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.

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.

 

 

 

 

 

 

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

Under the Maple Leaf: Western Canadian Producers Band Together

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One much talked-about problem facing Canadians is their isolation from each other. Canada is the world’s second-largest country, yet there are more Californians than there are Canadians. This relative emptiness gives some of us the feeling of being out in the hinterland, a tiny collective in a vast landscape shouting to the world ‘Yo! Up Here!’

Obviously, most Canadian business sectors have overcome this and Canada has always been a marvel of prosperity. But for film and television producers, prosperity has come through a tough, decades-long slog. Canadian producers now have a stellar reputation, but for them—particularly western Canadian producers—marketing has always been an expensive problem.

This has long been on the mind of Carole Vivier, CEO of Manitoba Film & Sound, the funding agency for that province’s film industry. Manitoba is increasingly busy as a production centre, and the agency funds 30 projects each year, with its $2 million budget and the provincial 35% tax credit it administers. On its own, as a marketing entity, Manitoba is small potatoes. On their own, so are the other western Canadian provinces. It occurred to Vivier that, if the four western provinces worked together, as a region, they could be an effective marketing force.

Vivier started discussing this with her counterparts at the funding agencies of BC, Alberta and Saskatchewan. Last year, it was agreed that a joint-marketing venture would be created. It came into being this year, in the form of CanadaWest.

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The goal of CanadaWest is to help producers compete successfully in the international marketplace, by presenting a united profile to the international marketplace. And, through various marketing initiatives, to provide western Canadian producers with a way to seek out co-venture opportunities, find support for projects in development, market completed projects and meet with international buyers to build relationships and gain market intelligence.

There are now many marketing initiatives under discussion. But the first was a huge success—it occurred when CanadaWest made its debut at this year’s NATPE which, with 20,000 attendees, is North America’s largest annual film/television market.

“I was thinking of strength in numbers,” explains Vivier. “Manitoba has a very strong independent film community, but we need to build visibility at the main markets. And it’s too expensive for us to have our own booth at any of these shows. Plus, while everyone knows about Canada, international buyers may not know the name ‘Manitoba’.”

“We faced the challenge of finding opportunities for early- to mid-career producers to access international markets,” says BC Film President & CEO Rob Egan. “The cost of attending these markets is going up, and the budgets of the provincial agencies are going down, or getting tighter—in 1997, BC Film’s annual budget was cut from $5 million to $3 million.

“Where BC Film has had booths at previous markets, because of the cost, our booths have been small and not well-located. Because of budget limitations, we were not able to have much of a presence or profile, and neither were our producers, many of whom are smaller or mid-sized companies which don’t have the financial resources of many eastern Canadian companies.”

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Before CanadaWest, for a western Canadian production company to go to NATPE, it had to consider how many people to send. That would be multiplied by the airfare, the registration fee and accommodation, plus the production cost of one-sheets, presentation packages and demo reels. Then there was the booth—a booth in Telefilm Canada’s space costs $9000.

“For a small production company, it can be a real challenge to participate in one of these shows, and we kept hearing from producers that they couldn’t afford it,” continues Egan. “And the international markets cost even more. Cannes, MIPTV, MIPCOM, Banff—those are the key international buying and selling markets and all of us in western Canada feel it’s really important that our production companies have the opportunity to get to those markets, be competitive and sell their products.”

For NATPE in January, the four provincial agencies—along with industry sponsors and the Ministry of Foreign Affairs and International Trade, pooled $90,000. This bought a professionally-designed 1,200 square-foot booth, and premium placement. To producers, the booth came with all electronic bells and whistlers, plus display areas for promotional materials, a compilation DVD screened on large overhead monitors, some trade advertising, a media campaign and a participant booklet.

Drawing participants was no problem—the word was put out and producers only had to sign up. In attendance were the four funding agencies, plus five Alberta producers, four from Manitoba, three from Saskatchewan and 13 from BC. Each paid a nominal user fee—$250 allowed for signage, display space and access to a common meeting area. Another $750 added to that a shared meeting/screening room; $1500 bought a private meeting/screening room. Producers were pitching developed or completed animation, documentary, drama and digital media projects—and no one was disappointed.

canwest6“We didn’t get involved with CanadaWest to save money,” says producer Ron Goetz, CEO of Regina’s Partners in Motion. “We’ve been going to shows for four years, and each year the cost was about $15,000. But we immediately saw that $15,000 would go a lot further with CanadaWest.

“When you first go to the one of these markets, you tend not to have a booth. You stay on the floor, see what’s happening, and have meetings in other people’s booths. When we got our own booth at NATPE, it was in with all the independent producers, and that can be a jungle because you have all the mom-and-pop companies there. It worked, but it wasn’t ideal. The Telefilm booth is fine, but if you’re in there you’re one of many players. This year, with the CanadaWest booth, we got a private meeting room. We had our own office with our own stuff in it and buyers could come in to see us. We were able to spend the balance of our show budget on advertising and presentation materials. And, for the first time, we made sales at a market—about $50,000 worth. So it was worth it.

“The revenue from markets isn’t that high, but you have to go—the growth of this company would not have happened without our trade show attendance. With each show, you build relationships, people get to know you, and you learn how things work. So I had 60 meetings booked before I got there, but when the buyers showed up at the booth, it was ‘Wow!’ It was definitely a step up. We had a great location, in a sophisticated and professional booth, and that brought credibility to everyone in it. At these shows, booth location and appearance are crucial. The CanadaWest booth felt important and everyone  looked good.”

“It’s basic economy of scale,” explains Egan. “We had more money, so we had a better booth and location, a higher profile, a greater presence, more people. We attracted more visitors and more business. CanadaWest is an interesting initiative and people are looking at it as a real innovation—Telefilm Canada has been in touch to discuss the possibility of working on a Canada pavilion.

“We’re definitely going to continue with it. Any marketer will tell you that you can’t go once; you have to keep going. You have to build that presence and work to maintain it. And given the time it takes for a project to move from development to production to market, it’s critically important that our producers have access to these international markets year after year.”

Vivier was thrilled with the result and says that other things could happen, such as group advertising campaigns and international missions. “The visibility benefit was enormous. The booth was constantly busy—we had about 1,000 people stop by and it was wall-to-wall meetings. The space-booker from MIPCOM couldn’t believe how busy we were.”

For Vivier, there are other important factors. “Each province has its uniqueness and there’s already friendly competition. But this is also a good way for the production companies, which are so far apart geographically, to get to know each other and explore the idea of co-ventures.

Also, while it’s fiscally responsible, as funding agencies, to spend our money wisely and get the most profile for our products, I also feel it’s very important to market ourselves under the Canadian banner, under Canada as a brand. Canada has an amazing reputation, we have co-production treaties with almost every country, we’re proud Canadians and people look for Canada at these shows. We supply the grounding, the producers take advantage of it and develop their own relationships. But the concept of CanadaWest lets us market ourselves as Canadians first.”

 

Blitz Magazine, May 2001

Tripping: YVR Rides High as #1

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You need to fly somewhere. You want to get there quickly, efficiently and in a cost-effective fashion. Upon arrival at your destination, you grab your luggage and get a cab. Do you care which airport you fly into?

And airports are essential. All air passengers have to use them, like it or not. So do airports need to market themselves?

The answer to both questions is yes. It’s not something most of us think about, but airports do need to market themselves—vigorously—and the Vancouver International Airport Authority is particularly good at.

The Vancouver International Airport Authority (VIAA) is a 230-employee, not-for-profit, locally-controlled corporation to which, in 1992, Transport Canada passed the Vancouver airport’s management and operation. While the VIAA has taken flack for being secretive, it has done a tremendous job of managing, and selling, the Vancouver International Airport (YVR).

When it took over, the VIAA’s first order of business was to position YVR as a gateway airport—not necessarily a destination terminal. It doesn’t appear so on a flat map, but Vancouver is the closest North American city to Asia. Travelers can save an hour by flying into Vancouver from, say, Beijing, to which it’s 800 miles closer than is Los Angeles. So YVR positioned itself as offering one-stop access to North America from Asia. It wants Asian travelers flying to the US, the rest of Canada, Latin America and Europe, to fly into, and transfer from, Vancouver.

The other target was, and remains, the cruise industry. One million cruise ship passengers pass through Vancouver every summer. And they have a choice—they can fly into Seattle and drive up.

YVR had to meet the arrival and departure requirements of all these international travelers, in addition to the needs of notoriously picky Canadians. The task was to create a facility that was efficient, comfortable and accommodating to everyone.

In 1996, the International Terminal Building opened as the first terminal of its kind in North America. It was designed especially for international connecting passengers, with state-of-the-art technology for ticketing, baggage handling and customs/immigration inspection.

By 1996, $250 million had been spent on constructing the International Terminal, installing a third runway, renovating the Domestic Terminal, adding a new parkade and creating 109,000 square feet of retail space. Work continues. In 1999, $90 million was invested in infrastructure, renovation and expansion of facilities. Also that year, work began on the $40 million Airport Connector Project, which involves road improvements and a new three-lane bridge. The YVR South Terminal, which services domestic commuter, small regional and charter airline traffic, was also upgraded. (The cost of all of this has been helped along by the much-loathed Airport Improvement Fee: $5, $10 or $15, depending on destination, payable by all departing passengers.)

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YVR’s location is, for an airport, incongruous. It’s only 20 minutes from downtown Vancouver but it’s on Sea Island, which is an environmentally-sensitive area. And it’s beside Richmond, a heavily-populated bedroom community. The VIAA pays rent ($64 m/yr) to the federal government, which owns the land, but it’s the caretaker of Sea Island and has to try to keep both environmentalists and Richmond residents happy.

YVR was one of the first airports to introduce a de-icing system which eliminates the pollutant urea from its ice control program. It maintains water, air quality and noise monitoring systems. It uses electric vehicles. It has a mobile, 20-unit environmental emergency response team. Its waste management program annually handles 470 tons of paper and 127 tons of compostable food waste. Construction projects are monitored for environmental compliance. It uses dogs to prevent bird strikes and negate the need for pyrotechnics—although YVR is located in the avian Pacific Flyway, its bird strike rate is less than half of that at other Canadian airports. From the PR perspective, all of this works—a 1999 survey found that 75% of locals had a favourable impression of this corporate citizen.

Most passengers don’t think about this sort of thing. They’re more likely to notice the airport’s amenities. Such as the 72 shops in the departure lounge. The concierge service, chapel, business centre, family rooms, nursery. The loads of inexpensive long-term parking and constant free connector shuttles. The art collection, natural light and mountain views. The dozens of multi-lingual volunteers. Cruise ship passengers have their own baggage belts and carousels. Fairmont Hotels attached a 392-room inn to the airport, which it bills as the world’s most luxurious airport accommodations. It offers day rooms, gym use, in-room airline check-in and satellite check-in. YVR’s positioning statement ‘Above & Beyond’ is something its management sticks to—and it’s true that a common reaction from arriving passengers is: “Whoa, nice airport.”

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Then there’s cargo. YVR has positioned itself as the global distribution centre for cargo between the world’s major trading blocs, particularly Asia-Pacific and North America. It’s a 30-minute drive from the US border, and from the Port of Vancouver, which is served by most international shipping lines, four railways and 400 motor carriers. The central Cargo Village houses 130 transportation companies, forwarders, brokers and other related businesses. The VIAA’s positive relationship with Canada Customs, and a pre-arrival review system, allow for international shipments to be released within 45 minutes. YVR also offers pre-clearance of US-destined cargo through Free Trade Zones (Export Distribution Centres), a 25% discount on landing fees for international all-cargo flights, a fuel tax exemption on international air cargo and 24-hour operations, all of which makes for a vast reduction in air cargo costs. Obviously, cost reductions make an airport attractive.

The pay-off of this investment and overlook-nothing organization is that, in 1999, 290,000 tons of cargo passed through YVR. That’s a 14% increase over 1998, far in excess of both forecasts and growth at other west coast airports. The International Terminal Building was meant to accommodate 8 million passengers; in 1999, 16 million passengers used YVR, allowing it to surpass San Francisco as the second-largest airport on the North American west coast. In 1994, airport revenue was $128 million, concession revenue $28 million. In 1999, airport revenue was $245 million, concession revenue $61 million. Today, YVR is one of BC’s most important economic engines, generating $4 billion in annual revenues. It supports 400 off-shoot businesses and 26,000 employees—more than the province’s mining and fishing industries combined.

In the International Air Transport Association survey of leading airports, YVR was ranked #1 in North America; #4 internationally (behind Singapore, Copenhagen and Helsinki). Business Traveler Asia-Pacific magazine named YVR its airport of choice, Conde Nast Traveler placed it among the world’s top ten. It has become a management model for airports around the world.

yvr5The VIAA subsidiary, Vancouver Airport Services (VAS), markets its expertise, operating philosophies and leading-edge systems to governments all over the world, which are rapidly dumping airport operation and financing on the private sector. VAS may take over whole airports, or perform specific services. It recently took over management of four airports in the Dominican Republic, as well as airports in Uruguay and Chile. It completed, for example, the business plan at St. Maartens, the reconstruction of the runway and apron at Moncton, the new retail plan at Wellington.

It’s easy to see that an efficient, beautiful, fully-outfitted airport is going to be attractive to those who have to use it. But VIAA has to work as hard to sell YVR to everyone who needs an airport.

Janice Antonson, the VIAA Manager of Aviation Marketing, explains: “A lot of people don’t think of airport management as a competitive business, but it is. Airlines and passengers have a choice of which airports to use. Back when Open Skies lifted restrictions on who could fly into Canada, we had a lot of new carriers flying into Vancouver and we had to compete with other west coast airports—LA, San Francisco and, to some extent, Portland. And we had to fill this new terminal.

“We work with the carriers that fly into Vancouver and are the liaison between the tourism industry and the aviation industry. Once a route is brought into Vancouver, we help market that route. Our job is to ensure that all airlines that fly in, as well as travel agents and tour operators, are aware of the connections available through the airport, and the facilities and services we offer.

“Education is a big part of the job of this marketing department. For example, to help Philippine Airlines establish the Manila-Vancouver route, I would go to the Philippines and meet with their employees, most of whom probably haven’t been here and don’t know the airport. I give a PowerPoint presentation on the airport and its location. I explain about Vancouver’s Transit Without Visa program, which means that most travelers connecting to the US, depending on where they come from, don’t need a Canadian visa. You come in on a flight from Hong Kong, you go immediately to US Customs, so you aren’t technically in Canada at all.

“When you explain this, people realize that they and their customers can save an hour in the air, and another hour by by-passing Canada Customs. When you shave off that two hours, YVR becomes the logical choice. And for business travelers, time is everything. The new airport in Seoul, for example, is over a hour from the city—YVR is 20 minutes from downtown Vancouver. That makes a big difference. And what a great stop-over city. On an overnight stay, you can go skiing, shopping, golfing—whatever, and make a short trip back for your flight out. These things are very important to passengers and airline employees. And once they know all of this, they choose Vancouver.”

Antonson also works closely with the cruise ship companies, through the VIAA membership (along with Tourism Vancouver, Tourism BC and the Port Authority) in the Pacific Rim Cruise Association.

“We have to work with both the cruise ship companies, and with the airlines that feed the cruise business,” she explains. “Despite the cruise passenger traffic we already have, we actually suffer in the summer because we don’t have enough seats coming into Vancouver. Sometimes we lose up to 11 busloads a day to Seattle because all the flights coming into Vancouver are full. So we work very hard to encourage the airlines to put on a bigger aircraft and more flights.

“We have the capacity for the traffic, but the airlines don’t have the aircraft on this route in the summer—their aircraft could be heavily directed at Europe in the summer. And cruising is seasonal. So it’s a big challenge for us to keep the carriers bringing in their service year-round. The airlines have to make sure that the yield from the seat price is right, and that it’s good enough to pull a plane off another route. And they have to know that the plane bringing in those cruise passengers will leave full. It costs a fortune to leave a plane sitting on the tarmac—planes have to keep busy, so we have to present airlines with positive passenger flow numbers.”

Antonson has found that airline economics leaves little room for patience. “Once we get a flight coming into YVR, we need time to market that flight. For example, American Airlines was flying non-stop Vancouver-Miami, which was excellent, but that route was pulled after four months because the flights weren’t full. But four months isn’t enough time to fully market a route and make travel agents aware of it. It takes a lot of time and effort to make a flight successful. But the airlines have to put their aircraft where they’ll make money.”

Antonson, who would not state her marketing budget, makes sales calls to travel professionals and, for travel agents and tour operators, she produces numerous brochures, maps and booklets—everything they need to know about the airport, its facilities, its connections, and what happens to passengers upon their arrival. For others, annual reports, Skytalk Magazine and the annual Airport Business Report, are helpful. Then there’s the hard-core process of convincing the airlines to book their routes into Vancouver. All of that goes on in boardrooms during months of negotiations.

“Our Air Service Development people are in charge of negotiating with the airlines,” continues Antonson. “Some airlines approach us, we approach some. It’s an extremely complicated business and most people have no idea of what goes on behind the scenes. We can’t have carriers landing here unless they can feed into the rest of the network—they have to be able to pick up traffic elsewhere, they have to have the right aircraft and the capacity to service the route. During negotiations, they discuss everything from who the ground handlers will be, to slot times, to catering, to aircraft size, frequency of flights, destinations, where their airport offices will be.

“The airlines have to be sure that the route will be profitable, because anything relating to the operation of the aircraft is their responsibility and cost. They become YVR tenants. They have to pay landing fees, fuel taxes, airport taxes. They have their own employees, including mechanics, on the ground. It’s a significant dollar investment for them, so we show them the traffic numbers; they see how active we are at marketing the routes. It’s not something anyone takes lightly—every landing of an Air Canada 747 from Hong Kong, for example, generates 86% of a person-year of direct employment.”

Most airports don’t even have marketing departments—just communications offices. But as YVR was the first Canadian airport to privatize, the VIAA may have felt pressure to succeed, or saw it as an opportunity to do something very well. Either way, very little has not been done well.

“YVR is not just a pretty building in a pretty city,” says Antonson. “And our mandate is to market YVR as the Pacific Gateway of choice. We’re in a competitive business and have to work to get the airlines to come here and stay here. So we’re aggressive about it—we create and try new programs first, and now we’re the leader in airport marketing. YVR is a great success.”

Blitz Magazine, July 2001

Case Study: 1-800-GOT-JUNK? Becomes a Successfully Crappy Brand

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Blitz Magazine, March 2000

A freak storm hits. As you watch hail bounce off your Jaguar, you wish you had a garage.

Oh, wait. You remember that you do, in fact, have a garage. It’s just full of. Of…you can’t remember what it’s full of.

Determined to reclaim your garage, you call a charity, which says it’ll send a truck Monday, between 8:00 and 5:00. You spend your week-end sorting through mounds of old furniture, sports gear and broken gardening equipment. On Monday morning, you lug it all down to the bottom of your driveway and head to work, thoroughly pleased with yourself.

But when you get home from work, the heap is still there. You leave a message for the charity. No one calls back.

‘Next morning, you look in the phone book under ‘Trash Removal Services’. You call Guy With Truck, who says he’ll be there Saturday at 10:00 a.m. He can’t quote a price until he sees what needs to be removed. Your junk sits and waits; the city garbage men come on Wednesday, but ignore the silent plea for help.

Saturday, 4:00 p.m., Guy With Truck appears. His truck is filthy and so is he. He has one arm and one eye. Your neighbours call their dogs inside and lock their doors.

You have neglected to hide your Jag in your now-empty garage. Guy With Truck sees the Jag, sizes up your house and quotes you $600. You don’t care; you want your junk gone. You write him a cheque and watch him take two hours to load the stuff before chugging off in a cloud of exhaust.

This is not an exaggerated scenario. It happens all the time. But Vancouver entrepreneur Brian Scudamore has taken this unhappy situation and turned it into a multi-million-dollar enterprise.

In 1989, the 18 year-old Scudamore was working toward a commerce degree. At the end of his first year, he needed a summer job but couldn’t find one. Then he spotted Guy With Truck and thought ‘Hey…’.

He paid $700 for an old truck; $100 to have fliers and business cards printed. He didn’t want people to think he was a one-man operation, so he called himself ‘The Rubbish Boys’, and came up with the slogan ‘We’ll Stash Your Trash in a Flash!”. While his little brother stuffed mailboxes with fliers, Scudamore drove the lanes of the city’s west side. When he found an over-flowing garage, he knocked on the door and offered to remove the junk. By the time he returned to school, he’d made a $1700 profit.

Scudamore kept working at the business. By 1993, it was so successful, he decided to make junk removal his life. He incorporated, hired student drivers and invested in more trucks, all bearing the slogan and ‘Rubbish Boys: 738-JUNK.’ Between word of mouth and these mobile billboards, business took off. By 1995, revenues were $100,000.

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This success had much to do with how Scudamore differentiated himself from Guy With Truck. He offered same-day service and promised to remove everything except toxic substances. Rather than charging a rate based on his perception of a client’s income, he provided a printed, pre-set pricing structure (from $35 for a mattress, to $339 for a full truckload).

Not only did the Rubbish Boys not show up late, they called 30 minutes before to confirm the appointment. Their trucks were spotless. They were clean-cut, polite university students wearing snappy blue and green uniforms. They cheerfully removed your junk, and then cleaned up after themselves, sweeping garages and driveways and/or raking the grass. They provided proper receipts and, a few days later, called to make sure you were happy with your service.

junk6By 1997, Rubbish Boys had 16 trucks, 45 high-season employees and revenues of $1 million. Scudamore was nominated Entrepreneur of the Year by Ernst & Young and the Business Development Bank of Canada. He was one of 11 BC firms to make Profit Magazine’s list of 100 Fastest-Growing Companies in Canada—its five-year growth rate of 1,169% put it at #74.

There were contributing factors to this success. In Greater Vancouver, residents are allowed just two bags of garbage per week. And practically every city block hosts renovating yuppies, most of whom don’t know where the nearest dump is, let alone have the requisite vehicle.

Another factor is that charities are increasingly selective about what they take. They get way too much junk and don’t get a break from the dump—some charities spend $20,000 a year on dumping fees. You may think you’re doing someone a favour when you give an old couch to the Salvation Army, but if it’s torn or broken or water-damaged, it’s going to the dump at a pricey $65/ton (the average truckload weighs 1.1 ton).

In addition, Vancouver has many commercials and residential buildings belonging to absentee owners. These buildings are operated by property management firms—professional organizations that don’t want Guy With Truck anywhere near their clients’ properties. Also, while dumpster rental is cheaper than Scudamore’s service, construction companies often find it more efficient to hire him. Now, half of his business is residential, half commercial.

Then there’s the staffing aspect. Junk removal is an April to October business—that’s when everyone cleans up. With commercial contracts, Scudamore still has work in the off-season, but his business is largely seasonal. Seasonal business can’t afford to hire guys who need salaries; they need to be staffed by people who want to work only from June to September.

“For the first three years, Rubbish Boys was a student-run operation—you had to be a student to be hired,” recalls Scudamore. “But by 1998, I realized that, while students were professional, clean-cut and polite, they had no business experience. We were growing and we needed people who knew about building a business.”

junk5Not wanting to abandon his students, Scudamore instituted STEP, the Student Training in Entrepreneurship Program. He recruited students, and then helped them create mini-franchises. They were fronted the requisite cash and provided with a partner, a truck and a route. They received a base wage and a share of the profits; they had to do their own sales and media relations. The most profitable students in each territory received scholarships of $500 to $1000. To date, 180 students have participated.

There was more method to this: Scudamore wanted proof that his operating system could be franchised. Rubbish Boys’ 1998 earnings were $1.3 million; Scudamore saw that there was no barrier to his company’s becoming the Federal Express of junk removal. He had built his brand, it was time to franchise.

The company name became 1-800-Got-Junk? (inspired by the ‘Got Milk?’ campaign). The owner of the 1-800-Got-Junk? telephone number was persuaded to relinquish it. A $30,000, 12-line call centre was installed. Scudamore invested $500,000 in consultants and technology, and perfected a franchise system that easily allowed expansion. Information packages were produced, ads were placed in franchising magazines, the word spread, people started to call. Now there are franchises in Seattle, Portland, Edmonton, Calgary and Toronto. Scudamore’s goal is to have franchises in 30 North American markets by 2003.

junk3The 1-800-Got-Junk? system is simple. Scudamore selects two or three candidates per territory, depending on its size. Successful candidates have to know their markets and have strong sales skills. They must pay $20,000 to the company then invest another $30,000 on leasing, staffing and out-fitting an office; and on acquiring, painting, insuring and staffing trucks. Scudamore does not want franchise owners driving their own trucks.

“We want people working on the business, not in it,” he says. “These franchises are about starting from scratch and using our system to build the business. As people see the trucks and get to know about the brand, they’ll call. In the meantime, we want our franchisees knocking on doors, making presentations to property management companies and staying focused on growth.”

In addition to training, promotional materials and business plans, franchisees receive their phone systems as part of the package.

Regardless of where customers are, when they dial 1-800-Got-Junk?, they get the Vancouver call centre. The centre takes all bookings, organizes drivers’ routes and e-mails the orders to the appropriate franchisee, who re-confirms pick-ups and takes it from there.

junk4Franchise owners also receive the company’s proprietary management system—Junkware, a software package that handles all areas of operations, from scheduling to accounting to marketing.

“All of this is done on our server, but we’re not playing Big Brother,” points out Scudamore. “Junkware is a coaching tool—we want our people to succeed.”

Franchisees pay an 8% royalty, plus another 7% for call centre services. Their gross profit should be 40%, their net 20%. Fixed costs vary by market but, for a $50,000 investment, franchisees enjoy minimal risk in a lucrative, seasonal cash business. And it’s worth it. The Toronto franchisee became the largest junk removal service in that megalopolis after four months of operation. His 1999 sales were $250,000 with two trucks; this year, he has six trucks, 20 employees and sales should exceed $1 million.

 All of this without anything resembling a sophisticated marketing or media program. While Scudamore plans to actively advertise one day, he has always preferred the inexpensive, face-to-face approach.

“Paid advertising has never given us the same return as the face-to-face sales,” he explains. “We’ve tried radio—it wasn’t worth it. We had a little more success with newspaper advertising, but it’s too expensive. We do decals and t-shirts; we’ll take part in home and garden trade shows, construction and renovation trade shows. We just stay out there and keep reaffirming the brand. For us, the most effective way of communicating is via our trucks, our fliers, word-of-mouth and media attention.”

Scudamore has received loads of media attention. He coaches franchisees on how to garner it, and he gets involved in community events. For example, when the community of White Rock was devastated by rain and mud last year, Scudamore’s staff went there to clean up. Scudamore also invented a program called PRIDE: People Removing I-Sores Dumped Everywhere, through which 1-800-Got-Junk? works with community volunteers to clean up littered areas.

Last year, the company posted a website (www.1800gotjunk.com or www.rubbishboys.com). The site gets about 1,000 hits a week, but few people book on-line, preferring to call.

The slogan ‘We’ll Stash Your Trash in a Flash!” slogan is long gone. Now, trucks carry the new phone number and the website address. Liberal distribution of bright, die-cut fliers and $10 or $20 TrashCash coupons remain a mainstay, as does old-fashioned cold-calling.

So Scudamore has taken the most simple of businesses and given it an efficient franchising system and an easily-remembered call-to-action phone number. To date, he and his staff have delivered 15 million pounds of junk to dumps and recycling depots. He has 20 full-time employees and 75 seasonal employees. Sales for 2000 should hit $4 million. And he has no competition. Or….?

“I do have competition,” he says. “The guy with the truck.”

 

Good-Bye to a Master: David Ogilvy

Blitz Magazine, September 1999

David Ogilvy passed away in July, at age 88. Surprisingly, many people you talk to these days have never heard of him, but he was perhaps the most famous of ad men; certainly the only one credited with contributing to the Industrial Revolution.

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He started out as a cook, then became a door-to-door salesman for Aga Cookers. During the war, he worked with  British Security Coordination, then moved to Pennsylvania to live with the Amish and work as a farmer. Somehow, the next logical step became a move to New York, and the advertising industry. In 1948, he co-founded Hewitt, Ogilvy, Benson & Mather; in August, Vancouver became home to Ogilvy & Mather’s 360th office.

Among Ogilvy’s pet peeves was the fact that many agencies, in their never-ending quest for increased billings, waste their clients’ money. By failing to learn from the experience of others in their industry. By encouraging or condoning Creative by Committee (a.k.a. ‘team work’ and ‘brain-storming’). By expending gobs of time and money on trying to be creative and entertaining and artistic, instead of producing advertising that makes people want to buy their clients’ products.

Another complaint was that agencies, often only for the sake of creating something new, replace advertising that is working perfectly well, instead of staying with it until it stops working and product sales start to slump. You know the line in today’s Dove (soap) commercials: “Dove doesn’t dry your skin the way soap can”? Ogilvy wrote that. In 1958.

Ogilvy believed in the power of imparting information through words. Today, writers have to slash copy to fit design, and grammar is rendered irrelevant; in one of David Ogilvy’s most successful car ads—for Rolls Royce—the ad consisted one photo and 607 words.

ogilvy2In his view, education and research were paramount and the biggest waste of clients’ money stemmed from the failure of agency personnel to learn. About the products they’re trying to sell, how and why the products are made, how they work, how they fit into their industries, how they are viewed by consumers. And he urged everyone to watch what direct -response advertisers do—he believed that they were the most knowledgeable of all advertising professionals.

He wrote three best-selling books on advertising. They should be read by everyone involved in marketing, advertising and public relations. Because there is no disputing that, even if he was a little pedantic, David Ogilvy was always right.

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Case Study: It’s Onward & Upward for Uniglobe Travel

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The airlines have slashed travel agent commissions; we’re supposedly in recession. ‘Tough times for travel agents? Not if they’re with Uniglobe Travel.

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You may recognize the name of U. Gary Charlwood, Chairman of the massively successful Century 21 Canada. The business philosophy of Mr. Charlwood (as everyone calls him), in a nutshell, and as his entrepreneurial history suggests, is ‘Sell, Sell, Sell, Service, Service, Service and Be Very Very Well-Organized.’ He also believes that, once you articulate your vision and give your staff the tools with which to carry it out, you should leave everyone alone to do their jobs.

After building his real estate operation into the force that it is, Mr. Charlwood knew that his philosophy, coupled with his co-operative consumer marketing methods, could be applied to other service industries; and he believed that an internationally-recognized consumer travel organization could succeed through strength in numbers of locations, and high sales volume. In 1980, he founded Uniglobe Travel International.

Today, Uniglobe is the world’s largest travel franchise company, with 1997 sales of $2.7 billion. It employs 6,000 people at 1,000 offices in 20 countries, with head office in Vancouver. It owns Uniglobe CruiseShip Centres and San Diego-based convention organizer Uniglobe Main Events. It was the only travel company recommended as a franchise buy by The Wall Street Journal’s 1998 National Business Employment Weekly Annual Listing and, in the travel industry, only American Express has higher unaided brand identification. Its first Middle East markets opened last year; it will next expand into Central and South America, the Far East, and Africa.

The reasons for Uniglobe’s success are varied, but basic.

First, it filled a niche. Any travel agency, of any size, is built on a core base of business accounts, and it used to be that only large corporations had access to the complete range of travel perks and services. Uniglobe specialized in providing big company services to small and mid-sized businesses (with 5-50 travelers). It now holds 100,000 corporate accounts; 70% of its business is corporate, but its goal is to increase its leisure business and bring the mix to 50-50.

uniglobe2Next, Uniglobe offers a superior franchisee support system. To be successful in this ultra-competitive field, travel agents need strong brand identification, technological support, access to professional training and development, back-office management controls, effective marketing plans, solid relationship with preferred suppliers and access to promotional initiatives. Uniglobe delivers it all, right down to free office automation. The high brand awareness is a big draw for potential franchisees, and Uniglobe spends $20 million annually on international brand identity, advertising, promotions, public relations and direct sales programs.

Another key to Uniglobe’s success is its commitment to a high level of customer service. Its research shows that consumers expect a professional agency to address four service categories: Cost Containment & Control, Experience & Expertise, Accessibility & Advanced Communications, and Reliability & Responsiveness. So Uniglobe gives people what they want. It guarantees the best possible value in all fares and constantly evaluates cost-management strategies, savings opportunities and spending patterns. Experience & Expertise are handled by Uniglobe’s franchise recruitment and selection process.

“We’re so well-known as a leader in both travel and franchising, that people looking at franchising automatically come across Uniglobe,” says Laurie Radloff, President of Uniglobe Travel Western Canada. “And when we’re looking at new markets, we’re careful in our recruitment. A lot of people today are dissatisfied with what they’re doing. We know that there’s great personal satisfaction in owning your own business, and we know that Uniglobe agents love what they do, so we do print and radio campaigns with the theme ‘Do What You Love’. We talk to the banks and chambers of commerce to see who’s successful in their areas; we look at existing agencies to see if there are people who we feel can represent our name. We never place a franchise for the sake of having an outlet—we want to make sure that our name and brand are handled properly and that we have the right cultural fit. There’s a very high level of trust among those using our name, so we have to have the right people.”

Who have to have money. “They do have to be properly capitalized, although we don’t cause them to buy any products,” continues Radloff. “They pay Uniglobe a royalty, starting at 10% for every dollar they earn in commission. As sales rise, that percentage declines. That royalty could be a little high, but that’s because Mr. Charlwood knows what level of support franchisees require. We often hear about franchisees of other companies who are unhappy with the level of support they’re getting from their franchisor but that’s because, financially, the franchisor can’t do more.”

Uniglobe provides professional training in sales, customer service, marketing and operations, as well as on-going support in business administration, sales development, financial controls, market research, strategic planning and supplier relations. All of this translates into better customer service, and the level of experience and expertise that customers want.

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Consumers want accessibility? No problem. The Uniglobe Customer Commitments promise that phone calls will be answered by the third ring, that callers never hold longer than 30 seconds, and that every call is returned within the hour. You find yourself trying to tell the customs officer/janitor in Novosibirsk that you’re supposed to be in Newark? Uniglobe has a 140-language interpretation service. ‘Course, that shouldn’t happen anyway, because Uniglobe guarantees error-free reservations and 100% accuracy in documentation. There is a Lost Luggage Control System, a 24-hour Rescue Line and the promise that service complaints will be resolved within 48 hours, supplier complaints within 15 business days.

Technology is another important component at Uniglobe, which has its own software: Travel Manager, and Software for Agency Management. Also, Uniglobe Net News, an extensive agent Intranet, piggy-backs Uniglobe Travel On-Line, an Internet booking and information system which was launched three years ago.

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With Uniglobe Travel On-Line, consumers can book car rentals, hotels and flights, choose seat assignments, order special meals, obtain street maps, book cruises and tours, research destinations and find restaurants, currency information, last-minute promotions and weather reports.

“The Internet travel segment is growing very quickly,” says Radloff. “Booking travel this way is a big leap of faith at first, and there’s no question that a well-trained travel consultant is the best value. But if a client’s on a plane at 2:00 a.m., and wants to make a reservation on his laptop for a 10:00 a.m. connecting flight, we have to be able to provide that service.”

Uniglobe is careful to see that this system does not exclude its agents. An income-splitting formula pays franchisees a referral fee, 10% of online revenue is distributed through a group fund, and another 10% goes into an advertising fund.

“The site is good for our agents too,” continues Radloff. “At 2:00 a.m., that client’s only other option is to call the airline to book that flight. This way, the agency gets a little commission and gets the data on the booking and can follow up with the client. The site gives clients 24-hour access; it gives agents a 24-hour office. Plus, you don’t have to be an existing Uniglobe client to use the online service, so agents gain access to new clients.”

Uniglobe Travel On-Line is a separate public company and its stock hasn’t done that well, but the site is coming along, with a booking-to-looking ratio of 1:74 and sales of $5 million to November 1998, as opposed to $1 million for all of 1997. And it’s a great system. But so is Microsoft’s Expedia, one of the web’s most popular travel sites. So, in November, Uniglobe entered into a joint-marketing agreement with Expedia. This accomplished two things—a tough competitor is now a partner, and Uniglobe has access to Expedia’s three million customers and is closer to attaining the aforementioned goal of a 50-50 leisure-business mix. (In the travel business today, leisure is the hot market—no matter how tight the economy is, seniors and Boomers will keep traveling.)

Cyber-competition is only one challenge facing travel agents. There are also increasingly complex bulk-purchasing and fare packages, frequent flyer programs and the ubiquitous fly-by-night operations which muddy the waters for reputable companies. Consumers now have so many choices that a successful travel agency has to give customers special reasons to come to it, and stay with it. Those reasons have to be brand loyalty and value-added products and services. Which have to be communicated through marketing, advertising and public relations.

The Uniglobe marketing plan is written following consultation with franchisees. Preferred supplier recommendations are then collected, and listened to. All travel agencies have preferred-supplier relationships; Radloff says that Uniglobe takes its relationships more seriously than does its competition. And these relationships are crucial to stretching the Uniglobe advertising budget. Uniglobe spends $1 million annually on straight advertising, but that budget is extended by as much as 40%, due to the fact that 75% of advertising is co-op (and most visuals are provided by suppliers).

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The plan includes four main marketing pushes per year; one or more could be on cruises, one could be the Caribbean in January, another on Europe in June—it depends on supplier input and on what key interest areas have been identified among travelers. The international quarterly campaigns come out of California; they are supplemented with regional, then local, campaigns. Most advertising is print; outdoor and telemarketing are not used. There are six to eight weeks of television each year, radio use is rising and direct mail is a constant, with 100,000 pieces mailed quarterly.

The non-Canadian markets handle their own advertising. Radloff says that, in Canada, the advertising focus is on offering holidays at destinations where the Canadian dollar will go the farthest.

“We sell on value, not on price. For example, people frequently say they want an inexpensive holiday and that they don’t care about their hotel, but that hotel becomes important when they get there. We can provide a nice hotel at a price they can afford because we use our clout and buying power to deliver quality products in a cost-effective manner. We also provide products like Rescue Line, Travel Manager and a preferred-rate hotel program called Key Cities—this is all extra value at no extra cost to the consumer.”

Uniglobe’s strategy for 1999 is to position itself as ‘The Navigator of Options’, with the goal of convincing consumers that Uniglobe agencies can best help them wade through the sea of travel options. Uniglobe’s corporate marketing uses the Uniglobe Travel Plan, a travel purchasing system which incorporates Uniglobe Travel On-Line and the Uniglobe Cruise Program. From the client’s perspective, it is a travel management and purchasing system; from the agent’s point of view, it is a sales kit with corporate proposal templates and a PowerPoint presentation.

“Our corporate marketing is mostly face-to-face,” says Radloff. “We have a professional, well-trained sales force and our salespeople are out knocking on doors, calling on clients, making presentations. No one at Uniglobe waits for the phone to ring—they’re out closing sales and getting the business.”

One very important aspect of Uniglobe’s communications activities is positioning. Not positioning as in ‘We’re A Really Good Travel Service,’ but as in ‘We’re A Really Good Travel Service and We’re On Your Side!’.

“Since its inception, our focus has been on building the Uniglobe name into the most widely-recognized name in travel—to be to travel what Campbell’s is to soup,” explains Radloff. “So while the competition advertises price, we talk about other things. People like to spend their money locally, so we talk about the fact that Uniglobe’s agencies are local but have global clout. But, to take that name recognition further, and to inspire confidence, we’ve positioned ourselves as problem-solvers and as the advocate for the traveling consumer.”

Two years ago, when Canadian Airlines had its near-death experience, Uniglobe was the only travel company that leapt into the fray, with Radloff appearing on Canada AM and various radio programs to talk about how having only one Canadian airline would not be in the best interest of consumers because of the negative impact on service, pricing and availability. While we assume that there’s no point in going to Hawaii because of the exchange rate, Uniglobe is out telling the media that the Asian market for Hawaii has withered, hoteliers are under tremendous pressure, air space has tripled and fares are down from $600 to $99. Every time a travel scam pops up, so does someone from Uniglobe, educating consumers about what to watch for. And, thought his may be stretching things a bit, after the recent Carnival Cruises on-board fire, Uniglobe became the exclusive dealer of Evacuate, a smoke-hood-in-a-can which provides 20 minutes of clean air. 

All of this is advocacy, it is brand-building, it is confidence-inspiring PR. And PR is a huge component of marketing at Uniglobe, where every message sent to the public is, quite literally, identical. This is achieved through the Agency News Media Program, a PR-Program-In-A-Box created by Uniglobe’s PR firm, Vancouver’s Verus Group.

“Uniglobe is one of the more enlightened corporations I’ve worked with, in that Mr. Charlwood has always instinctively understood that marketing and PR should be inextricably linked,” says Verus Group president Wayne Hartrick. “In some organizations, the PR and marketing functions are clearly delineated, which is a shame because there should be a coordinated strategy between them so that every dollar and every employee hour spent is leveraging their combined impact.”

To that end, Uniglobe’s four annual marketing pushes are supported by PR pushes on the same subjects. If the company is marketing cruises, Verus writes releases on cruises. It then sends the releases to national publications, then to all franchisees, who send them to their local papers. If a local paper asks a franchisee to write an article, it’s ready to go—Verus has already written it; the franchisee just changes the by-line. Promotion may be the intention, but it doesn’t carry the aroma of advertorial; publications passing it on to their readers do so because it’s useful, helpful information.

“This method has helped our agents become known in their communities as experts in their field,” says Radloff. “It is an extremely cost-effective way of achieving our marketing objectives, because it’s exposure that brings with it a credibility that you won’t get if people know you’ve paid for it.”

As mentioned, Uniglobe’s Agency News Media Program is literally in a box. It is a kit which includes articles and news releases on the subjects determined by the marketing plan, plus a 30-minute video, and a workbook that teaches franchisees how to deal with journalists and earn credibility in their communities. New franchisees come to Vancouver for PR training, then Verus Group staffers coach agency owners over the phone, encouraging them to work the program, and motivating them to build their profiles in their locations. If that sounds like a pain for both sides, it evidently was, initially.

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“The program takes patience and commitment,” says Hartrick. “It’s a challenge to get everyone to do PR because people are busy and there’s always another priority. And they get discouraged—we’ll issue a release, the franchisee can’t find an interested reporter and gives up. We encourage them to try other things, show them how they can become regular columnists and how to make presentations to corporate and community groups. This program of encouragement is crucial. Eight years ago, we just distributed the kits and had a 10% implementation rate. Now, with daily contact, we have a 62% implementation rate, and it’s climbing.

“This is all about credibility. If you’re writing in the local paper, or being quoted by your local media, your other marketing activities are met with less resistance. Uniglobe’s combined programs are generating 400,000 impressions per day from print alone, and these impressions carry the extra impact of having grass-roots credibility.

“Our research shows that most consumers see travel as a problematic experience,” concludes Hartrick. “We make sure that Uniglobe gets its name in the media for the right reasons—because it’s solving problems for people and providing useful information as well as quality, high-value products. The whole principal behind this, after all, is to do something well and get credit for it.”

 

Blitz Magazine, January 1999