Saturday, December 17, 2011
However, Passikoff’s trend, “Value is the deal,” has perhaps the best lesson for brands of them all.
“Differentiated and believable brand meaning — emotional, rational, functional, and experiential — becomes a more effective and profitable surrogate for value than low-lower-lowest pricing strategies,” writes Passikoff. “But only the consumer gets to say how ‘valuable’ is actually defined.” To do this, Passikoff suggests that brands listen to consumers, and use their feedback to help shape and grow the brand by "tuning in" to the consumer’s frequency.
At Beneath the Brand, the hidden dangers of the “daily deal” and discounting have been covered extensively. However, the lesson can’t be repeated enough, and the “Value isthe deal” branding trend once again reinforces the idea that discounting won’t save troubled brands.
Just as Passikoff put so succinctly, a brand’s value is the deal for consumers — not the price tag. Even in a down economy, consumers are willing to pay more for a trusted brand if they perceive a greater value in it over a cheaper competitor brand. To consumers, the true “value” of a brand is in how it improves, enhances, or positively changes their lives. It doesn’t necessarily have to be profound, but even saving a few minutes — or even seconds — in their daily routine may be enough to gain a consumer’s loyalty.
But, only listening to consumers, and knowing what they see as value, will allow brands to maximize their full potential.
Daily deals are a distraction from gaining this type of insight into consumers. And, for brands already on shaky ground, the effects can be devastating. Businesses that opt for the allure of daily deals without first understanding what consumers find valuable about their brands — and making the changes to maximize this value — is like holding an open house on a building that’s only half complete. Sure, consumers may see promising signs of brand value, but the promise of potential value isn’t actually value. And, it surely isn’t enough to turn a one-off, daily deal customer into a loyal consumer.
Brands should take a hard look at BrandKey’s trends, especially the first. Brands must take the time to listen to consumers and discover the differentiating factors (this is the "value," in the minds of consumers) that separate them from competitors.
Monday, November 21, 2011
Not so, according to a recent article at Fast Company's Co. Design, which suggests that the days of marketing are fading. “In an increasingly transparent, digitally empowered economy, where everyone potentially can know everything, companies can no longer use the other three P's (Price, Promotion, and Place) to gain a long-term competitive advantage,” writes Jens Martin Skibsted, founder of design agency Skibsted Ideation, and Rasmus Bech Hansen, London-based strategy director at Venturethree. “These P's, in other words, are becoming strategically less significant; they are still valuable, just less so than they used to be, and they don’t provide any long-term edge.”
Is this true? That’s the ongoing debate, and one that has monumental implications for brands large and small.
Skibsted and Hansen write further:
So, is a brand strategy more important than a marketing strategy? Can a company with a strong brand stay afloat with a small advertising budget? Can a company with a lousy brand make it by pumping money into marketing? Or, are they both necessary?
Leave your thoughts in the comment section below.
Friday, November 11, 2011
According to Hunt, “research shows that businesses with well-managed, consistent brands are worth up to 20% [more] than those who aren’t.”Gallucci continues:
Branding consistency is a primary means of brand recognition. Imagine if a company didn’t maintain a consistent brand name; not only would it probably go virtually unknown, it would appear unreliable, not to be trusted.Bingo. If there are two things you should remember about branding, it's that consistency and singularity are the building blocks to brands with staying power. Change your brand, or junk it up with line extensions or silly bells and whistles, and you lose value -- or, kill your brand altogether.
At the center of brand building is creating an idea in the mind of a consumer that his life will be improved should they buy your brand. This is what industry jargon terms as the “value proposition.” However, Apple and Google have gone beyond simple value proposition and have built products that consumers feel they can’t live without. They reinforce this “life-altering” benefit through simple, yet powerful, advertising.
See for yourself with one of Apple’s advertisements for the iPhone 4S and Google’s “Dear Sophie” campaign. Both commercials are simple in their execution, which allows them to masterfully drive home the value proposition built into their brands. The truly genius aspect of the brand advertising is that it injects their products into the consumer's life through the timeless technique of “demonstrations.”
As I wrote in “Why Apple Can Get Away With Murder,” Apple and Google didn’t build their brands through things like product quality or the exclusion-factor inherent in luxury goods. Google offers many of their products for free, and there isn’t an Apple product launch that isn’t followed by days of consumer gripes about build quality or battery life. Apple and Google built their brands on the idea that their products were not like anything else, and that your life is made significantly better by their use.
Small-business owners with struggling brands may look to Apple and Google and say, “Well I could never do that. They have the most brilliant minds in marketing, and a massive advertising budget, to help them stay at the top.” While this may be true now, it wasn’t always like that. Apple began in the family garage of Steve Jobs, and Google started out as a PhD research project.
Brands with larger advertising budgets than most companies gross in an entire year, who hire the best and brightest from Madison Avenue, have failed miserably in launching new products or even keeping their current brand alive.
The key to Apple and Google’s success was building products that set themselves apart from all other competitors and provided benefits to consumers that they cannot now ever live without. Does your brand do that? If not, focus on how you can get it there, then align your entire organization behind that idea.
However, Godin describers “New Marketing” as that which “leverages scarce attention and creates interactions among communities with similar interests." This would essentially be advertising to targeted audiences with products designed for a target demographic.
Old marketing was for the masses. New marketing is for the niche.
In the era of old marketing, microtargeting was hard to accomplish, at least relative to what is possible today. Therefore, products were created with mass appeal, and advertisements were broadcast to the masses in order to reach the most people. "Masses of people could be processed quickly and cheaply, and some would respond to your message and become customers," writes Godin. "The key drivers of this approach were a scarcity of choice and a large resource of cheap attention."
As a result of this style of old marketing, brands weren’t focused, but built for the masses.
The rise of microtargeting, especially with online mediums of advertisement, has completely changed the game. No longer do brands have to sacrifice a narrow focus in order to have a broader range of appeal. In fact, the ability of brands to microtarget audiences amplifies the strength of narrowly focused brands.
For online brands, this means playing to the niche. One of the keys to brand strength is keeping it narrowly focused, simple, and consistent. Online advertising now makes it easier than ever to find new customers, and let them find you. Even the most narrow of brands is able to ring-up sales, which would have been impossible in the era of old marketing.
In the era of new marketing, the niche is no longer the trap that it once was. In fact, it is now a positive because it allows brands to stay on the narrow track. As some brands continue to play to the masses, play to the niche. You don’t have to appeal to the 99% if your customer base is the 1% you want to reach.
Over at Fast Company, Debbie Millman, president of Sterling Brands, sits down with a man who helped build Starbucks into one of the world’s most powerful brands. Stanley Hainsworth, who has served as the creative director at Nike, Lego, and Starbucks before leaving to start his own agency, knows something about branding, and making brands superpowers in the marketplace.
The whole interview (available here) is full of expert wisdom worth an entire read, the following excerpt is the most valuable for those seeking to build a brand with staying power. Hainsworth describes how Howard Schultz took a coffee shop in a crowded marketplace, and turned it into a global icon [parts bolded for emphasis]:
Howard was very wise in knowing that Starbucks was not the only company in the world to make great coffee. On the contrary, there are hundreds of other companies that can make great coffee. So what's the great differentiator? The answer is the distinction that most great brands create.There are other companies that make great running shoes or great toys or great detergent or soap, but what is the real differentiator that people keep coming back for? For Starbucks, it was creating a community, a "third place." It was a very conscious attribute of the brand all along and impacted every decision about the experience: who the furniture was chosen for, what artwork would be on the walls, what music was going to be played, and how it would be played.
Differentiation. That’s the key.
Starbucks didn’t just make coffee. Starbucks made an “environment” for coffee. It was this differentiating factor — a conscious decision, executed to perfection down to the very art that was hung on the walls — that moved Starbucks beyond its competitors and into branding glory.
What differentiates your brand from your competitors? How are you creating an emotional connection with your consumers? Read the interview, and take a lesson from one of the masters of branding.
Wednesday, October 12, 2011
“Then they would get another coupon and go do it with someone else,” Wellpath’s director, Jennifer Bengel, told the Times. “There was no loyalty.”
No loyalty? No surprise.
Groupon is in trouble, and not because the rise of localized, competitor brands has already begun to take a huge chunk from Groupon’s market share. More and more businesses are learning just how disastrous daily deals can be for their bottom line. “We’re giving [customers] a discount when we could be filling that seat with a full-paying customer,” Arlington, Virginia pizzeria co-owner Joel Mehr tells ARLnow.com. “If we are giving discounts when we don’t need to be giving discounts, that doesn’t benefit us.”
Mehr says that despite selling more than 5,600 Groupon deals for his restaurants in the area, the pizzeria still lacks name recognition. Worst of all, they can’t control when customers come because the deals can be used anytime. “We are seeing people come in one time only, on a Friday night, they’re not coming back,” says Mehr, echoing a common theme among disgruntled Groupon users.
However, the discount emperor, Groupon, isn’t the one at fault. While Groupon has its own internal problems, from a business model that has investors worried to its new-found appetite for line-extensions (Groupon Now!, Groupon Getaways, Groupon Goods), it can’t be blamed for customer loyalty issues. When businesses use discounts and deals, loyalty issues are right around the corner.
Discounts are not a permission slip to excuse oneself from brand-building strategies, nor are they a panacea for driving business through the doors. Businesses that use deal sites as a marketing device can quickly find themselves drowning in customers who are only looking for one-off purchases at a discount price. One owner called using Groupon the “single worst decision I have ever made as a business owner thus far,” after the deal nearly put them out of business.
Yes, Groupon can help businesses find new customers, but the very nature of discounting undermines customer loyalty — especially when driven by daily deal sites. And, even more so when businesses aren’t prepared to convert new “discount” customers into loyal “full price” customers.
For example, oil changes are one common deal on Groupon, and they come from a variety of businesses. It isn’t out of the question that a Groupon deal for an oil change will come about frequently enough where a subscriber would never have to pay full price for an oil change, if he were to use the deals that came about every so often on the site. Therefore, the subscriber never establishes a bond with any of the businesses that advertise on the site — especially if those businesses have not put effort into retaining new customers.
Daily deal sites should be regarded with a huge caveat emptor for businesses looking to use them. There have been a number of success stories, but on the other hand, they can absolutely ruin a brand — as they have, and they will continue to do.
Discounting in and of itself isn't a brand killer. Just look at major department stores, which have opted for discount strategies instead of brand strategies. Rather than rushing to discounting sites for growing businesses, focus on building the brand through good branding fundamentals. It may take a little longer, but in the end, brand integrity is improved — not diminished.
On a side note, I would be remiss if I didn’t note the unfortunate passing of Apple Co-Founder Steve Jobs. The death of genius is truly like extinguishing a candle. The world is less bright without him around.
A recent study by Motista shows just how important emotional connections to brands are, and why businesses should not ignore brand-building opportunities. The study showed that emotionally connected customers are “four times more likely to shop those retailers first when relevant needs arise, as compared to consumers who are simply familiar and satisfied with their retailers.” These “connected” customers are also “50 percent more likely to advocate for the brand and recommend the retailer to others.”
Essentially, the more connected customers are to your brand, the more likely they are to seek out your brand, and recommend it to others. It seems very obvious, but many businesses — especially small businesses with limited marketing budgets — write off brand building in favor of other needs. Unfortunately, neglecting branding needs comes at the expense of building this emotional connection with consumers, which has long-term consequences.
Roger Dooley, author of the site Neuromarketing and a neuroscience-marketing consultant, says that there is no single way to create an emotional bond with consumers. He refers to ways several major brands built theirs with consumers, such as Apple’s innovative designs and Zappos’ shipping upgrades.
This is good news for businesses with limited marketing budgets because it doesn’t require tens of thousands of dollars to create an emotional connection. In fact, most small businesses would be better off investing in improvements to their operations rather than putting all of their marketing dollars into “daily deal” programs like Groupon. By hiring staff to improve customer service, or spending a little extra to make a website more user friendly, businesses can enhance the customer experience and better the emotional connection customers have with the brand.
Unfortunately, as many small businesses have discovered, Groupon packages send hundreds, if not thousands, of new customers through the door who are only looking for one-off purchases. And, if these businesses have done nothing to establish their brand by proving why customers should return — even if customers are paying a higher price for the service or product — then they have wasted a tremendous amount of money for nothing in return.
There are three simple steps to follow to build brands with which customers can emotionally connect:
1. Build your brand based on one single idea that demonstrates a value to potential consumers that they cannot get from any of your competitors. (For example, Apple built their brand on innovation, and Zappos built their brand on unmatched customer service).
2. Focus your efforts (and expenses) on fulfilling this promise of unique value and ensure you can deliver on everything that you promise.
3. Do not stray from this focus over time. Keep it simple and consistent. While you can innovate and upgrade your brand, you must always keep it differentiated from competitors in that single, unique way.
Any business, larger or small, can adhere to these three steps to create emotionally connected customers. It simply requires following the building blocks of branding. Differentiate your brand in a meaningful way, and keep that differentiating factor simple and consistent. It doesn’t require a big budget, just a dedication to maintaining a brand. And, if you are successful, you will create a large body of emotionally connected customers who are more likely to seek out your brand and promote it to others.
The advent of the digital age, especially in regards to the rise of social media, has made brand management a much more complex operation.
The Internet has opened a seemingly endless number of ways for consumers to connect to brands. Information is widely available, and can be shared instantly with thousands — if not millions — of others. This makes a once manageable mistake, such as a distasteful ad that wouldn’t go beyond the circulation of the magazine in which it was printed, a very, very public scandal. Take, for instance, Kenneth Cole's tweet announcing a new spring line of clothing using a pun and hashtag related to the riots in Egypt.
“This time, however, Cole isn't simply forcing his ‘Aw, Dad!’ jokies via billboards,” wrote MSNBC Technolog’s Helen A.S. Popkin. “Thanks to Twitter, perhaps Cole is now getting the feedback on his ad work he inexplicably never got before — well, at least in such volume, anyway.”
In addition to the amplification effect, consumers also have access to information that can shine sunlight on previously “protected” secrets. A little research can expose unscrupulous manufacturing processes that may conflict with brand messages. Viral videos — such as that featuring two Domino’s employees bathing in a sink as a prank — can lead to major public relations disasters in a matter of hours.
Even more than just gaffes, secrets, and scandals, brands are constantly being judged by the online community for things such as customer service or response times to issues. “Amazon.com apologized for a ‘ham-fisted’ error after Twitter members complained that the sales rankings for gay and lesbian books seemed to have disappeared,” writes the New York Times, “and, since Amazon took more than a day to respond, the social-media world criticized it for being uncommunicative.”
Brands operating in today’s world of lightning-fast communication — where brand reputations can be “blindsided by two idiots with a video camera and an awful idea,” as Domino’s spokesman Tim McIntyre stated in response to the sink prank — must take precious care to ensure every facet of the brand is in line with the overall brand strategy. For example, if your company promotes a culture of environmentalism and “green” responsibility, it will not be long before your company’s energy usage or manufacturing processes come into question if they don’t also align with the environmentalism brand message.
Be it a major corporation or a small business, brands can greatly benefit from a “brand alignment analysis.” Think about everything — from customer service, to marketing messages, to your front-end operations — and make sure they all serve to not only bolster your brand strategy, but also fulfill all your promises. If you take time to improve areas that aren’t serving to support your brand, you’ll strengthen your brand and protect it against an online “black eye.” You may also see a boost in positive online chatter about your brand.
Monday, August 29, 2011
There is more to monitoring social conversation than managing your brand’s reputation. The key to social marketing is joining the conversation, not changing it. And if you don’t know what the conversation is, your brand can’t become engaged with online consumers. Worse yet, you’re missing out on a treasure trove of insight into the relationship your brand has with consumers.
“We learn a lot from our customers, and our Facebook pages really help us to do that,” says Bic USA’s VP of Marketing, Traci Gentry, in an interview with DM News. Gentry says that Bic regularly “mines” social media conversations in order to understand how best to talk to consumers, as well as sharing the information with other marketing channels to make them more effective, such as keywords in paid search.
However, before you can join the conversation, you must first determine what that conversation is. Randy Hlavac, a social marketing expert and CEO of Marketing Synergy, Inc., calls this the “Social Media EKG.” It involves taking a measured look at the ongoing social conversation. Before engaging consumers, brands should determine what the online market, or community, is saying about its products, company, and competitors and what specific terms are they using in those conversations, as well as the tone. Do consumers have a negative impression of the brand, or a positive one?
Hlavac also says it is also important to determine the same in social conversations about competitors, which can help your brand to position itself better.
The information that you can learn from the Social Media EKG will help you join in the social conversation, and begin engaging with the online market for your brand. While you cannot change the conversation, you can help steer it in a positive direction.
Several tools exist for the purpose of monitoring the social conversation about your brands. Three popular tools are Radian6, Social Mention, and Technorati. These tools help you measure and investigate the conversation about your brand, which you can then use to form a social media plan to help engage with the online community.
"Social Mention allows me to see where the conversation is happening online, and provides insight into the discussion — whether it is positive, or negative,” says Spencer Broome, a marketing coordinator at MediaFiche. “It helps me to determine the reach of the response, as well as the keywords, or tags involved. From there, I know how to react."
And, knowing how to react is the name of the game for brands. From new products, to responding to complaints, to engaging with consumers in order to strengthen brand loyalty, everything starts with an awareness of the social conversation about your brand.
Wednesday, August 24, 2011
According to A&F, the appearance of their label on the Guido and Guidettes of the Shore is “contrary to the aspirational nature of the brand.” I suppose reality stars puking in the streets while wearing an A&F shirt is not exactly what the brand wants people to “aspire” to become. (Then again, they are making a boatload of cash for being, well, talented at getting drunk.)
Yet, the request is a bit confusing. A&F isn’t exactly known for their aspirational advertising. The clothing line is wrought with its fair share of Shore-esque branding signals, including shirtless greeters welcoming customers into its club-like stores. And, as Shore cast member Paul “DJ Pauly D” Delvecchio pointed-out in a recent tweet, A&F has taken advantage of the Shore hype. “Hmmm if They Don’t Want Us To Wear Those Clothes Why Make GTL Shirts,” asks Delvecchio.
It’s a good question, and has a few people asking if A&F isn’t just building a PR stunt around the request. "With respect to The Situation, Abercrombie & Fitch saw an opportunity to get some advantageous publicity during the all-important back-to-school season," BMO Capital Markets Senior Retail Analyst John Morris told the Chicago Tribune. "It's definitely a good water-cooler conversation."
Stunt or not, it serves as a good lesson about the importance (and, consequences) of your brand narrative.
You have a product. That product has a brand image. That brand image is created through branding signals. And, your branding signals tell a story to consumers. If your brand narrative is one of youthful bacchanalia — as is A&F’s — don’t be surprised if your brand starts showing up in places where said bacchanalia occurs.
Pervasive brands have a tendency to get co-opted by consumers. Therefore, it’s important that your branding signals weave a narrative that ensures the brand is reaching the right audience.
Wednesday, August 17, 2011
However, being the skeptic that I am, I said:
Google+ has opted for a “me too” brand, just as Google Buzz was a me-too clone of Twitter. There is nothing revolutionary about Google+. There is nothing worthwhile about it. It may be signing up subscribers by the millions, but how many of those will be active in a month, or even a week? People have stated that they’ll drop Facebook once their friends start using Google+, but if everybody is waiting on the sidelines, who will jump in the game? My guess is very few.
Commenters on the article said stuff things like, "Whoa. Quite the statement here," and "In today's tech word switching from one social network to the other is like having multiple email accounts."
But, today, those commenters now must stand and listen to the Google+ eulogy delivered by Forbes' Paul Tassi.
Yes, the die hard hipsters on the internet might flock to G+ to be the first kids on the block embracing the new network, and might even have their own little Google Plus cliques, but most of those who have gone there have found it to be an empty room. They’ve left one party at Facebook, which yes, may have been going on a bit too long, and could be starting to wind down, but arrived at a new one where simply no one has shown up.
Google just should have known better. No one is going to scrap a social network they’ve spent 8 years building up to start over from scratch for one that offers only a few minor improvements. To compete there needs to be something put forward that’s truly revolutionary, and tech companies half-heartedly copying each other is not going to cut it and can’t masquerade as true innovation.
Ahhh...to be right. Read Tassi's full eulogy here. It's awesome, mainly because it echoes my sentiments a month earlier. And, well, I have an ego to stroke.
Monday, August 15, 2011
The competition among brewers is amazingly fierce. The market for their products isn’t growing; therefore, expanding their share of the pie is the only way to move the needle on sales. This makes their brand story especially important because they must change consumers' tastes for competitor brands — no easy task.
Enter Coors and Corona.
Coors' latest offering to its product differentiation is the temperature bar on the label of their can. It turns blue when the beer is cold. Asinine? There isn’t a better definition. But, wait! Coors recently introduced a second bar, indicating whether beer has gone from “cold,” to “super cold.” (It was easy-pickings for Breckenridge Brewery.)
Meanwhile, Corona Extra’s “Find Your Beach” campaign is running strong. In these spots, Corona drinkers are shown to be on a beach, mentally, no matter where they are. For example, one of the latest spots features a man drinking a Corona on a beach when a Stewardess pushes a cart up to his chair. The shot switches to the man sitting on a plane. He found his beach, a mile above the earth.
One brand wrote a children’s novel. The other wrote War and Peace.
Cramer-Krasselt, who is Corona's agency of record, wrote that the “Find Your Beach” campaign is built for “further evolving the [Corona] brand's iconic campaign to extend the ‘Corona Beach’ from a physical place to a state of mind.” "What we want 'Find Your Beach' to do is literally show that the beach is where you make it," said Marshall Ross, executive vice president/chief creative officer, Cramer-Krasselt.
On the other hand, Coors’ “Bar Exam” spots pushes consumers to consider if drinking the beer will make them dumber.
When writing a story for your brand, consider what you hope to accomplish when the story is finished. It’s important that you create brand narratives that buttress what you want consumers to feel about your product.
The example to follow in this case is Corona. Instead of opting for a cheap trick, which has become the latest trend among the Big Three (Bud Light’s “write-on label,” Coors’ temperature bar, and Miller Lite’s vortex bottleneck), Corona chose to create a narrative that moved the souls of consumers and reinforced the power of escapism that has become a centerpiece of the brand.
Tuesday, August 9, 2011
To break up my day without losing productivity, I head down to the local Starbucks. There, I’ll usually get an iced coffee or green tea, and work for three to four hours at whatever table or seat I can find. And, I always tip the baristas. I consider that my “rent” for squatting in their establishment.
When I heard that Starbucks was cracking down on fellow squatters, a pang of panic ran through my spine. If I lost my Starbucks, I’d be a broken man. That’s a bit overdramatic, but if they began covering outlets to block power a precious source of power for my MacBook, or cutting off Internet connections after 30 minutes…I would be forced to find a new spot for WiFi.
I’m a proud, Gold Card carrying member of the Starbucks nation. I didn’t want to abandon my home-away-from-home office.
However, I do recognize the problem that squatters present for any sort of establishment that relies on high turnover for profit. And, then you have the jack wagons that give us squatters a bad rap, who plop down at the biggest table and occupy more than their fair share of the retail space. Me? I sit at the “carpool” table, where five+ people can squeeze in, even with gear.
That’s when it hit me.
Starbucks needs to move coffee. People need places to work. It doesn’t matter if those same people who are buying coffee over, and over again, or new customers. All that matters is that the cash register rings.
Instead of capping WiFi connection times, or blocking access to power outlets (some poor souls have batteries that won’t even last the 30 min. of which they have access to the internet), Starbucks could provide a code on receipts for internet access. At the end of that time period (one, or two hours would be optimal), customers would have to purchase a new item for additional access.
For people like me, who Starbucks is a necessity (for mental health reasons), I’d be more than happy to drop the $4 to $5 that I would pay for two drinks if it meant I could work as long as I wanted.
Of course, my preference is too keep the status quo…but, we’re not living in a utopia here.
Hey, Starbucks…don’t run-off your most loyal customers, even if they can be a pain in the ass sometimes. Leave the games and acrimony for the folks in D.C., and let’s come up with a relief plan that’s bi-partisan, or whatever.
If you want to use this plan, you know where to find me: Starbucks, Sandy Springs.
Sunday, August 7, 2011
However, State Farm is doing something different. Instead of joining the discount frenzy with insurance, State Farm is leveraging their human capital to build their brand. In a recent ad called “State of Regret,” former State Farm customer “Jerry” calls his old agent pleading for help after putting his car up a pole. When she can’t help him, he says: “It only took 15 minutes to sign with that new auto insurance company, but it’s taken a lot longer to hear back.”
By refusing to participate in the discount game, State Farm is avoiding the crowded, low-end insurance market coveted by companies like Geico, Progressive, Esurance, The General, and local agencies. However, by pushing service rather than discounted prices, State Farm is able to attract business from the high end of the insurance market. This means State Farm can still bring in new customers without dropping their prices.
In the end, this is a much better branding strategy because they aren’t locked forever into discounted prices and won’t have to keep dropping premiums in order to keep customers. Customers came to State Farm because even with higher premiums than say, Geico, customers know that an agent will be there. So long as State Farm delivers on their promise of service, they’ll keep customers.
Looking at the top 10 insurance companies by market share in 2010, State Farm is at the top, followed by Allstate — another insurance company that has directly attacked the “cut-rate” insurance game in their “Mayhem” campaign.
Brands can take a lesson from State Farm and Allstate: although there is money to be made by dominating the low end of the market, discounting is a trap that keeps your brand locked into low prices. Should you try to raise your prices, you’re likely to lose any sort of customer base you managed to build.
Monday, August 1, 2011
"Whatever happened to commercials?" asks Michael Imperioli, in one part of a series of commercials for 1800 Tequila. "So many of them don't make any sense, and you can hardly tell what anyone is selling." How is it that a commercial reached a level of enlightenment lost on even the biggest advertising agencies in the world? This ad from Dead As We Know It, New York calls out one of the worst offenses in advertising: letting the ad overshadow the brand.
There is an insidious trend in advertising over the past few years. It’s what I refer to as “advertising absurdism.” Examples of this trend include Wieden & Kennedy's Old Spice deodorant campaign, Grey’s Dairy Queen Blizzard and DirecTV campaigns, and many more that create a stream of creative that is as surreal as it is illogical. Most often these campaigns are characterized by long camera shots filled with fast copy, and include a storyline fit for a few hours compacted into 30 seconds.
The paradigm for this style is W+K’s Old Spice deodorant campaign “The Man Your Man Could Smell Like.” While the novelty of the ad sent it viral almost instantly, making it the prevailing “buzz” of the Internet for some time, the replication of its absurdist technique in other campaigns (and, even in future iterations of the Old Spice ads) make it seem cheap, played-out, and completely lacking in substance. As a result, these brands are trapped in the failed attempt of advertising creatives pushing a product with a trick, rather than a substantive brand strategy.
In contrast to this advertising absudism is the cutting simplicity of the 1800 Tequila ad, featuring nothing more than Imperioli in a suit with a bottle of 1800 Tequila. "This is a commercial for tequila,” says Imperioli — a fatal, sardonic swipe at the pop-advertising trends.
Humor, special effects, story appeal, and the like are advertising techniques. They are not products. However, when technique (whether effective at capturing attention, or not) overshadows the brand and becomes the true product of the ad, there is a serious problem. Humorous commercials like Grey’s “Russian Oligarch” spot for DirecTV may have great recall with consumers, but how many consumers connect the ad’s tiny giraffe with DirecTV? DirecTV paid Grey millions of dollars to sell a fictional creature and a rich Russian — at least, that was the end result.
The Dead As We Know It ad is about as close to perfect as you can get, and should serve as a model for how simplicity can take a brand further than large advertising budgets, special effects, and overly creative account teams. There are no distractions in the 1800 commercial that detract from the key purpose of the ad: to sell tequila. Imperioli may be a TV celebrity, but his Sopranos fame isn’t vast enough to overpower the tequila he’s marketing. From the dark, classy setting, to Imperioli’s haughty tone, and even his simple — yet finely tailored — suit, are all branding signals that serve to enhance the brand. Those signals convey that “real men drink real premium tequila,” as notes Tim Nudd of AdWeek, when the spot was featured as the site’s Ad of the Day. “Why make it more complicated than that?”
Some of the most memorable advertising campaigns of the years have been some of the simplest (and, not for lack of creativity): Bill Bernbach’s “Think small;” Dale Pon’s “I Want My MTV;” Goodby Silverstein’s “Got Milk?” So, indeed, why make it more complicated than that?
Friday, July 22, 2011
Google+ was launched with the typical fanfare that would be expected of an announcement that Google was getting into the social media business (again). These are the guys that revolutionized search and built a tech empire that has swiftly become the world’s second most valuable brand. The common logic goes that if Google can do what it did for search, they should be able to do the same thing for social media. And, since everybody loves a good fight, the “rivalry” aspect with Facebook is helping to fuel the buzz.
As of July 12, 2011, Google+ had added approximately 7.3 million subscribers, and was up to 10 million by July 14. According to one statistician, the service is expected to hit 20 million if kept at its current pace. When invites were limited during its initial launch, some even turned to eBay to get in on the action.
So, with the all the hype, interest, and backing of an online titan like Google, why will Google+ fail? It all comes down to the value proposition. The reason Google+ will fail is that there is no reason; that is, no reason for consumers to leave Facebook.
“In the high-tech field a new product or system is considered worthless without a ‘killer application,’” writes branding expert Al Reis in his book The Origin of Brands. “Take the Internet, which was something of a high-tech curiosity until the killer app came along. That application was email.” As of yet, Google+ features no “killer application” that would make it the assassin of Facebook. It may do most of what Facebook can do. And, in some instances, it may do it better.
However, in unseating a brand leader like Facebook — especially one that dominates the Social Networking category (even the word “dominating” falls short of describing how entrenched Facebook is as the category leader) — better isn’t good enough. If Google+ wanted to kill Facebook, as should be its goal, it needed to reinvent the Social Media category, and branch off into something completely new. Something so new, and so groundbreaking, that it would make Facebook obsolete.
But it hasn’t.
Instead, Google+ has opted for a “me too” brand, just as Google Buzz was a me-too clone of Twitter. There is nothing revolutionary about Google+. There is nothing worthwhile about it. It may be signing up subscribers by the millions, but how many of those will be active in a month, or even a week? People have stated that they’ll drop Facebook once their friends start using Google+, but if everybody is waiting on the sidelines, who will jump in the game? My guess is very few. The end result will be that Google+ has millions of barely active subscribers who will post on their Facebook wall about how lame Google+ is.
Wednesday, July 13, 2011
“American consumers insist that they are not swayed by celebrity endorsements,” reports Adweek on the results of a recent Adweek/Harris Interactive survey. “More than three-quarters [of respondents] answered that it has no impact on their intent to buy.” Furthermore, only 4 percent indicated it would make them more likely to purchase. So, what are brands getting for the millions they spend on “buying” celebrities in hopes they can get consumers to buy? More often than not, nothing more than a wasted advertising budget.
Of course, this should come as no surprise to brand managers. Advertising master David Ogilvy (himself once a cultural icon whose words still serve as teaching tools for young, and old, advertising junkies) wrote in his 1983 book, Ogilvy on Advertising, that celebrities don’t move product. “Viewers guess that the celebrity has been bought,” Ogilvy wrote. “And they are right.” Ogilvy also suggested that celebrities have a way of overpowering the brands they’re advertising, making the celebrity (and, not the brand) the only memorable part of the campaign. Any time that an advertising technique — be it a celebrity, or “humorous” copy — overshadows the brand, it’s not good advertising. It’s even worse when you spend extra thousands, or millions, to secure an endorsement.
Your brand doesn’t need a celebrity. It needs a strategy that’s based on solid branding fundamentals. There have been several famous non-celebrities as “brand figureheads.” For example, Subway’s “Jared,” or “The Man in the Hathaway Shirt.” However, the difference between these individuals and celebrities like Mr. T is that the ad campaigns made Jared famous; Jared didn’t make Subway famous. Their appearances in the campaigns were techniques that enhanced the brand instead of overpowering it. Jared wasn’t a celebrity. He was a product testimonial. Likewise, The Man in a Hathaway Shirt was story appeal.
Would Subway have achieved the same level of success with its “health and nutrition” positioning if they used someone like Justin Bieber? No. Celebrities have access to personal trainers and nutrition consultants. The “testimonial” technique would have been completely lost. And, what would have happened if Ogilvy had decided to use Frank Sinatra instead of Baron George Wrangell for the Hathaway campaign? Would consumers have even paid attention to the shirt? Doubtful.
This is not to say that celebrity endorsements fail 100% of the time. Using a celebrity who is an authority on the industry or product for which he is advertising can be beneficial to a brand. Rory McIlroy testifying to the quality of golf clubs, for example, might be a worthwhile investment. Maybe. At least it will certainly be more worthwhile than Mr. T hawking Snickers.
If your brand is looking to do something with endorsements, try focusing on delivering a solid brand performance to your customers. After all, it’s their endorsement that is the most influential to their friends. Yeah, it’s really cool that for $1 million you can get a celebrity to like your product. And, for $2 million, that celebrity will probably endorse your competitor as well.
Instead of dumping money into expensive advertising campaigns, or buying a head-nod from a celebrity, turn that money back into your business to improve upon things that will really better your brand. Denny’s opted out of advertising in the 2011 Super Bowl, saying they would rather spend that money on programs throughout the year. "It is a very expensive exercise and I don't believe it's necessary for us to continue to put all our eggs in one basket," says Frances Allen, Denny's Chief Marketing Officer, in an interview with AdAge. “We decided to focus our efforts on a broad, multilayer program that we believe better rewards our guests throughout the year, vs. doing a big, onetime push for Super Bowl.”
This lesson is especially apposite for small businesses with limited budgets. Never underestimate the power of smart branding fundamentals that resonate with consumers. There’s more evidence that a solid brand foundation will move product than there is for any endorsement from a celebrity. And, the return on investment is unquestionably higher.
Wednesday, July 6, 2011
Papa John’s began in 1983 and focused on a narrow menu that allowed it to deliver on the promise of “Better Ingredients. Better Pizza.” “By keeping the Papa John's menu simple, we ensure the quality of our product by using only the best ingredients,” says the company’s website. Through this narrow focus, Papa John’s was able to build itself from a pizza shop in the back of a bar to America’s third-largest pizza chain.
Simplicity allows brands to do more than improve the quality of their services. It also allows brands to have a narrow focus on new markets, and can even create new categories. Online dating services are a great place to look for this concept in practice. Although dating services like Match.com, eHarmony, and PlentyOfFish dominate the online dating market, splinter services with a narrower focus have created new opportunities for growth. JDate.com is a dating service for Jewish people. Because it leads the category for “online Jewish dating,” it can bill itself as the “most popular online Jewish dating community” (illustrating the power of category leaders). Other examples include dating sites for exclusively “beautiful people” (beautifulpeople.com), dating sites for mature singles (SilverSingles.com), and even dating sites for married people (AshleyMadison.com). It’s likely that this trend will continue, and even more new categories for online dating will emerge.
On the other side, brands that try to do too much have a hard time lasting in the market. These brands often fall for the fallacy of “convergence,” a branding idea that says that the more your product or service does, the more appeal it will have to a wider audience. Unless these products offer a convenience factor greater than their individual parts, the brand is doomed for failure. It’s because the more functions or service offerings that a brand promises, the harder it is to deliver. Consumers instead will opt for the “specialists.” A restaurant that offers fish, tacos, hamburgers, chicken, steaks, and salads may do one or two of those things well, but most consumers go to a Legal Sea Foods for fish, a Five Guys for hamburgers, or a Ruth’s Chris for steaks. These brands have established themselves as leaders because they have a narrow focus on their brand and excel at delivering on that focus.
If your brand is struggling, consider pruning it down and narrowing the focus. It’s better that you do one thing very well than several things poorly. By having a wide focus, brands lose to the specialists who can deliver a higher-quality product or service. Additionally, a wide focus makes it impossible for you to establish a brand position in the mind of a consumer. Don’t try to do too much with your brand. Keep it simple.
Thursday, June 30, 2011
I jokingly thought, "They should probably try eBay." Turns out, that wasn't a half-bad idea. Take a look. The search term "Google+ Invite" yielded 145 returns.
So, if you're desperate enough not to wait around for a friend to score some extra Google+ invites, seriously check out eBay.
Many small businesses fall into this trap. If sales are dropping, they throw more money into advertising in hopes that it will turn things around. It’s partially what fuels the buzz around Groupon and other discounted deals sites. Need exposure? Boom, run a deal on Groupon, and you’ll have a flood of new customers (at least in the short-term).
Yes, advertising is important; however, it isn’t necessary. Google, Amazon.com, Starbucks, Facebook; they are some of the world’s most powerful brands. They also happen to advertise only rarely. It’s not that these brands know something that others don’t. No, the “secret” to their success is strong branding; branding that doesn’t need advertising. By following the basic steps to establishing a lasting brand, they have created empires without advertising.
“While ad agencies and media companies tend to focus on producing spots for short-lived campaigns, great brands are more enduring because the compelling story they represent has to transcend any and all platforms or potential campaigns,” writes Gair Maxwell at The Seamless Brand. Maxwell says that if these types brands advertise, it’s usually late in the process, and only if it’s needed.
So, how does a small business go about building a brand like Google, or Starbucks?
The product or service that is offered is the foundation of any brand. Without a product that consumers want, no amount of effort you put into building a brand will save it from failure. And, in order for consumers to want your product, it must bedifferent from competitors in a way that they find valuable. You can’t break into a market with another product or service that’s not differentiated from the competition. Likewise, even established products need to stay updated to keep up with the competition. Create a product/service that consumers can’t live without. Do this, and your brand’s foundation will be rock-solid.
The art of positioning is about owning a category, or idea, in the mind of the consumer. It’s staking a claim in the marketplace; a claim that nobody else can hold except your brand. Google owns “search.” Starbucks owns “coffee.” Facebook owns “social networking.” Sure, there were search engines before Google, just as there was coffee before Starbucks, and social networks before Facebook. However, each of these brands had a differentiated product that consumers wanted, so they knocked off the competition and were able to position their brands at the top of the category. Google and Facebook have done this so well that their names have become widely accepted verbs in our language. ‘Why don’t you just Google that?’ ‘Facebook me.’
Once you have your product and an idea for your brand, you must ensure that your company is completely focused on this central idea. Your entire company must be aligned with the brand. From the manufacturing process to customer support, every facet of the company should not only understand the brand and what sets it apart from the rest, but they should also consider themselves a vital part reinforcing that idea. Google is Google because everything about the company is aligned behind the idea of technological innovation. Even the office structure is set up for maximum creativity and thinking. “At lunchtime, almost everyone eats in the office café, sitting at whatever table has an opening and enjoying conversations with Googlers from different teams,” says Google’scompany culture webpage. “Our commitment to innovation depends on everyone being comfortable sharing ideas and opinions.”
Delivery of the value proposition inherent in your differentiated product is what ties everything together. And, before you launch a product, you should know that you can deliver on what you promise. It’s why you align your company around that central brand idea. Zappos.com became the top shoe seller on the Internet because it delivered on its promise of exceptional customer service. If Zappos tried to differentiate itself by promising customer service beyond that of its competitors, but failed to deliver, you would have never heard of them. Likewise, Facebook delivered on being a better social network than MySpace, and Google delivered on being a more innovative search engine than Yahoo. Don’t promise what you can’t deliver, and if you can’t deliver anything new, then don’t bring your product or service to the market.
The local Mom & Pop store around the corner will most likely never find itself on BrandZ’s Top 100 global brands list. Then again, Apple was started in a garage (and, here are 10 Fortune 500 companies with humble beginnings). However, by following some basic steps to building a lasting brand, that Mom & Pop store can dominate the local market without ever needing to spend a penny on advertising.
Monday, June 13, 2011
Problems with brands are much like problems with houses. They can’t always be solved with new paint or fancy shutters. One must go straight to the source, or else risk spending resources on a quick fix rather than a long-term solution.
“Many potential clients call and ask for a new logo, a new package design, or typeface treatment,” says Allen Adamson, managing director at Landor Associates, in his book BrandSimple. “I tell them no.” Adamson says that before agreeing to any major change to the cosmetic elements of the brand, they must first define the problems they’re trying to solve. Only then will they be able to accomplish anything worthwhile. “It must be done from the inside out, not superficially,” says Adamson.
It’s easy to slap a new logo to your brand hope your sales go up. Companies try it all the time. For example, look at department stores, where Belk and JCPenney recently redesigned their logos. Sure, the new logos are nice, but new brand identities fail to address the real problems the two stores face. In a market plagued by a lack of differentiation, where discounts — not the strength of brands — drive sales, a new logo and a little more passion isn’t going to save them.
However, that’s exactly where superficial fixes leave brands. If quarterly numbers are dropping, it’s time to address branding problems at the foundation. If consumers no longer find that a brand is delivering a product or service that’s different from a competitor in a valuable way, then it’s a foundational branding problem that won’t be solved with a superficial solution. But, inspecting brands down to the core requires everyone from the copywriters to C-suite execs to get out of their comfort zone and start asking hard questions. It's not easy to do, but this type of probing analysis of a brand is necessary to avoid costly mistakes that only delay the inevitable decay of brand value.
It's more than passion. It's more than a logo. If something is fundamentally wrong with the foundation of the brand, its effects will be seen everywhere else until it is fixed.
Thursday, May 26, 2011
This is really good stuff from John Jay, of Wieden+Kennedy. Advertising is not a one-size-fits-all solution. And, trying to apply your "secret sauce" to every client isn't going to work. No client is the same, and each comes to the agency with different needs to solve. Listen to what they have to say, and find a solution that works for them. As much as you can't let them define your work, or you define their product -- you can't let your work become the definition of what you do.
Consumers can suffer from the same delusions. “There is no objective reality,” write marketing mavens Al Ries and Jack Trout in their book The 22 Immutable Laws of Marketing. “There are no facts. There are not best products. All that exists in the world of marketing are perceptions in the minds of the customer or prospect.”
“The perception is the reality,” they continue. “Everything else is an illusion.”
If facts ruled the day in marketing, many of the top consumer brands would be bottom-shelf items. However, because those brands have established a perception of strength, quality, or leadership in the minds of consumers, facts are irrelevant. Consumers believe that leading brands are “better” than their competitors, and that’s all that matters.
Roger Dooley, a marketing consultant specializing in neuromarketing, recently wrote at his site about a new study that will be published in an upcoming edition of the Journal of Consumer Research. The study illustrates the power of perception in consumer behavior. “Individuals who are dieting or trying to eat healthy foods have learned to avoid some foods by name,” writes Dooley. “The researchers found that the same dish containing vegetables, pasta, meat, and cheese was rated as healthier when it was called a salad instead of ‘pasta.’ Another test showed that subjects ate more ‘fruit chews’ than ‘candy chews,’ even though the product was the same.”
What is the lesson for brands? Consumer perception — positive or negative — is a good place to start when developing any marketing campaign. It’s far easier to start with how consumers perceive your brand rather than developing an entirely new branding strategy or creating a new product. Doing so would require building a new idea in the mind of the consumer, which is much more difficult that altering a misperception.
For example, Porsche discovered through consumer research that its models were perceived as impractical as a daily driver. This perception was hurting sales, especially in a down economy. Porsche wanted to change the perception and began a multi-channel marketing campaign highlighting the value of Porsche as an everyday car, without actually changing the car. “We're not going away from the core brand values of performance, engineering and state of the art technology,” Porsche’s Vice President of Marketing David Pryor told DMNews, adding they simply wanted to focus on some of the more “every day” aspects of it.
For brands hurting in sales, the problem may not be with the product, but rather the perception of the product. The first step to turning around sales should be discovering how consumers perceive the brand, then building a campaign around that perception. The research can discover a weakness (or, even a strength), which can serve as a solid launching for rebuilding the brand. As the research shows, even changing the name of a product can result in an increase in sales.
Thursday, May 19, 2011
Also making it into BrandZ’s Top 100 list for the first time was social media network Facebook. Facebook’s brand value jumped 246 percent in the last year, earning it the number 35 spot on the list.
Despite the tremendous gains of Apple and Facebook, and the continual brand-dominance of Google, 2010 was not exactly a banner year for these brands in the news. Google is facing challenges across the world to its “Street View” option in Google Maps. And, the company faced the wrath of the Federal Trade Commission after its Google Buzz application was shown to have severe privacy flaws. Facebook also had a litany of privacy flaps as it continued to develop commercial applications, which exposed sensitive user data to third parties.
Apple also recently experienced its own privacy headache, as reports emerged that the popular iPhone was tracking user location. While Apple denied the report, saying that it was merely keeping a log of WiFi hot spots and cell towers around the users location, Congress is now putting the company (and, its rival Google) under the privacy microscope. Apple also had an embarrassing quality issue with the release of the iPhone 4. An engineering flaw with the placement of the antenna caused the device to lose its signal if it was held incorrectly.
Yet, even with quality issues, privacy woes, and sometimes questionable relationships with Federal intelligence agencies (Julian Assange, the infamous founder of the WikiLeaks organization, called Facebook “the most appalling spy machine that has ever been invented”), these are some of the world’s top brands.
How, then, can they seemingly get away with murder? The answer is simple: branding.
Apple, Google, and Facebook have all developed such entrenched brand identities with consumers that it gives them a Teflon-like exterior that protects them from controversies that would mortally wound lesser brands. They didn’t do it through flawless quality, or even building a solid level of trust with consumers. These brands did it through creating products that consumers can’t live without.
Consumers know that Facebook has issues with leaking (accidently, or on purpose) the plethora of personal information uploaded to the site. But, does that stop people from using their account? No, just as people will line up for hours to be the first to buy the next generation of iPhone despite previous quality issues. For better, or worse, consumers are hopelessly addicted.
No matter what happens, Facebook users will not terminate their accounts, owners of the iPhone 4 are future owners of the iPhone 5, and Gmail account holders will not be switching over to Yahoo!.
The sheer power of these brands is a testament to product differentiation, and the predominant role differentiation plays in establishing brands. The products produced by these brands aren’t just different than their competitors; they’re different in ways that consumers consider to be invaluable. Consumers value these brands so much that they have become too deeply imbued in their day-to-day lives to use an alternative, or give up. Differentiation, above any other branding element, has elevated these brands to immortal status.
Brands looking to increase their value in the minds of consumers should focus on the difference that makes them more significant than their competitors. It is unquestionably the “secret sauce” to a lasting brand.
The difference doesn’t necessarily mean “higher quality.” There are thousands of brands that produce a higher-quality product than the brand leader. It’s just that the brand leader has done a more effective job of demonstrating to the consumer how their product will make their life better. A quirky commercial isn’t going to get a consumer to change from one brand to another, but showing them how their life could be improved will.
Friday, May 13, 2011
This is their story.
Brand One: Express Oil Change & Service Center
Express Oil Change & Service Center recently ran a Groupon deal that advertised $101.97 worth of services (oil change, tire rotation, and brake inspection) for $30. For those in desperate need of an oil change, this was a great deal. While oil change facilities are plentiful, it’s difficult to differentiate what sets each business apart until it is actually visited.
The automotive repair industry doesn’t exactly have a sterling reputation. So, the user experience is a key differentiating factor (along with price, of course) among these facilities. Establish a level of trust with the customer, and repeat business is nearly in the bag. Because of the level of competition created by the numerous choices for oil change businesses, the first impression is everything.
Unfortunately, Express Oil fell short of creating a memorable first impression. Additionally, they didn’t live up to their promise of service. However, during checkout, customers are provided a “new customer packet” with several discounts for future services. They bring customers in with a discount. They encourage customers to come back with discounts. Discounts are their primary marketing strategy.
Brand Two: Dr. Elizabeth Caughey, DDS
Dr. Elizabeth Caughey’s dental practice has a five-star rating on Kudzu.com. Reviews say such things as, “The detail and time she spent with me…was surprising,” and “The perfect dentist!” New patients calling for an appointment speak with the office manager, who talks to them about the practice and explains the mission of the practice: to provide comprehensive, quality dental care. This dedication to quality care involves more thorough exams, and greater involvement from Dr. Caughey. As a result, it is somewhat more expensive than other dentists.
However, as the reviews illustrate, Caughey’s practice fulfills this expectation of superior service. The exams are comprehensive. The attention to detail and quality is clear. Delivering a premium service above that of their competitors is their marketing strategy.
Two businesses, each with a high level of competition, both facing similar challenges in establishing a brand. One uses discounts. The other uses superior service.
While discounting, especially through deal sites like Groupon.com, can be particularly effective at generating new business, the fatal marketing mistake is focusing primarily on future discounts at the expense of brand development. Had Express Oil put as much effort into the brand experience as they do their discount programs, they would have a better shot at generating brand loyalty — and loyalty at full price. Even if consumers were willing to sacrifice on quality in return for a discount, consumer loyalty is there only as long as the discounts. Once the discounts go away, so will the consumers. This means they are forever trapped in “discount mode” — not a good place to be.
On the other hand, the dental office put their energy into delivering a superior product, even at a premium price. They built their brand on quality — not discounts. Their brand is far stronger than that of the oil change facility because the dental office will generate consumer loyalty so long as they continue to fulfill on the level of service promised.
Discounts can’t be a substitute for true brand development. Your brand must offer something different to consumers, and you have to follow through with that promise. Express Oil didn’t offer anything that was different from any of their competitors, and they even fell short of what promises they did make (speed, quality of service). Instead, they rely solely on discounts, which cripples their potential. The differentiating factor in Dr. Caughey’s dental practice is that it offers a service superior to that of their competitors. As a result, they are able to establish a premium brand that has lasting potential.