Sunday 20 March 2016

Mischievous Zagging and Customer Segmentation


Now there’s a sentence I never thought I’d write! Anyway…
One social trend highlighted by many observers over the last couple of decades or so is that towards increasingly thin skin, resulting in what is often rather disparagingly called 'political correctness'[1] – the notion that freedom of speech is being curtailed by the fear of causing offence, epitomised by people being investigated for posting 'offensive' views on social media. It's all a little bit Orwellian, conjuring up notions of ‘thoughtcrime’ (socially unacceptable thoughts) and ‘newspeak’ (the use of language to eliminate personal thought).


But some of my favourite Challenger branding and promotional efforts of late appear to be fighting almost directly against this trend. These are what Adam Morgan, in Eating the Big Fish – a seminal book on Challenger Brands – called 'The Enlightened Zaggers': "brands that deliberately swim against a prevailing cultural current...'I know the world buys into this’, they say, ‘but I am calling it for the BS it really is’."[2]
And “enlightened” is a key word here as, in order to do this, they must have supreme confidence in their assessment of their target market. In a previous article, I recognised customer segmentation analysis as being one of the main areas in which market intelligence can contribute to the Challenger approach, and never is that more important than in the case of 'The Enlightened Zagger'. Below I discuss three examples of companies intentionally provoking controversy – but cleverly informed by an understanding of their market – to swim against the tide of 'political correctness'.

Paddy Power

Paddy Power is a challenger in the betting market, behind William Hill online and the likes of them, Ladbrokes and Coral on the High St.[3] But it embraces this underdog status, and introduces itself as follows on the ‘About Us’ section of its website: “If we haven’t yet done the marketing equivalent of running up and slapping you in the face, then please allow us to introduce ourselves."


Paddy Power, in its traditional advertising and online, positions itself as a ‘mischief maker’[4], with particularly controversial adverts making light of old age, disability, immigration, and many other things. In general, their online presence delivers daily ‘banter’, with virtually every post achieving tens of thousands of likes and shares.
And I’m going to hang on to that word ‘banter’, because it gets to the heart of their target market: 18-35 year-old working class males, who typically love a bit of banter. But Paddy Power didn’t just guess that this approach would appeal to them, and that’s why, as an analyst, I like this example so much. In fact, it undertook a significant amount of qualitative and quantitative research to understand its customers, and called the underlying campaign, “we hear you”[5] – getting into the “hearts and minds” of their key customers, regardless of what the Advertising Standards Authority might think. The idea was to go beyond selling them gambling and to become a, “participant in sports culture”, including enjoying banter with their customers.

And the results? Well, firstly, they improved their social media footprint by 1000% and, more importantly, revenues have gone in the same direction. The campaign started in 2012, and they experienced 50% growth in new customers, 29% growth in both revenue and profit, and a 54% growth in share price.
Update (11 Aug 2016): Interestingly, since the merger between Paddy Power and Betfair, Marketing Week has reported that the latter is set to challenge betting advert norms by moving away from the "laddish" themes. So Paddy Power has set the tone, been imitated by many others, and now another arm of the business seeks to challenge by doing the opposite again - almost the very definition of zig-zagging!

Protein World

Protein World makes nutritional supplements for gym-goers and dieters, and is a Challenger in its market behind the likes of Maxinutrition (market share as high as 36% in the UK in 2012[6] but down to 26% in 2014[7]) and Hut Group’s MyProtein brand (which some commentators have as the new leader[8]). Protein World isn’t targeting the male gym-rats and body-builder-types, but instead focuses on the female segment of the market – this is readily observable by their advertising material and Twitter output, particularly the stream of ‘retweets’ from attractive young females using their products. (Although, admittedly, I have a Protein World shaker too!)

And they’ve sparked some controversy in their pursuit of that market. This most notably occurred when, in 2015, they took out billboards on the London Underground with an attractive model asking, “Are you beach body ready?” This resulted in online uproar from feminists, along the lines of ‘body-shaming’, as well as the billboards being vandalised.

But did Protein World care? No. And the reason that they didn’t care is because the uproarious types were not going to buy the product anyway! Indeed, the people behind Protein World stoked the flames online by responding, often tongue-in-cheek, to some of the criticism. And what lay behind all of this? Effective segmentation and in-depth analysis of their customers, of course. Head of Marketing, Richard Staveley, said that 84% of their customers were women, and that they had done meticulous research to understand what motivated them.[9] If, as a female, you go to the gym and care enough to consume protein shakes, then it is highly likely that you will want to show off the results of that on the beach – simple.
But not only did this resonate with their target audience; it did much, much more: it galvanised them and elevated many to ‘raving fan status’ – another important concept in the Challenger approach, according to expert John Gumas[10]. For every feminist deriding Protein World on Twitter, there was a raving fan sticking up for them too. It made their current customers considerably more attached to the brand.

And the results? Protein World attributes an extra £2m of sales directly to the ‘Beach Body Ready’ advert. It has also made them a household name – I am in this market, I consume protein shakes and bars regularly, but I had never heard of Protein World until this advert.



Fuckoffee

It’s in the name, right?! And it goes without saying who independent coffee shops like this one are Challengers to: the proliferation of chains and franchises – led by Starbucks, but including Costa, Café Nero, etc – that populate virtually every High St. Fuckoffee is in Bermondsey, London. In its vicinity - an area south of the Thames, going east from Lambeth Bridge to Tower Bridge Road, measuring roughly 2 miles x 1 mile - a quick Google Maps search shows 12 Starbucks and 9 Costa Coffees surrounding Fuckoffee – the scale of the challenge is clear!

So how do they try and stand out in this crowd? Controversy, of course. The name is the obvious one: previously called Bermondsey Street Coffee, the name was changed to Fuckoffee and revenues jumped, as owner Adrian Jones points out: "When we originally did the sign sales went up instantly by 20 per cent, so it was good for business. We were in talks with Gordon Ramsey to roll the brand out, but we looked into it and didn't think we'd legally be able to do it."[11] They were ordered to change the signage by the building’s leaseholder, so they posted that letter on their Twitter account and – as with Protein World – received much support from ‘raving fans’. But Fuckoffee had the last laugh as, in changing their signage, they simply swopped the “u” for a “*”, and then left the rest to our not particularly stretched imaginations.
And they continue to be strident in their response, with Adrian Jones directly recognising the Challenge against Starbucks, when he said, “I’ve been doing this for 17 years – I was doing coffee before Starbucks, so I can call my shop anything I want."[12]


Further controversies have followed, both with the boards outside their shops and with their social media presence. Most notably, one of its sister-shops wrote on its board outside, “Sorry, no Uggs. (Slag Wellies).” The typical Twitter uproar followed, and Fuckoffee responded by fighting fire-with-fire[13]. On top of those particular examples, following their Twitter account is a-laugh-a-day.
But, again, it’s all about targeting a customer segment and flying in the face of perceived wisdom in an industry – in this case, something different to the sort of ‘coffee shop (and Ugg boots) chic’ image. Similar to Paddy Power, perhaps it’s about targeting men with the banter-type approach – from a neon sign in the window that says, “Girls, Girls, Girls” (akin to strip clubs and bars), to constant banter on their Twitter account. Perhaps it is about giving men somewhere that they can identify with, in the days when pubs are struggling and coffee shops carry a perception that doesn’t really fit with 'traditional' men. I analysed Fuckoffee’s most recent 100 Twitter followers (as at 7 Jan 16), and found that 57 were male, 23 were female, and 20 were unidentifiable (e.g. businesses). I just ran that analysis again (as at 8 Mar - you can see how long I've been writing this article!) and found that 52 were male, 20 were female, and 28 were unidentifiable.


And the results? As mentioned previously, a 20% jump in revenues was the bottom-line benefit of this new approach, and their social media presence has grown exponentially. In addition to that, Adrian Jones claims that Fuckoffee is, “the second most photographed shop front on Instagram in the UK, after Harrods”. More than 1,300 Instagram posts are tagged with the shop name.

Conclusion

I’ve looked at three companies that have used controversy to fly in the face of a prevailing social trend, to notable, and ongoing, success in each case. As Challenger Brands they are ‘zagging’, and have based this on rigorous customer segmentation analysis and a thorough understanding of what will appeal to their customers – it is one of the areas where I have previously suggested that market intelligence can make the greatest contribution to the Challenger approach.

Now, I am not for one moment saying that all brands should turn around and start swearing at their customers and being generally controversial on social media! What I am saying is that if you understand your customers inside-out, then you will have a better idea as to how to communicate with them effectively – and this may be one way, for some.
The customer segmentation analysis that is required prior to this broadly consists of two stages:

Quantitative segmentation analysis: How many customers do you have, and what characteristics differentiate them? E.g. what proportion are male/female? Age distribution? Socio-economic status? Revenue/profit by segment? Ultimately, for this example: will a controversial approach gain more customers than it loses?
Qualitative analysis: Adam Morgan points out that qualitative analysis is more important than quantitative for the Challenger approach. A deeper understanding of your customers – gained through surveys, focus groups, and interviews – can help to determine the kinds of messages that appeal to this group, e.g. 18-35 year-old, working class male gamblers like banter; young, attractive, gym-going females want to be “beach body ready.”

And it’s important to get this analysis right, because the controversial approach doesn’t always work…
These three are good examples, but there have also been failures as well. At the start of 2016, Gourmet Burger Kitchen ran a poster campaign in London with a picture of a burger and the strapline, “-Vegetarians- Resistance is futile”, and another with a picture of a cow and the line, “They eat grass, so you don’t have to.” It provoked the anticipated online uproar from vegetarians, with the #GourmetMurderKitchen running for a while. But, while it was clear that these ads were deliberately provocative, Gourmet Burger Kitchen bottled it and pulled the posters down while issuing a grovelling apology on social media.

Gourmet Burger Kitchen got itself in a strange place: clearly red-blooded carnivores are its main market, but it has also historically made a big play about its vegetarian range. This all happened through January, which was dubbed ‘Veganuary’ by some, and a time at which competitor Handmade Burger Company ran a wider vegan range. While the number of vegetarians and vegans is growing markedly in the UK, it is highly questionable as to whether they would go to Gourmet Burger Kitchen for a vegetarian meal anyway – the notion of vegans boycotting a burger restaurant is laughable. So should they have stuck to their guns on this one and used it to reinforce their target market? Perhaps if they’d have done some considered analysis beforehand, they might have known the answer to that question.
So, next time you see one of these controversies, ask yourself whether the brand behind it has made a PR mistake, or an extremely well-informed decision based on rigorous customer analysis. And please contact me here if you want to undertake this kind of customer segmentation analysis. I hope you have found this article useful; but, if you haven’t, I don’t really give a…!


[3] Prior to recent announcements of Paddy Power-Betfair merger.

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