Discovering business opportunities

 Interview with Dr. Dan Herman, CEO of Competitive Advantages, a strategy consulting and branding services firm, serving worldwide clients ranging from local mid-sized companies to “Fortune Global 500″ corporations. Together with his highly trained team, he creates Unique Success Formulas, Emotionally Significant Brands and Short-Term ‘Hit’ Brands for their clients.

Among the many organizations and brands, he has worked with are multinationals such as Coca-Cola, IBM, Unilever, Motorola, Roche Pharmaceuticals, Holiday Inn, Apple computers, Suzuki, Chrysler, Warner Brothers, H. Stern as well as many others. The list also includes FC Spartak Moscow and many of Israel’s leading companies in the fields of banking and financial services, telecommunications, health services, food and beverages, toiletries and cosmetics, public transportation, hotels, retail chains, the national lottery and several non-profit organizations, government agencies and political parties.

Thank you, Dan, for your time!

You recently published a book in the United States titled “Outsmart the MBA Clones: The Alternative Guide to Competitive Strategy, Marketing and Branding” (www.outsmart-mba-clones.com)? What have you got against MBA programs and graduates? And – why do we need “an alternative guide”?

I have nothing against MBA programs or graduates. I am an MBA graduate myself. However, we should remember that management is very different from, say, engineering. When you take a strategy move in the market you do not only change the situation in the market – you potentially change the characteristics of the market. For examples, your innovative service strategy can change consumers’ expectations and the market norms. Therefore, management and marketing practices lose their effectiveness when everybody is using them and they should constantly change. Despite the apparent diversity among MBA programs, they produce executives who think and act in a similar and predictable manner. This undermines the competitiveness of their companies and provides a strategic advantage to those who recognize these biases and think differently. I do not, however, tell marketers to ‘think out of the box’ as so many do. I supply them with a new and comprehensive toolbox for success. My book, “Outsmart the MBA Clones” provides a set of new concepts and a toolkit unlike anything taught in MBA schools. The ambitious promise of this book is to help managers create business strategies that will succeed and yet amazingly will not be copied by the competition, resulting in private monopolies.

One of the many innovative concepts in your book is that of “Off Core Differentiation” which is supposed to lead to achieving an “Unfair Advantage”. What is new about this type of differentiation? And do you encourage marketers to be unethical when you herald “Unfair Advantages”?

A successful differentiation is not imitated by your competitors, even though it brings you unmistakable success with consumers. In order to create a differentiation that won’t be imitated, you have to think beyond the “core benefits” that are already considered important in your market. Why? Because if you invest your efforts and are truly brilliant and make a major break-through in improving core benefits – do you know what will happen? They’ll imitate you as fast as possible. That’s what will happen. You must understand: in that case, your competitors can’t allow themselves not to imitate you. You’d do exactly the same thing. The companies that have succeeded in maintaining their differentiation over the years and weren’t imitated even though they were making tremendous profits are those that innovated in qualities beyond the core benefits of their market. The farther you look, the more successful you can become. This is: Off-Core Differentiation. Grey Goose vodka is the only vodka produced in France. This differentiation is so way-out of the core benefits of the vodka industry! No vodka connoisseur in his right mind would imitate that. The advantage you will achieve is ‘unfair’ because you paralyze your competitors, but there is nothing unethical about it.

Another method in the book is that of Short-Term Brands and the paradigm and method called THINK SHORT that will also be the focus of your next book. What is it, in brief?

In recent years meteoric market successes have become a major form of success: fast, huge but not for very long. Think of Crocs or The Da Vinci Code or the New Beetle, or any gadget. You can even think of the candidacy of Obama. Nielsen data consistently show that the life expectancy of new products is far shorter than it used to be. They see it as a problem. I see it as a symptom of the new reality that we live in. The THINK SHORT methodology provides specialized tools for the creation, launch and management of diverse ‘marketables’ that are intended to become fast and huge market successes, in terms of sales and/or revenues and profits. These short-term brands are designed to gain fast momentum, inspiring enthusiasm among their target audiences that results in demand, active participation or support. Normally, their success is short-lived when compared to traditional long-term brands in the same category (which seldom achieve comparable results in terms of sales volume or market share). Notice that “short” means weeks in the movies category but it means seven years in the car industry. It’s all relative.

Are there other marketing thinkers / marketers who postulate a similar concept? Does this idea of building short marketing successes have many followers yet? Or do you encounter a lot of skepticism?

My THINK SHORT paradigm and methodology is the first one to claim that focusing on the  short-term  is essential for succeeding in today’s markets and for winning with today’s consumers. THINK SHORT is also the first new toolbox for marketing for reaching very high levels of sales and market share very fast and for enjoying a huge wave of success. No other authority on competitive strategy, marketing, innovation and branding heralds the need of marketers today to develop short-term success skills.The concept is new and my new book titled THINK SHORT is not out yet (it will be published in 3-4 months), so the terminology is not yet in the market, but my online articles on this subject since 2000 have been downloaded thousands of times, my lectures and workshops arouse a lot of interest and of course, clients that I and my partners work with already enjoy this method.Furthermore, I see many companies worldwide in various categories (from games through fragrances to cars) already experimenting with short-term hits rather than trying to create long-term products and services. They do it intuitively without a guiding theory and a method which increase the chances of succeeding. This is why I think that THINK SHORT is a paradigm whose time has come. It provides marketers with means to do methodically and expertly the things they try to do anyway.Naturally, many marketers are skeptical because we were educated to think long term. It’s counter-intuitive for them. A big shift in the way of thinking is required. But reality will leave them no choice. I think a lot of companies that build Short-Term Brands (STB’s), would rather build LTB’s and  in fact often do. For example Pixar wants Ratatouille part 1,2,3 etc. Oh yes, you’re right. The big fantasy of marketing and branding is to get and hold customers for life. Look at the huge investment in attempts to persuade customers to be loyal. Marketers would certainly rather have long term products and brands that do not require constant innovation. But we should be brave and acknowledge the fact that it doesn’t work any more. We already live in the Post-Customer Loyalty era. “Customer Loyalty” is dead. The data pattern is overwhelmingly clear all over the world. Consumers do not want to be loyal anymore. They have too many options with the global hyper-competition and the innovation craze. A new major consumer motivation is the Fear of Missing Out (FoMO). Since product quality is normally quite high consumers feel safe to try new products and new brands as well. Consumers have become serial adopters of novelties.This is the new reality marketers must face and adjust to. The traditional concepts and tools are not enough anymore. The THINK SHORT method provides the newly needed rules and tools for thriving in this new environment.

You mentioned FoMO – what is it?

In the second half of the 1990s I identified this radical change in consumer behavior and its dramatic rise driven by a new and very powerful motivation I named The Fear of Missing Out, or in short, FoMO. Contemporary consumers are drunk with possibilities. Choices are everywhere, and everything seems very much within reach. We want it all, or conversely, do not wish to miss out on anything. Therefore our lives are crazily paced and diverse, yet loaded with stimuli. We want everything and we want it now. We lead a hectic lifestyle in an attempt to squeeze as much as possible into our limited time. We’re always reachable, up-to-date, open to new things, and not afraid of change. Oops, let me rephrase that; we crave change. We spend much less time than was acceptable even a decade ago at the same apartment, same job, and same marriage (if we do not belong to the eternal singles group). We have fewer long-lasting habits. Once, having “character” was considered important. Today, consumers feel the need to maintain flexibility and to develop constantly throughout their lives. People are considered more interesting when they demonstrate contrasts, and if they behave differently and even contradictorily in various situations. (For instance, we may be in sync with our feelings and a warm personality in our personal life, a real killer in the business world, culturally attuned in concert halls, but loud and crude at the football stadium.) We like to change our appearance every so often.  On the Internet, if not (yet) in reality, we can live second lives and in our ever more complex communication with others we can assume multiple identities. That’s normal now. Today’s consumers are all for fusing together combinations previously unthinkable, to have even more options. They like fusion not only in their food, their home living room, and clothing, but also in their identities and in their lives. A person who is an engineer, who paints pictures, practices Kundalini Yoga, and manages an investment portfolio over the Internet is a versatile and interesting person. By versatile, I mean this person can be more and probably this person also wants to stay young as long as possible because old age means missing out. Another phenomenon that is closely related to FoMO is multi-tasking. It is growing stronger from one generation to the next. It is the inclination and the ability to do several things simultaneously. It is not unusual to see a young mother nursing her baby while working on her laptop, speaking on her mobile, and switching channels on her TV, perhaps following several television programs broadcast on several channels all at once. And there’s more. Naturally, consumers who are afraid of missing out are much less loyal to brands than before.

Tags: advantage, benefit, brand, competition, consumer, core, differentiation, FoMO, long term, loyalty, marketer, marketing, MBA, short term, strategy, THINK SHORT
Posted in Strategic marketing

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