Author: Sam Milkman

The Branding Genius Of Trader Joe’s

Tuesdays With Coleman

Trader Joe’s has a distinct and defined image in a very crowded, competitive grocery space. While most grocery market chains struggle to eke out very small margins, Trader Joe’s profits soar.

How do they do it? Let me count the ways.

IT’S FUN.

A grocery store? Fun?

Trader Joe's Hawaiian Shirts

It’s true, it’s hard not to smile in Trader Joe’s. There’s the quirky music selection playing overhead (think “More Bounce to the Ounce” by Zapp and Roger into “Alive and Kicking” by Simple Minds). The freshly cooked free samples at the back of the store no matter what time you’re there. The employee walking around with the wacky giant question mark available to answer questions. The Hawaiian shirts. The stuffed animal always hidden somewhere in the store for kids to find.

IT’S SMALL.

Read: focused. Far easier to navigate than most supermarkets, yet vastly wider selections than your typical small grocery store. We’ve blogged a few times on the tyranny of choice. Rather than presenting a benefit to the consumer, too much choice and selection often creates nothing more than stress. At Trader Joe’s, you know where everything is and can generally get in and out quickly.

IT’S SYNONYMOUS WITH QUALITY.

I don’t usually buy generic brands. I like Heinz ketchup, French’s mustard and Vlassic pickles. In the typical grocery store, I completely ignore the generic brands for products like these. Piggly Wiggly ketchup? No thank you. I wouldn’t even want to think about where it may have come from.

But Trader Joe’s brands? A totally different story. You trust them—they did their homework and found a better pickle. Trader Joe’s made their generic brands cool, because they made their brand cool.

Trader Joe's Ketchup-Mustard-Relish

THEY READ RIES & TROUT’S MARKETING WARFARE AND LEARNED TO PLAY GOOD OFFENSE.

Rather than being just like Whole Foods, the leader in the healthy, gourmet grocery category, Trader Joe’s found the “weakness in their strength” and attacked it.  Where Whole Foods takes itself very seriously to the point of being stuffy, Trader Joe’s is fun and whimsical. Whole Foods is expensive. Trader Joe’s is gourmet on the cheap. Whole Foods’ color is green. Trader Joe’s is red. As marketing/positioning experts Al Ries and Jack Trout might say, Whole Foods as the category leader is playing a perfect game of defense, while Trader Joe’s as a challenger is playing a perfect game of offense—which isn’t being better than the category leader, it’s taking a different approach than the category leader.

Trader Joe’s isn’t that different from Whole Foods when it comes to the products it stocks. No Trader Joe’s branded products have high fructose corn syrup or GMOs, and their seafood comes from sustainable sources. It’s just that everything else around it is the opposite.

Radio stations find themselves in battles with format competitors every day. It is easy to get caught up in thinking only in granular terms. We both play 80s music, but we’ll do it better than them. We both have big ensemble morning shows, but ours will be funnier than theirs. We both have big contests, but we’ll give away more money or tickets to hotter shows.

The Trader Joe’s lesson is that you beat a leader not by being better. You win by finding the inherent weakness in their strength and creating your points of differentiation. Some of the most successful brands are categories in and of themselves.

Do your research. Find your lane. Define your base position, then create brand depth.

Just don’t wear Hawaiian shirts and ring bells. That position’s already taken.

 

How Research Won The Super Bowl

Tuesdays With Coleman

In the week leading up to the Super Bowl, my colleague Jon Coleman hypothesized why New England Patriots head coach Bill Belichick would be a great radio programmer. In the big game, it was Philadelphia Eagles head coach Doug Pederson who got the better of Belichick in a 41-33 victory.

Philadelphia Eagles coach Doug Pederson

The post-game perception of Pederson was that he one-upped Belichick by stepping out of the box. Way out.

There was this post-game headline:

Doug Pederson Dethroned The Patriots By Taking Every Risk

Pederson has always been perceived as a risk-taker. Other Pederson headlines over the years:

Doug Pederson’s 4th Down Calls. Crazy, Or The Right Thing?

Doug Pederson’s Risky Decision To Kick A Field Goal Paid Off For The Eagles

Doug Pederson’s Go-For-Broke Style Could Give Patriots Fits

Risky. Crazy. Go-For-Broke.

Here’s the crazy thing.

What if Doug Pederson isn’t a risk taker at all?

By NFL definitions and perception of most, the Eagles coach is one who takes extreme risks. The NFL is later to the analytics party than some other sports. But like Major League Baseball (see: Moneyball), every NFL team uses research data in their operations. The difference between teams is how they use the data.

Most teams are using data for player evaluation and acquisition (the basis of Moneyball). They are using it for injury prevention, leveraging the data alongside sports science to keep players healthy.

What many teams have failed to adopt, according to Sports Illustrated’s piece, “Analytics and the NFL: Finding Strength In Numbers”, is game-day analytics that influence in-game decisions. Ironically, that 2017 article mentions that there’s little evidence of the Patriots’ investment in analytics and that Belichick “does it with intuition”.

That’s how the Philadelphia Eagles beat the New England Patriots.

With the Eagles up by 3 with 38 seconds in the half facing a 4th and goal from the Patriots’ 1 yard line, the safe route—the one seemingly without risk—would be to kick the field goal and likely take a 6 point lead into the locker room.

2017 Regular Season 4th Down Conversions:

NFL 2017 4th Down Conversions

A look into the numbers would show that going for it on 4th down wasn’t as risky as it may appear—the Eagles converted 65.4 percent of the time during the regular season (behind only the Jaguars and Saints, two other playoff teams). Plus, by converting the touchdown, the Eagles increased their win probability by 15%. The numbers said go for it, so Pederson did (with a trick play that had been practiced numerous times). Also note the Eagles attempted 4th down conversions twice as often as the Patriots.

Remember when Pederson went for it on 4th and 1 from his own 45 with 5:39 remaining trailing by 1? Going for it then looked even nuttier than the previous example, but believe it or not was the less risky play.

Leveraging their success in those situations, looking at the league average, and the fact that simply by converting that one single play increased their chances of winning by 7.3% made it not just the right play, but the less risky play.

Brian Burke of ESPN Analytics called that play a “bold, but calculated decision that paid off”.

Bold, but calculated.

In a clairvoyant article before the Super Bowl, The New York Times demonstrated how the Eagles used analytics to get there. What’s notable is that instinct is still very much part of the equation—it emphasized that “the Eagles have empowered Pederson to make decisions rooted in instinct or math, or both”. Eagles owner Jeffrey Lurie says of his coaches’ use of research, ““He can do whatever he chooses to do, but when you have the resource of data, why not?”

While sports has only started to use research as a tool to develop winning strategies over the past couple of years, radio stations have been doing it for much longer (our founder started providing insights in 1978).

Are you making data-influenced decisions in your strategic plan? Every day you have crucial programming decisions to make. How you present the audience with station components like music, personalities, contesting, and marketing – the foundation of our Image Pyramid – can be left strictly to intuition, or influenced by data.

Coleman Insights Image Pyramid

It’s possible while you’re programming on intuition alone, your competition is making data-influenced decisions.

It’s how even the great Bill Belichick got beat.

Is News of the Dashboard Radio’s Death Greatly Exaggerated?

Tuesdays With Coleman

We are all struck by the speed at which technology is moving—in general, and particularly around the automobile. Some recent studies predict that the autonomous car will dominate roadways by the year 2030. Sooner than that, new digital dashboards featuring Apple Car Play and Android Auto will be in almost every car, offering much greater choice beyond traditional FM radio.

Is in-car listening, one of the last safe havens for radio, about to go the way of the hand-cranked window? While the threat to radio listening in vehicles is certainly real, there is also reason to believe that the world may not be moving as fast as some may think. No matter what the future holds, we believe the best course is to follow the consumer to understand what they really want. The consumer should be our guide to understanding the new rules of car dashboards—and in audio entertainment in general. Consumers might also want to read the Honda Vezel Singapore review at Vin’s Automotive to enlighten themselves on the latest news concerning cars.

Car Radio Dashboard

Listening to consumers gives us reason for some optimism about FM radio’s importance in the car. First, the average Joe’s car does not look like the autonomous electrics we’ll see at the Consumer Electronics Show next month. Joe’s car is about 12 years old, with an FM radio, cassette deck and CD player. That was the basic layout of the entertainment system in most cars until the 2010 model year. That means many consumers will have an FM radio and a cassette player for at least another five or ten years.

Second, consumers have rejected new dashboards that lack a knob for the volume or the radio—even missing a CD player. Manufacturers have learned that consumer satisfaction drops significantly when they try to replace these basic features with newer technology. Honda, for example, backtracked and put a volume knob back into the design of its new cars after hearing complaints about their new dash concepts. Just because more streamline technology exists does not mean consumers want to learn to use it or be distracted by it at 70 mph.

Honda Car Radio Volume Knob

Third, more choices in audio entertainment in the car is not necessarily a good thing—or a desirable one—from the consumers’ perspective. The masses do not always want boundless choice; it often overwhelms them. This is a phenomenon known as the tyranny of choice. We might think that more choices make people happier. After all, they have a greater likelihood of finding what they really want. The opposite is often true. Too many choices leads to greater misery!

Curation and somebody to tell the people what is good remains highly important. While we might say we want infinite choice, often times what we really want is somebody combing through the choices and making a few good recommendations.

None of this suggest we should put our heads in the sand or ignore the threats that surround us. Certainly our industry needs to fight hard on two fronts. First, we need to continue to build strong brands and great content. That’s the part of the success equation we control as an industry. Listeners who really love your product will continue to seek it out regardless of the distribution means, as long as we don’t make it hard for them to find us.

Second, our industry must continuously remind the auto industry that the consumer wants radio. The delivery technology may change, but the auto industry cannot afford to get too far ahead of itself, or the consumer, and we must remind them of that.

So long as the consumer is driving—literally and figuratively—let’s give them what they want—great radio and an easy way to hear it.

 

How Do I Ensure A Cohesive Sound?

Coleman Insights recently introduced the FACT360 Strategic Music Test. FACT360 is online music testing done right through the latest sampling techniques and data collection capabilities, and includes the same benefits that Coleman Insights has provided through its FACT Strategic Music Tests for more than 20 years. These benefits help radio stations build the most appealing and strategically on-target libraries possible.

In the spirit of our launch of FACT360, we present the fourth in a series of five blogs authored by Coleman Insights executives covering important considerations about music testing and music strategy. This blog is written by vice president Sam Milkman and covers the value of cluster analysis and Compatibility scores in a library test.

The previous entries in this blog series shared a theme of using music testing to help implement music strategies established in strategic research, such as the Plan DeveloperSM and FLIPSM studies used by many Coleman Insights clients. With this entry, I’ll get a little more technical and discuss how the addition of advanced statistical tools to the analysis of a music test can help you keep your station’s sound aligned with your strategy and deliver an appropriate level of cohesiveness. (By cohesiveness I mean that while your station delivers sonic variety, its sound has a suitable level of consistency for its format position.)  One of the advanced statistical tools that can help you do this is cluster analysis.

When you have a large sample of listeners evaluating hundreds of songs in a music test you can observe patterns in their responses that reveal a lot about their appetites for specific genres of music. Cluster analysis helps identify these appetites by finding song combinations that objectively represent these appetites. In our FACT360 studies, we not only use cluster analysis to identify the most strategically important appetites that exist within your target audience, we also report Compatibility scores that reveal how correlated the demand for each song you test is with each cluster.

For example, if you are programming a station that—based on your strategic research—focuses on Contemporary Pop and Contemporary Rhythmic Pop as its core sounds, you may occasionally struggle with the selection of Contemporary Pop Rock titles to play. Beyond just looking at how popular these songs are with your target listeners, scores that tell you how compatible they are with the Contemporary Pop and Contemporary Rhythmic Pop clusters that exist in your research can help you make the best selections. Thus, you are not only picking Rock-textured songs your listeners like, you are picking Rock-textured songs that do not undermine the cohesiveness of your station’s Pop- and Rhythmic-centered sound.

This type of insight is especially valuable for stations that mix together music styles from different eras. A Country station, for example, may employ a contemporary approach but once or twice an hour features a Gold title from ten, 15 or 20 years ago. Sometimes such Gold titles “stick out like sore thumbs” and undermine the contemporary feel of such stations. Compatibility data can help stations avoid this problem; if two Gold titles are equally popular with your target audience but one is more compatible with the contemporary clusters in your music test, it is almost always going to be a better title to play.

Similarly, Compatibility scores help stations blend music from different eras appropriately. One 80s-centered Urban AC station may find that more 70s titles enjoy high Compatibility with its 80s core than do newer titles, while the opposite could be true for another station in the format. If you program a Classic Rock station trying to evolve and push the envelope into 90s and 00s music after your strategic research suggests you have some latitude to do so, Compatibility scores can help you determine which 90s and 00s songs blend best with your Classic Rock core.

How rigid should you be in applying Compatibility thresholds? There is no standard answer for that. A good general rule is that if your station enjoys strong well-defined images—which is something you can learn from Fit measurement (the subject of our next blog post) you can relax Compatibility standards and play more songs based on their appeal alone. However, if your station is in need of music image development, Compatibility scores can be helpful in avoiding or minimizing the rotation of songs that make it sound less cohesive and potentially undermine your music image development. Conversely, these scores can encourage you to emphasize the songs—through greater exposure and use in on-air imaging—that will help you build the music images that will benefit your station the most.

Not all library tests come with sophisticated tools like cluster analysis and Compatibility scores. If you have such tools and the guidance of a strategic researcher with the experience to help you take best advantage of these techniques, you may be a big step ahead of your competition.

Who Should Be In My Library Test?

Coleman Insights recently introduced the FACT360 Strategic Music Test. FACT360 is online music testing done right through the latest sampling techniques and data collection capabilities, and includes the same benefits that Coleman Insights has provided through its FACT Strategic Music Tests for more than 20 years. These benefits help radio stations build the most appealing and strategically on-target libraries possible.

In the spirit of our FACT360 launch, we’d like to present the second in a series of five blogs authored by Coleman Insights executives covering important considerations about music testing and music strategy. This blog is written by vice president Sam Milkman and addresses how to assemble the right sample for your next library test.

There is an old saying about market research, “Garbage in, garbage out.” It means that a study that is not designed correctly—including, among other things, employing a sample that does not represent the population you are trying to measure—will produce results that could lead to the wrong conclusions. One thing I learned when working in programming at Z100/New York, K-Rock/New York and WMMR/Philadelphia that has been reaffirmed since joining Coleman Insights is how vitally important it is to make sure the “right” people participate in your station’s library test. The specifics of who should be in your next test are highly customized for each station, but I will share a few basic rules of thumb that any station conducting library testing should follow.

First, you should test your music with listeners who are randomly recruited to be in your study. In other words, your sample should not be culled from your station’s listener database or from people who respond to a banner on your website inviting them to provide feedback on the music you play. Sure, this approach reduces the cost of acquiring respondents considerably and could have marketing value for your station; unfortunately, it may result in a sample that poorly represents your target audience. Researchers call this a “self-selecting sample,” and anyone who has taken a market research course quickly learns that such an approach is a definite no-no.

The other problem with music testing samples that are built this way is that the respondent knows the station for which the music test is being conducted. This invalidates any effort to objectively measure the perceptions respondents have of your station.

A second major tenet of library music testing sample design is that it should be driven by your strategic research. Strategic studies like Coleman Insights’ Plan DeveloperSM and FLIPSM studies should provide a station with a clear vision of its target audience in terms of age, gender, ethnicity, music tastes and listening habits. These studies should also give a station insights into how strong its position is and how deeply it has penetrated its market’s appetite for what it offers. Those two factors are crucial because library testing for strongly-positioned stations should generally employ samples that are relatively focused on the station’s existing listeners; stations with weak positions that are not deeply penetrating their market’s appetite for the music they play should generally take a broader approach.

Your strategic research should identify where the “true” demand for your music strategy exists. In general, the age range should rarely cover more than 15 years, for most formats the focus should be on one gender over another and—unless a station is very early in the development of its music position—most if not all of the respondents should be existing users of your station.

For our FACT360 Strategic Music Tests, we usually advocate our TSL MaxSM sampling approach for stations with well-developed music positions. TSL Max involves recruiting an appropriate mix of your station’s heavy, medium and light listeners to gain insights into the music that caters to the tastes of your heaviest TSL-generating core listeners versus the music that helps keep your station’s Cume appeal as broad as possible.

Third, and perhaps most important, ensure that you uphold your quotas. Once you determine the “right” sample parameters for your library test, you must stick with them. If you have determined—for example—that 50% of your sample should be 24- to 30-year-olds and the other half should be 31- to 37-year-olds, do not deviate from that if you are having more success recruiting one age cell over the other. If 24-37 truly represents the age target for your station, you should look to that age group to provide you with the data you need to make the right decisions about what songs to play and how often to play them.

Even though I have only scratched the surface of all of the considerations here, sampling for your library test is not rocket science. It does, however, require a scientific and disciplined approach and I hope these rules provide you with some guidance to successfully test your station’s music library.

Facing the Future

I was invited to appear on a panel at a state broadcasters’ convention in Oklahoma recently.  The topic—a pretty daunting one—was nothing less than “The Future of Radio.”  What advice could I share to help real broadcasters in the American heartland ensure their place in the complicated, competitive new world of media?

Not an easy topic, but an important one for sure.  A few things ran through my mind as I prepared for this assignment.  First, this convention would take place within walking distance from the site of the 1995 Oklahoma City bombing, the worst act of domestic terrorism in American history.  If you have been to Oklahoma City, you know that this event is still forefront in people’s minds.  The people there are hardy folks—survivors—stronger, kinder and very respectful of their experience.  They have seen the worst and the best of human nature.   Perhaps more importantly, they aren’t the type to run from a problem.  I wasn’t going to be able to scare them with talk of new forms of digital entertainment audio or traffic and weather apps while eating their lunches.  Then again, if I was looking for a group of people who knew something about rebuilding and coming together as a community to make a better world, I’d be in front of the right audience.

I would also be addressing a group of broadcasters in the trenches, duking it out every day with local newspapers, TV, and a host of new media competitors.  This couldn’t be a theoretical or philosophical conversation.  Rather, I needed to offer practical, actionable advice—a roadmap to a stronger future—without overwhelming the audience with discussion of every possible digital threat.

It certainly is easy to become overwhelmed.  Nearly everyday, a new streaming music service hits the market, whether funded by a superstar artist like Jay-Z or a superstar brand like Google or Apple.  Beyond music, hundreds of apps are released every day targeting core radio services like traffic, weather, news and sports.  How does a broadcaster compete with all of that?

Well, before our session we received one last reminder that we weren’t going to scare these Oklahomans with anything our panel had to say:  a tornado blew through as the convention began, toppling a number of local radio towers  Of course, these sturdy Sooners were back on the air within hours.

So what advice did I have for these broadcasters?

Start with the foundation; make sure it continues to be strong.  Your radio brands are your foundation and without them you really don’t have anything to hold on to.  These foundations need support—marketing, branding and focus.  These are the fundamentals of the radio business that we cannot forget.  Before anything else, make sure that you are paying attention to the basics, rather than getting distracted by all of the new competitive offerings.  Don’t ignore the competition and opportunities presented by the new audio entertainment spectrum, but be smart about what threats you can respond to and those you cannot.  While you must compete in the digital world, this cannot be done at the expense of the current product.  Moreover, in a more competitive landscape, first and foremost you must redouble your efforts in the fundamentals of marketing, branding and focus.  That radio brand has to be strong, or it will be blown over in the next storm—or tornado—to come your way.

Stay connected to your community.  Isn’t that what kept Oklahoma City going after the bombing?  Radio nobly rises to the occasion when tragedies befall our communities, but what are we doing on ordinary days?  Stay connected both on the air and behind the scenes.  Make the most of that human connection that radio does so well.

This is what Pandora and many other digital offerings do not do.  A real, local person has the ability to bring things to life in a way that a computer algorithm never will.  Can you imagine what it would be like to be listening to Pandora when a tornado blows through your town—and all you hear is a string of songs chosen by a computer program devoid of any context or connection?

Make a human connection.  That human connection is important on ordinary days as well.  This is where personalities fit in to the new landscape.  Only a person can tell a story, paint a picture, bring something to life.  My iPhone tells me the current temperature and provides an icon that generally represents weather condition.  But only a live person can provide color and context. What does it feel like outside?  Do I need a raincoat?  A human voice makes the facts meaningful, relatable, entertaining and immediate.

When I worked in radio in New York, I scheduled a lunch with the midday anchor on one of the news radio stations.  I walked over to his studio one drizzly morning.  On the way to the elevator heading out to lunch, he turned to me and asked:  “Do I need an umbrella?”  I laughed and responded:  “You just read the weather six times an hour for five straight hours—and you are asking me?”  Problem was, he was just reading, not thinking about how those facts related to real people, walking around in it.  That’s a missed opportunity.

Add your own unique treatment.  It doesn’t matter that the “facts” are available a hundred other places.  Adding your unique take on those facts makes them entertaining and compelling.  Steven Colbert appeared recently on the Slate podcast “Working.”  Colbert related the challenge of creating entertainment today:  everyone has access to the same “raw material”—radio, TV, bloggers, newspapers, Twitterers.  He has no “exclusive” content.  But what he does have is his unique point of view that allows him to filter and distill that same “raw material” and create great entertainment.  And so does every broadcaster!

Get back to your creative roots.  Create one promo, commercial or promotion this week that people will talk about, one that will move them, that will change them, something they will never forget.  This does not need to cost money.  And there’s no need to wait for a disaster to wake you up to do this—there must be a need in your community right now that aligns with what your audience cares about and the essence of your radio station.

In short, get back in touch with the basics of our business—and the reasons why listeners connected with our medium to begin with—and together we can weather the storm of the new audio entertainment choices.