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Why the Failed Unilever-Kraft Heinz Merger is a Very Good Thing

Had it succeeded, the merger likely would have ended Unilever’s admirable social programs.

The Brazilian private equity group, 3G Capital, who own Kraft Heinz and InBev, and whose strategy was summarized by Fortune as “Buy Squeeze Repeat,” were rebuffed in their effort to buy Unilever. Thank goodness.

Unilever is a shining light. In 2010, Unilever launched USLP (Unilever Sustainable Living Plan) with the vision of addressing the environmental and social problems in the world. Unilever has a host of specific environmental goals dedicated to reducing its footprint (cutting it in half), getting people access to safe water, increasing the use of renewable energy and stopping hazardous waste from going to landfills. Social programs abound at Unilever, like Dove’s programs to raise girls’ and women’s self-esteem and Lifebuoy’s program to change handwashing habits to reduce infant deaths throughout the world (they are halfway toward the goal).

Unilever’s Belief in Corporate Responsibility

The rationale, as explained by CEO Paul Polman, is fascinating. He notes that (in part) because of the limits of capitalism, we have created an unsustainable set of problems which include global warming, resource depletion and an increasing gap between the rich and poor. He believes that businesses have a responsibility to address these related issues. The Unilever business model calls on the firm to be an active contributor in finding solutions. Toward that end, the needs of citizens and communities carry the same weight as the demands of shareholders at Unilever.

“The Unilever business model calls on the firm to be an active contributor in finding solutions.”

Polman argues that such actions will help businesses in the end. Better employees, especially millennials, will be attracted. Enough customers will respect – even admire – you to make a difference. And, brands will get more visibility and energy, key determinants of long-term success. By raising the living standards of third-world counties, new markets will open. The risk of catastrophic damage to the environmental, social and economic framework will be reduced; which should objectively be a plus for business.

The Kraft Heinz Difference

In sharp contrast, 3G Capital strategy acquires and merges firms, and then ruthlessly reduces headcount and operational expenses to sharply improve operating margins, profits and, most important, per-share earnings. During the first 15 months after buying Kraft, the employee count went from 46,600 to 41,000 and overhead went from 18.1% to 11.1%. Just days after the purchase, ten top executives were fired, office refrigerators were removed, company planes were gone, everyone flew coach, people even shared hotel rooms—all in the name of creating a cost-reduction-first culture. All programs and people were placed on a zero-based budgeting system with a “justify what you are worth” ongoing evaluation.

Because of these changes, the Kraft Heinz market cap went up sharply. Wall Street is impressed by cost moves. This strategy may work short-term, but cost-oriented strategies can and have run out of steam requiring firms to change – sometimes painfully – to invest in rebuilding brands and finding growth avenues. Maybe that will happen at Kraft Heinz and maybe not. Perhaps the lack of a higher purpose will inhibit them from hiring the best people, and adversely affect the loyalty of a part of the customer base. Or maybe not.

It seems unlikely that over time 3G will champion a higher purpose or develop substantial programs to protect the environment or address social issues to the extent that Unilever and many other firms are doing. They may be right in setting their priorities and the result may be a financial success. Or maybe not.

Unilever invests in solutions to social problems in the context of running a business. I submit that we are better off because of the Unilever’s of the world, which incidentally, include many, if not most, major firms.


FINAL THOUGHTS

The opinion of Polman and hundreds of boards and CEOs like him is both amazing and instructive. They give credibility to the view that there are serious environmental and social problems and the private sector needs to be and can be part of the solutions facing our world today. They also provide inspiration that however dysfunctional our political systems are, the vitality, innovativeness and values of the private sector will help all of us prevail.

Want to build a higher-purpose program for your business? Prophet experts can help you build your brand through corporate responsibility.

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How to Power Brand Growth After a Merger

Prioritizing customers and employees through a merger can help you keep winning.

A merger is a unique opportunity to reimagine your business and brand. But the reality is stark: 70%-90% of mergers and acquisitions fall short of expectations. Prophet’s approach to M&A not only ensures that brand equity isn’t degraded but creates a new platform for growth through the development of a relentlessly relevant brand. This demand-driven approach is complimentary to driving efficiency of costs post-merger.

Relevance is the most reliable indicator of a brand’s long-term success. In fact, data from our latest Prophet Brand Relevance Index™ reveals that revenue growth of the most relevant brands have outperformed the S&P 500 average by 12% over the last decade on profitable growth.

It’s important to understand how to navigate this process, and mitigate the pitfalls that can derail or sub-optimize an M&A effort. This article will illustrate the key areas to focus on, and the opportunities and risks your business is likely to encounter.

The following potential pitfalls can be navigated if anticipated and addressed with a proper strategy:

  • Inadequate alignment with business strategy – Brand strategy must be informed by business strategy and designed to support strategic objectives and intent.
  • Too narrowly framing the merger as a “re-branding” effort – Mergers present a rare point-in-time opportunity to drive broader cultural and experiential change for a new brand or company.
  • Minimal internal orientation and focus – Successfully informing, engaging and enabling employees BEFORE launching externally is critical.
  • Approaching launch as a “one and done” effort – The initial launch is really only the beginning of creating a meaningful brand that is understood by consumers and valued by stakeholders.
  • Lack of coordination, integration and cohesion – Centralized planning and rigorous program management are essential to ensure success across numerous, concurrent efforts.

After all, a successful merger is defined by the value it creates in the marketplace. Effective business and brand integration goes beyond eliminating redundancies, merging teams and unveiling a new name and logo. While short-term profits can be achieved through efficiencies and cost reductions, long-term shareholder value is created through a deep understanding of customers and the power of the brand.

Developing relevant offerings that appeal to your customers will accelerate top-line growth. Additionally, creating a relentlessly relevant brand will inspire, influence and compel consumer behavior.

4 Key Areas to Prioritize for Brand Growth

Over decades of M&A work, Prophet has identified four key areas a company should prioritize to power M&A growth:

  1. Create a compelling “how-to-win plan.” This plan builds a comprehensive portfolio of company moves and customer-facing offers and experiences that deliver on unmet or underserved needs.
  2. Develop a transformative brand purpose. Building a powerful brand purpose and narrative can unify a company and establish an aspirational north star.
  3. Establish a motivating employee value proposition. This drives growth by engaging and inspiring employees to achieve their full potential and increasing the acquisition and retention of talent.
  4. Prepare to activate your brand. Ensure that your brand’s external activation shapes perceptions, changes behaviors and drives business impact.

FINAL THOUGHTS

CONSISTENCY WITH CLOSE. To successfully integrate two companies, the M&A plan for your business and brand to win in the market must be done well and done early. It’s important to guide the newly merged company’s actions towards customers, shareholders, employees and partners not just for the duration of the merger but for many years into the future.

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Using the 5 Content Archetypes to Build a Successful B2B Content Strategy

Refining your goals intensifies the impact of this important marketing tool.

B2B businesses continue to embrace the value of content marketing to position their brands, products, and services in more relevant ways with customers and prospects. In fact, B2B companies are ideally positioned to benefit from content marketing, given the inherent nature that expertise plays and the high degree of consideration and complexity that goes into buying decisions.

However, while many B2B businesses have compelling content, most lack a clear understanding of what should drive their content strategy. Every company needs a clear focus on the kind of content they will create and who it is intended for. We call these content archetypes. These archetypes are important because they bring focus, consistency, and scalability to content in a way that gives B2B brands a distinct voice, purpose, and platform on which to speak.

In our experience, the brands that take an approach like this make stronger connections with the right audience and get significantly better returns on their investment in content marketing.

Identify Your Brand’s Content Archetype

Altimeter, the research arm of Prophet, recently published a report, “Key Elements For Building a Content Strategy” that uncovers five distinct content archetypes that guide the content strategies of the strongest B2B brands. Before diving into each, it is important to note that the best companies pick one, maybe two, archetypes as the primary focus of their strategy. Driven by their core marketing objectives, they commit to this archetype for a period of time (maybe 1-2 years) while evaluating how they are doing and evolving their approach as needed.

The 5 Content Archetypes

Let’s take a closer look at these five content archetypes:

1. Content as Presence

The first is Content as Presence. This type of content is about engaging a broad audience while promoting brand awareness and brand health. It’s typically best used to help reposition a brand in a target’s mind or expand what customers think they know about the business.

For example, IBM has done a great job using Watson content to convey a more progressive and analytical IBM, to expand what customers think IBM can assist them with, and to demonstrate how Watson is already helping a wide array of customers.

2. Content as a Window

A second archetype is Content as a Window. This type of content is about giving customers and other audiences, such as prospective employees, a view inside the company that they otherwise would not have. This content is best used for businesses that want to humanize their brand or those that believe showing how they work is a key part of their brand promise.

The global shipping and logistics business, Maersk, is a great example of this archetype. It has built one of the best B2B content positions with its focus on giving people an inside look at the company, its operations and its people. By taking down the walls around its business, Maersk provides customers, regulators and prospective employees a view into its capabilities, purpose, and global scale.

“The best companies pick one, maybe two, archetypes as the primary focus of their strategy.”

3. Content as Currency

The third content archetype is Content as Currency. This is for brands that want to be seen as subject matter experts. This type of content helps consumers make better decisions for their business. It is particularly beneficial when used to augment the expertise of a sales team, who can educate customers on the right questions to ask, provide insight into how other companies are dealing with similar challenges, and help them move forward with a complex buying process.

GE, with its Industrial Internet platform, is an excellent example of how to deliver content that helps customers move forward. With self-assessments, relevant case studies, and points of view, GE is helping businesses understand the Internet of Things and what it means for their company.

4. Content as Support

The fourth archetype is Content as Support. This one is all about helping customers extract greater value and utility from the solutions you provide. It is best used in highly technical categories when product usage is complex, and ongoing loyalty and share of wallet of existing customers is marketing’s top priority. B2B companies following this strategy should focus on educating customers and partners about how to get the most out of their products by sharing tips on installation, product usage, troubleshooting and integration.

Schneider Electric, a global provider of energy management and automation solutions, is one of the leaders with this content archetype. It publishes content about design, installation and how to lower the total cost of ownership that is helpful to both its contract partners and end-customers. This strategy enables Schneider’s sales and service teams to stay as productive as possible by giving its customers an alternative way of accessing their expertise.

5. Content as Community

And finally, we have Content as Community. This content focuses on fostering a community of customers or other stakeholders with similar needs. This approach is best suited for B2B brands in highly collaborative categories such as healthcare and technology, or those with extremely engaged and loyal customers who can serve as brand advocates.

American Express, with their OPEN platform, used content to build a community of small and medium-sized businesses. For more than 10 years, it has served as a destination for entrepreneurs to learn from American Express, and each other, about what it takes to grow and run a healthy business. OPEN is a great example a content community that creates value, without explicitly selling.

Questions to Ask When Determining the Best Type of Content for Your Brand

As you think through what archetype is best suited for your business, consider the following:

  1. What are your top marketing priorities? What part of the purchase funnel is most important to you right now – increasing awareness, winning more business or driving greater loyalty?
  2. What content will your customers find most relevant? What information do they need to help them better run their businesses?
  3. What type of content platform could you build that reinforces your brand’s promise? How can your content strategy work in concert with your sales and operations departments to drive more efficiencies and value for your customers?

FINAL THOUGHTS

Focus Your Content Efforts

Keep in mind the key to content marketing is selecting the right archetype is focus on. The best B2B brands have figured out which one, or maybe two, of these archetypes is the best path for them to follow to create scale and deliver the best possible return on their marketing investment.

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How To Kill The Social Media Accounts You Don’t Need

Account proliferation is hobbling digital and social strategies. Social account territories can help.

As early as 2012—which seems like ancient history in social media—Altimeter researched the uncontrolled spread of brand pages on social. The first sentence of our 2012 report captured our message:

“Like a disease, social media proliferation will leave companies crippled — unless they develop a strategy to manage now.”

Problem solved? No. The problem still resonates with social business leaders today, including Alison Herzog, Director of Social Business Strategy at Dell. Herzog said, “Global businesses like Dell are complex – they’re made up of many regions, varying languages and cultures, diverse audiences and interests and wide-ranging areas of internal focus. Creating a focused, scalable social architecture and implementing this with a governing body is paramount. We knew that centering on customer experience, strategic pillars and where the real impact was possible matched with the appropriate resources would guide this, which became imperative when we completed the largest tech acquisition in history.” Prophet had the opportunity to work with the exceptional team at Dell to solve this challenge.

Social teams keep growing the number of owned accounts to keep up with continuous changes in social platforms, consumer behavior and business priorities. The result is a growing operational burden and a decrease in effectiveness per account. For many firms, like Dell, optimizing social account architecture is a requirement for effective social media innovation and performance.

Reinforcing the need for a solution is a telling data point from Altimeter’s 2016 State of Social Business report: 79% of the more than 500 strategists surveyed globally reported that “the social team is becoming more operational and a platform for other innovation teams.”

As a former social business leader at a major brand, that result didn’t surprise me. But, it heightened the importance of getting to the root of account proliferation. Business units will have a hard time using social platforms for business if they are too fragmented.  As a mature practice, we can expect the scope of social business operational responsibilities to grow, but an unchecked proliferation of pages amplifies this burden needlessly.

Can this be solved? Why hasn’t it?

Lack of governance lies at the heart of the problem. As a community of social business strategists, our “test & learn” approach has led to many impactful innovations, but rarely do we take the time to look back and decommission ideas that aren’t meeting objectives (especially individual pages/accounts that are perhaps perceived as low risk to leave abandoned).

There is a disconnect between the business objectives that initiated the page and the social team tasked with managing it. Or, the page’s creator may have left the company, making it difficult to remove. For many brands without an account management team for the social platform, filing a DMCA notice of copyright infringement may be the only option.

Another key issue is the low bar required to create a new branded page—especially if listening tools or rogue page trackers aren’t in place. Well-meaning employees may create pages for their store, an event or as a test. A few abandoned or underperforming pages may incur a little financial cost, but they quickly add up: crowding social metrics, complicating listening, confusing prospective customers with conflicting messages and – worst of all – creating the user perception that the brand doesn’t care or understand social media.

Simplifying a complex problem

As a governance problem, this is solvable—but it’s more than that. Not only do we need to fix the problem before it gets out of control, but better yet, this is the time to rethink the brand’s architecture of social media accounts.

Make a quick mental shift from today’s situation: If your current company had never implemented social media before, and had the benefit of starting from scratch, what would your social media brand architecture look like? You would want to consider the following:

  1. The Customer’s Journey. How do my social media pages fit within our broader, omnichannel customer journey? What pages do customers need and how do we create an intuitive experience that results in the outcomes we’re focused on? Does each organizational unit determine its own accounts in a silo, or is there a higher-level perspective where fewer, broader accounts could make the journey feel seamless? When is an account so broad that it loses effectiveness?
  2. The Social Network Landscape. Where is there alignment between my business goals and the capabilities, culture, user demographics and consumer behavior of social networks? It may be easy to name Linkedin for recruiting, thought leadership or B2B sales needs, but what if alignment like this isn’t so obvious?
  3. Your Team & Resources. What social account architecture meets customer needs and has teams in my organization who are ready to commit to ongoing content and engagement? While internal reorganizations may be a constant challenge, finding teams who have strong alignment between goals and a new social page (that they can run with) is ideal. Of course, the danger to avoid here is an “inside-out” architecture, where your pages reflect your internal organizational structure, rather than the market and customer you’re serving.
  4. Your influence. Beyond the issues above, if you manage social for your company, you know the decision to take down an underperforming page can be problematic. How do you convince that leader that set up a Twitter handle she rarely uses that she should re-invest or decommission the account?  What if you only have a single page in Chinese for that market, but it isn’t performing?  Do you take it down, merge with others or reinvest? These are just some “tip of the iceberg” issues that emerge.

3 steps to redefining social account architecture

In our work with Dell, we found the secret to success is to work on three fronts:

1) Identify “social account territories” that reflect coherent customer journey needs. Once identified, it is possible to optimize the social account architecture (steps 2 and 3 below) one territory at a time;

2) use a data-driven, quantitative model for making easy decisions (e.g., those pages showing great or very poor results); and

3) use a decision tree—based on governance principles that leadership supports—to make tough decisions. Decisions range from removing the page, maintaining as is, re-investing, creating a new page where there is a missed opportunity, or merging the page with another.


FINAL THOUGHTS

With Altimeter’s deep research on this issue and Prophet’s brand strategy expertise, we’ve together developed a process that has delivered terrific results. For Dell, we helped to reduce the social team’s operational burden while allowing them to do what they do best: innovate and be a growth engine for the business. We’re grateful to Dell for working with us on this approach and pushing our thinking.

If you’re seeking guidance on your social account architecture or advice on how to re-architect your branded accounts, look no further.

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Brand Transformation: A New Approach in the Digital Age

Cultivating flexibility, adding partners and understanding new brand stakeholders can all accelerate change.

Brand Transformation: A New Approach in the Digital Age

While auto manufacturing techniques are far more advanced today than when Henry Ford opened his first factory a century ago, one thing has remained consistent over time: the assembly line. What’s different today are the components of the assembly line itself: from humans to hardware, and increasingly today, software. The average car today has more computing power than the system that guided the Apollo astronauts to the moon. This astounding reality has largely underpinned the revolution we’ve witnessed in the auto industry — from vehicle-based hardware to software-based mobility.

Just as the methods utilized to build cars has been modernized, it’s time we updated how we transform brands as well. The legacy constructs of visual and verbal expressions of a brand, coherently organized into a consistent and distinctive system, are overdue for a refresh in today’s digital context, where digital is changing what a brand looks and sounds like, as well as how it behaves —and what it can do.

How is brand transformation accomplished? Let’s first take a deeper look first at why it’s imperative, then look at the new approach and tools necessary in this time of digital disruption.

Why is Brand Transformation Necessary?

Codified in guidelines, protected by marketing departments, adopted by employees, obeyed by vendors and absorbed by customers — for more than 150 years, traditional brand identity has been painstakingly crafted and translated into an elegant, fixed systems of architecture, pillars, visual-verbal elements and more. And it worked. This exhaustive and storied approach has helped countless brands from AT&T to Zurich successfully navigate, endure and grow with consistency through decades of customer evolutions and media revolutions.

But today’s increasingly digital world demands new ways to build and manage brands. The next wave of growth for brand looks different in a world where brand is experienced through platforms and ecosystems other than its own; where touchpoints and channels multiply daily; where interfaces become invisible; where machines are increasingly responsible for deciding preference. In this new ecosystem of data, algorithm and context, what is the role of brand? And more importantly, how do we build and manage a brand in this new paradigm?

In this disruptive, digital era of customer empowerment and interactivity, brands are now growing better when they are built to be relentlessly relevant to their consumers and against their competitors.

Brand Operating System: A New Approach to Brand Transformation

To deliver relentless relevance, brands require new levels of organizational readiness and responsiveness than ever before. Rapid cycle times driven by prototyping and ongoing releases mean relevance has an ever-shrinking shelf life. Stickier networks and ecosystems make it harder to win over consumers who reside elsewhere. Participatory experiences require brands to think in terms of relevant creation—and reaction. Massive sources of data offer endless opportunities for insight.

“Today’s increasingly digital world demands new ways to build and manage brands.”

These changes call for a new approach — from a static, two-dimensional system (preserved in a PDF) to a dynamic system that connects brand across and between experiences and ecosystems, versus just across physical spaces: A Brand Operating System (BOS). A system encompassing the tools, policies and processes that create the internal infrastructure needed to develop and deliver responsive, adaptive and intelligent brand behaviors and experiences in market.

The strategic and operational challenge is that a BOS is not static. However, most companies are not yet set up to deliver in this way, still approaching brand via PDF toolkits, guidelines, siloed asset management systems and siloed governance.

How to Transform a Brand in Light of Digital Disruption

Here are three ways to transform a brand and build brand relevance:

1) Leverage New Tools

The static, inflexible, PDF guidelines of the past are insufficient. Their contents — visual, verbal and spatial considerations — still remain integral ingredients, but they must be updated for digital applications and platforms. Managing brand across new digital spaces requires new platform integrations, content and asset management systems, dashboards and tools that help you design, maintain and deploy brands in these new environments.  Your message pillars, for example, can’t be rigid. Say a new and relevant conversation is heated in the social space, a brand manager needs a flexible language platform from which (s)he can adapt or even add a pillar to recognize the current conversation. Retail environments are shifting rapidly, requiring imaginative ways to express brand in spaces as screens, beacons, biometrics and NFC proliferate. Flexible brand assets are key to staying relevant.

Furthermore, a BOS requires entirely new ingredients, namely around behavioral guidelines that assert how the brand behaves and engages. For example, a chatbot assisting customers on a brand’s site must not only take on the brand’s tone of voice but be programmed to dynamically respond to questions and queries for each unique question — and get smarter from each question asked.

That classic PDF thus becomes an inadequate format for the Brand Operating System. As a fluid system, the BOS must be able to allow for new elements to be added all the time in order to allow it to be responsive to the world in which it operates. The most precious asset thus becomes not a PDF, but a set of platforms, code, tools and ways of working, like software, that enables regular updates.

2) Brand Defines the Means Not the Motives

There’s a need to broaden the definition of brand from an articulation of a company’s motives and ambitions towards an actionable policy that concretely guides decision-making internally to shape (data-driven) behaviors. A tangible and directional positioning enables front-line/customer-facing employees (e.g. customer service, sales) to have more concrete direction on how to behave. For example, Coca Cola’s positioning of “happiness within arm’s reach” sends a clear signal to salespeople about where the product needs to be (within arm’s reach); Disney’s positioning of “magic” translates concretely into quality standards that direct specific employee behavior: courtesy (smile), safety (seat belt checks), efficiency (fast service) and show (costumes).

Means vs. motives also inform the specific code and command engineers and data scientists use to program-specific branded triggers and behaviors. With a means vs. motives approach, digital and other “behavioral” teams (engineers, data scientists, designers, customer service, sales and other front-line roles) have a more concrete point around which to activate the brand. Looking at Coke again, “within arm’s reach” a UX designer translates that brand policy to inform the information architecture of the site, or where buy buttons are placed (within a click’s reach).

3) Embrace New Brand Stakeholders

To deliver on these new touchpoints and enablers, companies must broaden the skillsets they hire for — beyond marketers, brand managers and communications planners to UX/UI interaction designers, front-end and mobile engineers, MarTech and full-stack architects, scrum masters, DevOps and systems architects, to name a few. This has implications for where you look — Glassdoor, Hacker News, StackOverflow and social media become new networks to leverage — as well as how you look. UPS, for example, shifted from 90% print budget in 2005 to 97% in social media in 2010. The result was better quality hires — the interview/hire ratio was 2:1 for applications from Facebook and Twitter compared to all other media — and a reduction in overall costs, with the cost of a new hire going from $600/700 to $60/70 each.

These new skill sets enable companies to in-source a greater number of activities that were either previously managed by agencies, or simply did not exist, in order to better control and execute the brand behaviors and experiences. An in-sourcing approach is not at the expense of outsourcing — agency support is still valuable for production and other intermittent campaigns — however, the presence of new skill sets now creates the mechanisms needed to be more agile and facile with how agencies are briefed and managed.

Cultivate Flexibility and Create New Partnerships

Increasingly, the people, processes and structures that enable relevant brand behaviors matter as much as the brand design and positioning itself. This extends beyond developing a brand management framework and instead calls for a detailed governance model that creates the skills and culture needed for a flexible, always upgrading approach to manage and activate the Brand Operating System.

For example, Buzzfeed editors are paired up with data scientists to make data-driven decisions about their editorial approach. By tracking cookies, pixels and IP addresses, Buzzfeed can understand not just individual preferences (and in turn personalize your experience), but it can better understand “clusters,” which may reveal that a population’s interest in a celebrity actress also correlates with their interest in content about a cute animal. Editors on their own wouldn’t produce this knowledge; it’s the combination of traditional (editors) and new (data scientists) that lead to powerful insights to power relevant content, and thus grow the business.

How to Get Started on Transforming Your Brand

Here are the key questions to ask as companies begin to think about the Brand Operating System approach:

  1. As the brand, do we have the right tools in our toolkit?
    • Is there access to the right technologies and tools to capture what’s necessary to deliver on behavioral brand?
    • Is brand set up in a flexible way to modify to allow for pivots as consumer and competitor dynamics shift?
    • Are the right tools in place to handle these shifts?
  2. Where can we add agility to our brand and empower employees?
    • Are the right agile approaches embedded into key points where it matters most (e.g. product and service innovation, marketing, customer service, etc.)?
    • Where else can these principles be used throughout the company to enhance relevance?
    • Are the right incentives institutionalized to encourage new behaviors across the employee base?
  3. Do we have the right organization and people in place?
    • Is the company organized internally to align the different parts of the brand’s ecosystem with more points of integration (e.g., suppliers, partners, vendors, consumers)?
    • Do employees have the right skillsets and capabilities to deliver the brand and relevant experiences?
    • Are they organized and empowered to be stewards of brand and experience via the right governance structures?

FINAL THOUGHTS

Building a Brand Operating System takes a truly multi-disciplinary approach. At Prophet, we support our clients by combining the expertise of practitioners from Brand and Activation and Digital Transformation expertise to bring the right intersection of thinking to not only develop a new way of designing brands but also a new way of managing and deploying them (day in and day out) in service of today’s new digital experience standards.

Looking to update your brand for the digital age? Talk to our team about how and where to start.

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Four Keys to Gaining Attention for Brand Stories

The most memorable stories are provocative, credible, suspenseful and rewarding.

How do you get a target audience to both notice your brand signature stories and consume them? Without attention, the content does not matter.

I researched this question for my upcoming book on signature stories, and came across a helpful book by Ben Parr entitled “Captivology: The Science of Capturing People’s Attention.” Parr used academic research and case studies (by people and firms that have successfully achieved high visibility) to establish seven triggers of attention (or captivation, in his words): automaticity, framing, disruption, reward, reputation, mystery and acknowledgment. Based, in part, on his discussion of these triggers and their variants, I arrived at four keys to capturing and keeping attention to a brand’s signature stories.

The first two keys are relevant to the challenge of getting immediate or short-term attention.

  1. Have a trusted story source.

A trusted storyteller can come in the form of a friend or respected expert who passed along a video with a strong recommendation – “you have to see this.” Or a familiar personality, such as Garrison Keillor of Prairie Home Companion fame or Tom Dickson host of the “Will it Blend?” challenges for Blendtec blender. Recognizable subjects are also trusted sources, like the Budweiser Clydesdales that have for years delivered a satisfying, emotional experience.

  1. Send an immediate signal that the story is novel, provocative, out of the ordinary.

There must be a reason why a person will notice and process the story. It could portend an unusual character, plot or even presentation; and promise to be intriguing. It is the judgment of the audience that matters. Just because a firm executive thinks the story is intriguing does not mean a target audience will too.

The next two keys to gaining attention are around keeping the audience’s attention. To maintain interest, YouTube research has found that the first 15 seconds are crucial to getting a viewer to stay with a video. How do you keep the audience involved past the initial exposure?

Consider the following first sentence of this introduction to the McElroy “brand man” story, “It was a drab and rainy day in mid-May 1931 when 28-year-old Neil McElroy, the advertising manager for P&G’s Camay soap, sat down at his Royal typewriter and wrote perhaps the most significant memo in modern marketing history.” Doesn’t that perk up your ears.

  1. Create uncertainty and suspense.

The McElroy story does this. Why the memo? Why was it important? The detail gives you a visual image of McElroy at the typewriter and gets you thinking, “who is this guy?”  It gets your attention, keeps it, and promises real rewards.

What will happen as a result of the memo? Uncertainty is not enough, it needs to be resolved and, importantly, it has to matter to the audience. Making the audience feel emotionally invested in the characters and plot will make the audience care about the outcome. The way the plot and presentation is structured also matters. It is best if the process of the story builds and leverages the suspense and its resolution.

  1. During the first 15 seconds create the expectation that the audience member will be rewarded by continuing to hear the story.

There will be rewards for being thought-provoking, interesting, informative, newsworthy, exceptionally relevant, entertaining or by reaffirming an opinion or a lifestyle choice of the audience. There needs to be more than a hint or expectation, there should be a basis for believing that there is a reason to stay involved with the story. At this point, phony, contrived, salesy or boring impressions should not be emerging.

“Without attention, the content does not matter.”

Immediate or short-term attention is the first barrier a story needs to overcome. Using reputable storytellers gives your stories merit because there is an established expectation that the story will be worthwhile. This is similar to current trends toward targeting social media influencers – these influencers are trusted among certain audiences because they have established credibility on particular subjects.


FINAL THOUGHTS

Without a reputable storyteller, there’s no luxury of a slow, plodding start. The first few seconds or sentences of your brand’s story are critical. If those seconds pass without capturing your audience, the next ten to fifteen seconds are your last shot to have your story’s content processed.

These brand stories get your attention right away, and keep your attention throughout (for some reason shoe brands have excelled at this):

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Higher Purpose Programs Make For Powerful Brand Stories

Brands like Toms, Always and Lifebuoy are making the world better. No wonder their stories are irresistible.

Stories communicate messages better than facts: they are more arresting, persuasive, memorable and social. Most marketing executives have accepted that premise, and are hiring journalists and formalizing the task of finding or creating stories to leverage both internally and externally.

The problem is finding or creating what I call signature stories: stories that are intriguing, involving, authentic and have a strategic message. Most brands and products do not lend themselves to stories that capture attention and really touch people. Even when an occasion has a potentially emotional aspect to it, finding a story that is both involving and authentic can be difficult and finding one with the potential of a viral breakout is virtually impossible.

Signature Stories That Draw From Programs For Social Good

One solution is to find or develop signature stories drawn from social or environmental higher-purpose programs. By their very nature, higher-purpose programs tend to be arresting, inspiring, authentic, emotional and draw people in with vivid characters and significant challenges.

“Stories that are intriguing, involving, authentic and have a strategic message.”

The percentage of organizations that are developing or enhancing a higher purpose program is remarkably high and growing. They are making a difference, both to society and the organization. There are many motivations: to do the “right thing”, to inspire employees (particularly millennials) that want meaning in their jobs, and to appeal to a growing and influential customer base that prefers to do business with brands they respect and admire. Being the source of powerful stories is another unstated and often unrecognized reason.

Consider the raw power of stories such as:

  • A video in Lifebuoy’s “Help a Child Reach 5” campaign shows a mother put time and devotion into nurturing a tree that we learn was planted at her son’s birth, a custom in her village. This makes us curious. The next day there is a celebration, the woman’s son has turned five – an age that most children in their village will never see as many die from water-carried illnesses. Over 30 million viewers saw this campaign for hand washing programs.

  • As part of the Always “Like A Girl” campaign, a woman acts out the stereotypically assumed motion of running awkwardly and unathletic-like, “like a girl.” When she sees a 10-year-old girl run naturally, with vigor and speed, she wanted a re-do because she changed her mind about what it means to run like a girl. This story was packaged with three others into a signature video campaign that received over 85 million views. 85 million!
  • Blake Mycoskie, the founder of TOMS, was vacationing in Argentina in 2006, when he was overwhelmed by the sight of children without shoes. His vacation prompted him to start a company that, for every shoe bought, gives a pair of shoes to a child in need. “One for one” became the slogan, and most who buy from TOMS know the story.

FINAL THOUGHTS

These higher-purpose programs lend themselves to ripe opportunities for finding and creating powerful stories. Using social and environmental higher-purpose programs as the foundation for signature stories is another idea to consider. It is all about content. If your brand does more interesting things, it will naturally have more impactful stories.

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3 Brand Naming Strategies for Growth Acceleration

Names that respect both company heritage and customer journey resonate best.

Personalization is becoming increasingly prevalent in categories from shoes to cars to phones. But while appealing, this inundation of choice can overwhelm consumers rather than satisfy their needs.

How can a brand provide the variety of options consumers crave and fulfill the desire for a simple customer experience? The answer lies, in part, in naming. The most successful companies drive relevance and growth in their portfolios by naming – organizing and communicating offerings in a way that prioritizes what customers want and need in each purchase decision.

When done right, naming at the product, version or feature level can simplify and guide prospective shoppers to the relevant offerings for their needs. But when done poorly, it can frustrate customers—and even inhibit them from making a purchase at all.

The 3 Commandments of Brand Naming

1. Consider the customer journey: Brands need to think about the entire customer journey, how (and when) a customer makes decisions, and how to nurture customer loyalty.

2. Ask what requires a name: Not every product, service or feature needs a name. Be selective about what truly requires a name.

3. Keep the DNA of the brand front and center: The personality of a brand should be reflected in each brand name. Use it to gut-check and filter naming decisions. And then name accordingly.

3 Brand Naming Strategies Driving Growth

Looking across categories, we’ve identified three successful brand name strategies to help customers better understand your products and support business growth.

  1. Consider the Customer Journey: Jawbone Focuses on What’s Important

One of the most confusing and challenging naming conventions is tiering, or differentiating similar offerings within a portfolio by their power, capabilities, etc. The challenges companies face with tiering are many. Three of the most difficult are clearly differentiating between offerings, creating a tiering convention that allows the product line to expand into the future and avoiding making the lowest tier sound undesirable.

A strong tiering example comes from the consumer tech and wearables company, Jawbone. They’ve extended the simplicity of their product design to their naming convention and product architecture, choosing to quietly discontinue their line of Bluetooth speakers to focus more fully on fitness trackers.

Jawbone has four models on the market: Upmove (which is, after all, the essence of fitness – getting up and moving), UP2, UP3 and UP4. Each successive model builds on the functionality of the previous one, making the tiers a simple incline in value, rather than random sets of features customers need to understand.

With such simple product tiering and feature names, Jawbone has the freedom to be creative with color and material naming (which are paired together within the product tiers), providing customers with exciting choices like Ruby Cross and Black Gold Twist. In doing so, Jawbone simplifies the most important functional decisions (what to buy, what you need) and lets customers have fun with the more playful—and secondary—decisions.

  1. Ask What Truly Requires a Name: Tesla Builds Meaning Into Naming Conventions

Many technological advancements have opaque names with little explanation as to what they mean (i.e. Star Wars’ C-3PO). Sometimes they’re SKU numbers, sometimes they’re abbreviations and sometimes they stand for the developer’s children’s initials. Whatever they are, they’re rarely understood and have a high likelihood of creating confusion for customers navigating between nuances. (“What’s the difference between the X1300A and the X1301B?”).

“When done right, naming at the product, version or feature level can simplify and guide prospective shoppers to the relevant offerings for their needs.”

In contrast, Tesla’s naming conventions are incredibly simple. Known for its commitment to innovation, Tesla consistently defies expectations, even going so far as to publish a high-level roadmap in the form of its “Master Plan.” Tesla’s Model S P90D has all the bells and whistles, including an impressive and seemingly opaque acronym. But each component has a clear meaning: P denotes that it’s a performance model, 90 is the battery capacity in kilowatt hours and D means that the car has a dual motor. This is complemented with highly descriptive feature naming: Cabin Overheat Protection, Autopark and the famous Autopilot, and each is named for exactly what it does. Of course, this approach is supported by an extremely focused product portfolio. Tesla sells three automobile models, while many of its peers’ offerings are in the dozens.

  1. Keep the DNA of the Brand: IKEA Aligns Product Names to Scandinavian Roots

Unlike Tesla, IKEA has a vast portfolio; the company sells roughly 9,500 products and introduces 2,500 new items per year. Its stores, despite their homey vibe and intuitive layouts, can be overwhelming even to the best-prepared shoppers.

To help IKEA put a strategy in place to guide the creation of all names, which started with its founder, Ingvar Kamprad. Kamprad is dyslexic, making it much more difficult to use the traditional method of long SKU numbers. Instead, IKEA assigned a type of name for each of its product types. True to the company’s heritage, the system is Scandinavia-centric: beds, wardrobes and hallway furniture are named for places in Norway, dining tables and chairs are places in Finland, and upholstered furniture and coffee tables are places in Sweden. Because each type of name can apply to multiple items (for example, Nellie’s apartment features a Hemnes bed, dresser and hall bench), IKEA creates clear signposts that help customers shop the store more comprehensively and connect the dots across their pieces.

While this strategy is less intuitive for non-Scandinavian shoppers, it is inarguably memorable, and makes customers loyal not only to IKEA, but to Malm, Kivik, and of course, Hemnes.


FINAL THOUGHTS

Jawbone, Tesla and IKEA share a common overarching goal in their naming: to help customers understand their products. However, how they do it is distinct, and most importantly authentic to who they are. Jawbone’s naming is sleek and minimalistic, with a splash of fun. Tesla’s naming is efficient and hard-working. And IKEA’s naming is unwaveringly grounded in the company’s roots.

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The Drivers of Brand Loyalty May Surprise You

It’s time to learn the difference between customers who are merely satisfied and those who are committed.

Among the major challenges marketers face in the year ahead will be creating and retaining a loyal customer group. It is a challenge because of the difficulty of brand building in an era with fast-changing media, much under audience control, and because e-commerce and digital communication make it difficult to integrate messages and deliver on-brand customer experiences.

How to Build a Loyal Customer Base

How do you create, manage and leverage a loyal customer base in this environment? To empirically address that question we leveraged the database associated with Prophet’s Relentless Relevance 2015 study in which 400 brands from 29 categories were assessed on more than 20 measures of brand relevance. The goal was to determine what drives two loyalty levels: the satisfied and the committed.

The satisfied are those who buy regularly, often out of habit, because they are satisfied with the brand’s performance over a long time period. They perceive the brand to be familiar, dependable with consistently good experiences and easy to buy. The brand has become a comfortable habit and there is no reason to change. For some low-involvement products, the satisfied are the core loyalty group.

“They perceive the brand to be familiar, dependable with consistently good experiences and easy to buy.”

The committed have a more intense, involved relationship with the brand. They are more likely to have an emotional attachment, to receive self-expressive benefits and to have a user experience that goes beyond merely functional benefits. They are also more likely to be brand supporters, even telling others about the brand and its user experience. For some high-involvement products, a brand should aspire to have a committed group.

How do these groups differ with respect to what drives their formation and nurtures them over time? From the Prophet study, indicators of the two loyalty types and five potential drivers of loyalty were identified. The extent to which each of these five indicators impacted (explained variation in) the two levels of loyalty were explored statistically.

The “satisfied” group was represented by the phrase, “one of my favorite brands,” which reflects satisfaction and a lack of motivation to change to another brand. The “committed” group was represented by the phrase, “I can’t imagine living without,” which suggests there is a functional or emotional attachment that is so intense that the absence of the brand would be upsetting.

5 Drivers of Brand Loyalty

There are five variables that have been uncovered to be potential drivers of brand loyalty; several have multiple indicators that are combined. These variables are:

  • Dependable: described as “always deliver to expectations,” “I can depend on,” “I trust” and “consistent experiences”
  • Better: described as “better than others,” and “only brand that does what it does”
  • Social media: described as “has interesting and engaging content online”
  • Light emotional connection (LEC): described as “makes me happy”
  • Heavy emotional connection (HEC): described as “connects with me emotionally,” “makes me feel inspired” and “has a purpose I believe in”

Satisfied Brand Users

Consider the satisfied model. The “dependable” variable has more than three and a half times the explanatory impact as does the “better” variable. This confirms the hypothesis that satisfied loyalists are driven by habit, familiarity, comfort and satisfaction, and being better is not as important as delivering the brand promise. They are instead going to stick to the brand as long as it delivers. Controlling for “dependable” and “better” (perceived superiority), the “light emotional connection” variable has a meaningful role, about equal to that of the “better” variable, while the “heavy emotional connection” variable has zero impact. Finally, the “social media” variable, as expected, was not a driver, essentially zero.

The satisfied group included brands that do not engender much passion or emotional connection. Of the top 50 brands of the Relentless Relevance 2015 database, 15 were classic brand names that largely delivered functional benefits and were extremely high on the dependability measure. Leading the way with positions in the top 25 were Betty Crocker, Band-Aid, Clorox, KitchenAid and Folgers. All were extremely high on the “dependable” and trust dimensions as well. That reinforces the hypothesis that delivering to expectations may not be glamorous, but it can drive a brand’s ability to create and keep a loyal segment, which can be the basis of a healthy long-term business. There’s also likely some emotional benefit linked to the nostalgia of growing up with these brands. They become part of the fabric of people’s lives.

Committed Brand Users

Next, consider the committed model. The “better” variable has a large impact, about equal to that of the “dependable” variable. The “heavy emotional connection” variable has an explanatory power equal to the “better” variable and more than twice that of the “light emotional connection” variable.  Finally, the “social media” variable is now more of a player, albeit smaller than the other variables.

The committed customer group is necessary if you want to be a leader in more involving categories. This is the group that can deliver social buzz and net promoter scores. And it can defend you when you have an unfavorable incident. But to create and nurture this group, it is clear that brands must get beyond “dependable” to “better” and get beyond happy to deliver a meaningful emotional feeling that connects and inspires. The top brands on the committed scale such as Apple, Microsoft, Netflix and Chick-fil-A, also score high on the emotional connection, inspiring and having a purpose. Apple, in fact, is in the top two on each of these dimensions. They are clearly more than functional, high-use brands that deliver satisfaction. Social media also became relevant. The committed will likely include people that are influencers on social media, and they have an impact far beyond their number.

The strength of the “dependable” dimension to explain the committed status of a brand is noteworthy. Many of the top brands on the committed scale such as Apple, Netflix and Microsoft ranked extremely high on dependability and ease of use. Amazon, added to the study in 2016, was also extremely high in the committed and dependability measures. The ability of these high-tech, innovative brands to deliver an astonishing level of performance on the dependability dimensions is a crucial and largely unrecognized element of their brand strength. In general, they deliver on their brand promise without frustration or disappointment.


FINAL THOUGHTS

Patrick Barwise and Sean Meehan argue in their book, Simply Better, that success is determined by simply delivering basic category benefits better than others. Even for complex products or in high-tech settings, it is not just about strategy and innovation, it is about execution, consistently making customers satisfied.

Loyalty is not a simple concept; it has levels. How to develop and leverage a loyalty asset very much depends on whether you are after the satisfied or committed group or both, but in either case, the brand does need to deliver the basics.

This blog was originally published on ama.org

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Be Ruthlessly Pragmatic and Deliver on Your Promise

People treasure problem-solving brands, including Clorox, Band-Aid and Betty Crocker.

I have written and spoken on the importance of having brand energy, organizational values, a brand personality, and a point of difference so compelling that it forms a new subcategory. What is also true, is that a brand can develop substantial loyalty by just doing its job. Just do the basics: Deliver the brand promise. Don’t screw up and provide a reason to consider the competition. It turns out that people like brands that work…and question those that don’t.

I was again reminded of this fact when analyzing the Prophet Brand Relevance Index™. The 2016 U.S. survey tested the relevance of 325 top brands from 29 categories using respondents that were active in the category and familiar with the brand. The survey ranks brands across four dimensions: Innovation, Customer Obsession, Inspiration and Pragmatism. Two surprising results emerged regarding the Ruthlessly Pragmatic dimension, which measured ease-of-use and dependability.

Two Surprising Results from Top Pragmatic Brands

Fourteen of the top 25 brands measured on the Ruthlessly Pragmatic dimension were commonly used consumer brands such as Clorox (3), Ziploc (5), Band Aid (8), Tide (9), VISA (12), Crest (13), Kleenex (14), Dove (15), Betty Crocker (20), KitchenAid (22), Colgate (23), and Campbell’s (24). Nine of these ranked in the top 25 on trust, as well. All of these brands were in the top 75 on the overall relevance scale, ten were in the top 50 and 3 in the top 25. It is rather incongruous to see some commonplace, older brands that are not known for being dynamic (although if you look closely, they are innovating at a rapid pace) in such a rarified atmosphere. However, they all deliver on their promise, rarely disappoint and have earned remarkable brand strength.

An even more surprising result is the Ruthlessly Pragmatic dimension’s power among high-tech brands, the strongest in the survey. In fact, four of the top six brands in the survey were tech companies: Apple (1), Amazon (2), Android (3) and Google (6). We expect these brands to be strong, driven by the other dimensions such as being pervasively innovative, customer-obsessed or distinctively inspired. But it turns out that the ability to deliver in an easy, reliable manner is one of the qualities that push these brands to the top.

“The ability to deliver in an easy, reliable manner is one of the qualities that push these brands to the top.”

Amazon, which leads the retail segment by a huge margin, gets the highest marks from consumers for being available and dependable. To run such a complex service and do it so well, living up to the brand promise, is really astonishing and the company is rewarded with brand strength. The Apple iPhone and Android are visible and functionally enable customers due to their role in people’s lives. Google is given difficult assignments by their users and nearly always comes through with their search, maps and more. And both just work. Netflix’s platform is engaging and easier to use than others, delivering on another complex task. All these brands deserve a lot of credit for simplifying a complex offering and making it work so well.

I am reminded of a book, Simply Better by Patrick Barwise and Sean Meehan. In the book, the authors argued that success is achieved by delivering basic category benefits better than others. Even for complex or high-tech products and services, strategy is second-tier to exceptional execution and consistently delivering positive customer experiences.


FINAL THOUGHTS

There is much to be said for sticking to the basics of a brand to deliver its promise. That task should be first priority and can be used to create brand strength through loyalty, and also a lack of a reason to change. It can also be the platform for other customer connections that will drive growth and yield an even stronger brand.

The strongest brands are the ones that are relentlessly relevant and make a difference in consumers’ lives. Find out why Prophet ranks based on relevance.

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MetLife Rebrand: The Power of a Customer Centered Approach

With new visual branding, tagline and customer-experience strategy, the insurer recommits to its customers.

Companies that don’t just listen to their customers, but embrace them as true partners are those best poised to achieve commercial and brand success today. After more than one year of intense consumer research, surveying more than 55,000 customers around the world, MetLife found one universal truth: consumers are overwhelmed with the pace of change and looking for a trusted partner to help them navigate it.

In the most significant change to the MetLife brand in over 30 years, MetLife’s rebranding brings to life its role as a trusted partner to its customers as they navigate life’s twist and turns. With new visual branding, a new tagline  and a new take on its customer experiences, the brand is demonstrating its commitment to its customers.

Prophet Works with MetLife on Historic Rebrand

Prophet is proud to have worked with MetLife to develop a new logo and visual branding that reflects the new direction of the company and its new tagline “MetLife. Navigating life together.”

Creative Review noted in its recent article: “The rebrand forms part of a wider strategy to put customer experience at the heart of the business. Prophet says the symbol represents the idea of a lifelong partnership between MetLife and its customers.”

“MetLife’s rebranding brings to life its role as a trusted partner to its customers as they navigate life’s twist and turns.”

Three Examples of MetLife Pamphlets

Campaign magazine wrote: “Long synonymous with Snoopy and the Peanuts gang, the company will phase out the use of those comics characters. A blue and green stylized “M” will now serve as the logo, alongside a multichannel visual identity and a new tagline.”

It added: “The new look was created by agency and brand consultancy Prophet, which was heavily involved in helping MetLife redefine its overall brand strategy late last year, a move that helped trigger the decision to rebrand.”

MetLife App Displayed on Smartphones

The rebrand has attracted a lot of attention across the insurance industry and in the media. We are thrilled to partner with MetLife to help bring their new company vision to life. You can read more about the rebrand in Advertising Age, Bloomberg and Adweek.


FINAL THOUGHTS

It’s not always easy to update branding, especially when it means leaving behind characters as beloved as Snoopy. But it’s critical to shape brand identity around strategies for the future, reflecting what today’s core audiences say they need and value most.

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