stores opened last month
on the back of the fact that a lot of people said
they found it difficult to find well-fitting clothes
on the high street in larger sizes [previously the
brand was only available online or by catalogue].
We understand the differences between
peer panel retail marketing
someone that is 5ft 2in and a size 16 or
someone who is 5ft 8in and that size. The style
consultant is there to provide the personal
service and we have separate sales assistants to
do more operational tasks.
RB: We decided to introduce the O2 Guru role
after extensive research into what our customers
want and need from us. They are not salespeople.
MW: How do you motivate these staff?
PK: Our Simply Be style consultants do not get
individual bonuses. You do hope that the
customer buys, and the consultant up-sells and
cross-sells, so that is how we measure their
success. No one in the store is commission
based; it is more of a team bonus structure so
everyone is seen as equal.
We also measure success on the multi-channel
side of things, so if a customer doesnt buy in store
they might go home and order online. In an ideal
world we be able to track all store visits to online
sales, but if the customer has an account with us,
as the majority do, we can definitely track it.
RB: Performance is measured on the satisfaction
ratings collected from our customers, and also on
things like footfall in store.
The gurus are championed internally and it is
seen as a highly desirable role. Far from being a
stepping stone to a sales role, some of our sales
advisers retrain to become gurus themselves. We
had over 6,000 applicants for 60 guru positions in
a recent round of recruitment.
MW: What customer feedback have you had
about your use of value-added floor staff and
how will you use this to improve the service?
RC: In April, Pets at Home launched a customer
measurement tool called Fish for Opinion with
insight agency SMG. We used to do mystery
shopping and we would get about 3,000 pieces
of customer feedback a year, but Fish for Opinion
has given us 50,000 pieces of feedback. We are
using that to inform our customer service.
LR: We receive a fair volume of feedback from
customers to our support centre and to Ann
Summers stores. We hear that they appreciate
the professional and knowledgeable service they
receive and the passion our colleagues show
about the products they are selling. As a result
passion has become an integral part of our
brand values. We also encourage teams to share
experiences and best practice.
PK: Its early days for Simply Be stores, but we
will have some customer exit polls in the next
few weeks. But on the opening night of our first
Liverpool store, a woman was in tears after
having a bra fitting. Our staff found she had
been wearing the wrong size and were able to
find her a better fit.
RB: In the stores where we have gurus, we have
an average of 94% customer satisfaction. We have
also seen a 30% reduction in handset returns.
MW: Have you used the concept of specialist
floor staff as a PR or marketing story?
RC: In our latest shop fit, which we will roll out
across the Pets at Home chain, we have
developed point of sale that is very personal.
Around the food aisles there will be signs with
the pet nutrition advisers picture and
handwritten notes on what they specialise in.
People traditionally think those who work in
retail are low paid and low skilled, but that really
isnt the case for us. We are building on elements
of this in our national press and TV activity.
Everyone who featured in our last TV campaign
was a real Pets at Home colleague. Not only do
we need to invest in our staff knowledge but
there is a job to do at communicating this
knowledge to the wider public.
PK: Most of our PR has been about explaining
our multi-channel offering, so for example we are
promoting our fitting services and that people
can book them online. We havent aggressively
pushed it yet but we will.
RB: We launched a nationwide campaign in 2010
where we took the gurus on the road, helping
people all over the country get the most out of
their technology. The Guru Roadshow visited
Glasgow, Newcastle, Birmingham, Brighton,
Manchester, Liverpool and Leeds over the
summer. We helped 8,000 people in all.
We also ran an above-the-line campaign earlier
in the year to promote the gurus and have a
Guru channel on YouTube.
LR: Our Westfield Stratford store opening has
attracted a lot of attention for its new store
concept designed by agency Fitch. Key features
are the themed changing rooms, with
environments such as Mile High Club and
Naughty School Girl for staff to conduct fittings
in. The Fitch team had insight from previous
work that 80% of people shop just 20% of the
total store. The new store design shows how key
touchpoints for staff and customer interaction
can make a huge difference.
MW: Do you think that specialist advisers are
something all retail brands with stores
should eventually implement?
RC: Before I was at Pets at Home I was at
TopShop, and we were one of the first high
street brands to introduce personal shoppers and
style advisers. Similar to Pets at Home, service is
a point of difference. There are clearly some
areas of retail that are quite transactional where
there is less focus on service. If youre in a
discount store environment, what customers
really want is product availability.
LR: I feel there are very few retailers that
wouldnt see a benefit from having value-added
shop floor staff. Customers are becoming more
discerning and any retailer that believes a
service-focused culture is not a benefit will
surely struggle in the future as trading remains
challenging. Service excellence can be translated
into any store selling any products its the
people who are key to delivering it.
PK: It depends on the brand. If youre a value
retailer, does it fit with a low-cost model? It
certainly works if youre a brand at the higher
end of a scale in a niche market. G
People traditionally think those
who work in retail are low paid
and low skilled, but that really
isnt the case for us.
Ryan Cheyne, Pets at Home
c
Passion for products:

Ann Summers has an
academy to train staff
about its products and
the skill of bra fitting
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marketingweek.co.uk
ritson
NOTHINGSMARTABOUTRIMSAIMLESS STRATEGY
mark
Mark Ritson is an
associate professor
of marketing, an award
winning columnist,
and a consultant to
some of the worlds
biggest brands
c
not access your inbox on the device. As the New
York Times put it on launch day back in April:
RIM has just shipped a BlackBerry product that
cannot do email. It must be skating season in hell.
The reason RIM launched such a muddled
product with neither the business functionality
usually associated with BlackBerry or the
entertainment options expected by more casual
users can be explained by a lack of decisiveness
at the very top of the company. Despite originally
dominating the business user segment of the
market, 70% of RIMs current subscribers are
now non-business users.
The launch of the Playbook, therefore,
presented RIM with something of a dilemma.
Should it be designed with its traditional
business user in mind or be aimed at the bigger
consumer segment instead? It was a question
that RIM had to answer in order to position,
design and then successfully launch its tablet.
And yet it was a question the company
singularly failed to address.
In the initial design stages, RIMs CEO
described the Playbook as a professional tablet
built around the requirements of corporate chief
technology officers. According to a recent article in
the Wall Street Journal, however, a separate
executive faction lobbied for a tablet that was
designed around the gaming and entertainment
needs of non-business users. Patrick Spence,
RIMs head of global sales and regional marketing,
hardly helped matters when he recently
announced that the real target and we couldve
had more clarity around that was the 70 million
existing BlackBerry subscribers out there.
Basically, take your pick. Depending on which
RIM executive you listened to, the Playbook was
either targeted at business users, regular
consumers or both. And in the ultra-competitive
world of tablet sales, this lack of clarity and
decisiveness is proving hugely damaging.
By failing to address the issue of who RIM is
going after, and by definition who it is not, the
Playbook has fallen between two very large
stools. In a classic marketing muddle, the
Playbook failed because it was a device that was
aimed squarely at everyone and, as a result,
became one that appealed to no one.
Others will soon ascribe RIMs decline to bad
products, lowered profitability or disappointing
sales figures. But the real story is simpler and
more fundamental than that. The reason RIM
failed is that it never managed to answer the one
question that all marketers have to be able to
answer: who exactly are you targeting? G
RIMs Playbook
failed because it
was aimed at
everyone and, as a
result, became
one that
appealed
to no one
What segment are you targeting? Yes, I know I
keep banging on about it but its a question that
only a decent marketer can answer. Never mind
the number of Facebook likes or the size of the
ad budget, the targeting question is the one that
really separates well-run brands from the rest.
The Americans have a great word for it. They
call it being choiceful. Yes I know its a bit
cheesy but I firmly believe all good marketers
are inherently choiceful in their approach to the
brands that they manage. Choiceful in the
research methods they use and do not use.
Choiceful in the communications options they
invest in. And choiceful in the segments they do
and do not target.
Look at the troubles now besieging Canadian
tech firm Research In Motion (RIM) the once
powerful manufacturer of the BlackBerry as
evidence. In September the companys share price
dropped in value by a third. As RIMs troubles
intensify in the months to come you can expect a
wealth of opinions on where the company went
wrong. But lets see for ourselves the real cause of
the companys imminent collapse.
The reason for the continued drop in RIMs
share price can be explained by growing doubts
from investors about the companys long-term
profitability. Most notably, the stock market has
become concerned at the performance of the
companys new tablet device, the Playbook,
which was launched barely six months ago in
the US and in June in the UK.
The reason for these profitability worries can be
attributed largely to Playbooks major distributors,
who are rapidly losing faith with it. American
retailers like Best Buy have slashed prices in
recent days from the original RRP of $499 to $299.
Meanwhile in the UK, Carphone Warehouse is
giving the tablet away free to customers who sign
up for a new BlackBerry phone contract. Rumours
are rife that these discounts are the actions of
retailers who simply cannot shift their Playbook
stock. Some analysts estimate that up to half a
million of the original production run of 700,000
Playbooks have yet to be sold.
The reason for slow sales and the increasingly
desperate promotional activity on the Playbook
can be explained by the tablets remarkably poor
reception from critics and customers alike.
Launched with only a fraction of the iPads apps
and a significantly smaller screen, the Playbook
not only lacked entertainment credentials, it was
also launched without RIMs popular native
software for checking email meaning that
unless it was tethered to a BlackBerry you could
Welcome to your very own
OMG moment.
The eyes of your boss and the
agency are on you. The new pack is
in front of you. What do you say?
The problem is there are no rules
for good design. And if there were,
good designers would break them.
However, there are some
guidelines we use when judging
our own packs. They help us, perhaps
theyll help you.
1. Does the design come out of
the brand or is it bolted on? If the
latter, it can be unbolted and shoplifted.
An unscrupulous own label may
copy your pack and suddenly youre
looking generic. Be careful.
All is not fair in love and store.
2. If you are redesigning an old
pack is it recognisable? This is tricky.
Ideally people want their brand to
change with the times (be helpful,
stylish and relevant) without looking
different. They prefer evolution
to revolution.
3. Now we get deeper: has the
new design unlocked the latent equity
in the product?
Does it connect with a warm
visual history people have shared for
decades? (Think Hovis bike, Captain
Birds Eye, Bertie Bassett.)
Or, if your brand lacks heritage
are you initiating one (like Silver
Spoon, McVities Penguin and Mr
Strings for Cheestrings)?
In short, are you making history?
4. Is your new pack noticeable?
Two thirds of your customers need
help with their sight. Half of them
dont wear glasses when shopping.
Make life easy for them.
Ask: can you distinguish your
new pack from ten yards away in a
busy supermarket?
5. Most important of all. Do you
want it? Do you want to take it home
right now and take its clothes off?
Its the same for a Porsche or a can
of beans. The design must make you
want it or the whole exercise is kaput.
6. Research. Do it. Listen to it.
Learn from it. But if every bone in
your body says the research is wrong,
go with your bones.
Good luck.
se|oce i aaa judgemeot oo
toe oew ae| dea|go
i |ov|te ouc juo|oc ocaod maoagec
to eommeot.

Marketing Week 2011.10.06

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