Change is really hard.

Whenever one considers changing a system – even if it’s to innovate and improve that system, there are always a number of good reasons to avoid the change altogether and keep things as they are. Is it worth the effort, the risk and the cost to change something that works now? Will the old way be missed? Will something valuable be lost if there is change? These are all legitimate and often used questions that can and occasionally should stop innovation.

My favorite reason – often persistent, often misunderstood and always ultimately wrong – is the cover art.

In the 1940’s and 1950’s record companies began to illustrate the covers of records to help sell their products, differentiate performers, and catalogue collections. In the 1960’s, 1970’s and 1980’s, record companies increasingly referred to the cover illustration as “art”. In many cases, the cover art seemed to transcend the record album itself. Anyone listening to music in those decades remembers certain album covers in detail and with fond reverence – in many cases, part of the experience of listening to music was related to the imagery on the cover.

A stand out example would be The Beatles’ Sergeant Pepper’s Lonely Hearts Club Band, designed by Robert Fraser, Peter Blake and Jann Haworth with a complex and expensive collage of celebrities past and present (the cover cost 100 times as much as the average cover of the time).

The Cover Art became so important to performers and their record labels that some designers and visual artists became known predominantly for their Cover Art, such as the design team Hipgnosis (Pink Floyd’s The Dark Side of the Moon) and Roger Dean’s work for Yes and Asia. It almost seemed as if cover art had become a separate form of art, collected and in many cases even framed by enthusiastic music fans.

Despite it’s value as a branding device and marketing tool, the art on the cover of the record was ultimately of secondary importance. People bought records so that they could easily listen to the music inside – not because of the wrapper. The cover art may have helped encourage them to buy, but it was never the primary reason they did so.

When Compact Discs supplanted vinyl LP’s in the mid 1980’s, many skeptics of the new format pointed out that a smaller disc size did not allow for the same quality of cover art. In addition to concerns about replacing an existing library and a loss of some sound characteristics of vinyl recordings, music buyers wouldn’t accept the format in some part because they wouldn’t be able to enjoy the art they loved.

And yet, by the mid-nineties, vinyl records had become a niche product revered mostly by nostalgic collectors, but not a serious part of the music industry. In the beginning of the 21st century, when MP3 players such as the iPod came along with digital music downloads and almost no room for Cover Art, it only took a couple of years for mainstream consumers to throw away their love of cover art and buy songs without it. It turns out that none of the reasons for staying the same, including the cover art, are compelling enough to stop change.

The record companies were selling the vinyl records wrapped in cover art. The “art” was a powerful tool from marketing but at the end of the day, their customers were buying music – not records or art. The instant someone offered them a significantly better delivery device for the music, they would switch.
How important was Cover Art to the buyers? They liked it. They put it on their walls, they collected it. But they didn’t really ask for it; they never bought it.

Cover Art occurs in almost every mature system, whether it’s the record industry, a government, a car company or a bank, “Cover Art” can be identified by the following factors:

It is something offered that is incidental or even immaterial to the problem a customer is try to solve. In the case of records, the customer was trying to fulfill their desire to hear music – not look at art.
It is mostly decorative – a way to make something more palatable, more slick, more exciting – but it does not significantly contribute to the problem a buyer wants to solve.

It is mostly used to differentiate, sell or brand a commodity product. (Branding and advertising can be very important for selling something, but when presented with an alternative to a sales pitch, buyers almost always go with that alternative, even if it costs them more money. As an example, consider television advertising. Most people enjoy well produced commercials, and yet will pay extra to skip commercials through DVR’s and premium cable channels.)

It is expensive, time consuming and requires specialized skills to produce/deliver.

The customer will not pay extra for it and won’t go out of their way to get it independently of the primary offering.

Cover Art occurs in all sorts of companies. For example, up until the 1990’s airlines tried to differentiate themselves based on the quality of their hot meals served during flights. Serving a hot meal on a moving airplane is a very difficult and expensive thing to do – even when the food is less than good. Initially, in-flight meal service helped airline passengers feal safe and pampered during flights – as if flying was just like taking the train. But as air travel became a common part of life, that assurance became unnecessary. The meal is incidental to the main need of a passenger – to safely and quickly get to their destination. When someone offered a more attractive alternative without meals, they were willing to switch.

While most airlines continued to spend money on their hot food programs, Southwest Airlines offered peanuts for food and a less expensive ticket price. Despite their lack of “Cover Art” hot meals, today they are the most profitable airline in the history of aviation.

Computer software and hardware makers have recently been surprised by the market’s embrace of small, less powerful computers that rely on Internet based applications and data storage. They have long thought that their customers wouldn’t give up the Cover Art of abundant features, massive hard drives and large numbers of applications. But customers don’t buy massive hard drives – they buy a way to send e-mails, type up a letter, handle their bank account and surf the Internet. As soon as someone offers them a way to avoid buying a massive hard drive, they embrace it.

Where else is there cover art? Credit card companies have been offering elite gold, platinum, and black plastic cards for years. Although people love the status of the different colors, it is incidental to what they are buying – a cash flow management system. That status is very important, and it has been a very successful marketing strategy for the commoditized offering of credit. However, if someone offers a better cash flow management device that does not include the status Cover Art, will the platinum card be as endangered as an LP or in-flight meal? Are there other places that platinum card users will look for their status symbols in the future?

There are numerous examples of Cover Art throughout industries and organizations. Valuable to any company contemplating change, an assessment of the potential Cover Art can reveal significant opportunities for innovation. Customers don’t buy marketing (cover art) or delivery devices (records), they buy a solution to something (music). Even though marketing and delivery devices are essential for a successful business to sell to their constituents, they should never be confused with products and can always be trumped by a better solution.

And therefore, robust and mature Cover Art is a leading indicator that innovation and change is possible and even likely. Does your company offer the best Cover Art in your industry? Are your customers open to better delivery options?

Is it time you innovated?

(For more writings on Innovation and marketing, and to see some representative cover art visit www.bransonpowers.com)

Views: 119

Tags: art, change, cover, innovation, marketing

Comment by Michael B. Moore on September 24, 2009 at 10:00pm
Bravo Gunnar - a very thoughtful, well written piece! As the father of four youngsters, the Happy Meal represents one of the major examples of "Cover Art" on my radar screen! :-)

Strategically, what this brings to mind is Jim Collins prescriptive to diligently embrace the core but then let everything else be 'fungible'. Marketers must be intimately in touch with their consumers and how their product satisfies both their physical and emotional needs. Without that, it might be easy to misunderstand what consumers are really buying from you - which could easily throw you on the wrong path - as you say - when contemplating growth and innovation.
Comment by DavidCrace on September 24, 2009 at 10:18pm
Wow ! Great post. Lots to consider.
Comment by Alexandra Hobson on September 24, 2009 at 10:32pm
I also really enjoyed reading your piece. I wonder if sometimes its a bit more complicated though. For example, if we use Michael's example of McDonald's, I understand that the burgers are the primary offering, but doesn't the Coke represent meaningful value as well? I guess, surely, Pepsi might also serve the same purpose - but it just seems that the drinks, and the (now) the coffee, and the fries, and maybe the apple pies also represent items that contribute positively to the over-all consumer value proposition. It seems like a cumulative thing.

Yes, an airline is, at its core, selling transportation but wouldn't some of us here suggest that they also are selling an experience? Southwest may be profitable, but doesn't the fact that there is a Southwest open the door for a Jet Blue or a Virgin, airlines where there is a different experience? Likewise, for Virgin/JB, are the nice seats and the meals Cover Art or are they a part of the core value offering?

This is making my brain hurt. Enough for tonight! :-)
Comment by Gunnar Branson on September 25, 2009 at 2:27pm
Alexandra - thank you for your comments. Cover Art is an interesting metaphor to work with - thank you for playing with it a bit. To answer your struggle with fast food - I don't think I would define a Soda Pop or french fries as "cover art" for the following reason: Each of those items comes with a price tag - in other words, customers buy them separately, and associate a value with each of them. If someone pays for something, it probably isn't a value add or cover art - it's just another product. The cover art may be the packaging used to deliver the Soda or French Fries - which to McDonald's credit they've never hesitated to change if it made more sense. (Paper, plastic, paper again)

Once McDonald's offers a single price for the entire meal, however, there may be items in that meal that are strictly "value add" - in other words, if there were an alternative to including the item that better served the primary needs of a customer (a satisfying, fast meal at a low price), even if the customer loves that item, they would likely switch to something that better serves their primary need.

To Michael's note - Happy Meal toys might be considered on face value as cover art - but I'm not sure about that. The consumer of the toy and the meal is not the buyer. The parent buys a Happy Meal in order to quickly and cheaply please their child. They are buying the box, the toy and the food - and are consciously paying for all those items. I could be wrong on this one though, as I haven't bought one of those things in a long time. (My daughter is vegetarian.)

In the case of airlines - I think you are on to something regarding "the experience" that airlines sell - it is a form of "cover art" and a very good one. The experience is what Pan Am and American Airlines sold in the 1950's - and it excited a lot of people to buy the tickets. I am often surprised at how "retro" both Virgin and JetBlue marketing appears. But once that experience loses it's novelty, however, airlines needed to change the experience to fit the changing tastes and priorities of customers. For some reason, the old airlines confused the hot meal with the core offering, and were therefore unable to change it quickly enough when Southwest arrived on the scene. In some ways, they are still unable to completely let go of their attachment to meals as a differentiator. American Airlines continued to offer snacks in a lunch bag labeled as "Bistro Meals" - to perhaps, give some kind of illusion that they hadn't left the old idea behind? Or was it just to annoy frequent travelers like myself?

I fear that I'm rambling a bit here - but my central case is this - Cover Art is a very valuable marketing tool, but it should not be confused with the product. When companies believe they can't change because customers want the cover art, they are in danger of being replaced by a competitor.

Customers can be persuaded by marketing, they may love marketing, they may define their lives by marketing, but they won't actually buy marketing for very long if they are given a better alternative to their core purchase need. The ultimate acid test for cover art should be - to sell it separately with a separate price tag. If it can sell on it's own - it's valuable. If not, it's only a tool.

Jerry - I think you have put your finger on it in your comment. I've always been frustrated with the term "value-added services", however. "Value" is an intentionally vague term to use - and is not only defined differently by buyers and sellers - but is defined differently from one buyer to the next. The ultimate definition of value should be expressed in currency: Will you buy this? Will you pay extra for this? The most vulnerable "value" definition is "Will you choose this product over a competitor's offering because of this?" in great part because the customer isn't buying the product because of the value add - they are getting persuaded or nudged away from a similar offer.

Value Add is by definition very squishy, and very difficult to defend over time. In the near term - one should use whatever it takes to get the sale, defend the margin, and expand share, and good value add strategies or cover art helps you get there. The danger comes whenever one believes that "value add" protects against innovation.

I apologize, everyone, for rambling on here - but it is exciting to engage in this sort of dialog. Thank you for reading my post and for taking the time to thin about it, disagree with it, comment on it, and share your thoughts.

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