Traveling

I'm working on a very exciting global hospitality project and working in Zurich, Dubai and London for a few weeks. Today I got to escape for a couple hours and take the train to Lucerne (or Luzern as the locals spell it). Absolutely beautiful city...

How far will a brand stretch?

Friday's Wall Street Journal offers two examples of brands trying to stretch outside their traditional boundaries.

First, Wal-Mart plans to launch small-footprint stores in a response to Tesco's entrance into the US market. Two different concepts will be launched next year:

• Urban convenience stores stocked with groceries geared to more affluent tastes
• Stand-alone stores offering a variety of health services and products

Second, Samsonite is striving to play in the luxury-goods market by reinventing itself as a "sexy, high-end label." The brand has launched designer luggage and high-end men's shoes; sunglasses and stationary are in the works. They're looking to compete with the likes of Burberry and Coach.

So how far will a brand stretch? While there are no hard and fast rules, a basic guideline is to determine how closely aligned the extension is from current perceptions. Wal-Mart has built its brand on 'cheap.' The likelihood of successfully extending upwards towards "more affluent tastes" is dubious unless it disconnects the Wal-Mart name using a sub-brand. The Wal-Mart connection with healthcare has a much tighter association --  healthcare costs have spiraled out of control, and Wal-Mart is a very viable brand to bring affordable healthcare to lower-income segments. And by doing so, some (needed) positive brand equity can be generated  for the master brand.

Samsonite is another story. By their own admission, "people still think of that hard, plastic suitcase when they think of Samsonite." It's associated with durable, not with style. Last year they acquired Lambertson Truex, a high-end leather-goods maker; IMO, it would have been an easier and less expensive proposition to position Truex as the high-end brand and keep Samsonite as the durable mass brand. That would give the company two distinct brands to appeal to two very distinct target audiences, and it would keep the aperture for revenue opportunities much wider. Repositioning Samsonite can be done if they create a cool enough product, but it will be challenging and I'm not sure it's the smartest move for the company. Time will tell.

Moving On

After almost 4 years of running Mantra, I'm headed back to office life. I accepted a position at Prophet, a niche management consulting firm specializing in brand strategy for Fortune 500 companies. I'm writing this post from my hotel room in a resort just south of Playa Del Carmen, Mexico, as we wrap up a very fun all-company retreat. Everyone here works hard but also knows how to play hard, and we've had a terrific time. I'm excited about working here; the projects are much larger and more complex, and there's a nice balance of left and right-brain activity. Never a dull day.

So I'll start writing more about my thoughts and learnings around our key service offerings, including a new one focused on marketing effectiveness. We have an amazing research & analytics team who can actually tell you which 50% of your advertising dollars are wasted versus working. I also have the honor of working down the hall from Dave Aaker, the vice chairman of Prophet and the man who literally wrote the book(s) on brand strategy. I'll be posting some interviews with him as well as a few other senior execs  here on strategy-related issues and trends. So stay tuned.

Succinct Positioning

Five words or less. Use consumer language, not "clientese." Follow the 4D rule. These are a few of my guidelines for writing positioning statements that are compelling and executable.

• Five words or less. See if you can write your own tagline that clearly captures the essence of your brand. And don't whine and say that's a copywriter's job... if you can't boil down the brand essence into a short, memorable phrase, chances are a copywriter can't either. It's not a quick and easy process, but it pays off. 
• Use consumer language. Too many times I've worked with clients who've insisted that we use certain phrases in the positioning that make sense internally but not to customers, or they're so focused on features that they forget that customers care more about benefits. To get yourself in a customer state of mind, write your positioning statements from a customer's point of view. For example, "If I choose x instead of  (alternative), I will (get what benefit) because (primary reason to believe)"
• The 4D positioning rule is desirable by customers, distinctive from the competition, deliverable by the company, and durable over time. A good brand position will sit at the intersection of these four requirements.

Some companies live and breathe their brand positions, and they're articulated perfectly in rarely changed tag lines.  Apple's Think Different and Nike's Just Do It are so powerful that they are the "north star" for those brands.  I can think of other great companies like Southwest Airlines that change tag lines often but never waiver from their brand essence.

If you're not an Apple or SWA, it's important to follow the three rules above to determine your future state (where you want to be) and work your way forward using internal alignment, operational improvements and marketing tactics that -- over time -- coalesce into a coherent, memorable brand.

For a few related posts on positioning, see Positioning Debate and More On Positioning.   

Client/agency relationships

I read in the WSJ a couple days ago that agency/client relationships are becoming harder to sustain… not surprising as marketers are under increasing pressure to drive results. In the good old days, clients were happy with increases on brand awareness and preference metrics. But given that the average tenure of CMOs at top-branded companies is only 23 months, there’s an intense pressure to demonstrate results – fast – and often at the expense of the brand and its customers. 

Many times, a new CMO sends the current advertising agency into an unproductive frenzy when they, upon joining a new company, immediately question their predecessor’s strategy. If the agency isn’t immediately fired (which often happens), an incredible amount of time is spent on the re-education of the new CMO — oftentimes as much as three months. Also, because advertising campaigns are tangible, new CMOs have a tendency to quickly look to the creative for a change in direction. Clearly, these knee-jerk course corrections, designed to demonstrate that the CMO is making an impact, are not only expensive propositions, but, more importantly, force the consumer to accept yet another brand positioning.

Ad agencies have to shift their thinking from pure creative to advertising that moves products. If agencies don’t have senior staff that can speak C-level lingo and understand how to tie creative execution to business results, we’ll see more and more of agency/client relationships go sour. On the other hand, clients often fallaciously think that advertising is (or could be) a magic bullet. They no longer have the patience to stick with a campaign (or an agency) for the long haul. And lastly, most aren’t empowered to make the kind of customer-experience decisions that would actually move the revenue needle. So they lump all these expectations onto their agencies and expect them to work a short-term miracle. Clients and agencies both can take steps towards improving their partnerships to be more win-win.

Who else can win?

I've been writing about companies who are committed to making a difference. I think the issue boils down to a very simple question: "Who else can win?" The primary focus has always been on how companies make money... ie. how the company wins. But precious few companies contemplate how their business model can help others win too. I'm calling this "mindful business"... stopping auto-pilot for a moment to really think about the ecosystem in which you operate, and what you can do to improve it.

Brands win when they help others win.

A few examples:

• Dove's Campaign for Real Beauty addresses self-esteem and our society's distortion of beauty. It's a great example of a mindful marketing program that benefits everyone.

• Starbucks' concept of social responsibility is embedded deep into its brand, including conservation, community volunteerism, commitment to coffee producers, the Starbucks Foundation (youth literacy), Ethos water, socially responsible investing, and more.

• Squidoo enables lensmasters to send their revenues directly to a charity of their choice (Squidoo will add your favorite charity if it's not currently in their system.) Over half of Squidoo's lensmasters participate in this program, and Squidoo itself donates 5% of net revenue to the charity pool.

• Intel's World Ahead program is committing a $1 billion investment to extend broadband PC access to the world’s next billion users while training 10 million more teachers on the use of technology in education.

• Whole Foods helped establish national organic standards, supports the Marine Stewardship Council to ensure sustainable seafood, established the Animal Compassion Foundation, and helped organic farms in North America grow.

• From its earliest days, Patagonia has been committed to environmental activism. Their mission statement is to build the best product, do no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis. They have an impressive list of actions that their mission has inspired.
  

Many companies wanting to fill in the "social responsibility" checkbox will adopt a non-profit or encourage employees to volunteer. Not bad, but this type of add-on activity won't gain traction. Mindful businesses tightly integrate a social perspective into their current business models. This is about being, not just doing. In the examples above, each company is mindful of their role within a larger ecosystem and seeks ways to leverage their role to strengthen the entire ecosystem. Their beliefs and actions attract like-minded, passionate customers and employees. Everybody wins.

Heroic brands

Like heroic individuals, Heroic Brands are motivated by something bigger than themselves. They believe it just might be possible to change the world. Heros are usually ordinary people who end up doing extraordinary things; likewise, heroic brands might sell t-shirts or software or skin care, but they do it with the awareness and intention to make a much wider positive impact. Heroic brands employ big-picture people who actively seek ways to turn day-to-day business activities into catalysts for social and ecological improvement.  ROI becomes Return on Intention, where intention embodies what is good for the business AND good for the ecosystem in which it operates. Heroic brands act like magnets that attract employees and customers who share the intention to make a difference. They remind us that making a living can actually feel good.

Words and meanings

I've been thinking about brands that are making a difference in our lives and society, and I used the term "worthwhile brand" to define them. However, I don't think that term sets the bar high enough; as one reader commented, there are plenty of brands that are "worth" my time and effort.

So why not just call it corporate responsibility? A widely quoted definition by the World Business Council for Sustainable Development states that "Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." There's also a more easily quoted slogan, Doing Well by Doing Good. All of this sounds great and admirable... so why am I searching for a new term?

A few reasons. First, words carry a lot of underlying meanings and associations. When you think of the words responsibility and behave, what pops into your mind? Maybe I'm the odd one out here, but I think of my mother and house rules. I think about times when I was a young girl getting into trouble because I didn't behave the way I should.  I think of what I have to do vs. what I want to do. I think of chores. I think "not fun." The term "corporate responsibility" implies that the people at corporate HQ -- execs and board members -- are responsible, taking the emphasis off the individual. And perhaps that's why corporate responsibility has typically been encoded into rules, programs and accounting standards. Sometimes it's delegated to HR to initiate charity or volunteer programs. Other times it's used as a tactic for good PR (note Enron's yearly "Corporate Responsibility Annual Report" and tobacco corporations' social reports.) Rarely is it a mentality that's embedded in the DNA of the culture.

Back to definitions: responsibility and behavior are things that you do. Character is something that you are. If you're focused on actions, you create your to-do lists and check off the fact that you did your one good deed for the day. If you're focused on character, then your identity and intentions naturally create win-win opportunities for everyone involved. It becomes fun and rewarding to give back and "do the right thing." Corporate responsibility is the effect, not the cause.

Brand building focuses on character. If we're interested in how companies can act for the good of employees, customers, communities and the world, then we must choose words that are motivational and aspirational... words that define character (cause) not behavior (effect). Initially I used the word worthwhile, but in hindsight I see that I was still focusing on the effect. Now I'm thinking along the lines of noble, upstanding, honorable, and integrity. These are aspirational character traits for a brand. When used as hiring criteria, these traits can create formidable brands that make measurably positive impacts on the world. 

Good vs. Worthwhile

I'd like to elaborate on this morning's post on Worthwhile brands, ask a lot of questions, and then open this up for discussion. My earlier post discussed some initial ideas for defining a worthwhile brand: does it measurably improve quality of life, make the world a better place, or leave no trace on the Earth? But of course nothing is so black or white. I'm trying to find the line between worthwhile and the rest, and it's pretty damn hard.

I'm going to ramble a bit, so bear with me. First I started thinking about brands that are the opposite of worthwhile: cigarette brands, perhaps, or gambling (but of course smokers and gamblers would disagree with me.) Then there are the irrelevant brands, those running 10th or 20th in their categories with marginal points of difference, doing no harm but contributing to the clutter (I'll come back to this one in another post.) And finally there are good brands -- plenty of them -- that don't make my original Worthwhile cut but they're part of our lives.

The brand that I've thought a lot about is Apple. By all traditional accounts, Apple is a great brand... probably one of the best. But are they worthwhile? According to whom? Objectively speaking, they make computers and music players with an original spin. How does that benefit the world? I think that purists would say: they're not following sustainable business practices or giving to charity, and therefore they don't qualify. But are sustainability and charity the only two ways to create a brand that makes a positive impact on the world?

I think not. And yet there's a danger in opening the criteria too wide; too many marketing and advertising folks latch on to words like "meaningful" and "purpose" and "passion" and dilute their true meanings. I think it's time to raise the bar. But where to raise it, and which brands to exclude? Ahh, now things get tricky. What is the difference between good and great? Between great and worthwhile (ie. making positive contributions to individuals, society and/or our planet)? How is "positive contribution" defined?

Back to Apple. One could say that without Apple, this world would be rather dreary. Many people can't imagine life without their Apple computer or their iPod. It's their form of self-expression, and there isn't a comparable alternative. Does this qualify as a worthwhile and positive contribution? I could argue both sides. And Apple's a member of the coveted club called "cult brands:" Harley Davidson, Ikea, eBay, and the list goes on. These are the guys everyone's striving to be like, right? But do passionate customers make a brand Worthwhile? Not necessarily... but again, where do you draw the line?

Lastly, while I like the term 'worthwhile' because it hasn't been completely diluted from marketing-speak, I feel a bit bad for the good companies excluded by my definition. Does that imply they're worthless? Not my intention, but it could come across that way.   

I could keep rambling but I'll stop. I haven't come to any conclusions yet, and I'd love to hear from you.

UPDATE:  I do want to clarify that I'm trying to broaden the perspective from "corporate responsibility." I believe that corporate responsibility is vitally important (Brandchannel has a great article on it). However, I'm not a fan of the word "responsibility" because it sounds like a chore, and I think its definition leaves a lot of beneficial businesses out. For example, a number of large tech companies are trying to solve the digital-divide challenge in emerging markets. They're starting to create a virtuous circle where everyone wins (including themselves, of course). And  when companies initiate sustainable business practices, everyone wins too. No corporate action is completely altruistic, but I think there are plenty of opportunities for brands to think more creatively about how to benefit more people than themselves. This is what I'm terming a worthwhile brand... but it's broader and harder to define than corporate responsibility.   

Worthwhile Brands

In the next few posts I'm going to play around with the idea of a worthwhile brand. I like this term because a) it's not overused, b) it implies important, valuable and rewarding. Along these lines, the manager of a worthwhile brand would answer "yes" to at least one of the following questions:

Will this product/service/company...
- measurably improve quality of life?
- make the world a better place?
- leave no trace on the Earth?

And you can't weasel out of the first one with marketing-speak. "Our customers' lives will be improved by yet another brand of toothpaste because they have been long-deprived of grape flavoring." Sorry, that doesn't cut it. However, if part of the proceeds from the new grape-flavored toothpaste goes to provide dental care for underpriviledged children, you've introduced a worthwhile purpose into the brand.  Not every product is going to change the world, but brands like Starbucks are, at the very least, "walking softly on the earth." Starbucks' recycled-content cups are expected to lower the company's dependence on tree fiber annually by more than five million pounds. The Gap's RED line is contributing 50% of proceeds to fight AIDS in Africa.

Let's all expect more from the businesses from which we buy, and expect more of the companies where we work.  Marketers and executives: how can you can make your brands more worthwhile? Even from a pure business perspective, it's worth thinking about. As Hugh says, "the market for something to believe in is infinite."