Why would Amazon rush up to a #2 position in a category? (Hint: it’s the money.)

amazon-com-logo

One of the basic tenets of marketing, (and what almost all of my students are sick of hearing about already,) is that brands need to strive for a leadership position. You may not always be able to achieve category leadership, but you can certainly attain positional leadership: quality, price, availability, etc. Heck, leadership is so important, the concept of loss leaders is a thing.

And while leadership is the coveted spot, there happens to be some pretty cushy seats in the #2 position as well. Just ask Avis, Burger King, and Pepsi how they’re doing. Avis is the quintessential case study here, having turned their #2 status into a promote-able benefit nearly 50 years ago, and successfully positioning themselves in their category. (It turned into some pretty great advertising from Doyle Dane Bernbach, too.) Sure, these companies have never beaten out their category leaders on the key metrics, (revenue, profits, number of locations, etc.) but they have consistently beaten out EVERY OTHER player in the space.

I’m most interested in this positioning battle model since hearing the news that Amazon is entering the video content space with a new platform called “Amazon Video Direct.” This platform will allow users to upload their own content, and will even have revenue-sharing models for those who upload premium content that other users may be willing to pay for. If it sounds familiar, that’s because it’s YouTube under a different name. [PS – if you think you can be a video star, this may be your big chance to get in on the ground floor.  Just sayin’.]

Amazon has made a history (and quite a good living, thank you) by exploring opportunities outside its core competency as an online retailer. While purchases of companies like Audible and Zappos make perfect sense as extensions, development of electronics devices (like Kindle and more recently, Echo,) cellular enablement services (like Amazon Wireless,) and original content (Amazon Studios) really didn’t. That those products may have performed fairly or even very well is beside the point.  T

Just as a sidebar, let’s think on that for a moment:  Amazon, an online retailer, delivers original programming content. Could you imagine if, 30 years ago, K-Mart (a one-time very successful retailer,) launched a dramatic series on television? Who would have ever taken that seriously? So yay for the tech revolution and skewed boundaries!

Video content is really far from what we might consider Amazon’s sweet spot. Sure, Amazon Studios may have a mild hit with “Transparent,” as a piece of original content, but they’re not going to catch Netflix any time soon. And that may be precisely the point.

Nor is Amazon Video Direct going to catch YouTube and its billion-user infrastructure any time soon. But with Amazon’s 130 million unique visitors per month (just let that sink in a moment,) they can rush right up to a cozy #2 spot in the category, maybe disrupt a few long-held market beliefs, and add a few more zeros to their bottom line and their $700 per share stock price.

Is your marketing intuitive?

Over the last year, I’ve become fascinated – okay, maybe even a little obsessed – with cognitive psychology.  As a result, some of the principles of understanding the mechanics of how the mind works have found their way into our agency’s plans and presentations.  What we’re trying to uncover are the automatic mechanisms of the mind, and how to appeal to those functions with specific marketing messages.

One way we’re doing that is by embracing what we call intuitive marketing.  There’s no set formula.  There’s no best practices guide.  And it’s even more complicated in that it’s different, not just for every category, but for every marketer.

What does it mean to be intuitive anyway?  To (over)simplify, the human brain has two basic types of reasoning functionality.  Some of those are complex, multi-step functions.  Like a difficult math problem, or recalling a song in your memory, with the guitar riff and the drum intro and the lyrics, and the harmonies, all at once.  The other kinds are automatic functions.  These are the immediate perceptions of facts and concepts that happen instantaneously, and that don’t require other thoughts or substantiations.  Like walking outside and recognizing that it’s cold.  Or even having an insight while someone is talking.  It’s not something you think about thinking about.  It’s just an immediate mental perception that typically happens in an instant.

And as marketers and the agencies that serve them, we’re all trying to simplify the choices for our customers.  To make it easy (even instantaneous) to CHOOSE US!

Sometimes, it’s the package design.  Sometimes, it’s the media choice.  It could even be the distribution channel.  But in any case, if your marketing doesn’t make contextual sense and simplify the cognitive conversation in some way, try thinking more intuitively. Here are a few cornerstone idea-starters:

Do (or be) the thing that makes the most sense and simplifies the engagement.
Did you ever notice how when you walk into a room, the light switch is almost always just inside the door opening, and at about chest height?  Or how the toilet paper is almost always within arm’s reach of the toilet itself?  Wouldn’t it be weird, and downright silly to have the light switch (or the toilet paper) across the room somewhere?  That would not only not make sense, but it would make your life – or at least that particular experience – harder in some way.

Apple revolutionized the mobile phone industry with their iPhone design through a number of powerful features.  Whether it was combining a phone with an email device and an internet device and a music player, or introducing the touch-screen features to a broad audience, they just made it EASIER to engage with your communications needs on one handsome mobile device.  Once it was introduced, it made every device that preceded it seem clunky, limited and insensible.

Anticipate the customer’s usage environment.
I was recently traveling on business, and stayed at the grandest ole’ resort in Nashville.  When I got in the shower, I noticed something really curious:  the mini shampoo bottles had twist-off caps.  Having already been soaked with water, it was nearly impossible to unscrew those things!  It was a good laugh, but it proved that they hadn’t really thought the usage scenario through quite completely.  A flip-top design would have been much more intuitive.

My colleague and partner and a fellow blogger, David Adelman, brought to my attention an especially curious case:  while riding the subway, he was reading the ads on the train car, and noticed that one of them featured a QR code.
On the subway.
Where there is no mobile service.

As far as intuitive goes, that’s an epic fail.

Don’t design features into your product or service that its consumers will never need.
My life as a frequent traveler is made more enjoyable by the fact that I love airplanes.  One of the reasons I love them is that they’re super streamlined in their design. Many people don’t even realize that airplanes are not outfitted to go in reverse.  It seems silly, but it’s true. EVERY facet of an airplane is built to optimize one thing:  going forward and fast.

The same is true of Instagram.  Many people don’t realize you can’t go to an “instagram.com” and upload photos.  (There are third party web access points, but that’s what happens when an ecosystem evolves around a successful platform.)  Instagram is wholly designed to enable a singular and contained experience:  point, shoot, edit, upload and tag all through your mobile device.

The best products and services are built the same way:  hyper-optimized to accomplish the simple tasks they’re built for.  Think Dyson vacuum cleanersKeurig single-cup coffee brewers. Staffing companies that focus on specific job titles. Tax attorneys.  Singular specialization can be intuitive.

Elevate the experience on a rational and emotional level.
Finally, think about all these cornerstones, and then take it to the next level.  That’s what the great marketers do.  BMW automobiles are designed to appeal to the driver in a specific way, and to the passengers in a different – but also specific – way.  The dashboard instruments that are critical to the driving experience are pitched in to the driver so he or she has an elevated driving experience.  Amazon.com built an algorithm that monitors your purchase behavior to make intuitive recommendations for future purchases.  Then it goes a step further to create bundle recommendations and even offer you the most optimized shipping choices.  That makes your shopping experience more than just a shopping experience.  It makes it an Amazon experience.

Start with these cornerstones and then go further to create the most intimate and rewarding experience for your customers.  If you do that, you don’t have to be too intuitive to know that success is right around the corner.

The Law of Constant Improvement

In marketing, most brands that are enjoying success are likely doing so because they created something that WORKS. Whether it’s a consumer product like a vacuum cleaner that never loses suction, or the standard-setter in smartphones or a business-to-business service like an ad network or a social media platform or even a service provider like an ad agency or web development firm, something is WORKING. It could be the product design, or the solution to a common problem, or a specific process or a recipe or even an algorithm.

But what’s the secret sauce that KEEPS brands thriving? How do we move from enjoying just a modicum of success to relishing a systematic pattern of victories and enduring prosperity? While some may chalk it up to luck or a charismatic CEO or market timing, I assert that the most successful and most profitable brands in every corner of the marketing world all share a similar trait: they employ the Law of Constant Improvement.

When brands (in virtually any category) are thriving, it’s typically due to a combination of factors that include the basic food groups: an ability to deliver [manufacture/write/uncover/sing/whatever] something of value, an understanding of the market environment, an understanding of the target consumer needs, an understanding of limitations and mandatories, and so on. But the lasting effects of excellence are usually garnered by a sustained and even obstinate desire to continue improving on current successes.

The Law of Constant Improvement states that you are never quite “there” yet. While you may be enjoying success (and profits,) there is no qualifying reason to halt the process of improvement. And in this law, improvement is not one-sided. Normally, we would focus on the consumer audience, and how to make the product/experience/service better for them. But brands can constantly improve internally, [financially, operationally, culturally, philanthropically] as well. This is true if you run a small business, a large corporation, a non-profit or a community. It’s especially true if you’re in marketing.

A healthy side effect of The Law of Constant Improvement seems to be a proclivity towards extended tenure. It becomes evident when you review success stories in almost any category: a technology leader like Apple; an online leader like Amazon; a consumer leisure brand [or is it a retail experience? or is it a coffee shop?] like Starbucks; a band like Coldplay.  All seem to factor a common denominator: they are constantly striving to improve. And it doesn’t have to be big, blue-chip brand business: local and regional marketers can employ the same law, and alter their DNA to replicate success. The evidence seems to suggest that brands who continue to improve with a near-obsessive regularity become leaders.

Another aspect of The Law of Constant Improvement is its ability to permeate into the corporate culture. It’s clear that brands who adopt a process of constant improvement don’t do so as a line item operational procedure, but rather because it’s embedded into the personality of the company, and into the personality of each employee. It turns out that constant improvement is less a thing to do, and more a thing to be.

Also note that in the inner gears of today’s consumer-centric commerce machine, the market has come to DEMAND constant improvement. That’s just the new rules at play. There’s so much competition and customization out there that brands have to continue to evolve each product and feature to keep their audience(s) engaged and entertained.

It would likely be a lot easier to happen on a formula and then just keep churning it out for eternity. (Note, for some brands, that’s a solid strategy – see Coke vs. the New Coke debacle.) But for the vast majority of brands, The Law of Constant Improvement is the new mandatory to continue to engage your original audience, to roll up new fans, to outperform expectations and if you fit into this category, to satisfy shareholders.

So start improving today. And be prepared to never stop.