John Moore Say Hello!
john@brandautopsy.com
512.633.4086
Twitter Linkedin Facebook

It’s been said that for any lasting relationship, both partners need to understand, appreciate and quite possibly share the same “love languages.” Knowing the love languages of your partner helps you to better express your affection towards someone and to better interpret how your partner loves you.

John Mackey, Whole Foods co-founder and ceo, used the metaphor of marriage to describe Amazon acquiring Whole Foods. Mackey said, “It’s been a whirlwind courtship. Because, little over six weeks after we met on this blind date, we’re officially engaged.”

That marriage metaphor sparked me to think about what “love languages” have driven both Amazon and Whole Foods to achieve business success. In this context, love languages are the cultural and operational underpinnings that have fueled the success at both companies.

Having worked at Whole Foods as their director of national marketing in the early 2000s, I have a much greater understanding of Whole Foods love languages than I do of Amazon’s. However, I’ve studied Amazon enough, to know enough, to make a few observations.

Listed below are eight love languages that help to explain some of the foundational business aspects Amazon and Whole Foods have used to become beloved brands.


Technology & Data

Amazon is a digital company with zettabytes of data about how its customers behave. They use this information to make the smartest decisions possible.

Whole Foods is a retail business with loads of customer data but its physical locations and store-level operations make it a deeply-rooted analog business.


Efficiency

Amazon has been built to be highly efficient in every way it does business. Its fulfillment centers are wonders of logistical design and its growing global transportation network is threatening to upend UPS and FedEx.

Whole Foods is decidedly inefficient. The company places significant responsibilities to its twelve regions to solve for procurement, distribution and scores of other duties that retailers of its similar size centralize in order to bring about efficiency. This inefficiency was designed to give Whole Foods greater ability to localize the brand in the communities it serves.


Customer Obsession

Amazon prides itself on being obsessive about customers. Jeff Bezos, Amazon founder/ceo, believes, “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”

Whole Foods is designed to deliver awesome in-store customer experiences but if the company was truly obsessed with customers then it would’ve have solved for delivering lower prices to customers years ago.


Frugality

Amazon is notorious for being a frugal company. Frugality is a core Amazon operating principle: Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention. There are no extra points for growing headcount, budget size or fixed expense.

Whole Foods practices frugality but not near to the extent of Amazon. The frugality practiced at Whole Foods is more geared towards sustainability practices of reduce, reuse, recycle.


Decisiveness

Amazon practices something Jeff Bezos calls “high-velocity decision making.” It’s where speed meets smarts. Bezos believes, “Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases, you’re probably being slow.” He trusts that if/when a decision starts to look bad, his teams will be able to recognize the issue and make a quick course correction.

Whole Food makes decisions by consensus and that takes time and lots of meetings. If Amazon waits for 70 percent of the information to make a decision then Whole Foods waits for 99 percent of the information. Empathy drives so much of the culture at Whole Foods and that empathetic ear translates into having to hear all sides to every story many times over before a decision can be made.


Innovation

Amazon is a retail pioneer. They have changed, are changing and will continue to change the digital retail landscape.

Whole Foods was a retail pioneer. They proved a global retail grocery chain could be built focused on selling natural/organic products and humanely raised meat/poultry/fish. Competitors ranging from Costco to Walmart to Target to Trader Joe’s have surpassed Whole Foods in a few meaningful ways.


Triple Bottom-Line

Amazon doesn’t follow the triple bottom-line philosophy of people, planet and profits. Its environmental and people practices continue to be scrutinized. The company discloses very little about its carbon footprint amidst its growing global distribution network. Amazon has also had to answer to questions about its treatment of employees. To my knowledge, Amazon has never been listed as one of Fortune’s 100 best companies to work for in America.

Whole Foods is a leading business practicing “conscious capitalism” where business decisions are based and measured upon the impact to people, planet and profit. It has a longstanding reputation for supporting and advancing environmental concerns. The company is celebrated for being an employer of choice having been listed for 20 consecutive years by Fortune magazine as being one of the best companies to work for in America.


Point-of-View

Amazon’s retail point-of-view is strictly operational. It’s all about making it easier for customers to do business with them. Huge Selection. Low prices. One-click buying. Fast shipping. Liberal return policy. Speedy customer service. All of these factors make it easier for customers to remain loyal to Amazon.

Whole Foods point-of-view is staunchly aspirational. The company promotes a lifestyle of eating wholesome foods that do not contain anything artificial. Whole Foods has been at the forefront of setting organic standards and promoting eating a plant-based diet. Mackey has routinely said, “We’re in the business of selling whole foods, not holy foods.” Despite that, Whole Foods strong point-of-view on what’s healthy can alienate customers who must go elsewhere to purchase products that Whole Foods deems unhealthy.


CONCLUSION

Just because Amazon and Whole Foods speak different love languages doesn’t mean their impending marriage is setup to fail. However, it does mean they will need to communicate often and the partnership will need to be open to change.

Let’s be real. Whole Foods Market isn’t a healthy business. Comparable store sales are on a downward trend. Its stock price had stagnated. Competition has increased. Pricing pressures have hurt profitability. New store growth has slowed. For those reasons and more, Jana Partners, an activist investment firm, purchased nearly 10% of Whole Foods Market and pushed for big changes.

Amazon is a retail behemoth. They’ve changed the retail game in the digital era like Walmart did before the internet became omnipresent. Today, Amazon accounts for nearly 35% of all U.S. online sales. Expectation is that by 2021, Amazon’s online retail market share will grow to 50%.

With a $500 billion market capitalization, some industry folks have said the $13.7 billion purchase price for Whole Foods is a “rounding error” for Amazon. In many ways, Amazon risks little with this purchase. On the other side, Whole Foods risks a lot.

What’s at stake is more about Whole Foods point-of-view and its willingness to adapt to a new retail landscape.

The Altar Alters Little

With this proposed marriage, both Amazon and Whole Foods need to fully accept what makes each business unique. If Amazon tries to change Whole Foods too much then the marriage will fail. Whole Foods cultural and operational underpinnings have very strong roots and trying to change the core of what makes Whole Foods a beloved brand has the potential to crumble the relationship.

Consummating a relationship at the altar will not alter the core of what makes each partner unique. Amazon will be smart to hold off on its high velocity decisiveness and allow for time to better understand its marriage partner. For Whole Foods, the company needs to be open to evolving and incorporating more of the customer obsession mentality that has made Amazon outrageously successful.

FRICTION: Passion Brands in the Age of Disruption is a just-published book from Jeff Rosenblom and Jordan Berg. If you believe brands have the responsibility to make more than just money then FRICTION is worth a riffle.

It’s Lovemarks meets Purple Cow.

Lovemarks taught us that making emotional connections with people leads to fostering brand loyalty beyond reason. Purple Cow taught us that remarkable products make deeper, more meaningful connections with people than does (meaningless) advertising.

FRICTION teaches us that brands find lasting success when they can remove barriers preventing people from becoming a better version of themselves.

The authors explain that fighting friction can be about helping people prepare healthier and tastier meals (Blue Apron) and about empowering people gain control of their money (TurboTax). And, it’s about creating “content and experiences that are so powerful people go out of their way to participate in them and then share them with others.”

FRICTION will inspire you to use empathy as a strategic driver when designing your next marketing program that doesn’t just sell a product but rather, shows how a product will enhance one’s life.

Click below to read a snippet:


Disclosure: I buy lots of business books but this one was given to me from a book publicity firm.


People, not Products. Information, not Data.

I recently stumbled upon what can best be described as a “Master Class” session on building a people-first business. It’s an interview with Howard Behar, a highly influential and long-ago Starbucks executive.

During this interview at the 2015 Foodservice Technology Conference Trade Show, Behar shares fundamental business beliefs of what made Starbucks the beloved business it has become.

The fundamental beliefs are all about caring for people, both customers and employees. After all, it’s people who buy products and people who sell products. It’s people who fuel the engine of business.

When you watch the following six-minute interview snippet, listen carefully when Howard Behar shares the following perspectives and allow it to shape how you go about doing and being in business.

People, not Products.

The entrepreneur thinks their business is about the product or service they are selling. As soon as they hire one person, it becomes about people and people serving people.” — Howard Behar

Information, not Data.

We think we have to have data to make a decision. We don’t. We have to have information to make a decision. The best information still comes from one-on-one conversations.— Howard Behar

The Rules of Social Media Haven’t Changed

I stumbled upon a decade old video of me talking about how businesses can better use social media to connect more meaningfully with people.

We’re talking 2007 when Myspace was the place to be online. Twitter was the darling of the SXSWi 2007 conference. Facebook had recently extended beyond .edu addresses. People were digging Digg big time. Blogs were becoming mainstream.

All this to say that was a long time ago in a galaxy far, far away. But not that far away. The rules I shared ten years ago still ring true today.


Be everywhere your customers expect you to be.

Back then it was if your customers were listening to podcasts, reading blogs, and or using YouTube then your business should be there to connect with current (and future) customers. True today as it was yesterday and as it will be tomorrow.


Social media helps small companies look bigger and big companies get smaller.

Every business no matter its size has access to the same social media platforms and many of those platforms cost no money to use. This rule is about using social media to engage on a more personal and human level with people.

Then it was how a tailor on Savile Row was using video and blogging to look bigger and in the process, this tailor got more clients and was able to charge bigger fees.

It was also how massive Microsoft got smaller with its Microsoft’s Channel 9 project that gave PC peeps insider access to the engineers, programmers and designers behind Microsoft’s products through a series of online videos. (Amazingly, Microsoft’s Channel 9 project is still going.)

Today it’s small brands using Snapchat to look bigger and big brands using Instagram stories to get smaller.


If you lack confidence, don’t do social media.

The real issue here is how vulnerable is a brand willing to be. By sharing your brand’s voice online, you got to be prepared to hear from the haters just as much from people who love you.

A decade ago I used the example of Starbucks launching a podcast and quickly canceling it because so many people trashed it.

Recently, it was Cinnabon trying (and failing) to get in on the real-time marketing action of using Carrie Fisher’s death to post (and then delete) this unfortunate tweet.


If you hide the truth, someone will find the truth.

Transparency and truthfulness weren’t always top of mind for marketers in the early days of social media marketing. In 2006, a couple created a blog that chronicled their adventures RV’ing across America stopping at Walmart stores along the way. At these Walmart stores they would interview employees and share those stories on a blog called, Wal-Marting Across America. Online sleuths exposed this as a total fake. (Oops.)

Chipotle got stung recently by claiming their Chorizo burrito has only 300 calories. The real truth was hidden. Someone found the truth and Chipotle had to admit their Chorizo burrito has about 1,050 calories. (Oops.)


What happens online remains online.

Anything posted and shared online is a matter of permanent record. A decade ago, I used the example of an unhappy Dell customer posting a series of “Dell Hell” diatribes to shame the company for delivering horrible customer service. Uber today is reeling from dashboard video of its CEO arguing with an Uber driver over declining fares that hurt his ability to make money. This video will remain online for a very long time.

It’s a trip to revisit these old social media rules and see how they aren’t so old. However, it’s more of a trip to see me deliver this talk on video. What happens online remains online also pertains to me…

Cult Brands Fight Monsters

This week a few hundred marketers will be making a pilgrimage of sorts to attend The Gathering in Banff, AB. The Gathering is a conference that recognizes and celebrates the bravest brands in the land. Every year, since 2014, a handful of brands get honored as being a “cult” brand.

I was fortunate enough to attend and speak at The Gathering last year and I’m jealous of those attending this year. I’m jealous because I took away so much from last year hearing from cult brands such as Lululemon, AirBnB and Movember Foundation. (Jealousy also oozes from me because Banff is beyond picturesque.)

The premise of the presentation I delivered at The Gathering in 2016 centered on how and why the boldest brands fight injustices. These rare air brands fight monsters in the marketplace. This fight is how they have been able to achieve greatness. And it’s how they have been able to gain an emotional connection with their customers and their employees.

Consider this video snippet of my FIGHT GAME talk from last year’s gathering as a #TBT (throwback Tuesday) nod to all the purpose-driven and passion-filled presentations sure to be delivered at The Gathering 2017.

Growing Beyond the Core of Your Business

beyond_520

My wife is an account director at a company that supplies branded tools to automotive toolmakers. Once-a-quarter she and a few other company leaders meet to discuss ideas and strategies that can help them improve as a team and grow their business. Someone suggested they start a book club. Great idea… EXCEPT, they needed a business book to read for this club.

(This is where I, husband and business book junkie, enter the scene.)

My wife asked for my recommendation of a business strategy book that can help them think smarter about ways to grow their business into different markets and channels.

I immediately thought of Chris Zook’s brilliant book, BEYOND THE CORE: Expand Your Market Without Abandoning Your Roots.

Recommendation was made. Books were ordered. The book club now had a business book to read. And that’s where a problem surfaced—these people don’t enjoy reading business books.

(This is where I, the business book junkie, had a small conniption fit.)

Instead of letting my annoyance get out of control, I channeled my energy into writing a super short summary of BEYOND THE CORE for the book club.

And now, I’ve put together an even shorter super short summary of BEYOND THE CORE for you to gain new knowledge from. Enjoy.

zook_quote_520

Most business growth initiatives fail. Research from Chris Zook, a Bain & Company consultant, indicates only 25% of growth initiatives succeed. The analysis reveals too many companies fail to grow because their growth strategies are not connected enough to their core business.

According to Zook, businesses can greatly improve their growth initiatives when they focus their efforts on one of six adjacencies:

PRODUCT – selling new products/services to current customers.

Apple has profited greatly by creating and selling new products (iPhone, iPad, etc.) to its core computer customers. Enterprise Rent-A-Car parlayed their core business of renting cars to people after having a car accident into the adjacent business/leisure rental market.

According to Zook’s research, this is the most commonly pursued and highest potential growth initiative.

GEOGRAPHY – selling current offerings in new domestic and international markets.

Uber started in 2009 by serving only the San Francisco market. It quickly applied its technology core competency to enter new cities in the US. Today, Uber operates in 60+ counties and 500+ cities around the world. Vodafone began as a UK-based cellphone business. It long ago expanded its core business outside of the UK and into Japan, Germany and many other international markets.

Zook warns that companies pursing growth this way have a lower than average success rate due to underestimating the complexities of entering domestic and international markets.

VALUE CHAIN – developing offerings up and down the value chain.

Apple used to sell its products solely through retailers. In 2001, Apple applied its user-friendly and design-rich approach to opening its own retail stores and today there are nearly 500 Apple stores in 20 countries around the world. Zingerman’s is a beloved deli in Ann Arbor, MI that opened in 1982. There is still only one Zingerman’s deli but the company operates 10 businesses up and down its value chain from a Bakehouse to a Coffee Roastery to a Creamery to ZingTrain, a consulting and customer training business.

Finding lasting business growth down this path is extremely difficult. Enter with caution.

CHANNEL – entering a new distribution channel.

Cranium, the family-friendly board game, found modest success when the game was sold in independent mom and pop stores. Cranium became a wild success when in 1999 it entered a new distribution channel, Starbucks stores. EAS, a sport-supplement company, used to only sell its Myoplex bars in nutrition stores. Sales of Myoplex bars really took off when EAS began selling the product in the Walmart distribution channel.

Zook says this adjacency can either bring massive results or become a significant burden to a company’s resources.

CUSTOMER – altering proven products/services to reach new customer segments.

J.Crew began as a men’s and women’s clothing catalog retailer and then opened J.Crew retail stores. The company has since modified its products and services to enter a variety of new customer markets: children’s apparel (crewcuts), trendy/artsy women’s wear (Madewell) and cost-conscious shoppers (J.Crew Factory). Dell famously began as a direct-to-consumer computer maker in 1984. Dell found greater success when it entered the corporate sales market. From there, Dell began to develop its IT services business to serve new customers in new ways. Today, Dell generates a significant amount of its total revenue from its IT services business.

The customer adjacency path is a very common way for businesses to find new growth.

BUSINESS – building an entirely new business from the core.

Amazon is an online retail behemoth. In the process, Amazon realized they had become uniquely skilled at running reliable, scalable and cost effective cloud storage centers. In 2006 Amazon started selling cloud storage to other businesses under the name of Amazon Web Services and today this new business contributes about 30% of Amazon’s total revenue. American Airlines created a major competitive advantage when the airlines developed its proprietary SABRE reservation system. SABRE was eventually spun-off into an entirely new business and interestingly, SABRE created a business adjacency of its own by developing Travelocity.

Zook’s research findings reveal this is the most difficult growth initiative to undertake.


So there you have it. A way too short of a summary to BEYOND THE CORE. My wife’s book club at work has a slightly longer summary. I hope she and her co-workers will read and discuss the 1,000-word summary.

I also hope that you found this summary thought-provoking enough to share it and discuss it within your company.

Obsess over Customers

A few weeks ago I talked to a roomful of marketers and operators at the Florida Restaurant and Lodging Association Summit. I delivered a version of my GRANDE GROWTH presentation that shares the importance of small businesses needing to look bigger and big businesses needing to act smaller in order to find long-lasting success. This 3-minute video ditty discusses why businesses should Obsess over Customers. Enjoy…

The Remedy to Maintain the Founder’s Mentality

Founder_520

Chris Zook has done it again. He’s written another smart book on business growth. This time, Chris and James Allen turn their attention to the importance of maintaining the business soul that the founder instilled when the business began in order to achieve lasting success.

THE FOUNDER’S MENTALITY: How to Overcome the Predictable Crisis of Growth is a worthy summer read.

Zook and Allen’s research shows that public companies where the founder is still active in day-to-day activities outperform other companies threefold. Unfortunately, too many businesses stop succeeding as they grow bigger because they get overrun by complexity/systems and in the process, lose the “founder’s mentality.”

The remedy to maintain the founder’s mentality involves these business behaviors:

1. Following an Insurgent Mission
A sharp insurgent mission should provide a company with its focus and purpose, both inside and out. Companies run in this way have the special ability to foster employees’ deep feelings of personal responsibility.”

2. Obsessing over the Front-Line Experience
Most founders were their company’s first salesperson, its first product developer, or both. They lived and breathed the front-line, driven by an intellectual curiosity about every detail of the customer experience and of how everything in the business works. An obsession with the front-line is fundamental to the founder’s mentality.”

3. Maintaining the Owner’s Mindset
Three ingredients make up the essence of the owner’s mindset and establish it as a source of competitive advantage. The first is a strong cost focus—treating both expenses and investments as though they are your own money. The second advantage is a bias to action. The third advantage is an aversion to bureaucracy—an aversion to the layers of organization, headquarters departments, and hordes of corporate staff that can accumulate, capture power, and create complex decision processes that clog the arteries of a business and slow it down.”

Of course, growing a business in this way is more complicated than just following these three behaviors. Thankfully Zook and Allen provide a detailed playbook for how to makes these ideas happen in your business even if the founder left the scene eons ago. You’ll be a smarter businessperson for reading THE FOUNDER’S MENTALITY.

Branding Made Easy

The headline is misleading.

Branding isn’t easy but it can be made easy.

How? By being simple. Yes, simple.

The most simplistic brands give people what they want at the moment they want it without complication. And in the process, these brands earn devotion (and dollars) from customers.

According to the Siegel+Gale’s Global Brand Simplicity Index, 69% of consumers “are more likely to recommend a brand because it provides simpler experiences.” Dollar-wise, 63% of consumers are “willing to pay more for simpler experiences.

A lighthouse brand that is following the simple path to branding success is Netflix. The company gives people the shows they want at the precise moment they want it with a simple click of button. A totally hassle-free customer experience.

Amazon is another successful simple brand. Yes, their diverse offerings are anything but simple but the nearly anything you want to buy and one-click buying experience makes Amazon simple.

Another way to look at “Branding Made Easy” is through something I call The Aspirational Gap.

Aspirational_Gap

A gap exists between a consumer’s aspirations and their actual lifestyle. All consumers aspire to live a certain lifestyle but most times they settle for living a life below their aspirations. Successful brands make it easy for people to actualize their aspirations.

Customers who shop at Whole Foods Market aspire to live a healthier and more flavorful life by avoiding foods complicated with artificial ingredients and with genetically modified organisms. Whole Foods simplifies the lives of people by only selling natural and organic products. The company makes it easy for people to actualize their aspirations of living the good life.

People aspire to support charities beyond writing a check. But it’s difficult to volunteer one’s time to a charity because… that, takes time. The Movember Foundation makes it easy for men to raise money and volunteer their time to support men’s health charities. All a guy has to do is answer the challenge of growing a moustache for 30 days (starting Nov. 1) by registering at Movember.org. Then, for the month of November, men become walking (and talking) billboards for the Movember cause and they encourage friends/family to make a donation online.

The branding takeaway here is simple:

Create a customer experience that is ruthlessly easy.

Make it so simple for people to do business with you that you become their only choice. The world is already complex enough. The last thing people need is to be burdened with hassles and obstacles in order to support your business and actualize their aspirations.

The Low Road or the High Road? You Decide.

High_Low_road_sign_520

Businesses have a choice in how they treat employees to make profits. They can choose the low road by offering employees low wages, basic benefits and uninspiring, menial job responsibilities. Or, they can choose the high road by offering employees a living wage, better benefits and a job that motivates them to do great work. Unfortunately, too many businesses choose the low road.

Zeynep Ton, MIT professor and operations management expert, has been studying businesses and has learned that retailers, even the low-price players, do not have to choose the low road to find the pathway to lasting profits.

GoodJobs_175In her book, THE GOOD JOBS STRATEGY, Zeynep upends conventional business wisdom and outlines a practical vision for how companies can profit without taking advantage of front-line employees.

According to Zeynep, “There are companies in business today that [follow] the good jobs strategy. These companies provide jobs with decent pay, decent benefits, and stable work schedules. But more than that, these companies design jobs so that their employees can perform well and find meaning in their work.”

For many businesses, especially retail chains, labor is their biggest controllable cost. So when sales decline, store managers quickly turn to reducing employee work hours, shifting full-time employees to part-time, cutting back on training and slicing benefits in order to rein in costs. These drastic cuts can negatively impact employee morale, which can further erode sales.

Model businesses featured in the book following Zeynep Ton’s good jobs strategy include Costco, QuickTrip and Trader Joe’s. All three businesses compete on offering customers low prices but each business has chosen the high road pathway to profits. Zeynep profiles each of these companies in the book and explains how they make greater profits than their competitors all the while treating their employees better.

The good jobs strategy recipe that these model businesses follow is a combination of investing in great employees and making smart operational choices.

Investing in employees starts with hiring somebodies and not warm bodies. Somebodies are cultural fits that display a willingness to learn and eagerness to help. (Warm bodies are just people to fill a hole on the daily labor sheet.) Once a great person is hired, pay them a living wage and offer them benefits that can sustain a family.

Zeynep also observed that these model companies view overstaffing as a good thing because customer service will improve, stores will be cleaner, re-stocking will happen and employee morale will be higher.

Making smart operational choices is about simplifying everything from the number of products on the shelves to the amount of promotions needed to be implemented by employees. Zeynep’s research revealed that each layer of complexity a business adds on, the more an employee has to manage. And the more an employee has to manage can result in increased mistakes, less time to spend with customers and greater inefficiency on all levels.

It’s easy for businesses to fall into the trap of offering customers more variety and more services because they believe customers want that. Zeynep’s good jobs strategy approach disagrees. She explains, “It is as if the store hasn’t taken the time to really figure out what its customers want or which products will best satisfy their needs, so instead, it just offers everything.”

Why don’t more companies follow the “good jobs strategy”? The answer is simple: it’s difficult.

It’s difficult because the culture of company has to be centered around designing their entire business around employees. Zeynep writes, “The good jobs strategy requires more than providing decent wages and benefits, stability, training and opportunities for success and growth. Companies pursuing it also need to think carefully about their offering of products and services, their work design, their staffing, the allocation of work among employees, and how employees will actively engage in improvement.”

Which path are you choosing to find business success?

If you choose the high road, the good jobs strategy way, then make sure your company culture is focused supremely on your employees and treating with respect and dignity. This road will not be easy but it will be meaningful to everyone connected to your business.