kellogg miami slideshare

How the Re-Invention of the Music Industry Can Inspire New Approaches to Marketing Strategy

John Greene Kellogg School of Management

September 14, 2014

Hello.

I believe the future of marketing innovation can be inspired by the re-

invention of the music industry.

You want me to apply lessons learned from the music industry?!?

Sometimes, re-invention happens only when

there is no other option.

“For years, the record labels had a business model that was consistent and single-minded: (1) bundle together a dozen songs on a CD, (2) ship the discs out to retailers, and (3) collect money. “

And then, suddenly, music could no longer be sold like cereal.

The scary news: Every industry has a Napster.

The better news: You can be the Napster.

Through a decade of collapse, innovators within the music industry have had to re-invent their approach to everything.

And the re-invention in the music industry illuminates new ways of

looking at three fundamental questions that can help any industry

stay ahead of their Napster.

What do we really sell?

Who are our true competitors?

How do we inspire our customers?

TODAY’S AGENDA

What do we really sell?

Who are our true competitors?

How do we inspire our customers?

Pharrell’s “Happy" and How to Design

Hit Brand Experiences

Avicii, Aloe Blacc, and The Age of

Liquid Expectations

Beats by Dre, Emily Dickinson, and the End of

Insights

Pharrell’s “Happy” and How to Design Hit Brand Experiences

#1: What do we really sell?

#1: What do we really sell?

“We rent DVDs.”

“We sell film.”

“We sell newspapers.”

Products in any industry can be quickly and devastatingly Napster-ed.

“Customers don’t buy hammers. They buy a beautifully hung picture on their wall.”

$0.05 $5.00

Shift #1:

Products Experiences

- Guy Oseary, Madonna’s manager

“In the past, people would tour to sell their albums; today they put out albums to promote their tours. The pendulum has swung.”

It turns out that a hefty number of “MDNA” albums weren’t sold the usual way. For every ticket sold online to Madonna’s upcoming shows, purchasers automatically receive a copy of “MDNA.”  They get a link to a free purchase on ITunes, or they can send in their mailing address for a physical CD. It doesn’t matter if the concert ticket is $52 or $350.

- John Philip Sousa, 1906

"I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue -- or rather by vice -- of the multiplication of the various music-reproducing machines."... The player piano and the gramophone strip life from real, human, soulful live performances.”

In partnership with McSweeny's, Beck's forthcoming Song Reader will be "an experiment in what the album can be at the end of 2012," there will be no CD, no LP, no mp3.  Just the sheet music, ready to be performed by anyone willing.

What can Pharrell’s “Happy” teach us about designing contemporary brand experiences?

“We should consider every day lost on which we have not danced at least once.”

- Friedrich Nietzsche

Yes, that Nietzsche.

That’s how powerful dance is.

“Danceable grooves have just the right amount of gaps or breaks in the beats. Your brain wants to fill in those gaps with body movement.”

- Maria Witek, Arhaus University in Denmark

Witek says that people all over the world agreed on which drum patterns made them most want to dance: “Not the ones that have very little complexity and not the ones that had very, very high complexity… but the balance between predictability and complexity.”

Designing hit brand experiences: Molecules, Gaps, and the Right Amount of Surprise

Think of your brand experience as a molecule of experiences from your customer’s perspective.

The Challenge: Only 1 in 3 young adults between the ages 21-27 have ever tasted Budweiser.

You’re not selling liquid. You’re a catalyst for a social experience.

Celebrating the New Americana that is being created each and every day.

“Makers of Tomorrow” TV Spot Premieres During

Olympics Opening Ceremony

Print Ads

Made In Parties in Local Markets

Teaser Video on Life + Times

On-Premise Promotion

Instagram Flag Mosaic

30 Artists Perform on 4 Stages

Project 12 Local Brewery Feature

Made In America Merchandise

Live Mural Painting

R/W/B Project for Young Artists

Mobile App

Live FanCam

Over 1.3 Million Festival Live Streams

MadeInAmericaFest.com Over 600 Million Earned

PR Impressions

Commemorative Budweiser Bottles

Forthcoming Documentary from Ron Howard

Proceeds to the United Way

“MAKERS OF TOMORROW” TVC 1500% increase in Budweiser Social Conversation TOTAL FESTIVAL ATTENDANCE 90,000+ TOTAL LIVE STREAMS 1,310,256 (Goal was 500,000) TOTAL MEDIA IMPRESSIONS Over 2 Billion

NEW FACEBOOK FANS Over 1.19 Million (238% above goal) UNITED WAY DONATION $700,000 to Local Philadelphia Chapter

Celebrating the New Americana that is being created each and every day.

Start with your mission.

From products to experiences

Design the molecule that includes everything your customers experience; not just those that you directly create/sell.

Leave the right gaps for your customers to fill in on their own.

Start with your mission.

Identify the core pillars of the customer experience.

Array their product offering off of the pillars of the experience.

Exercise #1: Brand Molecule

Identify opportunities for product expansion: new audiences and need states where they have yet to scale off of the core pillars of the experience.

Start with the Mission

Identify the Core Pillars of Your Customer Experience

(feel free to add more)

Scale Products off of Your Core Experiences

(feel free to add more)

Identify New Audiences and Moments of Need

(feel free to add more)

And, Importantly, Identify Opportunities for Growth

What Other Consumer Markets Need to Have Movement Evolved?

What are other ways to create products/revenue streams off of the core pillars of the customer

experience?

What Other Consumer Moments Need to Have Movement Evolved?

15 Minute Team Exercise: My Take

evolving  the  way  the  

world  moves  

Start with the Mission

evolving  the  way  the  

world  moves  

On-Demand

Real-Time Tracking

Invisible Payments

Identify the Core Pillars of Your Customer Experience

UberBlack

evolving  the  way  the  

world  moves  

On-Demand

UberX

Real-Time Tracking

Invisible Payments

Uber Taxi

Uber Rush

Scale Products off of Your Core Experiences

UberBlack

evolving  the  way  the  

world  moves  

On-Demand

UberX

Uber Family

Real-Time Tracking

Invisible Payments

Uber Taxi

Uber Rush

Whimsical Deliveries

Uber Chopper

Ice Cream Delivery

Kittens

Identify New Audiences and Moments of Need

UberBlack

evolving  the  way  the  

world  moves  

On-Demand

UberX

Uber Family

Real-Time Tracking

Invisible Payments

Uber Taxi

Uber Rush

Whimsical Deliveries

And, Importantly, Identify Opportunities for Growth

Uber Chopper

Ice Cream Delivery

Kittens

What Other Consumer Markets Need to Have Movement Evolved?

Why Not License the Software Experience (eg, Amazon Cloud

Storage)?

What Other Consumer Moments Need to Have Movement Evolved?

Avicii, Aloe Blacc, and The Age of Liquid Expectations

#2: Who are our true competitors?

“Avicii Unveils Bizarrely Twangy Mumford & Sons Reinvention During Ultra Set.”

“Hey, you got your bluegrass in my techno!”

“EDM Superstar Avicii Makes a Kazoo-Heavy Kinda-Country Record.”

#2: Who are our true competitors?

Business breeds us to be fighters.

Direct Competitors

Original iPhone Launch

But often it’s not the competitor right in front of us that we should be most worried about.

Experiential Competitors

Experiential Competitors

Customer expectations are becoming increasingly liquid across every category.

Perceptual Competitors

Shift #2:

Static Expectations

Liquid Expectations

The Age of Liquid Expectations

Direct They sell products that compete with ours.

Experiential They sell experiences that

replace ours.

Perceptual They change the expectations our customers have for us.

Team Exercise #2: Liquid Expectations

Direct

Experiential

Perceptual

Team Exercise #2

Direct What competitors sell products/services that compete with Uber?

Experiential What competitors offer

experiences that are threatened by Uber?

Perceptual How does Uber change the expectations that consumers have

for brands in other industries?

Direct

Experiential

Direct

Direct

Experiential

Perceptual

Team Exercise #2

My Take

Direct

For Londoners and tourists alike, Wednesday was a headache-inducing travel day in the city. In a new show of solidarity and anger against the taxi app Uber, around 12,000 London cab drivers suspended their service and took to the streets.

Direct

Direct

Experiential

"We get customer feedback everyday saying, 'Hey I just sold my car; I don't need to pay for parking at home or work.' Lets say that's $500 a month for both. We just saved them $6,000 a year. ... I think that's why so many people are using Uber and getting rid of their cars."

- Travis Kalanick

Direct

Direct

Experiential

Perceptual

Uber has made payments invisible by making the entire checkout experience, well, invisible. Getting out of the taxicab is the equivalent of checking out of the taxi, with payment automatically triggered at that moment. The overall experience is predictable and hassle-free.

Direct

Experiential

Perceptual

Uber has made payments invisible by making the entire checkout experience, well, invisible. Getting out of the taxicab is the equivalent of checking out of the taxi, with payment automatically triggered at that moment. The overall experience is predictable and hassle-free.

Direct Black car companies, taxi drivers, delivery companies

Experiential The Auto Industry

Perceptual Anyone who connects people to a service, anyone in the payments

industry…

Beats by Dre, Emily Dickinson, and the End of Insights as We Knew Them

#3: How do we inspire our customers?

What can a 19th Century poet teach us about how to inspire

customers?

“Tell all the truth but tell it slant

Success in Circuit lies Too bright for our infirm Delight

The Truth's superb surprise

As Lightning to the Children eased With explanation kind

The Truth must dazzle gradually Or every man be blind – “

Emily Dickinson

Success in Circuit lies Too bright for our infirm Delight

The Truth's superb surprise

As Lightning to the Children eased With explanation kind

The Truth must dazzle gradually Or every man be blind --

Emily Dickinson

“Tell all the truth… But tell it slant” 

Success in Circuit lies Too bright for our infirm Delight

The Truth's superb surprise

As Lightning to the Children eased With explanation kind

The Truth must dazzle gradually Or every man be blind --

Emily Dickinson

“TELL ALL THE TRUTH… But tell it slant” 

REAL ACCURATE >

ACCURATE: Laps/Can has risen among passives, slowing raw/new growth for State Farm.

REAL: Too many people see insurance as more or less the same, so why not get a lower price.

90

10  

11  

12  

13  

14  

15  

16  

17  

18  

21-­‐27  Years   28-­‐34  Years   35-­‐49  Years   50-­‐65  Years  

ACCURATE: Budweiser is losing market share amongst their most important market segment.

REAL: Budweiser is a relic of Norman Rockwell’s Americana.

92

ACCURATE: Sales of the Big Mac have steadily slipped, especially among young adults.

REAL: Once a cultural icon, the Big Mac is invisible in plain sight.

Success in Circuit lies Too bright for our infirm Delight

The Truth's superb surprise

As Lightning to the Children eased With explanation kind

The Truth must dazzle gradually Or every man be blind --

Emily Dickinson

“Tell all the truth… But tell it slant” 

95

If you had to choose, would you rather be interesting or right?

“If I were President of the United States, I would rather be right than interesting. If I were a CEO of a company, I would rather be right than interesting. But I am a journalist– what journalist would rather be right than interesting?”

- Malcolm Gladwell

TRUTH + SLANT

“YOUR STUFF IS COVERED… BUT ARE YOU?”

Insight Provocation

PEOPLE PROTECT YOU IN A WAY THAT A 1-800 NUMBER CANNOT

“IT’S ONLY WEIRD IF IT DOESN’T WORK.”

Insight Provocation

NFL FANS TRULY BELIEVE THEIR ACTIONS AFFECT THE

OUTCOME OF A GAME

“DON’T TRY TO OUT-THINK YOUR TASTE BUDS.”

Insight Provocation TRY AS YOU MAY, YOU

CAN’T QUITE EXPLAIN WHY YOU LOVE A BIG MAC

Shift #3:

Insights Provocations

"You listen to Apocalypse Now (on iPhone headphones), and the helicopter sounds like a mosquito."

- Jimmy Iovine

Insight A generation missing out on audio fidelity.

But that’s not the real story.

Insight Provocation A generation missing out on audio fidelity.

It’s better to look good than sound good.

The Fidelity Era The Fashion Era (Insight) (Provocation)

What do we really sell?

Who are our true competitors?

How do we inspire our customers?

Staying ahead of Your Napster

Products Experiences Static Expectations

Liquid Expectations Insights Provocations

Why the Apple/Beats Deal Should Terrify CMOs from Every Industry

The Age of Liquid Expectations

Direct Terrestrial Radio, What’s left of the CD industry, Spotify, etc.

Experiential Where are you spending time now that Apple/Beats steals?

Perceptual Why isn’t everything that I enjoy delivered with trusted,

contextually-aware curation?

“The national TV Guide's first issue was released on April 3, 1953.”

Why are you still watching TV that way?

“Music, we realized, sells everything but music.”

- Troy Carter

+   +   +  How will you stay ahead of this Napster?

Thank you. JohnGreene60614@gmail.com

http://thennowsoon.wordpress.com

www.aboutjohngreene.com