Consumers today increasingly use ATM debit cards, on-line bill pay, wire transfers, and other electronic methods to pay for goods and services. As a result, the demand for paper checks is in decline, shrinking at the rate of 3-4% a year and not likely to reverse course. Yet Deluxe Financial Services (DFS), the world's largest check printer and a division of Fortune 500 firm Deluxe Corporation, isn't ready to write-off the check printing business yet.

Four years ago, DFS President Chuck Feltz and his senior management team acknowledged they couldn't stop the decline of the check printing industry in general and that check usage was unlikely to grow, no matter what. But, they wondered, was there something that checks offered (or could offer) consumers? They also asked themselves, given a declining industry, how could the division get more business from its primary customers, financial institutions (FIs)—banks, credit unions, and other financial services firms. They knew that, like any other group of businesspeople, its FI customers wanted their companies to grow and thrive and their individual careers to advance and would only give Deluxe money, and more of it, if they got something that they wanted. But what could Deluxe offer that its FI customers wanted as it relates to printing checks?

To answer these mission-critical questions, Deluxe partnered with Copernicus and launched one of the largest, most sophisticated strategic marketing studies ever undertaken in the financial services industry among consumers and FIs. Among consumers, Deluxe and Copernicus found a sizable group very excited about buying more designer checks with different pictures, colors, animals, and prints that allowed them to express their unique personalities and interests (something electronic payment methods could not do for them), but lamented that the "retail experience" at their FI didn't entice or excite them. The FI customer service rep pointed them towards the standard "blue," inexpensive checks. Meanwhile, the research among FIs uncovered a large group of decision-makers who could barely contain themselves talking about their need for assistance creating unparalleled customer experiences. Many FIs admitted they struggled with customer relationship management.

Deluxe realized it could leverage its knowledge about consumers and check expertise, and put an infrastructure in place to help FIs with their biggest want—creating better customer experiences. Deluxe believed it could "own" the entire customer relationship when it came to checks, delivering an experience so extraordinary, it forever impacted the consumer perception of an FI. Delivering what their customers want with a phenomenal experience that would bring in higher profits for the FI and ultimately win more business for Deluxe.

DFS immediately set about transforming itself from a check "printer" to a check "retailer." In 2002, after extensive concept testing, the company launched DeluxeSelect^SM, a service powered by the richly-detailed consumer segment profiles Deluxe and Copernicus had created. The service offered FIs the chance to streamline their operations by letting Deluxe provide, "the right check products, through the right channels, and at the right price," thereby increasing the profitability of their check buying program and improving the customer experience. DeluxeSelect^SM quickly exceeded sales and profit objectives and is widely heralded in the industry as a major success.

When it came to marketing communications, Deluxe decided to produce knowledge-focused events exclusively for its FI customers where they learned about building better customer relationships. The Deluxe Knowledge Exchange Series (KES), launched in late 2003 as the cornerstone of DFS' marketing program, included insightful articles, web seminars, and audio conferences written and given by leading marketing authors and customer experience consultants on a quarterly basis. After attending a KES event, 87% of customers indicated they view Deluxe as a strategic partner, as opposed to a commodity vendor, and 89% reported they're more likely to do business with Deluxe. As an extension of KES, in 2004, Deluxe also established the Knowledge Exchange Collaborative, which brings together a select group of customers and leading academics to tackle different customer experience issues, develop solutions, and even do some in-market testing of solutions before sharing findings with the larger Deluxe client base. One of the first collaborative meetings was held at Harvard Business School.

DFS could easily have become yet another casualty of a shrinking and commoditizing industry, but instead it transformed itself into a valued partner to FIs across the country. DFS today is driving the future of the company and is well on its way to becoming the stuff of business legend.

We've always gotten a kick out of John Stossel's commentary on the ABC television network's venerable news magazine program, 20/20, which always conclude with his frustrated dirge, "Give me a break!" We've found ourselves echoing his sentiments, in between moans and groans, after reading several outlandish claims about positioning—commonly defined as the one, two, or three words, phrases or sentences about your brand that you want to imprint in the heads of key stakeholders—and the importance of differentiating your brand from competitors in recent weeks.

In an early August editorial in Advertising Age, futurist Faith Popcorn wrote, that "differentiation is beside the point." She's hardly the only rabid anti-positionite. A senior VP of marketing at a major package goods company a short time ago told us, "Brands don't need a positioning any more." We also tuned into some of the popular business and branding blogs and came across postings questioning the relevance of positioning and musings that the concept has become outdated.

While it's true that positioning is about as close to death as you can get without the next of kin pulling the plug, the sad state of this fundamental marketing concept is not the result of irrelevance, but of malignant neglect. We conducted an exhaustive content analysis of more than 450 primetime television commercials and found just 7% have anything one could begin to describe as a positioning, [for more on this study, see "Whatever Happened to Positioning"]. Just as disturbing, there's nary a reference to positioning in a number of the best-selling books on marketing and branding.

The dearth of contemporary examples of strong positioning may have lead some marketers to conclude it isn't necessary to have one, ergo it's a defunct concept. But in this day and age of hyper-competition and unprecedented choice, differentiating your brand is about as far from meaningless as Pluto is from the Sun.

We've confirmed through extensive research that buyers in a wide array of consumer and business-to-business categories perceive brands as becoming more similar over time than different. So how do they make a purchase choice from a wide array of competing options? They buy what they see on the shelves, what brand name they happened to remember, what sales rep called the most, and which one has the lowest price. Basically whoever shouts the loudest and/or drops their price on any given day gets the nod. But these aren't sustainable competitive advantages and certainly don't foster loyalty. If a competitor runs more advertising or drops price next week, buyers forget all about the brand they seemed to love just days before..

One of the criticisms of the concept of positioning is that it's impossible to find a compelling point of differentiation that appeals to all people. That's true, but who cares! You don't want or need to appeal to everybody, just the customer target(s) that you determine to be most profitable to your brand. In fact, we suspect that positioning is such a counterintuitive idea to so many marketers in large part because so little time goes into the targeting decision, and even less research. Once you know who you want to target, it's no great stretch to determine what will compel them to purchase your product or service and give your brand a raison d'être that will compel action.

Popcorn, in one of her frequent moments of illogic, also wrote in her editorial, "What matters to consumers today is how you connect with them, not how you separate yourself from competitors." Wouldn't it follow, Faith, that companies that understand what they want to be in the minds of their target buyers and implement a strategy to earn that spot connect with their customers and distinguish (a.k.a., differentiate) themselves from competitors?

In the immortal words of John Stossel, give us a break!

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For those of you wondering what to expect from the 2004 Fall television season in the U.S., you can rest assured that there'll be plenty of "reality" television fare from which to chose. Granted, many reality shows have been successful, grabbing viewer attention and raking in advertising revenue, but we still wonder if a strong dose of "reality" is really what American TV networks—ABC, CBS, NBC, Fox, WB, and UPN—needed.

Audiences began a steady migration to cable and other entertainment fare (i.e., the internet) in the late 1990s, spurring many advertisers to question the future of TV advertising and to look at other options. But even as networks scrambled to develop programming to win back viewers, the rate of failure for new dramas and comedies remained high, with certifiable hits few and far between. Costs of producing traditional shows had also soared as actors, directors, and screenwriters demanded high salaries and other perks, which networks were all too willing to pay if it meant keeping stars and storylines that would grab eyeballs.

The networks seemed desperate for a solution, and—like a knight in shinning armor—in strode reality TV, a cheaper product with no actors with star-studded salary and benefit demands; no scripts so no screenwriters; no expensive sets to maintain; and story lines/competitions that captured the attention of viewers. Within three years, reality TV dominated network programming. "Before the [2003-04] season, you basically had one reality show working on each network," explained Steve Sternberg from media firm Magna Global. "Now reality has been integrated into their lineups; they're not being considered alternative programs anymore."

Though much talked about and hyped as the savior of network television, reality TV has not reversed audience declines. During the 2003-2004 season, viewership fell 3.6 percent, while cable was up 3.3 percent. Costs to produce reality shows have also started to rise as star directors, hosts, and key "characters" demand their share of the genre's success. Real estate tycoon Donald Trump, for instance, the star of reality hit, "The Apprentice," demanded and received a 360 percent pay raise to $18 million per episode for next season.

The shows themselves are still profitable at the moment, earning ad revenues, but recall that the majority of money made by networks comes from building a collection of shows to sell as syndicated reruns to local and cable stations. Rebroadcasts of reality shows haven't produced high ratings, leaving the networks potentially without a traditional and heavily counted-on source of revenue (not to mention local affiliates without programming).

Reality shows may have temporarily helped TV networks, "to get an audience, but I don't think it speaks to how you build a long-term strategy," commented Shari Anne Brill, an analyst at leading media firm Carat USA. Copernicus recently recommended 20 different ideas to one of the three major networks for improving programming, ratings, and profitability. Senior execs demurred, saying, "we don't' have the time or the money to do any of these things. And we responded, as we always do, "how come you don't have the time and money to get it right, but you have all the time and money to keep making the same mistakes over and over again?"

Perhaps they thought they'd be OK with reality TV, but from where we're standing, it looks as if this genre of TV programming was another example of a short-term solution that may actually cause more problems that'll have to be fixed in the long run.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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We've often said—tongue-in-cheek, mind you—that testosterone impairs the judgment of marketing managers and compels these poor, hormonally challenged souls to make critical decisions as quickly as possible, with as little serious thought and research as possible. So you can imagine our curiosity in book that speculates—in this case, not so tongue-in-cheek—that too much testosterone is to blame for the fall of four of America's celebrity CEO's: Revlon's Ron Perelman, Chainsaw Al Dunlap from Sunbeam, Dennis Kozlowski of Tyco, and the king of them all, GE's Jack Welch.

We can't say there are many important nuggets of business wisdom contained in the pages of Testosterone, Inc., but, aside from offering a fun read about the outlandish escapades of four well-known businessmen, it does offer an implicit caution against deifying business leaders.

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The first takes place on January 12-14, 2005, in Miami: the Institute of International Research's Return on Marketing Investment, The New Era of Accountable Marketing, "the premiere conference for cross-industry learning on the organizational, tactical, and strategic aspects of building accountability and linking marketing to solid financial returns."

At this conference, Copernicus chairman and CEO Kevin Clancy will give what is sure to be one of the most talked about presentations of the year: "Beyond STM and Marketing Mix Modeling: The Evolution to Marketing Navigation Stations." Add this link to your bookmarks and check back periodically for conference updates and registration information: http://www.iirusa.com/accountablemarketing/

The second takes place May 9-11, 2005, in Chicago: the American Marketing Association's Strategic Marketing Conference, which will once again feature the best thinkers, best books, and best ideas in marketing. Again, add this link to your bookmarks and check back periodically for conference updates and registration information: http://ecommerce.ama.org/strategic.htm

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