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.   

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.   

Trying to be cool

I've noticed an interesting pattern in marketing articles lately: big brands trying to be cool.

1. HP's trying to be cool with a viral video and new ad campaign. From the New York Times:

(The FingerSkilz video) was revealed to be a “viral’’ advertisement from  Hewlett-Packard, the leading edge of a new global campaign that aims to imbue H.P.’s machines with some of the coolness more commonly associated with Apple.

H.P. executives say the new campaign, which includes television and print advertising in addition to a variety of edgier approaches, is aimed at shaking up perceptions of the company as slightly stodgy, an image that has been reinforced by conservative corporate brand campaigns with themes like “everything is possible.’’

Hmm, so HP wants to be cool like Apple? Ok. First, let's compare company names: HP: blah. Apple: cool. How about web site and advertising? HP: blah. Apple: cool.  Now here's a quick test. Which laptop below is cool?

Yep, you're very good. And what brand is the black computer below? Wrong, it's a Dell. Just kidding... it's an HP. But you probably couldn't tell at a glance, could you?

2. Walmart's trying to be cool by copying MySpace. Slashdot quotes AdAge:

"It's a quasi-social-networking site for teens designed to allow them to 'express their individuality,' yet it screens all content, tells parents their kids have joined and forbids users to e-mail one another. Oh, and it calls users 'hubsters' -- a twist on hipsters that proves just how painfully uncool it is to try to be cool."

I can't comment on this better than BL Ochman: "Watching big ad agencies (and corporations) trying to master new media is a lot like watching people who are having mid-life crises trying to look hip, cool and young by adopting the toys, tools, and language of youth. It's rather pathetic."

3. McDonald's tried to buy cool. From BBC News:

McDonald's, the world's biggest fast food chain, is desperate to keep in with the youth market and saw hip hop as the key to a piece of the action. Last year, they offered to pay artists to rap about Big Macs. The deal was cash per airplay for any song featuring a Big Macs. Not surprisingly, the idea never flew, as not a single band would take up the offer from McDonald's.

DJ Semtex, hip-hop DJ for the BBC's 1Xtra radio station, says artists don't want to be seen to be bought. "The way that they came up the scene was like 'yeah, we're going to get into this culture and we're going to exploit and make some money and you're going to buy our food'."

Ouch. Come on, McDonald's... this is so not the way to be cool.

So what makes a brand cool? Stephen Cheliotis, chairman of CoolBrands, said: 

"When we ask about what makes a cool brand, the kind of things we get back is authenticity, originality, uniqueness," he said. "These are things that people are trying to strive for. They don't want to be seen as having the same type of brands as everyone else. They're looking for brands that have that cool edge."

Authenticity, originality and uniqueness. If your brand doesn't inherently have these traits, please... don't attempt to be cool. You'll look like you're having a mid-life crisis, and you will be laughed at. You can play the "cool dad" who's still a grown-up and acts accordingly, but don't try to be 18 again. If it's important to connect with the younger audience, don't do it with your existing brand... this is the time for a new one that's created from the ground up to appeal to a different mindset.

Innovation and brand extensions

The debate continues on whether brands must limit themselves to a single product. In my last post, Roger asks, "Amazon is doing very poorly of late.  To what extent is performance due to brand extension?"

I would agree with Scott's answer: Amazon has definitely overextended itself to a generic "online shopping destination." It no longer stands for anything meaningful or memorable. And I'm glad Scott brought up Virgin, which is the brand for an airline, a record label and a music chain. What makes Virgin successful doing this where others would definitely fail? I believe it comes down to a reputation for innovation.

Virgin = rebel = Richard Branson. Richard sets out to do something rebellious in whatever industry he chooses to enter. The Virgin brand is based not around what Richard does, but how he does it. Consumers understand that anything with the Virgin label will likely have a unique experience attached to it. Therefore, the only way Virgin can be successful with  new ventures is to make each one rebellious and new for its respective industry. If the new venture is innovative, it's consistent with the brand. Unfortunately, the Virgin brand is so closely tied to Richard that it will likely flounder when he leaves (ditto for Steve Jobs.)

And speaking of Apple, the Apple brand can expand from computers to music players and perhaps phones because they are known for "thinking different" and therefore setting an expectation of originality. We don't buy an Apple product, we buy the idea of what Apple stands for. The same goes for 3M, which makes a wide variety of products. Perhaps not so coincidentally, the 3M tag line and mission has always been "Innovation." Google is an innovation machine, generating a lot of new ideas that may or may not fly, but they all hang under its mission of organizing the world's information and making it universally accessible and usable.

An upward spiral is created when the brand drives focused innovation, and innovation reinforces the brand.

Company brands are like people brands. The only individuals whose reputations don't suffer when they switch from one area of focus to another (to another to another) are entrepreneurs who are known for breaking new ground. It is not out of character for Mark Cuban to go from software to basketball and HDTV.

Company brands, like people brands, are most successful when they don't try to pander to everyone's tastes. They have a definite vision that's different from the alternatives. Consumers buy into their vision or not. if it's a clear vision, it's easily recognizable regardless of the product to which it's attached. This is perhaps why some of the most successful companies are associated with a figurehead who has a strong personality. You either love them or hate them, but they probably don't care too much about what you think.

So pick one thing and do it really well. Make it ground-breaking. Earn a reputation for innovation. This gives you the credibility to extend your brand within a reasonable scope and reinforce your groundbreaking image. This isn't easy to do. It's not for everyone. But it's the best way to build flexibility into a brand.

So coming back to the original question about Amazon...although it was initially groundbreaking, its focus has become highly diluted; it's moved from innovative ideas to selling groceries. Big mistake; that's like Mark Cuban becoming a bag boy. By trying to be all things to all people, a brand becomes nothing to anyone.

Focus or Flexibility

My last post, Positioning for Extinction, stirred up quite a debate. Laura Reis, a big proponent of highly focused brands, suggested that Weber stick to charcoal grills and launch a new brand for gas grills. I took the other side, saying that Weber's brand is strong enough to cover both types of grills (plus, as Marianne points out, their grilling utensils and restaurant.)  At last count, over 20 people have contributed to the debate; the comments are worth a read.

As is often the case when smart people are polarized on an issue, I start thinking of the middle ground. How can we all be right? I often agree with Laura when she talks about focus, yet there are very successful brands that don't fit that mold (I'm thinking of GE, IBM and Apple, for starters.) The issue of focus versus flexibility in a brand can depend on a couple factors:

1) How new is the brand? Here's where I completely agree with Laura: new brands should tightly focus. Pick one problem that needs solving and build a reputation for solving it. Netflix solved convenient movie rental. Google solved fast, accurate search. Apple offered a cool new way to compute.

As the brand becomes well-known, it may earn the right to extend its products and services. Sometimes age translates into trust; older brands are familiar and usually within our comfort zone (we assume that if they're still around, they must have done something right.) IBM could move into IT services because of its long history in computing, and GE could successfully move into financial services... although that was a real stretch; I wouldn't have recommended that one. Regardless, if a company develops a strong reputation that transcends their original product (ie. convenience or trust or safety or cool) then it can consider product/service expansion within the scope of that reputation.

Is expansion always recommended? Not at all. But building a brand is a dynamic, ongoing activity... not something you do once and check off your list. Brands are living entities, and their continued existence largely depends on the environment in which they operate. If markets and consumer preferences change over time, brand flexibility and adaptibility becomes important. Some might say that changing times require a new brand; in most cases, I'd disagree. Companies pour a lot of money into building a brand over the years; if it executes well and earns trust, then there's a big bank account called 'brand equity' that would be foolish to discard. Which leads me to #2...

2) How much trust has the brand earned? To use an analogy, let's say I hired an assistant to help me coordinate projects. Would I trust her to take on strategy work, or customer interviews, or client interaction? No.... at least not at first. If she's not a great project manager, I'll let her go. If she's good at project management but doesn't show an aptitude for anything else, I'll keep her as a project manager. But if she earns my trust and shows a willingness to learn, I'd be quite open to testing her out in other areas... and pretty soon she might be running with projects of her own. I think you can see where I'm going with this.

Customers "hire" a company/product/service to fill a certain role. After building up a set of perceptions about that company, they know to either replace it, keep it for the specified role, or expand their relationship with it based on earned trust.

In my analogy, the assistant's 'brand' is not based on being a project manager. If I trust her with other tasks, it's because she's built a personal brand on how she works, not what she does. In the "focus" philosophy, that person must stay a project manager her entire life; in the "flexible" philosophy, she can extend into other areas as long as she proves that she can build on her strengths and that the new role fits her strengths.

So Apple should not confined to being a computer brand because its reputation is not based on what it does (computers) but how it does it (cool). The Apple brand easily encompasses a broader range of products as long as they all deliver on Apple's cool reputation. Conversely, Comcast (in my personal experience) should stop trying to get into telephony and internet access until it's earned a solid reputation as a cable provider. If I have continued problems with my cable service, why should I trust them with other services? By spreading themselves too thinly, they end up not doing anything well.

So as you build your brand, think both about your core offering (what you do) and what you want to be known for (how you do it). The latter part -- which is ultimately your reputation -- provides the flexibility for your brand to transcend your initial product or service offering if it makes sense. And yes, there is a point where too much flexibility completely dilutes your brand. Unfortunately there are no hard and fast rules in this business; we can debate this issue for weeks, and everyone can provide examples to prove their respective points. But at the end of the day, every brand must consider a multitude of factors that go into this decision. Like people, brands are highly personal and individual. What is right for one is not necessarily right for all.

 

Positioning for extinction?

I just came across Laura Reis' post about why Weber should limit their brand name to charcoal grills (excluding gas) and I just have to disagree. Laura says:

Trying to cover all the new emerging categories with one brand name will weaken your brand in the mind of the consumer as new brands are launched by specialists. Keep Weber as a “charcoal” brand, period. And launch the gas grills with a new brand name. Maybe even a new name for the portable gas grills...

After you build a leading iconic brand, the last thing you want to do is undermine it with a line extension that goes against the core belief of the brand... You build brands by being first. Weber was the first covered-kettle grill.

OK... so following that logic, the railroads were actually smart to think of themselves as being in the railroad business instead of the transportation business. And IBM was definitely wrong in putting the IBM name on PCs and services when mainframes became obsolete. And McDonald's was wrong to add salads to its menu because it goes against their "hamburger" positioning. Following this logic, there is no reason to launch line extensions and new products under the same brand name, regardless of changes in the market. Hmmm.

I guess I see things a bit differently. When you position your brand on what you do (charcoal, hamburgers, computers), it can only lead to extinction. Rather, base your positioning on how you do it (ie. a higher-level benefit), which allows you more flexibility over time. Google's brand position isn't search, it's organizing the world's information. Nike isn't shoes, it's passion. McDonald's isn't hamburgers, it's convenience.

And back to Weber. A quick search shows that while the grill industry is flat, shipments of charcoal grills are down 32% while gas grills are up 83%. The article states: 

"Right now, grillers and barbecuers are looking for more convenience, more safety and more versatility. Because they are easier to use, LP gas grills have shown steady growth in sales    over the past few years. Most grill owners (55%) say their next purchase will be a gas grill as opposed to 29% who plan to buy charcoal grills."

So in a nutshell, Laura is suggesting that the Weber brand should just die out with charcoal grills.

The Weber brand is far bigger than charcoal. A more flexible position that's loaded with emotional attachment is tied to backyards and barbeques. As Laura noted, Weber's been around since 1952; there are a lot of collective backyard memories tied to Weber. That's where the brand equity lies... not in a lifeless piece of charcoal.

Soft Underbellies

Tim Manners writes about the "vulnerable soft underbellies" of Apple and NetFlix in a recent Fast Company article.

Apple won't let us do what is ultimately the most important thing. It won't let us easily change the damn battery when it dies... This is not the stuff of which undying customer loyalty is made. They have needlessly left themselves vulnerable to any competitor able to design something of comparable aesthetics and smart enough to let the consumer have life-and-death control over its battery.

The famous Netflix promise is that you can rent as many movies as you want each month for a flat fee. Well, not exactly. Netflix recently acknowledged that it slows down the rate at which it fills the orders of its heaviest users, a practice critics call "throttling."... As with Apple, it took a class-action lawsuit before Netflix would publicly acknowledge that it is giving preferential treatment to its newest -- and least loyal -- customers.

A strategy that punishes one's most loyal consumers is hardly sustainable.

There are so many examples of this. In the wireline telecom world, service providers promote a low per-line rate while adding special surcharges that almost double the advertised price. Consumer electronics are made to last only for the life of the one-year warranty. Wireless and cable providers give special discounts and promotions only to new customers, not to existing ones. Software companies like Symantec offer frustrated virus-infected customers no way to reach a live customer service rep without paying $40 to $70 for the call (which is why I ditched their software).

What is your company doing to sabotage its success with customers? Do you even know the areas where customers are frustrated and may cause them to jump ship? Are you willing to break away from "industry-accepted practices" in order to give customers a more desirable experience?

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BTW (shameless self-promotion plug here), we've got a pretty cool online customer dashboard where our clients can measure the gap between what's really important to customers and their satisfaction level with each attribute... then track progress in closing those gaps over time. It's a great way of identifying your vulnerable spots from your customers' perspectives. Ping me at jrice at mantrabrand.com if you'd like to know more.

Maslow & Branding: Wrap-Up

In previous posts I've outlined 8 basic human needs in Maslow's Hierarchy and how they relate to branding: Security, Connection, Esteem, Control, Aesthetics,  Cognitive, Self-Actualization and Transcendence. But as Tomas commented, "such a sequential hierarchy of needs doesn't usually happen in our post-scarcity society. Rather, we should see "human needs as an ecosystem where all needs co-exist together for the vast majority of us once our basic subsistence needs are met." Exactly right... and that's the topic of this post.

As you can see from this diagram, I've changed the pyramid to a circle (I've also rephrased a few of the names to be more reader-friendly).  In the center of this example is "Web 2.0", which refers to blogs, forums, wikis, social networking, etc. You can see at a glance what's driving the massive growth of web 2.0 -- almost every core human need is satisfied through these technologies. Blogs, MySpace, epinions.com and Slashdot are all places where different types of people can converge to get their needs met. Whereas web 1.0 only offered a source of learning via one-way communication, Web 2.0 offers entire ecosystems for people to learn, share, grow, achieve, connect, and promote a cause.

I've titled the chart "Employee/Customer Engagement" for you to think about how your brand activates core needs, both internally and externally. Let's take a look at Starbucks as an example. Starbucks environment activates Belonging and Aesthetics. Ordering a half-caf blended vente latte satisfies the need for Control (I get my coffee exactly how I want it), and Ego/Esteem (pride of being an "insider" and knowing the terminology). Ego/Esteem is also stimulated by friendly employees who remember your name and exactly how you like your coffee. Starbucks is a strong brand because they meet numerous core needs simultaneously. I'd be interested to hear from John Moore or Paul  Williams on how this model works internally at Starbucks.

From an employee engagement perspective, you might think about how you can enable employees to learn, grow, achieve, or contribute to a cause of their choice. How can you give them more control over their work environment, or their career path? How can you use Web 2.0 technologies to create an ecosystem for learning, collaborating and recognition?

Everyone talks about change... but basic human needs don't change. By aligning your brand with one primary need -- Apple with Aesthetics, or Starbucks with Belonging -- then that need serves as your anchor and compass to guide business decisions over time. Then establish links with secondary needs to deepen and enrich the brand experience.

 

Maslow & Branding: Last 3

We're almost to the end of the series on Maslow and Branding. I'll wrap up the last three needs in Maslow's hierarchy here, and then we'll look at how they all interact in social networks.

Cognitive: This is about learning and understanding the world around us. While many people still blindly accept the doctrines of traditional authority (church, state, corporations, media, etc.), others are taking control, asking questions and seeking answers. Brands that knock down barriers to knowledge and provide easy access are delivering on this need. These aren't just the obvious brands like Google; they're also brands that practice transparency and educate customers on the how's and why's of their products, services and business practices. Transparency and openness deliver on customers' desire to know. FedEx tracking is a great example (of both Cognitive and Control). And of course, blogs and forums fit into this category as well.

Self-actualization: Nike pioneered the focus on self-actualization with their famous "Just Do It" tag line. Home Depot followed suit with "You can do it. We can help." Brands that demonstrate a belief in their customers' abilities will win the hearts and minds of those who want to reach higher and accomplish more. But it needs to be more than just talk or a nice tag line. Microsoft's campaign, "Where do you want to go today?" appeals to this need, but I haven't found a lot of supporting evidence for the promise (of course, I haven't looked very hard.). How about creating more interactivity with customers, learning where they want to go, offering online education classes, or perhaps social networking tools that connect mentors with learners?

Transcendence. This need is about giving back, enriching others or championing a greater cause. The Body Shop was founded on core values like environmental protection; their web site reminds visitors, "Never doubt that a group of thoughtful, committed citizens can change the world; indeed, that's the only thing that ever does." The Toyota Prius won Edmund's Consumer's Choice for Most Significant Vehicle in 2004. Cause-related brands have strong appeal to small but loyal customer segments.

So now we've looked at 8 core consumer needs: Security, Connection, Esteem, Control, Aesthetic, Cognitive, Self-Actualization and Transcendence. As someone pointed out in an earlier post, it's not such a clean, linear hierarchy in real life. How they interact will be the subject of the next post.

Maslow & Branding: Aesthetics

OK, back to the series on Maslow and Branding. So far I've written about Security & Connection, Esteem and Control; these four have the most relevance to the widest audience. I believe every company must make an effort to address each of these needs in the way they do business. Some  may choose to focus their entire brand around one of these: Nordstrom's with Esteem, or IBM with Security. 

Aesthetic is the next core need on the pyramid (actually, Cognitive is next but I think Aesthetic is more important). A couple years ago, Virginia Postrel wrote a book called The Substance of Style: How the Rise of Aesthetic Value is Remaking Commerce, Culture and Consciousness in which she argues that increasingly wealthy and sophisticated customers demand "an enticing, stimulating, diverse, and beautiful world." The income range that aligns with this need continues to go down along with prices; yet perhaps this need is not based on income but pure psychographics. It's the difference between customers of WalMart and Target, or 7-11 and Starbucks.

Aesthetic used to be a nice-to-have, but it's increasingly becoming foundational. Witness the explosive success of Apple and the iPod, or the gotta-have Razr phone. Target is bringing designer style (Isaac, Oldham) to the masses, along with InStyle magazine and "The Look for Less" show. Starbucks combined coffee with an aesthetic environment. Barnes & Noble did the same for books. There are now 250 bathroom faucets from which to choose.

Style is important because it's an external representation of our own self-image. What we wear, drive, carry... they're all badges to demonstrate who we are. It makes me wonder if Aesthetic really is the core need; perhaps it' something much more basic, like 'validation of self-existence.' Perhaps style is our subconscious way of defining who we are, or attracting a mate (like peacocks and bird plumage).

This is an interesting challenge for brands. It means you must have either a distinctive style that a subgroup is attracted to (meaning you can't be all things to all people)... OR you offer ways that your product or service can be customized to suit their diverse aesthetic preferences.  And don't think this is just for 'consumer' goods. Business people are consumers too; they don't leave their aesthetic desires at home. For example, a good friend of mine who's a programmer and serial entrepreneur is obsessed with writing "elegant code."

Has your company considered the importance of aesthetics to your customers?

How important is the brand?

I'm going to interrupt my series on Maslow & Branding to chime in on a debate between Tom Asacker and Laura Ries.

Laura says, "Building strong brands is the key to success, in our opinion, not better products or better people." (go read the entire post for background).

Tom says, "Wow! I couldn't agree with her . . . less." The comments were even less kind:

"Are you kidding me Laura??? What planet are you from??? How can you brand a bad/mediocre product or service anyway?  I guess she also believes advertising is the other key to success."

Laura responds by saying,

"Is Google a 'better' search engine? Is Red Bull a 'better' energy drink? Is Microsoft a 'better' operating system? Or did these companies build better brands? Building a brand means standing for something in the mind of the consumer. What gets you into the mind? Usually it is by being first in a new category..."

You really need to read all the comments on these few posts to get the gist of the passion on the two sides of this debate. I'll bite and add my two cents.

Branding is so complex and often misunderstood. The traditional view is that branding is something done by the marketing department or ad agency to position the brand in consumers' minds, usually through advertising. Laura's father Al Ries and Jack Trout wrote a famous book called "Positioning" that outlines this theory. It was the bible for ad agencies (and probably still is.) He wrote it back in the days when products were generally well-made, customer service hadn't yet been outsourced, there were half the number of products on the shelves, and the pattern of releasing software too early hadn't yet become commonplace.

Then life started speeding up; competition got faster and fiercer; outsourcing was discovered; quality started declining... but the perception was that "we can still win if we do positioning and advertising." The dot-boom exemplified this phase: companies with no real product or business plan were spending millions on Superbowl advertising. Sure, they were first in their categories and followed all the right steps as outlined by traditional marketers. But they thought they could buy their reputations instead of earning them.

Al and Laura aren't wrong; we can't throw the baby out with the bathwater and just focus on products and people. Marketing shouldn't be forgotten. We need to find a balance. But their emphasis on marketing and being first unfortunately doesn't address the core need we have today of getting back to the basics and creating something worth talking about.

That said, I think their emphasis on building a strong brand is right on... and that's because I believe that brands are not the domain of marketing departments but of executive teams. A brand strategy is, in essence, a focused strategic platform that guides every aspect of the business. If a brand is a house, then the various departments are the rooms, and the brand platform (the brand mantra) is the foundation. Ideally the foundation sums up the purpose of the company in 5 words or less. In other words, why should people care about you?

The full brand strategy fills in the details; it's the blueprint for the house and guidelines for interior design. The blueprint outlines the type of customers who will visit the house, how it will be used, and how the experience should differ from the other houses on the street. If the blueprint and execution are done right, marketing is simply an open-house sign in the front yard. Starbucks created a powerful brand with no advertising. Ditto with Google. They both created a new and/or better experience for people to talk about.

I think (and hope) that this is what Laura has in mind when she talks about the importance of brands. I don't necessarily agree on the importance of being first, especially in the technology arena. Someone can come up with a great idea (Newton) but another company can quickly figure out how to do it better (Palm). And I think that marketing is partly the job of everyone in the company, not just the people who call themselves marketers. But I do agree that building strong brands is the key to success... and it involves aligning great products and great people with a great purpose to meet customers' unmet needs.

 

Maslow & Branding: Control

OK... after 2 computer crashes, a new computer and a trip to San Fran, I'm back in business. I've been reviewing the 8 basic human needs in Maslow's Hierarchy and discussing the implications for branding. First came Security and Connection, then Esteem. Now we're on to a need that's currently not in the hierarchy but I think it's crucial: Control.

It's quite possible that Control didn't show up on Maslow's radar back in the 30's; I think our need for control is directly proportional to the rate of change in our society. As stability breaks down, our need to control whatever we can becomes greater.

Control is tightly linked to the notion of freedom; without freedom we have no ability to control our environment. Control and Freedom are two sides of the same coin, a linkage that has surfaced in primary research for several different technology and B2B clients. Features like flexibility and customization relate back to Control, but so do social technologies like blogs, forums, user ratings, etc.

The emerging grassroots economy is pushing both Freedom and Control into the hands of employees and customers... forming a vast, distributed human network where each node (individual) can connect, communicate, make choices, learn from each other, grow. In essence this new economy is enabling and empowering us to live and work the way we want, not how someone else tells us we must.

On a related note, the do-it-yourself (DIY) movement is spurred on by several core needs including Control, Cognitive and Self-expression. As it relates to control, DIY goes far beyond building your own deck or painting your house. Instead of paying professionals for our divorces,  wills, travel arrangements, stock trading or tax filing, we're embracing technology and information sources that enable us to learn and do it ourselves. In other words, we are taking control of the areas of life that are important to us (and we'll outsource those activities that aren't so essential.) Home Depot's tag line, "You Can Do It. We Can Help." beautifully sums up how brands can think about putting power and control in the hands of their customers.

The challenge for marketers is that we're accustomed to maintaining control (over our messages, over the product), but we're being pushed to share it. We're being relegated into the 'helper' role while customers are willingly doing the work. Customers are not only taking control over ad viewership (a la Tivo) but are appropriating many aspects of marketing and business including

• marketing (word of mouth, consumer-created ads)
• product development (open source, legofactory.com)
• media and journalism (blogs)
• distribution (eBay, Amazon affiliates, peer-to-peer)
• content & information (wikipedia)

At some point, perhaps we'll be evolved enough to realize that the pie is not finite -- giving or sharing control does not leave us powerless. On the contrary, companies that ride the grassroots-economy wave and enable customers to have more control over the brand experience will find themselves in a much stronger place than those companies who refuse to open up. When you give customers control over the brand experience, they feel a sense of ownership... which of course leads to greater loyalty. And let's not forget all the unpaid labor you're getting with your volunteer army.

In what ways can you help your customers gain greater control... over their lives, their jobs, or your carefully crafted brand experience?

Maslow and Branding: Esteem

Yesterday we looked at Security and Connection, the two most foundational needs (above basic survival) on Maslow's Hierarchy. I was planning to focus on another two today, but this next need -- Esteem -- is rather juicy. I'll save the other ones for tomorrow.

Esteem
Or, "make me feel special and important."  There are numerous ways that brands can deliver on customers' need for Esteem; customer service comes to mind first. A great example is Conference Calls Unlimited, which stopped all advertising and redirected marketing dollars into overqualified customer care members, employee incentives and a ton of customer perks including free passes to events and conferences (I received flowers after my first conference call!). The CEO, Zane Safrit, informed me that the strategy produced measurable results.

Some newer ways of delivering Esteem include:

• "New Economy" forums like LegoFactory. Not only is this a place to show off your new Lego designs to other community members, but you also get a chance to be publicly recognized for a great design by the Lego Product Designers themselves. Another example is Slashdot, where you earn karma for smart participation in the forums. You can see in the FAQs that people's karma scores serve as  'reputation badges,' and it appears that some folks were a bit peeved when the karma indicator was changed from a potentially unlimited number to a label ( Terrible, Bad, Neutral, Positive, Good, and Excellent.) You can see the importance of Esteem in this (pretty funny) response:

• "Q: It seems unfair that I can't get any more karma than that even if I earn it.

A. The text label is one way we've decided to emphasize the point that karma doesn't matter.... Karma is used to remove risky users from the moderator pool, and to assign a bonus point to users who have contributed positively to Slashdot in the past. It is not your IQ, d**k length/cup size, value as a human being, or a score in a video game. It does not determine your worth as a Slashdot reader. It does not cure cancer or grant you a seat on the secret spaceship that will be traveling to Mars when the Krulls return to destroy the planet in 2012. Karma fluctuates dramatically as users post, moderate, and meta-moderate. Don't let it bother you. It's just a number in the database."

Interesting; they're trying to emphasize that karma doesn't matter. Clearly it does... it's a foundational human need. Despite their huge success, they may do even better if they reinstate numbers instead of labels. It's all about earning recognition.

• Amazon's plogs (personalized weblogs) and recommendations are good examples of how to deliver Esteem using technology instead of people. They're so good it's almost creepy. I visited Amazon yesterday and was greeted with "Jennifer's Plog" that included a long post written by Elizabeth Kostova, author of The Historian (good book, BTW.)  Amazon is the only brand from which I actually enjoy receiving emails; they're always kindly informing me about a new book that I should be interested in (and they're always right.) It's as if I had a personal book assistant thinking about what Jennifer might want to read.

So yes, this really is all about ego. We don't like to admit that we need our ego stroked, that we want to be recognized and feel important. But hey, it's a fact AND it's a huge motivator for purchase (like L'Oreal's tag line: "It's more expensive, but I'm worth it.") Obviously all fashion, cosmetics, car companies, etc. are playing on Esteem, but as you can see from the above examples, any company can meet this need.

How could your brand boost your customers' egos and make them feel special?

Maslow and Branding

Remember back in your Psych 101 class when you learned about Maslow's Hierarchy of Needs? Bet you never expected to see it again in the business world, but... ta da! Here it is. Personally I think a few are missing like freedom and control. But in general, we can easily see how strong brands relate back to the hierarchy. In the next couple posts, I'll walk through the expanded hierarchy (8 needs instead of 5) and discuss their relation to brand strategy.

Security
Right above survival (food, water, shelter) we find security and risk aversion. This is the "No one ever got fired for buying IBM" syndrome. There are people  everywhere who will only purchase products and services from companies that have proven themselves over time. They stuck with SBC when their more adventurous counterparts were fleeing to try one of the new competitive phone companies. They don't want to be held responsible for making a bad decision if the new company on the block doesn't pull through. Security and trust are tightly aligned; since this is such a fundamental human need, all brands need to earn trust. But incumbents have (usually) earned the right to differentiate themselves on risk aversion, especially in rapidly changing markets like high-tech.

Connection
Above risk aversion we find connection and belonging. Combine this fundamental need with the fact that our society has become extremely fragmented, and you've got (IMO) the primary fueling factor for the explosion of social technologies like blogs, wikis and forums. We no longer stay in the same job for 50 years; we participate in fewer local activities; we do less and less as families and more as individuals (for more on this subject, check out Bowling Alone by Robert Putnam). We're seeing this era of fragmentation come to a close, and the locus of connection is reforming on two very different levels: the physical world where brands like Starbuck's are providing modern tribal gathering spots, and the virtual world where like-minded people can connect based on affinity instead of geography (like Slashdot.)

As with trust, all brands can work on facilitating a sense of connection through blogs and forums. But newer brands that are plugged into the grassroots economy are making 'connection' a foundational differentiator for their brands. I'll end up revisiting social technologies and grassroots economy after going though the entire hierarchy, because the virtual locus of connection is actually the point at which 4 different needs intersect.

I'll tackle the next two, Esteem and Cognitive, in the next post. In the meantime, what are your thoughts on security and connection? Do you have examples/counterexamples?

Change

I just started reading "The World is Flat" last night and was struck by this quote by David Schlesinger, who heads Reuters America:

"Change is hard. Change is hardest on those caught by surprise. Change is hardest on those who have difficulty changing too. But change is natural; change is not new; change is important."

I opened with a very similar thought in my presentation last week at the Online Computer Library Center (OCLC) symposium at the ALA conference (go here for a very short synopsis). Wow, talk about an industry that's about to get hit with a sea change... and of course it's already started. I had the idea that Netflix, not Google, might be libraries' greatest competitor;  Netflix taught the world that we don't need to leave our homes, drive to physical locations where what we want might not be on the shelves, or pay late fees. I got an email the next day with a link to BooksFree --  the Netflix model applied to books. I also received  a link to a post on E-Ink,

"...the world's largest flexible organic active matrix display. The displays measure 10 inches diagonally and are laminated with E Ink Imaging Film making them .4 mm thick. This material conveys a similar appearance as printed ink-on paper and can be contorted and rolled without damage. Power is required only when an image is being updated, and is held indefinitely. Plastic electronics are forecast to be a $250 billion USD industry by 2025, including electronic newspapers, roll-up monitors, and other innovations."

As much as I love books, how cool will it be to download 100+ books into a single reader interface that reads and feels like paper and allows us to annotate, search and send snippets to others? Talk about disruptive technology.

Yesterday I spoke at Tulsa's Business Marketing Association about how the grassroots economy and social technologies like blogs, wiks and forums are impacting businesses today.  Fundamental human needs (connecting, learning, contributing), combined with new technology advances, are creating a fundamental shift in our society.

One of my favorite posts over the past two years is titled Blogging and the Singularity. If you're not familiar with the Singularity, it's the point when societal, scientific and economic change is so fast we cannot imagine what will happen from our present perspective. The idea is based on the premise that the rate of change is exponential, not linear; the rate of change in the past is a snail's pace compared to what we'll see in the next 10, 20, 50 years.

"Change is hardest on those who have difficulty changing too."

Humans don't like change. We hunker down in our comfort zones and don't see change until it hits us over the head... and at that point it's usually too late. I just finished reading "Seeing What's Next: How Theories of Innovation Predict Industry Change" by Clayton Christensen. If you've never read anything by Clayton, I encourage you to do so. (He also wrote The Innovator's Dilemma and the Innovator's Solution.) His fundamental premise on industry disruption is one that, IMHO, every business person should be familiar with.

How current are you with fundamental consumer and technology trends? With the tenets of the grassroots economy such as co-creation, transparency and customer/employee empowerment? With the opportunities among underserved or unserved customers that cry out for disruptive innovation?

None of us should be in any business but the change business. We must not only keep up with the facts of change, but also (and perhaps more importantly) release  our death-grip on the way things are right now. It's completely futile.  Is your business structured for flexibility and change? Are you?

Madison Avenue and branding

In Bob Bly's recent post entitled "The Great Madison Avenue Branding Rip-Off,' he and friend Richard Armstrong argues:

“'Get three Madison Avenue types in a room and it’s ‘branding’ this and ‘branding’ that.  But it’s ridiculous...  it’s just one of MANY credibility factors that go into an advertisement.' 

... The conclusion: branding is just one of many CREDIBILITY factors in marketing … and credibility is just one of multiple factors in selling … so to devote your advertising to building the brand is to do something like 1/10th of the selling job it should be doing."

I've worked on both the agency and client sides of the table, and here's my take:

• Agency execs are right: the brand is paramount.
• Ed and Richard are right: credibility and reputation are paramount.

A brand is an idea in the minds of constituents (customers, employees, etc.)... and that idea is created by what a company says (marketing) and does (operations.) A brand is the sum total of what people think about your company. Sometimes it's schizophrenic, or says one thing and does another, in which case credibility is shot.

An effective brand keeps its promises. Advertising should communicate the brand promise, and operations should fulfill it. Everything should work together. Think Apple, probably the most coherent brand on the planet.

So, back to the original discussion: no, agencies are not off-base by focusing on the brand. However, I don't believe that many of them are going about it the right way. IMO, there are two core issues here: first is the fallacy of 'brand advertising', and the second is that agencies are usually not well-suited to do brand strategy.

The brand-advertising fallacy:
As a client, I was told by my (nationally recognized) ad agency: "no, we cannot do response-oriented advertising until we've run 'brand' advertising for at least 3 months." Sorry, but that sets off my bullsh*t meter. The imagery, tone of voice, tag line, copy... there are plenty of elements that can deliver the brand message in conjunction with a sales promotion. CFOs don't have the patience for so-called 'brand advertising' anymore, and marketing is now accountable for results.

Agency effectiveness in branding:
I'm probably going to take some heat for this, but I personally don't believe that a traditional ad agency can do an effective, unbiased job at brand strategy. Their primary sources of revenue are ongoing campaign development and media; the up-front strategy project is a means to an end. The objective in advertising-driven branding is to come up with a core selling point that can be communicated right now. But I have often found that the right brand strategy (ie. what the market really wants and no competitor is delivering) is not something that the client can deliver right now. I've often recommended that the client stop advertising because they're dumping money down a black hole by running ads that are not relevant to the target audience... yet they're not operationally prepared to deliver on what the customer really wants.

The brand project deliverable from an agency is an ad campaign. The project deliverable from an independent brand strategy firm is a set of recommendations for every aspect of the business -- including the internal culture -- to bring it more in alignment with the open market opportunity.

Don't get me wrong; the really good account-planning agencies do fantastic work in creating highly relevant, effective ads that reposition brands in a more positive light. It helps when the company is already delivering a positive experience but perhaps hasn't figured out how to communicate it effectively. Yet I also strongly believe that since the ad agency is an outsider with no influence over operations, they cannot initiate or effect a fundamental brand shift when it's necessary... unless they're working for a client who understands how to translate the agency's strategy into operations, and has the clout to get it done.

Yes, I admit this post is a bit biased... I am, after all, an independent brand strategist. But I started my business precisely because I experienced the difficulty in creating effective brand strategies for my clients when working for an agency. Sometimes we were grasping at straws for an ad promise that was deliverable, desirable and distinctive, and we had no opportunities to impact the core business. We took what we could get.

Final thought: branding starts with the CEO and executive team, not with advertising. And neither an agency nor an independent brand strategy firm can make a whit of impact if the executive team doesn't buy in.

   

 

Positioning and customer insight

Back in Feb 2004 I was host to a hoppin' debate about positioning. In the past couple days, the conversation was revived again by Greg with the question, "How can I simplify the concept of positioning for new business owners?" I thought it was a great question and one to bring forward in a new post.

I answered Greg with this comment:

'What can you do better than anyone else that meets an unmet need in the market?' That's your position. To arrive there, you need a pretty good understanding of your customer and your competition.

Greg replied:

Part of me wonders how possible that really is... i.e. unmet need. Is there really anything new under the sun? Or have we not looked in the right places?

I answer:

There are unmet needs everywhere! You simply need to talk to customers to learn what they really care about.

And this ties into my most recent post on innovation: Find out what customers want, and then deliver on it. This does not mean we let them tell us how to do our jobs. But I think most companies would be amazed to learn what customers really think.

There are two different kinds of "talking to customers." The first is direct company/customer dialog; this method is terrific for making customers feel heard, identifying areas for product/service improvement, and finding out what they like best about the products/services. Jonathan Dampier offers a great example: 

We recently invited 10 key, multi-million dollar accounts to a no-holds barred customer advisory/user group meeting. What's the big deal? Some LOVED us and consistently sang our praises while others would likely be calling our competitors come contract renewal time. Yet we encouraged open and honest feedback on what we were doing right as well as how we were screwing up. We also exposed our R&D concepts and asked their opinions...

Bringing together clients with various feelings about our company was a risk. Yet, we saved large amounts of money and other resources killing projects deemed to be turkeys. And we'll generate more future revenue by bolstering the burgeoning product lines we now know will sell.

However, this method of talking directly with customers is not the best for a positioning exercise. Drawbacks are twofold:

• Blind spots. You're talking with a non-representative sample of your customer/prospect population.
• Bias and lack of complete information. Customers will often refuse to share perceptions of the company's competitors. Or, they'll play down (or up) competitor's strengths and weaknesses.

For positioning, we need an unbiased view from a representative sample of customers, prospects and trialers. This requires third-party involvement to coordinate 'blind' studies that explore:

• Perceptions of the category
• Awareness and perceptions of all the players in the category
• Likes/dislikes about the current available options
• 'Ideal world' and how it differs from current options

There are many other areas for exploration, but I find that these basic questions will  unveil the obvious issues related to brand/product positioning. From this exercise, you should be able to draw 3 circles that (ideally) overlap in one spot; that one spot is your positioning.

• Company strengths
• Competitive difference
• Customer needs

But many times they don't overlap. You might have a competitive strength and point of difference in an area that no one cares about. Or you identify the perfect unmet customer need, but your company can't deliver on it. And I've also had a situation where all the circles overlapped, but the company wasn't using the most relevant words to communicate that core benefit and customers were rejecting the message. (Actually, all these options would make for good follow-up blog posts!)

This is a great, multifaceted discussion topic. If you have questions or comments related to positioning, I'd love to hear them.

Innovation

John Winsor wrote  over on BrandShift a couple weeks ago titled "Ignore the Consumer?". He quotes a recent Ad Age article:

Companies spend billions on market research to divine the needs and wants of consumers and businesses. Yet the new-product failure rate remains high. And we’re not coming up with better product concepts by listening to the voice of the customer. Why? Maybe the customer isn’t worth listening to.

John comments:

Innovation can spring from any part of the company-customer community, but ONLY if the support and encouragement for this environment exists at every level of the business.... When involving customers, be sure to think about inspiration and not reliance.

My personal philosophy on customer involvement is this: Find out what they want. Then figure out how to deliver it. Customers should be involved in "need identification"... or as John puts it, they should serve as the inspiration. But it's the company's job to figure out the best, most cost-effective solution to that need.

I was thinking about innovation this morning when making my breakfast burritos. I'd purchased Mission brand tortillas... ugh. I'll never buy them again. Not because the tortillas taste bad, but because they didn't put plastic sheets in between each tortilla so they wouldn't stick to each other. You can just picture the brand manager's scratching his or her head, trying to find out why they're losing market share... doing taste tests and evaluating product placement. And all the while, it's because of some silly little plastic sheets that make customers' lives easier.

Two insights from my Mission tortilla fiasco this morning:
- Brands that aren't in touch with their customers miss out on small but critical innovation opportunities.
- Brands that seek customer insight only along predetermined lines of thinking (like taste tests) can easily miss out on the real opportunities (like plastic sheets).

Have you connected with your customers lately? Have you allowed yourself to be surprised by a need you hadn't foreseen?

Brand Humanity: From Processes to People

Both the blogosphere and traditional media are buzzing about “customer focus.” You can’t go a day without reading about word of mouth, the power of blogs, the shifting balance of power to customers, importance of customer service, and so on. Trendwatching identified "Customer Made" as the next big thing.  Andy Sernovitz, President of the Word-of-Mouth Marketing Association (WOMMA), rightly declared, “The weight of consumer opinion is greater than our advertising power.” And yet it doesn’t seem like anything’s really changing. The most lively discussion board about Comcast is the comments section of my “I hate Comcast” post. Last week Jake posted a complaint letter that he'd sent to American Airlines.

Do we think if we talk about “customer focus” enough, something miraculous will happen? Are we trying to convince the laggards? I don’t believe they’ll be convinced until they start going out of business. One would think that every smart business executive would be working furiously to improve customer service and product quality. There are enough examples, case studies, books and articles making a pretty compelling case that this stuff works.

So why aren’t all businesses noticeably moving towards customer-centricity? They’re either holding on because the old way of business is the only thing they know… or the current organizational structure doesn’t support the new way of doing business… or there’s something else that needs to happen first.

Here’s what I think is going on: contrary to popular belief, there’s no such thing as a product company, a telecom company, a consulting company or a retail company. All companies are people companies. People make products for people. People serve people. People work with people and for people. I’d venture a guess that the root cause of business problems is not financial, not product-related, and not structure-related. Businesses live and die by its executives' and employees’ talents, levels of empathy and ability to play well with others… and by their willingness to listen and acknowledge that customers just may have some valuable input. If a business is rife with internal politics, fiefdoms and one-upmanship, I doubt that it will be successful in this new customer-relationship era. If a company’s employees aren’t successful in their personal relationships at home, it can’t become a successful people company.

The current sea-change is problematic because the necessary solution is not a new business practice; it’s a new people practice. We don’t need a new ad campaign or a new org chart. There are no quick fixes. The skill sets needed in today’s times are not management consultants or word-of-mouth marketing specialists. If we’re all really honest with ourselves, what we really need are psychologists and coaches and relationship experts. We’re talking about real customer connections, not a personalized direct mail piece. And this is why blogging and other social technologies have exploded onto the scene. Evelyn Rodriguez writes,

With everything you might have heard you’d think the blogosphere is anti-business. And it’s scary for businesses. That’s not exactly true. But, yes, it is a response to the depersonalization - the dehumanization - of commerce."

Over the past few decades, we’ve lost the humanity in business. With the advent of mass produced cars and org charts and relocation and nuclear families, we’ve forgotten our ability to relate and connect. How do we expect a company to build relationships with customers when most Americans have difficulty making genuine connections with anyone? In Bowling Alone: The Collapse & Revival of American Community, Robert Putnam notes that social and family ties are loosening and we're increasingly withdrawing into ourselves:

• In the past 3 decades, participation in government, local clubs and organizations dropped by up to 50%.
• Job instability, churn and the increasing numbers of independent contractors have resulted in a measurable decline of social connectedness in the workplace.
• Americans are entertaining friends at home 45% less frequently now than in the mid-70s; the number of picnics declined by 60% in the same time period.
• The fraction of married Americans who say that their family 'usually dines together' has dropped from 50% to 34%
• The number of families who vacation together dropped from 53% to 38%; watch TV together from 54% to 41%; sitting and talking, from 53% to 43%
• Reported charitable giving dropped by almost 20% from 1980 to 1995.
• The percentage of those who feel that "people in general today lead as good lives -- honest and moral -- as they used to" dropped from 50% in 1952 to 27% in 1998.

So we can keep talking about the importance of customer focus, authenticity and co-creation. But we’ll never get there until we recognize that it’s not that easy to overturn decades of societal depersonalization. We may have to make some difficult choices: letting go of talented employees who are more focused on being right than being empathetic; moving to a new job at a company that fosters a relationship culture; taking a risk and going out on your own. I’m sure that part of the free-agent trend stems from a rebellion against the dehumanization of business. Evelyn continues in her post:

"Blogs harken back to an era before…

Megaphones. Before Super Bowl ads. Before celebrity-studded concert-format megachurches. Before Ryze, Friendster and LinkedIn.

To a time of community marketplaces, bazaars, neighborhood shops and pubs where everyone knew your name, and town squares. And going back further still to trading posts and tribal campfires.

We know this stuff. Perhaps conversing is nearly a lost art. But it’s fundamentally human too. Basic building blocks of humanity."

So yes, let’s keep talking about customer focus. But let’s also focus on what we can do in our own sphere of influence. Let’s start where we are.

Book meme 123.5

Last night I discovered Network(ed) Rhetoric, a blog for a graduate course at Syracuse University. They're looking at how recent trends in network studies and social software connect with issues in rhetoric and composition and vice versa. I found all kinds of thought-provoking goodies that I'll write about when I have a bit more time to percolate on them. This site led me to Theory Canal, which featured a fun little game you can try next time you're lacking inspiration for what to post on your blog.

It's called the Book Meme 123.5 (originally from the chutry experiment). Here's how it works:

1. Grab the nearest book.
2. Open the book to page 123.
3. Find the fifth sentence.
4. Post the text of the sentence in your journal along with these instructions.
5. Don’t search around and look for the “coolest” book you can find. Do what’s actually next to you.

I'm part way through John Winsor's Beyond the Brand, so I picked that up and flipped to p. 123. The fifth sentence isn't inspiring by itself, but -- bending the rules a bit -- the fourth is:

"Trust is a product of active listening."

What a great statement. I was thinking yesterday about "customer relationship management"  and how CRM couldn't come close to actually building relationships. Relationships are built on trust, and trust is a product of active listening. If you're trying to build relationships with customers without listening mechanisms in place (like forums, blogs, users groups, non-focus-group qualitative research, etc.), then you're just spinning your wheels.

So what does 123.5 inspire you to say today?

Who's volunteering?

Here's a good test of brand strength:

If you asked for customer volunteers to work for your company, how many would jump at the chance? How many would ignore you?

Great brands have passionate customers. They'll work for free. They'll sell better than your paid sales force. They'll write code. They'll create online fan clubs.

Here's a key indicator: If your employees aren't passionate, your customers probably aren't, either. 

How you do it

Had a one-day branding session with a client yesterday. Small company, lots of potential. They wisely selected a niche market to target initially, because they're in a crowded space. So right now, they can say to prospective customers that they're the only widget software designed to meet the needs of "x" market.

This is a terrific way for most businesses to get a loyal following: pick a niche and own it. Then pick another one. And another. (I wrote previously about this here and here.) BTW, this can't be a marketing trick; your product really needs to be designed to meet the specific nuances of that niche.  But the challenge is, you can't build your company brand on being the 'Niche X Widget Provider' for two reasons:

1. The 800-pound gorillas finally notice you and think, "Hey, that's a great idea. We'll do that too." And they've got the resources to eat your lunch pretty quickly (or they buy you, which isn't always a bad thing).
2. You're too successful, run out of customers in Niche X and want to adapt your product to Niche Y.

So you build your brand not on what you do, but how you do it. There will always be somebody else doing what you do. If not today, then just wait a couple months. I disagree with Al and Laura Ries; you can't "own" a product category... but you can own a way of doing business.  The computer industry is a great example of this:

• Dell makes computers. Big deal; so do a lot of other companies. But they've built their brand on how they do it. Customized and mail-order. Now, do they have to stick with computers? Not if they leverage their "how."
• Apple makes computers. It's their "how" that's given them a cult following. It's their "how" that they extended to the iPod. There are a lot of other music players out there. It's iPod's "how" that sets it apart.
• Gateway makes computers. How? Hmm... like everybody else. Oh, and they have something to do with cows. Once you pull off the cow suit, their products and service are pretty generic. This is why branding is the executive team's job, not marketing. Marketing can work with customers to determine the opportunity in your space, but it's got to be translated into an operational "how" before it's turned into an ad campaign.

What is your "how?" Are you faster, better, cooler, more innovative? More connected with your customers? Or, asked another way, how do you inspire emotion in your customers? Do they feel liberated? Hip? Special? In control? Connected?

Own a "how" in your industry, and you'll have a path for future growth as the market and competitive set changes.

Is Apple losing its cool?

PSFK suggests that Apple's losing its cool.

Interesting, I just had a conversation about this a few weeks ago. My conversation partner suggested that Apple will lose its cool factor now that it's hit mainstream with iPod... and that its "cool" came from its being a high-end niche player. My argument was that if Apple remains true to its brand (innovation) it can maintain its cool... but the innovation position requires Apple to have something new (and cool) ready to launch as soon as the trend of the moment has reached its peak. As long as it continues to provide new products for the trendsetters to adopt, it can 'surf the wave,' so to speak. My 2 cents... we'll see how it plays out.

Love/Hate brand scores

Just for fun, I started typing in "I hate (brand)" in Google to see what comes up. I then got curious about the findings for "I love (brand)." Here's the love/hate score for a random selection of brands. While I was at it, I did a "passion buzz  index" against the average number of comments for these brands (positive or negative). Microsoft, Walmart, Comcast and McDonalds  are the big losers on the Love/Hate score. No surprise. (And yes, this is the random stuff I do when I'm procrastinating.)

Brand	Hate	Love	L/H Score	Buzz Index
Linux	3860	34,000	8.8	358.8
Google	1170	22900	19.6	233.2
Microsoft	16600	5990	0.4	214.1
Apple	696	16100	23.1	159.2
McDonalds	3540	2730	0.8	59.4
Yahoo	2800	2950	1.1	54.4
Target	438	4950	11.3	51.1
Walmart	4850	534	0.1	51
Dell	2410	2240	0.9	44.1
Ikea	469	3350	7.1	36.2
Comcast	1800	318	0.2	20.1
Starbucks	861	878	1.0	16.5

Big thanks to Christopher for helping me get this info into a table format!

Co-creation defined

We're having a great dialogue over at Corante's BrandShift on Co-creation.  I'd love for you to join the party!

What is co-creation?
More on co-creation...

Brand positioning

I just stumbled upon Honeywell's brand position in their Brand Management site (and as soon as they realize that anyone can visit this, I'm sure they'll password-protect it):

We are building a world that's safer and more secure …
More comfortable and energy efficient …
More innovative and productive.