Ben Wise on Branding

Watching the world through the lens of the brand

Archive for April 2010

Selling to Your Employees

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If your brand is your business system, then the people running your business system are pretty damn important. In other words, a company’s employees are a critical component of their brand.

As marketers, we obsess over how to increase brand loyalty among consumers by even a few percentage points, but we fail to look at loyalty to the brand from within the company. With this in mind, recent results from a joint Reuters/Ipsos survey are alarming. Reuters reports that “Americans are more loyal to their favorite soft drink, television show or car brand than they are to their employer”.

The study found that fully 45% of employees would jump ship if they were offered a 10% raise somewhere else. If that many employees are lacking commitment to their company, how can we expect them to perform to the best of their ability?

Internal Branding is Critical

Generating loyalty from employees isn’t just about salary. There are other ways to reward employees whether it is through regular recognition, increased responsibility, access to a good network or training and learning opportunities.

This may sound like Branding 101, but your company needs to understand the value proposition offered to employees. How is this unique from your competitors? Why shouldn’t they jump ship? If you want to attract and retain top talent, you will need a compelling answer to these question.

Without it, your internal brand will suffer which will inevitably lead to a decline in how consumers perceive your brand.

What do you think? Is your brand compelling to your employees?

Written by benwisebranding

April 29, 2010 at 7:02 pm

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Facebook Making a Comeback for Brands…Sort Of

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A few months ago, Facebook separated your stream into the ‘Top News’ and ‘Most Recent’. Essentially, Facebook created an algorithm to try to show you only the most relevant items. For some users this was a big improvement, but for brands this has been detrimental.

The beauty of social media to brands is the ability to quickly spread your brand name through existing social networks. If one of my friends became a fan of something on Facebook, that would appear in my news stream giving me to option of doing the same. This is how some brands rapidly grew the size of their Facebook pages.

Unfortunately, these updates rarely get chosen by Facebook to be included in your Top News feed, instead being relegated to the Most Recent section which few people look at. Without the visibility of other users’ brand preference, brands are finding it much harder to spread across Facebook.

A Comeback

Facebook’s recent announcement of their Social Graph across the web does a decent job of addressing this problem. Now whatever site I am looking at, they can show me which of my friends ‘like’ them and give me the option of ‘liking’ them without having to leave the webpage. This will reduce the friction faced by users, helping brands reach more potential fans.

Facebook Still Falls Short

Unfortunately, even with more exposure, Facebook does not address the ability for a brand to spread through a social network. So brands will grow, but they will be much less likely to go ‘viral’.

You can argue that this doesn’t matter for Facebook’s 400+million users and that is probably true. But those users aren’t paying to use Facebook. For the company to grow, they need to provide more value to brands that are going to be paying their bills for the foreseeable future.

A good first step in making up lost ground, but Facebook still has some way to go in providing brands more value.

What do you think? Does Facebook provide enough value and growth potential for brands?

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April 28, 2010 at 8:44 pm

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Are Brands Going Green?

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For the past 18 months, there has been a regular stream of press releases about brands making efforts to be more environmentally friendly. Generally these efforts can be grouped into internal (more efficient use of energy) or external (more sustainable products).

Internal Greening

Internal projects will generally produce a compelling cost savings. Any goodwill it generates from consumers is just a bonus. For example, a few months ago eBay announced that they had installed Bloom Boxes, a more efficient source of power. The economics of this surely produce a substantial savings, which is likely the key driver behind eBay installing them.

Internal greening is driven by cost savings, not an effort to save the environment.

External Greening

External greening, on the surface at least, appears to be for a much nobler reason. You can’t dispute that producing products with more eco-friendly materials is good for environment. But is that what consumers are paying for?

The reality is that most consumers aren’t yet willing to part with their money in order to help the environment. When I tell people this, they often cite examples like cleaning products (eg Green Works by Clorox) or food (eg anything organic). While these products do have environment benefits and do command a price premium, consumers are buying them to help themselves, not the environment. Fewer toxins or other yucky things in the home is safer for people, and people are willing to pay for their safety. Again, this means that the environmental benefits for most consumers are only a bonus and not the primary driver of the purchase.

External greening, unfortunately is driven by consumer needs other than wanting to save the environment.

What do you think? Are consumers willing to pay a premium for brands that help the environment?

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April 27, 2010 at 9:22 pm

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How Wall Street is Killing Brands

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Wall Street (or Bay Street for us Canadians) is lambasted in the press on a pretty regular basis. Their bonuses are too big, they crashed the financial system and caused the recession, they are profligate with the government money they received – pick your reason for hating them.

But an often overlooked aspect of Wall Street is their negative impact on brands.

How does Wall Street impact brands?

In a nutshell, what gets measured gets done. And since Wall Street measures quarterly earnings, companies have to focus on them. The excessive emphasis on quarterly reporting is often counter-productive to building great brands. For example:

  • Need to cut costs quickly? Brand building activities are often on the chopping block (and since your brand is your business system, these cuts can be almost anywhere).
  • Need to boost revenue? Start selling your product through other channels, regardless of how it fits with your strategy.

I am not saying that companies shouldn’t be accountable for how much money they earn. After all, the value of the brand is derived from its ability to produce profits. And sometimes companies need to improve their financials quickly to stay afloat. But the short-termism brought on by Wall Street is in direct conflict with the long-term view required to build a brand. When the short-term is prioritized over the long-term, investors lose out in the long run.

What do you think? Are quarterly earnings calls hurting brands?

Written by benwisebranding

April 26, 2010 at 4:27 pm

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New Coke and Brand Failures

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ABC News kindly pointed out that today is the 25th birthday of New Coke, one of the biggest brand failures of all time. To mark this occasion, I wanted to share a few other big brand failures of interest.

Crystal Pepsi: In 1992 Pepsi launched a clear-coloured cola called Crystal Pepsi. This was the same time that bottled water was gaining popularity and Pepsi wanted to capitalize on the market desire for ‘purity’. This brand was taken off the market within a year. Sometimes when there is a gap in the market, it is because there is simply no demand for it.

Virgin Cola: Virgin has enjoyed a lot of success through brand extensions, but the move into cola was a flop for Richard Branson and company. The Virgin brand was about irreverence, which was compelling in categories where the big guys were complacent. The rivalry between Coke and Pepsi made sure this category was competitive so Virgin wasn’t able to offer anything unique, giving consumer no compelling reason to try the new product.

Harley Davidson Perfume: Harley Davidson is able to command brand loyalty that most of us can only dream of. What other brand logos do you find tattooed onto people? But their attempt to move into perfume in the ‘90s was a mistake – a classic example of a brand extension in a category where there is clearly no fit with the core brand.

KFC in Hong Kong: The literal translation of the famous KFC tag line, ‘Finger Licking Good’, into Chinese, is ‘Eat Your Fingers Off’. I don’t think I need to explain why this one didn’t work!

Kodak: Kodak had for decades been the leader in photography. Whether you think they got complacent with the rise of digital or they didn’t pursue it for fear of cannibalizing their sales, the result was that they missed the boat. Great brands need to constantly innovate to meet evolving consumer needs and stay relevant or risk being left behind.

What do you think? Any other big brand failures come to mind?

Written by benwisebranding

April 23, 2010 at 8:12 pm

Leading Brands Must Lead

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Earlier this week I posted about the power of underdog brands. Conversely there is great power in being the leader as well. Big brands that are managed well have been able to dominate their markets for years. Think of Coors Light, Tide, Google – all big brands that are dominant in their industry and who continue to set the trend.

Unfortunately, in the face of a strong underdog, leading brands can sometimes forget that they are in fact the leader and start taking their cues from the follower.

A great example of this in Canada is with Loblaws and Walmart. In Canada, Loblaws has a much bigger market share, yet it seems that the market is increasingly being led by Walmart. The way that Loblaws merchandises, their range of products, the introduction of the ‘Joe Fresh’ clothing line in response to Walmart’s ‘George’, are a few examples.

Leading brands must remember what made them the leader in the first place. What are the key benefits that helped you get to your current position and are those benefits still relevant in today’s marketplace? If they aren’t, how can you adapt to better meet the needs of your consumers?

This is where leading brands run into trouble. The logic is as follows: if Walmart is growing they must be doing something right so Loblaws should do those things too. This logic will quickly turn you into the permanent follower without anything unique to offer.

Leading brands must make sure they are continuing to innovate in ways that are meaningful to consumers, regardless of what others are doing.

What do you think? Are other leading brands following their smaller competitors?

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April 22, 2010 at 4:29 pm

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Underdog Brands

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People are naturally attracted to the underdog. The story of the little guy that beat the odds gives everyone a warm and fuzzy feeling inside. In a brand context, this is no different. A brand that is well positioned as the underdog can use this as a powerful marketing tool to gain consumer loyalty.

Here are a few quick examples:

  • Pepsi is the underdog to Coke and used this to effectively capture the youth market
  • Adidas is the underdog to Nike and has grown their brand considerably in the past decade
  • Apple is the underdog to Microsoft/Nokia/HP (and more) and has become one of the most powerful brands on the planet

What do all of these brands have in common?

A key part of playing the underdog role is a sense of irreverence towards the bigger guys. Don’t try to copy what your competitors are doing, find an exciting, scrappy way to win then flaunt it as much as possible.

Second, if you look at the above list of underdogs, they are all seen as cool and rebellious. There is a social status aspect for consumers who buy and use these brands.

Finally, all of the underdog brands promote emotional benefits, not functional ones. This allows them to develop consumers that are much more loyal to their brand. People feel very strongly about supporting the underdog and are going to try to convince others to do so as well – even once the ‘little guy’ has become a behemoth, as with all of the above examples.

What do you think? What other brands play the role of the underdog?

Written by benwisebranding

April 20, 2010 at 11:22 pm