Ask people to name today’s top marketer and you will get responses like Apple, Facebook and Starbucks, with a few BMWs and Mercedes thrown in. But if you take a longer view of the past, different candidates emerge – iconic companies like Coca-Cola, Disney and McDonalds.
While these are all great companies, for its sheer consistency and breadth in building consumer brands, no one beats Procter & Gamble>. The world’s largest consumer products company with global sales of $80 billion, P&G has 26 brands with sales over $1 billion and names like Tide, Crest and many others.
I started my career in consumer packaged goods. P&G’s marketing success provides 10 important lessons for financial advisors.
Lesson one: Start with the customer
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P&G’s success starts with its focus on developing an unparalleled understanding of its customers. P&G was a pioneer in researching customer wants and needs and in understanding the customer decision-making process and post-purchase experience, going so far as to observe how customers use its products in their homes. One of P&G’s core concepts is identifying moments of truth for its products. The first moment of truth happens when customers see a product on the shelf and evaluate it by comparing it to alternatives. The more important moment of truth comes when they use that product and decide whether it’s lived up to its promises.
Question for advisors: Do you focus on the key moments of truth that shape how your clients feel about the decision they made to work with you?
Lesson two: Offer differentiated value
While marketing is what P&G is best known for, much of its success stems from a big ongoing commitment to research and development, developing solutions in its laboratories that solve significant customer problems. Indeed products like Pampers and Febreze have transformed the landscape in many households. Another core concept for P&G is the “USP” – the unique selling proposition that sets a product apart and that can be crystallized into one short sentence. P&G doesn’t believe in parity products; its focus is on superior products that deliver a compelling benefit to customers
Question for advisors: What’s the clear, concrete USP that sets you apart from your competition?
Lesson three: Focus on the right segment
Harvard’s Michael Porter, considered today’s top thinker on corporate strategy, has said that they key to success for business today is refining your product’s core deliverable to meet the needs of a narrowly defined market, in his words to “aim to be different rather than to be better.” Another idea on which P&G was at the forefront was target marketing, pinpointing products to specific customer segments. This 2011 Wall Street Journal article describes how P&G is reacting to the squeeze on the middle class by launching lower priced products; P&G has also launched smaller sizes of its products at lower price points.
Question for advisors: Have you clearly defined the segment of clients that you want to work with and organized everything about how you work to serve those clients exceptionally well?
Lesson four: Obsess about planning
A web post from someone who worked with P&G describes her key lesson about the firm’s success was its commitment to “Plan, plan and plan some more.” Indeed, detailed annual written plans are at the center of the disciplined planning process that has made P&G excel.
Question for advisors: Do you commit the time each year to develop a written plan that sets the course for your business?
Lesson five: Keep it brief
Long before today’s time-starved and short-attention-span world, developing the skill of brevity was key to getting promoted at P&G. The firm was noted for its one-page memos, in which the essence of a recommendation had to be distilled down to fit one typed page, often going through a dozen iterations to get the wording precise and the reasoning exactly right.
Question for advisors: Have you instilled the habit of brevity in yourself and in your team, so that communication with clients is short and to the point?
Lesson six: Invest in innovation
Many companies talk about a commitment to innovation, but few consistently deliver on that talk in the way that P&G has. Key to this was the firm’s willingness to fail – to try, try and try again until they got it right. Another pioneering practice from P&G was test markets. This meant taking a well-thought-through idea with promise and trying it out in the field, carefully tracking outcomes against clearly defined goals. Today, innovation is at the core of companies becoming more agile, reducing the cycle time between strategy, small scale implementation, feedback, fine tuning and rapid rollout.
Question for advisors: Are you open to new ideas and do you make innovation and exploring new ideas a key priority in how you work?
Lesson seven: Invest in building your brand
It’s not enough simply to innovate and to have a great product that delivers great value; you also have to get the word out. P&G was a leader in using media to tell its story and was at the forefront in using television to reach mass audiences with sponsorship of soap operas and memorable lines like “don’t squeeze the Charmin.” To this day, P&G is America’s largest advertiser.
Question for advisors: What are you doing to ensure that your story reaches your target audience?
Lesson eight: Attract top talent
Nothing has been more central to P&G’s success than its ability to recruit top talent. Bill Gates recruited Steve Ballmer from P&G to become CEO of Microsoft; other alumni include Steve Case (AOL), Scott Cook (Intuit), Jeff Immelt (General Electric) and Meg Whitman (EBay and Hewlett Packard.) Today, 175 years after its founding, LinkedIn identifies P&G as among the top 10 most in-demand employers. Indeed, the firm is highly selective, hiring less than 1% of applicants.
Question for advisors: What are you doing to make your team a magnet for top talent?
Lesson nine: Get implementation right
Few companies epitomize an obsessive “devil is in the details” mindset more than P&G. With all the focus on big-picture strategy, getting execution right is still paramount. This article about a reunion of P&G alumni who are now CEOs of other companies starts by talking about the “owl paperclip” that is mandatory at P&G, because it is judged better at holding together pieces of paper.
Question for advisors: Have you created a culture of “getting the details right” within your team.
Lesson 10: Dealing with complacency
P&G has been historically noted for relentlessly analyzing market opportunities and in making tough decisions as a result. But even the most successful companies can make mistakes and allow success to lead to complacency and resistance to change. After disappointing profit growth and numerous articles like What Went Wrong at P&G?, last year the company announced that it was selling 100 product lines so that it could focus on the 80 brands that represented 95% of its profits. P&G is far from unique in falling into this trap – there is a long list of once dominant market leaders that have fallen off the map.
Question for advisors: What are you doing to stay open to new ideas and to avoid the risk of complacency?
While advisors can’t boast billion dollar brands, all of us can borrow from the principles that have made P&G an enduring success. To move forward, do as P&G would do and pick the one lesson from the list that will have the biggest impact on your business – and then get started.
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.
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