Category: Brand Management

Transform Employees from Hired Help to Brand Assets

Companies spend enormous sums of money to create, manage, and protect valuable brand assets: names, logos, web sites, and ad campaigns, to name a few. Another valuable brand asset that resides within organizations that goes under-utilized too often is the human resources that carry out the work of the firm: the employees. In today’s highly connected world, individual employees can build personal brands to put a face on a company. The payoff is creating a relationship connection point with customers and other stakeholders.

This concept is discussed by Kaplan Mobray in a piece he wrote for Advertising Age. Mobray cites the impact of individuals like Kevin Carroll (Nike) and Keith Wyche (Pitney Bowes) who have positively impacted corporate brands by spreading their wings and sharing their expertise and passion with others. Strategies recommended to leverage employees’ personal brand equity include having employees use social media like Twitter and Facebook and include key employees’ names when managing search engine optimization and paid search.

Companies that are able to create visibility for employees (or leverage visibility they already have) are in effect creating additional brand associations for the corporate brand as well as building relationships with customers and others. It comes down to tapping an existing resource. Employees are not merely hired help that complete assigned tasks, they are your brand.

Link: Ad Age – “How to Turn High-Profile Employees Into Brand Ambassadors”

Advertising Sends Signals… So Does Not Advertising

Marketing budgets are often vulnerable during economic downturns. When a business has a decrease in revenues, it can trigger a need to reduce operating expenses. The reduction is needed to bring the financial picture in line with the lower than expected revenues. Since marketing is a non-essential expenditure and less painful to cut than reducing employees’ hours or even making layoffs, cutbacks on advertising and promotions may be targeted. Therein lies a dangerous assumption: marketing is essential.

A study by Ad-ology on consumers’ perceptions of advertisers finds that the idea of taking a timeout from marketing during a recession may be hazardous to a brand’s health. Almost one-half of the study’s participants (48%) indicated a lack of advertising by an auto dealer, bank, or retailer during a recession is a signal that the business is struggling. So, the money saved when cutting back on marketing spending in the short term could be more than negated by customers who switch to other brands or simply stop buying because of reduced confidence.

Brand building requires a long-term time orientation. A focus on making sales targets in a given quarter or trimming costs does little to nurture relationships with customers. Ultimately, a brand is owned by customers. Their thoughts, attitudes, trust, and loyalty are what is valuable. When a business opts not to engage in marketing, it sends a message. Unfortunately, it is a negative message that can undo years of brand building.

Link: Marketing Insights Today – “New Ad-ology Study: Reduced Advertising During Recession Negatively Impacts Consumer Perception”

Brand Building Starts at Top of the Organization

For all of the investments in brand marks, advertising, and other forms of communication, they are rendered ineffective if brand promises are not kept. That assertion seems reasonable, so any good marketing staff ought to be able to do its job to ensure that execution is consistent with strategy, right? No, the marketing staff is important, but it is not the key to creating a strong brand and bringing it to life everyday. The key resides in the executive suite.

An organization’s leader sets the tone for what is important. He or she articulates organizational values and goals. Everyday actions like meeting regularly with customers versus remaining holed up in an office send clear messages about the leader’s commitment to the organization. It also sets an example of how employees should do their part to carry out brand promises made to customers.

These thoughts come to mind as I read the Sports Illustrated list of the best and worst owners in U.S. professional sports. Specifically, I was drawn to the #5 ranking given to Tampa Bay Rays owner Stuart Sternberg. The franchise had been the butt of jokes for most of its existence. It had never made the playoffs since beginning play in 1998. The previous owner was viewed as unwilling to invest to improve the team. Tropicana Field, the team’s stadium, was considered to be one of the worst in Major League Baseball.

Sternberg arrived on the scene in 2004 and addressed many of the problems plaguing the franchise. He listened to fans, he initiated improvements to Tropicana Field, and the team worked to makeover its image in the Tampa/St. Pete area. These efforts, which also included a rebranding of the team from Devil Rays to Rays in 2008, resulted in greater fan acceptance. Winning the American League championship in the franchise’s first ever playoff appearance did not hurt, either. The value of the Rays franchise is estimated to be $320 million today, a giant leap from the $65 million Sternberg paid to buy the team just five years ago.

The best way to build a brand? A leader with vision and the willingness to serve customers, not just talking about it.

Link: SI.com – “SI’s Best and Worst Owners”

Chicken Giveaway Not Root of KFC Problem

The now infamous KFC grilled chicken giveaway will go down in the annals of marketing as a botched promotion. In a matter of a few days, KFC managed to anger customers, stress employees, negatively impact franchisees, and get lampooned in the blogosphere. What did it accomplish? Nothing, so far. But, there is a chance for redemption if KFC understands that the promotion, though flawed, was not the root of its problem.

KFC is known for fried chicken, with fried being the key word. The company has tried vigorously to distance itself from the negative associations with fried. First, it changed its name to the initials KFC so that the word “fried” would not be uttered any more than necessary. Then, there was the short-lived ad campaign in which it was suggested that eating KFC products had some health benefits for those persons on a high protein diet.

A brand cannot run away from its heritage. KFC will never be known as a “good for you” brand. It is not alone; fast feeders like McDonald’s and Burger King will not ascend to that level, either. The difference is McDonald’s and Burger King are finding ways to remain relevant with consumers. McDonald’s has added healthy menu options, but it remains focused on its core items. A brand cannot be all things to all people. For KFC, it faces a tremendous challenge if it wants to appeal to health conscious consumers with grilled products and remain known as a purveyor of fried chicken.

Link” Ad Age – “Grilled Chicken a Kentucky Fried Fiasco”

Brands Should Stay Course through Recession

During weak economic periods, emphasis is often placed on reducing costs (and rightfully so). If customers are spending less, marketing managers would be irresponsible if they did not adjust their spending, too. A focus on building and maintaining a strong brand should continue, even during the leanest of times.

A recent trends study report released by Landor Associates acknowledges less consumer spending, but suggests opportunities will continue to exist in the marketplace. Brands with price-oriented value propositions like Wal-Mart as well as what the report calls “home and hearth” brands like Disney and Johnson & Johnson will be less vulnerable during the recession. There is always a space for innovative products, too. The Landor report points out that the Apple iPod was introduced to market during a time when the economy was recovering from the dot-com bubble burst and 9/11.

Most importantly, the Landor trends study report reminds marketers about brand basics. The importance of managing brands is summarized effectively by Landor CMO Hayes Roth: “What we are saying is that brands can’t get thrown off the track. If you have done your homework on your brand, are clear about who your customers are, are determined to deliver on that brand promise and don’t cut corners on brand fundamentals, you will stay the course. You may have to reduce margins and some services but the core brand promise you cannot walk away from.”

Here’s to your brand’s health in 2009!

Link: MediaPost News Marketing Daily – “Analysts to Brands: Stick to Your Knitting”

“Change” is ’09 Marketing Buzzword, Too

“Change” is in the air. It was the one word uttered by Barack Obama that propelled him to the White House. Change is being forced upon us in the business world as well. First it was escalating prices, then deteriorating credit access and finally, a sharp pull back on consumer spending. With no immediate end in sight, 2009 will require change in marketing and strategies.

An excellent article on the need for change in marketing was written by Jonah Bloom for Advertising Age. Among the most critical points Bloom makes is that short-term obsession on sales and profit growth should refocus and become a long-term view of brand building. In particular, brand building efforts that entail environmental and social responsibility components can elevate the relevance a brand holds for consumers. Bloom points to Jet Blue and Starbucks as two brands that may have gotten too consumed with growth and lost some of its relevance with customers in the process.

There are concerns that weak economic conditions may force companies to abandon social responsibility initiatives given that they often create expenses that lead to higher prices for their products. In Bloom’s view, companies must not back down from becoming better stewards of the places where they do business. In a list of 8 resolutions for 2009, Bloom quotes Nike chairman Phil Knight on the role brands will play going forward: “The performance of Nike and every other global company in the 21st century will be measured as much by their impact on quality of life as it is by revenue growth and profit margins.”

Link: Ad Age – “Recession Provides a Chance to Build a Better Capitalism”

New Department for Full Service Ad Agencies: Brand Invention?

Advertising agencies are feeling the pain of a slow economy as businesses evaluate advertising and marketing spending. According to many studies, the outcome is a shift away from mass media (especially newspaper), the heart of an a traditional ad agency’s business. So, to combat this trend ad agencies may need to become nontraditional.

Such is the case with London-based Bartle Bogel Hegarty (BBH). Rather than have its business negatively impacted by reductions in clients’ marketing budgets, BBH is looking for growth opportunities as a developer and marketer of brands in its own right. BBH operates Zag, a brand-invention unit. Zag looks for unmet consumer needs and taps its marketing know how to bring products to market. Examples of products launched by Zag include a personal safety device that emits a woman’s screams and vegetarian meals. Neither product is likely to reshape BBH’s direction as an advertising agency, but they are certainly revenue opportunities.

BBH’s venture with Zag is a good example of exploring growth options. The agency focused on a strength, its marketing know how, and is looking to meet unmet market needs with niche products. Notice that BBH is not jumping into crowded spaces to compete with packaged goods brands that have brand awareness and more resources. Growth opportunities still exist in today’s soft economy, but they may require new thinking and greater risk taking to pursue them, just like BBH is doing.

Link: Ad Age – “While Everyone Else in Adland Zigs, BBH Zags”

Sprint Dialing Wrong Numbers

Sprint Nextel is a brand in trouble. It is losing money and customers at an alarming rate. Its CEO, Gary Forsee, stepped down in 2007 and received a compensation package of more than $21 million. Forsee’s replacement, Dan Hesse, received a compensation package of more than $27 million. At least these two gentlemen fared better than Sprint Nextel, which lost $29 million in 2006. Forsee’s settlement with the company includes a monthly payment of abou $84,000… for life. This generous compensation for top executives comes at a time when Sprint expects to lose 2 million customers this year.

This picture is totally out of focus. Sprint Nextel has been mired in massive customer service problems since the merger of Sprint and Nextel. The exorbitant compensation packages handed out in the face of a dwindling customer base and plummeting financial value have to devastating to employee morale. Also, the mix of lavish CEO pay and struggling customer service does nothing to endear the brand in the minds of existing customers and people who might be in the market for wireless services. Hopefully, company leadership can right the ship with customers and return sanity to the management of financial resources. Otherwise, this brand faces the prospect of becoming irrelevant in the marketplace. Link

Cut Corners, Lose Trust: The Southwest Story

I have been a huge fan of Southwest Airlines for many years. Its story as a maverick brand that fought conventional wisdom and built a profitable airline is legendary. But, the brand is now all grown up, and it is experiencing adversity that it rarely faced in the past. Earlier this week, Southwest had to ground more than 40 planes that had missed scheduled safety inspections. The inspections were done and Southwest resumed a regular flight schedule by the next day.

The Southwest situation illustrates the importance of maintaining customer trust. The cancelled flights were the least of the airline’s concerns. It’s a fact of life for seasoned air travelers. The long-term damage could be to Southwest’s reputation. Consumers could perceive that Southwest is focused too much on either making money or cutting costs to take planes out of service temporarily and carry out inspections as scheduled. Let’s face it, questions about safety are not good for any product, airlines especially.

For the first time in my 12-year “relationship” with Southwest, I find myself questioning the sincerity and integrity of the brand. It is a reminder that any person or any company that cuts corners in their relationships risk losing the trust of others. Southwest can use this negative situation to its advantage by evaluating its inspection and safety management procedures and make changes as needed. Or, this event can be harmful if the company puts too much energy into downplaying it.

Your Brand is NOT for Everyone!

Time to face the harsh reality: Not everyone wants what you have to sell. Get over it and move on! For some customers, your product is too expensive; for others it is too cheap. Some people think your product is too hard to use, while others believe your product will not benefit them enough to part with their money.

Good news: It is OK to not be universally loved and accepted! Besides, it is very difficult for a single brand to appeal to diverse segments within a market. The solution many companies have used is to create different brands that target different market segments. For example, Marriott created Fairfield Inn as a brand for serving leisure and business travelers looking for modest accomodations. Fairfield Inn allowed Marriott to serve a segment that would not likely consider staying at its flagship brand, and it protected the equity of Marriott among its loyal customers.

Starbucks finds itself in a brand quandry. The company is looking to stimulate sales, and it is experimenting with going down-market and serving $1 drip coffee. It is possible that coffee drinkers would flock to Starbucks stores to pick up $1 Joe, but what does that do for the Starbucks brand long-term? It does nothing to nurture relationships with existing customers who do not come to Starbucks for low-priced coffee. While stockholders may want to see sales and profits boosted, this move would potentially do much more damage long-term than any benefits realized from selling $1 cups of coffee.