Owning Game-Changing Subcategories: A Conversation with David Aaker About His 17th Book
Digital powerhouses like Airbnb, Salesforce and Dollar Shave Club demonstrate the transformative power of subcategories.
It’s been nearly 20 years since I started working with my mentor and friend David Aaker. Dave inspired me to write my first book, Brand Asset Management and my second, with my Prophet partner in crime, Michael Dunn, called Building the Brand Driven Business. Dave remains a shining light in helping all of us think of brands as true assets that cannot only unlock true accretive enterprise value but can be also leveraged as a strategic north star in helping a company reach its longer-term growth aspirations.
“To grow you need to become the exemplar brand to position, scale, and build barriers.”
David’s ability to evolve his business acumen, while grounding it into his key landmark idea – brand relevance – has made him an icon in the eyes of generations of marketers like myself. His 17th and latest book, Owning Game-Changing Subcategories: Uncommon Growth in the Digital Age, tackles brand-building amidst digital transformation – a topic that could not be more important today.
As organizations and brands face unprecedented change, opportunities and challenges (i.e. coronavirus), they must turn to digital to continue to grow. Dave and I had a (virtual) catch-up recently to learn more about his book and what marketing leaders can gain by creating “must-haves” in the digital age.
Your new book, Owning Game-Changing Subcategories: Uncommon Growth in the Digital Age, is launching in early April. Why did you pick this subject and why now?
I observed in category after category— from Japanese beers to automobiles to computers— bursts of growth were almost always explained by the formation or reframing of a subcategory created by a new or improved customer experience or brand relationship. It almost never was caused by a “my brand is better than your brand” strategy. So, I felt that there would be value in a compact book that explained why that assertion was true and how to implement a subcategory growth strategy.
Of course, digital is putting subcategory growth strategies on steroids by enabling subcategories and their exemplar brands to pop up more often and grow at incredible rates. I knew that I needed to factor in digital’s prominent role into the book’s insights as it is a true accelerator in both overall brand and the use of subcategory growth.
You dive into several real-world examples of brands that are achieving growth by creating categories of their own. What are some of your favorite brands you discuss? Why?
The first was Asahi Super Dry which immediately took 10 share points from Kirin because it defined a new subcategory with a new taste AND a young, cool personality. Then there was the Chrysler minivan, which created and owned the minivan subcategory for 15 years with no competition. Enterprise Rent-A-Car became, for decades, the exemplar and only relevant brand for a subcategory that targeted an underserved market, those with a car under repair.
My favorite brands of the digital age include Airbnb, Dollar Shave Club and SalesForce.com. Each developed a new subcategory and customer experience and then expanded and enhanced that experience over time. Each also created a persona and brand relationship that delivered energy, passion, and creativity. Airbnb inspired and enabled the owner/managers to be entrepreneurial hosts. Dollar Shave Club and SalesForce.com both burst onto the scene as a feisty underdog ready to take on the established giants with an irreverent sense of humor.
What is the biggest takeaway you hope readers gain by reading your book?
There are four takeaways.
First, real growth comes from relevant subcategory creation, not from “my brand is better than your brand” competition based upon differentiation.
Second, to grow you need to become the exemplar brand to position, scale, and build barriers. Unlike other innovation strategy books, this book recognizes the role of brand building that makes a new subcategory come to life and win the day both win the short term and over time.
Third, brand communities in the digital age are an important way for customers to become involved in the subcategory and bond with the brand and others that share a common interest and/or activity. Brand communities can be built around B2B products or even at companies with ‘commoditized’ products or services but a social program that has relevance and energy like that illustrated by Dove’s self-esteem initiatives.
Fourth, digital has put subcategory creation on steroids through the Internet of Things (IoT), e-commerce, social media and websites, and brand communities.
You wrote your first book in the seventies, now you’re about to publish your 17th book in 2020. What are some of the biggest changes you’ve seen over the decades? What has remained the same?
The concept of brand equity is the same. It is brand visibility, brand associations, and the size and strength of the customer base. And the process involved in creating and building brands is much the same as well.
One change is the enhanced role of higher brand purpose, particularly social higher purposes. Employees, especially, younger ones, need motivation that raises above increasing sales and profits. And customers increasingly value a higher purpose as part of a brand relationship.
Another is the power of digital—the IoT impact on offerings, e-commerce and social media providing customer access, and brand communities all have created a more dynamic marketplace, accelerated innovation and new subcategory formation. The digital era makes it more challenging to create messaging that breaks through. One answer is to package content into stories that involve, entertain, engender emotion, intrigue etc. in order to attract attention, change perceptions and avoid counter-arguing.
How has the necessity for brands to “go digital” shaped your current perspective on topics like “brand equity”?
In my view, digital transformation has an important strategic role to play in marketing and organizational strategy. Digital can enable the creation and success of new subcategories providing strategic growth platforms that become the basis of strategic vitality and success. Too often the focus is on the tactical role of digital. Its exciting to see the way Prophet is changing to help our clients with their digital transformations.
One of your passions is brand relevance. Not only did you write the book about it, but you’ve entered it into the lexicon of marketers and executives everywhere. What does it mean to be a relevant brand in the digital age?
Being relevant means being visible and credible with respect to a subcategory. So, it is context-specific. A brand that is relevant to automobiles does not mean it is relevant to compact hybrids. Becoming the exemplar brand is critical because it is not only the one positioning, scaling and building barriers, but its status as the subcategory representative makes it the most relevant or even the only relevant brand.
In this digital age, the road to relevance almost always needs to involve digital-enabled communication to provide both visibility and credibility and a website to represent the brand message in all its multiple dimension richness. And digital enables brand communities, a loyalty driver, to thrive.
You’ve been called the “father of modern branding.” What is your personal brand?
My purpose and my brand has been to encourage organizations to manage for the long-term by building brand assets that will be the basis of their future success. That has not changed even though digital has expanded the challenge and enabled new routes to that goal. My brand also involves aspirational process elements such as research-based ideas, rigorous conceptual thinking, and humor.
Look out for David Aaker’s book wherever books are sold, including online and e-book retailers. Learn more about Owning Game-Changing Subcategories and reach out if you’d like to connect with David or any other experts from Prophet.
While many of the principles of modern branding remain the same, digital continues to make some more powerful than ever. The right subcategories can add rocket fuel to growth strategies.