Rory Sutherland Columnist I Dont overlook the basics have a name for a few weeks ago. When reading a piece by the recently spoke to Dr Stephan Vogel, the creative director of brilliant business writer Roger L Martin, I discovered that more Ogilvy in Europe. Stephan is German. He is also a genius, as than 20 years ago Procter & Gamble had appointed someone as evidenced by his authorship of a wonderful campaign head of commercial innovation, which the company ingeniously promoting Deutsche Bahn, the company that runs the defined as any innovative activity that doesnt change the product German railways. The creative team used artificial intelligence to itself, but seeks to improve and explore new ways for consumers to find photographs of places in Germany that visually resembled engage with, use or pay for it. It is distinct from R&D, which seeks more exotic foreign destinations and then, using behavioural to invent new products or materially enhance existing ones. economics reframing, juxtaposed live rail ticket prices to the Mainstream economics tends to discount the importance of German attraction alongside the (vastly higher) airfare to reach the product innovation because it treats everything as a commodity, more distant, but equally attractive, national attraction. and assumes theres a straightforward value exchange between One question I had for Stephan was this: why was Germany such volume and price. In the real world, this isnt true. a bit-player in the global tourism market? Ive always regarded I can think of many billion-dollar ideas that have emerged German tourism as a missed opportunity, a dog that doesnt bark through a clever piece of commercial innovation: the Starbucks in the night. It is a glorious country with reasonable prices, stored value card, Amazon Prime and the Nespresso subscription marvellous infrastructure, fabulous landscapes and historic towns programme are just three examples. and cities rich in culture and architecture. The climates not bad How you charge can make more and the locals largely speak English. Why dierence to your business than how would it seem totally normal to say were much you charge. If we were billed going to Florence for the weekend, but annually for our Starbucks consumption, not Freiburg, Mainz or Cologne? How you charge can make wed probably all stop drinking coee! I Stephans explanation was simple. The more dierence to your would further argue that the introduction Federal Republic of Germany is exactly business than how much of Londons ultra-low emission zone that: federal. The budgets for tourism are you charge (Ulez) would have aroused far less held at the level of the individual lnder. hostility had there been a more nuanced Since most non-Germans dont know approach to charging, and that the where or what Nordrhein Westfalen or recovery of Britains railways after Covid-19 will also depend on Schleswig-Holstein are, the branding doesnt really work, so coming up with better ideas for pricing. The season ticket is a Germany doesnt really advertise its many attractions overseas. nineteenth century anachronism. It would make much more sense to pool the money and advertise Maybe the success of your product isnt being hampered by what the country. We wondered if we could suggest that the German it is thats the province of R&D but by lack of commercial government did exactly that. innovation, which is the province of, well, kind of nobody. Its sort I tell this story to illustrate something very simple. Quite often, of a marketing question, and an economic question, and an the reason we dont do something is really quite silly. If you dont operational and technological question. As a result, I think, have a department for something, or if the budgets arent in the responsibility for it falls between five dierent stools, meaning that right place, nothing happens. Whole valuable fields of valuable everyone ignores it. Consequently almost any business, including business activity are neglected for this reason. my own, could benefit greatly from experimenting with dierent Former marketing professor Mark Ritson has pointed to two ways of selling what they do. As with the German tourist industry, woefully neglected activities in the field of brand-building: namely structural and bureaucratic factors have simply led to something sonic branding and brand partnerships. I dont think it is a very, very important becoming woefully overlooked. If we want to coincidence that these are two activities that dont really have grow the economy, and you want to grow your business, this may budgets or departments specifically charged with pursuing them. well be the first place to look. To Marks pair I propose to add a third something I didnt even 7 Impact ISSUE 43 2023_pp6-7_Rory.indd 7 18/09/2023 11:52