Friday 26 March 2010

Sometimes you get it right by apparently getting it wrong

When, a few years ago, I was director of media relations at the parent company of Dixons, I wrote a two-page press release announcing that we were going to stop selling video recorders.

I remember issuing the press release under embargo on the Friday afternoon and having that feeling that the tide might be with this announcement. About ten minutes later I had my first call from the press association and in the course of the call I was handed messages to call a broadcaster urgently as well as a national newspaper.

Fast forward to the Monday and the first call that I received when I got to my desk at around 6.30am was from the buyer responsible for video recorders. It was pretty obvious that he was concerned, responsible as he was for shifting the 200,000 video recorders that he had in stock. It was a pretty challenging conversation and I think to begin with that he was probably alternating between the two colours of the Dixons logo.

The announcement had of course been carefully orchestrated. The business had taken the decision to remove video recorders from the range and the senior marketeers and the MD of Dixons had sanctioned the announcement.

So, why take such a seemingly reckless decision, given that there was something like £2 million worth of stock in the business and we were effectively consigning video recorders to the dustbin of history? It was what happened next that bore out our hunch and made sense of the decision. The story was a worldwide hit, making front pages, leader columns, all UK and many international broadcast outlets. It was the one and only time in my career that I have done an interview for Khazakhstan Radio. The story reached a global audience of 3.25 billion and the media value was estimated at £2.45 million.

So much for the exposure – what was the impact on the brand?

The underlying purpose of the story was not to talk about video recorders but to signal the importance of a new technology, the DVD player. It was also to position Dixons as a business less associated with the old and more associated with the new. In the wake of the story, two significant things happened. DVD player sales boomed and video recorders sold out. The “get them while they last” message on the latter smoked out customers concerned that they wouldn’t have equipment to play their videos on when their existing equipment wore out. The story turned out to be a major commercial success and was the precedent for a series of announcements that for their time changed perceptions of the brand.

Today, as an advisor to many national retail brands, the central logic of this story is something I return to frequently. Not so much the demise of a product, but the idea of doing something apparently counter-intuitive. Last year, for instance, we proposed to John Lewis that they work with their 28,000 partners to rewrite the wartime classic “Make Do and Mend”. A booklet was published and we created a Twitter account, feeding top tips about how to make the most of what you have and how to economise. The booklet was a huge success, selling out three times over, raising money for charity and generating huge amounts of online, pres and broadcast coverage.

To most retailers, the idea of offering advice to customers that might cause them to think twice about a purchase – especially in the teeth of recession - might sound like anathema, but the tactic paid off. The book and the advice was consistent with the John Lewis ethos of exceptional service. In the months that followed, the department store chain was rewarded with all-time record sales, an incredible achievement in one of the most savage recessions for decades.

The common denominator in these two anecdotes is that they’re about the authentic and honest voice of business. On many occasions, both in-house and as an advisor to businesses, I have seen executives back away from an announcement because they are worried about the outcome. Sometimes these worries are legitimate, but there are many times when an announcement ought to be made, even if the precise outcome is a little unpredictable. Businesses owe it to themselves to think the apparently unthinkable from time to time and at least pressure-test ingrained assumptions. Acting on an educated hunch or counter-intuition can create real opportunities for a business that simply don’t exist if you take the well-worn path of least resistance.

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