On the End of the American Auto Industry

Blitz Magazine, March 2006

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The other day, I was sitting in a long line of traffic. I was at the top of a hill and could see all the cars below. I noticed that, out of 50 or 60 vehicles, only three were not Japanese or German. The US was represented only by a Hummer, a big lump of a Cadillac and an ancient Buick. All the rest were foreign. As I continued to drive around Vancouver that day, I kept an eye out and saw the same thing on every street, in every parking lot. Japanese, German, some Swedish. Lots of Jaguars. And everywhere, SmartCars. Nary an American vehicle in sight.

Meanwhile, the news on the radio was about how Ford and GM are on the brink, and I’m thinking “Well, duh.”

The mantra for big marketing is all about knowing consumers, knowing what they want, and giving it to them. This is nothing new. But American car-makers—who rank among the largest retailers in the world—have never done this. The American auto industry has always given consumers what it wants them to have. Consumer research may have been conducted, but it was ignored. Ditto all research into what the competition was doing. The message from American auto-makers has always been the same: “Here’s what we’ve built. Buy it.”

If I were the president of, say, General Motors, I would have looked at Great Britain, whose citizens pay some of the highest fuel prices in the world and have never wanted anything but the small and zippy. I would have seen the same thing across Europe and thought ‘Hmmm. Maybe the big car is about to do the way of the dodo.’ I would have listened to trend analysts—not American auto trend analysts, but energy trend analysts. I would have seen what the Japanese saw long ago: a growing need for smaller, more fuel-efficient cars with all of the options and comforts. I would have said to myself: ‘Look at how successful those Japanese manufacturers are. Maybe we should do the same thing.’

Well, that didn’t happen. Instead of giving consumers what they really wanted out of a vehicle—fuel-efficiency, safety, reliability etc., American car-makers said: ‘Oh forget the reality. Let’s look at consumers’ cultural aspirations, create vehicles that fit with their idealized self-images and appeal to their egos, and then market the hell out of them.’

So, at a time when roads are true danger zones, and when most couples wouldn’t dream of having more than two children, American car makers produced SUVs—gas-guzzling vehicles that everyone knows are unsafe. Then they marketed them as family essentials. At a time when drivers are increasingly distracted by cell phones and fast food, American consumers got vehicles with entertainment systems. In an era where commuting time can run up to three hours, Americans produce longer vehicles (longer vehicles increase commuting time for everyone).

Did consumers ever indicate that they wanted this? No. But the marketing worked. Until reality sunk in. Those vehicles are no longer desirable. There are millions of them out there, and no one wants them.

auto1Pick-up trucks are only needed by tradesmen. Yet we’re now seeing massive pick-up trucks driven by executives who happened to respond well to hearing Bob Seeger sing ‘Like a Rock.’ For the under-endowed, there’s the Hummer. Meanwhile, the US government is so desperate to find sources of oil that it has gone to war and is ready to plunder a northern nature preserve for a three-year supply. Chop logic.

If you look at the advertising for German cars, the emphasis is on performance and status. If you look at the advertising for Japanese cars, the emphasis is on reliability, safety, stability, comfort—and fun. If you look at the advertising for American cars, the emphasis is on all the snappy things you can fiddle with inside vans—to create toy bins and space for baby carriages. Please.

And speed—we’re still stuck with those tired old commercials showing cars driving very fast along twisting roads. Meanwhile, public tolerance for speeding is at an all-time low. Fines are way up, California drag-racers are going to jail—a Vancouver man was recently deported as a result of a fatal speed-crazed crash. Speed and recklessness are, like, totally yesterday.

The major shareholders of American auto manufacturers have never done anything to remove board members or CEOs. Now all’s lost. And you have to wait in a very long line to buy a SmartCar or a Prius; and a 2002 Toyota Echo costs $17,000—if you can find one.

Big Auto wasn’t paying attention. The lesson that everyone can learn from that is that communicators have to be smarter and make more of an effort to predict the future. We have to watch, listen and learn. We have to hear the ideas in our own heads, and listen to those of others. And we have to be better communicators.

We are in the Age of the Internet. And the Age of the Entrepreneur. Long-term success now depends on communicating, fulfilling needs, listening, providing great products and services at fair prices, and giving clients and consumers what they want and need. Otherwise, adios.

Communication Gone Wrong

Blitz Magazine, July 2002

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Direct marketers always talk about how precise their methods are. About how, when they send out promotional mail, they know exactly who’s getting it. They say they can target by income level, age, children’s ages. That they know that their clients’advertising pieces are being received by potential buyers.

In the mail, I receive an expensive package from a purveyor of yacht accessories. I don’t have a yacht. I receive an elegant package from a private school, asking me to consider sending my child there. I have a poodle. Now that I’ve announced that, I’ll start receiving samples of cat food.

Trade magazines also claim to be precisely targeted. (I’m one of the few publishers who can truthfully say that, as I up-date the Blitz mailing list every day and know exactly who’s getting it.) But my mechanic receives Strategy and Reel West. He doesn’t know why, he just does. I know this because I found them on the floor of his waiting room.

Technology has allowed for marvelous developments in magazine design. With the wrong result, I believe. I glance at Maclean’s and Vancouver. Both are so over-designed as to be unreadable.

Companies that can afford to commission good creative are airing TV commercials that are cloying (Toyota), nonsensical (Suzuki, Microsoft), badly written (Nestle) and annoying (Mott’s, All Bran). Even if people can stand to watch them, or make sense of them, the ads are bad enough to turn people away from the products they’re pitching. (And how about that McDonald’s slogan: ‘There’s a Little McDonald’s In Everyone’. Think about it. Ew.)

The Internet Advertising Bureau claims that an increasing share of marketing dollars is being committed to Internet marketing. Internet marketing firms say that advertisers can be confident about spending thousands of dollars in this fashion because web advertising is now so targeted—so precise.

I am a single, heterosexual female. When I open my email, I’m offered discounts on Viagra, potions to increase the size of my husband’s penis (by 3”!!!), potions to remove the hair on my chest, and something about a virtual experience wherein I can have sex with an Asian girl.

On a per-capita basis, Canada is the world’s most wired nation. Yet 1,000,000 Canadians have closed their Internet access accounts. It was recently reported that the editor of a popular e-zine has disconnected his incoming email address. His receipts were too time-consuming, too stressful.

Broadcasters are making TV unwatchable. We have an endless stream of propaganda pieces for the US military. Laughably bad sci-fi series. Shamefully stupid sit-coms. A special on the most passionate movies in history. Anniversary specials of once-popular TV shows. Weakest Link. Reality shows. Crap.

I now use the Internet only for addresses. If an email message doesn’t immediately appear to be relevant to me, it’s gone. My recycle bin runneth over. Friends report that they own TVs for the sole purpose of watching rented movies—they now refuse to watch television.

So this is The Great Age of Communication. Communication is so easy, so quick, so efficient. Marketers are spending untold sums to communicate, and they think that their messages are reaching the right people. Methinks they’re wrong.

Worse, where the correct people are reached, they’re turned off messages by their quality. Because, more often than not, that quality is so mind-numbingly bad, so insultingly inferior, that people are rejecting both the message, and now, the medium.

Art, Inside Out

Blitz Magazine, September 2001

Ah, the Summer of 2001…

Everybody was protesting something; I just wish someone had had a clearly-articulated point. We watched riot squads in action. At the G8 Summit in Genoa, Canada’s Prime Minister Chretien sat down for a confab with Bob Geldof and Bono; outside a young man died on the pavement, shot in the head. Who knows what he wanted…’something to do with stamping out evil capitalism, perhaps wanting it to be less evil.

In Vancouver, when people have something to protest, they do it at the Vancouver Art Gallery (VAG), which has become the de facto social meeting point. It’s architecturally grand, centrally-located, and surrounded by the Towers of Power (the Law Courts). Perfect. And now, it is decorated. With outdoor art. Specifically things like a vehicle sculpture by Kim Adams and some ‘stranded boats’ by Ken Lum. They’re fine…inoffensive. Just, well, why.

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On Location, according to the press release, “is a commissioning project created as an artistic legacy that will enrich and animate the public spaces around the VAG. Designed to celebrate the rich social and political diversity that forms urban life in Vancouver, it will address subjects such as street life and cultural histories that are often ignored in public art projects.”

The VAG isn’t only popular for protesting. It’s a hot spot for busking and selling jewellery (if junior capitalists can get permits), and for celebratory events (if the Vancouver Police don’t mind). This “complex and active street culture” contributed to the rationale behind On Location: “…the gallery has been largely focused on the exhibitions inside, resulting in a sharp distinction between the interior activities and the exterior world,” continues the release. “Recent planning at the gallery has prioritized projects that reinforce a strong and visible link between art and its social context, that provide a greater public transparency for the institution and create increased opportunities to integrate visual arts into the public spaces that surround it. We want the gallery’s building and exterior site to communicate ‘art’.”

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Hmmm. We are skeptical. Because art is a matter of taste. It’s impossible for a group of board members and curators, regardless of how much public consultation has been conducted, to tell the public that what they are putting in its open spaces—in its collective face—is ‘art’. And, given the architectural disasters which Vancouver City Hall has allowed to be constructed on the Georgia Street waterfront and the shores of False Creek—not to mention the absurdly mundane public sculpture everyone is constantly made to look away from—we are loathe to have any more visuals foisted upon us. As far as ‘art’ is concerned, it’s often a good thing that it is inside—if people want to look at it, they know where it is.

 

Sing it Like it Is: The Star-Spangled Banner & O Canada

Blitz Magazine, September 2001

anthem2‘Tis the season. Baseball season. And, as is the case before every game, I sit and listen to the American national anthem. And, as always, I want to throw something at the TV.

A national anthem is a song of praise. It is meant to stir the soul, to remind people of the love and pride they share for their country. And it’s a song written in such a way that all members of a country can sing it. Together. All citizens, regardless of their location or circumstances of vocal capability, should be able to sing their anthem, along with their fellow citizens.

There’s nothing wrong with the US anthem—aside from the reference to rockets and bombs. (Actually, I think they should ditch the Star-Spangled Banner and go with America the Beautiful, but if I suggested it down there, someone would probably shoot me.)

What is wrong is that Americans have let their anthem be hi-jacked. While some Americans must mind, no one complains when, instead of having the anthem led by an able-voiced person who gets up and sings it the way it was written, the performer turns the US national song into a version of gospel entertainment, complete with vocal somersaults and senseless variations, always with excruciating effect. Instead of eagerly waiting to watch the Yankees dust Tampa Bay, you’re searching for the remote so you can mute the noise.

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The reason that Americans should mind is that, whether they’re at a stadium, in a pub, or in their homes, they should be able to sing along. It’s everybody’s anthem; everyone should be able to sing it, and share it.

This hasn’t been a problem with the Canadian anthem—so far. Our problem is that we have to quickly figure out if the occasion calls for the French version, and when we’re supposed to lapse into French. We end up blurring our words a little; it’s like singing Happy Birthday to triplets.

Enter David Foster, one of the many proud Canadians who call California home. Foster, one of the most successful music producers around, intends to run for the job of Premier of British Columbia and, to that end, is studying political science and economics at Pepperdine. (He needs a tutor—he told the Vancouver Sun that explorer James Cook was BC’s second premier.)

In June, Foster held a press conference to promote his new (not-for-profit) CD. The CD is called O Canada. It contains six versions of the Canadian national anthem, a full-length version with French lyrics added by screamer-come-lately Lara Fabian, and four standard two-minute versions edited from the original. Foster told the Sun that he tried to up-date the anthem and “put, I don’t know, my flair to it.”

ocanadaWhat? Hello? Foster’s ‘flair’ might have made Whitney Houston a lot of money, but it also turned a sweet little Dolly Parton love song into “And I-EE-I-EE-I will always lHUUUUV you-who-OOOOooWAAAA, HUWAAA will always lHUUUUV youooooooo WHOAHAA.”

And he wants to re-work Canada’s national song? I don’t think so.

If I go to a Canucks game, I want to be able to stand up and sing O Canada, just as it was written, along with my fellow Canadians—not stand there watching some large-lunged kid from the local church make like Celine Dion with a tune that no one can hope to follow. If Foster’s celebrity allows him to gain in-roads in his bid to turn our anthem into entertainment, I hope Canadians, unlike Americans, will stand up, sing their anthem the way it was written and tell the ‘talent’ to shut up.

 

 

 

Murder Most Popular

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What is about murder that so enthralls us?

Curiosity, probably. ‘Not so much about the actual act—which is usually nasty and decidedly rude—but about whodunit and why.

The whodunit genre is relatively new in literature. With Shakespeare and those who followed to the mid-1800s, murder was there, but we never had to wonder—or try to figure out—the who or the why. In 1860, Wilkie Collins gave us The Woman in White, after which no one could get enough ghost stories.  But there was no detective work required. The ghost dunnit.

It wasn’t until the two Masters came along that society became hooked on murder mysteries. ‘The Masters’ being, of course, Arthur Conan Doyle and Agatha Christie. There’s no way of settling the argument of whose stories are better, but it was Christie who created what has become history’s most cherished, and most durable, whodunit.

In 1947, as a gift for Queen Mary’s 80th birthday, Christie wrote a 30-minute BBC radio play called Three Blind Mice. It was well received, so Christie stuffed it with jokes, added characters, turned it into a full stage play and called it The Mousetrap. The play opened in Nottingham in October 1952, briefly toured the north of England and then was booked into St Martin’s Theatre. Christie thought it might last six months. Richard Attenborough played Sergeant Trotter; his wife Sheila Sims played Mollie Ralston (they took a 10% profit-participation, a move which Attenborough later called the wisest business decision he ever made.)

In 1955, after two SRO years, Attenborough left. Takings plummeted, the theatre gave the production notice to quit, and that created what is now called ‘The Mousetrap Effect’, i.e. when people heard it was closing, they flocked to performances. The play stayed.

By 1958, The Mousetrap was the longest-running play in British history. By the mid-‘70s, it was the longest-running play in theatrical history—anywhere.

mouse2On December 16, 2001, The Mousetrap celebrated its 50th anniversary. By that time, its lines had been spoken by 297 actors, some of whom are in the Guinness Book of Records: David Raven was named ‘Most Durable Actor’ after he completed 4575 performances as Major Metcalf; the late Nancy Seabrooke set her record by spending 15 years as a Mousetrap understudy.

The Mousetrap is about a group of strangers who find themselves snowbound in a country inn, Monkswell Manor. There is a blizzard without; within, they are subjected to terrors at every turn. It’s funny, it’s fun, it’s harmless and, to traditionalists, it’s a charming fragment of a lost dramatic age of polite, witty dialogue and clean humour. But to many modern critics, some of whom have spent their careers campaigning to have it shut down, The Mousetrap is tiresome folly—and it’s got the gall to take up a coveted venue in London’s West End.

Tough. The Mousetrap is more than a tourist attraction—it’s an institution, and it’s not going anywhere. In 2000, the set was finally replaced. Although it doesn’t yet have a wind machine—an old canvas drum and elbow grease still create the sound of the blizzard. Miss Christie would find this most amusing, I suspect.

 

Blitz Magazine, March 2002

All Aboard: Tourists Flock to BC for Rocky Mountaineer Railtours

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British Columbians are spoiled. Most of us live with mountains, spend our days unavoidably looking at mountains. Mountains and lakes, mountains and rivers, mountains and mountains. We’re used to seeing wildlife, and a trip to Calgary is no big deal.

But for people from Kansas City or Manhattan, Liverpool or Cairo, a trip through the Canadian Rockies is an awe-inspiring, once-in-a-lifetime experience. And this is why Rocky Mountaineer Railtours is one of the world’s most coveted of train trips.

The Rocky Mountaineer story goes back to 1988, when VIA Rail, Canada’s national passenger train, started running a service called ‘Canadian Rockies by Daylight’. The service was heavily subsidized and, after two years without profit, the federal government put it up for auction. Twenty bids were received; the rights were awarded to Vancouver’s Great Canadian Railtour Company (GCRC), a team of former railroad executives led by one-time Gray Line Tours president Peter Armstrong. Rail is no longer a cheap, efficient way of transporting people over long distances, but the GCRC people knew that if the trip became an experience, it could be successfully marketed.

They were right. This was long before terrorism hit the travel industry but, even then, North Americans were looking for different types of vacations, especially those that didn’t involve leaving the continent. And tourists from all points of the globe want experiences—not just a couple of weeks sitting on a beach. They want an understanding of the places they visit; to experience the culture, history and geography of unique places.

GCRC purchased the VIA routes and equipment, bought and refurbished the old VIA coaches and, in April 1990, began operating a 500-passenger train service between Vancouver and Jasper, and Vancouver and Banff/Calgary. By the following May, capacity had increased to 600 passengers and departures were up by 50%. GCRC employed 50 people and received 11,000 guests.

Today, Rocky Mountaineer Railtours (RMR) is the largest private passenger rail operator in North America. It employs 350 people, owns 65 pieces of rolling stock and, in 2001, welcomed 73,000 guests. And the whole success story boils down to terrific service, excellent guest relations and targeted marketing.

rocky8The Rocky Mountaineer experience is a two-day, all-daylight journey that follows the historic train route constructed over 100 years ago through BC and the Canadian Rockies. (The high season is April to October, but there are also winter tours.) It’s not just a trip from Vancouver to Calgary; from Calgary, guests can do the return trip, drive out of Calgary, fly out of Calgary, or keep heading east on VIA. If they return to Vancouver, they can hook up with a cruise to Alaska, head to Whistler, Seattle, home, whatever. There’s a Calgary Stampede Tour, a Christmas in Victoria tour, various wildlife tours, skiing tours—RMR markets 40 different packages.

For the rail portion, guests choose from two levels of service: Gold Leaf, which is first class, and Red Leaf, which is first class-ish. Red Leaf is classic rail travel on 50 year-old reconditioned Pullman coaches. There are reclining seats, large picture windows, open-air vestibules and in-seat dining. Gold Leaf coaches are $3.5 million, state-of-the-art, two-tier cars with glass ceilings, observation platforms and dining rooms.

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Either way, guests are wined and dined with BC Salmon, Alberta beef and BC wines accompanied by white linen and fresh flowers. On-board attendants speak English, French, German, Japanese and Mandarin, and give passengers plenty of notice when the train is about to slow for key photo ops. Guests carry detailed maps and follow the line’s history with the Rocky Mountaineer newspaper.

The two-day journey travels 918 miles through the UNESCO Rocky Mountain World Heritage Site, which is Mount Revelstoke National Park, Glacier National Park, Yoho National Park, then Banff and Jasper. The average pace is 75 k/hr and passengers do not disembark, but they can gape away at bears, bighorn sheep, moose, deer and elk. Along the way, they take in seven mountain ranges, plus tons of bridges, tunnels, waterfalls, canyons, lakes and rivers. And in the middle, they spend the night in Kamloops, where they have the option of attending the RMR-owned Two River Junction Dinner & Musical Review.

The cost of the trip depends on passenger choices. The minimum is $499 for Red Leaf, $999 for Gold Leaf (the split of choice is 50/50). When people order and book directly from the RMR brochure, they can spend up to $6000 per person; the average is $1300. But if they want to rent a car and drive back from Calgary, or head back to Vancouver via limousine, then stay at the Four Seasons before spending a week at Whistler, it can all be booked as an RMR custom tour and the sky’s the limit.

rocky6RMR houses a group travel department that arranges customized itineraries for groups—in the incentive and leisure travel sectors, plus the pre- and post-conference sector (many companies have their conferences right on the train).

Outside North America, RMR has sales reps in 18 countries, plus five sales managers who work out of the Vancouver office but travel the world making sure that tour operators, travel wholesalers and travel agencies are aware of the company’s offerings. The company supports the European market through a London office, PR firms are active in Los Angeles and London, and the company works very hard at maintaining a positive relationship with the international media.

As RMR’s VP Marketing, Graham Gilley, explains: “Our PR people pitch the international media with many different editorial angles. In 2001, we hosted 75 groups of media—we want those photographers and cameramen on board. We’ve been on Chef at Large, on the BCC, on CNN’s Hot Spots. And we work very closely with Tourism BC, Tourism Vancouver and Travel Alberta to get the most out of the media and make sure that Rocky Mountaineer is part of the story.”

This coverage not only helps sales, but it has helped the company build an excellent reputation. Its trade-marked slogan ‘The Most Spectacular Train Trip in the World’ was actually a comment made by former Canadian Prime Minister Joe Clark. Rocky Mountaineer is only one of seven rail journeys to twice make the 20 Best Rail Experiences list issued by the prestigious International Railway Traveler magazine. In 1998, it was voted Best Attraction by the North American Association of Travel Writers. Fodor’s listed RMR’s winter tours on its list of Top-Ten Most Overlooked & Under-Rated Winter Tours.

This sort of thing goes over very well with the RMR market, which is people 55+, mostly couples and empty-nesters who can afford to be discriminating. About 40% come from the US; 25% from Britain, 20% from other parts of Canada, the rest from Europe, Asia and Australia.

rocky1“People come to Canada because they want to see its natural beauty,” says Gilley. “We’re the centrepiece of that Canadian vacation and a big draw to Western Canada. For train buffs, the fact that passengers have their own train [no cargo attached] is a big deal, but only about 15% of our guests have a real interest in trains.”

There are two groups of customers: tour operators and FITs, or Fully Independent Travelers, who either call to book directly, or ask their travel agents to book.

The Internet is a big part of the marketing effort. RMR has three sites: rockymountaineer.com, which has been up for four years; winterrailtours.com and spectacularmeetings.com have been up for two years. Gilley notes that rockymountaineer.com receives 2,500 unique visits every day, making it one of the most visited of Canadian travel sites. The sites are extremely thorough, offering detailed information packages, streamed video and 360-degree Ipix tours, plus scheduling and pricing information. But you can’t book on-line. You have to call.

When someone has chosen his trip from the website, he calls the 800 number; in Vancouver, there there’s a 24/7, 24-operator call centre that fields 1000 calls a day. The call is answered by a well-trained RMR salesperson, who starts with the caller’s immediate choice, then helps with the ‘vacation design’, then books it all. RMR has strategic alliances with Hertz, Laidlaw Motor Coaches and Fairmont Hotels, so the up-sell angle is very important. But it’s a win-win situation. With one phone call, RMR makes a profit, the consumer gets a fabulous, custom-designed vacation. And the one-stop-shop approach makes life easier, and costs lower, for travel agents.

There’s another, equally important kind of caller. Those are people who want the all-important, 56-page RMR brochure, 800,000 of which are distributed every year. The brochure is an even more important planning tool than the Internet information and is most likely to lead to the booking.

While the sales managers and overseas agents take care of their areas, in North America, advertising encourages people to make that call. A print campaign targets the FITs from January to June, with ads in Readers Digest, Canadian Living, Conde Nast Traveler, Smithsonian and regional lifestyle magazines. Gilley says that newspaper and radio ads do not work for RMR. “We’ve tested radio; we went heavily into newspaper three years ago, but we weren’t pleased about getting stuck in the clutter of seat-sale ads. We don’t sell on price point—we’re an experience and that’s difficult to communicate with newspaper and radio. We’re a very visual product and need to be seen in full-colour.”

rocky4Gilley’s print advertising budget is around $850,000. Aside from bringing in those phone calls, the advertising provides very strong brand awareness. The ads tell people to call their travel agents, or the 800 number. This helps to drive business to the travel agents, who are also very important to RMR’s success.

“We support travel agents very strongly,” says Gilley. “It’s important that people deal with travel specialists. We’re happy to take bookings over the phone, but we don’t want to cut off the travel companies—about 60% of our business comes from travel agents. And unlike other travel-industry companies, we have not cut or capped commission rates.

“This business is similar to any manufacturing business. We design and manufacture the product. We sell it to the wholesaler, who sells to the retailer, who sells to the consumer. And then we have to secure distribution to get our product on the shelf. We have to build relationships, maintain them, and build new ones.

rocky7“That’s how we get listings and co-op deals for promotions and marketing. We forge relationships by having a unique product which complements what those in the travel business are trying to do with their companies. It has to be worth their while. We’ve made it worth their while by gaining the reputation of providing a superior product—whether it’s the end product or part of a package. We have excellent worldwide distribution—since September, we’ve gained 10 new American tour operators who previously weren’t selling Canada. We already deal with most of the large operators, but we like to have distributors of all sizes.”

Gilley joined RMR in 1997. At that time, the company’s marketing was very much grass-roots. There was no database, no print advertising. And the marketing budget was only 2%.Well, now the marketing budget is only 4%.

“It’s not a large budget, but that’s the nature of this business,” explains Gilley. This is a very labour- and capital-intensive business. To make a train move 10 feet, it takes literally every employee we have—350 people in sales, operations, reservations, guest services, maintenance. That’s why there’s a tremendous reliance on the travel and tourism network.”

RMR has come a long way, however. Its marketing strategy was set up in four stages, with each stage taking one year to implement and all four eventually running concurrently. The four stages are Response, Anticipation, Experience and Referral.

Gilley explains: “Response involved retaining an advertising agency [Vancouver’s Bryant Fulton & Shee], then ensuring that our brand was in place, and that our ads were ready to go, so we had a way of generating response from potential guests. And we provided our PR people with the messages required to generate exposure for the brand.

“Phase two was Anticipation. The best part of any trip is the anticipation of it—the ability to say ‘I’m going on this vacation and this is what I’m going to do’. If we wanted people to say ‘I’m going on an incredible rail tour in an awesome part of the world’, we needed to capture those elements in our materials. So we re-did our letterhead, our corporate identity, our brochures, vouchers, itineraries, travel guides—everything down to the travel wallets. We built a presence in the hotels and started to get into response marketing.

“The Experience component begins when you arrive at the train station to board. We created a product department which is a group of people dedicated to designing itineraries and improving the on-board experience. We own 28 motor coaches, so we branded those and changed the colour of our trains—to red, white, blue and gold. And we looked at all our souvenirs, to make sure that there was consistent branding and delivery throughout.

rocky3“That leads to the Referral stage. This is very important, as 26% of our guests are referred by friends and relatives. This is why service is such an important element in the branding of Rocky Mountaineer. It has always worked without prompting, but we decided to formalize that relationship and make our clients our ambassadors. So if they want to refer a friend or relative, we’ll send personalized referral materials. And this year, we gave all of our guests a three-minute commemorative video to take home and show their friends and relatives.”

RMR also sells full-length souvenir videos for $18.95. Gilley wouldn’t give any precise figures relating to profits, but did note that annual souvenir sales are well over $1 million.

In 1999, RMR started conducting direct response campaigns, all of which have been very successful. Last fall, it spent $37,000 on mailing a win-a-trip package to 20,000 people who had previously requested brochures. The result was 203 bookings, 511 guests and $1 million in sales. Another campaign was simply a questionnaire sent to 20,000 US households; it received 13% response.

The company does some market research, though not much. Focus groups are the communication check for creative and there has been telephone research. But the best research is done on the trains. Four hours before the end of each trip, guests are given reply cards. They have the time and the motivation to fill them out, and about 32,000 cards are received each year. The cards are checked every two weeks; if adjustments are indicated, they are immediately made.

“This is the best way to know how we’re doing,” continues Gilley. “But it also allows us to build relationships with our customers. We employ three people who do nothing but look after responses to guest comments. If someone says his coffee was cold, we send him a letter. If someone says that he wanted to buy a sweatshirt and they were all gone, we’ll send him a letter. If there’s something a little more serious, we’ll send an appropriate refund. We send out 10,000 personal letters annually in response to comments. rocky2

“Our market is people who are older—they love to be communicated with. They’re not used to getting acknowledgements of their comments from travel companies. So this practice, in addition to creating referrals, creates lots of goodwill and improves their overall experience. We aim to please and the follow-up makes the entire Rocky Mountaineer experience that much more satisfying.”

 

Blitz Magazine, March 2002

On the Post-9/11 Plague

Blitz Magazine, November 2001

On September 9th, it was time to start another book. I randomly plucked one from a shelf and began to read. The book was The Plague, by Albert Camus. By September 12th, I realized that the choice was an eerie coincidence.

plagueThe Plague, published in 1947, is the story of a city visited by the bubonic plague, and of the psychological and functional changes forced upon the city’s people. However, the plague is only a symbol. What Camus was really writing about was the German occupation of France.

We are now the plague-stricken, with our affliction being terrorism and everything that created it. The parallels between the novel and what we are now experiencing, and what we will experience, are too numerous to cite—you’ll have to read the book. But in it, Camus touches on the media and writes about how, when journalists become bored with reporting the death tolls, and on the frustratingly-slow recovery process, they turn their society’s disaster into morbid entertainment. Their news becomes limited to the information supplied by the Prefect. In the time of crisis, they lose all credibility.

In the aftermath of the September 11th attack on New York, I’ve been sickened by the media/Hollywood treatment of it. The image of the plane crashing into the World Trade Center just had to be shown again. And again. And again. And again. The major news organizations used it as a logo. There were/are the Creative Writing 101 titles: ‘America Under Attack’, ‘Helping America Heal’, ‘America’s New War’. The White House joined in, with Dubya’s speechwriter making him say things like ‘Dead or Alive!’ then helped with the branding of it all with the incredibly ridiculous ‘Operation Infinite Justice’. Dateline is still busy wringing every last melodramatic ounce from the disaster. Advertisers are running promotions around it: ‘Buy an RV and we’ll give $100 to the New York relief effort!’, and ‘Buy a 2002 SUV and help keep America moving!’

Other truly nauseating examples were the special editions of the magazines. Those from Time and Newsweek were little more than collections of photographs taken on and around that horrible day. As what? Keepsakes for scrapbooks and photo albums, to be pasted in along with the baby pictures? On September 16th, Fox scheduled Independence Day for its Sunday night movie. On the already moronic Entertainment Tonight, the story from the odious Mary Hart was how ‘The Stars’ managed to get home from the Toronto Film Festival. Then she interviewed a producer, who unwittingly summed up all that’s wrong with Hollywood when he said: “This kind of thing is entertainment as long as it’s fantasy. Once it happens, it ceases to be entertainment.”

plague1In The Plague, the citizens struggle to live their lives normally, in denial, helplessly going through the motions, obedient to every edict from the Prefect. Dissenters are quashed.

The novel’s main characters are heroes; doctors and volunteers, who spend their days lancing the buboes on the bodies of the stricken, in hopes that release and disposal of the noxious fluid will help bring an end to the pernicious plague.

There is only one character who self-destructs—the profiteer. This man makes a lot of money by appealing to the base instincts that arise in people during times of crisis; once the plague has run its course, he loses his mind, his friends and his freedom.

Camus was writing about World War II, and we know that this type of situation, and its effects on any society, has been the same for centuries. But the nature of media has changed; its scope and capabilities have changed. One would hope that, with all this sophistication, the behaviour of those who work in all forms of media would change for the better. I’m not seeing it.

 

 

 

 

 

 

On Freedom of Speech

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The cocktail talk is about John Ralston Saul. Saul, an established author on, among other things, political philosophy, is married to Canada’s Governor General. And, in his latest book, he states that the western world is, in part, to blame for the events of September 11th.

Horrors! In the House of Commons, acting Reform Party leader John Reynolds rants about the fact that the Governor General’s husband could say this. Prime Minister Chretien was happy to point out that Saul is an individual who is a member of a free society and can, therefore, say anything he likes.

On October 1st, Sunera Thobani, Assistant Professor of Women’s Studies at the University of British Columbia, addressed the unfortunately-named Women’s Resistance Conference (I’m sorry I missed that shindig). In her speech, Thobani sharply criticized US foreign policy, including its policy regarding the Arab world. Kaboom! There were calls for her job, calls for her head, calls for cuts to the university’s funding—Thobani suddenly needed a security detail.

Back at the cocktail party, the guy next to me recalls how nonplussed David Letterman was after the September 11th attack. Of every pundit on his show, he asked: ‘Why would they do this? How could they hate us?’

Hello, I say. Of course the western world bears some responsibility for this attack. Of course US foreign policy has been horribly wrong. Of course many Arabs deeply resent the western world. Every federal dollar that every western government has ever sent in support of Israel, while not providing equal support to the Palestinians, has been a drop of gasoline on the inferno has resulted in 9/11. Many people—of all religions and political stripes, cannot believe that democratic leaders support a government that treats human beings the way the Israelis treat, and have long treated, the Palestinians. I note to my martini-swilling pals, that I have a Jewish friend who sees no difference between the Israelis, the IRA, Al Qaeda and the goons in Somalia and the former Yugoslavia. Yet, she tells me, she can’t express her thoughts to any member of her family, including her husband.

“Shhhh!” my friends say. “Lower your voice! Someone might hear you!”

So? What the hell is going on here? We’re all of a sudden not allowed to say what we think? We all have to toe some line of political correctness? Whose apple cart are we not supposed to upset?”

People are going to read this and say “Oooh. You shouldn’t have said that.”

Why not? Does stating my opinion mean that I’m going to be called ‘stupid’ for blasting hypocrisy? Anti-Semitic for disagreeing with Israel? Sued for injuries to someone’s sensibilities? Or attacked in the name of someone’s god?

Dubya can’t say enough about the “boys overseas” who are “fighting to preserve the freedoms we hold dear.” Well, that includes freedom of speech. In this country, in the US, in all democratic nations, we’re all allowed to say what we think. To whomever we want. Wherever and whenever we choose. We’re allowed to print opinion, broadcast opinion, shout opinion. If someone doesn’t like it, he can argue back, voice his own views, open a debate. It’s that kind of communication—free communication—that leads to resolution.

If more of us had spoken our minds all along, maybe September 11th wouldn’t have happened. Maybe billions of dollars, which are much needed elsewhere, wouldn’t be going up in smoke over Afghanistan. Maybe some of the countless people who have died over the Israel/Palestine issue in last 50 years would still be around. And if more people start saying what they think, and telling the truth regardless of public relations, party position or political fall-out, maybe we could enter 2002 with a little more optimism.

 

Blitz Magazine, January 2002

Man And The Machine, Man In The Machine

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For 150 years, humans have been fascinated by the Cyborg—the cybernetic body (part human, part machine). It has been with us since the advent of the machine. But with this fascination came an intense anxiety around masculinity and mechanical equipment.

In a 1919 essay on the subject of the Uncanny, Sigmund Freud meditated on a form of neurosis that is manifest in a confusion of living and dead, real and imaginary, and between things and symbols. For Freud, the uncanny was a familiar object or event that, estranged through repression, returns to us in the form of the dreaded or bizarre.

In the 19th century, machines were built to mimic human behaviour; biological functions were described in terms of the machine. In the early 20th century, machines were simultaneously eroticized and feared. At this time, there was also a shift in the traditional exchange between art and popular culture, and a blurring of the boundaries between the two.

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The era around the Second World War saw developments in the science of cybernetics and war machines. From the 1960s to the present, the Cyborg has been developed for multiple uses (particularly by Japan and the US), including military technology, body implants and nanotechnology. These developments have been contingent on a growing economy and the burgeoning relationships with corporate cultures that have changed the way production and commercialization relate.

Artists have always shared this fascination, and the neurosis. We can see this in the invention of the 19th-century automata, in Fritz Lang’s Metropolis, Marcel Duchamp’s bachelor machines or Fernand Leger’s La mecanicien. In the past works of Mary Shelley, Aldous Huxley, HG wells; in modern-day titles too numerous to mention. Today, the Cyborg image is everywhere—in movies and comic books, on TV and toy store shelves. The Cyborg is an industry unto itself. It has its own power.

man1The Vancouver Art Gallery exhibit The Uncanny: Experiments in Cyborg Culture, focuses on the uncanny relationships between humans and machines over time and through cultures. It offers insight into a subject that has captured the imaginations of artists, writers, movie-makers, scientists and cultural theorists since the mid-1800s. Key historical works include a 19th-century automaton, 19th-century scientific photography, and early 20th-century artworks by Duchamp and Leger, as well as Pablo Picasso, Jacob Epstein and Francis Picabia, plus a selection of outstanding photographs by Eadweard Maybridge, Lewis Hine and others.

Blitz Magazine, January 2002

For the Love of Lager: Loyalty to an Old Law & Savvy Marketing Make Okanagan Spring Brewery #1

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For natives of Germany, a country where open land and big sky are at a premium, western Canada is the Land of Opportunity. In the early ‘80s, pub owner Jakob Tobler, and real estate developer Buko von Krosigk immigrated to Canada and settled in BC’s Okanagan Valley, specifically Vernon.

Their goal was to address one glaring problem with their new home: the beer was no good. The offerings of Canada’s major breweries fell short of the quality to which they were accustomed. Meanwhile, Jakob’s son Stefan had earned a degree in beer-making at a German university, and that made him one of only two certified brew-masters in western Canada. It was logical to establish a brewery and sell true German beer—but just within the valley, they thought. The partners bought a 10,000 square-foot fruit-packing house, invested in the finest equipment available, put the neighbourhood name together with that of a brewery that had operated in Vernon in the 1800s (the Vernon Spring Brewery), and Okanagan Spring Brewery was born.

There are three types of breweries. A ‘microbrewery’ produces less than 15,000 hectolitres per year (a hectolitre is 1000 litres). Okanagan Spring Brewery (OSB) is an example of a ‘regional brewery’. Then there are the mainstream, or commercial, breweries such as Labatt and Molson.

Almost all microbreweries and regional breweries are ‘craft’ breweries. Craft-brewed beer is made in accordance with the Bavarian Purity Law of 1516. This law, which is still followed by all German breweries and is the core of OSB’s operations, states that there can only be four natural ingredients in beer: hops, malted barley, yeast and purified water. (A non-craft brewery may add adjuncts or preservatives; things like rice, cornmeal, corn syrup and chemicals.)

OSB brings barley from the Canadian prairies and has it malted in the Okanagan. Hops are imported from Germany (the hop is a plant and there are two types: aromatic and bitter). The X Factor is the yeast, which is prepared to OSB’s secret recipe by an outside supplier. The already high-quality Okanagan water is purified, and that’s it.

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There are two processes which craft breweries do not use. In ‘high-gravity brewing’, water is added back to a sort of beer concentrate. It’s more efficient, and more profitable, but it makes beer taste diluted (as in American beer). The other process is pasteurization, which is when beer is heated or boiled to kill germs. Pasteurization extends shelf life, but it makes for common ‘Wonder Bread’ beer. In craft brewing, everything is ‘sterile-brewed’, so pasteurization isn’t necessary, although the shelf life of craft beer is reduced to about three months. After that, the beer is still drinkable, but may have the ‘skunky’ smell that German imports often acquire by the time they reach us.

It should be noted, however, that it is a misconception that a small brewery produces a higher-quality product. The opposite is true. A regional or mainstream brewery has employees devoted to quality control. And if a batch falls short of its standards, it’s thrown out. A microbrewery can’t afford to toss imperfect inventory.

While there are many beer brands, beer (‘baere’ is German for ‘barley’) is broken down into two categories: lager and ale. The beer-drinking population is split in half—half prefers lager, half ale. The English are the ale masters; Germans are best known for lager. So Buko and Jakob started with lager. On December 31, 1985, the first pint of Okanagan Spring Premium Lager was poured.

While Jakob and Stefan managed operations, Buko started traveling through the Okanagan Valley, selling draft beer to pubs and restaurants. Sales took off and, after a little lobbying, he was able to get the lager onto liquor store shelves. Then Expo ’86 came up and the BC government extended sales licenses to smaller provincial beverage manufacturers. Demand surged. Buko moved to Vancouver and started selling on the Lower Mainland and Vancouver Island. Today, Okanagan Spring Brewery is BC’s #1 craft brewery.

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“There are a couple of reasons why Buko did so well,” says Steve Pelkey, OSB’s Director of Marketing. “He promised, and delivered, consistently fantastic products, and he service customers better than the major breweries did. The key to this was having his own distribution network. The beer has always been brewed in the Okanagan, shipped to Vancouver and delivered to customers—all by OSB employees. That allows them to provide great service, including next-day delivery, rush delivery, Saturday delivery—OSB drivers even rotate kegs. Large breweries won’t do any of that.”

And how do you convince a publican to make room for your beer? “We sell premium beer,” continues Pelkey. “So licensees can charge more for it. Also, you say to the owner ‘You have all the mainstream brands. Why not give your patrons a chance to try something different?’”

Pelkey notes that, by the time Buko started selling his lager, astute pub owners already were already seeing the need for an alternative. “In the last 15 years, there has been a dramatic shift in consumer buying behaviour. As people get older, they drink less, but they drink better. Then there’s the fact that British Columbians—Vancouverites in particular, are the most knowledgeable, educated and discerning alcohol consumers in North America. The market was there. Look at Victoria—30% of beer sold there is craft beer.”

Once customers had tried OSB lager, they asked for porter. Stefan responded by creating Okanagan Spring Old English Porter, which quickly earned a loyal following. Also in response to demand, in 1988, Stefan created Extra Special Pale Ale. Now it’s winning gold medals at international beer competitions and is the most successful craft-brewed brand in BC.

Breweries are secretive—they don’t discuss sales or profits. We know that British Columbians buy 25 million cases of beer annually, and that that translates to $425 million. The government takes 60% of that in taxes. A 12-pack of an OSB product is $17.45. Pelkey estimates that the industry average profit on a 12-pack is $1.70. He will also say that, in 1986, OSB sold 3,700 hectolitres, or 20,000 cases. In 1990, it was 25,000 hectolitres and, in 1995, 75,000.

In its first years, Jakob and Buko put all OSB profits back into the company. In 1988, the brewery was revamped to increase production. A few sales people were hired. The brewery was expanded to 50,000 square feet. The focus remained on the three brands, while production increased and the company grew (it now has 150 employees, including a sales force of five retail reps and 11 licensee reps).

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The trade continued to ask for products. In 1995, to meet demand for an easy-to-drink dark ale, OSB released Cottage Nut Brown Ale. In 1997, in response to the success of the ‘honey’ category, which is lighter and more thirst-quenching, Honey Blonde Ale was launched. (There’s a direct correlation between colour, bitterness, weight and low sales, with lighter beers garnering higher sales.) In 1999, after market research showed that there was room for a different style of lager, there came Traditional Pilsner, modeled after the classic Czech Pilsen recipe. There has been just one failure—Autumn Red Ale.

Not surprisingly, after years of increased success, a suitor came calling in the form of Ontario’s Sleeman Brewing & Malting Company. Although you’ll find no mention of it on either company’s website, Sleeman now owns OSB. Buko has retired; Jakob’s two sons still work at the brewery. With that change came a marketing person—Pelkey was hired in 1997. The first thing he did was conduct an agency review and appoint Grey Advertising (Vancouver) as OSB’s Agency of Record. Ipsos-Reid handles market research; point-of-sale and packaging is managed by dossiercreative.

Last year, OSB’s packaging was up-graded, to the tune of $1.5 million, but it’s still notable for its conservative look. Just as the product names are plain and direct, there is a distinctly elegant tone to the packaging. You won’t find any zany graphics or wild colours—its labels are metallic, but that’s it for flash.

(OSB was, however, the first beverage company to use the stamped MettleTab. Now, when anyone opens an OSB can, they are reminded of the Bavarian Purity Law of 1516, and the purity of OSB beers.)

“Our customers are age 25-44,” explains Pelkey. “We’re not going after the teen crowd. So our branding is more refined and traditional.”

The same is true for all OSB point-of-sale materials, which is just as well, given Liquor Control Board restrictions. There are three sales channels for a BC brewery: trade (pubs, bars, restaurants), consumer-direct through LRS (Liquor Retailer Sales; the pub-attached cold beer and wine stores), and the LDB (the government’s Liquor Distribution Branch). A brewery cannot conduct any marketing programs in the LRS trade channel unless the programs have been approved in the LDB channel. At the moment, in-store draws, contests or promotions are verboten. Danglers and shelf-talkers have to fit within strict size restrictions, and the largest allowed size was just reduced to 18” x 24”. OSB reps conduct hundreds of trade promotions every year—mostly instant gratification things like getting to keep your mug. All other promotions have to be in-case.

With in-case promotions, you open your case of beer and find a card offering a chance to win ski passes, a fishing trip, golfing trip etc. OSB consumers are off-the-couch types, so promotions are related to outdoor activities. OSB works with Golf BC and its courses, with the Oak Bay Marine Group and its fishing resorts, and with ski resorts and tour groups. But LDB regulations make for amusing situations. A brewery isn’t allowed to connect any physical activity with beer consumption. So in a recent white-water rafting promotion, the brewery was allowed to show the river, but not a raft, or anyone in a raft.

There’s another wrinkle with the LDB that may surprise some. Since all LDB stores are government stores, you would think that, once an alcohol producer has a license to sell its products in BC, its products would automatically go onto liquor store shelves. ‘Not so. When a new product is launched, it has to be approved by the LDB’s Listing Policy Committee. After that, there’s still no guaranteed distribution. Every liquor store in the province has to be sold individually. OSB’s reps have to sell and service each government liquor store manager, just as if he were a hotelier or restaurateur. And there’s hot competition for that shelf and floor space.

Fortunately, there is ‘beer category management’, which is the same sort of process used by grocery retailers. Liquor stores put premium products in the best locations, mainstream products in the intermediate locations, value products at the back.

“It’s trading people up, which is a good thing for retailers,” says Pelkey. “Putting premium products at the front lets them make more money. Our products sell very well. You multiply the margin by the volume and you get a good profit. That’s what it’s all about, particularly for the cold beer and wine stores, which don’t have to stay with the stated price—they can charge whatever they want, as can the trade establishments.”

And what accounts for high-volume sales? A combination of reputation and marketing.

“Our strategy is always to stay with the core attributes of the brand,” continues Pelkey. “The purity, the quality, the freshness, the BC-ness. The secret is to know your consumer. It sounds simple, but if you offer your consumer a great quality product, communicate the quality and don’t disappoint, that consumer will keep coming back.”

Compared to other craft breweries, OSB conducts a lot of focus-group research. There’s an annual tracking study to gauge what’s going on in the beer industry and new advertising is tested. Pelkey says there’s a lot of emphasis on brand perception.

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“The market’s always changing; consumers’ tastes and perceptions are always changing. We also need bench-marks to see how we’re doing over the long term. And research indicates how tastes will change in the future.”

In BC, 65% of liquor purchases are in the beer category. Beer, wine and spirits, however, do not compete. “We all have share of mouth,” continues Pelkey. “In the premium category, consumers leave the store with a bottle of wine and a case of our beer. At home, they’ll have spirits, wine and beer. The only real competition is with the spirit-based coolers. We haven’t addressed that, as a company or as an industry—we stay focused on communicating our attributes and keeping consumers happy.”

Grey Advertising doesn’t have a huge annual budget to work with—about $700,000. But it has used that money effectively. Most of OSB’s advertising spend is in radio, with print ads running in the summer months (there was some outdoor last year). Although some specific ads are produced for OSB’s two biggest brands—pale ale and lager, the budget doesn’t allow for each beer to be advertised separately, so the focus is always on the core brand attributes.

“We never walk away from the core values of the brand,” says Grey Creative Director Jeff Lewis. “We keep the message consistent. Okanagan Spring Beer is from the Okanagan—a region known for its purity. It’s all-natural, premium beer. More than anything else, when it comes to branding beer, consistency is key. Plus, what we say is true. And that’s one of the big reasons why OSB is so solid. When a consumer pops open a bottle, the quality is there. There’s a lot of crappy beer on the market, but consumers now know that. They’re no longer impressed by image.

“The beer business is a tough business. ‘Very competitive. And you see a lot of breweries whose advertising is extrinsic, rather than intrinsic. Mainstream breweries promote their image outside the bottle. There’s not a lot of talk about the actual liquid—because it’s not that special. Other craft breweries focus on a goofy name, or the brewery’s size. But people want to hear about the liquid—about what they’re drinking. They want to know that it’s a quality product. Okanagan Spring always talks about what’s in the bottle.”

Lewis notes that the OSB strategy has lately become a little more fun. One recent ad (which received angry calls from ex-Torontonians) was ‘Still Not Available in Toronto’, which pointed out that Toronto enjoys black flies and one tower, while BC has towering mountains and bald eagles. Another ad noted that OSB beer is what Okanagan wine-makers drink after work. Lewis used the term for the Bavarian Purity Law—Reinheitsgebot, as an attention-getter in print ads. In radio ads, it is admitted that OSB does, in fact, use a preservative—the cap.

ok6“It is not easy to advertise beer,” continues Lewis. “You have to do work that cuts through all the other beer ads. For a brand with a more conservative stance, the ads with attitude accomplished that.

“One challenge we did have was that, as OSB became increasingly successful, people started to think that it had sold out—that the beer had somehow changed. So the marketing has always made it clear that OSB is the same company it always was. For ’98 and ’99, we used people from the brewery—truck drivers, people who work on the line, Stefan. We need to show that, even though it sells a lot more beer than it used to, Okanagan Spring Brewery is still the same group of people who are passionate about making premium beer. The Still Not Available in Toronto campaign was an interesting way of saying “We Are Not A Mega-Brewery.’

“That part of the strategy remains, along with the core values. It’s pure premium beer from a natural setting. Everything emanates from that. And when people walk into a liquor stores or see the taps at a bar, they see the different brands but they know that every beer is made to the same high standard. Okanagan Spring Brewery has a solid foundation and a very good name. That’s a great thing to work with.”

Blitz Magazine, January 2002