What happened to Holden (2)

I wrote about Holden yesterday. And, my mentor was kind enough to send his thoughts to me. We like to discuss and share ideas. Below is his input.

There were other reasons Holden was shut down.
1. It was unprofitable and when the Australian government finally stopped bailing it out, GM couldn’t continue. Shutting the plant was just step 1.
2 Holden was an Australian only brand. GM cars are branded internationally. Chevrolet is sold in many countries. I know in the UK it is called Vauxhall, but there are 65million people there versus 26 million in Australia. 
3. GM didn’t move with the times. SUVs captured a large slice of the market and GM didn’t launch one in Australia.
4. Asian manufactured cars have a bigger market share here and even bigger in New Zealand.
5. Government taxes are ridiculously high making cars much more expensive in Australia.
6. The much loved Ute, only existed in Australia. When the plant shut down, Aussies lost the car they loved the most and the market moved to light trucks like the Hilux. The GM version couldn’t compete.

So in summary, importing right hand drive cars and rebranding just for Australia didn’t make sense. Ford might still be okay as the branding is the same internationally.


What happened to the Holden brand?

I just saw the news about Holden (a car brand in Australia) will be retired by the end of 2020. When I came to Australia many years ago, I wish I could buy one of its cars. Holden was a huge brand 10+ years ago in Australia.

Then, in 2017, its plants in South Australia was shut down. I thought that was the starting point when Australians lost their love to this brand. While it’s a part of the US’s General Motor car company, having a local plant kind of made a relationship with the local people strong.

I am not a car expert but from reading a few articles, I feel like the following are the reasons why Holden faded.

  • Holden had a super ambitious growth plan from its legendary CEO. He planned to go internationally. His successors weren’t on the same page to make it work.
  • The Holden brand was not well-known when compared to Mercedes or even Hyundai. Holden management used these 2 brands (or makes) as a case to justify their expansion.
  • There were some tensions between the Holden management team in Australia and the GM team in the US.
  • Global financial crisis hit the US and GM had to go through a bailout process.
  • GM didn’t get what the Holden brand was about.
  • Customer’s tastes changed. They turned to more energy saving options.

I remember I stood at a Holden dealer looking at a second hand Holden Cruise. I really liked that car and wanted to buy this model. Unfortunately, I didn’t have the money to get one.


The role of creative designers

There is a creative designer at our company. She is amazing and I have been working with her for more than 10 years. She is super talented. Unfortunately, her skills and times are mostly used to create presentations for our executive team. I personally think it’s a huge opportunity cost. Her skills would be worth a lot of money if we could use those skills to drive marketing activities.

Design is important in marketing (every area really). The one thing I’ve never done is I never ask her (the designer) to share her input in our strategy. She would add different perspectives. A consistent design is a life-blood of how you want your brand to be remembered.

People know what a good design looks like when they see it. A good design is hard to quantify into $$ amounts. But, it does play a crucial role in our marketing efforts. Her skill shouldn’t be used to create presentations.


Short-term and Long-term Dilemma

The biggest challenge in my career is how to balance between short-term and long-term to drive a sustainable performance.

The issue is to be sustainably profitable you need a group of true passionate customers who believe in your brand. To achieve this level, it requires a continuous, smart, strategic brand and ‘know your why’ investment. Many companies are always under a pressure to deliver a right-now performance. To deliver the right-now performance, we have to concentrate most if not all resources to short-term sales and marketing activities.

And, because you have to come up with new promotions all the time to sustain the short-term results, you wouldn’t have the time and the energy to invest in the longer-term future. Worse, the cost of doing business is getting more and more expensive because you have to target new customers all the time. It’s basically a death spiral. We would keep on doing it until it eventually ends.

If people at the top don’t understand this dilemma, it’s going to be hard to change.


Audience-centric storytelling

Another buzz word I afraid – audience-centric storytelling (ACS). At its core, ACS is a story told from the perspective of a customer. It’s more compelling than brand storytelling because it blends both the power of storytelling and social proof.

We are all familiar with User-Generated Content (UGC). But, with ACS, we would be more specific about how a product could solve customer problems. It could be a blog post that use a real customer explaining his problem and how he uses a product to overcome it. Another effective form of ACS is a video review by customers.

The concept of ACS should be used on other channels too such as a company’s website, emails, social media (of course).


Product positioning and target market

I was in a meeting yesterday discussing about one of our hotels. The team told me that this hotel which is situated in a CBD area has a corporate business as a main target market. However, the hotel performance has not be good. And, I was explained that one of the reasons is because the corporate business in this area has dropped significantly in the past few years. It could be the case, or not.

This hotel was built and branded under an art theme. Originally, its rates were set higher than other hotels in the area because of its artistic differentiation. It didn’t work well so the rates had declined and the team took whatever markets they could find. The hotel lost its positioning.

Corporate marketing could be important. However, would they pay extra to stay at this hotel to have an artistic experience? I don’t think so. The problem is when the product positioning and the target market do not match, you struggle. The team need to figure out first on how to fix this mismatch. If not, they will struggle forever.


The role of Public Relations (PR)

What is the role of PR in the modern, social media driven world? Many said PR is dead because no one would read a long press release. Also, consumers today do not read magazines or newspaper as much.

I agree and disagree that PR is dead. I don’t like the concept that PR has to prepare a press release, send to a bunch of journalists and wait anxiously which ones will pick a story. You have no control whatsoever in this process. I think this process (or concept) is dead. It makes companies feel good to do this with a minimum return (if they can even measure the return).

I support what I called a PR 2.0. Why do you need to rely on journalists when you can communicate with customers and the public directly? Doing it this way, you take control 100% of every aspect of your stories. You can even put a call to action in your stories.

One important thing to understand though, people don’t read much anymore. They skim through articles, stories, posts, etc. PR should tell compelling, short & sharp stories. How their company or product could solve people’s issues.


Why would customers buy a product from you?

Have you ever ask yourself this very question? Why would people buy from you, not from your competitors, or from the shops next door? I find this question very useful. This is because it’s sometimes difficult to find a good answer.

In my industry, the question I often ask is ‘why would guests choose to stay at our hotel, not the hotel next door?’. We have a hotel in a place called “Gold Coast” in Australia. There are more than 1,000 hotels in this tourist city. In the city’s tourist spot, there are more than 100 similar hotels to ours. Hence, the question I ask – why?

The response I got is frustrating. We don’t have a good answer. Could it be our service? Or, could it be our room standard quality? Our beds? Kitchen? All of the above, or none of the above? As far as I can see, the hotels next door offer the exact same things that we do. That’s why all of us go to the price war. We offer discounts. We focus more on the revenue management function.

Some changes in the way we think need to happen. We have to find the right answer. Some woks are in progress. We started by giving a unique positioning to each hotel. We will separate them all with different positioning.

Wish me luck.


The law of diffusion of innovation

How to make your idea spread? How to make your product reach the mass? There is a theory called “The law of diffusion of innovation”. You may have heard about it before. The law said there are 5 groups of people – innovators, early adopters, early majority, late majority, and laggards.

The first group, innovators, accounts for only 2.5% of the population. Early adopters account for about 13.5%. The last 3 groups account for 84%. There is a little gap between the early adopters and the early majority as Geoffrey Moore calls “crossing the chasm”. That is your tipping point.

What does it mean? It means that if you want your idea to spread, you first have to ignore the early and the late majority. These 2 groups will not try anything new until someone else tries it first. You have to aim at the early adopters. They are willing to try something new and if they like your idea, it will tip.

This simple law should be a basis in your marketing strategy.


Do you use ephemeral content?

I never use it before. Do you? Does it work for you? For those who don’t know what ephemeral content is, it is short-lived but long-remembered content. It is rich media, primarily images and videos, that are only accessible for a brief period. You can guess that it’s widely used on Snapchat and Instagram.

The benefits of ephemeral content are quite a few. It takes advantage of FOMO – Fear Of Missing Out. So, this type of content is very engaging. Additionally, it generates an immediate response to your campaign.

I would think videos would work best for this content type. The target market would be quite young, under 35 years old. I still don’t know how to use this content in our campaign. If I could find a way to do it, I will share with you later.