Ask people to name today’s top marketer and you will get responses such as Apple Inc., Facebook Inc. and Starbucks Corp. But if you think about the past 50 or 100 years, different candidates emerge – iconic companies such as Coca-Cola Co., Walt Disney Co. and McDonald’s Corp.
Although these are all great companies, no one beats Procter & Gamble Co. (P&G) for sheer consistency and breadth in building consumer brands. P&G, the world’s largest consumer products company, with global sales of US$80 billion, has 26 brands with sales of more than US$1 billion -names such as Tide, Crest and many others.
As someone who started his career in consumer packaged goods, I think the things that have made P&G excel as a marketer provide 10 important lessons – and questions – for financial advisors.
– Lesson 1: Start with the customer
P&G’s success starts with its focus on developing an unparalleled understanding of its customers. P&G was a pioneer in researching customer wants and needs, going so far as having its researchers observe how customers use its products in their homes. One of P&G’s core concepts is identifying “moments of truth” for its products.
The first moment happens when customers see a product on the shelf and evaluate it compared with alternatives. The more important moment of truth comes when consumers use that product – and decide whether it has lived up to its promises.
Question for advisors: Have you identified the key moments of truth for prospects and clients? Do you focus on the key moments of truth that shape how your clients feel about the decision they have made to work with you, especially in the first 90 days?
– Lesson 2: Offer unique value
Although P&G is best known for marketing, much of its success stems from a big commitment to research and development. Indeed, products such as Pampers and Febreze have transformed the landscape in many households.
Another core concept for P&G is the unique selling proposition (USP), which sets a product apart and that can be crystallized into one short sentence. P&G’s focus is on superior products that deliver a compelling benefit to customers.
Question for advisors: What’s the clear, concrete USP that sets you apart from the other advisors?
– Lesson 3: Focus on the right segment
Harvard University’s Michael Porter, considered today’s top thinker on corporate strategy, has said that the key to success is refining your product’s “core deliverable” to meet the needs of a narrowly defined market. In Porter’s words: “Aim to be different rather than to be better.”
P&G is at the forefront of target marketing: pinpointing products toward specific customer segments. A 2011 Wall Street Journal article describes how P&G has reacted to the squeeze on the middle class by launching lower-priced products.
Question for advisors: Have you clearly defined the one or two segments of clients that you want to work with, and organized everything about how you work in order to serve those clients exceptionally well?
– Lesson 4: Plan, then plan more
A woman who used to work with P&G described in a web post the firm’s commitment to “Plan, plan and plan some more.” Detailed, annual written plans are at the centre of the disciplined process that has made P&G excel.
Question for advisors: Do you commit the time each year to develop a written plan that sets the course for your business? Do you review that plan each month to ensure that you are on track to achieve that plan’s goals?
– Lesson 5: Keep it brief
The skill of brevity has always been key to getting promoted at P&G. The firm was noted for its one-page memos, in which the essence of a recommendation had to fit on one typed page, often going through a dozen iterations to get the wording precise.
Question for advisors: Have you instilled the habit of brevity in yourself and in your team, so that communication to clients is short and to the point?
– Lesson 6: Invest in innovation
Key to P&G’s policy is its willingness to fail – to try, try and try again until the company gets it right. Another pioneering practice from P&G is test markets – taking a well thought through idea and trying it out in the field, tracking outcomes against clearly defined goals.
Today, innovation is at the core of companies becoming more agile, reducing the cycle time among strategy, small-scale implementation, feedback, fine-tuning and rapid rollout.
Question for advisors: Are you committed to implementing new approaches in your business, and do you make innovation and exploring new ideas a key priority in how you work?
– Lesson 7: Invest in building your brand
P&G is a leader in using media to tell its story and was at the forefront in using television to reach mass audiences, with sponsorship of soap operas and ads with memorable lines such as “Don’t squeeze the Charmin.” To this day, P&G is the U.S.’s largest advertiser.
Question for advisors: What are you doing to ensure that your story reaches your target audience? Does your website contain articles that tell your story to prospects, and are you using low-cost online vehicles such as blogs to stay in front of younger clients and prospects?
– Lesson 8: Attract top talent
P&G’s ability to recruit top talent has been central to its success. Bill Gates recruited Steve Ballmer from P&G to become CEO of Microsoft Corp. Other P&G alumni include Steve Case (AOL Inc.), Scott Cook (Intuit Inc.), Jeff Imelt (General Electric Co.) and Meg Whitman (eBay Inc. and Hewlett-Packard Co.).
Today, 175 years after P&G’s founding, LinkedIn identifies P&G as among the top 10 most in-demand employers. Indeed, the firm is highly selective, hiring fewer than 1% of applicants.
Question for advisors: What are you doing to make your team a magnet for top talent? And what is your strategy for retaining staff to ensure that you are supported by a motivated and effective team?
– Lesson 9: Get implementation right
Few companies epitomize an obsessive “devil is in the details” mindset more than P&G. With all the focus on big-picture strategy, getting execution right is still paramount. An article in the Wall Street Journal about a reunion of P&G alumni who are now CEOs of other companies opens with a reference to the “owl paperclip,” a stationery device that is mandatory at P&G because it is best at holding together thick stacks of paper.
Question for advisors: Have you created a culture of “getting the details right” within your team?
– Lesson 10: Deal with complacency
P&G has been noted for relentlessly analyzing market opportunities and in making tough decisions as a result. But even the most successful companies can make mistakes and allow success to lead to complacency and resistance to change. After disappointing profit growth and numerous articles about “what went wrong at P&G” last year, the company announced that it was selling 100 product lines so that it could focus on the 80 brands that represent 95% of its profits.
More recently, P&G announced that it was looking at spinning off some of its underperforming beauty brands, such as CoverGirl and Herbal Essence.
Question for advisors: No matter how successful you are right now, what are you doing to stay open to new ideas and to avoid complacency?
While we can’t boast about billion-dollar brands, all of us can borrow from the principles that have made P&G an enduring success. To move forward, do as P&G would do and pick the one lesson from the list above that would have the biggest impact on your business, then get started.
Dan Richards is CEO of Clientinsights (www.clientinsights.ca) in Toronto. For more of Dan’s columns and informative videos, visit www.investmentexecutive.com.
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