BOOK

Aaker on Branding: 20 Principles That Drive Success

DAVID AAKER

Summary

“Aaker on Branding” presents in a compact form the twenty essential principles of branding that will lead to the creation of strong brands. Culled from the six David Aaker brand books and related publications, these principles provide the broad understanding of brands, brand strategy, brand portfolios and brand building that all business, marketing and brand strategists should know.

This book is a source for how you create and maintain strong brands and synergetic brand portfolios. It provides a checklist of strategies, perspectives, tools, and concepts that represents not only what you should know but also what action options should be on the table. When followed, these principles will lead to strong, enduring brands that both support business strategies going forward and create coherent and effective brand families.

Those now interested in and involved with branding are faced with information overload, not only from the Aaker books but from others as well. It is hard to know what to read and which elements to adapt to. There are a lot of good ideas out there but also some that are inferior, need updating or are subject to being misinterpreted and misapplied. And there are some ideas that, while plausible, are simply wrong if not dangerous especially if taken literally.

“Aaker on Branding” offers a sense of topic priorities and a roadmap to David Aaker’s books, thinking, and contributions. As it structures the larger literature of the brand field, it also advances the theory of branding and the practice of brand management and, by extension, the practice of business management.

“Aaker on Branding: 20 Principles That Drive Success” is available at Amazon (US/UK), Barnes & Noble, IndieBound, or wherever books are sold.

Endorsements

Ann Lewness
CMO Abode Technology

“Nobody knows brand strategy better than David Aaker. Aaker has taken all of the essential principles of branding and collapsed them into one epic brand book. Whether you’re a seasoned brand marketer or just getting started, this book will provide you with a practical path to creating, nurturing and leveraging strong brands.”

Joseph V. Tripodi
Chief Marketing and Commercial Officer, Coca-Cola

Professor Aaker has truly given the business world a gift: A highly concise and wonderfully cogent and insightful tutorial on the principles of brand stewardship and leadership.”

Richard Lyons
Dean, Berkeley-Haas School of Business Administration.

I am a devoted user of David Aaker’s work over many years, I like many of you have benefitted from his insights in chunks. Here those chunks are all pulled together, and seasoned with years of his own applied work. It’s just outstanding.

MaryKay Kopf
Global CMO of the Electrolux Group

Addresses ten strategic brand challenges including created a compelling brand vision, getting digital brand building right, and building the brand internally.

Elisa Steele
CMO Consumer Apps and Service, Microsoft

David’s new book is for learners and experts alike; a knowledge center for branding principles and strategies every marketer needs to know and practice. Why go anywhere else?

Steven Althaus
Director of Brand Management

Provocative, rooted in substance, a guiding star for modern marketers!

Sue Shim
Global CMO, Samsung Electronics

David Aaker provides 20 core principles and practical steps to create, enhance and leverage powerful brand asset, which can bring sustainable growth. It is a must read for businessman who want to find a key to future success led by power of brand.

Larry Light
CMO Consumer Apps and Service, Microsoft

David Aaker has created a must-read review of enduring principles and current challenges for 21st Century marketers.

Jim Stengel
Former Global Marketing Officer

David Aaker’s many books have been helpful guideposts for my career in business and marketing. Here is a great book that succinctly summarizes what he has learned in his storied career about building enduring, successful brands. Apply David’s 20 principles, and your brand will be more successful, and you will be a better leader guaranteed!

John Wallis
CMO Consumer Apps and Service, Microsoft

I found the book to be compelling reading for any CMO in this ever changing time and world. It touched raw nerves of challenges we are facing as a company and increased my to do list. And it connected the dots of the evolving role of marketers in organizations.

Philip Kotler
co-author of Marketing Management, 14th ed

The real test of marketing genius is not to produce a successful product but to build a lasting brand. Dave Aaker has done more to help us understand brand building than anyone else.

About the Author

David Aaker, is the author of over one hundred articles and 18 books on marketing, business strategy, and branding that have sold over one million copies. A recognized authority on branding, he has developed concepts and methods on brand building that are used by organizations around the world.

Connect

Want to interview Dave or feature him on your next podcast? Please connect with us or David Aaker directly.

Explore how David Aaker and Prophet can help your business create signature stories that resonate with your customers and employees.

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Brands as Assets: The Idea that Transformed Marketing

The radical idea that brands are valuable changed how companies view marketing, creating a monetary advantage.

Sometime in the late 1980s, an explosive idea emerged that brands are assets, have equity and drive overall business strategy and performance. That idea altered perceptions of what marketing does, who does it, and to what end is its purpose. It’s also the focal point of the first chapter of my latest book, Aaker on Branding. It truly transformed marketing, comparable in impact to other transformational ideas that have appeared in the last century such as mass marketing, segmentation and globalization.

“Brands are assets, have equity and drive overall business strategy and performance.”

When firms adopt this asset view of branding, marketing is no longer perceived as a tactical arm of the business run by middle and lower-level managers (or an outside agency) in order to generate short-term sales for a single brand, offering and organizational unit. Rather, marketing is seen as:

Strategic and visionary

Marketing contributes to the business strategy through its first-hand knowledge of customer insights and marketplace trends, plus its expertise with respect to segmentation, brand portfolio strategies, the value proposition, growth strategies and global brand strategies.

Being managed by top executives

From a strategic view, the brand is usually managed by people higher in the organization, often the top marketing professionals in the business organization. For marketing-driven organizations, the ultimate brand champion can be the CEO. In any case, marketing now gets a seat at the strategy table becoming a participant at creating and managing the business strategy.

Charged with building brand assets

Shifting the emphasis from tactical measures such as short-term sales to strategic measures of brand equity and other indicators of long-term financial performance is a monumental change. The guiding premise is that strong brands can be the basis of competitive advantage and long-term profitability going forward. A primary brand-building goal will be to build, enhance or leverage brand equity, the major dimensions of which are awareness, associations and loyalty of the customer base.

Leveraging brand assets

When a brand is viewed as an asset, the opportunity will arise to leverage that asset to generate growth. It can be used as a master brand or perhaps as an endorser to support a vertical extension or a strategic entry into another product class by providing awareness, credibility, customer relationships and positive associations. It can also be used to frame a subcategory, thereby rendering competitor brands less relevant.

Managing the brand portfolio

As offerings and brands proliferate, it’s clear that marketing needs to manage the brand family to foster clarity, synergy, energy, relevance and leverage. That means that each brand needs to be assigned well-defined role sets and managed so that they are successful in those roles. The possible brand roles include strategic brands, cash-cow brands, master brands, endorser brands sub-brands and more.

Addressing the organizational silo issues

Nearly all brands span different silo organizations defined by products, markets or countries. Marketing is charged with fostering communication and cooperation across silos without which there can be inefficiencies, lost opportunities to scale effective programs and brand diminution. The brand-as-asset view has faced resistance for various reasons. The power of short-term financials is overwhelming and pay-off from brand building is difficult to quantify, especially in the short term. Building brand assets is no easy feat. Nevertheless, the time has come to prioritize brands as assets – its impact on marketing can be transformational.


FINAL THOUGHTS

The transformative idea that brands are assets, with real monetary value, changed the way corporations see them. It’s brought about the understanding that brands require investment, nurturing and oversight in order to maximize their value.

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The Five Biggest Ideas of the Branding Era

Be more flexible. More strategic. Let customer sweet spots–what they are thinking now–dictate your next move.

The concept of brand equity and the science and practice of building and managing brands strategically have been with us for more than a quarter-century. Taking stock, what are the most powerful and impactful ideas that have emerged during that time?

I addressed that question when writing my book, Aaker on Branding: 20 Principles That Drive Success. Drawing on my previous branding books, my articles and the work of others in the field, I identified some four dozen ideas and packaged them into 20 principles. The result is an overview of what has emerged during the brand era that has allowed strong brands to win in tough marketplaces. Of these ideas, here are the home runs that have changed, if not transformed, marketing:

Think of brands as assets, with strategic value

In the late 1980s, the idea that a brand was an asset with equity began to get traction. That concept has since transformed marketing, which had been dominated for a half-century by the tactical view of marketing developed in the halls of Procter & Gamble. Starting in the ’80s, marketing was managed by a CMO who had a seat at the executive table. Marketing was now intimately involved in—if not a driver of—business strategy, and was no longer relegated to being a tactical arm. Marketing was now measured by brand equity in addition to short-term sales, and marketing resources were allocated to strategic brands and programs rather than to the big silos rich with funds and political power.

We have seen mass marketing, segmentation and globalization as transformational ideas in marketing. Considering brands as assets with equity should be in that set.

Communicate a multidimensional, strategic and flexible brand vision

There was a time when markets were stable, segmentation was simple, and a brand just needed a unique selling proposition that could be captured in a three-word phrase and worked everywhere. No more. A brand vision for today should be multidimensional and allow the brand to express itself. Some brands will aspire to have a personality that adds interest and energy as well as communicates attributes. Some may feature organizational values that provide a point of differentiation. Some will deliver social or self-expressive and functional benefits. What will differentiate and resonate will depend on the brand context and the brand strategy going forward. The brand vision thus cannot be constrained by a “fill in the box” model with pre-specified dimensions and no sense of priorities.

A brand vision should be strategic. It should reflect not only the existing offering but also the role that the brand will play in future offerings and in supporting other brands. The brand vision also should be flexible, as the goal should be to have strong brands in every product category or country. The adjustment can be made by interpreting a vision dimension differently, by changing the priority within the vision or by augmenting the vision in some contexts, and it may change as the market and strategy changes.

Find opportunities to create new subcategories

Growth, with some exceptions, only occurs by engaging in transformational or substantial innovation that creates “must-haves” that define new subcategories. Brand teams thus need to nurture “big” innovations in offerings, services or programs. One implication is that the competition in dynamic categories is shifting from “my brand is better than your brand” marketing to the creation of subcategories, and to managing their defining image so that the right subcategory wins, and so that your brand is the most—or the only—relevant brand.

“Subcategories have to be protected or the advantage of the innovator can be short-lived.”

Another implication is that subcategories have to be protected or the advantage of the innovator can be short-lived. One way to protect a subcategory is to brand the innovation, thereby creating a branded differentiator that can not only help communicate the “must-have,” but also provide a way to own it. Competitors can copy the innovation but not the brand.

Look to the customer sweet spot instead of selling the offering, brand or firm

The driving logic is that customers will seek out, discuss and be engaged in what they are interested in, and, with rare exceptions, offerings or firms do not qualify. The alternative is to become an active participant using a shared interest program around a customer’s “sweet spot.” For example, Pampers went beyond diapers by “owning” a “go-to” website for baby care.

A sweet spot reflects customers’ “thinking and doing” time, beliefs and values, activities and passions or possessions. Ideally, it would be a part of, if not central to, their self-identity and lifestyle, and reflect a higher-order value proposition much beyond the benefits provided by the offering. Connecting with a shared interest area provides avenues to a relationship much richer than that of an offering-based relationship. The positive feelings associated with the shared-interest area can lead to positive feelings about the brand. Further, people attribute all sorts of good characteristics to brands that they like, and with which they share values and interests. And a shared interest program should stimulate a social network because people talk about what they are interested in.

Manage the brand portfolio strategically

Naming a new product on an ad hoc basis potentially leads to brand confusion, brand damage and the loss of an opportunity to build brand platforms to support future strategies. Instead, a new product should have a brand that will support the new offering, will enhance the brand and will be effective in needed roles when additional products make their appearance. Branding new products strategically involves working with the brand relationship spectrum where descriptors, sub-brands, endorsed brands and shadow endorsers are employed to control the distance from the master brand. A sub-brand will allow some distance from a master brand, an endorsed brand more, a shadow endorser even more and a new brand the most.

Vertical extensions are risky but sometimes necessary when business realities dictate a vertical move. When moving into a value market, a brand may be put at risk, and even a strong brand may lack the prestige and credibility to support a super-premium offering. The use of a sub-brand or endorsed brand can reduce such risk when creating a new brand simply is not feasible.


FINAL THOUGHTS

Here are the next three big ideas:

Neutralize the silos: Breaking down the product, country and functional silos to create synergistic and resourced brand-building is becoming an imperative. Often, the best path to that goal is not to centralize and standardize, but to replace competition and isolation with cooperation and communication.

Energize the brand: Brands with energy have the visibility to be relevant and avoid the loss of equity suffered by brands that lack energy. A brand can gain energy by energizing the product or the marketing effort. Another route is to create or attach to branded energizers.

Embrace a higher purpose: In part because of the value of inspiring employees and creating a relationship with customers that goes beyond functional benefits, a high percentage of brands have taken on a higher purpose, sometimes around the environment or a social program but often around the offering itself, as in creating “insanely great products” or “delivering food that is natural and organic.”

This article originally appeared in the July 2014 issue of Marketing News.

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How Chobani Won The Subcategory Competition

With a distinct value proposition and stand-out packaging, this once-tiny brand made Greek yogurt a dairy star.

In the future, branding and business, in general, is going to involve more subcategory creation and competition and less “my brand is better than your brand” competition. This is because, with rare exemptions, that is the only way to achieve real profitable growth. In category after category, real growth results not from market share increases, but from brands that have created a set of “must-haves” that define a new subcategory and then manage that subcategory by becoming its exemplar.

These brands continue to innovate and create a moving target. By managing the perceptions and attitudes toward the subcategory, the subcategory wins. I’ve previously discussed in my blog and my book, Brand Relevance, a host of examples of brands that have created subcategories and won a subcategory battle. The Chrysler minivan, Asahi Super Dry, Enterprise-Rent-a-Car, Muji (the no-brand retailer), Patagonia, Zipcar, Tesla, Red Bull, IKEA, Gillette razors in India, the list goes on and on.

“Real growth results not from market share increases, but from brands that have created a set of “must-haves” that define a new subcategory.”

Chobani, recently written about in Marketing News, is another good example. Hamdi Ulukaya, a native of Turkey and the owner of a small cheese business, bought a former Kraft yogurt plant in New York in 2005. His goal was to produce Greek yogurt, back then a minuscule and unnoticed part of the yogurt scene dominated by Yoplait and Dannon. He named it “Chobani,” and in just over five years, was making 1.4 billion dollars. The share of the yogurt market held by the Greek subcategory went from 0.7% in 2006 to 52% in 2014. The Greek subcategory won.

Four observations about Chobani’s achievement:

  1. The product has a distinct value proposition. It’s thicker, which makes it have a richer, creamier texture. With the same amount of calories, it usually has twice the protein, half the sugar, and half the carbs as regular yogurt. That has an appeal to those interested in high protein diets as well as those that want or need to avoid meat. The low sugar, carb, calorie counts are valued by anyone into health or trying to lose weight.
  2. Chobani created a unique package design. Their cup was shorter and fatter than the prototypical yogurt container and displayed vivid colors. That provided a symbol of the new subcategory that helped customers recognize which option was Greek. It also provided the self-expressive benefit of knowing that what you are buying and eating was the authentic Greek yogurt with all its attributes.
  3. Chobani positioned itself as a subcategory and not as a specialty product. It wasn’t to be used only by those that would want a niche, ethnic product. That enabled the brand to become a mass product with appeal to a broad segment.
  4. Chobani fought back. When its rivals, particularly the big players Dannon and Yoplait, attempted to become relevant, Chobani leveraged its exemplar position by innovating and framing the subcategory. As a result, the upstart Chobani still retains a 40% share of the Greek yogurt market. Chobani innovated. It now offers a 100-calorie version (Simply 100), a flip yogurt with added toppings such as blueberries, a breakfast line labeled Chobani Oats, a line of seasonally inspired yogurt flavors called Chobani Indulgent, a line of dips, and a full-fat yogurt in large containers for cooking and as a substitute for sour cream. They have even opened retail cafes that stock more exotic versions of their product.

Further, Chobani framed the subcategory to include natural ingredients, where Chobani has an edge. Their “How Matters” campaign highlights the Chobani production process and will become a theme of a larger campaign about how important process is when training for the Olympics, as well as making yogurt. How could the two dominant yogurt brands sit by while a newcomer with very limited resources grew to a 1.4 billion business in under six years?


FINAL THOUGHTS

It’s an amazing story, but the answer is familiar. The dominant players were engaged in vigorous “my brand is better than your brand” competition and were focused on winning share points in a static category. And they were successfully, steadily growing profits. But this new subcategory, which in their mind was worth less than 1%, was not worth investing in because they believed it could not materially affect their business.

In my new book, Aaker on Branding, I quote Mahatma Gandhi as saying: “First they ignore you. Then they ridicule you. Then they fight you. Then you win.” And that’s the story of Chobani’s business over the last decade.

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What Makes a Good Brand Story?

Today’s brands could benefit from a closer read of the Truth versus Parable folktale.

The concept of storytelling is one of the hottest topics in marketing today. By communicating a narrative that has a beginning, an end, emotions and facts, brands are able to become more human and more compelling.

Both research and common sense tell us that when facts are put into story form they are powerful because stories are more easily remembered. When facts are embedded into a story, counter-arguing is less likely because the power of the story distracts. When an argument is in a story context, people deduce the logic themselves and we know, again from research and common sense, that self-discovery is much more powerful than having people talk at you. Lastly, and perhaps most importantly, a storyteller is usually more liked than one attempting to persuade an audience with facts.

There is a classic Israeli folktale that tells the story of two women, Truth and Parable, who compete against each other to see who is more attractive to the townspeople. Truth wanted to attract as much attention as possible, so she shed her clothes thinking people would flock to her. They in fact did the opposite and shut the route. When Parable walked quietly into town, unassuming yet friendly, the townspeople came out and followed her, talking happily. The lesson comes when Parable explains, “People do still love Truth, but they do not like the naked truth. If you wish people to accept you, you must clothe yourself in the mantle of story.”

“People do still love Truth, but they do not like the naked truth. If you wish people to accept you, you must clothe yourself in the mantle of story.”

Stories break down suspicions and distract from facts that may be counter to beliefs and thus threatening.

So, what makes a good story?

Consider the classic series of Timex ads hosted by John Cameron Swayze, one of America’s first network TV anchors. In one, a diver climbs to the top of an amazingly high Mexican cliff with a Timex strapped to his wrist. Will the Timex survive the shock? The diver leaps into the air, enters the water and struggles to get to shore. However, the Timex is still working. Swayze announces the familiar “Timex takes a licking and keeps on ticking.” This story is repeated dozens of times with the watch on Mickey Mantle’s bat, on the stomach of a Sumo wrestler, running through a dishwasher and many, many more examples.

Why was this story so effective? There are 4 reasons:

First, there is a narrative. With a beginning that captures our attention and interest (a high diver wearing a watch and facing a challenge), a middle that is involving (the dive), and a conclusion (the watch still works) we are enthralled as viewers for the duration of the commercial.

Second, there is a climax. The emotion in this case is created by the uncertainty of the outcome and the nature of the activity.

Third, there is authenticity. The settings and challenges are real. The voice of John Cameron Swayze offers another level of credibility.

Fourth, there is a brand-related goal. In this case, the goal is to show that Timex is durable and reliable. There are many examples of great, memorable stories that got disassociated from the brand and the intended message. There needs to be an objective and a point to the story that satisfies the objective.


FINAL THOUGHTS

Stores are powerful for good reasons. But make sure that you have a story and not just a series of facts. Your story must be an effective one, with a start that intrigues, with emotion, with authenticity and with an objective. Find ways to give it legs. You can re-tell the story again and again if you change the context and climax again and again as Timex did.

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3 Ways to Re-frame Your Category

A strong frame will dominate perceptions and information flow, changing the way consumers make decisions.

There is way too much emphasis on “my brand is better than your brand” competition.

The real payoff comes as a result of shifting positioning the brand to frame the subcategory (or category) and thereby changing the way people perceive, discuss and feel. It changes which brands are relevant.

Your goal should be to define what people are buying in such a way that competitor brands are at a disadvantage or are not even considered at all. This route to winning is often the only path to real growth and is a way toward a marketplace niche that will result in enduring leadership, energy and success. Winning by framing the subcategory can take several forms:

Elevate Your Offering By Defining What the Customer is Buying.

Ideally, it will become a “must-have,” which means that if a brand is deficient in that characteristic it will be less relevant and unlikely to be considered. It may even become completely irrelevant. Consider: -Whole Foods Markets making “organic” a primary choice factor for food. -Dove creating a case for moisturizing as a must-have shampoo characteristic -Patagonia arguing that clothing brands should have sustainable programs and values -ASUS creating a subcategory that makes motherboards for the big name computer brands. When a subcategory can be defined using multiple dimensions it becomes exclusionary. Fewer brands will be able to qualify. For example, Prius defined a subcategory that included car styling, the self-expressive benefit of appearing as a sustainable person, low operating costs and Toyota quality. This set of “must-haves” in combination allowed the Prius brand to define and dominate a subcategory for well over a decade.

Reframe Competing Subcategories.

The publicity around the recent Tesla fires potentially brought the important issue of safety to the forefront of consumers’ minds. Tesla needs to reframe the discussion away from the safety of Tesla alone and shift the conversation to a comparison between the safety of gasoline-powered cars and the subcategory of high-powered electric cars for which Tesla is the exemplar brand — and, in fact, the only brand. Fire incidents are over four times as great in gasoline-powered cars. And for some, a more visible fire risk might create a reason for a car buyer to say yes to the electric-powered subcategory.

Expand the Perceived Category Decision.

UC-Berkeley’s Haas School of Business reframed the MBA category by launching an “Evening & Weekend MBA Program.” DiGiorno introduced their signature “rising crust” pizza, the first frozen pizza without a precooked crust, and reframed the frozen pizza subcategory and even the delivery pizza category. “It’s not delivery, it’s DiGiorno.” In the reframed subcategory, DiGiorno, instead of being a premium-priced frozen pizza, now has a decided price advantage by being half the price of a delivered pizza. And its quality is perceived as comparable to boot.

“Your goal should be to define what people are buying in such a way that competitor brands are at a disadvantage or are not even considered at all.”

This notion that the real branding challenge is to create and win subcategory competition instead of brand competition by framing a subcategory is a big one. Framing is powerful because a strong frame will dominate perceptions and information flow. UC-Berkeley Professor of Linguistics George Lakoff, who wrote the delightful book Don’t Think of an Elephant said, “Frames are mental structures that shape the way we see the world. If a strongly held frame doesn’t fit the facts, the facts will be ignored and the frame will be kept.”

In order to successfully frame or reframe a subcategory and actively manage its perceptions over time, it is necessary to become the subcategory exemplar, the brand that represents the subcategory. Brands such as Prius, Jell-O, Gatorade, V8, Google, Apple, Whole Foods Market, Enterprise Rent-A-Car and Geek Squad are examples. A brand with a strong exemplar position can actually become the label for the subcategory and will thus be its most visible and credible brand. Any competitors are in the awkward position of defining their relevance in a way that only reaffirms the authenticity and leadership of the exemplar.


FINAL THOUGHTS

Framing matters because it influences thinking, perceptions, attitudes and behavior. The same information will be processed or not processed, distorted or not distorted, affect attitudes and behavior or not affect attitudes and behavior, depending on the frame.

It matters whether you are buying an energy bar for athletes, an energy bar for office workers, an energy bar for women, an energy bar for men, a nutrition bar, a breakfast bar, a protein bar or a diet bar. In each case, the choice criteria and the perceptions of brands will be different.

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Is Your Brand Vision Realistic?

Visions are compelling and unifying. Just make sure you can really bring it to life.

Look for Proof Points and Imperatives

What does a winning brand vision look like? As I noted in a recent post, the brand vision should reflect and support the business strategy, differentiate from competitors, resonate with customers, energize and inspire employees and partners, adapt to different markets and precipitate a gush of ideas for marketing programs.

Creating a brand vision that meets these requirements is a great start to success. However, the brand vision implies a promise to customers and a commitment by the organization. It cannot be an exercise in wishful thinking but, rather, needs to have substance behind it.

Is Your Vision Really Feasible Given Organizational Limitations, Resource Demands and Competitive Dynamics?

The answer comes from an analysis of proof points and strategic imperatives. Proof points come from existing capabilities and programs that enable the organization to deliver the promise of each brand vision element and its associated value proposition. IKEA supports its low prices with deep design expertise and functional products. Tesla supports its category-changing mileage range with battery knowledge and capability. Dove supports its product expansion strategy with its moisturizer image and branded differentiators such as the “weightless moisturizer” shampoos. Patagonia supports its environmental credentials with its heritage values and its programs such as the “Common Thread” effort.

Proof Points Can Be Visible or They Can Exist Behind the Scenes.

The visible proof points behind Nordstrom’s claim of outstanding personal service are its return policy and its empowered staff. The employee compensation system, together with hiring and training programs, are proof points the customer doesn’t see. Proof points are to be leveraged, but if they are weak or missing altogether a strategic imperative is needed. A strategic imperative is a strategic investment in assets, skills, programs or people.

“A strategic imperative is a strategic investment in assets, skills, programs or people.”

It’s essential if the customer promise is to be delivered. But delivering on a strategic imperative might require significant investment or a change in culture. Consider the following: For a regional bank brand that aspires to have a comprehensive customer relationship, a strategic imperative might be to equip each customer contact person with access to all of the customer’s accounts with the bank. For a premium audio equipment brand that aspires to be a technological leader, strategic imperatives might include an expanded R&D program and improved manufacturing quality. For a value sub-brand for a household cleaning product, a strategic imperative might be to develop a cost culture.

The strategic imperative represents a reality check, because it makes the critical “must-do” investments visible and thus stimulates an assessment as to the feasibility of the brand strategy. Are the investment resources available? Is the commitment from the organization really there? Is the organization capable of responding to the strategic imperative? If the answer to any of these questions is “no,” then the organization is unable or unwilling to deliver behind the brand promise.

Delivering on Your Brand Promise.

The promise will then become an empty advertising slogan. At best, it will be a waste of resources and at worst it will create a brand liability instead of a brand asset. For example, if the regional bank is not willing to invest the tens of millions of dollars necessary to create the database needed to allow appropriate customer interaction, then the “relationship bank” concept will need to be rethought. If the audio components firm is not willing to create innovative products and improve manufacturing quality, a high-end leader brand vision may be doomed.

If the household cleaning product manufacturer is not willing or able to create a sub-unit with a real cost culture, then the value market may be a recipe for failure. The Haas School of Business is a good example of an organization that recognized the strategic imperatives they needed to address if they wanted to stand out as the innovation school where faculty and students “challenge the status quo.” The curriculum, the faculty, the research programs, the alumni outreach and the admission process were all adjusted to make the school realize the vision.


FINAL THOUGHTS

The best brand vision won’t win. The brand vision that actually gets implemented will.

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Is Your Brand a Giver or a Taker?

Attempts at generosity may benefit companies, but only when they seem authentic.

Adam Grant’s book Give and Take suggests that all people take different dominant approaches to their jobs. They are either defined as “givers,” “takers” or “matchers.” Research shows that these different styles can affect performance and satisfaction.

I wonder if the same paradigm could be applied to brands and whether some of the psychologically-based research that Adam reports could shed light on the management of firms and brands. Are some brands and the firms they represent “givers?” And if so, under what circumstances is that style of operating likely to result in superior short-term or long-term performance?

A “giver” is concerned with what others need and is both willing and able to spend time and energy helping others, even if that time and energy will not result in personal gain. A “taker” is self-focused with an unrelenting goal of advancing his or her own career agenda. A “matcher” takes a more balanced approach, helping others when the net result will be reciprocated in a balanced way and result in fairness.

A host of studies have shown that being a “giver” can result in inferior personal performance, especially if the “giver” has little self-interest and if the measurement is not extended over time. However, the “giver” style tends to win, sometimes big, over time when the effects of creating trust, forming relationships, creating networks and moving into areas in which collaboration is important becomes more relevant factors. Though the “giver” style tends to be successful in the long run, it does require a measure of self-interest as well. There needs to be some ambition there.

An important caveat is that successful “givers” need to be authentic. Those that appear as “givers” but are really self-oriented and interested in promoting their own image (either by exaggerating their accomplishments and/or manipulating their audience) will often eventually lose, and lose big.

How would these ideas apply to brands?

A “giver” brand is customer-oriented in order to not only maximize sales but also because there is an intrinsic interest in customers and their concerns. The brand would likely also be guided by a higher purpose. They would tend to be passionate about something – think organic food and Whole Foods, on protecting the environment and Patagonia, or helping people live healthier and Kaiser Permanente. This higher purpose may be directed to people that are not just customers but also include those that share common problems like climate change, hunger or water shortage. Their “other” orientation would be sincere and supported by real programs such as Pamper Village’s microsite for baby care tips and forums, or IBM’s effort to improve education.

“A “matcher” takes a more balanced approach, helping others when the net result will be reciprocated in a balanced.”

A “taker” brand has a single-minded mission to achieve growth in sales and profits. It would tend to focus on the products and services of the firm exclusively and look to the customer mainly to make those products and services more attractive in the marketplace. A brand “taker” would subscribe to Milton Friedman’s prescription that “the social responsibility of business is to make profits.”

Can being a “giver” still result in superior performance? Will success improve over time, as the impact of more motivated employees and more committed customers provide traction?

There is no shortage of studies that show that firms that meet the giver criterion do well. For example, in his book Grow, Jim Stengel stated that 50 firms that “centered on improving people’s lives” had a decade long performance that was 400 percent more profitable than the S&P. And in their book Firms of Endearment, Sisodia, Sheth and Wolfe found that 18 publicly traded “firms of endearment” had financial performance over eight times that of the S&P. These studies and others like them fall well short of showing a cause-and-effect relationship, but they are still suggestive. Perhaps more persuasive is the concept that the sheer incidence of “giver” behavior in the marketplace would not occur if it did not have some positive impact on financials.

Brands, like people, should realize that the “giver” label should not be self-applied when the belief is not authentic and supported by substance. Like people “givers,” brand “givers” that have a false front exposed will be worse off. Not only will its image suffer, so will its long-term credibility. A brand cannot be in business only to be a “giver.” It needs evidence that its ambition will do well commercially. So those firms that allow the higher purpose to dominate, to eclipse the “giver” goals, will be at risk.


FINAL THOUGHTS

There are a lot of ways to communicate an effort beyond an obsession with financial performance. I often use the phrase “higher purpose.” But the concept of being a “giver” instead of a “matcher” or “taker” is a different and interesting perspective. Further, the empirical research on people who are “givers” vs. those that are “takers” is suggestive, if not provocative, when applied to brands and the companies they represent.

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5 Essentials to Organic B2B Growth

How our work with Avery Dennison, GE Healthcare and Pentair helped them develop new levers for growth.

B2B growth leaders such as Avery Dennison, GE Healthcare and Pentair share a few common essentials that are the key to their success. They prioritize meaningful innovation. They target customers who appreciate value and are willing to pay more for it. They create and deliver solutions that are hard to duplicate.

Accomplishing this takes hard work, a belief in profitable growth and an unrelenting focus on the underlying needs of customers. Put simply, these companies think through where to play and how to win one application, one industry segment at a time.

We’ve worked with B2B companies with a strong track record of sustained, profitable revenue building and have since identified five growth essentials for success:

Focus On Your Customers

You have to focus on the customers who are the key decision-makers in the value chain. A manufacturer of labels has to think about the CPG company that determines how packages are labeled, not just the distributor. Commercial insurers need to add value to the companies seeking risk management who ultimately buy their products, as well as the brokers who sell them. Finding the right decision-makers and building relationships with end customers is crucial. Their insights will ultimately drive new product and service innovation at your company.

“Finding the right decision-makers and building relationships with end customers is crucial.”

Avery Dennison put its core label business back on a sustainable growth trajectory by supplementing its distributor-focused sales effort by identifying, understanding and addressing the needs of the end customer – packaging engineers who were the drivers of packaging decorating innovation. Segment teams learned where packaging engineers played and who advised them in different industries. The Avery Dennison segment teams determined how to tailor innovation and product information to meet their requirements. By making innovation and marketing more relevant, they boosted sales.


FINAL THOUGHTS

Sell Solutions

When we began working with GE Healthcare, scores of different P&L centers proliferated in a siloed pursuit of revenue growth. It was common for five or more different GE Healthcare sales teams to call on the same customers, each selling a different product or service. GE Healthcare leadership recognized the need to drive a more comprehensive value proposition to spark hospital engagement, loyalty and growth. Through careful research, the company identified the three top opportunity segments to receive unified messaging, targeted innovation and a cross-business sales support model.

The sales organization could now work as a single team to deliver an expanded, relevant value proposition that stretched across all healthcare units. The result: Exposure to higher-level decision-makers and communicating an integrated view of how GE Healthcare’s entire spectrum of products and services could work together on their behalf.

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It Starts with a Brand Vision: 6 Key Components of Successful Models

Defining this important concept clarifies strategic decisions, driving growth as it connects with audiences.

What Is Brand Vision?

Brand vision refers to the ideas behind a brand that help guide the future. When the brand vision clicks, it reflects and supports the business strategy, differentiates from competitors, resonates with customers, energizes and inspires employees and partners, and precipitates a gush of ideas for marketing programs. When absent or superficial, the brand will drift aimlessly and marketing programs are likely to be inconsistent and ineffective.

The Importance of Brand Vision

As I was writing my latest book, Aaker on Branding: 20 Principles that Drive Success, I realized two things:

First, brand identity is the cornerstone of brand strategy and brand building. You need an articulated description of the aspirational image for the brand, and what you want the brand to stand for in the eyes of customers and employees. That description drives the brand-building component of the marketing program and greatly influences the rest of your brand’s activity. In fact, seven of the 20 principles in my book are centered on getting the brand identity concept right.

Second, I had a chance to re-label brand identity as “brand vision,” something I had long wanted to do. In golf, we call that a do-over. I had been stuck with the term brand identity because it was described in two of my previous books and countless articles I’ve written in the past. Now in this new book, I could finally change the label to “brand vision.” This term better captures the strategic, aspirational nature of the concept. The word “identity” has less energy and too often creates confusion because, for some, identity refers to the brand’s logo and visual identity as supported by graphic design.

“Brand identity is the cornerstone of brand strategy and brand building.”

When the brand vision clicks, it will reflect and support the business strategy, differentiate from competitors, resonate with customers, energize and inspire employees and partners, and precipitate a gush of ideas for marketing programs. When absent or superficial, the brand will drift aimlessly and marketing programs are likely to be inconsistent and ineffective.

The brand vision model (formerly the brand identity model) is one structural framework for the development of a brand vision with a point of view that distinguishes it from others in several ways:

The Brand Vision Model: 6 Key Components

The Brand Vision Model directs you through the process of defining your brand vision and incorporating it fully into your business. Keep these six components in mind:

1. Defining Your Brand Vision

It may be based on six to 12 vision elements. Most brands cannot be defined by a single thought or phrase, and the quest to find this magic brand concept can be fruitless or, worse, can leave the brand with an incomplete vision missing some relevant elements. The vision elements are prioritized into the two to five that are the most compelling and differentiating, termed the “core vision elements,” while the others are labeled “extended vision elements.”

The core elements will reflect the value propositions going forward and drive the brand-building programs and initiatives.

2. Incorporating Extended Vision Elements

They add texture to the brand vision, allowing most strategists to make better judgments as to whether a program is “on brand.” The extended vision affords a home for important aspects of the brand, such as a brand personality, that may not merit being a core vision element but are crucial for success. Such elements can and should influence branding programs.

Too often during the process of creating a brand vision, a person’s nominee for an aspiration brand association is dismissed because it could not be a centerpiece of the brand. When such an idea can be placed in the extended vision, the discussion can go forward. An extended vision element sometimes evolves into a core element, and without staying visible throughout the process that would not happen.

3. Selecting Unique Brand Vision Dimensions

Brand dimensions that are relevant for the context at hand are the dimensions that should be selected. And contexts vary. Organizational values and programs are likely to be important for service and B2B firms, but not for consumer package goods. Innovation is likely to be important for high-tech brands, but less so for packaged goods brands. Personality is often more important for durables, and less so for corporate brands. The dimensions that are employed will be a function of the marketplace, the strategy, the competition, the customers, the organization and the brand.

4. Keeping the Brand Vision Aspirational

It is the association the brand needs to go forward given its current and future business strategy. Too often, a brand executive feels constrained and uncomfortable going beyond what the brand currently has permission to do. Yet most brands need to improve on some dimensions to compete and add new dimensions in order to create new growth platforms. A brand that has plans to extend to a new category, for example, will probably need to go beyond the current image.

5. Representing a Central Theme of the Brand Vision

When the right brand essence is found, it can be magic in terms of internal communication, inspiration to employees and partners, and guiding programs. Consider “Transforming Futures,” the brand essence of the London School of Business, “Ideas for Life” for Panasonic, or “Family Magic” for Disneyland. In each case, the essence provides an umbrella over what the brand aspires to do. The essence should always be sought.

However, there are times in which it actually gets in the way and is better omitted. One B2B brand, Mobil (now ExxonMobil), had leadership, partnership and trust as the core brand vision elements. Forcing an essence on this brand would likely be awkward. If the essence does not fit or is not compelling, it will soak up all the energy in the room. In these cases, the core vision elements are better brand drivers.

6. Using Brand Position as a Short-Term Communication Guide for Reaching Your Target Audience

The current positioning often emphasizes the brand vision elements that are credible and deliverable. As organizational capabilities and programs emerge, or as markets change, the positioning message might evolve or change. The centerpiece of the position is often a tagline communicated externally, that need not and usually does not correspond to the brand essence, which is an internally communicated concept.


FINAL THOUGHTS

Get the brand vision right and break out internal and external brand-building programs that are “on-brand,” and you will inevitably become the leading brand you’re aspiring to be.

A good example to look at is the Berkeley-Haas School, which used solid research, inputs from stakeholders, school culture and strengths, and a very involved Dean to establish their brand vision. Putting the key ideas behind their brand— questioning the status quo, having confidence without attitude, being a lifelong student, and thinking beyond yourself— at the forefront of their operations resulted in more than a communication guide, but in extensive changes in programs and how they are presented.

Learn more about creating successful brand visions that inspire customers and employees.

This post originally appeared on LinkedIn Pulse, where you can follow David Aaker’s thinking.

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The Importance Of Strong Brand Positioning

Geico illustrates how challenger brands can quickly de-throne category leaders.

Do you remember when McDonald’s was “lovin’ it” as it recovered and passed by Burger King in the early 2000s, when Amazon cleared Borders’ shelves, or when Netflix canceled Blockbuster’s monthly subscription? Each of these brands dispatched their counterparts by “de-positioning” them in ways from which they could not recover.

Challenger brands

While Allstate isn’t going anywhere, Geico accomplished something historic recently by overtaking Allstate in the hyper-competitive automotive insurance market. It represents a victory of positioning for the challenger brand and a seismic shift in the insurance category that demotes Allstate to the role of chasing, where once it was the one being chased.

In fact, in February we saw Allstate launch a campaign for its online “Geico/Progressive killer.” Esurance now claims that Geico’s “15 minutes could save you 15% or more on car insurance” is far too slow for an auto insurance quote. John Krasinski narrates, “15 minutes for a quote is crazy. With Esurance, 7-and-a-half minutes could save you on car insurance. Welcome to the modern world.” Really? Allstate’s decision to challenge the time component—the 15 minutes—over the savings component—the 15%—misses the entire point of Geico’s successful brand positioning of helping you save money. In addition, by going after the time to quote for savings promise, Allstate validates Geico’s strategy in the first place—often a losing tactic for a challenger brand.

“When you have a singular brand focus and idea, customers have total clarity on what you are and what you are not.”

My friend, Professor Tim Calkins out of the Kellogg School of Management explains: “Geico is a perfect example of why positioning matters. Why buy from Geico? To save money. This is the core of the brand. Geico is a reputable company with low rates. Geico doesn’t promise the best service or the most complete coverage. It promises low rates.”

Why brand positioning is so important

To Tim’s point, when you have a singular brand focus and idea, customers have total clarity on what you are and what you are not. And to Geico’s credit, it has stayed true to the same brand positioning relentlessly for almost 20 years with arguably one of the longest-running call-to-action strategies and taglines in recent history. Because Geico hasn’t moved from its positioning, has stuck with a target segment that values price over paying for a traditional agent network model and has continued to beat a steady, relevant drum through a series of clever ads and characters—whether its cavemen, pigs, the gecko, banjo players or the newly minted camel of Hump Day fame—customers know exactly what to expect from Geico.

The need for brand relevance

Geico also realizes that consistent brand positioning and relevance must go hand in hand. So while the message has stayed the same, Geico’s advertising campaign tactics and medium usage have evolved. For example, in 2010, Geico provided mobile users with a first in the insurance industry — the ability to quote and buy a policy from mobile-friendly pages on their iPhone and Android mobile devices. Just recently, Geico was announced as the premier sponsor for the pilots of Amazon Studios’ new series, streaming on the Amazon Prime Instant Video service. It’s a wide-ranging ad deal that also includes banners and placement on the Amazon Pilot Series home page, as well as ads on Kindles with Special Offers, the cheaper version of the Kindle that shows ads. The expansion continues on new, relevant mediums but continues the “save you money” messaging.

Geico has also kept the conversation light, juxtaposed against Allstate’s darker Mayhem. Yes, the Mayhem campaign has a lot of ground to cover in auto, home and life and Dennis Haysbert’s booming voice reminds us how important insurance is. However, consumers continue to write the rules on how brands should be built. They need products and services that fit into their lives, with the price/value equations they are looking for, communicated in authentic, genuine and consistent ways. Geico has built a brand for these times and for the segments of the market that will help them drive disproportionate growth. And growth seems to be the key word when talking about Geico!

By the way, Geico is not always the cheapest. You are not truly trading price for service and you can actually get a quote in around three minutes, which is faster than Esurance’s new promise. And animals as spokespersons have a longer shelf life than humans.

Just ask the cavemen.


FINAL THOUGHTS

The best positioning finds a single idea that matters to its customers and sticks with it. For Geico, that meant low prices. Positioning is fixed. But it’s important to continually find new ways to keep it fresh, making sure it stays relevant to core audiences.

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5 Lessons From T-Mobile’s Game-Changing Strategy

Take a closer look at how we helped develop the Un-Carrier, shattering the competitive field.

Typical mobile industry players are regarded as arrogant and insensitive to the frustrations of the consumers. It’s an industry that has long frustrated customers with complex plans, locked-in contracts, restrictions against upgrading phones and the loss of investments in existing devices. But now, T-Mobile has introduced a game-changer to the market.

They call themselves the Un-carrier, to vividly emphasize that they are doing something radically different. They’re basing their whole philosophy around doing exactly what the customers want, as indicated by their feedback. It sounds simple. So why did it take so long to create such a strategy? And why was T-Mobile, the number 4 player in the industry, the first to innovate? (Full Disclosure—Prophet was a partner with T-Mobile in developing the new strategy.)

The “Simple Choice Plan,” introduced in March of 2013, included elements that broke long-time industry practices. Long-term contracts were replaced with monthly plans with no long-term commitment. Plan pricing that required you to estimate minutes used and text messages sent was replaced with plan pricing that was much more flexible and easier to understand. The basic plan includes unlimited talk, text and web access (up to 500MB high-speed) and can be augmented for those that need large pools of high-speed data. Finally, you can bring your own device to the program. You don’t have to buy a new phone, but if you do, T-Mobile will finance it over 24 months. When it’s paid off, the monthly bill will be reduced accordingly.

With Un-carrier 2.0, launched in the summer of 2013, family plans without necessary credit checks were added. This was a huge deal for users that are routinely slammed with multiple $200 deposits on family plans. Families could now get four lines with unlimited talk, text, and web (up to 500MB high-speed) for $100 per month, plus taxes and fees. In addition, the JUMP! (Just Upgrade My Phone) Program recently launched, where a person who subscribes for $10 a month can update their phone twice a year. At the same time improvements in their network, particularly in major urban areas, were announced, improvements that allowed T-Mobile to surpass Sprint on coverage.

And the momentum continues. In October of 2013, T-Mobile announced at a New Your concert event their Un-carrier 3.0 strategy, by which they would deliver unlimited global data at no extra charge in 100+ countries. The program was a dramatic attack at the practice of charging large fees for cross-border connections.

Then, at the 2014 Consumer Electronics Show (CES), T-Mobile announced an offer to pay the termination fee of the locked-in customers of Verizon, Sprint or AT&T and give them a credit toward a new phone. The colorful T-Mobile CEO, John Legere was quoted as saying, “We are either going to take over this whole industry or these bastards are going to change.”

Since the Un-carrier launch, T-Mobile has steadily brought this strategy to life through positioning, framing the discussion, messaging, communications, customer experience and employee engagement. The strategy was supported by humorous advertising (advertising gets easy when you have something to say) that featured Bill Hader as an inept phone user who welcomed the Jump! program. The JUMP! campaign was led by some outrageous (think Steve Jobs-style) presentations by Legere talking about why customers are switching to T-Mobile and how backward competitors are.

“They’re basing their whole philosophy around doing exactly what the customers want, as indicated by their feedback.”

At the beginning of 2013, T-Mobile was suffering from an ongoing loss of share that affected its image as well as its financial health. The Un-carrier initiative dramatically changed that. At one point during the campaign, T-Mobile was gaining customers at a rate that exceeded the three competitors combined. Further, according to a study by Baird Equity, 26 percent of potential wireless carrier switchers are looking at T-Mobile, as compared to 9 percent for Sprint, 10 percent for AT&T, and 19 percent for Verizon. In the minds of many, T-Mobile went from an also-ran company to a firm with a leadership position that reinvented a major industry. It’s an amazing achievement.

There are 5 lessons to be learned from T-Mobile’s Strategy: 

As I discussed in Brand Relevance, the only way to grow is to create “must haves” that define a new subcategory

T-Mobile was not able to grow until it did just that, developing a half dozen “must haves.” Note that the disruption was not caused by a technological advance, but by some simple changes in pricing and contracts.

A new subcategory needs to be protected

T-Mobile protected its innovative, disrupter position with breakthrough brand-building and ongoing game-changing innovation.

The disruption was driven by an understanding of basic customer frustrations and complaints

In fact, it did not take strategic insight that was subtle and nuanced. Perhaps the depth and influence of these customer issues were underestimated, but they were well known.

Any brand can become a true challenger brand

It is interesting that the brand that pulled off this innovation wasn’t Verizon or AT&T, but the fourth-place player. Why was that? The industry leaders had too much to gain by sticking with the status quo. As a challenger brand, T-Mobile had less to lose and more to gain by disrupting the wireless category and doing what the other carriers do not; they put the customers’ needs ahead of business-as-usual.

Once you start innovating, keep up the momentum

All three major competitors scrambled to respond with their own versions of fewer contracts, quicker upgrades, cheaper plans and more. To maintain relevance, they had no choice. But they are all clearly copying the innovator, playing catch up. Although these competitors have an impressive set of assets, it is likely that the market structure will be changed by the T-Mobile initiatives. Further, the T-Mobile momentum and energy will make it hard to reverse these changes.


FINAL THOUGHTS

The disruption of a major industry doesn’t happen very often. But when it does, there will be significant growth almost always from a new entrant or an also-ran. The essence of strategy in dynamic times is to drive disruption, understand it and maintain relevance in the new marketplace.

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