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I wake up to a ra­dio alarm, which is set on The Breeze, be­cause you re­ally, re­ally need easy lis­ten­ing mu­sic when it’s 3.30am. I also have the alarm set on my iPhone, in case I sleep through the first one. I never miss an episode of 3 News or 3D. I love The Good Wife, Veep, Mad Men (still in mourn­ing af­ter the fi­nal episode) all of which are recorded on MySky for view­ing when time per­mits. I lis­ten to lots of mu­sic off my iPod, via the Blue­tooth in the car. I’ll of­ten lis­ten to CDs in the car too and also ra­dio, which I switch be­tween Ra­dio Live, The Edge and The Breeze, depend­ing on my mood and whether the kids have hi­jacked the tun­ing but­ton. My mu­sic tastes are pretty eclec­tic; I’ve got Ray La Mon­tagne, Ly­dia Cole, Tiny Ru­ins and some re­ally bad/good ‘80s bal­lads. I don’t own a kin­dle be­cause I love read­ing real, pa­per books. I’m old fash­ioned! I rather en­joyed Sue Monk Kidd’s latest The In­ven­tion of Wings re­cently. Yes, Twit­ter mainly, which I find quite en­ter­tain­ing at times. I use Face­book as well but it’s like driv­ing your Nana’s Honda Jazz af­ter you’ve spent a lot of time on Twit­ter.

and The Lis­tener in equal mea­sure.

AirNZ and Shop­style. Brows­ing online fash­ion web­sites/apps. When the kids catch me ogling shoes again, I feel like I’ve been caught with my hand in the candy jar.

Noth­ing. Si­lence is golden.

The other mother of the na­tion has been read­ing the news (and crack­ing jokes) at TV3 since 1999 and took the brave step of sign­ing up as news­reader for The Paul Henry Show this year. Here’s a taste of her media diet.

“Given the long ges­ta­tion pe­riod for in­sanely ex­pen­sive brand ads, I’d haz­ard a guess that the good peo­ple of Den­mark, Tur­key or Peru were treated to a touch­ing wee cin­e­mato­graphic num­ber fea­tur­ing the tragic loss/ heart­warm­ing res­cue of a baby lem­ming/hedge­hog/python by a soft-cen­tred-but-clearly-het­ero chappy some­time around, um, last Septem­ber. At least the rest of us get a lit­tle smile out of their em­bar­rass­ment.

One night while toss­ing and turn­ing awake af­ter a mas­sive busi­ness set­back of my own dur­ing the global fi­nan­cial cri­sis, I took my own rem­edy and had the best night’s sleep I’d had in a long time. It dawned on me that I mustn’t be alone in this strug­gle for sleep dur­ing this tough fi­nan­cial time so I de­cided to make Sleep­Drops avail­able to the public. Not hav­ing enough money to get the busi­ness off the ground. Like most start-ups I had no money so I had to print la­bels and hand pour bot­tles at home. Ev­ery cent made went back into build­ing brand aware­ness. Lack of money also hin­dered prod­uct de­vel­op­ment. It took two years to fi­nally have all five prod­ucts launched, even though all of the for­mu­la­tions were ready and wait­ing right from the be­gin­ning. Af­ter two years our in­ter­net sales were steady but we were be­ing asked to con­sider mak­ing the prod­ucts avail­able for re­tail. We had to cre­ate de­mand for the prod­ucts be­fore the stores would agree to stock them. It was risky, but us­ing our en­tire mar­ket­ing bud­get, we drove cus­tomers in-store in­stead of to our web­site, with­out ac­tu­ally hav­ing prod­uct in-store, in an ef­fort to cre­ate de­mand. It was tough go­ing in the be­gin­ning but paid off quickly as Sleep­Drops had one of the fastest re­tail “take ups” by phar­ma­cies for a pre­vi­ously un­known brand in New Zealand. It’s such a wide­spread is­sue. Around 50 per­cent of the world’s pop­u­la­tion strug­gle with sleep is­sues, so I wanted to help peo­ple and sleep was the ob­vi­ous choice to make the big­gest dif­fer­ence in peo­ple’s lives. We have a strong pres­ence across all media plat­forms to max­imise brand ex­po­sure. Our main mar­ket­ing chan­nel is ra­dio with reg­u­lar print and pe­ri­odic TV ads to back this up. We cre­ate new ra­dio ads ev­ery month or two so that we can keep our mes­sages rel­e­vant and timely. We con­stantly in­vest in our web­site ex­pe­ri­ence, we keep in touch on Twit­ter and Face­book, and we use Adwords. Ba­si­cally, we want be any­where our cus­tomers are. We want to be first to mind when peo­ple think of sleep prod­ucts. I be­lieve it’s about hav­ing a multi-pronged ap­proach. We un­der­stand our mar­ket and we make a prod­uct range that ac­tu­ally meets our con­sumer’s needs. We have a com­mit­ted and strong advertising cam­paign that doesn’t just try to sell prod­uct, we raise aware­ness, and I have the very best team of amaz­ing and ded­i­cated peo­ple who care about the dif­fer­ence we make in peo­ple’s lives. In­no­va­tion is in­cred­i­bly im­por­tant to us. We feel that cre­at­ing a range of prod­ucts that can help all ages sleep bet­ter with­out cre­at­ing toxic side ef­fects or de­pen­dency is both awe­some and in­cred­i­bly in­no­va­tive. Re­search and de­vel­op­ment is im­por­tant, so we spend a sig­nif­i­cant per­cent­age of our bud­get on it. Cur­rently we are work­ing on grow­ing sales for the ex­ist­ing prod­uct range but we have a few new prod­ucts that might be in the works soon. We re­cently ex­hib­ited at the Nat­u­ral Prod­uct Expo West in Cal­i­for­nia and since then have had an in­cred­i­ble amount of in­ter­est in tak­ing the Sleep­Drops range global. We are cur­rently in dis­cus­sion with dis­tri­bu­tion part­ners in both China and the US, and al­ready have dis­trib­u­tors in Sin­ga­pore and Hong Kong. The sim­ple an­swer is no, it’s not fair. Doc­tors are trained in drug ther­apy dis­ease man­age­ment and there’s def­i­nitely a time and a place for that. But there’s also an op­por­tu­nity for natur­o­pathic treat­ment, which is very sci­en­tific. Most mod­ern natur­opaths are trained in re­search, anal­y­sis and nu­traceu­ti­cal ther­apy. There is a wide body of re­search with nu­mer­ous clin­i­cal tri­als show­cas­ing the ef­fi­cacy and ben­e­fits of all types of nat­u­ral medicines in hu­mans and this in­for­ma­tion is easily ac­ces­si­ble to the public. Nat­u­ral reme­dies have been used for many cen­turies, long be­fore con­ven­tional syn­thetic medicine was in use. The way media re­port on nat­u­ral reme­dies needs to be ad­dressed as well. We do not see any ben­e­fit in chal­leng­ing other sci­en­tists’ per­spec­tives on nat­u­ral reme­dies. We are a com­pany in­ter­ested in get­ting the best re­sults for our cus­tomers.

PR is a key part of our busi­ness strat­egy. We work closely with our PR com­pany to ob­tain ex­po­sure through the media and take up op­por­tu­ni­ties to pro­mote the Sleep­Drops brand

Whit­taker’s and Lewis Road Cream­ery nailed it with their cho­co­late milk and now Whit­taker’s is hint­ing at a Jelly Tip cho­co­late blend with “leaked” im­ages of what ap­pears to be the new pack­ag­ing do­ing the rounds on so­cial media. It also up­loaded a pic­ture of J H Whit­taker with some wob­bly jelly on his head to its Twit­ter page and asked fans to keep an “eye on July”. Mmmm, co-brand­ing. NZ Post has been bat­tling hard over the last few years as tra­di­tional mail is in­creas­ingly be­ing left be­hind for dig­i­tal com­mu­ni­ca­tion. But it’s try­ing to bounce back, evolv­ing its busi­ness with new ideas like YouShop and YouPost and with its new cam­paign, ‘You Can’ it’s fo­cus­ing on what it can do for busi­nesses as a sup­plier. Those who re­cently lost their jobs weren’t happy about money be­ing spent on an ad, but the new TVC shows a fresh and hip new face for NZ Post and also fea­tures ac­tor Charles Dance, which should make peo­ple pay at­ten­tion to the changes. Res­tau­ra­teur-turned-phi­lan­thropist Michael Mered­ith launched Eat My Lunch re­cently, which uses the buy-one, do­nate-one model. Those who or­der a packed lunch will au­to­mat­i­cally do­nate another lunch to a Kiwi kid who would oth­er­wise go with­out. Mered­ith teamed up with Iaan Buchanan and Lisa King to aid the one in four New Zealand chil­dren who live in poverty and go to school hun­gry ev­ery day. Eat­ing never felt so good. Like many, we’re still mourn­ing the loss of Camp­bell Live, which screened its last episode on 29 May. A new cur­rent af­fairs show is sched­uled to take its place soon with more than one host and a softer, lighter ap­proach. But as it wasn’t ready, Camp­bell Live was re­placed with Road Cops and then Come Dine With Me, which lead to much de­ri­sion be­ing sent Me­di­a­Works’ way on so­cial media. When it rains it pours. And it’s cur­rently rain­ing rab­bits and pigs. In a case of un­for­tu­nate tim­ing, Voda­fone’s lost pig called Piggy Sue and BP’s cute fluffy bunny were in­tro­duced re­cently (noth­ing like cute an­i­mals to dis­tract the public from oil spills). And while it’s not un­usual for ads to use an­i­mals, won’t some­one think about the ugly ones? Where are the hideous look­ing deep sea crea­tures? They don’t get any love. We have also no­ticed a dis­tinct un­der­use of manta rays in advertising. And we de­mand ac­tion.

Dur­ing one of the re­cent U20 World Cup quar­ter­fi­nals, Ger­man de­fender Robert Bauer smashed a ball into the advertising bar­ri­cade sur­round­ing the pitch. It re­mains a mys­tery which bar­ri­cade the ball thun­dered against or even why the player ob­vi­ously in need of anger man­age­ment classes lashed out, but the Clax likes to imag­ine that the ad be­longed to McDon­ald’s or Coca-Cola and that Bauer was mak­ing a state­ment that these brands don’t be­long any­where near a ma­jor sport­ing event, es­pe­cially when young’uns are in­volved.

Se­ri­ously, if you were to type sport into the antonym searcher on Dic­, it would al­most cer­tainly spit out big food brand names. And yet, de­spite sport and Big Macs be­ing about as com­pat­i­ble as Cad­bury’s cho­co­late and vegemite (this atroc­ity is also due a slap), un­healthy brands can’t help but at­tach their sticky/greasy lo­gos to sport­ing events and ini­tia­tives.

You know why you never see a football player down­ing a Coke at half time? Be­cause ev­ery per­son even re­motely in­ter­ested in sport­ing per­for­mance knows that Coke will do very lit­tle be­yond in­creas­ing the vis­cos­ity of your saliva.

Sure, you have ex­cep­tions to this rule. Sports drinks were made for sports (but most peo­ple drink­ing them seem to be try­ing to cure a hang­over). And sports peo­ple aren’t im­mune to the al­lure of greasi­ness. Usain Bolt claims to have eaten over 100 chicken McNuggets a day while in Bei­jing for the Olympics. But, as his su­per­hu­man speed can at­test, Bolt is any­thing but or­di­nary and he ad­mits that his train­ing diet is es­sen­tially the an­tithe­sis of healthy.

Speak­ing of the Ja­maican run­ner, he also fea­tured as the pro­tag­o­nist in a Ga­torade mo­bile game, which re­quired play­ers to com­plete an ob­sta­cle course while avoid­ing Caribbean Pi­rates, cannon fire, ex­plo­sions and—wait for it—wa­ter.

The Clax can’t even crit­i­cise this move. It’s im­pres­sive. Well done Pepsi. You’ve lit­er­ally en­cour­aged kids to ac­tively avoid wa­ter (Nes­tle’s chief ex­ec­u­tive is fa­mous for say­ing wa­ter is not a hu­man right).

Now, this isn’t to say that ev­ery­thing you do is this dis­turb­ing. Your sport­ing de­vel­op­ment pro­grammes do pro­vide freshly laid as­tro turf and bas­ket­ball courts for the chil­dren of the world to play on. But re­leas­ing videos, in which you claim credit for the smiles on the kids’ faces is cer­tainly tak­ing a step back. It’s kind of like lend­ing money to a strug­gling fam­ily and then cap­tur­ing video footage of the mum buy­ing gro­ceries.

Now brands, look, I un­der­stand that you’re try­ing to as­suage some of the guilt you’ve ac­cu­mu­lated over the years from mak­ing us un­health­ier—but can’t you just qui­etly go con­fess your wrongs be­hind closed doors rather than hyp­o­crit­i­cally sit­ting in at­ten­dance at sport­ing events?

You’re not fool­ing any­one.

In the spirit of past heretics, ranters and ag­i­ta­tors, our res­i­dent an­gry out­sider Clax­ton tells you what’s get­ting his goat about this in­dus­try.

Haw­ley: “A truly mov­ing spot that man­ages to con­nect the gulf be­tween the world we take for granted now, and the world pro­tected by our coun­try­men all those years ago. Quite some­thing that this sin­gle spot can achieve such an emo­tive re­sponse from 30 sec­onds of cre­ative ex­cel­lence. Great re­veal.” Haw­ley: “Lovely story telling de­mon­strat­ing what makes driv­ing through New Zealand great, and BP’s role in mak­ing that hap­pen. Ar­guably the story could be ap­plied to any fuel com­pany though …” Humphries: “By clev­erly us­ing all the on­look­ers that gather around a bit of film­ing they’ve cre­ated some­thing very pow­er­ful and mov­ing.” McKee: “On the whole New Zealand should be proud of the way it hon­oured the An­zac Cen­te­nary. This was a great ex­am­ple of bring­ing to life the re­al­ity of the sit­u­a­tion with­out glam­our or fanfare whilst get­ting their mes­sage across at the same time.” Humphries: “Nicely told story, well cast­with the prod­uct/ser­vice at its core. But how they must have cussed when Voda­fone pulled its tale of a lost piglet out of a very sim­i­lar shaped hat.” McKee: “Apart from it be­ing slightly un­for­tu­nate tim­ing with all these lost an­i­mals be­ing found at the same time, I re­ally like it. It’s beau­ti­fully shot and heart-warm­ing and I am cer­tainly look­ing for­ward to more BP sto­ries.”

Agency: Ten­fold Cre­ative Client: Mar­ley New Zealand Brand/prod­uct: Pre­mium Spout­ing and Down­pipes Media: TV, dig­i­tal, print Cam­paign De­scrip­tion: Con­tin­u­ing the ‘Where style meets dura­bil­ity’ propo­si­tion es­tab­lished in the pre­vi­ous TVC, this ad­vert for Mar­ley Stra­tus De­sign Se­ries’ new colours, Iron­sand and Grey Fri­ars, re­tains a con­nec­tion be­tween the de­signer spout­ing and down­pipe sys­tem and the New Zealand weather it pro­tects your home from.

I’m the youngest of five girls and I grew up in Hamil­ton. My first part-time job at high school was in the del­i­catessen at the Wool­worths su­per­mar­ket in Hamil­ton East. I didn’t ever in­tend to work in re­tail. I ac­tu­ally planned to be an ar­chae­ol­o­gist, and re­alised quite early on that there was no money in ar­chae­ol­ogy. And in a coun­try with a history as short as that of New Zealand, maybe that wasn’t the best long-term ca­reer op­tion. So, I started law school, re­alised that wasn’t an op­tion for me, and I did an arts de­gree. Dur­ing univer­sity I had part-time roles in food re­tail in Welling­ton, and didn’t re­alise at the time that I would end up do­ing what I’m do­ing now—which, in my opin­ion, is the per­fect job. For a data-driven mar­keter to end up as the gen­eral man­ager of mar­ket­ing for the largest su­per­mar­ket brand in the coun­try is un­usual, be­cause we op­er­ate in the world of mass com­mu­ni­ca­tions—but, at my heart, I’m a di­rect mar­keter. So some­times peo­ple ask me how those things rec­on­cile, and in my mind they rec­on­cile in an amaz­ing chal­lenge: how do I take a very mass con­ver­sa­tion and drive some of the prac­tices and tech­niques that you learn as a di­rect mar­keter? And how do you get those things to co-ex­ist? Whether I’ve suc­ceeded in do­ing that, I don’t know. I cer­tainly have a lot to do, but if I think of some of the things I’m most proud of it would be tak­ing the One Card pro­gramme and turn­ing it into some pretty smart com­mu­ni­ca­tions di­rect to con­sumers. The most pow­er­ful as­set I have in my ar­se­nal is the data of peo­ple shop­ping in their lo­cal stores. It lets us have those rel­e­vant con­ver­sa­tions. Through things like the My­Count­down email and web plat­form … we are able to have more per­son­alised and tai­lored con­ver­sa­tions. As mar­keters, we should never feel com­fort­able or com­pla­cent. Frankly, if we do, then we’re do­ing our cus­tomers a dis­ser­vice, be­cause they are con­tin­u­ally mov­ing and evolv­ing. The way peo­ple are con­sum­ing media is evolv­ing and chang­ing and as mar­keters we should never be com­fort­able that we’ve got it right … I am per­pet­u­ally dis­sat­is­fied. If you ask my team, they’ll tell you that I’m al­ways want­ing to do the next thing. I’m proud of what we’ve done, but there’s so much that’s pos­si­ble. But in an en­vi­ron­ment like re­tail, you have to be con­struc­tively dis­sat­is­fied. It’s not about things not be­ing good enough. And if I think about my col­leagues in buy­ing, oper­a­tions and lo­gis­tics, it’s clear that the ex­ec­u­tive team at Count­down is never go­ing to ac­cept that what we’ve done is enough. It’s never fin­ished. And although it sounds neg­a­tive, there’s ac­tu­ally a pos­i­tive in that it means there’s al­ways more that we can do for our cus­tomers and there’s al­ways a bet­ter way for us to de­liver a ser­vice and mar­ket … And that drives me. Count­down is an in­cred­i­bly huge and com­pli­cated beast that serves 174 com­mu­ni­ties made up of 2.6 mil­lion cus­tomers a week. I know it sounds like a cliché, but my job is very sim­ple: I have to tell sto­ries and sell baked beans and bananas. It’s noth­ing more com­pli­cated than that. Where we hit the nail on the head with the an­i­mal card pro­mo­tion was that it had an ed­u­ca­tional com­po­nent. Now, I’m not go­ing to sit here and say that we will only ever do pro­grammes that have an ed­u­ca­tion el­e­ment to them, but it’s clear that when you get the com­bi­na­tion of ed­u­ca­tion, col­lectabil­ity and scarcity, then you get the kids, their par­ents and the schools en­gaged. This was seen an op­por­tu­nity for a learn­ing ex­pe­ri­ence. It wasn’t just a su­per­mar­ket pro­mo­tion. We are hav­ing a lot more con­ver­sa­tions among the lead­er­ship team about be­ing more lo­cal … So in that re­gard we have things like the Count­down Kids’ Hos­pi­tal Ap­peal, which with the help of our cus­tomers raised $1.3 mil­lion last year. We also have our re­la­tion­ship with the Sal­va­tion Army, through which we sup­port Red Shield and Christ­mas ap­peals and also our food res­cue pro­gramme … We’ve been do­ing that kind of stuff for quite some time. We haven’t talked very much about it. We’ve been rel­a­tively quiet about the ‘for good’ work that we do—and that’s an ac­cept­able po­si­tion. How­ever, in my view as a mar­keter I see it as a missed op­por­tu­nity. We should talk about the good stuff that we do. The re­al­ity is that brands do things to be good cor­po­rate cit­i­zens, but that is not the only rea­son why we op­er­ate in that space. We need to be prag­matic. We do things to ben­e­fit our brand eq­uity as well as be­ing a good cor­po­rate citizen. That was un­for­tu­nate. I don’t know very much about how things tran­spired there, but what I will say is that we took a sound and valid po­si­tion around An­zac Day. It was about sup­port­ing the RSA, and it’s purely and sim­ply that. We were a ve­hi­cle for our cus­tomers to ex­press how they feel about An­zac Day and the role that it plays in the New Zealand psy­che.

al­ways been in­tended as a fa­cil­i­ta­tor of this, seek­ing to pro­vide a plat­form from which the right be­hav­iours can be recog­nised and more pow­er­ful emo­tional con­nec­tions can be forged.

All prom­ise, no de­liv­ery?

While loy­alty pro­grammes might in­tu­itively feel like a good idea, and while the US alone might in­vest more than the GDP of half the world’s coun­tries in util­is­ing them, the fas­ci­nat­ing truth is that there is very lit­tle ev­i­dence at all to sug­gest they ac­tu­ally work in prac­tice.

In­deed, in the vast ma­jor­ity of cases, the real world ev­i­dence sug­gests that com­pa­nies that fo­cus heav­ily on de­vel­op­ing loy­alty pro­grammes end up worse off.

A 2013 McKin­sey study of 55 pub­licly traded com­pa­nies across North Amer­ica and Europe showed that those with more prom­i­nent loy­alty pro­grammes grew at the same rate, or slightly slower, over the past ten years than those with no or low in­vest­ment in loy­alty pro­grammes. And far more sig­nif­i­cantly, those with prom­i­nent loy­alty pro­grammes had earn­ings mar­gins that were around ten per­cent lower than com­pa­ra­ble com­pa­nies within their sec­tors with less sig­nif­i­cant pro­grammes.

Put sim­ply, the ev­i­dence sug­gests that loy­alty pro­grammes are, for most busi­nesses, sim­ply adding costs with lit­tle tan­gi­ble long-term ben­e­fit.

Sim­i­lar re­sults are seen when the lens is flipped from busi­ness per­for­mance to look at how con­sumer be­hav­iour is ac­tu­ally im­pacted over time by loy­alty pro­grammes. A Deloitte re­view of the ho­tel mar­ket con­cluded that at best the loy­alty pro­grammes in place had lit­tle or no im­pact on pur­chase de­ci­sions, and at worst were ac­tu­ally driv­ing un­de­sir­able switch­ing be­hav­iours. A re­view of the Fly Buys pro­gramme in Aus­tralia by mar­ket­ing aca­demic By­ron Sharp, au­thor of How Brands Grow, showed a sim­i­lar lack of ben­e­fit for mem­ber com­pa­nies, fail­ing to iden­tify any across-the-board ad­van­tages for them in terms of re­peat loy­alty be­hav­iours be­yond the “dis­ap­point­ingly small”.

But per­haps most com­pelling in this space is a 20-year lon­gi­tu­di­nal study of con­sumer pur­chas­ing be­hav­iour, con­ducted by mar­ket­ing and com­mu­ni­ca­tion guru An­drew Ehren­berg. The study, which cov­ered a huge range of FMCG and ser­vices cat­e­gories in Europe, Ja­pan and the US, showed that the truly ‘loyal’ be­hav­iour (i.e. buy­ing only one brand) that pro­grammes de­sire from us sim­ply didn’t ex­ist in any cat­e­gory be­yond a small niche of light buy­ers, typ­i­cally less than ten per­cent of cus­tomers. In all cat­e­gories, peo­ple tended to dis­play a polyg­a­mous loy­alty to two or three brands, and that the chance of us­ing these brands was more or less di­rectly cor­re­lated to their mar­ket share. And over this 20-year pe­riod, there ex­ists no ev­i­dence that loy­alty pro­grammes had any long-term im­pact on the share of pur­chas­ing a brand achieved. The only way brands in the study achieved a greater share of loyal buy­ers was by im­prov­ing their mar­ket­ing mix and grow­ing.

Put sim­ply, the study sug­gests that in­cen­tives alone are not enough to change be­hav­iour. To get loy­alty im­prove­ments, you had to get bet­ter at what you of­fered the mar­ket and grow.

pro­gramme, but ev­ery other that fol­lows. In­deed, it forms the ba­sis for the whole idea of re­la­tion­ship mar­ket­ing and dom­i­nates the dis­course for the data-driven mar­ket­ing move­ment. The ac­cepted wis­dom here, as out­lined in a wide-rang­ing re­view of the space con­ducted by the Sloane busi­ness school at MIT, is that a loyal cus­tomer is more prof­itable to a firm. They cost less to ser­vice, they are less price sen­si­tive, spend more and pro­vide pos­i­tive word of mouth to the mar­ket. Fur­ther, there is an as­sump­tion that there are cus­tomers who want an in­volved re­la­tion­ship with the brands they buy; they seek to es­tab­lish loyal be­hav­iours and can be en­cour­aged up a ‘loy­alty lad­der’ to ex­clu­sive us­age.

As­sump­tions, as­sump­tions

All of this looks pretty sen­si­ble on the sur­face. The trou­ble is, how­ever, that many of these as­sump­tions about the value of loy­alty and how it can be ob­tained don’t bear out when we look at how peo­ple ac­tu­ally be­have. And this is where things start to go wrong for a lot of loy­alty pro­grammes.

First let’s re­visit the Ehren­berg study of buyer be­hav­iour. What this es­tab­lishes from the out­set is that there is no ‘hard core’ of truly 100 per­cent loyal cus­tomers in most cat­e­gories, be­yond a small group of very light users. And in­her­ent in this is a chal­lenge to the idea that cus­tomers want to be loyal to a sin­gle brand, or even that this be­hav­iour can be in­cen­tivised. And there are very good rea­sons for this. We don’t want to only eat McDon­ald’s when we need fast food, Speight’s is bet­ter suited for the rugby you’re about to watch than the Mon­teith’s you usu­ally quaff in bars and Air New Zealand isn’t fly­ing to Mel­bourne at the best time for you on this oc­ca­sion. Some­thing we see in our own work with clients time and time again is that peo­ple like to op­er­ate small reper­toires of ac­cept­able brands in pretty much all cat­e­gories, be­cause this makes de­ci­sion-mak­ing easy. If a sit­u­a­tion arises call­ing for a pur­chase, one from the reper­toire will fit and you don’t have to ap­ply a lot of ef­fort. Sin­gle brand reper­toires are sim­ply not de­sir­able in most in­stances, be­cause they make our lives harder. And no amount of in­cen­tivi­sa­tion is likely to over­come this.

What the study also es­tab­lishes, and some­thing that is re­in­forced in By­ron Sharp’s Fly Buys study, is that even in­creas­ing fre­quency of pur­chase through in­cen­tivi­sa­tion is a fraught as­sump­tion. Over the 20-year pe­riod of the study there was no real ev­i­dence that loy­alty pro­grammes changed a firm’s share of re­peat pur­chase be­yond what could be ex­pected for their mar­ket size. What this again sug­gests is that chang­ing be­hav­iour us­ing re­wards and in­cen­tives is dif­fi­cult. And again, there are some very good rea­sons for this. We es­tab­lish our us­age of brands in cat­e­gories based on our belief in their abil­ity to meet our spe­cific needs.

A cus­tomer’s rel­a­tive use of Air New Zealand vs. Jet­star is all about their per­cep­tions of the ex­pe­ri­ence that will be de­liv­ered, the cost, the timetable, des­ti­na­tions, etc. In essence, the brand’s mar­ket­ing mix for­mu­la­tion. What fol­lows, there­fore, is that it will al­ways be dif­fi­cult for re­wards alone to dis­rupt this pat­tern, be­cause they are ask­ing us to put aside our be­liefs around brand suit­abil­ity for the pur­chase oc­ca­sion in favour of an in­cen­tive. For that value equa­tion to work, the in­cen­tive will likely need to be far more sig­nif­i­cant than what can be man­u­fac­tured by most loy­alty schemes, es­pe­cially over a longer term.

So, the big con­clu­sion we can draw at this point, is that most loy­alty pro­grammes fail to achieve re­sults for busi­ness be­cause they are based on flawed prin­ci­ples re­gard­ing how cus­tomers want to act. They are, by and large, try­ing to in­cen­tivise changes that peo­ple don’t want to make. And as such, any loy­alty pro­gramme that is based solely on pro­vid­ing re­wards to change be­hav­iour will fail.

It’s prob­a­bly also worth point­ing out that some of the as­sump­tions around the value of loyal cus­tomers are also based on very lit­tle sound fact. There is no real ev­i­dence that very loyal cus­tomers pass on any bet­ter feed­back to the mar­ket than ‘nor­mal’ happy-but-pro­mis­cu­ous cus­tomers; there is lit­tle ev­i­dence that highly loyal cus­tomers are any less ex­pen­sive to ser­vice than nor­mal long-term re­peat-but-pro­mis­cu­ous cus­tomers; and no clear re­search to prove they will be less price sen­si­tive ei­ther. Sig­nif­i­cant re­views of the space con­ducted by lead­ing aca­demics and man­age­ment con­sul­tan­cies find con­sis­tency in these as­sump­tions, but find lit­tle to ac­tu­ally sup­port these ideas.

How­ever, while there are strong clues to why loy­alty pro­grammes fail in the core as­sump­tions that un­der­pin the move­ment, there are also prin­ci­ples that do hold true in this space, and which point us to­wards why some pro­grammes pros­per.

And that’s the idea of cus­tomers want­ing a re­la­tion­ship with brands and the value of emo­tional con­nec­tion.

Suc­cess is scarce

What is ev­i­dent when suc­cess­ful loy­alty pro­grammes are ex­am­ined against those that fail to cre­ate change is that they cre­ate stronger emo­tional bonds be­tween the cus­tomer and the brand. Their trans­ac­tion with the cus­tomer is not merely a re­ward for a be­hav­iour, but also recog­ni­tion for be­hav­iour. The ear­lier men­tioned

How many ‘loy­alty schemes’ do you see nowa­days where you’re given a generic dis­count voucher in ex­change for your email con­tact de­tails? Did this ex­change ac­tu­ally change your feel­ings or be­hav­iour with that busi­ness? For many mar­keters to­day, the loy­alty pro­gramme re­mains a trusted tool to en­cour­age cus­tomer be­havioural change. Yet the rise of email mar­ket­ing and new tech­nolo­gies, lever­aged in an un­tar­geted man­ner, in­creas­ingly ob­scure the core value that loy­alty pro­grammes can of­fer to brands. Busi­nesses to­day can cap­ture huge amounts of data on their cus­tomers and have more chan­nels than ever be­fore at their dis­posal to reach them. All too of­ten, how­ever, per­mis­sion to use this data and send blan­ket mass mes­sages to con­sumers is as­sumed rather than earned. Mar­keters adopt­ing this ap­proach to­day are miss­ing out on gain­ing a deeper un­der­stand­ing of their cus­tomers, mak­ing it more dif­fi­cult to de­liver a bet­ter re­turn on in­vest­ment on over­all mar­ket­ing spend. Be­yond this, they’re miss­ing the op­por­tu­nity to build a stronger, longer last­ing re­la­tion­ship with their con­sumers through this bland, un­tar­geted ap­proach.

Re­cent multi-mar­ket con­sumer re­search by the Aimia In­sti­tute has found a growth in ‘deletist con­sumers’. These are shop­pers that in a bid to cope with the del­uge of mass, un­tar­geted dig­i­tal mes­sag­ing from to­day’s brands sim­ply hit the delete but­ton. This re­search found that ir­rel­e­vant blast mes­sag­ing is do­ing more dam­age to cus­tomer re­la­tion­ships over time than you might re­alise. These cop­ing mech­a­nisms mean that 71 per­cent of con­sumers will now un­fol­low brands on so­cial media, 73 per­cent will close ac­counts and 60 per­cent will delete apps thanks to poorly tar­geted brand com­mu­ni­ca­tions.

hen so­cial media re­ally started to hit the scene in a big way in the mid-2000s, pre­dic­tions of its com­ing dom­i­nance were rife. The spec­u­la­tion be­gan as far back as 2005, with media blog­gers at Slate won­der­ing if the In­ter­net would her­ald the death of tele­vi­sion, pre­sciently cit­ing p2p-shar­ing and time-shifted on-de­mand view­ing as the har­bin­gers of that (pre­dicted) doom. But with the ben­e­fit of some 20/20 hind­sight in 2015, per­haps the cart was be­ing put be­fore the horse a lit­tle.

Although so­cial media and in­ter­ac­tive advertising goes from strength to strength, it hasn’t been quite the TV-killer pun­dits as­sumed. In­stead, we find our­selves in a world where so­cial media and tra­di­tional media each have their parts to play. “Tele­vi­sion advertising may have dropped in rel­e­vance but it still holds a lot of cred­i­bil­ity in peo­ple’s minds,” says Tom Reidy, so­cial media agency Cat­a­lyst90’s CEO. “The real ‘sil­ver bullet’ for mar­keters is in in­te­gra­tion, stitch­ing all these dif­fer­ent plat­forms to­gether.”

Ad­mit­tedly, this is not the sort of thing peo­ple are used to hear­ing so­cial media agency heads say. But Reidy’s view is that so­cial media agen­cies, with their fo­cus on nim­ble tech­nol­ogy and pro­duc­tion, are im­por­tant strat­egy part­ners dur­ing early stages of cam­paign plan­ning with more tra­di­tional agen­cies, en­sur­ing the right con­tent for the right plat­form for the right au­di­ence is pro­duced, and backed up by solid cus­tomer ser­vice and re­ten­tion. In the early days of so­cial media, brands flocked to it with the idea that it could be treated as “just another chan­nel,” says Reidy. They brought an advertising mind­set that was all about selling a prod­uct, but left out the ser­vice com­po­nent – whether or not the prod­uct could live up to the hype. “That’s where agen­cies got it wrong be­cause the fo­cus was on the advertising of the prod­uct and not the fol­low up, not the re­ten­tion,” he says. Con­sumers forced brands into two-way con­ver­sa­tions, tak­ing to so­cial media not just to am­plify ap­proved mar­ket­ing mes­sages, but their own likes and gripes. And a brand’s re­sponse – or lack thereof – has the power to earn or lose mas­sive amounts of public good­will. “Like it or not, aware­ness quickly be­comes rep­u­ta­tion and if you don’t have your rep­u­ta­tion locked down on so­cial media, and if you don’t have a plan to re­tain your au­di­ence, your cam­paigns will merely am­plify your brand’s fail­ings,” Reidy says. De­spite the en­hance­ments that so­cial media and other tech­nol­ogy have brought to the mar­ket­ing dis­ci­pline, the im­por­tance of know­ing who your au­di­ence is–and where they are–hasn’t changed. An­swer­ing that ques­tion is where any good strat­egy starts, and a strat­egy is where any good in­te­grated cam­paign starts. Dif­fer­ent plat­forms call for dif­fer­ent ap­proaches and an un­der­stand­ing of how peo­ple in­ter­act with that con­tent, whether it’s a TVC, a YouTube pre-roll, or a seven-sec­ond Vine video. Sim­ply cut­ting shorter or longer ver­sions of the same con­tent isn’t go­ing to work. So­cial media and tra­di­tional media can work well to­gether, and sec­ond-screen­ing be­hav­iour means users are primed by TVCs to en­gage more deeply online. But this ex­tended en­gage­ment needs to be planned for at the out­set, not as an af­ter­thought. “A great strat­egy will cre­ate the foun­da­tion for ex­e­cu­tion across all chan­nels, and con­tent can then be adapted for suc­cess in each spe­cific

As Jeff Malone, the man who has re­cently ar­rived in New Zealand to run the lo­cal out­post of #ogilvy­change, says “there is no such thing as neu­tral choice ar­chi­tec­ture.” What the crit­ics also for­get, he says, is that no mat­ter how well you un­der­stand hu­man be­hav­iour, you can’t make peo­ple do some­thing they don’t want to do. If some­one doesn’t like bananas, it’s un­likely you will be able to con­vince them to eat a banana. But as Som­mer Kap­i­tan, lec­turer (as­sis­tant pro­fes­sor) in mar­ket­ing at AUT, says, you can try to push peo­ple who may be in­clined to eat a banana in a cer­tain di­rec­tion by un­der­stand­ing how in­for­ma­tion is pro­cessed by the brain. And, if the smell of bak­ing bread be­ing pumped out of the Sub­way store works for one in ten peo­ple, then the im­por­tance of the sub­con­scious—or as she calls it, sen­sory mar­ket­ing—be­comes an en­tic­ing prospect. Suther­land be­lieves the advertising in­dus­try has been de­ceiv­ing—and un­der-es­ti­mat­ing—it­self for decades in this re­gard: “Un­nerved by books such as The Hid­den Per­suaders, by at­tacks on mo­ti­va­tional re­search and by an ex­per­i­men­tal study of sub­lim­i­nal advertising ef­fects in cine­mas (which it later tran­spired was bo­gus) they disin­gen­u­ously played a get-out-of-jail-free card by pre­tend­ing that advertising worked ex­clu­sively within the realm of con­scious aware­ness. This act of de­nial had some ter­ri­ble side-ef­fects. It cre­ated a strange cul­ture within mar­ket­ing where ev­ery­one pre­tended that all per­sua­sion oc­curred through rea­soned ar­gu­ment alone. As a re­sult of this con­ve­nient fic­tion, im­por­tant as­pects of hu­man be­hav­iour were ef­fec­tively of­flim­its for about fifty years. The de­nial of sub­lim­i­nal ef­fects also made mar­ket­ing/psy­chol­ogy much less in­flu­en­tial than it de­served to be.”

For him, “our per­cep­tion of, and re­ac­tion to, re­al­ity is sub­jec­tive. How you feel about prod­ucts, or even about your life, is at least as im­por­tant, and prob­a­bly much more im­por­tant, than the prod­uct or your life’s ob­jec­tive char­ac­ter­is­tics”. FCB’s plan­ning di­rec­tor David Thomason be­lieves the best advertising is proven to be over the long term. And while the bean coun­ters might not agree with the view that “there is no sen­si­ble dis­tinc­tion to be made be­tween value cre­ated in a fac­tory and value cre­ated in an advertising agency,” he is in Suther­land’s camp and thinks that advertising is part of the prod­uct.

“It prob­a­bly sounds like an ad agency try­ing to de­fend it­self, but you don’t just buy the phys­i­cal item. You buy what’s at­tached to it and it gen­uinely adds en­joy­ment to it and neu­ro­science proves that’s cor­rect. If it’s got a Coke la­bel on, you’re ac­tu­ally get­ting more ex­cited, it’s not just the chem­i­cal in­ter­ac­tion on your taste buds.”

Lewis Road Cream­ery’s cho­co­late milk was a great prod­uct, but the mad­ness seemed to be less about the taste and more about the en­joy­ment de­rived from find­ing it and shar­ing that ex­pe­ri­ence. And Kap­i­tan agrees. She points to a study that gave women empty Vic­to­ria’s Se­cret bags to carry around a mall and just do­ing that made them feel more el­e­gant. Another study had MBA stu­dents use a Har­vard pen and it made them feel more con­fi­dent and pow­er­ful. Thomason says it even ap­plies to the type of undies we’re wear­ing, even though most peo­ple, thank­fully, aren’t go­ing to see them.

“It’s the idea that we can sub­tly get in there and change at­ti­tudes,” Kap­i­tan says.

David Thomason

Or, as ICG ex­ec­u­tive di­rec­tor Mike Hutch­e­son likes to say, you’re drink­ing what you’re think­ing, some­thing proven very lit­er­ally by a study that saw more Ger­man wine than French wine pur­chased when Ger­man mu­sic was be­ing played in the store. Of course, when asked why they chose the Ger­man wine, none of the cus­tomers men­tioned the mu­sic as the rea­son. Thomason be­lieves a lot of the aca­demic stuff is just catch­ing up to what those work­ing in the per­sua­sive arts in­tu­itively knew. Cre­atives have long worked on the ba­sis that some­thing like­able and emo­tional will be more ef­fec­tive, some­thing that was brought into sharper fo­cus dur­ing the cre­ative revo­lu­tion in the 1960s; Kap­i­tan says ad­ver­tis­ers have al­ways looked at what at­tracts peo­ples’ at­ten­tion best, whether it’s the colour used, the size of the im­agery or the flu­ency of the read­ing; and the main goal of brand­ing is to cre­ate a short-cut in the con­sumer’s mind (Ries and Trout’s con­cept of po­si­tion­ing). So Thomason doesn’t be­lieve a deeper un­der­stand­ing of cog­ni­tion is com­pletely chang­ing the sec­tor, but it is a form of sci­en­tific val­i­da­tion for the in­dus­try’s longheld be­liefs and in many cases, the prin­ci­ples of be­havioural science are be­ing used to make cre­ative work even more ef­fec­tive.

In an age where ef­fi­ciency of­ten seems to trump imag­i­na­tion and where ac­count­abil­ity is de­manded, Malone be­lieves the lan­guage of mar­ket­ing of­ten comes across as bull­shit to ev­ery­one else in the c-suite. So he thinks BE could also help solve what he feels is mar­ket­ing’s PR prob­lem.

“BE doesn’t just open up new op­por­tu­ni­ties. It gives mar­keters a bet­ter way to sell them into their or­gan­i­sa­tions.”

Thomason, who is part of FCB’s global De­ci­sion­mak­ing In­sti­tute, says the New Zealand of­fice’s early fo­cus on be­hav­iour change (which is now be­ing rolled out around the world) ini­tially came about as a re­sult of all the work it was do­ing with gov­ern­ment clients. He says so­cial mar­ket­ing has re­cently gone through some­thing of a revo­lu­tion and it shifted from ‘don’t do this be­cause bad things will hap­pen’, to ‘here’s a funny ad and some­thing you can do to get a pos­i­tive out­come’. So is this change in ap­proach based on science? Ac­cord­ing to one of the world’s lead­ing author­i­ties on pos­i­tive vs. neg­a­tive in­cen­tivis­ing in so­cial mar­ket­ing, ‘we don’t know’.”

Thomason says it’s all about cul­ture, about what’s trendy at the time, although he be­lieves gov­ern­ment has learned from com­mer­cial mar­ket­ing, where the prod­uct or ser­vice be­ing ad­ver­tised al­ways pro­vides an an­swer to a prob­lem.

“We shifted to pos­i­tive role mod­el­ling with ALAC. We did a big study on how peo­ple re­sponded to that plus we were read­ing all about BE stuff and it’s bloody ob­vi­ous when you think about it. You can’t tell peo­ple what not to do. Peo­ple run from prob­lems. You have to of­fer a so­lu­tion.” In the com­mer­cial realm, he points to its work on Mitre 10’s ‘Easy As’ as one of the best ex­am­ples of us­ing BE tech­niques to help cus­tomers and drive sales. The com­pany’s core pur­pose is about ‘the unique sat­is­fac­tion of a job well done’, so he says it uses the herd­ing prin­ci­ple (DIY is in our DNA, so if you don’t have it you’re not part of the herd), the iden­tity prin­ci­ple with the two guys stand­ing side by side in the ad (‘you don’t want to be this guy’) and chunk­ing, or split­ting tasks into man­age­able bites, as seen in the prac­ti­cal videos. »

Slow says, the two-sys­tem set-up is also how our brains work.

“The big­gest ef­fects of advertising are long-term,” says Thomason. “It sounds like a weak de­fence to say ‘if you didn’t do that cam­paign your sales would’ve gone down’, but if you don’t do it, ten years later that will be the case. Be­ing known is im­por­tant as well. In some de­bates about advertising ef­fec­tive­ness they say there are only two things that mat­ter 1) you get seen by the au­di­ence and 2) they know who it was for.”

And all the rest, such as the cre­ative idea, em­pha­sises those two things to try and en­sure the brand is the first one to be as­so­ci­ated with a cat­e­gory, or at least a sub-cat­e­gory.

Malone says Vir­gin At­lantic re­alised brand build­ing wasn’t all about comms when in­stead of get­ting rid of the salt and pep­per shakers that were regularly stolen by busi­ness class pas­sen­gers, it added the words ‘pinched from Vir­gin At­lantic’ to the bot­tom (it also made ice cubes in the shape of its founder Richard Bran­son’s head). He says it re­alised it’s of­ten the small things that mat­ter most and that peo­ple re­mem­ber. And this aligns with one of Suther­land’s fa­mous sug­ges­tions: in­stead of tak­ing the ra­tio­nal ap­proach and spend­ing bil­lions to shave a few min­utes off a train jour­ney, it would be a bet­ter (and far cheaper) idea to hire su­per­mod­els to serve you cham­pagne, thereby en­hanc­ing the ex­pe­ri­ence and chang­ing the way you think about trav­el­ling.

“It’s nat­u­ral for peo­ple to think that big prob­lems re­quire a big so­lu­tion,” says Malone. “It’s called the pro­por­tion­al­ity bias, but that’s not al­ways the case.”

Thomason says dig­i­tal brands are prob­a­bly the mas­ters of us­ing BE tech­niques, but many of the small changes that of­ten cre­ate re­sults are just not very ex­cit­ing. Google’s re­ally sim­ple home page is a good ex­am­ple. And Face­book has also cre­ated big changes from small tweaks on its plat­form (last year it was lam­basted for its role in an experiment it con­ducted on users with­out con­sent that showed it was able to mod­ify users’ emo­tions through changes to its al­go­rithm).

“It’s shift­ing from com­mu­ni­ca­tions to en­gi­neer­ing ex­pe­ri­ences, but it’s not nov­elty that mat­ters in that case, it’s ease.”

Malone be­lieves gov­ern­ment in­sti­tu­tions are also lead­ing the way in the area of BE be­cause they of­ten don’t have large media bud­gets. For them, it’s of­ten about ef­fi­ciency, which is the core of strat­egy and plan­ning. And they also have to be ac­count­able. Fol­low­ing the prin­ci­ples of BE al­lows gov­ern­ments and busi­nesses to experiment in small ar­eas, rather than spend money on big cam­paigns or con­duct na­tion­wide re­search that is most likely based on claimed be­hav­iour, rather than ac­tual be­hav­iour. We can’t ex­plain our un­con­scious de­ci­sion-mak­ing, which means there’s lit­tle point ask­ing a ra­tio­nal, log­i­cal ques­tion like ‘does en­joy­ing this ad make you more likely to pay more for the prod­uct in the fu­ture?’ Some­times the most ef­fi­cient so­lu­tion can be the sim­plest. As an ex­am­ple, Malone points to a high­way in Chicago that had some dan­ger­ous curves and where speed was an is­sue. Ra­tio­nal mes­sag­ing about the dan­ger didn’t help. But paint­ing some nar­row­ing lines on the road to trick driv­ers into think­ing they were go­ing too fast did. It was ba­si­cally a brain hack and Thomason says a sim­i­lar prin­ci­ple ap­plies to shared pedes­trian zones where dif­fer­ent road sur­faces are proven to make you slow down.

These are evo­lu­tion­ary re­sponses and our be­hav­iour is af­fected when we sense a change in our en­vi­ron­ment, he says. Kap­i­tan points to a study by one of her col­leagues who pumped the sub­tle scent of straw­berry through a lec­ture theatre. When stu­dents were asked to take a lolly at the end, all the red lol­lies were taken. When the smell wasn’t present, red and green lol­lies were taken equally.

“The idea is that you can change re­ally big im­por­tant things by mak­ing these lit­tle tweaks and they use the same ex­am­ples over and over again,” Thomason says, such as the experiment in a ho­tel room to get guests to re-use their tow­els. Fo­cus­ing on ab­stract con­cepts like ‘sav­ing the en­vi­ron­ment’ or ‘this ho­tel does three tonnes of wash­ing ev­ery day’ is far less ef­fec­tive at chang­ing peo­ple’s be­hav­iour than show­ing them that the ma­jor­ity of peo­ple who stayed in the ho­tel reused their tow­els.

Another oft-used ex­am­ple is the ma­jor e-com­merce site that re­placed the “register” but­ton with a “con­tinue” but­ton and added a mes­sage say­ing that reg­is­tra­tion wasn’t re­quired to check­out. As the case study showed, this sim­ple change in­creased sales by 45 per­cent—$15 mil­lion in the first month, and $300 mil­lion in the first year.

It’s un­clear if that site was selling di­a­monds. But, given the in­dus­try’s un­der­stand­ing of hu­man be­hav­iour, it wouldn’t be en­tirely sur­pris­ing.

Turns out that de­sign­ers, tasked as they are with the con­sid­er­a­tion of ac­tual end users’ ex­pe­ri­ences of a prod­uct or ser­vice, are well served by their tools and pro­cesses to solve a whole lot of prob­lems be­yond sim­ple pack­ag­ing and graph­ics. In fact, their re­mit has widened so far that their skills are now sought af­ter as a way to engi­neer in­no­va­tion within or­gan­i­sa­tions.

Thanks to im­prove­ments in dig­i­tal tech­nol­ogy and widen­ing ac­cep­tance of the ‘de­sign think­ing’ prin­ci­ples of rapid it­er­a­tion and cus­tomer cen­tric­ity, right-brained cre­atives are in­creas­ingly stak­ing claims in tra­di­tional realms of the left-brained. Busi­nesses in need of cul­ture change are choos­ing de­sign­ers in favour of MBAs, and gov­ern­ments are sup­port­ing de­sign ini­tia­tives (as has our own through Bet­ter by De­sign) to en­cour­age in­no­va­tion and growth. Mean­while, cor­po­rates the world over are cre­at­ing chief de­sign or ex­pe­ri­ence of­fi­cer roles to cham­pion and pri­ori­tise de­sign in­ter­nally.

Why? Si­mon Wedde, group ac­count di­rec­tor at Dow De­sign thinks it’s that de­sign­ers are in­ter­ested in re­flect­ing the re­al­ity of a prod­uct or ser­vice and the way those are used by ac­tual users, which leads to prag­matic so­lu­tions. On the other hand, he says con­sul­tants can be too far re­moved from re­al­ity. “You can over­com­pli­cate it and get lost in the the­ory.”

The im­por­tant thing, what­ever hap­pens and who­ever is driv­ing the process, is keep­ing the cus­tomer at the heart of the ex­pe­ri­ence. “Great de­sign has al­ways been based on the con­sumers’ ex­pe­ri­ence and us­age,” says Wedde. “You can la­bel it user ex­pe­ri­ence and you can call it cus­tomer­centric, but it’s al­ways been that way.”

De­sign for the bot­tom line

Does good de­sign im­pact the bot­tom line? Ac­cord­ing to Ap­ple, the world’s most prof­itable com­pany, ab­so­lutely.

To be slightly less blithe: yes, but it takes some work—and pos­si­bly some con­vinc­ing.

“The chal­lenge has been, as with de­sign it­self, that you need to demon­strate a user­centred ap­proach isn’t slower, it’s faster. It’s not more ex­pen­sive, it ac­tu­ally adds value,” says Che Tama­hori, man­ag­ing di­rec­tor at Dig­i­tal Arts Net­work (DAN), where he’s headed up projects for TVNZ and Tourism New Zealand, among oth­ers.

Tak­ing a real user-cen­tric de­sign fo­cus takes time and that’s why agen­cies like DAN pre­fer to build long-term re­la­tion­ships with clients they know are com­mit­ted to de­sign. It’s also seen agen­cies be­ing brought in to dis­cus­sions with clients and advertising agen­cies much ear­lier in the process than in the past.

For­tu­nately, the out­comes of good de­sign are mea­sur­able. Es­pe­cially in dig­i­tal de­sign, where op­ti­mi­sa­tion tools speed of the in­ter­net al­lows changes to be made and tested al­most im­me­di­ately. “In near real time you can tell whether a change to some­thing has added value, or whether you’ve gone back­wards,” says Tama­hori. That means de­sign is less sub­jec­tive now. “You can know by the end of the week whether or not [a de­sign change] had the im­pact you were seek­ing. It’s an ob­jec­tive mea­sure—and that’s quite con­fronting for some de­sign­ers. It’s ex­cit­ing be­cause you can prove the value, it’s scary for some peo­ple be­cause they have to let go of the idea

“de­sign in­ten­sive” firms out­per­form their pre­sum­ably less de­sign-in­tense peers by 200 per­cent in the stock mar­ket—through bull and bear per­for­mance. In qual­i­ta­tive in­ter­views con­ducted with busi­ness lead­ers, re­ported ben­e­fits weren’t lim­ited to im­proved sales and mar­ket shares, but also in­cluded non-fi­nan­cial ben­e­fits like higher brand recog­ni­tion and en­hanced cus­tomer sat­is­fac­tion. “Im­por­tantly,” the Coun­cil’s re­port states, “a cor­re­la­tion was made: the more strate­gic the busi­ness’s use of de­sign, the greater the ben­e­fit.”

Still, New Zealand is a na­tion of SMEs. Is it fair to ex­pect that smaller, es­tab­lished busi­nesses shift gears so com­pletely if they’re not al­ready fa­mil­iar with de­sign? Well ac­cord­ing to Moon, it’s crit­i­cal. “When I started [Ice­breaker], de­sign was an op­tional strat­egy. Now it’s mis­sion crit­i­cal,” he says.

Brand de­signs

Ice­breaker founder Jeremy Moon likely never heard Kevin McCloud’s ex­hor­ta­tion to cut your costs and spend the sav­ings on bet­ter de­sign—but it’s a mes­sage he prob­a­bly agrees with. Moon took half of the $200,000 seed cap­i­tal he raised and put that into prod­uct and brand de­sign. “Some peo­ple said ‘oh god, that’s risky’, but for me the big risk was not hav­ing a strong, pro­fes­sional story be­cause I knew we would fail if that didn’t hap­pen,” he says. “So for me it was ac­tu­ally a risk re­duc­tion strat­egy.”

Right from the start Moon knew he had a good prod­uct, but no one at the time wanted wool. So plung­ing the money into set­ting up a be­liev­able, pro­fes­sional im­age was

cen­tral to gain­ing the trust of cus­tomers and re­tail­ers. At the out­set, Moon says he didn’t know any­thing about de­sign so he teamed with some­one who did—Brian Richards— and to­gether they in­ter­viewed sev­eral de­sign agen­cies to see who had the best ap­proach to bring­ing the brand’s story to life, a deal that ended up go­ing to De­signworks.

It wasn’t un­til the brand story was in place that Moon be­gan de­sign­ing the first prod­uct. “Brand is iden­tity, it’s a re­flec­tion of why the com­pany ex­ists and what the com­pany stands for. The prod­uct is the phys­i­cal ex­pres­sion of the brand,” he says. That’s a con­cept Moon says a lot of the busi­nesses he comes into con­tact with through his as­so­ci­a­tion with Bet­ter by De­sign (he’s the cur­rent chair­man to its ad­vi­sory board) don’t un­der­stand. “They think they’re in busi­ness to make prod­ucts. They’re ac­tu­ally in busi­ness to make an im­pact on peo­ple’s lives and you need story as a way of bring­ing that nar­ra­tive alive and mak­ing it rel­e­vant for peo­ple. The prod­uct is then the phys­i­cal ex­pres­sion of the prom­ise that comes from that story,” he says.

The strat­egy paid off for Ice­breaker and the ini­tial $200,000 of seed cap­i­tal has turned into about $200 mil­lion of sales across 45 coun­tries and 500 staff, with more than 80 per­cent of sales from the North­ern Hemi­sphere.

“If you don’t have a dif­fer­en­ti­ated prod­uct or ser­vice you com­pete on price, and if you com­pete solely on price then un­less you’re the cheap­est, you die.”

from a busi­ness per­spec­tive and McCort from a cre­ative per­spec­tive, which the team be­lieve is another con­trib­u­tor to its suc­cess.

Dow’s lead of the agency is par­tic­u­larly im­pres­sive given she is one of the few in her par­tic­u­lar de­sign field head­ing a suc­cess­ful com­pany in a male-dom­i­nated en­vi­ron­ment.

“I am very aware of that and that’s some­thing I’m re­ally proud of,” she says. “We’ve been go­ing a long time, we’ve got a re­ally solid rep­u­ta­tion. Hav­ing said that it is nice to have a bal­ance with some­one like Si­mon [Wedde] … it is good to have that bal­ance of the male and fe­male gen­ders and ev­ery­one of­fers some­thing dif­fer­ent.”

De­sign is also an in­her­ent skill, she says, so it can’t be said that fe­males are bet­ter than males or vice versa but the fe­male eye can in some sit­u­a­tions of­fer some­thing dif­fer­ent.

“You’re ei­ther a great de­sign thinker or you’re not and our male de­sign­ers are just as good as our fe­males,” she says. “But I do feel that the fe­male de­sign eye can slightly have more em­pa­thy in some de­sign spa­ces than per­haps the males.”

Dow also takes its craft se­ri­ously, re­sult­ing in the ex­quis­ite ex­e­cu­tion of its de­signs, which Wedde says is due to be­ing staffed by very se­nior and ex­pe­ri­enced cre­ative thinkers and pro­duc­tion staff “…and we are also ex­tremely fussy and crit­i­cal. This is Donna’s ex­pe­ri­ence and great eye and also An­nie’s phi­los­o­phy that she has in­stilled in Dow that ‘good enough is not good enough’, it is re­flected in her own per­sonal taste and style,” he says.

An­nie Dow says it takes courage to do things dif­fer­ently and stand out from the crowd. “We pride our­selves on that. We’re bold, and we chal­lenge cat­e­gory norms on many oc­ca­sions, but only when we need to. Not just for the sake of it.”

She says Dow keeps its eye on the prize, de­sign­ing with pur­pose and with the sim­ple knowl­edge that great de­sign so­lu­tions sell “And that is the most sat­is­fy­ing, our clients’ sales re­sults. De­sign is not just about look­ing good, it is about be­ing ef­fec­tive, truly pow­er­ful and po­tent in the mar­ket”.

And af­ter a pros­per­ous two decades Dow De­sign is show­ing no signs of slow­ing down yet, with the team say­ing it looks for­ward to another 21 years of suc­cess with its clients.

on ac­count of need to re­vamp the re­search method­ol­ogy used. At first, Me­di­a­Works claimed that it was an agree­ment across the in­dus­try, but then NZME re­sponded by say­ing that it had al­ways wanted to have the sur­vey.

“Clients have told us they want more data, not less data,” said NZME com­mer­cial di­rec­tor San­dra King at the time.

So to give clients and agen­cies what they sup­pos­edly want, NZME fi­nanced its own in­dus­try-wide sur­vey in­de­pen­dently—a move that was quickly de­nounced by Me­di­a­Works for giv­ing its com­peti­tor an un­fair ad­van­tage. Sev­eral ar­ti­cles in the media painted a pic­ture that Me­di­a­Works and NZME were strug­gling to get along and that they weren’t in­ter­ested in work­ing to­gether at all. And these sen­ti­ments were only fur­ther con­cre­tised through spec­u­la­tion that The Ra­dio Bureau (TRB) was set to be dis­banded.

The ru­mours sur­round­ing the dis­so­lu­tion of TRB served as some­thing as a turn­ing point for the un­easy re­la­tion­ship be­tween NZME and Me­di­a­Works, and was fol­lowed by the pair send­ing out a joint state­ment to quash the in­dus­try mur­mur­ings.

At the time, state­ments like “both com­pa­nies are com­mit­ted to TRB” reeked of PR in­sin­cer­ity, but NZME Ra­dio man­ag­ing di­rec­tor Dean Buchanan and Me­di­a­Works’ Palmer have main­tained this co­op­er­a­tive ap­proach ever since (some­thing ev­i­denced by the fact that nei­ther net­work cel­e­brated their rat­ings wins fol­low­ing the re­lease of the NZME-fi­nanced sur­vey).

As Buchanan and Palmer took their seats at the Ra­dio Rewired event, it quickly be­came ev­i­dent that the plat­form was go­ing to be used to con­sol­i­date the mes­sage that the pair were col­lab­o­rat­ing.

‘As Dean says’, ‘as Wendy says’ and ‘we’re 100 per­cent com­mit­ted to this’ were com­mon phrases as the pair shared thoughts on where the in­dus­try was go­ing. And while the tra­di­tion of com­pet­i­tive feisti­ness in the ra­dio in­dus­try still made these state­ments sound forced at times, there did seem to be a com­mon un­der­stand­ing that col­lab­o­ra­tion was nec­es­sary to en­sure the longevity of ra­dio.

A sim­i­lar ap­proach has been em­ployed in the mag­a­zine in­dus­try. Sev­eral years ago, off the back of years of com­pet­i­tive in-fight­ing be­tween the na­tion’s ma­jor pub­lish­ers, the Mag­a­zine Pub­lish­ers As­so­ci­a­tion rec­om­mended that its mem­bers work to­gether and, in­stead of try­ing to rev­enue from each other, look to gain a cut of the ad spend pie from other chan­nels. The tele­vi­sion in­dus­try also ap­pears to be putting aside some com­pet­i­tive ten­sion and work­ing to­gether to pro­mote the medium. Pan­dora, Spo­tify and the re­cently ar­rived Rdio all oc­cupy a space that is be­com­ing in­creas­ingly threat­en­ing to tra­di­tional ra­dio. And the com­mer­cial net­works now regularly vie against these online play­ers not only to at­tract au­di­ence num­bers but also for a cut of ad rev­enue.

Faced with the in­flat­ing pop­u­lar­ity of these in­ter­na­tional play­ers, NZME and Me­di­a­Works have been trum­pet­ing the in­flu­ence of their lo­cal tal­ent.

“It’s about lo­cal­ism in the global econ­omy,” says Buchanan. “The power of the per­son­al­ity will grow in the years to come. That’s what dif­fer­en­ti­ates our medium from the in­ter­net providers.”

But the ab­sence of per­son­al­i­ties on Pan­dora doesn’t con­cern Me­lanie Reece, the com­pany’s com­mer­cial di­rec­tor in New Zealand.

“We do one thing and we do it re­ally well,” Reece says. “You don’t get to have 300 mil­lion users world­wide un­less you have some­thing very spe­cial.”

Reece de­scribes the in­ter­net as a demo­cratic space and that con­sumers will ul­ti­mately de­ter­mine what they want to lis­ten to. And while this might be true for the thou­sands of of­fice denizens lis­ten­ing to Pan­dora while star­ing at spread­sheets, in-car lis­ten­ing—which ac­counts for

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