Tag Archives: brand relationships

3 December, 2013 · 9:01 am

Good vs. Great Brands = To vs. Through

We in the marketing game are constantly looking for ways to attract people to brands. Yet when you look at the brands that are the most successful and most enduring, a subtle truth emerges. People connect to good brands, but they connect through great brands.

Many marketers fantasize about having an asset that’s as iconic as the Harley Davidson brand. The ultimate success, many say, is when your customers are willing to tattoo your logo onto their bodies. It’s worth thinking for a moment about why they are doing that. Is it to commemorate the great relationship they’ve developed with the brand? Are they doing it as a tribute to the Harley worker or dealer who made their great ride possible? Of course not. They do it to signal to other people. The brand becomes a way for them to define themselves to others. They are going through the brand to connect with other people about what matters to them.

The Apple logo on the Powerbook computer is an apt metaphor. There was an extensive debate among Apple designers as to the best orientation for the logo on the computer. Because of Apple’s emphasis on the user experience, the logo was originally placed on the computer so that it was right side up to the user as the computer was opened. But after a few years, the logo was flipped. They decided it was more important for others to see the logo right side up when the computer was opened. Apple recognized that the relationship between the user and the product was less important than the relationship between the user and other people.

This truth is especially applicable as brands continue to adapt to the world of social media. Ambitious marketers should look beyond metrics that measure direct interactions with the brand and strive to enable interactions people can have with others through their brand. For example, in this framework, Pinterest repins are far more valuable than visits and even more than clickthroughs. In this context, the most important role of the brand is not the direct relationship it develops with the customer, but the relationships it helps that person define with others.

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Filed under 21st Century Marketing, Branding, Innovation

Tagged as brand relationships, Harley Davidson, Powerbook computer, social media

28 December, 2010 · 3:13 pm

The Missing Measure of Business Strength

There are three areas that determine the strength of a business. Yet widely accepted measures have only been developed for two of them.

The overall health of a business depends on three factors:

The quality of its products and services
The cost/price structure
The strength of customer relationships

The third area is often overlooked, but shouldn’t be. Peter Drucker distilled the issue into a fundamental truth when he said that “the purpose of business is to create and keep a customer.” It’s the strength of the customer relationship that makes people automatically ascribe higher levels of design and performance to Apple products. It’s the lack of a customer relationship that feeds the high churn rates in wireless carriers. This is what CEO’s mean when they use the word “brand,” as opposed to what CMO’s often mean when they use the word brand. The CEO describes it in terms of a competitive advantage, and the CMO too often in terms of imagery and recall.

As vital as this relationship is to both the short and long-term health of the business, the measurements around it are not well-developed. There are rigorous measures and standards around quality, as evidenced by approaches like Six Sigma and third-party evaluators like J.D. Power. There are even more rigorous measures in place over the financial health of the firm, enough to employ an army of accountants at any large firm. But measures of the customer relationship are underdeveloped. The net promoter score attempts to measure the customer relationship by likelihood to recommend to friend. It is the closest thing we have to a standard measure of customer relationships. As such, it has been a useful tool for many companies looking to develop a stronger customer-centered culture. Still, its critics are as numerous as its supporters because it lacks the objectivity that is standard in measurements of quality and financial performance. For example, people may be less likely to recommend something they perceive as a vice, even if they are very satisfied (e.g. high fat ice cream). Many companies have their own loyalty measures that are more sophisticated than the net promoter score. But the fact that they are proprietary means that it’s difficult to compare their measures to other competitive companies.

The day will come when savvy investors will analyze customer relationships as closely as they analyze EBITDA. That will be a good day for enlightened marketers because it will establish the best of them as mission-critical drivers of business growth.

Getting It: Chevrolet and Volkswagen

The contrast in behavior between two car companies over the past several months could hardly be more illuminating. As reported by DetroitNews.com, the marketing heads of GM directed their internal staff to stop referring to cars using the Chevy nickname and instead use the more proper Chevrolet label. It smacks of a guy I knew named “Ox” who tried to convert everyone to calling him Alex after he graduated college and got his first job in banking. He thought it was more fitting to help him climb the corporate ladder. It distanced him from his old friends and made him less interesting to his new ones. After all, who would you rather have watching over your money, Alex or the Ox? GM’s attempt to backtrack a couple days later was only slightly less baffling. They explained that because they sell more cars internationally now than domestically, they thought it better for consumers outside the U.S. to learn their proper name first before learning the nickname. That defies the way nicknames really work with both people and products, if Paul David Hewson (Bono) and Coca-Cola (Coke) are any indication.

Compare that approach to Volkswagen. They’ve embraced the Punch Dub game that kids started around spotting a Volkswagen. When I saw their ads shortly after my kids starting punching each other in the arm every time they saw a VW drive by, it was both endearing and smart. It made those familiar with the game feel like insiders, and those unfamiliar with it curious. Every marketer strives to integrate their brands into the popular culture, and they handled the opportunity deftly.

The contrast comes down to a simple definition of a brand. While marketers work hard to foster brands, a true brand is ultimately owned by the consumers. It is people’s perceptions and feelings that define a brand. VW took what people were doing around the brand and embraced it, GM pushed it away. Maybe GM took their part in popular culture for granted because Chevy has been around so long. It might have been easier for VW to see the relatively new phenomenon as a gift in a way that GM could not. Still, the fundamental mistake was in a mindset that misunderstood the fundamental nature of brands.

How Markets Create the Need for Tea Parties

As the anti-incumbent story rumbles across the mediascape, there is a familiar theme — call it the “I’m mad as hell and I’m not going to take it anymore” movement. Congress is at its lowest approval ratings of all time, political distrust is at an all-time high, and new activist fervor is sweeping the land. Politics as we know it is about to change.

Don’t believe the hype. Whether it’s the Know Nothings of the 1840’s, the Term Limit supporters of the 1990’s, or today’s Tea Party, they are all a response to the fundamental structure of the American political market.

I worked on political campaigns, and it is important to learn that there is a fundamental difference between the political marketplace and the consumer marketplace. Both are ruthlessly competitive, so it is not a difference in ethics or morality. It has to do with what I call “category effects.” Consumer markets have them, and political markets don’t. Here’s why.

In simple game theory terms, there are four general outcomes between two competitors in the consumer marketplace:

Both gain
Both lose
Competitor 1 gains, Competitor 2 loses
Competitor 1 loses, Competitor 2 gains

For an example where both gain, look at Adidas and Nike. Both doing well financially, both well-regarded major brands, and benefiting to a large extent from the fact that they have a major competitor helping them drive the market and mythology of athletes and athletic gear.

For an example where both lose, look at United and American Airlines. Even before the recession, the two largest US carriers were losing share to Southwest-like competitors on the discount end and Virgin on the high-end. Neither gained from the struggles of the other, and both added to each other’s problems by pricing and service policies that soured people on the airline travel experience.

In both situations, individual players face consequences for how the whole category performs. If companies compete in such a way that the category grows, they may both win. If they compete in a way that the category suffers, they may both lose. It is in their self-interest to have people think well of the category.

By contrast, political competition has only two outcomes:

Competitor 1 gains, Competitor 2 loses
Competitor 1 loses, Competitor 2 gains

In a campaign, it does not matter if you have two great candidates or two terrible candidates, one person gets elected. There is no outcome where both gain or both lose. There are 100 Senators in the US Congress, and short of a change to the Constitution or an overthrow of the US government, that number is not going to change based on people’s approval ratings. In other words, there are no category effects for politicians. If doesn’t matter if people love or hate the category, 50 people still win the same prize either way. There is no self-interest for politicians to make people feel better about the category.

That is why negative advertising is frowned upon in the consumer marketplace, and embraced in the political marketplace. In politics, if people hate the category I’m in, I can still win as long as they dislike my opponent more than me. It doesn’t matter if the population is so put off that only 3 people even bother to vote. If two of them vote for me, I win. In the supermarket, if people hate the my category, it does not help if they hate me less. I still lose. If two people buy my product and only one buys my competitor’s, we both go out of business.

As long as there are no category effects in politics, there is no incentive within the system for the candidates to improve the institution. Efforts like the Tea Party represent an external effort from outside the system, attempting to impose category effects on a market that inherently lacks them. If patterns are true to form, one of the political parties will absorb their key tenets into their platforms, and the system will continue to chug along as it always has.

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Filed under 21st Century Marketing, Branding, Market Strategy, Uncategorized

Tagged as brand relationships, incentives, politics, strategy, tea party

4 September, 2009 · 12:31 pm

Impressing vs. Connecting

As the world flocks to social media, it is important to remember that not every tool is right for every situation. On a tactical basis, Twitter is an excellent example of this. Just as nearly every marketer who wanted to look plugged-in 18 months ago was starting a blog, the same crew is now crushing on Twitter. Lost in this rush to appear like a modern marketer is even a cursory examination of what the tool is designed to do. As its heart, Twitter is an announcement vehicle disquised as a conversational vehicle. It is ideal for passing along news, gossip, and funny quips. It is a mediocre vehicle for dialogue. Yet, I have heard many a marketer justify their Twitter efforts as a way to have a deeper conversation with their customers.

This begs the larger issue of using social media strategically, as part of a plan with real objectives other than to use the latest thing. To make the point, I’ll go so far as to say there are some companies for whom social media in general is a bad idea. Social media implies an effort to open up your brand to your consumer. It is about providing more ways to connect with people. But there are some brands for which connecting more intimately with their consumer would work against their basic strength. That is because the success of some brands depends more on impressing people than on connecting with them.

High-end luxury and fashion brands in particular succeed to a large degree on their aloofness. The democracy of social media promises a degree of access that undercuts the sense of elitism that is central to these brands. Many brands succeed by instilling a sense that they are our friends or our supporters. But some succeed by instilling a sense that they are our superiors. To use an analogy from the pet world, not every brand should aspire to be a golden retriever — fun, bouncy, always happy to see you. Some brands succeed better as the Russian Shorthair cat, keeping an elegant distance that makes each encounter a hard-earned pleasure.

Tag Archives: brand relationships

The Missing Measure of Business Strength

Getting It: Chevrolet and Volkswagen

How Markets Create the Need for Tea Parties

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