Losing strategies from AT&T, Target

You know a brand is failing when it gets desperate to find new customers and keep its current ones, often by reducing prices. It’s the last gasp of brands in markets where brand meaning is ineffective and often similar across the board.

That’s what has happened for both cell phone carriers and retailers. Two cases in point: AT&T and Target.

AT&T
AT&T is in defense mode…

AT&T is doing away with overage fees for data plans, instead reducing the speed of data customers receive if they go over their limit. AT&T is hoping customers will opt to buy bigger data plans or simply be satisfied that they are not getting unexpected fees.

AT&T is following in the footsteps of both Verizon and Sprint, who have similar processes. (Although Verizon actually charges for what it calls its Safety Mode.) This is a defense tactic. And once you are in defense mode, your brand message isn’t working.

Target isn’t doing any better, and maybe worse.

Then there is Target. CEO Brian Cornell told investors that it will double down on the second half of its brand promise: The Pay Less section of “Expect More, Pay Less.”

Target
…and so is Target.

Great. That means Target, which saw a dip in sales of 1.1% last quarter, will reduce prices (and, therefore, margins) to compete with Walmart, which already owns the “Save Money, Live Better” space in retail.

One thing retailers like Target have not learned is that, if you copy the market leader, customers will default to that market leader because market leadership becomes the only reason to choose.

You see that strategy all the time in many markets. Someone takes market leadership with a unique claim and everyone in the industry follows suit, thinking it’s a winning strategy for them as well.

But that’s not how it works. To steal market share, especially if you are not the market leader, you need to be different and better than the market leader. You have to present yourself as a true choice.

AT&T could hold onto its customers with a better brand message than “Mobilizing Your World” because that’s just a definition of its category. If it had something more meaningful, then reducing data speeds to eliminate overage fees wouldn’t need to happen. It would already have true preference.

Same with Target. Give customers a reason to prefer you, not just put your thumb in the hole of a collapsing dam.

Verizon’s purchase of Yahoo makes little sense

My first question upon hearing that Verizon is paying $4.8 billion to buy Yahoo was: Why would Verizon do that?

Yahoo has been a declining brand for some years. In the 90s, it was the search engine and counted millions among those who had an email address with the tech company. It won its battle with AOL and its future was bright.

Yahoo
The price may be cheap, but I don’t know what Verizon is getting from Yahoo.

But Yahoo never evolved after Google entered the market and took over so overwhelmingly that google is now a verb.

A better way to judge Yahoo’s downfall is to remember that Microsoft was willing to pay $45 billion for it just nine years ago. The $4.8 billion Verizon just ponied up is chicken feed in comparison.

The strategic purpose of buying Yahoo

Verizon’s overall strategy is to become a larger technology and media company rather than just a mobile carrier. It wants to count Google, Time Warner and Amazon as its competitors. Its recent purchases of AOL and the Huffington Post prove that. But it has an overall strategy that has yet to come to true fruition.

So why Yahoo? I suppose Verizon wants access to its one billion users. But AOL once boasted of those kinds of numbers. As we learned, those AOL customers were basically empty ones as they sported AOL email addresses they never used. Yahoo did buy Tumblr and brought in Katie Couric to be some sort of news anchor, for what it’s worth.

But it has been a brand without purpose. All that mishmash of what it had didn’t add up to a satisfying whole. It was a collection of disconnected parts.

Part of the reason why I wonder why Verizon would buy Yahoo is that, so far, Verizon’s collection also seems jumbled. What is Verizon going to become?

I suppose we should let this play out and see what Verizon will emerge as. But it worries me when companies grow through acquisition and not organically.

Verizon needs to come up with a brand promise that unites all its offerings. That was the problem Yahoo always had. No one could state what how its users were different than any other kind of user. It had no unifying brand.

If Verizon wants to make some sense of what it will become, then it needs to re-examine its brand. Because, right now, it doesn’t have one that will impact the market the way it should and buying companies like Yahoo don’t fix the problem.

Nintendo is finally making apps

When I was young, I enjoyed arcade classics like Donkey Kong and Pac-Man. Simple games that involved a joystick and a couple of buttons. These days, I am afraid I could never learn what the plethora of buttons do on a Playstation or X-Box controller. Ultimately, I would end up doing the button “mash” to accomplish much of anything. This is why a video game controller hasn’t touched my hand in decades.

Nintendo
This is where Nintendo needs to put its games.

It is also probably why the one gaming brand I am attracted to is Nintendo. Its systems have always felt like they were rooted in simplicity. Which is an attribute I admire. The brand houses some of the most recognizable gaming characters like Mario and Link.

A handful of years ago, Nintendo was riding high on its Wii system. A Wii system was once next to impossible to wrangle. Customers would snatch them up as soon as they hit the selling floor almost a year after their release.

Since then, Nintendo has been on the decline. The Wii U, an updated version of its predecessor, never hit home with audiences. Moreover, the company recently reported mediocre Q4 results.

Nintendo needs to think outside of the box.

All of this means that Nintendo doesn’t have the same permission to release the action packed, shoot-em up games as its rivals do and must consider a new strategy. For instance, the company has to think more innocently with its games — consider the titles it offers compared to its competitors. Yoshi World vs. Grand Theft Auto.

A few years back, I was contemplating the next steps that the gaming giant should make. Then, I suggested that the company needed to look outside of itself and partner with a company that is top-of-mind, like Apple.

Turns out, Nintendo is doing just that.

Its first foray into the Apple app world was a failed social network/game attempt. However, I have high hopes for its second attempt which will feature a “very familiar character.” This is its best move since the release of the Wii.

By joining the Apple ecosystem, Nintendo’s reach expands tenfold. With Sony and Microsoft ruling the gaming category, Nintendo now has permission to “Think Different.”

The Samsung Chrissy Teigen ad is that bad

Samsung has a new commercial for its Galaxy Note 5 and its S6 Edge+ phones featuring the voice of Chrissy Teigen.  Of course you would assume that there were actually two separate ads, one for the Galaxy Note 5 and one for the S6 Edge+. But I guess, for Samsung, that would be too obvious. Instead, the ad has Teigen waffling back and forth as to which phone she thinks she needs. She actually goes back and forth between the two phones with point and counter point, as if she is selling one against the other.

This Samsung Chrissy Teigen commercial fails on so many levels it is embarrassing.  It is not single-minded. In an effort to try to sell two phones, it really does nothing to sell either. It paralyzes the viewer with choice.

If the commercial can’t make a decision, how does Samsung expect the consumer to? Perhaps Samsung believes the ad is about its brand and that it has two good phones and that either is a good choice. But again, the waffling back and forth between the two phones is just confusing and reflects poorly on Samsung. It creates confusion.

Too much choice leads to inertia.

Because it is confusing, it accomplishes nothing more than informing current Samsung users there are two more choices for them. The ad is not designed to steal market share. Samsung fails to clearly define anything in this ad. It assumes consumers know something about both phones and sells indecision to an unnamed target audience with unnamed needs and wants.

As bad as modern advertising has become, I can generally tell what the purpose of most ads are. Furthermore, most ads at least try to be single-minded insomuch as they are about a single product or a single company and do not paralyze the viewer with choice. (Although trying to be single-minded seems to be a problem in the mobile phone category.) Ads tell consumers to choose a product or choose a brand. The Galaxy Note 5 and S6 Edge+ ad does neither. It just tells consumers that Samsung is confusing.

I guess then, the Samsung brand face is for those people who want to be confused. The ad is really that bad.

PonoPlayer review Part II

A while back, I wrote a blog about the Neil Young brainchild, PonoPlayer. At the time, the music playing device, which is being sold for $400, was raking in the dough on Kickstarter. In fact, the campaign raised over $6 million dollars. Well over the initial goal of $800,000.

As it turns out, they are a waste of money.
As it turns out, they are a waste of money.

The marketing for the device was poignant. Somewhere between Young’s mantra of damning present-day MP3s and touting the sonic effectiveness of the PonoPlayer (hi-definition music you can hear and feel), I was sold. Not sold enough to buy a device, but sold to the point that I bought Neil’s pitch. Plus, Stephen Stills endorsed the product and I am prone to believe anything he has to say.

Shows you what little I know.

A few months ago, just prior to seeing Crosby, Stills and Nash in concert, I heard Stills in an interview state how he is basically stone deaf. All I could think of at the time was the PonoPlayer Kickstarter video where Stills was sitting beside Neil in a car and going in a tizzy over the great sound PonoPlayer was delivering on the car’s stereo system. Music he couldn’t even hear.

Man, was I ever duped.

Your phone might sound better than PonoPlayer.

That’s exactly what the research has shown. Yahoo! Tech wrote a PonoPlayer review that blasted the PonoPlayer at the start of the year. In it, the writer gave a test where he connected a PonoPlayer and iPhone to an A/B switch. Remarkably, and unknowingly, the participants generally felt that the iPhone (whether with headphones or earbuds) sounded better than the PonoPlayer did.

What’s more, the author of the selection wrote Neil, who responded that “Of approximately 100 top-seed artists who compared Pono to low resolution MP3s, all of them heard and felt the Pono difference, rewarding to the human senses, and is what Pono thinks you deserve to hear.”

Such clever wording. Of course a hi-definition PonoPlayer FLAC file would sound better than a “low resolution MP3.”

PonoPlayer isn’t necessary.

I’m not suggesting that Young’s heart isn’t in the right place, but what I am suggesting is that nobody needs the PonoPlayer. It’s a statement piece, which complicates your music library (you need to repurchase everything you may have already bought from the Pono Music store). Plus, If Yahoo!’s sampling is a correct snapshot, the files we have on our phones are just enough and may even sound better.

With the PonoPlayer, Neil Young masterfully sold us on a perceptive fantasy, a potentiality (music would sound and feel different) that I wanted to believe. Thing is, fantasies run thin after a while, as did my belief in the magic of PonoPlayer. The PonoPlayer review is in.