It’s important to reassess your personal values: What would make you walk away from an employer?
What Are Your “Take My Name Off the Door” Values?
I was recently reminded of the power of meaningful organizational values when I watched Leo Burnett’s farewell speech, “When To Take My Name Off the Door.” In his own style, he talked about making outstanding advertising, which is the core value of Leo Burnett.
He says: “Somewhere along the line after I’m finally off the premises, you – or your successors – may want to take my name off the premises, too. That will certainly be OK with me. But let me tell you when I might demand that you take my name off the door. That will be the day:
When you spend more time trying to make money and less time making advertising – our kind of advertising
When you forget the sheer fun of ad making and the lift you get out of it
When you lose that restless feeling that nothing you do is ever quite good enough
When you lose your passion for thoroughness…your hatred of loose ends
When you are no longer what Thoreau called “a corporation with a conscience”
When you disprove of something, and start tearing the hell out of the man who did it rather than the work itself
When you stop building on strong and vital ideas and start a routine production line
When you start believing that, in the interest of efficiency, a creative spirit and the urge to create can be delegated and administrated, and forget that they can only be nurtured, stimulated, and inspired
When you start giving lip service to this being a “creative agency” and stop really being one
THAT, boys and girls, is when I shall insist you take my name off the door. And by golly, it will be taken off the door. Even if have to materialize long enough some night to rub it out myself – on every one of our floors. And before I de-materialize again, I will paint out that star-reaching symbol too. And burn all the stationery. Perhaps tear up a few ads in passing.”
“The Leo Burnett core value doesn’t sound like much until it is elaborated with a multidimensional perspective.”
The Leo Burnett core value doesn’t sound like much until it is elaborated with a multidimensional perspective, buttressed with the numerous anecdotes reflecting the style and standards of the founder, and brought to live with legendary campaign role models (such as “Maytag: The Dependability People,” United’s “Fly the Friendly Skies,” Allstate’s “Good Hands,” the Marlboro man, the Jolly Green Giant, the Keebler Elves, and countless others).
Organizational values are almost always central to the long-term success of a business. They underlie any successful business strategy, they are the basis for a market-facing brand vision that differentiates and provides credibility, and they contribute to an internal brand that inspires and clarifies. Among those values should be a few signature values supported by substance and by stories that are central to the business. When they fade, the business may no longer reflect the brand. And as a result, its equity and legacy may become damaged.
So if the Haas School loses its “confidence without arrogance,” if being “weird” is no longer comfortable at Zappos.com, if Patagonia stopped using its business to inspire and implement solutions to the environmental crises, if Apple stops creating leadership products that extend human capability, if IBM stops focusing on being dedicated to every client’s success, or if Prophet was no longer about liberating ideas, inspiring people and driving impact, then in each case, the soul of its organization and the essence of its brand will have been compromised.
The start of a new year is a good time to reflect on values. What are your business and brand values? Which are the signature values that represent the core of the organization and brand? Which values support the heritage brand? Do the employees and partners know and care about the values? If answers to these questions don’t come easily, it may be time to invest in their creation and articulation.
New fans matter. But its real secret is deepening relationships with its most devoted customers.
As the Chief Growth Officer at Prophet, I see a lot of companies struggle with growth—both where to find it and how to manage it. And unfortunately, oftentimes marketing isn’t even part of those conversations. That’s why I never stop marveling at the way Steve Robinson, Chick-fil-A’s senior vice president and chief marketing officer, and his team combine their role as marketers with the businesses’ broader goals and growth targets.
Recently, I sat down with Steve to talk about what he’s learned in his 32 years at the fast-growing QSR chain. Between gains from its existing restaurants and opening new stores, the company has been growing at the enviable rate of roughly 13 percent annually, which means the business doubles every five to seven years. Not jealous yet? For the last several years, it’s even managed to do so with no borrowing.
“Our growth is based on two things,” he says. “The first is brand relevance, which includes everything from menus, buildings, service, technology, packaging and sustainability. And next, we have a strong focus on our Operators to ensure they have what they need to grow same-store sales.”
Here are six of Chick-fil-A’s marketing strategies that apply to the many companies looking to find new paths to growth:
Build your “raving fan” base
Long before social media experts talked about WOM and brand ambassadors, Chick-fil-A had identified a type of customer it nicknamed “Raving fans.” Of the 7 to 10 million people eating at its restaurant each week, this is a rabid subset, about 10 to 15 percent of its total audience. They visit Chick-fil-A four or more times each month, and are so jazzed about the company that they even dress up as the brand’s famous cows to celebrate “Cow Appreciation Day” to win a free sandwich.
Of course, Robinson says the company always strives to bring new fans in at the top of the funnel. But these die-hards “are crucial to the health of the business and help us grow. Our goal and strategy is to build special relationships with them.” To that end, Chick-fil-A Operators go to incredible lengths. They might follow a customer out to their car, holding an umbrella on a rainy day. A recent example: After Auburn’s recent defeat of the University of Georgia, some homebound fans phoned in an order, even though the store was about to close. Not only did the restaurant stay open, when the Operator discovered they were bereft “Dawg” fans, he gave them the meal for free. “No one told the Operator to do that,” Robinson says. “They create these fans themselves every day, and we’re constantly amazed at the innovative ways they think of to deliver this level of unexpected service.”
Know what will make your customers happy tomorrow
Whether it’s a Peppermint Chocolate Chip Milkshake, ever-more-clever cow “Eat Mor Chikin” ads, or a new mobile payment app, Robinson says the company tries never to lose sight of what delights its customers.
“Yes, great crave-able food is the most important thing. But how do we plus-it-up with great service, interactions, and experiences?”
Steve Robinson, Chick-Fil-A
That also means reaching beyond known pleasure points to discover new ones: “Sometimes customers don’t know what they want yet. Our job is to uncover those things and get out ahead of them. It’s like my favorite Wayne Gretzsky quote, ‘We need to go where the puck is going, not where it’s been.’”
To that end, Chick-fil-A recently opened “Hatch,” its 80,000-square-foot innovation center, to explore new ideas in food, design and service. Among its breakthroughs so far: Streamlined technology to make ordering and payment faster and easier, and a new way of fixing chicken that actually required patenting and building a new custom grill. “By May, you’ll hear us talking a lot about this new platform for grilled chicken. That is a hardware innovation, but it is key to our marketing message of relevant menu improvement.”
Build relationships, not transactions
Selling more sandwiches is a good thing, but to Robinson, almost beside the point. Real growth, he maintains, comes from rich relationships, not minor sales blips. College football is one of his favorite examples, and the company has been involved with college sponsorship for 17 years. “It’s our sweet spot,” he says, “a demographic and lifestyle fit. College fans, alumni, and viewers index very high for Chick-fil-A.” The company tracks engagement by measuring reactions to digital offers made during games: Some 75 percent of Chick-fil-A customers watch with a second screen in their hand.
“We also activate on the ground, giving away food at Chick-fil-A Bowl games, and at events on campus. Our Operators strike vendor relationships with stadiums. We have Operators in the communities who have great relationships with over 200 athletic departments where we provide catering.” Yes, it’s an expense, and not always an easy one for everyone to grasp. “But for us, measured in terms of relationships built and enjoyment for fans and our customers, it’s worth it.”
Stand up for your customers, even when it’s difficult
Robinson, who is also on the executive committee, says marketing has earned its seat at the table primarily “by being a relentless advocate for the customer.” Sometimes, he concedes, that requires tenacity. A current example: Building restaurants that are LEED-certified, a sustainability certification that carries greater expense. “That may not sound interesting to all of our leaders, but it is very important to our customers. Which makes it a priority.”
Decide how you won’t grow
Robinson and his team are keenly aware of the fierce battle for share of America’s stomach. More than half of the country’s meals are now eaten away from home. As restaurants proliferate, even convenience stores and grocery chains are now selling prepared meals, fighting for every breakfast, lunch and dinner. “But we know we will not compete on price. For us, the evolution has been how to do more than food. Yes, great crave-able food is the most important thing. But how do we plus-it-up with great service, interactions, and experiences?”
Bring grace to the table
Robinson admits he’s had to learn a lot, both personally and professionally, to roll with the punches that come with engaging on a political or social issue. Last year, the company found itself embroiled in a controversy over remarks Dan Cathy, COO and son of founder Truett Cathy, made regarding same-sex marriage. The ensuing firestorm resulted in boycotts, protests, and even nasty Tweets from some mayors. The company eventually issued a statement that it would harken back to what has always been most important to Chick-fil-A – serving everyone with honor and respect. “The experience reminded me about the spirit of hospitality, of graciousness, that this company was founded on. Everyone is welcome at Chick-fil-A. Everyone should feel at home. The root idea is grace, and our Operators have really leaned in and stayed true to that model, even handing out food and water to protesters. Staying true to our core values can help weather any PR storm.
Steve’s tenacity at growing Chick-fil-A in both a gracious and aggressive manner should give current and future marketing leaders something to think about as they head into 2014.
This post originally appeared on the Forbes CMO Network on Scott Davis’ blog, The Shift. To read related thinking from Scott on Forbes, follow his blog here.
Of course, long-term growth strategies matter. But there are many ways to boost revenue–starting right now.
Quick wins are crucial to any growth strategy. They build momentum and fund investment for longer-term growth initiatives. Cost-cutting, acquisition and restructuring are important tools in improving short-term gains, but they often distract organizations from building revenue organically.
Immediate, customer-driven revenue gains are often overlooked in the search for quick wins. When combined with prudent cost reduction they yield tangible results and keep employees focused on the customer. They also build the marketing, sales and innovation competencies needed to grow even faster in the future.
At Prophet, we’ve developed a checklist of ten rapid revenue drivers based on the repeated achievements of successful growth organizations. But first, let’s ensure we’re all clear on what organic growth means:
What Is Organic Business Growth?
Organic business growth is achieved by using your existing resources to expand your business. On the other hand, inorganic growth is done through mergers, acquisitions, and takeovers.
Organic growth is a key method for yielding tangible results, keeping employees focused on customers, building marketing, expanding sales, and innovating.
10 Ways to Organically Drive Business Growth
To help you determine some quick ways to drive organic growth, we’ve developed a list of ten essential strategies, based on organizations we’ve seen grow successfully:
1. Sell More to Your Best Customers
It’s easy to believe your biggest customers are also your best customers. But, usually, it’s a myth. An analysis of profit contribution, cost-to-serve and organic growth potential can highlight key customers worthy of an intense, cross-company focus. We’ve repeatedly seen that type of full-court press on just 10 to 20 percent of the customer base (the best customers) boost bottom-line profit by 5 percent or more.
2. Make the Most of New Customer Relationships
The early days of a new relationship are critical, and yet one of the most overlooked parts of the customer experience. Clients across categories consistently express the greatest willingness to buy more and to try different products just after they come on board. Why not take advantage of that honeymoon period, offering more products, services and accessories?
There’s a long-term benefit as well. Our studies on behalf of clients have found that on average, customers who make a second purchase within 90 days of the first purchase are more than double the lifetime value of the average customer.
3. Focus on Your Sales Team
For immediate impact, adding or beefing up the sales team is one of the most effective drivers of organic growth. This is especially true in industries with multiple sales channels. We’ve seen it work for a national insurance company, which got immediate results by resisting the urge to cut costs and instead adding sellers to its highest-growth market. And we have also found a consistent pattern of profitable revenue gains from targeted sales-strengthening moves in Fortune 500 companies. Many didn’t even increase headcount, but rather redeployed existing resources, using better training and better processes. Redeploying resources generates an almost instant payback versus the typical six to 12-month payback from new sales hires.
4. Optimize an Upcoming Launch
Too many line extensions and not enough blockbusters scheduled for launch next year? Prioritizing the most important introductions and focusing on execution is one of the simplest ways to organically boost revenue. It won’t create best sellers, but it avoids having a plethora of small launches dilute impact among customers.
It doesn’t happen as often as it should because it takes day-to-day diligence and a willingness of functional teams to work together. But when leaders focus on cross-functional priorities, time-to-market improves an average of 20 to 30 percent, mostly from avoiding the delays that build up in over-extended organizations. These gains require little to no incremental investment.
5. Raise Prices Strategically
While across the board price increases may be inadvisable in competitive markets, there are usually groups of customers or clusters of products that can withstand a price increase without slackening demand. Our clients have repeatedly identified 20 percent of their lines with lower elasticity due to a different competitive set or different buyer profiles. Selective price increases are one of the fastest and lowest risk moves a company can take because almost all the benefits flow to the bottom line and the investment in analysis takes only a few weeks.
6. Implement a Measurable Media Strategy
Insufficient data is no excuse for not being able to assess the impact of media investments or failing to conduct marketing mix analysis. If media isn’t measurable, shift the mix to media that is. If it is measurable, dig in and start optimizing. We have found that companies who have shifted marketing dollars to digital mediums have been able to quickly launch, test and learn new value propositions and pricing, which can add 10 to 15 percent incremental revenue.
7. Consider Organizational Change
Organizational change can definitely result in greater working efficiency and increased productivity, but keep in mind that organization-wide restructuring is incredibly taxing for leaders and employees— it creates upheaval and usually takes a while to pay off.
The cross-functional dependencies required to innovate, sell and market are easily disrupted— so evaluate your goals and your timelines before you decide to rock the boat now, or whether you need to focus on short-term growth.
If your primary goal is long-term organic growth, consider an organizational change. But if your priority is short-term business growth, concentrating on encouraging and supporting the work of informal multi-functional teams will have a greater impact.
8. Refresh Best-Selling Products
When times are tough, supply chain leaders want the sales force to focus on over-inventoried products. Finance frets about margins. And product engineering looks to the newest thing – even if it doesn’t have a benefit. Don’t indulge. Take your best-selling products and focus on selling more of them.
Crayola increased crayon sales by 50 percent in a single year by renaming a few colors. Samsung boosted washing machines sales by 15 percent, simply by making them in bright reds and blues. Find ways to refresh the products through color, materials and packaging. Explore new marketing avenues through brighter merchandising, sharper messaging and more inspired promotions.
9. Rework Your Sales Pitch
It’s usually just a few highly skilled members of the sales team who produce the bulk of incremental sales. Use their experience and customer understanding to rework the pitch for the rest of the team. A sharper pitch, particularly when it shifts focus to customer issues and delivers solutions, can have an immediate organic growth payoff.
Avery Dennison generated remarkable results by doing just this for their reflective materials division. A single pair of salesmen sold five times the average. It turned out they talked about the advantages of the product in a totally different way than their colleagues. The revelation changed the way everyone else went to the market and transformed the marketing message.
10. Set Concrete Goals & Reward Success
It is amazing what people can do if they have a concrete goal to speed up a launch or introduce an important initiative. Detailed process redesign may be crucial to long-term speed-to-market improvements. But in the short term, there is no substitute for asking teams to go faster, celebrating their success and rewarding them for the additional effort. The secret sauce? Growth leaders at these companies take the time to find and unclog administrative and process bottlenecks their teams are facing.
Beyond the power to boost revenue in the short term, organic growth wins also provide key insights into your customers and their motivation. This customer focus will help sharpen your strategy every step of the way.
Learn how Prophet can help you implement a more successful growth strategy within your organization.
Advanced companies need integrated tools to succeed in digital business. Suites are the solution.
As companies become advanced in social and digital business, they require consolidated technology instead of point solutions
Adobe Marketing Summit and Oracle OpenWorld both took place recently. It’s another month until Dreamforce, but I expect similar announcements to be made there. These giants are all building “suites” for cross-channel customer engagement through a series of acquisitions and integration with their existing offerings (see Figure 1). Among the pieces, each has bought social media monitoring and management tools, as well as marketing automation players. Having a complete social offering is a big part of this, but it’s also about integrating social with other customer engagement channels for the best data, targeting, and contextualization. The result: a technology suite that goes beyond just social, designed to entice CMOs with one-stop shopping convenience. Figure 1: How Three Companies Are Creating Digital Marketing Suites
Component
Salesforce
Adobe
Oracle
Social media monitoring
Salesforce Marketing Cloud (Radian6)
Adobe Social (Adobe SocialAnalytics)
Oracle SRM (Collective Intellect)
Social media management
Salesforce Marketing Cloud (Buddy Media)
Adobe Social (Efficient Frontier / Context Optional)
Oracle SRM (Vitrue & Involver)
Social media advertising
Salesforce Marketing Cloud (social.com)
Adobe Media Optimizer (Efficient Frontier)
N/A for now; on product roadmap
Marketing automation & multi-channel targeting
Salesforce ExactTarget
Adobe Campaign (Neolane)
Oracle Eloqua
Analytics & insights
Salesforce Marketing Cloud (Radian6)
Adobe Analytics (Omniture)
Oracle SRM and OBIEE (Oracle Business Intelligence Enterprise Edition)
Content marketing
No internal component, but integration (e.g. Kapost)
Experience Manager & Creative Cloud
Compendium
Enterprise social network
Chatter
N/A, although has built collaboration into Marketing Cloud
Oracle Social Network
Data & CRM
Salesforce
No CRM, but has Omniture DataWarehouse and data connectors into partner solutions
It should go without saying that this chart is not an exact comparison and that line item “components” vary in complexity. The degree of integration also varies.
Advanced companies need integrated tools to succeed in digital business
These suites are finding an audience ready for a better option. Focused on social business for a moment, brands are getting increasingly advanced, yet they continue to use point solutions in different departments and channels for monitoring, management, optimization, and analytics. In a typical example, one of our clients uses Radian6 for monitoring, Vitrue for social content publishing, Cotweet for customer care, and Adobe Analytics (formerly Omniture) for web analytics.
Plus enterprise social networks and customer communities are disconnected. The result is disparate sets of data being compared in Excel, mixed levels of communication and collaboration, and lost insights. The emerging need for more integrated solutions has been anticipated by Salesforce, Oracle, and Adobe, who are now assembling Digital Marketing Suites.
Best-in-class point solutions dominate today, but change is coming
Although point solutions can’t fully address the needs of an advanced social business, they are often best-in-class—because the promise of the Digital Marketing Suite has yet to be fulfilled. When advising clients on monitoring tools or SMMS today, we often end up recommending point solutions. This is based on specific client requirements, which vary, but it’s not often that one of the “giants” makes it to the very top of a shortlist. With SMMS for example, the offerings are good but not typically best for the client. And overall, the benefits of a suite aren’t compelling enough today—but over the coming 12-18 months, they will be.
“The promise of the Digital Marketing Suite has yet to be fulfilled.”
The future is suites—or irrelevance
Not only will there be consolidation in terms of technology coalescing into larger suites, but the marketplace will also go through the natural evolution and consolidation as the landscape matures. For social marketing vendors determined to stay independent, there is only one option: to raise money to scale into suites themselves by buying or quickly building missing components like monitoring, optimization, and analytics. Several SMMS vendors like Hootsuite, Sprinklr, Spredfast, and HearSay Social have raised significant rounds of financing to build scale.
They are embedded and tough to replace, and integration-enabling APIs may extend the timeline, but over time that will not be enough to support so many players. Consolidation or exits are an inevitable outcome, as it has been in previous technology spaces. A few of the other SMMS vendors have already folded, like Awareness Inc. and Syncapse. This left their customers high and dry and needing to start the search for vital tools all over again. That has been another reason why some companies are looking to the big players—simple staying power.
What does the future look like with Digital Marketing Suites?
Beyond the obvious benefits of integration, like fewer tools and logins, and platform security that come from an integrated suite, there are four impending changes that marketers should watch closely:
1. Internal and external social networking on a single platform
In SMMS, collaboration features are mostly limited to basic workflow (tag, flag, annotate, route). Yet as social permeates an organization, the need for internal communication through Enterprise Social Networks (ESNs) becomes necessary to plan and react to external engagement. Adobe has already made a push to bring greater collaboration into its new Marketing Cloud offering, although it does not have an ESN product of its own. Salesforce will undoubtedly integrate Chatter into future offerings of its own Marketing Cloud, while Oracle is embedding Oracle Social Network into the social publishing workflow for collaboration. Companies with installed ESNs are also eager to tap and evolve internal employee engagement and direct it toward external conversations for purposes like providing customer support and employee advocacy.
2. Company-wide utility—this is not just for one department
Most SMMS address one or two departments’ needs well, yet we found that companies today are likely to have up to 13 departments involved in social. Social customer support may require the features familiar to a call center, whereas marketing may require a content repository and an editorial calendar that includes earned media. Because each department has different use cases and metrics, these suites are looking to address the needs of many departments rather than just the one or few primarily addressed today. Marketing is central, but other stakeholders are increasingly being involved.
3. Customer relevance and targeting (Social CRM)
Speaking of sharing nicely across departments, the growing need for a common view of customers’ social profiles and social behavior data is also driving a move to suites. Several SMMS vendors have focused on customer identification and targeting from the outset—but few integrate well with marketing automation and enterprise CRM systems in order to know and target customers based not only on social data, but all available customer data.
To take an example, Walmart allows Facebook fans to Like local stores, then shows them items specific to that store, based on comparative local prices and even the local weather. By integrating (in this case, location) data, the relevance of its content is increased. For now, customers remain mostly anonymous, so only certain layers of relevance may be applied at any given time (geography, demographics, psychographics, socialgraphics, mobilegraphics, brand affinity, loyalty program, etc.). So far, the local Walmart pages have little engagement, since they still feel impersonal compared with other local businesses.
Eventually, though, companies will have a single customer view, connecting these layers of relevance for contextual, personalized messaging for individual customers and prospects. This has been a long-term promise and the customer journey keeps getting more complex, but Adobe, Salesforce and Oracle have all been especially focused on this of late.
4. Bigger sticker price and IT involvement
The average enterprise deal size for SMMS has steadily increased over the past few years, rising from $76k last year to deal sizes of what we typically see today in the $100-150k range. This reflects a growing ability to spend on social software where there is perceived value.
These larger Digital Marketing Suites will naturally be even more expensive, but as social is integrated, an independent social business technology budget will be a challenge for most marketing organizations that are still just beginning to build out their social business capabilities. Also, because these suites are larger in scale and require greater care to be “plugged in” correctly, marketers will need IT to be more involved than it has been in decisions like SMMS, which marketing departments have in some cases been able to buy and install on their own.
P.S. Digital Marketing Suite seems like a good name for now, but this goes not only beyond social but even beyond marketing. While Adobe and Salesforce each have their “Marketing Cloud,” Oracle has its “Social Relationship Management,” which is department-agnostic, but of course, focuses on Social (Oracle Eloqua is referred to separately for now). So what is this called, really, and does it change over time?
While there are still plenty of best-in-class point solutions, more companies are offering a full suite of solutions. And it’s about time. Advanced companies need more integrated tools, so they can better navigate complexities. The future is either suites–or irrelevance.
Some people think MRIs and EEGs may soon be a standard in the marketing research suite. We’ll see.
Neural marketing, which involves techniques such as fMRI (functional Magnetic Resonance Imaging) or EEG (electroencephalogram), is a hot topic in marketing. It can purportedly generate insight into consumer response to marketing variables while reducing the biases inherent in asking consumers their opinions, such as when they are not able or willing to give valid answers to questions involving perceptions, attitudes, or behavior. Further, consumers are driven in part by subconscious thoughts and emotions that neural marketing techniques can access. There are estimates that 95% of all thoughts are subconscious.
Neural marketing, in the right context, can measure variables like attention, engagement, emotion, pleasure/liking, and memory. Each of these can be an extremely relevant dependent variable of interest when testing or evaluating many marketing stimuli.
Here are several interesting anecdotes involving neural marketing:
The MiniCooper from BMW was designed with the aid of fMRI equipment. The physical characteristics of the model were linked to a highly likable and beautiful baby face. It was said that the resulting design made people feel like caressing the car.
Frito-Lay used EEG technology to learn that when Cheetos made the fingers of an eater turn orange a strong response was created. The consumers liked the messiness of the product perhaps because it reflected an indulgent experience and because it indicated that the product really was infused with cheese. This insight was exploited in an advertising campaign.
Neural research has helped practitioners design stimuli that lead to engagement on social media.
The Weather Channel has used EEG and eye-tracking to measure viewer reactions when showing different promotions to a popular show.
What is the future of neural marketing? Will it become an important and even game-changing technique? Or will it become more of an academic research tool that will be helpful commercially in niche contexts? I predict the future is more in line with the latter because of fundamental limitations.
The equipment is highly intrusive which limits the stimuli that can be presented. The EEG measure requires wearing a hat with measurement devices attached. The fMRI is beyond intrusive. Respondents have to ride through a tunnel and endure the risk of claustrophobia and the loud, high-pitched noises that accompany most experiences.
EEG technology is not capable of reaching the interior of the brain where an area reflecting pleasure and liking exists. The fMRI is extremely expensive to own and to use, the polar opposite in terms of the cost of conducting something like Internet-based surveys.
The results are ambiguous and probably unreliable even in expert hands. It turns out that a lot of emotions can activate most regions of the brain in addition to target stimuli; in fact, some may be the opposite of what is being hypothesized, for example, eliciting disgust rather than liking. It takes a great deal of skill and experience to design experiments that guard against spurious results and to interpret the results accurately. Research to determine if findings are robust is probably rare.
“Neural marketing, in the right context, can measure variables like attention, engagement, emotion, pleasure/liking, and memory.”
Neural marketing reminds me of motivation research that was introduced in the 1950s by Ernest Dichter. Like neural marketing, motivation research aimed to understand the subconscious and its impact on motivation and choice. Dichter, a clinical Freudian psychiatrist, used in-depth interviews to find out what was motivating people. He famously linked Campbell’s soup to a mother’s love. He was very good at translating his insights into why people buy into copy like “wash your troubles away.” In the hands of Dichter, the insights were magical. But, more generally, as time passed and it became clear that motivation research insights were often not reproducible, the method was all but discredited a few decades after Dichter pioneered them. However, it is clear that many of the current qualitative research techniques incorporate some of his methodology.
My take is that in the right hands and when addressing the right problem and context, neural marketing can be helpful but it should not be oversold. And, at least with the current technology, it will be something of a niche technique. It will make significant advances in technology for it to do more—but I and others have underestimated new technologies before…
Brand equity is a term used to describe the value of having a recognized brand, based on the idea that firmly established and reputable brands are more successful. More specifically, it’s a set of brand assets and liabilities linked to a brand name and symbol, which add to or subtract from the value provided by a product or service.
Connecting “brand” to the concepts of “equity” and “assets” radically changed the marketing function, enabling it to expand beyond strategic tactics and get a seat at the executive table.
To help break down brand equity and provide details about how the term is used in the marketing industry, we’ve outlined how it all came into place, why it’s so valuable and a roadmap for success.
How Brand Equity Came Into Place
In the late 1980s, brand equity was just emerging as an important idea. An avalanche of researchers, authors and executives who provided substance and momentum to this idea reframed marketing.
In 1991, I published a book, Managing Brand Equity, which defines brand equity and describes how it generates value. This model provided one perspective on brand equity that is worth another look now more than twenty years later.
Why Is Brand Equity So Valuable?
Another aspect of the definition of brand equity that I presented in my book was the argument that brand equity is that it also provides value to customers. It enhances the customer’s ability to interpret and process information, improves confidence in the purchase decision and affects the quality of the user experience.
The fact that it provides value to customers makes it easier to justify in a brand-building budget. This model provides one perspective of brand equity as one of the major components of modern marketing alongside the marketing concept, segmentation, and several others.
The Roadmap for Building & Managing Brand Equity
Brand equity has four dimensions—brand loyalty, brand awareness, brand associations, and perceived quality, each providing value to a firm in numerous ways. Once a brand identifies the value of brand equity, it can follow this roadmap to build and manage that potential value.
Brand Loyalty
Reduced marketing costs
Trade leverage
Attracting new customers via awareness and reassurance
Time to respond to competitive threats
Brand Awareness
Anchor to which other associations can be attached
Familiarity which leads to liking
Visibility that helps gain consideration
Signal of substance/commitment
Brand Associations (Including Perceived Quality)
Help communicate information
Differentiate/Position
Reason-to-buy
Create positive attitude/feelings
Basis for extensions
The introduction of brand loyalty to the model was and is still controversial, as other conceptualizations position brand loyalty as a result of brand equity, which consists of awareness and associations. But when you buy a brand or place a value on it, the loyalty of the customer base is often the asset most prized, so it makes financial sense to include it.
And, when managing a brand, the inclusion of brand loyalty as a part of the brand’s equity allows marketers to justify giving it priority in the brand-building budget. The strongest brands have that priority.
Examples of Brand Equity
Positive Brand Equity
Amazon and Apple are classic examples of brands with positive brand equities. Both Amazon and Apple provide consistent customer experiences, are dependable, innovative, and purposeful, and are integral in people’s day-to-day lives, making them indispensable.
They also deliver on their promises to customers— Amazon provides convenience and industry-leading shipping options, while Apple prioritizes innovation and sleek design. All factors combined, these brands boast positive reputations or brand equities.
Negative Brand Equity
When it comes to negative brand equity, Volkswagen is an example that can be learned from. In September 2015, the EPA issued a notice of violation stating that the brand had been falsifying emissions numbers. As the news spread, Volkswagen lost brand equity, since the public no longer viewed the brand as trustworthy, nor as adhering to its promises to be environmentally friendly.
Brand equity is a key factor in both marketing and business strategy thanks to the idea that brands are assets that drive business performance over time. The equity of a brand is not only a tactical aid to generate short-term sales, but also a strategic support to creating long-term value of an organization.
Learn how Prophet helps businesses build and manage brand equity that drives growth.
7 Brand-Customer Relationships that Create Loyalty
Love, passion, nostalgia and even intimacy can all deepen the connection consumers feel about favorite brands.
A key to building segments with high loyalty is to create brand relationships that have traction and meaning. To understand relationships, it’s useful to recall the classic work of Susan Fornier going way back to her dissertation in the mid-90s in which she used human relationships as a metaphor for brand relationships. She examined the work of psychologists who studied the nature of relationships and the characteristics of ideal relationships. Drawing in part on this body of work plus her own consumer research, she identified seven types of relationships that are important to understand and had intriguing insights into how brand-customer relationships should be conceived, measured and managed.
These dimensions provide lessons on brand loyalty but come at it from different perspectives. A brand can use them to understand the nature of their customer relationships and how they might expand and deepen them. The two statements associated with each dimensions provide texture and items for a measurement scale.
The Seven Dimensions of Brand Loyalty
Behavioral interdependence
The degree to which the actions of the relationship partners are intertwined. Indicators are the frequency of interaction and the importance of and involvement in the use occasion.
This brand plays an important role in my life.
I feel like something’s missing when I haven’t used the brand in a while.
Personal commitment
The partners are committed to each other. There is a desire to improve or maintain the quality of the relationship over time and guilt when it is compromised.
I feel very loyal to this brand.
I will stay with this brand through good times and bad.
Love and passion
The intensity of emotional bonds between the partners, the inability to tolerate separation, and the reflection of love and passion that exist. In brand relationships, customers can develop passionate links to brands. Substitutes create discomfort.
No other brand can quite take the place of this brand.
I would be very upset if I couldn’t find this brand.
Nostalgic connection
The relationship is based in part on the memory of good times.
This brand reminds me of things I’ve done or places I’ve been.
This brand will always remind me of a particular phase of my life.
Self-concept connection
The partners share common interests, activities and opinions. The brand reflects the interests and activities of the person.
The brand’s and my self-image are similar.
The brand reminds me of who I am.
Intimacy
A deep understanding exists between partners. The consumer will achieve intimacy by knowing details about the brand and its use. One-on-one marketing programs enhance intimacy by fostering mutual understanding.
I know a lot about this brand.
I know a lot about the company that makes this brand.
Partner quality
The evaluation by one partner of the performance and attitude of the other. The evaluation by the consumer of the brand’s attitude toward the consumer.
I know this brand really appreciates me.
This brand treats me like a valued customer.
“These dimensions provide lessons on brand loyalty but come at it from different perspectives.”
It is unlikely that a brand will need or want to gain superiority on all the dimensions. There will be a need to focus. But keeping the larger picture in mind provides more fundamental understanding of the all-important relationship concept.
Subcategory innovators account for a disproportionate percentage of revenue growth and market capitalization.
In my book, Brand Relevance, I argue that the only path to real growth, with rare exceptions, is to engage in transformational or substantial innovation that creates “must-haves” that define new subcategories (or categories). In virtually any product arena that you examine over a long period of time, from water to banking to computers, any growth spurt, (again, with rare exceptions) can be associated with such an innovation. For example, in the Japanese beer market, the market share trajectories changed only four times in over 40 years. In three of those instances new subcategories were formed, and in the fourth two subcategories were repositioned.
In a recent article in the Harvard Business Review, Eddie Yoon and Linda Deeken provide more evidence of this phenomenon. They observed that if you analyze Fortune’s lists of the 100 fastest-growing U.S. companies from 2009 to 2011, 13 of those companies were instrumental in creating a new category or subcategory. These 13 firms accounted for 53 percent of the incremental revenue growth and 74 percent of the incremental market capitalization growth over those three years. Such innovators benefit from higher growth in part because they can expand the marketplace. Chobani, for example, created a new subcategory of thick, creamy, high-protein yogurt that is now in excess of $1 billion in part by attracting new customers into the yogurt world.
These subcategories or categories can be created by substantial innovations that do not alter the basic business model. In the article, Yoon and Deeken point to Sara Blakely’s creation of Spanx slimming apparel and Kevin Plank’s development of Under Armour’s moisture-wicking apparel for athletes, both $1 billion brands, as examples. Another is Crest’s Spinbrush, which created a new subcategory between the regular toothbrush and the expensive electric versions. All these products use the same marketing and distribution strategy as before, they just now contain a new “must-have.”
A category or subcategory that innovates can also involve a change in the basic business model. Yoon and Deeken describe several examples. Keurig pioneered the “cup-at-a-time” pod-style brewing in the 1990s as an alternative to the existing coffee pot for the office, and later for the home. With a business model around selling K-cups, which come in 200 flavors and sell for around 50 cents, they have created a U.S. business approaching $4 billion. Redbox DVD kiosks, which offered rentals in other stores, were transformational as was Microsoft’s Xbox Live gaming system which added a subscription-based online service to a video game console.
“Firms under-invest in “big” innovation and the product and market research that would support it and over-invest in incremental innovation.”
Transformational innovation can actually be easier to develop and implement than a substantial innovation. You have to have a lot of resources and luck to come up with the innovations that led to Spanx, Under Armor and the Spinbrush. But it just takes insight and creativity to offer a reward program that helps cell phones users in Africa earn life insurance benefits, like MTN. Or for a cell phone maker in China (Xiaomi) sells phones directly by bypassing the telecom firms (think of Dell bypassing the retailers). Both were transformational innovations because they altered the marketplace.
In my view, firms under-invest in “big” innovation and the product and market research that would support it and over-invest in incremental innovation. Yoon and Deeken note that Nielsen’s Breakthrough Innovation Report finds that only 13% of the world’s leading consumer product companies introduced a breakthrough innovation from 2008 to 2010.
It should be more. I don’t know how much more, but more. It is a “big” innovation that moves the needle.
P&G used a campaign promoting the benefits of sleep to introduce disposable diapers to parents in China.
P&G’s Pampers completely reframed the diaper category in China, and in doing so created enormous growth for the category and for the brand. It is a good example of how focusing on category competition is a better route to growth than trying to win the “my brand is better than your brand” battle. The story is fascinating and informative, not only with respect to framing a category but to entering a new country with a different culture.
Pampers entered the China market in 1998 with a strategy of making a cheaper version of their Western product. The result was indeed cheap, and also was of inferior quality. The product was perceived as plastic and irritating, and it didn’t go anywhere. In 2006 a revised product, called the Pampers Cloth Like & Dry, was soft, effective and half the cost of U.S. versions. But still, sales lagged. The problem was that Chinese consumers were not motivated by dryness or convenience. They did not see a problem that would merit changing their existing habits. But a solution was on the horizon.
P&G was in the midst of in-depth research on consumers that revealed that the quality of a baby’s sleep and its impact on the future development of the baby was a real concern for many parents. This was coupled with the insight that a sleeping baby tended to stimulate a mother’s thoughts of the baby’s future. A study was then commissioned to the Beijing Children’s Hospital’s Sleep Research Center that revealed that babies wearing Pampers fell asleep 30% faster, slept an extra 30 minutes every night, and had 50% less disruption throughout the night.
“Look for a new benefit, application or segment to define a subcategory that will consist primarily of new customers.”
In 2007, Pampers launched the “Golden Sleep” campaign, which included extensive advertising, mass carnivals and in-store campaigns in urban areas. The objective was to frame disposable diapers as aides to quality sleep and to communicate the research data from the Sleep Research Center. The cornerstone of the campaign was getting women to post a picture of their baby sleeping on the Pampers website that would be incorporated into a huge photomontage. Can you imagine the appeal of a sleeping baby? The hook was their goal of beating the Guinness World Record for the largest photomontage in the world. They got over 200,000 responses and indeed used over 100,000 of them to break the Guinness World Record with a 7,000 square foot photomontage that was hung in a retail store in Shanghai.
Sales went up 55% but, more importantly, the category exploded. From 2006 to 2011 the baby disposable diapers market grew to nearly 3 billion, and it’s much larger today. And Pampers continues to be the market leader.
The key is their focus on category competition instead of brand preference competition. Look for a new benefit, application or segment to define a subcategory that will consist primarily of new customers. Make an effort to make sure your subcategory wins.
Competing at the category and subcategory level is the only real path to growth.
This brand’s expert combination of sports, events, content and adrenaline bring its positioning to life.
A pioneer in energy drinks three decades ago, Red Bull is now the world sales leader with estimated 2012 fiscal sales of over $3 billion, profits over $400 million, and a 43% leading US dollar market. To establish a new category in the face of Coke and Pepsi and then hold it for decades is very impressive.
Four observations about Red Bull’s unique approach to brand building:
Red Bull’s brand building is largely based on associating its brand with an amazingly wide range of people, teams and events.
Red Bull believes in owning teams and events rather than being one of several sponsors.
Because of this ownership model, they can and have turned this buzz machine into a profit center.
Their on-brand activities reflect two very different personalities that live side by side.
The scope of Red Bull activities is overwhelming. It gets involved in a wide mix of sports such as wakeboarding and motorcycle racing, dozens of Red Bull music events, sponsoring athletes such as motocross racer Ashley Fiolek, teams such as the New York Red Bulls soccer team and much, much more. The Red Bull website has entertainment features such as the Red Bull Soapbox Racer video game, weekly rock music bulletins on the Rock Report, plus sections on movies and TV shows as well. The list of their entertainment features goes on and on and is captured on their Facebook Page, which has more than 37 million followers. With well over 100 potential points of contact, Red Bull will connect to their target market many times, in multiple ways. And more importantly, Red Bull becomes a big part of their customers’ lives.
Red Bull believes in owning teams and events so that they have control over the content and the cost. They do not subscribe to the normal sponsorship model where they would have their name attached to an entity they do not control. They own two professional soccer teams, two Formula One car racing teams, the Red Bull X-Fighters (freestyle motocross) World Tour, the Red Bull Air Race (an international series of air races in which competitors have to navigate a challenging obstacle course in the fastest time), the Red Bull Cliff Diving World Series and much more. Even when Red Bull backs an athlete, they get involved; it is not about a logo on a shirt. Their four-year association with Shawn White, who ultimately won a gold medal in snowboarding at the 2010 Olympic Winter Games, involved building a half-pipe training facility in Silverton, CO, complete with support staff to help him train.
And then there is “The World’s Biggest Jump.” In mid-October 2012, well over 10 million watched Felix Baumgartner rise more than 24 miles above the New Mexico desert in the 55-story ultra-thin helium “Red Bull Stratos” balloon, jump off, and reach 830 mph during a 9-minute fall, setting records for both the height of the jump and the speed of descent. Since then, more than 33 million have watched the YouTube video. With the pre-jump and post-jump news features, videos and documentaries there could have been over a billion quality impressions, which meant an incredible ROI, even though the cost might have exceeded $40 million.
Its ability to stage sporting and music events and manage special athletes means that its rich library of video content will always be fresh and will always be expanding. The Red Bull Media House, launched in 2007, creates and markets new and existing content through TV, mobile, digital, audio and print. For example, the 2011 film The Art of Flight showed hundreds of don’t- -try-it-even-in-your-dreams sequences. There are partnership deals such as the one with NBC, the Red Bull Signature Series, which is made up of 15 events spaced out throughout the year. The brand’s magazine, Red Bulletin has a global distribution of 4.8 million. The media presence is extensive and includes the Red Bull TV channel in Europe and Red Bull documentaries elsewhere. There are versions of content in any length and form. The Red Bull mission, to fascinate, is compelling to content users and audience members alike.
“And more importantly, Red Bull becomes a big part of their customer’s lives.”
Although all the activities are around high energy, there are two brand personalities that live side-by-side. One is the serious athlete excelling in difficult challenges. The other is a fun-loving, humorous, whimsical personality as represented by much of their “Red Bull gives you wings” advertising and humorous cartoon videos on their website.
And have you seen a Red Bull Flugtag? It’s a contest that challenges teams of everyday people to build homemade, human-powered flying machines and pilot them off a 30-foot high deck above a water landing. Entrants are judged not only for their flight’s distance but for the creativity and showmanship of the designs and the people operating them. There are designs stimulated by flamboyant kites, by space-age vehicles and by entities that are, for lack of a better expression, hard to describe.
The first Flugtag took place in Vienna, Austria in 1992, and since then more than 35 Flugtags have been held around the world, attracting up to 300,000 spectators. The record for the farthest flight-to-date currently stands at 207 feet set in 2010 at Flugtag Minneapolis/St. Paul. It is just one representative of the whimsical Red Bull brand personality.
Red Bull is exceptional in telling its brand story in so many compelling, involving ways. And though all of their activity is on-brand, it is far from a “focused” strategy. Taking the next step to building a profit center was not only a smart strategic move, it was the ultimate tribute to their brand-building effort.
It’s a Trap! Insights Functions vs. Insights Systems
Primary research is great, but it’s just one tool. It’s how companies use insights that makes the difference.
Too many companies fall into too common of a trap: mistaking the difference between an insights function and an insights system. Far too often, companies invest in an insights or research department, or function, only to have its value limited because they are not connected to the broader business.
And more than ever, companies are investing in primary research but getting mixed results. Don’t get me wrong. Primary research is core to being a more outside-in, customer-centric business. However, that’s just one tool – it’s what happens with those insights and who is using them that make the difference. Far too often, this primary research is conducted, summarized to a select set of stakeholders, and then put on the shelf.
An insights function is critical to bringing expertise, discipline and execution to the gathering of insights. However, what sets high-growth companies apart from their peers is having an insights system. An insights system is not bound by functional areas or business units. It is not project-based. It is not a one-way flow of information. Far too often, insights are left at the customer level, not the market level. Or even worse, they are never shared at all.
It is by definition a system. An insights system has on and off ramps for insights. A wide range of stakeholders access and contribute to the system, well beyond the insights or research function. This includes sales and marketing, innovation and R&D, service, engineering and operations, and even partners and principals. Each of these groups has key insights into customers’ needs and behaviors, competitors and ideas for growth.
So, how do you start to build out the system? Market leaders such as UPS, 3M and Microsoft have built their systems by following these proven strategic steps:
1. Map it. Start by mapping the current flow (or lack thereof) of insights. Where do they go? Who’s contributing them? Who’s using them, and who’s not using them?
2. Define it. Define what the ideal insight system looks like for your business to drive that outside-in perspective. Where should they come from (i.e., sales, service and market research)? Where should they go (i.e., innovation, marketing and sales)? How should they be accessed (a central repository and/or several strategic forums for insight sharing)?
3. Educate. Don’t take for granted that everyone starts with the same definition and value of an insight. Leading companies have invested in upfront education and communication about the definition and value of insights to their business under the impressions that more people will contribute to and use them once properly informed.
4. Build the toolkit. Based on the future insights map you have created, there should be a core set of tools to leverage and/or build. This can include primary research such as quantitative research and focus groups, customer advisory groups, ethnography and usage studies, analytics of customer buying behavior, win/loss analysis, and even listening to contact center calls or complaints on your website. Remember, more isn’t necessarily better. It’s about a core set of tools that give you fresh, actionable insights into your market, competitors and customers.
5. Make insights core to the conversation. Make insights a baseline expectation for decision-making. Whether it be go-to-market planning, a business case review, an innovation pipeline review or a strategic customer plan, bring insights to the core of the conversation and make this a consistent expectation throughout the business.
6. Incent to drive the behavior change. To really accelerate the insight system, people need to be incented to contribute insights. The companies that have been most successful building this competency have built this into individual’s performance and incentive plans. It’s become an expectation of virtually all areas of their business.
The answer to insights isn’t always more headcount and bigger budgets in the research group. The path to truly becoming an outside-in company starts with the insight system. It will allow you to more rapidly and consistently identify and act on market opportunities as they emerge.
This campaign soars on its ability to change the way women are perceived–and how they see themselves.
What are the most impressive brand-building efforts in the last 15 years? In constructing such a list, it would be hard to leave out Dove. A $200 million soap brand in the early 1990s has grown into a brand that has been estimated to be worth nearly $4 billion dollars today. They play in an intensively competitive arena with large, smart and established competitors. And in my view, the Dove brand-building effort played a big role in their success story.
Have you seen the latest from the Dove ongoing “Campaign for Real Beauty” that originated in Brazil and was done by Ogilvy & Mather in 2004? A forensic sketch artist draws several women, first based only on their descriptions of themselves (he does not actually see them) and then based on the descriptions of a stranger who has observed the women. The subject, seeing the resulting sketches side-by-side, realizes that the sketches inspired by strangers are much more flattering than the versions from their own self-descriptions. The tagline? “You are more beautiful than you think.” The first two versions of these videos each got over 35 million views within two weeks of being posted to YouTube. Thirty-five million!!
Dove’s success is, of course, driven in large part by a business strategy that involved brand extensions, product innovation and geographic expansion. The Dove® Campaign for Real Beauty set out to make women aware that they have real beauty that is not based on the common standard of a young, model-thin body with excessive makeup. The goal was to make a fundamental change in the way that women are perceived and in the way they view themselves. The campaign started with advertisements, showing real women that may have been older or heavier than the “ideal” but exhibited beauty. Billboard ads invited passers-by to vote on whether a particular model was, for example, “Fat or Fab” or “Wrinkled or Wonderful”, with the results of the votes dynamically updated.
The Real Beauty campaign involves substantive programs with girls as the prominent target. Since 2002, Dove has been collaborating with Girl Scouts of the USA to promote self-esteem and leadership programming among tween and teenage girls with programs like uniquely ME! and It’s Your Story – Tell It! An annual Dove Self-Esteem Weekend, started in 2010, aims to inspire moms and mentors to talk to girls in their lives about beauty, confidence and self-esteem supported by discussion aids. The goal is to reach 15 million girls global about self-esteem awareness by 2015.
The Real Beauty campaign resonates at several levels. It connects with an issue of deep concern within the customer base, their appearance and self-confidence. Additionally, it addresses the insecurity and self-esteem issues of young women to which customers could empathize. It strikes a chord. It provides a higher purpose to the brand and a shared interest with customers.
The impact for some of Dove’s efforts has been estimated to be 30 times their expenditure. One of its ads, Evolution, showed how much effort goes behind creating the “model look” and won advertising awards as well as created unpaid exposure estimated to be worth over $150 million. There are anecdotes about dramatic sales increases tied to the campaign and surveys showing that those aware of the effort are more likely to use and recommend Dove products. But the creation of a huge business base is the best evidence to its impact.
“The goal was not to avoid being disliked but to connect to the target.”
The campaign has had its critics, though. In part, this scrutiny has been stimulated by and is a testament to its success and visibility. But during a panel discussion at the WEF at Davos once, Phil Knight dismissed critics to some controversial Nike ads by saying that the goal was not to avoid being disliked but to connect to the target. Exactly.
Dove’s success is, of course, driven in large part by a business strategy that involved brand extensions, product innovation and geographic expansion. The energized brand with its higher purpose and clear value propositions supported by branded innovations simply amplified a remarkable business strategy.
The extension strategy was to leverage the moisturizer heritage of the brand into new categories supported by meaningful innovation. The first extension success was the Dove Moisturizing Body Wash with the innovative Dove Nutrium technology that deposits lipids, Vitamin E and other nutrients onto the skin. This was followed by entries into deodorants, disposable face cloths, shampoos with Weightless Moisturizer, Nutrium soap, and lotions with Shea Butter. Dove also entered the male market with Dove Men+Care. Each extension’s success was based in part on compelling value propositions.
Additionally, an aggressive global expansion resulted in the brand, once a factor in only a few countries, now having a presence in some 80 countries. However, the business strategy would not have had its remarkable success without the brand-building effort to support the offerings and to drive the higher Real Beauty purpose.
The Dove brand success didn’t just happen. It was research-based and employed a host of methods to understand the issues women face with respect to Dove products and perceived beauty. Customer research was supplemented with expert guidance. The Dove Self-Esteem Program, for example, has an 11 person Global Advisory Board. The brand has the ability and the willingness to stimulate, access creative thinking from around the world and then push the best ideas into the marketplace.
Letting ideas emerge and then flourish is not a natural part of most organizations. Dove’s efforts are remarkable.
