Zapped by Zappos – Learnings from CEO as CMO Tony Hsieh

November 9, 2009

The best CMO is a CEO who believes in Marketing. By this definition, Tony Hsieh, CEO of, must be one of the best CMO’s around. Hsieh, known for his firm’s digital and social networking prowess, had over 870k Twitter followers the last time I checked. I recently talked with Tony after he participated in a “What’s Your Digital?” panel discussion. And what he had to say might surprise you.


Tony Hsieh -- The Zappos CEO as CMO

Zapped by Zappos

Before that, however, let me tell you about my own Zappos experience—which is instructive. Seeking a pair of dress shoes for my new job, I went on-line to Zappos, and saw a great pair of shoes on the Mezlan Zappos homepage. I searched for the shoes all over the site — to no avail. Exasperated, I sent Zappos an e-mail, asking: “where are those great looking shoes?” No response. I sent another e-mail, and waited…and waited.

Finally, I received a short e-mail:  “Yes, you’re correct; we don’t carry that particular pair of shoes and will remove the photo from our site.” And they did. In fact, here’s the new picture sans shoes:


Mezlan on Zappos - Without the Shoes

This is great customer service? So, I related my story to Tony. He seemed mortified, especially after talking about how much Zappos cares about customer experience. He then followed up to have someone reach out to understand what happened so they could fix it, followed by an offer to send me a free pair of any shoes I wanted. Now, not everyone gets to talk to the CEO about their poor customer experience, but Zappos clearly IS different.

What Makes Zappos Different?

Simply stated, Zappos believes that customer service = marketing. Instead of spending loads of money on traditional (and non-traditional) marketing, they focus intensely on delivering a great customer experience—and recovering from mistakes with grace and humility. Tony believes that “the Zappos brand manifests itself through every employee/customer interaction,” and that brand is a lagging indicator of customer experience. His key points:

  • “The phone is a great marketing tool” – I’m not taking about mobile marketing here. Tony made the point that 5 minutes with a customer on the phone is far better Marketing than any web experience can ever deliver. He loves the phone and bricks and mortar touch points and thinks they are often undervalued by companies.
  • “Culture is our number 1 priority” – Many companies talk a good game about culture, but Zappos actually lives it and uses it as a core part of their business model. Zappos has 10 cultural norms that they instill in employees. They interview for these 10 norms, evaluate employees on them in their annual performance reviews, and let people go who don’t follow them.
  • “Authenticity and transparency are really important” – Tony sees authenticity and transparency (to read more on this topic, see my blog post) as a core part of the Zappos brand. When reporters show up at Zappos, they’re shown the bathroom and lunch-room and then told to roam around and talk to whomever they like. Tony’s daily Tweeting is less about Marketing than it is about him trying to make Zappos more authentic and transparent for followers.
  • “Zappos wants totally engaged employees” – Tony only wants people working at Zappos who are really passionate about the company and delivering great customer service. How much does he believe in this? So much that the company offers every new employee $2k to quit after two weeks on the job – they only want the truly committed.

What About Digital and Social Media?

But isn’t Zappos a social media icon? What about Tony’s almost 1MM Twitter followers? Well, get this: Tony hates the “social media” tag. He says they don’t even bother to measure the ROI of their digital and Twitter efforts.

Further, he’s not a believer in creating marketing “buzz.” Instead, he believes the primary role of every employee is to create “positive customer stories” about their Zappos experience. If they do this–everything else, including buzz, will take care of itself.

Oh, and one more thing. Tony does believe in the importance of “influencers,” but not necessarily the digital kind you might be thinking of. He noted that to this day, when his mom calls, he really listens.

Key Learning’s for Marketers

First, having a CEO who really believes in the brand and customer experience sets the tone for the whole organization. This job shouldn’t and can’t be left to the CMO; it’s the CEO’s job too. The CEO and CMO need to be partners in driving a truly customer-centric, marketing focused organization and business model.

Second, actually delivering a great customer experience, particularly in a service oriented business, comes down to employees delivering each and every time they interact with a customer. Building a culture that attracts the right kind of employee and fosters this kind of performance is just as important as any Marketing program.

Zappos Secret Weapons

These are Zappo’s true secret weapons—their CEO as CMO and their unique culture. So what about my Zappos experience? I like Tony’s description of what employees are supposed to do: “Create positive customer/employee stories.” But what I love most of all is that Tony, as the CEO, does what he says. After all, you just read a story about how Zappos recovered brilliantly from a terrible customer experience. Clearly, Tony knows how to create a good story, too.

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Learning From the Hidden Success Factors of the Hyundai Assurance Program

October 19, 2009
At a recent M50 CMO Conference, I had the privilege of listening to two senior Hyundai executives, Joel Ewanick, V.P.Marketing, and David Zuchowski, V.P. of Sales, discuss the success of the Hyundai Assurance Program.
Hyundai Assurance Program

Hyundai Assurance Program

If you haven’t been following this story closely, Hyundai is one of the very few bright spots in a downright ugly automotive sector. Hyundai U.S. unit sales year to date were up +1.4% and September was its 9th consecutive month of year-over-year gains in retail market share.

The Hyundai brand is clearly one of the few auto companies to be driving both sales and brand equity, consistent with some of the learnings described in a previous post, “Should Your Brand Focus on Energy to Drive Growth?”

Hyundai Assurance Program

The Hyundai Assurance program, and its success, has been well reported in the media and other blogs (see Brand Channel’s “Hyundai Formula: Inconspicuous Luxury Plus Empathy),” so I don’t need to go into great detail here about it. Essentially, Hyundai recognized that U.S. consumers were reluctant to buy cars when they feared losing their jobs. So, they launched the Buyer Assurance program which allows Hyundai buyers to return their car within 12 months, no questions asked, if they lose their job.

Success Factors – Beyond the Obvious

That’s the story. But actually, it’s not. Listening to Joel and David, it was clear there were other equally important aspects of the program that drove success. What were they?

Consumer Insight – The basic insight was simple: potential new car buyers were afraid to purchase because they feared losing their jobs. The answer, the Hyundai Buyer Assurance program, was anything but. It actually communicated two very subtle, but important additional messages:

  • “Hyundai understands me.” Consumers felt that Hyundai was really listening to them and acknowledging their real world concerns. Everyone else was just offering bigger discounts and O% APR financing. Consumers always want brands that they feel listen to and understand them.
  • “Hyundai is providing hope.” In the depths of the financial crisis, consumers were looking for something, anything — to provide hope. The Assurance program provided a simple message of hope in an industry with almost none. The program met a very real and powerful need for consumers to latch onto something that would connect them with a positive future.

Product Quality – Hyundai had a perception gap. Over the years, car quality improved significantly, yet the perception of “cheap and inferior” was deeply rooted in consumers psyche. The great recession of 2009 provided an opening for Hyundai, just as the gas crisis of the late 70’s did for the Japanese.

An opening for consumers to actually reconsider and try a less expensive Hyundai as an alternative to higher priced U.S. or Japanese models. And when they did, most consumers were surprised at the quality: “Wow—this is a really nice car.” This “surprise” generated positive word of mouth, which in turn reinforced business growth.

Media Spending – Hyundai historically spent its advertising in 1/3’s: one third for “brand” advertising, one third for dealer ads, and another third for individual dealer model promotions. Working together, Sales and Marketing consolidated all of the spending behind the Assurance Program, effectively tripling the media weight versus a standard marketing program. This enabled a fully integrated marketing program from TV ads down to dealer POP.

3 Key Lessons for Marketers

  1. The Hyundai example illustrates the power of a great consumer insight. Connecting your brand’s benefit to a compelling need is a great way to engage consumers and make them feel like your brand is for them. Hyundai identified and tapped into basic powerful consumer insights about hope and understanding.
  2. Getting consumers to rethink your brand is easier when you can connect to an external event that prompts reconsideration. Executing a new Marketing program to capitalize on an external event gives consumers permission to reconsider. Consumers wanted less expensive options during the crisis, and the Assurance Program gave them a reason to reconsider Hyundai with less risk.
  3. When you have a recognizably big idea, really put your money behind it. Hyundai tripled-down on the Assurance Program media and delivered an end-to-end fully integrated campaign in support of it.

The Hyundai Assurance program has all the earmarks of fundamental marketing done extraordinarily well – great consumer insights, a quality product, innovative marketing programs, integrated marketing — and a measure of boldness and daring-do that’s all too rare in Marketing.

Wouldn’t it be great if your brand could do the same?

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Is iTV the Next Digital Marketing Frontier ?

August 24, 2009

Engagement, conversation, interaction. Whatever you call it, the web has ushered in a new era for Marketers to not just preach their gospel to consumers, but to actually engage in a more meaningful two way dialogue.

But, there’s another digital frontier beyond the web, and one that also has vast potential to change the way Marketers interact with customers — interactive TV. iTV marries traditional TV with digital interactivity–by using your TV remote to “point and press.”

iTV -- The Next Digital Frontier ? (visual courtesy of

iTV -- The Next Digital Frontier ? (visual courtesy of

As Meg Brossy, SVP Marketing at Brightline iTV, an iTV consulting firm and services provider, says:

“Consumers are being pulled in many different directions today. Done right, interactive TV allows marketers to feed viewers’ desire for entertainment through compelling ad experiences – when, where and how viewers want to encounter them.  When a consumer voluntarily opts-in to engage with the brand in this way, not only does ad effectiveness jump, but product/brand recall and purchase intent is heightened and the consumer embraces the information. The results our advertiser clients see from iTV speak for themselves.”

Did You Know ?

  • 75MM U.S. consumers now have digitally capable iTV
  • iTV reaches 7MM more consumers in the U.S. than broadband
  • 7 major satellite/cable TV companies can now provide iTV
  • “Time shifting” is growing, continuing traditional ad erosion

Implications for Marketing

TV no longer needs to be a passive medium that is in danger of irrelevance as consumers time shift and avoid uni-directional one to many broadcast ads. Instead, iTV creates opportunities for brands to interact with consumers in a variety of ways. An interesting view of this is “TV ads that refuse to be ignored” at ECommerce Times.

iTV -- Extending Interactive Marketing Beyond Web and Mobile to TV

iTV -- Extending Interactive Marketing Beyond Web and Mobile to TV

Most Marketers seem vaguely aware of the theoretically large potential of digital TV, but largely unaware that it’s moved from “potential” to “real, scalable and impactful.” With iTV, brands can expand the range of interactive platforms beyond on-line and mobile to include TV.

Brands are catching on. Unilever has 30+ brands using it. J&J and others are not far behind. And the medium isn’t limited to CPG, as TD Ameritrade, Nike and others are experimenting aggressively.

5 Ways Brands Can Leverage iTV

  1. Improved Targeting— iTV enables brands to tailor the message to the audience. For example, TD Ameritrade offers three different investor options for consumers to “point and press” to learn more about a particular investing style. Instead of a single message, it’s now possible to let viewers choose the message most relevant for them.
  2. Content Marketing — Suddenly, there’s a large opportunity for brands to create relevant and meaningful content to deepen and surround their brand promise–via the TV. Consumers can access educational content, games, or virtually any type of brand relevant content. For example, Hellman’s developed simple games and recipes to drive increased usage.
  3. Partner Marketing— Brands can partner their iTV creative content with relevant TV programs to increase viewer engagement. Consumers can now interact with a brand during a TV program about a similar topic — e.g. consumers can learn about sleeping bags while watching Man vs. Wild, etc.
  4. Direct Response Activity— Brands can use iTV to request free samples, sign-up for newsletters, etc. Viewer data is housed within the cable or satellite providers platform, so viewers don’t even have to provide personal info in reaction to direct response activity.
  5. Metrics and Measurement— iTV is digital, which means it’s measurable in the same ways as the web. ITV brings more sophisticated engagement and ROMI measurement to traditional TV spend.

Results & Impact — Encouraging

Brightline iTV claims CTR’s typically range from 3-6% vs. <1% typically seen on-line. Viewer engagement measured by time spent with brand typically increases dramatically. And, companies like Unilever seem convinced about the ROMI of such programs as evidenced by their increased participation in this new medium.

iTV — Too Good To Be True ?

So, what’s not to like about iTV ? Well, there are challenges:

  • Complexity— Each of the 7 cable and satellite companies have their own proprietary platforms and measurement approaches. Creative developed for iTV has to be modified across platforms. While these challenges are not insurmountable, they create cost and complexity and have deterred many Marketers in the past.
  • Opt-In / Audience Size— CTR’s are impressive, but there’s still an open question about consumer education and opt-in. iTV will only be as good as the number of consumers who know how to use it and are willing to opt-in. To date, it’s unclear what fraction of the 75MM viewers are actually “engage-able.”
  • Organization Skills— Where does iTV fit ? Is it creative or media ? Who drives it–ad agencies or clients or special service agencies ? What works and what doesn’t ? Like any nascent technology, there’s a lot to learn.

The world is moving digital — but not just on the web. iTV is arguably the next digital frontier for Marketers. CMO’s need to ask a very simple but fundamental question:

Should my brand be exploring iTV ?

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Guest Post: 3 Things Marketers Need To Do Now

August 20, 2009

This is the 2nd in a series of periodic guest posts. Susan Kanefield Lauinger is a senior marketing executive, strategist and brand consultant with L’Oreal, Philip Morris and American Express.


August, 2008:   Do you remember what you were doing this time last year?  You may remember gas prices going up, you may have heard of a friend of a friend who had been laid off from his job, but overall, things in the U.S. were pretty good. 

September, 2008:   Lehman Brothers files for bankruptcy.  AIG requires a bailout.  Stocks plummet.

Flash forward to August, 2009:   The fallout from the economic crisis has touched every corner of the U.S., causing a significant shift in consumer confidence and a sea-level change in the way consumers think about their spending and consumption habits.  

Marketers -- What Do I Do Now ?

Marketers -- What Do I Do Now ?

What Should Marketers be Doing Now to Rebuild Consumer Confidence?

1.  Keep the Conversation Going — As the economy suffers and budgets shrink, it is tempting to look to marketing dollars for quick cuts.  However, brands that go dark risk playing into the fear and uncertainty that consumers are feeling.  In fact, Harvard Business School professor John Quelch stresses that a recession is the time to maintain, not cut, marketing spending.  He writes:

“It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands…”  (Read a summary of John’s article here).

2.  Remember the Basics:  In these tough economic times, there is a driving consumer need to get back to the fundamentals.  Consumers are hunkering down to weather the financial storm and are looking to their brands to reflect that new focus on things like price, value, family and stability.  

Kraft Foods, for example, has added a “Budget Wi$e” section to its website, highlighting tips for feeding your family while watching your spending.  One tab of this section called  “Why Snackrifice?”  highlights snacks you can feed your family “for about a dollar.” 

Kraft -- Focusing on Value with Snackrifice

Kraft -- Focusing on Value with Snackrifice

Kraft has also focused its product advertising on value messages.  For example, their advertising shows the difference between the cost of a DiGiorno frozen pizza and a restaurant pizza, or the lower cost of Kool-Aid vs. soft drinks. 

Allstate is another brand that has done a good job of reflecting this shift in consumer focus with its “Back To Basics” campaign.  The Allstate advertising talks about the brand’s experience managing through recessions and their understanding of what consumers need “after the fear subsides.” You can read more about this campaign here.

Allstate -- Focusing on the Basics in a Crisis

Allstate -- Focusing on the Basics in a Crisis

 3.  Think About the Future —  Although the pressure is on brands to cut spending, raise prices and retrench in these tough times, the smartest brands will be looking to the future and laying the groundwork for the next 6, 12 and 18 months.  Brands that have held fast during the recession and who are actively planning for the future will have a distinct advantage over brands who will be trying to reboot their consumer relationships in the coming months.

Keep the conversation going, remember the basics, think about the future — these are good maxims for success in any environment. But in the current hyper-charged environment where fear, uncertainty and budget conscious actions dominate, they are especially important lessons for Marketers in any business.

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Susan Kanefield Lauinger  is a senior marketing executive, strategist and brand consultant with deep experience in health & beauty, tobacco, and financial services with companies including Helene Curtis, L’Oreal, Philip Morris and American Express.  Susan holds an M.B.A. from Kellogg and a dual B.S./B.A. in Economics and Communications from Wharton/The University of Pennsylvania.

Why Your Brand Needs an Acoustic Identity

August 10, 2009

We’re all aware of the powerful nature of music in our personal lives. Music instantly conjures up long forgotten memories, and in fact, we can usually complete the melody of any well know tune after hearing only a few notes. As Tolstoy once said: “Music is the shorthand of emotions.” How many brands actually understand and leverage this power in their marketing efforts ?

Acoustic Identity -- Does Your Brand Need One ? (visual courtesy of museum of the gulf coast)

Acoustic Identity -- Does Your Brand Need One ? (visual courtesy of museum of the gulf coast)

I recently met with Susan Aminoff, Managing Director at EliasArts, an acoustic identity and branding agency, to talk about the role of acoustic identity in brand building. Susan made the point that there is now a sizable body of research which validates what we all intuitively know–that an acoustic identity can be a key element in your branding and an important means of reminding consumers of your brand. As Susan noted:

“Not taking advantage of audio from a brand (vs. a commercial) level is a huge lost opportunity, on so many different levels.  Every brand needs an established and distinguishing voice, so that it can engage in dialogue with its consumers.  Sound is the most enduring and sustaining of all our five senses and our brand messaging; it is a powerful transporter of the brand’s emotional values…and it has the ability to unleash the whole brand story — the one that you’re spending millions of dollars telling — in just one note.”

In fact, Martin Lindstrom discusses this phenomenon in some detail in his book “Brand Sense–Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound.” This book and others have documented the growing literature which support the ability of music to powerfully engage humans in a myriad of ways–not the least of which is branding.

Why Acoustic Identity is Becoming More Important to Your Brand

Beyond the science, there are other reasons to be thinking about an acoustic identity for your brand. In particular:

  • Media Fragmentation — Fragmentation means complexity. Complexity makes it even more important that there is a simple, common theme–or “red thread”–to your marketing efforts. Your brand promise is the ultimate red thread, but music can augment it.
  • Print to Digital — Consumers have been moving on-line and until recently, spending less and less time with off line media. This means there are more opportunities to engage them not just visually–but with sound as well.
  • Brand Proliferation — The past decade has seen a blizzard of new products, many of which are not significantly differentiated. Consumers are overwhelmed with sameness. Acoustic identity represents another potential differentiator.

Acoustic Identity — Benefit Focused or Attributed Meaning ?

Just to be clear. I’m not just talking about the use of music in advertising. I’m talking about using an acoustic element as an important part of your brand signature–everywhere the consumer touches it. There are at least two schools of thought on creating an acoustic identity for your brand.

  1. Benefit Focused — The most obvious approach is to create an acoustic identity which directly supports your brand promise. The idea is to architect the sound or music so that consumers naturally associate it with your brands benefit–even without knowing the product or service. A great example of this is the piano music scored for the UBS “You and Us” TV spots. The music is peaceful, serene and intimate. It directly supports the brand’s promise to understand you and your needs so you have more confidence in your financial decisions. The brand demonstrates it’s value proposition through advisors 1:1 listening (intimacy) and client’s confidence (peace of mind). The music evokes these feelings even when heard without the UBS context.
  2. Attributed Meaning — The second approach is to create a sound, or leverage an existing one, into an acoustic identity that you attribute meaning to over time via use in your brand building activities. An example of this would be the NBC 3-note ding-ding-ding, which used to signify “station break.” NBC took this instantly identifiable station break ID, and turned it into a real acoustic identity with many variations and themes so that it’s now instantly understood as “NBC.” Other examples include Intel Inside and United Airlines well known use of “Rhapsody in Blue.” Each has come to represent its respective brand through repeated and consistent usage.

Acoustic Identity — Creative or Brand Driven ?

This naturally leads to the question: who or what drives the need for an acoustic identity? Historically, it’s often been driven by the creative process and the development of new advertising. Think of the United Airlines example above. There’s nothing wrong with this approach, but I’d argue that it’s way too narrow.

Given the vast array of potential customer touchpoints in most business models, and the almost limitless ways to utilize sound and music, an acoustic identity should be a key marketing driven activity–and not relegated to the agency creatives. So, who drives it ? Whoever is leading the brand.

Music has the proven ability to remind us of a brand, differentiate it versus competition, appeal to our deepest emotions, and encourage us to engage with and ultimately purchase it.  Given the media fragmentation, print to digital trend,and brand proliferation,  it’s more important than ever that Marketers begin to think of their branding not just in terms of a visual and logo, but an acoustic identity as well.

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6 Steps for Turning Digital Chaos into Brand Equity

July 23, 2009

From my July 21 guest post on Branding Strategy Insider:

The marketing landscape is increasingly chaotic and getting more so. The old world of command and control marketing messaging is dead. And marketers are woefully unprepared to deal with this new reality. In a recent survey, over 70% of CMO’s surveyed said they feel ill-equipped to manage their brands in this new digital environment.

The explosion in new media channels, and the increasing ease with which consumers can react to, create content about, and generally discuss brands is challenging even the best marketers. How do you manage your brand in such a chaotic consumer empowered world ? How do you ensure that consumers understand your brand equity and that you drive a single minded understanding of your brand promise ?

Explosion of Media Channels

Media channels — paid and otherwise — are increasing exponentially. YouTube, Facebook, Twitter, webinars, forums, reviews, etc. are only the beginning. Everyday brings new options. Who had ever heard of Stumble Upon a year ago ? Consumers ability to access these new channels, engage with other consumers, and talk back to companies has radically changed how Marketing organizations need to behave. And it’s going to get worse before it gets better. The Social Map below by Brian Solis shows how many different options there are–and the pace of change is fast.

The Increasingly Chaotic Digital Landscape (courtesy of Brian Solis)

The Increasingly Chaotic Digital Landscape (courtesy of Brian Solis)

6 Steps for Turning Digital Chaos into Brand Equity

Here are 6 steps you can take to ensure your brand effectively engages consumers with your brand promise in this increasingly complex and chaotic environment:

  1. Be Different, Special and Better — Let’s start with a basic truth. Your brand equity is what consumers think it is–not what you think it is. Unfortunately, too many brands have brand equities that are identical to competitors. So, the starting point is to have a brand promise, and delivery of it, that is truly differentiated–a basic truth too often ignored in today’s frenzied world of media and digital innovation.
  2. Know Your Target’s Media Habits — Consumers consume media content differently. Know your targets media habits–traditional and new, and don’t be seduced by the latest media innovation if your target isn’t participating. Map their usage. Then, listen to the communities that are conversing about your brand, understand their priorities and beliefs, and identify respected opinion leaders.
  3. Measure Marketing Contact Point Impact — Understand not just what your target is doing, but the impact of different contact points.  Quantifying the relative impact of contact points provides a data-based framework for deciding where to focus your limited resources. Word of mouth has always been important, and digital is making it even more so. Thus, it’s critical to identify your categories “amplifiers” who drive it.
  4. Equip Your Organization to Deliver the Brand Promise — Knowing your brands key contact points, you can then map organizational ownership to each of these. Many “old line” functions are being impacted by new media–e.g. PR, Customer Service, etc. Ensure that they — not just Marketing — really understand your brand promise, what it means, and how to deliver it.
  5. Organize your Team to Engage Key Media Channels / Amplifiers — Establish teams to engage with consumers across your most important digital channels. Equip them with the talent and skills to publish, respond, and engage–whatever is required to focus the discussion on your key brand equities.
  6. Create Value-Added Content — Consumers want more from brands than just a restatement of the brand promise. They want relevant and creative content that surrounds and supports it. Sometimes, they even want to create it. Do your homework to understand what kind of content your consumer wants, whether and how they can contribute, and how it can support and reinforce your brand promise.

Reactive, Proactive or Engaging ?

It’s natural to feel that some of your Marketing communications are reactive and some are proactive. But engaging your target audience over time in an intelligent dialogue that drives your brand promise is key:

  • Lead with your brand promise in new and creative ways. Engage with consumers to interpret it based on their values and needs.
  • Give consumers a voice about your brand and brand promise by enabling feedback, comments and user generated content.
  • Guide consumers back to your brand promise, even when they have a negative experience or point of view. Ask “how could we do better?”
  • Use value-added content that surrounds and supports your brand promise to make it easier to engage consumers.

The key point is this: focus your limited resources. Focus on the most impactful, highest consumption media channels. Focus on building relevant, value-added content to surround and support your brand promise. And then focus your organization on engaging with your consumers across the key media channels in a conversation that continues to reinforce, develop and deepen your brand promise. Why ? So that when consumers think of your brand, they think of one thing — how you’re different, better and more special than the other guys.

What is your brand doing to turn digital chaos into brand equity ?

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