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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Will Pruning Your Business Build Your Brand ?

July 20, 2009

Nothing is more sacrosanct in Marketing than never giving up a customer. But is keeping all of your customers always the best way to build your brand? Here’s a possibly controversial view:  in the future it will become even more important to gracefully remove dissatisfied customers from your franchise–and this will be key to maintaining a healthy and growing brand.

Build Your Brand by Pruning Low Value Customers (visual courtesy of AdWeek)

Build Your Brand by Pruning Low Value Customers (visual courtesy of AdWeek)

This is because “recommendations from known people” is the most powerful form of advertising, and your detractors are likely hurting your brand more than you think. And as my recent blog post “How the Future Social Web will Transform Marketing” pointed out, word of mouth from friends will become vastly more important in the future.

Are all Customers Equal in Value ?

Not all customers are equally satisfied. Whether you’re using standard satisfaction metrics or Net Promoter Score, a customer satisfaction metric popularized by Fred Reichold in his book ‘The Ultimate Question,” it’s important to not just look at overall satisfaction, but to understand differences in customer satisfaction across products, channels, customer groups, acquisition channels, etc. to identify potential problem areas.

Net Promoter Scores -- Identifying High and Low Value Customers

Net Promoter Scores -- Identifying High and Low Value Customers

Customers are also not equal in economic value. Some are more valuable and some are less. Measuring the profitability or life-time value (LTV) of a customer is a complex, but important marketing metric.

Customer Lifetime Value -- Some Customers Are Unprofitable (courtesy of Pear Analytics)

Customer Lifetime Value -- Some Customers Are Unprofitable (courtesy of Pear Analytics)

Not surprisingly, customer satisfaction and lifetime value are related. More satisfied customers are generally more loyal, more willing to pay a higher price, less likely to switch brands based on promotions and price deals, and are more likely to generate positive word of mouth that positively benefits your brand. Conversely, less satisfied customers are likely to generate negative word of mouth. This is critically important because “recommendations from people known” is the single most trusted form of advertising based on a recent Nielsen study.

Building Trust -- Recommendations From Friends Count Most

Building Trust -- Recommendations From Friends Count Most

Measuring your various customer groups on satisfaction and customer profitability is the starting point for understanding whether pruning customers will build your brand. Slice your data to identify groups of customers with low satisfaction and/or profitability, understand why, and then determine whether the problem is economically solvable. If not, you have to ask whether it makes sense to prune the customers.

“De-Recommending” Your Brand

Because if you don’t, dissatisfied customers will be “de-recommending” your brand and eroding your hard earned brand equity. Research has shown that only about 5% of customers will complain, but of the balance 95% that don’t, they’ll not only remain dissatisfied but also tell an average of 9-10 people each about their poor experience. They are, in Net Promoter terms, brand detractors that hurt your brand.

 Examples Where Pruning Could Make Sense

  • Channel Experience — Customer satisfaction by channel — web, phone, retail, etc. is often significantly different. Should you shut down a channel ?
  • Product Variant — Product satisfaction frequently differs by product variant, with some variants having much lower satisfaction. Should you eliminate a product or product line ?
  • Acquisition Channel— Some acquisition vehicles deliver lower satisfaction and lower profit customers than others. Should you de-emphasize an acquisition channel or tactic ?

Gracefully cutting business lines and exiting dissatisfied and vocal customers from your franchise in these and other similar situations is important to building your brand. Why? Because exiting dissatisfied, low value customers will reduce negative word of mouth, improve your average satisfaction, and improve profitability. And not doing so will become ever more risky as the future social web enables customers to bring the opinions of their friends with them as they traverse the web and interact with products and services like yours.

Are you bold enough to build your brand by pruning your business ?

Should Your Brand Focus on “Energy” To Drive Growth ?

July 7, 2009

What if I told you that one of your core beliefs about brand equity is wrong? If you’re like me, you were trained to believe that as a brand manager, you should define your key brand equities, develop marketing programs to communicate these to consumers, and over time, “own” these attributes. If you believe that, you’d be right, but not totally so. It seems there’s a special kind of equity your brand needs to own these days. And one that very few brands understand, much less drive.

Brand Market Value vs. Brand Consumer Value

In recent years, brand value has climbed inexorably higher, as measured by Millward Brown’s Brand Z Most Powerful Brands and others. Using the Millward Brown data, brand value climbed from 5% to 30% of the S&P market cap over the past 30 years. Brand experts cheered; it was an implicit endorsement of the great brand building efforts across companies.

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

But, a curious thing was happening. Brand equity measures, as measured by consumers, were falling.  Traditional measures such as awareness, trust, etc., were eroding based on surveys by Y&R Brand Asset Valuator (BAV). How could this be? How could market driven brand values be going up, while consumer driven brand equity scores were going down?

Causes of Declining Brand Equity

John Gerzema and Ed Lebar of Y&R think they know the answer. The markets were wrong. Brands and branding are in a serious state of disrepair. In their excellent and well researched book, “The Brand Bubble,” they cite the following for the deteriorating health of brands. They are declining because of:

  • Excess Capacity– There’s been an explosion of choice. Consumers are drowning in more products and services than ever. There is less differentiation and greater commoditization.
  • Lack of Creativity – With more choices, consumers increasingly look for creativity and unique experiences from brands. Yet most brands today are highly similar, and deliver modest incremental improvements.
  • Declining Trust – Brands considered trustworthy have eroded from 52% in 2007 to 25% in 2006. Why? Public scandals, corporate misdeeds and institutional crises. Perhaps more important is transparency of information on the web—no brand can hide or say things not consistent with reality – authenticity counts.

You may or may not agree with these causes. What seems inarguable is this – key brand equity measures have generally declined over the past 20 years.

Growing and Successful Brands

There is a small minority of brands that are growing both market brand value and consumer brand equities. Companies as disparate as Google, Subway, Lego, Dove and Axe have shown it can be done. When Gerzema and Lebar searched the data to understand what was driving this growth, they identified a new factor – “brand energy.” They describe energy as “the consumer perception of motion and direction in a brand.” They describe brands with energy as being irresistible and differentiated because they:

  • Move with innate purpose and conviction
  • Constantly reinvent themselves
  • Engage consumers on their own terms
  • Compel devotion
  • Move culture and categories

Branding Implications – From Current to Future

What’s interesting about their learning is the following: it refocuses marketing from what the brand currently delivers—a static state–to where the brand is going. Motion and direction mean the brand is going somewhere. Consumers want to be with brands that are on a compelling journey. They want brands that:

  • Create a sense of mission. Dove is about redefining beauty.
  • Continually surprise and delight them with new products and services. The iPhone and apps.
  • Engage them in a conversation, not talk at them. Subway’s fresh, healthy tips for parents.
  • Creatively use new communication channels. Best Buy people on Twitter.

These are behaviors consumers expect from great brands—now and in the future. There’s an implicit “contract” these brands have with consumers that says: we will be dynamic and ever changing in meeting your needs. And the brand is as much about the future as it is about the present.

This change in orientation from the current to the future is a huge mindset change for most Marketing organizations. Going forward, brands will still need to stand for important functional and emotional equities – bigger, faster, better, etc. What’s different is that to be successful, brands will need to spend an equal amount of time and effort communicating and delivering what they’ll be in the future. Because the most successful brands will provide energy–direction and motion that helps take consumers forward to where they want to go—not just stay where they are.

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How the Future Social Web will Transform Marketing

June 29, 2009

In a recent white paper titled “The Future of The Social Web,” Forrester’s Jeremiah Owyang predicts the social web will  morph through 5 different stages over the next 5 years, wreaking havoc on the way brands market. In his summary, Owyang states:

“Today’s social experience is disjointed because consumers have separate identities in each social network they visit. A simple set of technologies that enable a portable identity will soon empower consumers to bring their identities with them — transforming marketing, eCommerce, CRM, and advertising. IDs are just the beginning of this transformation, in which the Web will evolve step by step from separate social sites into a shared social experience. Consumers will rely on their peers as they make online decisions, whether or not brands choose to participate. Socially connected consumers will strengthen communities and shift power away from brands and CRM systems; eventually this will result in empowered communities defining the next generation of products.”

Portable Social Networks

Consumers will still use Facebook, MySpace, LinkedIn and such, as they do today. What’s different is that OpenID, Facebook Connect, and similar capabilities will enable consumers to traverse the web, and have their networks flow with them.

The Future Social Web -- Transforming Brand Marketing ?

The Future Social Web -- Transforming Brand Marketing ?

The implications of this are potentially profound, given that ~50% of consumers now belong to at least one social network. And even more important, these “portable” social networks will bring data and knowledge that is more trusted than the content delivered via traditional marketing contact points.

Changes Due To Social Network Portability

Owyang points to a number of important changes which will be driven by portability:

  • Social networks such as Facebook and LinkedIn will aggregate member activities and preferences and sell or leverage this data with brands
  • Consumers, using OpenID or Facebook Connect, will be able to expose all or portions of their personal and network information to the web sites they visit
  • Web sites will be able to use the personal information enabled by OpenID or Facebook Connect to personalize consumers web experiences
  • Consumers will visit web sites and know to what extent the site has been frequented by their community, what their community thinks of the site, product or service, etc.
  • Social communities will feed data and insights about web sites, brand experiences, product and services, etc. to members on an as wanted basis.
  • Search results will account for user preferences, habits, as well as the users social network preferences

My interpretation: Social communities will play an increasingly important, and perhaps even dominant role, in the future. Brand Marketers are going to have to rethink how they organize and market their brands.  This is because the future social web will make “portable” the opinions, insights and knowledge of friends — which all research shows is much more trusted than virtually any other information source–as consumers travel the web and interact with brands, products and services.

Implications for Marketing

  • Social Network Segmentation — Segmentation will potentially move from traditional demographic, usage, or needs based schemes to social networks. Not necessarily the group of friends an individual belongs to, but the aggregated set of individuals that tend to be like them based on habits, practices and preferences.
  • Focus on “Amplifiers” — Influencers will become more important because they will be omnipresent. Word of mouth theory posits that 10-15% of any population are “amplifiers”–consumers with unusually large social networks who also are on the leading edge of sharing new information. These amplifiers will become portable and follow their non-amplifier friends and inform them as they travel the web. The future social web will enable marketers to identify these amplifiers and develop programs to interact with and influence them.
  • Personalized User Generated Content — Consumers will be able to see what their social network — either their immediate network or people like them — think of a given store, product or service, wherever they go on the web. Thus, user generated content will become more personalized–and more impactful. Marketing organizations will need to develop new tools to influence and monitor this new content.
  • User Experience Personalization — Consumers will come to your website, along with a wealth of information about themselves and their network. Brands can use this data to personalize the experience, recommend products, etc. Brands which fail to take advantage of this opportunity will be at a disadvantage.

Owyang is quite bullish in predicting all this will happen in the next 4-5 years. Personally, this feels a bit aggressive. But, there’s no doubt that if the world above materializes, even in 10 years, marketing will be a far different place than today with far reaching implications for how brands market themselves. The time is now to begin thinking through the implications of social network “portability” and how the Marketing organization of the future should be designed in response.

Leading Your Brand Beyond Marketing

June 25, 2009

Every Marketing organization needs to answer a fundamental question: “what’s the role of Marketing in our business ?” Why ? Because the “brand” is almost always much more than just the Marketing plans.

In many organizations, for example CPG, Marketing’s role is clear, well defined and a given. But for many organizations, particularly non marketing driven ones, it’s a question that needs answering. In an earlier post “What Do CEO’s Really Want From Marketing?,”  I summarized ex-IBM and American Express CEO Lou Gerstners’ point of view: the role of Marketing is to build the brand and deliver a great customer experience. But is it really that simple ?

Brand Experience -- More than Marketing

Brand Experience -- More than Marketing

Extending Marketing Influence

At a recent CMO Club dinner in New York, I had the privilege of leading a discussion on this very topic:  “Leading the Brand Beyond Marketing.” What followed was a spirited discussion among CMO’s about how and when Marketing should exert more influence over the brand experience. The simple part was agreeing that Marketing should influence the brand experience beyond the marketing plans. The hard part is how.

Tools for Defining Brand Experience Drivers

Here are 3 tools I’ve found helpful in increasing Marketing’s influence over the total brand experience–including some areas historically considered irrelevant to Marketing.  The common denominator with all of them is facts. The tools provide a data based approach to defining which factors are driving the brand and what role Marketing should play in influencing them.

  1. Market Contact Audit — This is an excellent tool to help you understand the relative importance of various Marketing contact points in your category. It measures the top 35 contact points for impact, as well as brand ownership–e.g. the degree which contact points are owned in consumers minds by different brands. Importantly, the approach forces you to think beyond the standard marketing touchpoints–e.g. advertising, sponsorship, etc. and consider new ones like answers forums, annual report, etc. A likely outcome is a clearer understanding of the most impactful contact points in your existing marketing mix as well as new ones outside the traditional marketing mix that you hadn’t thought about before.
  2. Brand Equity / Customer Satisfaction Drivers — Customer satisfaction surveys not only measure satisfaction. They also measure the important factors contributing to satisfaction and quantify the relationship between those factors and satisfaction. Understanding these drivers enables Marketing to define areas outside Marketing that are central to driving a superior brand experience.
  3. Corporate Reputation Drivers— Similar to above, a corporate reputation survey measures the overall corporate reputation and the key drivers which most impact, positively or negatively, the reputation of the firm. For single brand firms, this can be a critically important element of managing the total brand experience. It’s different from satisfaction research in that it measures all stakeholder groups (e.g. media, analysts, NGO’s, etc. ) and it is focused on corporate reputation, not the user experience or brand equity.

Defining The Role of Marketing

With a clearer understanding of the most important drivers of brand experience, the question then becomes: “what’s marketing’s role in driving it?” Developed by the Marketing Leadership Council and Corporate Executive Board, the “Marketing Alignment Survey” is a great tool to foster discussion and alignment as to the role of Marketing in your organization. It surveys non Marketing functions to understand, across the full range of Marketing activities, both the perceived importance and impact of the Marketing organization. This helps answer the question: “does everyone agree on what marketing should be doing?” and if not, to define gaps and how to bridge them.

It’s vitally important that within the firm, there’s  a central point of influence over the key drivers that impact brand experience. It’s less important that Marketing have direct functional control–and in most organizations it’s not realistic or appropriate that they do so. What’s most important is that the Marketing organization play a leading role in ensuring that there is focus on the most important touchpoints that bring the brand to life.

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The Responsible Way to Improve Your Marketing

June 1, 2009

What’s a small player to do when facing behemoths in a heavily marketed category ? How do you stake out a credible position when the category benefit is already “owned” by the big guys ? One approach is to discover and exploit a unique and compelling consumer insight.

Insurance is a dull category that yearns for creative Marketing–hence the Cavemen, Ducks, Lizards, NBA stars, etc. Everyone knows the category benefit (security) and each firm has a different way of expressing it. There’s Allstate’s advertising “You’re in good hands with Allstate;”  and of course, State Farm is still mining their decades old advertising slogan “Like a good neighbour, State Farm is there;”   etc.  And, of course, there’s AFLAC and GEICO. In the land of insurance behemoths, what’s a small player to do ?

Liberty Mutual Print Advertising -- Using A Great Insight

Liberty Mutual Print Advertising -- Using A Great Insight

How about discover and exploit a compelling consumer insight ? That’s exactly what Liberty Mutual has done with the “responsibility” insight. Like most great insights, it’s so simple that when you hear it, you think: “I knew that.” In fact, as Jack Trout points out in his book “In Search of the Obvious,” good ideas are simple, understandable, easy to explain, and intuitive. The insight:  most consumers think insurance companies frequently don’t do the right thing. Everyone has either a firsthand experience or a story from a friend or family member of an insurance company doing the wrong thing.

In my case, it was 1976 and I was driving my parents Volkswagen way too fast when the road changed from pavement to gravel. I fearlessly tried to negotiate a sharp turn at 60 mph., but the car skidded sideways and rolled over multiple times onto a public golf course.  Some golfers on the 9th hole rescued me from the car, where I was hanging upside down  in the shoulder harness — unhurt.  In this case,  State Farm did the wrong thing by cancelling my parents insurance — after 20+ years of family accident free driving !

Liberty Mutual stakes out the bold claim that it’s the insurance company that does the responsible thing — and by inference, that others may be less so.  My favorite Liberty Mutual ad  focuses on a parent doing the right thing after school with the kids.

And not only have they used this insight in their ads, they’ve now exploited it as THE marketing idea with the “Responsibility Project.”  Liberty Mutual has extended beyond ads into social media, as their web site invites consumers to share their stories of people doing the right thing and behaving in a responsible way–a great way to engage consumers and reinforce their brand benefit in the process.

Paul Alexander, head of marketing for Liberty Mutual, says: 

In a category where you find geckos, cavemen, hot dogs without a bun, and Flo taking you down the “Dave” isle, we believe there is room for a brand to have a serious conversation about responsibility with it’s consumers and customers.  More importantly, we do not want to come across as preachy or finger-wagging.  Rather, we want to encourage a conversation, especially around issues where there is more than one right answer.

So what’s the lesson here ? When you can’t easily differentiate based on your benefit, consider the possibility of identifying and leveraging a unique consumer insight. Developing great consumer insights is hard work. There are  several excellent books on the topic, including “Hitting the Sweet Spot: How Consumer Insights Can Inspire Better Marketing and Advertising.”

The most important learning here is to relentlessly focus on understanding your consumer and developing great insights. It’s the responsible thing to do, and in the best cases, yields better marketing plans and even better business results.

What Do CEO’s Really Want From Marketing ?

May 21, 2009

CMO turnover continues to be too high. In the lastest Spencer-Stuart survey, the average CMO tenure rose slightly to 28 months–a positive trend, but still a very short lifecycle by any measure. Given that most CMO’s report to CEO’s, it’s a fair question to ask: “What do CEO’s really want from Marketing?” Lou Gerstner, ex CEO of IBM and American Express has an answer. I attended the M50 CMO Summit last week, and Gerstner talked about what he expects from the Marketing organization.

Lou Gerstner's Marketing Mandate: Customer Experience and Brand Building

Lou Gerstner's Marketing Mandate: Customer Experience and Brand Building

Ensure Excellent Customer Service

His first CMO mandate is customer service. Marketing’s job is to ensure the organization is delivering great customer service,  particularly during tough times. Taking care of the customer, always the right thing to do, is even more important during challenging economic times, because competitors often cut back. And customers notice. Customers have long memories and remember how they were treated–in good times and bad.

A good question to ask yourself is the following: are my CEO and I aligned on the customer experience and what is expected of Marketing ?  Defining and measuring customer satisfaction is only the first step. How and what kind of role Marketing plays in influencing other important functions in the company — Customer Service, R&D, etc., in delivering an excellent customer experience is equally important. Marketing plays a lead role in defining and quantifying the most important factors driving customer satisfaction and how these can be improved, as well as the relationship between customer satisfaction metrics and improved top and bottom line business results.

Build The Brand

His second expectation is that the CMO is building the brand. Gerstner acknowledged that during downturns, you may not be able to spend as much money driving the brand as you’d like. But the CMO’s job is to be the brand steward and to ensure that the company is always investing something in brand building activities and that every part of the organization is living the brand values day in and day out.

Brand building means defining your brands key equities, and continuously working to better communicate and deliver those equities to your customer. This requires that everyone in the organization is crystal clear on what the brand should stand for, and that there is consistent focus and application over time across all functions–and not brand “drift” which tends to occur in many organizations.

Time and again, Gerstner came back to the point that everything starts with the customer.  To reinforce this point, he focused his IBM team on just two metrics: customer satisfaction and market share–two outcomes which are directly linked to delivering great customer service and building the brand.

That’s it. Two simple expectations. Deliver great customer service. Build the brand. If Marketing did these two things extraordinarily well, chances are that the 28 month CMO tenure would increase and begin to approach that of CEO’s at 54 months. Because they would be focusing on what every CEO and CMO should care most about: the customer.