Voices: the CMB Blog

Just over a year ago, leading toy maker the LEGO Group launched its new line of blocks and figures for girls called LEGO Friends in key global markets in the Americas, Europe, and Asia. It is one of the most successful launches in the company’s history and has already generated twice as much business as expected.The story of Friends started long before the 2012 launch, and deserves a full-length case study; for now I’m excited to share a little of what I learned from meeting and listening to Laura Post, Senior Director, Strategic Planning and Insights, for LEGO in the U.S., when she talked about LEGO Friends at the IE Group’s Women in Strategy Summit in New York City a few months ago.

Laura attributed much of the success of the launch to a shift to a customer co-creation approach, and a willingness to really observe and listen to customers and to engage them in co-design of the products. The LEGO Group had tried for over two decades to expand its appeal with girls with little success. Barriers included lack of company focus and support, core products geared to boys ages 5-9, and products designed with strict adherence to internal ‘sacred cow’ beliefs about what mini figures should be and look like. LEGO was also in serious turnaround mode in 2003-2004 after straying too far from its core.

One of the things that LEGO executives realized needed to change was that employees needed to be empowered to make customer-focused decisions. Consumer insights are now core to LEGO’s strategy. As evidence of this shift, according to Laura, the company spent four years and conducted 13 major studies researching customer needs and wants related to Friends. It directly tested products with 3,500 girls and moms, and once a month, girls were brought in to co-create products with LEGO’s designers and researchers.

It was through this focused effort and investment that LEGO learned that the majority of young girls around the world prefer to play with building toys and figures that look very realistic, have vivid colors (especially pink and purple), and that have different personalities that increase the emotional connection. The traditional old mini figures with generic facial expressions just wouldn’t do. As a result, LEGO invented the Friends mini-dolls, each with their own names, interests, and favorite things and places (see Olivia and her invention workshop graphic).

This co-creation story is only one example of what the LEGO Group is doing in this space. There are many, many more examples of how co-creation is changing business for the better. As a big fan of the co-creation approach, I hope to tell more stories on the use of this customer centric methodology at Lego and elsewhere. Watch this space.

Jennifer is a Director at  South Street Strategy Group. She recently received the 2013 “Member of the Year” award by the Association for Strategic Planning (ASP), the preeminent professional association for those engaged in strategic thinking, planning and action.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Join Tauck's Jeremy Palmer, CMB's Judy Melanson and South Street Strategy Group's Mark Carr on September 12th at noon for a webinar: Focused Innovation: Creating New Value for a Legacy Brand Focused Innovation: Creating New Value for a Legacy Brand

Goodbye, plastic hotel room key. So long, wallet. Farewell camera. These days you don’t need any of the above to unlock a hotel room, buy a mojito or snap a vacation photo.  All you need is, well — you. –Stephanie Rosenbloom, “Just Tap Here,” The New York Times

That quote, from an article in the NY Times’ Travel section, hit me like a wave. Since the beginning of the year, I’ve managed to lose a hotel key card, leave my cell phone at the office before going on a business trip (after carefully placing it where I would see it before dashing to the airport), lose my office and son’s daycare key cards, drop my American Express card somewhere during a 3-mile run, leave my reusable coffee cup next to the register at my local Trader Joe’s, and lose my sunglasses. It’s painfully obvious why this article, on the wonders of biometrics, hit so close to home.Biometrics have come a long way since the retinal scans featured in the old Bond and Batman movies. Now you can do more than imagine scanning your fingers to open the door, or make a purchase; hotels can use infrared signals as a virtual “Do not Enter” sign, detecting body heat and ensuring housekeeping staff doesn’t knock or barge in.

While I look at technology as enabling convenience, others just see more evidence of Big Brother penetrating our lives—all that data needs to live somewhere and that makes many people uneasy. Of course, you could make the argument that the NSA is already collecting vast amounts of data tracking our every move; we may as well use it to our advantage by gaining something out of this sharing.  As Zachary Karabell notes in a recent article in The Atlantic:

…for all of the legitimate concerns about government intrusions on personal privacy, Americans today -- along with many people worldwide -- surrender vast amounts of personal information to companies and seem quite prepared to surrender even more if it adds to the enjoyment and reduces the friction of myriad transactions that are part of everyday life.

With that quote in mind, I thought about how my clients can leverage this technology to deliver a better experience to their guests (while decreasing their operating costs, and gain repeat business and free marketing through advocacy).  Our work in the cruise industry, as well as the JD Power 2013 Cruise Line Satisfaction Report, reveals that the embarkation and debarkation process are very important in driving guest satisfaction. Think about how much more quickly those lines would move if an iris and/or fingerprint scan were all it took to board the ship?  Guests get where they want to be more quickly and cruise lines need fewer embark and debark crew members to manage the process.

Onboard photography is another area that frustrates guests (and represents lost revenue) when they don’t have an adequate number of photos from which to choose. Facial recognition technology that enables onboard photographers to group every candid picture they take, so passengers can easily browse, would solve that problem.

For cruises attracting a mix of guests from all over the world, using fingertips as a purchase trigger rather than cash or credit cards would also help improve the onboard shopping experience for those guests who do not hold currency in the denomination used on the ship and/or who are not fluent in the primary language spoken onboard.

New tools and emerging technologies offer myriad opportunities to improve the customer experience. Biometrics and mobile tracking are giving brick and mortar businesses the opportunity to catch up with their online counterparts. But there’s a real trade-off here—if customers are going to take that leap of faith it needs to be worth it. What do you think?

Lynne is Research Director of CMB’s Retail and Travel practice; she has not lost one personal object since June. She would like to thank the The London Hotel NYC for getting her back in her room quickly (after verifying her identity), Judy Melanson for letting her use her phone to stay in touch with her family while traveling and Sean Kearney for dropping off her phone at home so it would be there when she returned, AmEx for getting sending a replacement card within 24 hours and Trader Joe’s for maintaining a Lost & Found. 

Learn how we help Royal Caribbean measure guest experience and improve customer satisfaction and retention.

In March of 2011 a movie was released in theaters, with all the hallmarks of box office success, it starred a handsome Hollywood newcomer and a seasoned Hollywood veteran, it had an intriguing plot, and it was released during the traditionally uncompetitive winter/spring movie season. So, when the movie, Limitless, debuted at #1, it was no surprise.

Now this sounds like a typical Hollywood hit, but there was something about this movie that made me (self-proclaimed movie buff since age 8) pay a bit more attention. The main plot device was a product: an experimental drug that allows the user to use 100 percent of his brain, and this product played a crucial role in character development and the overall plot. Could this movie increase demand for a similar type of drug in the real world, specifically for a segment of the US population that previously hadn’t been very demanding of that product? In short, could this movie make a target market aware of a need that they didn’t even know they had before?Fired-up about this epiphany like Peter Finch in Network, I boldly predicted to a friend that a certain company might actually run short of supply of the drug, because the movie would uncover previously unknown needs to a large segment of the US population, and that segment would consequently want to start buying like the floor traders at the end of Trading Places. (Yup: two movie references, one sentence.) After all, I had previously seen the effect that movies could have on product demand in the past:

• Top Gun = approximate 500% increase in the number of Naval aviator applications to the US Navy as well as a 40% increase in sales of Ray-Ban Aviator sunglasses (in a decade that had been decidedly keen on Ray-Ban Wayfarers, which themselves were allegedly given a sales boost after Tom wore them in 1983’s Risky Business)

• Lord of the Rings = 40% increase in New Zealand tourism from 2001 to 2006

• Field of Dreams = an isolated cornfield in the middle of Iowa that gets 60,000+(!) visitors per year

• 300 = sudden spike in GoogleTrends for Mark Twight and his CrossFit-like workouts that made the actors look like Spartan warriors

• And then of course there is the sad story of what Supersize Me did for the demand of ol’ McDonald’s Big Mac and its friends

So, I had seen this sort of thing before, and – wouldn’t you know it – about three months after opening night, this certain company publicly announced to its stockholders that it did not have enough supply to meet demand for the drug: they were plum out!

Coincidence? I think not! Well, at least I didn’t think so at the time. You see, I wasn’t a market researcher yet, so I didn’t really consider the hundreds of variables that could be involved in the outcome of something (in this case, that “something” being a company’s unexpected shortage of a certain type of product). Besides, it was a pretty bold and insightful prediction, it wouldn’t be the first time a movie drove up demand for something! So, the fact that my prediction actually came true gave credence and justification (at least in my own mind at the time) to the fact that the movie must have had the effect that I predicted it would!

Well, now that I have a few market research years under my belt, I see the situation a bit differently. In the article “Advertising Analytics 2.0” from the March 2013 issue of Harvard Business Review, I was happy to see that they DID talk about movies having an effect on product sales…but “cinema” is only one of hundreds of variables that are taken into account and run in a software analytics engine that determines the true weight and importance of each variable. So, the only way to determine whether or not the “movie variable” was actually significant in Limitless would be to get fancy and use some of those new Analytics 2.0 techniques, run an analysis of the effects of all the possible variables – and, after watching CMB’s analytics team in action, I can tell you that this means a lot of variables. Any of which could have played a part in either an increase in demand or a shortage in supply or both happening simultaneously. There are a few possible scenarios that led to a shortage in supply, and a lot of different variables that could’ve caused each of those scenarios to occur.

So, is it crazy to think that movies have the potential to dramatically increase demand for a product, when the right conditions are met within the movie? Well…maybe; for Supersize Me, the effect is obvious, but for Limitless, the effect of drivers is not perfectly clear and the conclusions are obtainable yet less certain. But, what’s important is the fact that sometimes, completely unbeknownst to anybody – there could be an unforeseen variable or set of variables out there, and they could ultimately have a profound effect on your product or industry. It could be a shift in consumer viewing habits, it could be a general economic shift, or maybe, just maybe, it could be a movie. Either way, you won’t know until you start asking the right questions and digging through all the possible variables.

Jonah is a Senior Associate Researcher, he’s been a movie buff since he saw India Jones: Raiders of the Lost Ark when he was 8 years old. (If you ever need a “movie guy” on your trivia team, he’s your man.)

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In early 2012 we did some research on healthcare reform predictions. At the time, there was a pretty strong consensus that large groups, most of which were already insured, would experience little impact. The uncertainty lay around small businesses (<100 employees) offer rates: the Robert Wood Johnson Foundation predicted pretty much neutral effect, but RAND predicted an overall increase in offerings. So where do we stand now?We have found most analysts are pretty shy when it comes to forecasting new numbers. For the overall market (all sizes) the International Foundation of Employee Benefit Plans (IFEBP) reports that 94% of employers are definitely or very likely to continue employer-sponsored health care. That’s a pretty good indication of no major drop outs compared to 2012, when only 46% were certain that they would continue sponsorship.

But expanded health insurance coverage will come at a cost, and small employers particularly are vulnerable. As a result, they are implementing cost control tactics: encouraging healthy behaviors and wise usage that reduces costs, entering private health exchanges, offering self-insurance for small groups, and reducing the number of full timers.

For insurance companies, reform opens up new opportunities to serve the small business market. Small businesses today are treated as a uniform group with similar needs. As reform unfolds, the market will fragment into: those who truly believe in providing insurance to their employees and will continue to do so, those who cannot afford to pay increased premiums but are still interested, and those who simply opt to exit the market. Smart and creative insurers will look for ways to serve the middle segment with unique offerings, whether those are self-insurance, stripped down plans, voluntary products, or others. The insurers that will move first by matching deep customer knowledge with creativity and innovation will have a leg up in this rapidly evolving market.

Rachel is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

What do Crayola, Amazon, Cheerios, Apple, and Subway have in common?

Over the years they’ve each been named one of America’s most loved brands. Of course there are lots of strong brands (nearly as many as there are “most loved brands” lists) but what is it that makes those brands so strong? No one will deny the importance of the brand name, positioning, or communications, but what these beloved brands have in common is how they deliver their brand experience.When M3 Insurance, Wisconsin’s largest privately held provider of commercial insurance, decided they wanted to strengthen their brand position, they had a few options. One common approach is to invest time and money into a brand’s value proposition and the brand promises they’re making to their customers. A company that takes this approach will spend a lot of time building enthusiasm and energy around a brand position, both internally and externally.  They might have banners, posters, and many companywide meetings to communicate the brand to employees.

There’s a lot of good stuff in this traditional approach, but our experience tells us that it rarely, if ever, goes far enough. Brands that stand out are able to find ways that empower their employees to make decisions that support the brand.  They’re able to articulate how employees can/should act to deliver on the brand promises and benefits—they use each interaction with their customers as a chance to deliver brand value—something even the best company-wide meetings can’t inspire alone.

With M3, our approach was both practical and comprehensive. At center, was the need to ensure customers’ experience aligned with M3’s brand promise. Guided by that core principle we developed a plan to determine how (customer facing) employees should behave to deliver the brand promise. Want to learn how we did it? Join M3’s Traci Mandell and me this Thursday to learn a new approach to developing and measuring truly brand-building customer experiences.

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Posted by Amy Modini. Amy is Account Director for CMB’s Healthcare and Insurance Practice, when she gets the time she loves going to the beach with her two kids.