Discipline 1. Differentiate
Three Little Questions
Wanna bring a high-level marketing meeting to a screeching halt? Just do what brand consultant Greg Galle of Creative Capital does—demand unambiguous answers to three little questions:
1) Who are you?
2) What do you do?
3) Why does it matter?
Now, the first question is fairly easy for most companies to answer. “We’re Global Grommets, a multinational provider of grommets.” The second question is a little harder. “We make grommets—no, we make more than grommets, because we have a full line of widgets, too.” But the third question, why it matters, can get sticky. “It matters because we make really good grommets—and widgets.” (Sure, but everyone says that.) “Because we sell the widest selection of grommets and widgets.” (Right, but I only need one kind of grommet, and I already buy it from someone else.) “Because we have the best people.” (Yeah, right—prove it.) Unless you have compelling answers to all three questions, meaning that customers find them irresistible, you haven’t got a brand. If you do have compelling answers, great—you can skip this chapter.
Still reading? Thought so. Because most companies have occasional trouble answering the first question, a little trouble answering the second, and a lot of trouble answering the third. Together, these questions provide a litmus test for what makes you different, what gives your company its raison d’etre.
A good example of a company that knows what it’s about is John Deere. “We’re John Deere. We make farm tractors and related equipment. It matters because generations of farmers have trusted our equipment.” Their trademark is a silhouette of a leaping stag, and their tagline is “Nothing runs like a Deere.” As long as the Deere folks can keep it this simple, their brand will keep running. If they begin to add too many UNRELATED products and services to their line, however, their message will turn muddy and their brand will get stuck. Let’s say, for example, that they decide to hedge their bets by adding health care, real estate, and fertilizer to the mix. How would they then differentiate their brand? “We’re John Deere. You know us for tractors, but we do much more. It matters because you can come to us for lots of things.” (Hmm, I think I’ll buy a Kubota.)
Clorox is a company that understands differentiation. When Clorox purchased Hidden Valley ranch dressing, their marketing people had the good sense not to add it to their product line and rename it Clorox Hidden Valley. In fact, the name Clorox has never appeared on any of Hidden Valley’s packages, advertisements, or other marketing materials. Yet you’d be surprised at how many companies have violated common sense and paid the price. The lesson? Keep it pure, keep it different.
Dressing, Anyone?
It’s Different—I Like it
Differentiation works because of the way the human cognitive system works. Our brain acts as a filter to protect us from the vast amount of irrelevant information that surrounds us every day. To keep us from drowning in triviality, it learns to tell things apart. We get data from our senses, then compare it to data from earlier experiences, and put it into a category. Thus we can differentiate between a dog and a lion, a shadow and a crevasse, or an edible mushroom and a poisonous one (usually).
The sense we rely on mostly is sight. Our visual system is hardwired to discern the differences between the things we see, starting with the biggest differences and working down to the smallest. It looks for contrasts. It recognizes the differences between subject and ground, big and small, dark and light, rough and smooth, fat and thin, motionless and moving. Then the brain takes over and begins to make meaning. It recognizes differences such as those between near and far, old and new, light and heavy, peaceful and aggressive, simple and complex, easy and difficult.
The traditional view of design is that it has four possible goals: to identify, to inform, to entertain, or to persuade. But with branding there’s a fifth: to differentiate. While the first four are tactical, the fifth is strategic, with its roots deep in aesthetics—a powerful combination of logic and magic.
The Evolution of Marketing
As we’ve moved from a one-size-fits-all economy to a mass-customization economy, the attention of marketing has shifted from features, to benefits, to experience, to tribal identification. In other words, selling has evolved from an emphasis on “what it has,” to “what it does,” to “what you’ll feel,” to “who you are.” This shift demonstrates that, while features and benefits are still important to people, personal identity has become even more important.
Cognitive expert Edward de Bono once advised marketers that, instead of building a brand on USP (the Unique Selling Proposition of a product), they should pay more attention to “UBS” (the Unique Buying State of their customers). He was ahead of his time in predicting the rise of consumer-centric marketing.
The success of the Nike brand is ample proof that de Bono’s concept works. As a weekend athlete, my two nagging doubts are that I might be congenitally lazy, and that I might have little actual ability. I’m not really worried about my shoes. But when the Nike folks say, “Just do it,” they’re peering into my soul. I begin to feel that, if they understand me that well, their shoes are probably pretty good. I’m then willing to join the tribe of Nike.
Globalism vs. Tribalism
We’ve heard a lot of talk about globalism—the knocking down of national, economic, and cultural barriers to create a single society. In the 1960s Marshall McLuhan envisioned a world so connected by technology that the old divisions would disappear, made obsolete by a massive “global village.” Forty years later we have no global village, and we probably never will, at least in the usual sense of a village—an intimate community united by a single language and culture. Instead we have a global communication network, an electronic layer on top of the old divisions that influences them and adds to them, but doesn’t replace them.
The fact is, we need divisions just as much as we need ways to transcend them. Without barriers there would be no safety—against war, disease, natural disaster, a feeling of alienation, of being lost in an uncaring world. The faster globalism removes barriers, the faster people erect new ones. They create intimate worlds they can understand, and where they can be somebody and feel as if they belong. They create tribes.
If you stretch the concept of tribe just a little, you can see that a brand creates a kind of tribe. Depending on your Unique Buying State, you can join any number of tribes on any number of days and feel part of something bigger than yourself. You can belong to the Callaway tribe when you play golf, the VW tribe when you drive to work, and the Williams-Sonoma tribe when you cook a meal. You’re part of a select clan (or so you feel) when you buy products from these clearly differentiated companies. Brands are the little gods of modern life, each ruling a different need, activity, mood, or situation. Yet you’re in control. If your latest god falls from Olympus, you can switch to another one.
Focus, Focus, Focus
These are the three most important words in branding. The danger is rarely too much focus, but too little. An unfocused brand is one that’s so broad that it doesn’t stand for anything. A focused brand, by contrast, knows exactly what it is, why it’s different, and why people want it.
Yet focus is difficult to achieve because it means giving something up. It runs counter to our most basic marketing instinct: If we narrow our offering, won’t we narrow our opportunities for profit? Answer: Not necessarily. It’s often better to be number one in a small category than to be number three in a large one. At number three your strategy may have to include a low price, whereas at number one you can charge a premium. History has shown that it pays handsomely to be number one in your category—first, because of higher margins, and second, because the risk of commoditization is almost nonexistent. Yet number two can also be profitable, despite a smaller market share. Number three, or four, or five, however, may only be worth the effort if you think you have a realistic shot at becoming number two someday.
Can’t be number one or number two? Redefine your category. The industrial-strength software product Framemaker only made it to number three as a word-processing product, but as a document-publishing product it quickly became number one, with double its previous sales. All it took was a change of focus.
Competition forces specialization. The law of the jungle is “survival of the fittingest,” and the smart company doesn’t wait to be forced. In the competitive world of automobiles, for example, Volvo built a bulletproof brand when it turned a heavy, boxy vehicle into the “safe” alternative, a market niche they were able to own and defend for many years. Was that good enough for Volvo? Apparently not, because they’ve recently added fast, sexy vehicles to their lineup. Time will tell if the concept of raciness is compatible with the concept of safety. In trying to satisfy every desire, Volvo may be weaving recklessly down the road toward no man’s brand.
Are You Growing or Harvesting Your Brand?
Brand guru David Aaker likens growing a brand to managing a timber reserve: You plant new trees for future profit and you harvest old trees for profits today. The trick with brand is to know which is which. What may seem like growing a brand may actually be harvesting it. Take line extensions. When you have a successful product or service, a nearly irresistible temptation is to “leverage” the brand, to extend it into a family. It makes complete sense—except when it doesn’t.
Brand extensions make sense when new additions to the family serve to strengthen the meaning of the brand, adding mass and definition to whatever it is that makes it different. In the supermarket, a good example of growth by brand extension is Oxo Good Grips, the clever line of hand tools whose every new addition reinforces its ownership of the easy-grip/high-style/black-and-white-pack category.
Brand extensions make less sense when they’re driven by a desire for short-term profits without regard to focus. What makes them especially seductive is that they can work remarkably well in the short term, even as they undermine the position of the brand. A recent example of defocusing by brand extension is the Cayenne, an SUV from Porsche. In a single misguided stroke, Porsche has pulled the rug out from under its reputation as a maker of classic sports cars. They maintain that the Cayenne is an example of Porsche innovation, but Porsche fans will say it’s a grab for profits in a tired market. Had Porsche invented the SUV, people might see it as innovation, but at the tail-end of the trend it looks more like greed—especially since Porsche is already highly profitable. Naturally, the new car will sell. It’s got the revered Porsche styling, engineering, and pedigree, all of which can be harvested through line extension. But the question is, what does Porsche now stand for?
Even in the best of times, the principle of focus is a hard mistress, demanding fidelity, courage, and determination. And when a company faces additional pressure from stockholder expectations, political infighting, unexpected competition, or changes in management, there’s a temptation to extend the product line for short-term relief, even at the expense of its market position. Resist, because the long-term survival of a brand depends on staying focused. As positioning expert Jack Trout succinctly puts it, “differentiate or die.”
Discipline 2. Collaborate
It Takes a Village to Build a Brand
In her book, THE NATURE OF ECONOMIES, Jane Jacobs writes that economic development is not just expansion, but differentiation emerging from generality, much like evolutionary or embryological development in nature. Moreover, she says, differentiation depends on codevelopment—no entity, natural or economic, evolves in isolation.
Brands don’t develop in isolation, either. They result from the interaction of thousands of people over a long period of time. Branding requires not only the work of executives and marketing people who manage the brand, but an ever-changing roster of strategy consultants, design firms, advertising agencies, research companies, PR firms, industrial designers, environmental designers, and so on. It also requires the valuable contributions of employees, suppliers, distributors, partners, stockholders, and customers—an entire branding community. It takes a village to build a brand.
Building a brand today is a little like building a cathedral during the Renaissance. It took hundreds of craftsmen scores of years, even generations, to complete a major edifice. Each craftsman added his own piece to the project—a carving, a window, a fresco, a dome—always keeping an eye on the total effect. Like yesterday’s cathedrals, many of today’s brands are too large and too complex to be managed by one person or one department. They require teams of specialists, sharing ideas and coordinating the efforts across a creative network.
Management guru Peter Drucker maintains that the most important shift in business today is from “ownership” to “partnership,” and from “individual tasks” to “collaboration.” The successful company is not the one with the most brains, he suggests, but the most brains acting in concert. Brand managers and communication firms are responding to this new challenge in a number of interesting ways.
The New Collaboratives
Today there are three basic models for managing brand collaboration: 1) outsourcing the brand to a one-stop shop, 2) outsourcing it to a brand agency, and 3) stewarding the brand internally with an integrated marketing team. All three models are forward-thinking responses to the problem, because they recognize brand as a network activity. Let’s examine them one at a time.
The first model, the one-stop shop, has its roots in early 20th-century branding, when companies routinely consigned large portions of their communications to a single firm, typically an advertising agency. The advertising agency would conduct research, develop strategy, create campaigns, and measure the results. The main benefit was efficiency, since one person within the client company could direct the entire brand effort. As branding has grown more complex, so has the one-stop shop. Today’s one-stop is either a single multi-disciplinary firm, or a holding company with a collection of specialist firms. The advantages of the one-stop shop are an ability to unify a message across media, and ease of management for the client. The drawbacks are that the various disciplines are not usually the best of breed, and, in effect, the company cedes stewardship of the brand to the one-stop shop.
The second model, the brand agency, is a variation of the one-stop concept. With this model the client works with a lead agency (an advertising agency, design firm, PR firm, strategy firm, or other brand firm), which helps assemble a team of specialist firms to work on the brand. The brand agency leads the project, and may even act as a contractor, paying the other firms as subcontractors. The advantages of this model are the ability to unify a message across media, and the freedom to work with best-of-breed specialists. A drawback is that stewardship of the brand still resides more with the brand agency than with the client company.
The third model, the integrated marketing team, bears little resemblance to the traditional outsourcing model. It sees branding as a continuous network activity that needs to be controlled from within the company. In this model, best-of-breed specialist firms are selected to work alongside internal marketing people on a virtual “superteam,” which is then “coached” by the company’s design manager. The advantages of this model are the ability to unify a message across media, the freedom to work with best-of-breed specialists, plus internal stewardship. This last benefit is important, because it means that brand knowledge can accrue to the company, instead of vanishing through a revolving door with the last firm to work on it. A drawback of an integrated marketing team is that it requires a strong internal team to run it.
Of course, while these three types of collaboratives seem tidy in print, they’re messier in practice. Companies are mixing and matching aspects of all three models as they grope their way to a new collaborative paradigm. Still others are behind the curve, unaware that there’s a revolution afoot.
Hooray for Hollywood
According to a recent McKinsey report, the next economy will see a significant rise in network organizations—group
s of “unbundled” companies cooperating across the value chain to deliver products and services to customers. By owning fewer assets and leveraging the resources of partner companies, these network orchestrators require less capital, return higher revenues per employee, and spread the risks of a volatile market across the network.
The network organization isn’t new; a successful model of unbundling has existed for years. It’s called Hollywood.
A half-century ago, the major Hollywood studios not only owned the soundstages and backlots necessary for their movies, but also the producers, directors, writers, actors, cinematographers, musicians, PR specialists, and distributors. Some even built theater chains for the exclusive use of their own properties. As the dream machines cranked out hundreds of look-alike movies to feed their growing overhead, movie-making began to slide from craft to commodity. The independents soon learned how to end-run the mega-studios by producing high-quality “little” films and low-budget B-movies.
What happened next? The big studios learned from the small ones, and began unbundling their vertically integrated companies. By switching to a network model, the studios could avail themselves of the best talent for each project, thereby creating unique products and shedding unnecessary overhead. In reversing the trend toward commoditization, they encouraged the growth of an artisan community, not unlike those that grew up around the cathedrals of Europe. Like the cathedral-builders, Hollywood specialists don’t see themselves as technicians, but as craftspeople working in a creative network.
The Brand Gap Page 2
