By Cindy Orlandi
Nov./Dec. 2009
Know your customer. Develop the right products. Hone your marketing strategy. Sound simple? It’s certainly not a piece of cake or even easy as pie, but, this focused approach works whether you are selling Special K, S.M.A.R.T. interest checking accounts or something else that’s your business’ sweet spot. Here are examples of successful marketing now that might make the current economy a little easier to swallow:
• Since 1997, Kellogg Company has seen net sales double from $6 billion to nearly $13 billion in 2008. “We achieved these results by continuing to drive our focused strategy: to win in cereal and expand snacks,” says Kellogg Company spokesperson Kris Charles.
| Rosetta Partner Nathan Carmon provides banks like Flagstar with online strategy and branding, experience-based design and usability, SEO/SEM, and analytics. |
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• Flagstar Bank’s secret is driving “laser-like precision,” says David Joyce, first vice president and director, advertising, marketing and promotions. With more than $16 billion in assets today, Flagstar Bancorp is the largest savings bank headquartered in the Midwest. Based in Troy, it operates 175 banking centers in Michigan, Indiana and Georgia and added two branches in Atlanta this year as well as one in White Lake Township. Flagstar Bank originates loans nationwide and is one of the leading originators of residential mortgage loans.
“We are focused on making our clients’ brands more personally relevant throughout interactive channels in order to drive material and measurable business impact,” says Nathan Carmon, partner at Rosetta, an independent agency that works with Flagstar as well as Borders Books and Marriott Hotels. His own firm’s sales of $127 million were up 35 percent last year as a result.
Carmon’s advice to Michigan businesses: “Focus on understanding your consumers and their needs. It is vitally important to understand your brand’s most valuable customers better than your competition. This is a competitive advantage that will allow you to market to, acquire and retain the most profitable customers in your industry.” Carmon stresses, “Understanding the consumer is the foundation for your marketing strategy. With that insight you can drive the development and execution of your brand strategy, develop a tailored user experience and drive targeted product development. Driving a clear understanding of your customer into every aspect of the experience they have with you is a critical differentiator for any organization.”
Rosetta, which has worked with Flagstar for more than three years, is focused on helping the banker grow its retail banking and consumer lending business. Said to be one of the top 10 interactive marketing agencies, Rosetta helps Flagstar improve its ability to identify and target the most profitable customers, then develop and market products and services based on their needs, attitudes and behaviors. Rosetta has five patents on the intellectual property underpinning it calls its “Personality-based” segmentation, a technique that uncovers the drivers of brand choice and product usage for retail banking customers.
“With the fears in the economy, many people are focused on doing a better job managing their money and saving,” Carmon explains.
| Based in Troy, Flagstar added a new branch this year in White Lake Township. |
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Flagstar’s David Joyce says the bank is doing a better job of getting to know its customers.
“We have an opportunity to get better results for less money. That’s why I believe in segmentation,” he adds. “We need to get our organization to rally around it and have our products aligned.”
Flagstar, which has 1,857 employees at its Troy headquarters and nearly 3,300 company-wide, is said to be ranked at the top in overall customer satisfaction in a survey of Flagstar’s retail bank customers done by Informa Research Services.
Kellogg also cites product renovations and innovations as fundamental to its growth. “In 2008, 15 percent of sales, approximately $2 billion, came from new products launched in the past three years,” says Kellogg’s Charles, who points to the expansion of the Special K brand (beyond the cereal aisle to protein shakes and protein meal bars, as well as with the addition of a variety of snack bars and crackers) as a tangible reason for the growth spurt.
As more and more people are getting and sharing information online, Kellogg and other companies are using new media and social networks to connect with their customers.
| An online media program for Kellogg’s Special K brand has generated strong results. |
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Kellogg partnered with Katalyst Media, a studio for social media co-founded by Ashton Kutcher and film and TV producer Jason Goldberg. Together they shed light on the growing hunger epidemic in the U.S. through an online video directed by Demi Moore. The video was produced to reach out through social media channels and encourage people to work together to help replenish food banks and feed the hungry by making donations to Feeding America.
Kellogg donated more than 55 million cereal servings to Feeding America and launched a Kellogg Cares Facebook page as a vehicle to bring awareness of the issue. Through Facebook, Kellogg invited employees and consumers to become fans, view Kutcher and Moore’s video, make donations to Feeding America and find out about other ways to help fight hunger in their local communities.
Within its first two weeks, Kellogg Cares had more than 200,000 fans on Facebook. By using social networks in its campaign, Kellogg helped draw greater attention to the social problem of some 36 million Americans struggling with hunger, giving the Facebook page a nod as “Best Use of Social Media for Social Good” by an industry organization that recognizes excellence in social advertising, media and marketing.
Even as it embraces innovative new media, Kellogg officials say driving sales in the current economy still depends on investing in advertising and other long-time marketing techniques for brand building.
With consecutive increases in advertising since 2000, Kellogg invested more than $1 billion each year in 2007 and 2008. “In 2009, our commitment to advertising continues,” says Kris Charles, who expects a double-digit increase in second half internal advertising spending.
“Our major categories are highly responsive to strong advertising,” she adds. “We are also aggressively exploring digital avenues of reaching consumers, which offer better targeting, engagement and dialog capabilities than many other media channels.”