Noel Leeming, Harvey Norman, Bond & Bond. Please spend less on advertising.

I bought a new TV over the break.

I’d been thinking about it for ages but had caught myself in that trap of not being able to commit knowing that something thinner and more attractive would come along as soon as I did.  And while I was certainly looking forward to owning a new TV, I wasn’t really looking forward to the process to be endured in order to get one.  (Vaughn Davis wrote about his recent experience here, and I was expecting much the same.)

So I ventured into Noel Leeming in Newmarket with due sense of dread and trepidation.  But what a pleasant experience it was.  A smart, helpful, young man answered some questions, made some suggestions, sold some accessories and dispatched me with a lovely new TV. All in all, an enjoyable experience with an excellent outcome.

And then I opened the paper the following day and got hit by the barrage of advertising from Noel Leeming/Harvey Norman/Dick Smith et al.  All of it was entirely focused on telling me what I already know.  Because I know that they are all cheap. I know that they will all price match.  And I know (or at least I believe) that they all sell much the same stuff from much the same brands.

Which got me wondering about why every one of those retailers is putting so much focus on the area of the market where there’s no meaningful differentiation to be found.  There must have been $100k spent by the main players in the Saturday paper.  All to say the same thing.  In the same way.

Maybe I’m missing something obvious, but it does seem like one of those self-reinforcing arguments that marketers create. We believe that price is the primary driver (and I’m not for a moment suggesting it’s not very important) so we focus all our marketing on price. Then we ask people what matters to them, they say price, partly because it’s true but partly because it’s what all the marketing focuses on so it seems like it must be what matters. Which means we then focus all our marketing on price…..

But it’s ultimately undifferentiated.  If they’re all about price, and they’re all about price, then aren’t they all just spending a lot of money to create a very expensive ground zero?

In contrast, the experience I had was quite differentiated. The guy who sold me my TV had a great manner (which I know you can’t teach) and excellent product knowledge and sales skills (which I know you can).

So why wouldn’t they take some of the money they spend on non-differentiating retail advertising and spend it on a lot more very-differentiating staff training?  No all of it, obviously, but they could then spend some of what’s left on advertising that tells people about their focus on staff training, which would also be differentiating (bearing in mind that that advertising is likely be as effective as the retail advertising in keeping their store top-of-mind). And they could spend a decent chunk of it on Search.

So they’d still be in the ‘price’ game, but they’d be carving out a new service/experience game? Maybe?

I’m certainly not trotting out an argument for more ‘brand’ advertising here. That’s the last thing I believe is needed. And I’m not arguing for no retail advertising, as clearly it has a big role to play. It’s just that it can’t be the only thing that matters, and from the outside it looks like all the effort, and money, is going into a territory that’s ultimately a bit fruitless.

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Noel Leeming, Harvey Norman, Bond & Bond. Please spend less on advertising.

2 thoughts on “Noel Leeming, Harvey Norman, Bond & Bond. Please spend less on advertising.

  1. Jason says:

    if you have ever visited Noel Leemings marketing department you would realize why. Their entire focus is around what the competitors (namely HN) are up to and reacting to that rather than using research to see what the customers actually want.

  2. I’ve long advocated the same thinking but for Harvey Norman actually. Principle is the same.

    Give me a great experience and I will gladly pay $10, $50, $100 more (depends on the overall purchase) to know that I have exactly what I should have, the best after-sales service, a knowledgeable person helping me, and just that little bit extra feeling that they care.

    100% Electrical did some brand advertising a couple of years back that attempted to differentiate them on overall experience. Not sure if it work for them but I think they are just too small to play with HN, NL, etc.

    In short, spend more on being and less on saying.

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