Building brand value during a recession

A reporter asked me the other day if marketers should weather a recession by putting strategic branding activities on hold and instead focus on tactical promotions that drive short-term results.

I don’t know whether the story will run, but I thought I’d share my response.

Consumer spending accounts for nearly two-thirds of our GDP.  Consumer spending rises and falls with consumer confidence.  During uncertain times consumers look for safer bets than during boom periods.

So what should brand marketers do? Certainly marketers must create new ways to provide value. Starbucks recently announced the return of its $1 short coffee. Our clients at Best Buy are offering free appliance delivery and recycling. And United Airlines, another BD’M client, is partnering with Visa on a Beijing Olympics promotion.

But beyond price promotions, I believe empathy and authenticity become increasingly important sources of brand differentiation in a recessionary environment.

During uncertain times we tend to place our trust in those people, brands and institutions we believe truly understand us. When every dollar counts we take fewer risks and are likely to choose brands that are highly relevant to our immediate needs. We seek products that represent a genuine value, not because of a price cut, but because they deliver on their promise.

Empathy and authenticity are essential ingredients in any healthy brand, even during good times. But now, more than ever, marketers must earn market share by being the brand consumers believe is the most relevant and genuine value.

In praise of the USP

Rosser Reeves, the CEO of Ted Bates, is best known for defining the concept of the Unique Selling Proposition in his 1961 book, Reality in Advertising.

Reeves held that successful brands are those that offer customers a specific and unique benefit. FedEx built its business on a simple USP (absolutely, positively overnight). So did Domino's Pizza (hot, fresh pizza delivered in 30 minutes, guaranteed), Oil of Olay (younger looking skin) and Avis (we try harder).

But the idea of a USP is seriously out of fashion in our business. The speed at which product advantages can be matched make it difficult for many marketers to find and sustain a point of difference. And that's why today, instead of unique products, we rely on unique marketing. Instead of selling propositions, we have theme lines.

GEICO is a great and current example of a successful USP in action -- "15 minutes can save you 15% or more." Having a clear proposition has enabled GEICO to create consistently memorable, engaging and effective advertising. The Gekko. The cavemen. Peter Frampton. Jed Clampett. The creative diversity of this campaign breaks the traditional rules of branding. No cookie-cutter campaign approach. No requirement to invest heavily behind each individual campaign. No single creative format as the basis of brand integration.

Therein lies the power of having a clear and consistent USP. It gives marketers the freedom to be diverse and interesting in a age when people have the attention span of a gnat. GEICO can roll out a never ending series of new and different campaigns without ever deviating from their core proposition. GEICO's investment behind each new campaign is simply part of an ongoing investment in the idea that GEICO saves us 15% or more. And GEICO's USP provides an authentic basis for brand integration.

There are lessons for marketers. It is still possible to find and own a USP. One of my previous clients, Sony Electronics, found its USP (like no other) within the truth of the product. Wal-mart's USP (everyday low prices) comes from the efficiency of its supply chain. Enterprise (we'll pick you up) found its USP in its channel of distribution.

This isn't limited to consumer marketing. BD'M has created a USP for Applied Materials, the leader in nanomanufacturing technology for industries as varied as semiconductors and solar energy -- helping the world do more with less. This isn't a theme line, it's a statement of the company's true north.

Finding a USP requires knowing what's important to customers, creating a unique way to deliver it and aligning every aspect of the brand's value chain around the proposition -- i.e., product, service, communications, experiences, employee training, sales force, etc. Be consistent over time. Most importantly, don't get bored with your own success.

Where's my virtual toaster?

We've all heard the saying "there's a sucker born every minute" (incorrectly attributed to P.T. Barnum). Now Second Life has proven beyond a doubt how closely its virtual world mirrors the real world.

A story in today's Wall Street Journal reported on Linden Lab's decision to shut down failing banks in Second Life, the company's online game. One line from the story says it all: "(the company) pulled the plug on about a dozen pretend financial institutions funded with actual money from some of the 12 million registered users of Second Life."

That's right, real people invested money in pretend banks. But, to be fair, some of the banks had offered 200% annual interest. Seems reasonable to me.

Perhaps Second Life needs to create an avatar for Alan Greenspan. He did a decent job in First Life.

Audi's Super Bowl secret

Marketers will pay about $2.7m to advertise in the upcoming Super Bowl and be part of the national zeitgeist for 30 seconds. I've long believed the sponsors which derive the biggest return are those that use the Super Bowl as part of a larger marketing initiative. (Thirty seconds just doesn't seem to last as long as it used to.)

Using the Super Bowl simply to run a new spot for an existing product is an exercise in brand vanity and a colossal waste of money. (Unless you're Bud or Pepsi where the main goal is to excite your bottlers.) However, it is a huge stage upon which to launch a new product or a new positioning.

Today I received an email from Audi that demonstrates this point. Audi offered me a sneak peek at its Super Bowl commercial and asserted that the advertising heralds a new and important chapter in the brand's history:

"Soon, a bold challenge to the tired old myths of luxury will be hitting millions of TV screens across the land. A new viewpoint. A new way of thinking. A new era.
On February 3rd, you will be sent an exclusive preview of the Audi Super Bowl commercial. You will have a chance to witness the moment that will set the nation talking.
The countdown has started. Don't miss the moment of truth.
Audi. Truth in Engineering."

Audi is clued into one of the secrets to a winning Super Bowl sponsorship. While the commercial has to be big and entertaining, what it says about the brand should be even bigger.

Based on the note I received from Audi, this announcement had better be awesome.

The petri dish of bad ideas

I read a story the other day about McDonald’s decision to pull advertising it had placed on school report cards in Florida.

I’m not going to debate whether advertising on report cards is a good idea or not. They did it with the permission of the local school district officials in Seminole County. And we all know schools are woefully under-funded and need to find money for teachers and books.

My question is why McDonald’s did not anticipate the incredibly obvious backlash this initiative would invite given the mounting (and much-needed) focus on childhood obesity.

Who do I blame for silly decisions like this? The inventor of PowerPoint. That's who. PowerPoint is the petri dish for bad ideas.

I’ve found that PowerPoint has the ability to make the worst ideas seem logical, particularly when expressed with the obligatory Venn diagram that attempts to make the most contradictory and improbable ideas sound compatible and reasonable. I bet the McDonald's PowerPoint presentation had this Venn diagram…in one circle the word “burger”, in the other the word “school”, and in the overlapping section, the word “reward."

Perhaps peace in the middle east can be achieved through Venn diagrams. Hmmm...

Scented tires. Really?

I realize we live in an age where segmentation and innovation reign supreme, but some things just seem absurd. (See earlier post.)

Which brings me to the idea of lavender scented tires from KUMHO Tires. I'm not sure which part of this idea is funnier. Is it the fact that somebody actually believes we need scented tires? Or is it the fact that, having decided we need scented tires, lavender was deemed to be the most appropriate scent?

No, I think what's funniest is the statement on KUMHO's website that these tires are targeted at female buyers. Why not just make them pink while you're at it. If you're going to stereotype and pander then go all the way.

Lessons from New Hampshire

It struck me that brand marketers can draw three lessons from the New Hampshire primary.

First, market research must be taken with a grain of salt. (Polls leading up to the election showed Barak Obama jumping to a 12 point lead.)

Second, never underestimate the power of emotion and empathy. (Hilary Clinton's much publicized show of vulnerability and emotion momentarily humanized her in a way that connected with voters, particularly women.)

And lastly, leaders must never lose their sense of humility. Americans love underdogs. (Barak Obama, fresh off his victory in Iowa, began acting like the front runner the media had suddenly hailed him to be. Referring to Clinton as "likable enough" was a rare show of hubris.)

We see these same mistakes committed every day in the world of marketing. Focus groups taken as gospel truth. Rational appeals from marketers desperate to argue customers into buying their products. And the overconfidence that one-time underdogs adopt when they suddenly get hot (Apple? Facebook?), forgetting that it was their challenger status that made them attractive to us in the first place.

YouTube meets Harvard

I just came across a new site that should be on the daily diet of any thinking person.

BigThink.com aims to do for intelligent public discourse what YouTube did for Miss South Carolina. It's a video based site organized around topics such as science, faith, politics, and history, offering in-depth insights from thought leaders in academia, business, think tanks and the arts. The site encourages civil exchanges and debates.

At the center of BigThink are what its founders call "The 10 Questions." Who are you? What do you do? How do you contribute? What inspires you? What do you believe? Who are we? Where are we? What is your outlook? What is your counsel? What is your question? Today's site features musicians (Moby), politicians (Sen Arlen Specter), geneticists (George Church), Supreme Court Justices (Stephen Breyer) and others addressing these questions.

Think of it as the home version of Davos.

Wikiball

I came across a story in the Wall Street Journal about an English football club (aka, soccer) that is planning to let an online community of “owners” to decide who plays and who sits. Welcome to the age of WikiBall.

Over 26,000 fans have each pledged $70 to become a part owner of the Ebbsfleet United football club. If the take over deal goes through the owner-fans will access myfootballclub.co.uk to determine how the team will compete.

Imagine if brands had the courage to do the same. Would Ford allow customers to vote on future designs? Would AT&T invite customers to vote on the most desired handsets and features that to be offered? Done incorrectly, this could be mass anarchy. Done right, however, and it could result in mass sales and loyalty.

Politics and brands

The 2008 presidential race is poised to be the most important election in decades. For the first time in 80 years no incumbent President or Vice President is seeking election. The choice is important, and so are the messages Americans are sending to candidates during the primary season.

One clear message is that we want our elected officials to stop behaving like neatly packaged, focus group tested brands. Don’t spin us, be authentic. Have a clear point-of-view, stand for something deeper than yesterday’s polls. Display an ability to get the job done because the problems we face are significant. Blind partisanship is part of the problem, so build bridges and make things happen.

While we want our leaders to stop behaving like brands, perhaps it is also time for brands to begin behaving like leaders.

I admire brands that have a clear sense of true north, a set of values that inspire product decisions and corporate behaviors. We intuitively know what brands like Target, Nike, Land Rover and Apple stand for. They each have a clear sense of true north.

I admire brands that connect with customers in an authentic manner. Toyota doesn’t spin us. It’s about the virtues of the product, not the glitz of the message. Ditto for Ford trucks, Callaway Golf and Dyson vacuum cleaners.

And, mostly, I admire brands that perform at a higher level. I am loyal to Westin because its Heavenly Bed is incredibly comfortable. I drive a Prius because nothing else matches its combination of green creds, comfort and versatility. I fly United (even before they became a client of BD'M) because of its Economy Plus seating and its PS service on transcon routes. And although I’m typing this on my beloved Mac, I will admit I miss my Blackberry Pearl since being seduced by the iPhone. It simply cranks out emails better.

Brands that are too driven by yesterday’s focus groups tend to have no sense of purpose, no clear north. Let’s make 2008 the year of brand leadership, not brand marketing.