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MAXed Out

MAXjet Airways’ failure proves that a business model and strong marketing, in addition to a good idea, is needed to succeed when thinking about transatlantic business.

Capital intensive businesses such as airlines are prone to failure as their fixed costs are so high.  When the price of fuel or the number of people flying fluctuate dramatically, there is little management can do to adjust.  Throw in a much better capitalized competitor which decides that your nipping at its heels has gone far enough, and you’ve got a recipe for disaster.  When Swelled Head first spoke with Henry H. Harteveldt, airline expert at Forrester Research, he said pretty much the same (essentially predicting that American Airlines or British Airways could easily add Stansted flights and crush MAXjet).  His view was guarded to pessimistic as to the viability of MAXjet without something compelling to differentiate its business model, and he was spot on.

The failure of MAXjet casts a long shadow on business class airlines Eos and Silverjet.  They need to demonstrate a point of departure (sorry) that goes beyond a better seat, or they will follow MAXjet into the history books.  The biggest weaknesses these airlines face are narrow loyalty programs (useful only on their own routes), limited feeder networks, capital constraints that limit flights per day and number of destinations. 

Advertising in this category has generally been pretty uninspired given such innovation in the air.  Perhaps the failure at MAXjet will cause CMO's at Eos and Silverjet to rethink their efforts, and become more aggressive in pointing out their advantages and creative in presentation and positioning.  Public relations at these companies has also been notably weak.

A little go-to-market savvy might be useful, too, in making airlines such as Eos and Silverjet more compelling.  Unlike MAXJet, from which I never had a sales call, Eos is active in direct marketing and telemarketing.  Could be that Eos’ sales prospecting is differentiating enough – with only 48 seats to fill a few times a day, it wouldn’t take much of a sales effort, especially at prices that are lower than BA’s for a better service, to do the job. 

None of this is to say that MAXjet was a total loss to the business traveler; seating on many airlines’ transatlantic flights has been upgraded and the cost for business class travel has gone down dramatically even in the face of skyrocketing fuel costs. So I hope you will join Swelled Head in saying a fond farewell and thanks to MAXjet for its short but important service to transatlantic business.

With this post, Swelled Head returns after a six-month hiatus.  Sorry for the discontinuity, but we've been working on business strategy and development for our agency, Austin Lawrence Group, and can now return to Swelled Head with some regularity.  See you here again soon - and Happy New Year!

Lawyers who really "get" transatlantic business

We don’t often imagine that an attorney could be a strategic partner when considering new markets for a product or service, but I’d recommend you think again.  Withers Bergman, a midsize law firm with offices in the US, UK, Italy and Switzerland is a standout; they are great attorneys but what makes the firm a must-evaluate resource for transatlantic marketers is that they really get the business side, too.

I’ve had the opportunity to meet a number of the partners and senior lawyers at the firm, first at its launch event for its handbook for Americans in London (with fantastic pragmatic advice across a wide range of personal, tax, legal and cultural subjects), and then subsequently in pursuit of opportunities for clients and prospects.  Everyone at the firm with whom I spoke or met has strong business acumen and understanding of entrepreneurship to go with their law degrees.  If you’re considering a new venture that crosses borders, I strongly recommend that you consult with Withers before making a move overseas or a major financial or legal decision involving your personal or business affairs .  The advice they offer could be very valuable. 

If you want a copy of its handbook for Americans in London, send an email to dawn.bishop@withers.us.com

US B2B Public Relations Success Tip #3: Help your agency understand what you want

When was the last time you told your agency what you want them to do for you? Chances are that it was months ago – perhaps even back to the point when you hired them. It sounds simple enough to be clear about what results you’re asking your agency to achieve, and it is, but it tends to be one of those tasks that is done once and then only taken care of again when a problem is perceived.

By that stage the relationship with the agency can become damaged. It feels as though they’re unable to work to your agenda and maybe you need to try someone or something else.

It's our experience that maintaining a clear understanding of expectations between agency and client is made even more challenging by distance. If your service is delivered remotely, maybe in different languages, the situation can be exacerbated. If this sounds like you, what should you be doing to prevent things from going stale?

While changing your agency can seem refreshing, it could be a move that sets you back in terms of time and unnecessary effort. Your incumbent knows your business and knows you, but what they may not know is that what they’re working on isn’t giving you satisfaction. To be sure, it’s a question any good agency should ask every so often, yet appearances can be deceptive - it appear that everything is fine when in fact it is not.

The simple answer is to ask questions and help your agency partners in finding the answers:

Are we getting coverage in the right media?
Are the correct messages getting through?
Should we be looking at other activities?
How can you better support our sales staff?
What impact is activity having on our prospects?

We suggest making this process a quarterly task as part of regular reviews of communications planning. It doesn’t need to be an in-depth session – just asking the questions and acting as a team to giving the answers some thought is all that it takes.

A great opportunity to sponsor a U.S. sport in the U.K.

Our agency, Austin Lawrence Group, recommended to a U.S. financial institution that it become the title sponsor of baseball and softball in the U.K.  Unfortunately for us, BaseballSoftballUK, thousands of British kids and this particular firm, the sponsorship didn’t happen.  It was intended to burnish the reputation of this company in the local market, aid employee morale (a community service concept was part of the program, whereby its employees would act as coaches and umpires with a great reward event at the end of the season) and make baseball accessible to British youth who might not have had a prior interest or the ability to pay for the equipment and/or coaching and umpires needed to have an organized team and league. 

We also recommended to start a “City Softball League” to raise money for a teenage crisis center in London – elements of which seem to have been taken up by BBSBUK with its “London Corporate Games” initiative.

I’ve posted this item because I believe so strongly in the value of such a program to the kids who could be served by it…hundreds or maybe even thousands of children could be positively impacted by an investment well within the reach of most City financial firms.

For a U.S. securities broker or money manager this would be a transatlantic sales, marketing and branding initiative that would more than pay for itself in terms of enhanced reputation among clients and peers, and a unique way to make a difference in the community.  As I write, there is no title sponsor for this organization, so a close and possibly exclusive relationship should be possible to negotiate.

And baseball represents a lot of what is great about the United States.  It’s a wonderful game that teaches many important life lessons, and for the British, a chance to experience a bit of our culture firsthand, instead of through Hollywood or McDonald's.

If you think there’s no market for U.S. sports in the U.K., consider: more than 300,000 British kids play baseball every year.  And, U.S. football is making noise about greater activity in the U.K., with the New York Giants and Miami Dolphins playing in London in October.  Check out the NY Times article today for more info on U.S. football in the U.K. and beyond.

If you’re interested and would like to learn more about our program design, contact me at k.lempit@austinlawrence.com or James Ollerenshaw, at james@austinlawrence.com.  You can learn more about baseball in the U.K. at http://www.baseballsoftballuk.com/

US B2B Public Relations Success Tip #2: Run press events only if you’ve cured cancer.

Our experience running press events in the U.S. for small to midsized companies from the U.K. tells us that it’s just not possible to gather a meaningful sized group for your news unless it really is earth shattering.  It’s much better to make your spokesperson available for a media tour of a few days to a week in our top tier markets (New York, Boston, San Francisco) for in-person or phone interviews.  Everyone will be much happier.  You won’t have spent a fortune to rent a room, perform the recruitment drill, cater breakfast or lunch, etc., and you’ll still get the coverage you seek.  We won’t have to kill ourselves to fill a room that most likely won’t be filled.  And the journalists here, who are spread much more thinly than in the U.K. or Europe, will thank you for making your news easily available without a huge time commitment on their part.

U.S. B2B Public Relations Success Tip #1: U.S. customers needed for interviews.

It’s imperative to have U.S. customers available to speak with our media. We admire top tier U.K. companies to be sure, but our trade press journalists (and even most business press) are only interested in speaking with U.S. company executives who are using your product or service. Call us provincial, but that’s the way it is. On the plus side, if you provide journalists with one or two good case study candidates, there’s a high likelihood that you will get the feature coverage you are seeking.

Transatlantic musings on other blogs

Every once in a while, I poke around on other blogs to see who’s writing interesting things on transatlantic branding and marketing. Instead of keeping these treasures to myself, they’ll be posted when a good gaggle are collected. Enjoy!

The Big Chorizo is a well thought out and written blog on Spain and Spanish, written in English. A recent post, “Spain’s Global Brand Image,” offers useful insights about a country many Americans don’t pay as much attention to as they might. A strong economy, reasonably inexpensive cost of living and productive workforce make Spain an interesting location for transatlantic marketers looking for a source of supply or a market to serve.

Executive Travel is not really a blog, but a wiki published by American Express Publishing. It has an oldie but goodie on foreign trade that’s worth a revisit for US marketers seeking trading partners. Which country is our largest trading partner? Japan? China? The UK? Nope. It’s Canada. Check out this post… If you think that it might have changed over the past two years…WRONG! The US Census statistics as of February, 2007 have Canada keeping its lead comfortably. Interestingly to long-time readers of SwelledHead, the UK is sixth in trade with the US.

The Intelligence Summit has an interesting item from Economist Intelligence Unit on the enduring strength of transatlantic ties. The essential point of view is that economic ties are stronger than distaste for the Iraq war, and that post-Bush (and beginning even now as Washington is seen as less bullying) the strength of our ties, mutual interest and shared cultural history will keep western economies closely knit.

Happy Reading!

Ten Golden Rules for UK Business Success in the US

Last fall, I met HRH Prince Andrew at a transatlantic business event sponsored by UKTI. Prince Andrew is one of the best listeners I’ve ever met. He worked the crowd of more than 100 in groups of five to eight, asking each person to share an insight or story relevant to his talk on US – UK relations. My "five minutes of fame" was devoted to the first three of these Ten Golden Rules for UK Business Success in the US. Let us know what you think; we’d welcome your comments.

British brand owners aiming for success in the US market need to do more than spell a few words differently. A common language masks differences in business and consumer culture that are equally as significant as between Britain and anywhere else in Europe. Every individual company or brand will require its own approach, but there are some simple rules of which every arrival to our shores should be aware.  If your business is already here, these rules apply to you, too...are you doing everything you can to succeed in the US?

We'll work some of these themes in greater detail over the next weeks and months. Stay tuned!

1. Don’t open your first office on the West Coast.

It’s too far from the UK in terms of both distance and time zones to make day-to-day business practicable. If your company has a specific need, such as access to Hollywood’s movie industry or Silicon Valley’s tech sector, then fair enough. Otherwise, stick to the East Coast and save yourself a lot of missed phone calls and time in the air.

2. America is at least 25 markets.

Never be tempted to treat the US as a homogenous market. It isn’t. There’s coastal vs. inland; north vs. south; ultra rich, rich, middle-income and poor; white, black, Hispanic and others; legal and illegal residents (at last count more than 12 million are here illegally); seniors, baby boomers, generations X and Y and teens; left and right (politically); gay and straight; religious and secular. And then there are the myriad permutations these create. Get advice on where and to whom your product or service will appeal. It may surprise you. Regional differences in US culture can be explored in great depth; a convenient place to start is the US Department of State’s information web site, a chapter from a book on the main InfoUSA site.

3. Don’t underestimate America’s size.

It really is huge – almost eighteen times the land mass of Europe’s largest nation (France) and five times its population. There are now more than 300 million US residents according to census figures. From New York City to Los Angeles is 2,790 miles (4,450 km). You can drive for hours in some states, mostly out west, and never see another living being. Logistics dictate how you might roll out a retail or wholesale business; locating retail operations too far apart reduces efficiency, while B2B sales teams need to be spread out among major business centers to make it possible for sales reps to effectively cover a territory. A great place to start to understand the magnitude of the country is at the US Census Bureau’s Quick Facts site. This bigness impacts every aspect of your business, from operations to marketing.

4. We can’t (won’t) be educated.

We love to sample the international (just look at the size of our trade deficit), but understand that it’s on our own terms. This can be confusing when we tell you that yours is better than ours; it leads many to attempt to educate us dumb Americans in the "proper way" of things. Well, guess what: We’re not interested. And trying to teach us any different will either (a) cost way more than your budget, or (b) annoy us (we hate imperialism). We’ll probably buy what you’re selling, but we’ll consume it in our own way – and you may need to describe it more fully than is necessary at home – I still don’t know how to prepare Christmas Pudding. Certain UK marketers may wish to initially target British expatriates (there are close to one million in the US – see http://answers.google.com/answers/threadview?id=731995 for great stats on those born in the UK living in the US).

5. We’re all Anglophiles.

To us, there really is nothing cooler. When they announced the new actor playing James Bond, it was massive news here. There was front page coverage everywhere about one actor replacing another in a foreign movie series! We revere everything that has British connotations, assuming that it must be better than anything we produce. At the same time as hating imperialism, we also think the British can sometimes be too apologetic, so show us what you’ve got. Odds are we’ll like it.

6. America has a more advanced consumer culture.

And that means we have much higher expectations. We demand more choice, greater speed, better service and lower prices. Constantly. We tend to be more technologically advanced as well. Be prepared to reassess your offer and adjust it upwards to succeed in our market. That said, there are a few conspicuous anomalies. The British supermarket, mobile telephony and airline industries are all more advanced than ours in one way or another. Oh, and if your customer service is sub-par, don’t be surprised to find complaints out in the blogosphere – and if your service is poor enough, to have a dedicated blog on how terrible you really are. On the bright side, fan sites can emerge for something truly wonderful.

7. Americans comparison shop.

And we expect you to compare yourself as well. It’s common to see advertising in the US where one brand openly pits itself against another. That goes against the grain somewhat in Britain, but in the US it’s central to buying behavior. Dyson stands out as a UK firm that did a great job with this, in our market as well as yours. Sites like epinions.com and shopping.com (similar to Ciao) demonstrate not only our appreciation for the best deal, but our desire to share our opinions with others (some say that shopping in the US is a "contact sport"). Adjuncts to this rule: testimonials never grow old, and celebrity endorsements work.

8. Our business culture and history are different.

It is tempting to think that because you can speak our language that our market operates under the same principles as yours (this advice works both ways across the Atlantic). Doing business in the US is just plain different than in the UK. For example, some businesses (especially in the Midwest) still operate without written agreements, while others are so detail-oriented and over-lawyered as to be offensive (I’m thinking software). Americans are very comfortable talking business over a meal, in fact "breaking bread" is a major step in developing a relationship with a prospect or client. Lesser commitments, say for a coffee, indicate caution is still being practiced. The written word has lost its value here, perhaps more than in the UK or Europe. Proposals for fairly significant initiatives can be delivered in electronic form.

9. You need more advice than you think.

Recruiting key advisors and employees who can accelerate your market entry is a must. We’ve seen plenty of communications and go-to-market planning that, controlled by UK headquarters, missed the mark here in the US. There are myriad ways you can fail, including thinking cultural references translate (most don’t), indiscriminately applying British humor to your advertising, printing anything on A4 paper, sending condescending executives to meet with our press or your client executives, media plans that are much too small to make the desired impact (see size of US, No. 3 above), retaining UK spelling, underestimating the advantage of an indigenous competitor, centralizing your sales office and flying reps to their meetings, maintaining a too-conservative posture, and more.  Local knowledge also can save you massively on your outlays for media and creative services - our largest agencies are not always our most creative, efficient or aggressive.

Get the most out of institutions that assist UK businesses in the US, including UKTI and British American Business Inc. (the US/UK Chamber of Commerce).

10. Be willing to reinvent your brand.

What may seem sacrosanct in the UK may not be relevant elsewhere. Sometimes it’s very hard to work out what really is important; marketers put a lot of time and effort into understanding their core brand values and these would seem to be set in stone. Beware; differences in cultural frames of reference and buying behavior can mean they don’t translate, though it can be almost impossible to know this from the outside. Get advice, and then once you’ve figured out what really matters, see how that affects the business your in. The results can be very surprising and you may find that you need to do something else altogether.

Is your head swelling yet?

For advice and insight on your marketing initiatives, give a call to Ken Lempit at +1 203 391 3006 or email k.lempit@austinlawrence.com. In the UK, contact James Ollerenshaw at +44 (0) 20 7403 2888 or james@austinlawrence.com.

Lessons for UK and European brand marketers in the Don Imus debacle.

The US continues its intolerance for intolerance, even when shrouded in the veil of comedy as was made clear by the cancellation of Don Imus’ Imus in the Morning Show on WCBS-AM radio and MSNBC cable television. Imus and his on-air producer exchanged very offensive remarks regarding the Rutgers Women’s basketball team last week, and a firestorm of protest has resulted in ending, for now, his 30-year radio career.

The judgment of whether this episode is worthy of canceling Imus is beyond the scope of Swelled Head. You can see the offending segment here on YouTube and decide for yourself.

 

What’s important for Swelled Head readers from the UK and Europe who own their companies' transatlantic marketing roles is to realize the risks associated with the speech and actions of your executives traveling and working in the US. What might pass for funny or inoffensive at home could generate a lawsuit, loss of business and damage to your reputation here. Society generally in the US has become very protective of people's feelings and there are consequences for those who “cross the line.”

And, crossing that line may not be as obvious as Imus’ remarks are to you and your colleagues. When we meet a prospective client from the UK or Europe who will have exposure to journalists, we strongly recommend media and cultural sensitivity training. The reason is that your instincts, successful behaviors and speech might not be acceptable here.

Has your spokesperson ever put his/her hand on a journalist’s wrist, shoulder or knee while making a point? Assumed a journalist was a liberal and talked politics during an interview? (While more journalists do lean Democratic than Republican, most prefer to keep their political views out of the reporting process unless they are political reporters.) Made a provocative remark about the appearance of a colleague? We’ve seen all these and more from company representatives who were unwilling to participate in training, and none of these episodes ended well.

The way in which the Imus matter unfolded has important implications as well. Today’s Wall Street Journal article describes how this 30-second segment of a four-hour radio show became an Internet cause célèbre, beginning with a single blog post on mediamatters and leading to national media coverage, debate, protest and ultimately the downfall of a top tier U.S. media figure. If you ever doubted the relevancy and power of blogs, those doubts should be erased forever.

In a culture where even the mighty can fall from one slip of the tongue, being prepared and aware makes more sense than ever. Have your executives been media trained? If not, and you need help, feel free to give us a call or contact us by email.

Technorati tags: don imus, MSNBC, CBS, media training, cross cultural training

Some PR people love blogs

And I'm one of them. SwelledHead has advocated corporate blogging for nearly two years now, so it was heartening to read this article on BBC News Online, "Companies Urged: 'let your staff blog'".

We couldn't agree more.