3 that beat the odds (and how you can too)

Some businesses fail. In fact if you believe Forbes then eight out of ten small businesses fail within ten years.

80%. That’s hard to ignore, but it seems that some companies – those 20% who succeed – have a ‘magic touch’ or are ‘really lucky’ – as though they have guardian angels who protect them from harm.

The truth, however, is that while brands seem to stay the same – to become like old friends in our minds – the people who manage them are always busy reinventing and reimagining what they are offering. This gives them the ability to adapt easily and effectively, depending on their customer’s desires.

There are times, however, when a big shift in thinking is needed to ensure they can retain their customers. These are when a company needs: to show positive differentiation from a new innovative competitor; eliminate a negative image; recover lost market share; take advantage of new technology; or manage emergent situations that have widespread effect of business operations.

Of the many examples of solutions to these challenges, some are small and simple, others are large and complicated – but of these, there are some great examples of how to think about these problems in the 21st century. We thought we would take a minute to have a look at a few.

“Brand is just a perception, and perception will match reality over time. Sometimes it will be ahead, other times it will be behind. But brand is simply a collective impression some have about a product.” – Elon Musk

The little company that could – the amazing story of Reed Recruitment

“It’s very important for a brand to have an identity through the years, but it’s very important as well to evolve because times change.” – Donatella Versace

The recruitment agency Reed was formed in the 1960’s. It was built on a business model that focused on specialist recruitment within target markets – a simple idea that revolutionised UK recruitment. Over the following 30 years they went from strength to strength – moving on to training, setting up accountancy and business schools, and even founding global charities.

In the mid-nineties, however, the internet was beginning to grow larger – moving into more and more industries.  As such, Reed were faced with a crucial choice – to commit large scale investment to this new tool or to ‘stay the course’ and hope the internet did not have the impact that was expected.

They chose (wisely) to invest – becoming the first high street recruitment agency to have a presence on the web. This was the first of many steps they would take over the next decade, but it was perhaps the most important – it gave them the confidence to change and evolve which even today marks them as a leader. In taking this step, away from what they knew and towards the murky world of the future, they had done the seemingly impossible – as a large and successful business they were able to identify and react quickly to a significant threat – enabling a widespread change in operations.

Jump forward to the year 2000 and Reed had been growing – developing a new online strategy in a bid to do something dramatic and revolutionise the recruitment market for a second time.

The ‘Freecruitment’ campaign marked a change in the Reed business model. Like other recruitment companies, they charged a fee to use their services. They saw, however, that the growth of the internet could only mean one thing – more competition and less easy profit. So, they did the unthinkable – they gave their customers a free online recruitment service. This drove the market towards web-based tools and away from paid recruitment, perhaps forever.

To say this move was ‘effective’ is to seriously undervalue their accomplishment – within the space of weeks, over 85% of the top 200 recruitment agencies were using Reed. From the outside it was a strange move for a profitable market leader, but one that was undeniably important in creating the giant global organisation that exists today. Many competitors who went out of business at the time directly because of the campaign still believe it was the wrong decision (at least in business terms), but the fact was that Reed were not  afraid of change and taking bold steps – innovation went hand in hand with their identity.

In 2008, however, their model was not quite so innovative anymore – it had been copied by almost every other recruitment company in the UK. Once again, they felt the need to do something a little bit different.

In many senses their next rebrand (or significant investment in strategy), was less dramatic or risky, but once more changed the way that the recruitment market operated at a fundamental level. The idea was this – ‘people should not just have jobs – they should want to go work’.

While the idea seemed minor – a small differentiation in messaging – it combatted a very real problem in their market which was not being addressed: job searches were driven by utility, not by personal needs or desires. In the mind of both employers and employees, jobs were a trade-off – a way for individuals to earn money by giving up their free time. Similarly it was risky to consider looking at other jobs if you already had one – they were considered a luxury given by an employer.

Reed knew that the  most important factors in business were ones that played on perception, not reality. In other words they knew that the next big change would not come from a new technology – it would be a psychological shift in the way people thought about work in the context of their life. So, with their idea in mind, they began their campaign, launching new mobile tools (job alerts based on preferences) and keyword searching for employers.

The vast majority of their spending was on promotion across mainstream television channels, YouTube, Catch-Up TV, Outdoors, Mobile and Social Media – using a superhero (a symbol of hope) to introduce the idea that people should ‘love Mondays’ – ie. jobs should be a matter of preference and choice, not of availability and utility. Overnight, Reed made it okay for current workers to aspire to something better – for people who were in jobs they didn’t enjoy to imagine a better life. They decided to give people hope.

So, what is the moral of this story? Well perhaps that success cannot (and should not) be measured in terms of sales, conversions, revenues – but rather in dedication to pushing limits – doing the dramatic thing and reaping the rewards. Of course, it may be easy to say that Reed could have failed at any point along the way – but it would be just as easy to say that those people, those employees who were along for the ride, were driven by a strong incentive that would not allow them to concede defeat – the need to be part of a special company.

“We like trying things. If the bus is going somewhere interesting, we want to be on it.” – James Reed, CEO

Starting small, growing big – the curious case of Just Eat

“Ensure your employees understand what your brand stands for so they can be your first line of word-of-mouth advertising.– Simon Mainwaring

In 2001, a small Danish business called ‘Just Eat’ was started by a group of students with a simple idea – home cooking can be a pain, and it would be great to have a range of choices of takeaways in one place. Thus, the idea for an online platform to connect customers and local restaurants was born.

5 years later, 2006, and they had seen impressive growth and decided to launch their online platform in the UK. At the very same time another company based on the exact same idea, Hungry House, was appearing on the BBC’s Dragon’s Den. The cat was out of the bag, and it seemed as though the market was set for fierce competition.

At the time, Just Eat did not have vast resources to spend on marketing (at least not to start with). Today though, 8 years later, they operate in thirteen countries – attracting over 30,000 restaurants across Europe to use their platform, with over 7 million website members. Last year they conducted 70% of their business in the UK and floated on the London Stock Exchange valued at £1.47bn.

So how did they achieve such rapid success in such a short space of time? Well, like many great companies, their success was not just due to one factor but many, all working together to push the business in the right direction.

Timing also had a huge role to play. Two factors were arguably most important to their success – the first was the fact they had a big competitor in the same market. While it may not seem relevant, the very fact that Hungry House entered the market at the same time gave their potential customers a choice – the chance to show allegiance to a particular brand.

As largely tribal creatures, we enjoy making decisions and showing loyalty. The simplest example of this can be found in the competition between Coca-Cola vs Pepsi – the very fact that there were two big players forced people to take a side – to show preference towards one or the other. If only Coca Cola had been released, or only Pepsi, it is quite possible that it may not have seen the same success. As a side note, if companies do not have a direct competitor they can produce the same effect with clever branding techniques, as demonstrated by Marmite with their ‘love it or hate it’ slogan.

With necessity being the driving force for business growth, Just Eat and Hungry House grew quickly within a short space of time – using the sense of competition as a catalyst – speeding up the process of expansion and raising their standards of service. As such, both companies saw great success over the next six years – scaling up their business.

The next 6 years were busy – full of business acquisitions driven by VC investment. In 2012 though, Just Eat made a big decision.

Their current business model was focused online – they had invested huge amount of time and energy creating an expansive website – but with mobile applications quickly growing in popularity and usage, they saw the need to break into this brand new market.

Using funding to support the change – they developed a powerful user driven mobile application, and then went further, driving home a new two pronged strategy in a bid to take the lead in their race with Hungry House.

The first step was through advertising. Their ‘Don’t Cook – Just Eat’ campaign was well marketed – using online content such as articles about the most dangerous vegetables to work with, the likelihood of people injuring themselves whilst copying celebrity chefs and the amount of money spent on useless kitchen gadgets. This was backed up by PR Stunts – the main character of their campaign – ‘Mr Mozzarella’ hijacked news agendas and stood in the high profile Corby By-Election, standing for ‘The Don’t Cook Party’.

“The Don’t Cook Party is a single issue political party whose main aim, like JUST EAT, is to liberate people from the tyranny of having to cook every single day. As well as striving to eradicate the pressure on the public to cook elaborate meals in fifteen minutes, the Don’t Cook Party also advocates a nationwide amnesty on useless kitchen gadgets, protection from the danger of hard root vegetables, wage equality between hard working restaurant chefs and celebrity chefs, and celebrating ‘Don’t Cook Sunday’ as a day of rest.” – Just Eat

Their second step was less traditional and more subtle. Staff were actively encouraged to get involved with the brand message – asked to add their own ‘anti-cooking’ messages to their company email signature, and the phrase ‘Anti-Cooking Activist’ was also added to their job title. These smaller changes were accompanied by a huge increase in Social Media – with discount codes hidden within their Facebook feed and some great visual aids to support the campaign.

As such, Hungry House – who have arguably stronger brand identity – have fallen into the second spot in terms of sales. Of course this is only the middle of the story – Delivery hero (who merged with Hungry House in 2013) have just raised $600m in an effort to reclaim the top spot. For now, I suppose we will have to wait and see, but by pooling their resources and taking the first step, Just Eat have managed to apply pressure on their closest competitor, which is what branding is all about.

“It’s healthy to have a competitor in the marketplace to keep you on your toes, we are constantly innovating and thinking of new things to offer our restaurant partners. They love us because we drive a lot of orders to them.” – Graham Corfield, Just Eat UK managing director

The Emperor’s new business model – how ASOS got a shock

“I actually do think you’re seeing this trend towards organizations just caring more about their brand and engaging. I think that’s a lot of why companies are starting blogs, are just giving more insight into what’s going on with them.” – Mark Zuckerberg

In 2000, a  company called ‘As Seen On Screen’ (aka. ASOS) was started by an advertising specialist called Nick Robertson, who just happened to be the son of Austin Reed – the high class men’s clothing retailer. With experience in product placement and a thorough understanding of the clothing market, he was perfectly situated to act on an observation.

“We read a stat back in 1999 that when the programme Friends aired, NBC got 4,000 calls about some standard lamp in one of their apartments asking where it could be purchased. So that was the real idea behind the business. Anything that gets exposure in a film or TV programme creates desire among the public, so we based the shop around that.” – Nick Robertson, CEO.

With the demand for their products so high, it was seemingly the perfect setup for an online retail business. In the space of 6 months they had successfully launched, quickly followed by a well-publicised move that aligned them closely with big names in the fashion industry. They had shown the world that they had their sights set on one thing. Growth.

With a low cost model, they ploughed profit back into the business, implementing a strategy designed specifically to boost sales, deepen brand engagement and encourage advocacy at every turn.

After another string of highly effective online launches including a magazine, iPhone and iPad apps and spreading their reach into Europe, Russia and China at the end of 2013, retail sales were up by 40% year- on-year to £754 million. This growth was generated by a strong international performance, up by 44%, and a sales increase of 34% in the UK – translating to 7.1 million active customers globally.

Then, unexpectedly, they hit a road bump – their social media following in the UK, especially among their core group – females between the age of 20-25 – began to slow down, even though their global presence, and sales figures, were growing.

To many companies, this would be an annoyance – a strange occurrence perhaps but not the end of the world. However, after growing so dominant using these channels, ASOS reacted quite differently to this news.

Instead of comparing their social media following figures to their competitors (who had far fewer proportionally), then continuing their current focus on international growth, they recognised that this decline it was a symptom of a far larger and more important effect of scaling their business.

Because they were based online, they recognised their customers did not have the same level of interaction (at a day-to-day level) as more traditional businesses based on the high-street. Indeed, after recognising this fact it became obvious that the relationship they did have with their consumers was more fickle – prone to change rapidly when it did not have due care and attention. As such, they considered how they could tackle this problem directly – leveraging core parts of their brand identity to ensure success while they scaled.

Near the end of 2012, ASOS launched a fully integrated social media strategy. As a way to compensate for their exclusively online model, they found their way into their customer’s minds by playing to their strengths and giving them what they wanted – releasing a huge storm of videos, competitions and content across Facebook, Pinterest, Twitter, Instagram, YouTube and Google+ based around the idea that, for females aged 20-25, their main concern (or main desire for knowledge) revolved around ‘going out’ – or more specifically providing inspiration, advice and suggestions to improve their ‘going out’ experience.

Thus began an eight week social media campaign – #Bestnightever. Unlike their previous campaigns however, and unlike their competitor’s campaigns, ASOS had an innovative idea.

They decided to use a totally-integrated social media approach, shifting from a broadcast model (a brand message to be swallowed by consumers) to a bi-directional model (getting their customers to participate) – encouraging social engagement by offering extra material such as music videos, celebrity interviews, advice, styling tips and offers. Quite intelligently ASOS saw the success of business models such as MTV, who were having substantial success with their target market, and used the same ideas to meet their target audiences specific needs – allowing their brand name to be present in the mind of their consumers on a day-to-day basis, rivalling the high street store front without paying the extra costs associated with their model.

With over 15 tailored social activations, integrated across a broad array of other platforms, the campaign had social currency which their users felt compelled to share and be associated with.

Highlights included:

  • Shoppable celebrity music videos received over one million views in the first two weeks.
  • There were over 78,000 creative competition entries across Facebook, Instagram, Pinterest and Twitter.
  • #BestNightEver was the most used hashtag across the campaign period vs competitor brand names and marketing tags (beating Topshop #Whosthatgirl featuring Kate Bosworth).
  • The #BestNightEver Facebook app had over 55,000 unique users, a return rate of 58% and an average dwell time of three minutes per session.
  • Behind the scenes model shots from the Savvy Sunday sale received over 39,000 likes on Instagram in just two days, demonstrating the power of a ‘social currency’ over a ‘broadcast-led’ approach to social media, even with promotions.

The results were quite incredible. ASOS recorded 5.6 million positive acts of engagement across all social platforms and a social audience increase of 12% in just eight weeks – generating a staggering 281,059 new Facebook fans (growing 2.94 times faster than the yearly average during the campaign). In addition, sales were substantially higher in this period compared to the eight-week average.

Within a few short weeks they unleashed waves of brand information across their user base – giving them a way to feel emotionally connected and cementing the brand name in the minds of their chosen market.

The lesson here is that people like to be included – to feel as though they are part of something exciting, fresh and that will be helpful to their lives. Of course competitions do not always work as intended (in fact they can be worse for signup competitions – encouraging others to join reduces their chance of winning) but creative competitions and campaigns which meet the desires of an audience can be a huge success – getting people to take pictures or write content which can be used and spread to include more and more people. In effect, it is the gift that keeps on giving!

The secret to success – how to make it big (and keep it big)

As with many things in business, while the big things matter – like the idea, the team, the business model and investment – the one thing that connects these stories is timing, or more specifically, acting in time to make a positive impact and turning a potential threat into a strength.

In all cases these companies identified a particular challenge and used their brand identity to turn a disadvantage into an advantage through determination and confidence. From Reed, who refused to become obsolete, to Just Eat, who saw their competition and decided they could lead the market, right through to ASOS, who realised their foundations were vital to future success, even though their business was growing so quickly.

The secret then, is to have a good understanding of timing, knowledge of what your market thinks (not what you want them to think)… and to not be afraid to take a risk every once in a while.

Summary

  • A business should seek to show positive differentiation from a new innovative competitors; eliminate negative imagery; take advantage of new technology; and focus on solving problems caused by emergent situations that have widespread effect on business operations.
  • The longer a business operates and the more successful they become, the greater the need to be flexible in the face of changes and take bold steps in order to stay relevant.
  • Healthy competition can be a driving factor in business – pushing a market to boost the quality of the services. A natural part of this is branding, which can be a pivotal tool for business growth.
  • A successful business understands why it is profitable and does not underestimate the importance of stability – of their customers attention, care and affection.
  • Rebranding or rethinking marketing strategy can stoke a fire that is beginning to go out.