denise lee yohn: brand as business bites™ / stuff for your brain to chew on

I’ve been working with a major retail brand and my engagement has included an audit and assessment of retail best practices.  Although most of my work is proprietary, I wanted to share some of my findings here because I’ve found some really interesting patterns.
My investigation covered several different retailers (selected for confidential reasons), representing a range of non-apparel product categories, and business sizes and scopes, including:

• The Container Store – the $650MM “original storage and organization store”
• IKEA – the Swedish home furnishings big box and catalog concept
• Uncommon Goods – the niche catalog and online gift retailer
• Wegmans – the $5BB regional grocer with 75 stores in 5 states
• Williams-Sonoma – the $3BB “catalog for cooks”

Although each of these concepts has its own strengths, together they paint a good picture of what works best in retail.  Here are 6 best practices from the group:

1.    distinctive brand personality
More than the products these companies sell, their brand personalities are what distinguish them from less remarkable concepts in their categories.  From The Container Store’s positivity to IKEA’s pragmatism to Uncommon Goods’ whimsy, the personalities of these brands are distinct and memorable.

The brand personalities manifest themselves in the entire shopping experience – from the visual strategy to sensory stimuli to product assortment to customer service to tone of voice in messaging.  In fact, you could take all the branded signage down and still know you are in a particular brands’ store.

Generally speaking in retail companies, merchants drive the business – they set the brand strategy through the product range and assortment they cultivate.  But the strength of execution on brand personality in the concepts I investigated suggest that marketing, merchandising, and store operations are all working together to deliver a distinctive personality which permeates the entire customer experience.

2.    self-promotion
Most of these brands are unabashed in their self-promotion – they very clearly communicate their product and brand stories, and their features and services.

But I’m not talking about advertising or PR.  In addition to these traditional methods, the companies I studied integrate their brand promotion into the actual customer experience. Through pages on their websites, in their catalogs, and in their in-store collateral, they actively promote what makes them different and better than other companies.

Wegmans, for example, explains in a website section “How Wegmans Supermarkets Compare to Others.”  Folksy stories about the company and profiles of designers are sprinkled throughout IKEA’s catalogs.

Executing on your brand promise (doing what you say) is obviously the priority for any company – but once you’re doing that, it’s OK to let people know.  This kind of self-promotion is welcome because it has integrity and it invites people into relationship with the brand.  And it’s not considered bragging if you’re good.

3.    value added services and content
Every one of these retailers delivers more value than their product alone.

Some add value to their products through the stories and details they provide about their products.  Uncommon Goods tells its shoppers about the origins, cultural significance, and manufacturing processes behind their products.  In doing so, they enable customers to buy into shared values and significance.

Others show how to use their products.  Whether it’s recipes from Williams-Sonoma or organizational tips from The Container Store, the value of these brands’ products increases as customers’ usage of them improves.

Design and installation services are additional sources of revenue for IKEA and The Container Store.  Classes play a similar role for Williams-Sonoma and Wegmans.  So these are smart business offerings – but they’re also smart marketing approaches, as they facilitate more personal interactions and engender trust among customers.

4.    sensory engagement
When a customer walks into a Williams-Sonoma store, she gets a feeling of walking into a kitchen.  It usually smells like food because there’s a cooking demonstration or samples being offered; customers’ sense of taste are also tickled by these.  Kitchen furnishings are used for displays, fabrics cover many surfaces, and aprons are worn by the staff, engaging the visual and tactile senses.  It’s a full-sensory experience.

Uncommon Goods which does not have physical locations engages its customers’ senses through its multi-media website.  Sound files let you hear what an alarm clock sounds like; videos show you what products do when they’re turned on.

An immersive, entertaining shopping experience comes from engaging as many senses as possible.

5.    cross-channel shopping experience 2.0
As recently as only a couple of years ago, retailers could distinguish themselves by offering the option of ordering a product online and then picking it up in store.  Or of buying a product a product online and returning it to the store.

Now these options are expected and quite commonplace.  To really stand out and serve customers well, retailers must take the cross-channel shopping experience to the next level.

The Container Store stands out as a leader in this area.  Their “Go Shop” platform offers services support their brand value of simplicity and streamlining, including options such as:
-    order online, call when you’re on the way to the store, and get the product delivered to your car when you arrive.
-    use a scanner instead of a shopping cart to select your items in store and get the products delivered to your home.

IKEA and Wegmans not only allow you to create shopping lists online but they produce itemized print-outs indicating where you can find the items in store.  IKEA also informs you whether or not the product is in-stock at your local store.

No doubt, these tools and processes not only make it easier for customers to shop; but they also make it easier for them to buy more.  So facilitating cross-channel shopping is a win-win for the companies and their customers.

6.    strong organizational culture and values
Almost all of the companies I researched have strong organizational cultures and values. And these are manifested in a superior customer experience.

Wegmans and The Container Store are renown for how well they treat their employees.  No wonder their employees seem so happy and are so helpful!  IKEA’s earth-friendly business practices and commitment to product affordability make their products unique.  The value Uncommon Goods places on social responsibility is a primary reason why people shop the brand.

As such, these companies are the ultimate examples of what a brand is – that is, a brand is a bundle of values and attributes which define:

• the value delivered to customers
• the unique way of doing business with all stakeholders.

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Ben McConnell, one of the most influential online marketers, spoke with me about employees as brand evangelists and other developments in today’s participatory culture.

Ben is the co-author of the fun and insightful Church of the Customer blog, which he writes with Jackie Huba.  With more than 121,000 daily readers, their blog is ranked as one of the most popular business blogs in the world and was recently named by MENG as one of Top 20 Marketing Blogs That Marketing Executives Read.

Ben is also author of two books, Citizen Marketers: When People are the Message and Creating Customer Evangelists: How Loyal Customers Become a Volunteer Sales Force.  He is also principal of management consulting firm Ant’s Eye View.

Because Ben has spent so much time thinking and writing about customers as brand evangelists, I wanted to get his take on employees as brand evangelists. He also shared insights on:

• the virtuous cycle of listening, applying, and measuring, for companies which want to foster employee and customer evangelism
• the benefits of companies which humanize themselves (vs. use corporate speak)
• how employees can encourage their companies to be more transparent

Lots of good stuff!  You can contact Ben at ben ::*at*:: antseyeview.com. Enjoy!

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Nike recently released their “Corporate Responsibility Report FY07-09” and I was so impressed by it, I just had to share my thoughts about it.

Many of you know how big of a Nike fan I am, so it’s probably not surprising that the report resonated so strongly with me.  But actually, I don’t think my positive brand bias has much to do with my reaction to the report.  After all, I take a very skeptical stance when it comes to corporate social responsibility because many companies’ CSR efforts lack integrity the way their brand efforts do – they emphasize the saying vs. the doing.

Clearly Nike is giving CSR more than lip service.  Although the report itself is an impactful document (it’s a well-designed, well-written 176-page piece), it’s what it relays that is so impressive.   Here are 3 remarkable things Nike is doing:

1. Connecting vision and execution – Nike has a compelling vision for their CSR efforts – “to bring people, planet, and profits into balance for lasting success.”  It’s crisp, memorable, and inspiring.

And while many other corporations have similarly lofty aspirations, Nike’s vision is clearly only the beginning for them.  They have crafted specific strategies to fulfill the vision, specific goals for each strategy, and specific plans for each goal. This planning infrastructure increases the likelihood of actually achieving what they dream.

Furthermore the tactics they’ve undertaken demonstrate they’re breaking down their plans into digestible chunks and incremental steps.  Sometimes even small-sounding changes – like using a single shoe lace woven between parts of a shoe to eliminate the need for adhesives and allow for easier disassembly – has moved them one step closer to their vision.  It’s clear they understand the Thomas Edison adage “vision without execution is hallucination.”

2. Seeing it a business issue – CSR at Nike isn’t about being politically correct or improving brand perceptions.  Yes, those may be outcomes but Nike is doing this because it matters to their business.

Nike explains, “The cost of competition for resources will increase as [natural] resources become increasingly scarce.  Coupled with emerging trends – such as customization, a push to be closer to multiple markets and shifting labor markets – we see a new opportunity to create business growth for the future.”

This business orientation is evidenced in that they are pursuing new business models, not simply new programs.  The report repeatedly states that “sustainability is a route to future profitability” – and explains why they believe that.  They tie their CSR results to business performance (It’s remarkable that the first pages of the report include a Business Overview. )

3. Leveraging core competencies – Many companies seem to struggle to implement impactful CSR because it requires them to adopt new skills and perspectives that are counter-intuitive to their m.o.

A fast food burger chain which usually runs ads that exploit women suddenly adopts breast cancer as their CSR cause; an investment bank which caters to high net worth individuals trying to connect with local communities through food drives and homeless shelter donations – these efforts are doomed to fail because they don’t make sense to the company’s customers and don’t leverage the strengths of their stakeholders.

Nike’s CSR work, on the other hand, involves what Nike does best – design, innovation, and brand-building.  They’ve attacked the problems of resource scarcity, workforce abuse, and social injustice with the power and prowess that comes from these core competencies and thus have been able to make real progress.

solid business principles

Beyond these smart approaches, Nike’s CSR report outlines how they’re using the business principles that characterize any effective corporate undertaking:

• proactive stance – Although Nike may have started down this road reacting to criticisms about labor conditions in the company’s supply chain, they’re now taking a proactive approach.  The report declares, “Waiting means we risk facing a forced requirement to shift on someone else’s timeline. For us, the choice is clear. We are always on the offense.”
• address root causes – Similarly, Nike’s first steps in addressing labor conditions were in monitoring and policing, but their approach has evolved to diagnose and solve the root causes behind the problems they experience.  They’re focusing on training factories in Human Resource Management so that the factories implement environmental, health, and safety practices because they’re valued, not because they’re required.
• organizational alignment – They’ve increased the traction of their CSR efforts by reorganizing the functions responsible for driving them — and integrating “dedicated sustainability specialists” into operational parts of the organization such as retail, logistics, and information technology.
• political insight – Pushing for legislation and cooperation through advocacy groups and world stages demonstrates Nike’s savvy.  Indeed, everything is political.
• collaboration – Nike acknowledges that they will be able to affect real change only by working with others, so they’ve partnered with other companies to improve conditions in their shared supply chain through the International Labour Organization’s Better Work program, and to build GreenXchange, a digital platform that enables companies to promote sustainability innovations, for example.

Mark Parker, Nike’s President and CEO, provides the best summary of the company’s CSR efforts with a short-list of “lessons learned”:

Transparency is an asset, not a risk.

Collaboration enables systemic change.

Every challenge and risk is an opportunity.

Design allows you to prototype the future, rather than retrofit the past.

To make real change, you have to be a catalyst.

While I’ll let other people provide a reality check on whether the information in Nike’s report is fair and accurate, I’ll tell you why I’d be willing to bet it is.

First, it relays failures as well as successes. For example, Nike admits that one of their strategies has been derailed, and they concede they haven’t made as much progress as they would like in some areas.  Sure, there’s a positive spin to the entire report, but how many other companies are willing to publish and widely promote a document that outlines that they missed their targets?

Secondly, Nike employees attest to the success the company has achieved. The report includes findings from an employee survey which their full- and part-time employees voluntarily completed.  78% of employees agree with the statement, “I am satisfied with the actions my company is taking to be socially responsible,” and 74% with the statement, “I am satisfied that my company is responding appropriately to address the impact of our business activities on the environment.”

A company’s employees are in a great position to evaluate the veracity of corporate claims.  They know first-hand whether or not if the company is doing what it says it is.  If they’re satisfied, it gives me reason to be as well.

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I’m working with a client to develop a new brand platform and thought I’d share one of the tools I used in my engagement – Brand Obituaries.

the background
The client lacks a clear brand identity and their brand seems “forgettable.”  The problem is not that they don’t have good products – it’s that they no longer know what they stand for, and so neither do consumers.

The first step in my engagement was a Discovery — a diagnostic evaluation to assess the current performance of and future opportunities for the brand.   As a matter of course, I conducted stakeholder interviews to learn (among other things) individual perceptions and beliefs about what the brand currently stands for and aspirations of what they want it to stand for.

Although this process was helpful, I found people were more likely to define the brand by what it isn’t, as opposed to what it is, or could be.  As such, I wanted to generate more perspectives about the potential identity for the brand.

the objective
I decided I needed to do something in the first project team worksession to spark a dialogue about the brand’s “reason for being” – generating rich discussion and revealing points of consensus and disagreement – which I could use as inputs to our work on crafting a new brand platform.

I often use projective techniques in consumer qualitative research in order to uncover underlying attitudes and beliefs.  They also help less-verbal people articulate their ideas.  I decided to use such a tool with the project team.

the process
Prior to the worksession, I asked the participants to complete the assignment described in “the tool” section below.

During the worksession, I divided the group into small groups and asked them to share their completed assignments with each other — and then to incorporate the best of each into a composite to share with the large group.

the tool
People were asked to write a Brand Obituary:

Think about the brand as a person – not necessarily the type of customer that shops at the brand, but rather the type of person the brand would be if it came to life.

Also think about the brand today when it’s at its best – not some idealized future – and think about it as a whole – all that the brand entails.

Pretend that upon waking today, you learn that the person “the brand” has passed away.  As a reporter for the local newspaper, your job is to write an obituary for the brand as if it were an actual person who has died.  Please jot/type your thoughts in the space provided below.

In doing so, think about describing the salient points of the brand’s life, as well what is different now that the brand is gone.

Some of the type of things you should include are:

• the cause of death – given how the brand is “living” today, what might be the reason he/she would die?  Was his/her death unexpected?  Did anyone (competitors or trends) contribute to his/her demise?

• who/what the brand left behind – who will mourn or miss the brand – and why?

• what was the brand’s biggest accomplishment in life? What will he/she be remembered for?

• what lessons can be learned from the brand’s life? – and from his/her death?

• who will take the brand’s place now that the brand is gone?

the outcome

This exercise was a real success on several different fronts:

1.  Participation in the assignment – Given that the project team is comprised mostly of the company’s executive team, including the CEO, CFO, and head merchant, I wasn’t sure how much cooperation I would get with a “homework” assignment.   But I was pleasantly surprised that 12 out of the 14 participants completed the assignment and it was clear many of them had spent a lot of time on it.

2.  Tone – I was also a little concerned that I was asking people to think about something quite unpleasant – the brand’s death.  I even included a note on the assignment to offset any potential negativity:

“Please note this is intended to be a fun exercise, to get you thinking out of the box.  Although the approach seems to come from a negative place, the results will be quite positive!”

This turned out to be a non-issue.  People did indeed have fun with the exercise — some of the obituaries were quite creatively written and the small groups had animated discussions, sometimes punctuated with laughter.

3.  Participation in the discussion — The exercise seemed to break the ice and get people really talking.  After engaging with each other over the obituaries, the participants seemed more willing to speak up and speak openly.  As one person explained to me in a follow-up note, “Exercises outside of our normal routine can and should serve as important learning experiences that are fun.”

4.    Group buy-in — Some of the issues revealed by the obituaries were the same as those that I had presented as having learned from my stakeholder interviews – but they seemed much more powerful and persuasive coming from the participants.   Actually I think the exercise gave my assessment and recommendations more credibility because many of my points were reinforced by the obituary outcomes.

5.    Rich insights – Above all else, the tool accomplished its objectives.  From the reactions in the small and large group discussions, it was obvious that the obituaries revealed thoughts that people had not shared with others before.  People were surprised to learn what others really thought about the brand – and in some cases, I suspect, they aren’t aware of all they had thought or communicated themselves.

I definitely have rich fodder from which to craft a “strawman” brand identity for our next worksession!

Let me know if you’re interested in learning more about this tool or other approaches I use in my Discovery process.

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Last week I had the pleasure of hearing Seth Godin speak at a LinkedOC event.  He was promoting his latest book, Linchpin, Are You Indispensible?

The talk was classic Seth – full of memorable quotes and entertaining images.  Explaining that linchpins are a new class of passionate people who make themselves indispensible, Seth was more inspirational than substantive.  But his comments must have resonated with folks who have been beaten down and discouraged by the recession and the slow recovery — the audience gave him a standing ovation.

Here are my notes:

Andy Beal, an internet marketing consultant, award-winning blogger, professional speaker, and co-author of the critically-acclaimed book Radically Transparent: Monitoring & Managing Reputations Online, was kind enough to share a few moments with me earlier this week. 

Our talk covers topics like:

• how the social web is changing search
• the difference between brand and online reputation management
• noteworthy points about marketers and this year’s Super Bowl

We also discuss a cool company Andy founded, Trackur.  Trackur is an online reputation monitoring service that tracks what is said about you on the internet. Trackur scans hundreds of millions of web pages–including news, blogs, video, images, and forums–and lets you know if it discovers anything that matches the keywords you’ve indicated.  Fortune 500 companies, as well as small businesses, agencies, PR firms, etc. currently use Trackur as their “reputation guardian” and I think we’ll see even more uses and applications of the service going forward.  Check it out here.

You can reach Andy through his website:  www.andybeal.com .

I enjoyed talking shop with Andy and hope you enjoy listening in our conversation in the podcast below.

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If you’ve been in the business long enough, you come to understand there are some basic rules to follow when running an ad on the Super Bowl.  Humor works best.  Use animals or big-breasted women – or both.  Wow people with extraordinary settings and production values.

Many of the advertisers on last night’s big game followed the Super Bowl advertising playbook to a tee (view all of the spots here).  And, yet, they violated some fundamental rules of advertising in general.

know thy customer

Last night there were at least three spots (I lost count after awhile) that tried to tap a certain manly spirit but failed.

Dockers called on all men to “Wear the Pants” and rebel against the growing movement of proud, but pants-less men.  In Dove’s spot for its Men+Care line, men were bolstered with the upbeat charge: “You can take on anything, of course you can — becaaaauuuse you’re a man!” The ad implied to men that although you previously felt inadequate or overwhelmed by others’ expectations, you can now “be comfortable in your own skin.” Chrysler’s manthem threw subtlety out the window with its defiant declarations of “I will drive the car I want to drive” and “man’s last stand.”

In each case, the message came through loud and clear:  Men have been oppressed and suppressed for too long.  Men, it’s time to stand up, take a stand, stand up for your rights, stand tall…in other words, be a Man!

Problem is, there is no problem.  Or at least, there’s not a problem men are willing to admit.

Such calls to arms fell flat with men because the consumer insight upon which they’re founded is inaccurate.

The movement in American culture of recent years toward Alpha Females, more matriarchal families, and Girl Power gave rise to the “I am woman, hear me roar” advertising anthems.  Ads which have resonated with women demonstrated that marketers understood their female targets and had something relevant to offer them.  Spots like Nike’s “I Feel Pretty” featuring Maria Sharapova proving that’s she’s more than a pretty face, and ESPN’s “Running Away” in which a woman goes running and leaves the burdens of her life in the dust, were inspired by years of women actually being oppressed and suppressed.

Men are in a different place.  They haven’t spent years trying to shed stereotypes and live up to impossible expectations.  They don’t feel misunderstood and misrepresented by advertisers.  There’s no widespread pent-up disappointment or resentment.  Perhaps there should be – and maybe there is, but it’s hidden.  And so rallying-cry ads don’t resonate with them.

Men don’t need to be inspired to embrace who they are.  In fact, I suspect men found such suggestions embarrassing, if not offensive.  They don’t need ads to tell them what to do – they’re men, after all.

These ads demonstrate that their creators don’t really understand their target. Instead of finding a message that resonates with men in a socially acceptable way, they simply took a formula that had previously worked on women and applied it to their male target.  Ironic, don’t you think?

know thyself

Second to knowing your customer, knowing yourself is the most critical rule for advertisers. A few of Hyundai’s spots make this point.

In one ad, beauty shots of a car getting a paint job and a voiceover talking about classical music sonatas are followed by the title card, “Better paint quality than Mercedes CLS550.”  Another spot suggests that Hyundai is the new definition of luxury.

With both of these ads, Hyundai is trying to position itself as a luxury brand — but it’s just not credible.  Comparisons to Mercedes and caviar are too far-fetched.  Given that the Sonata’s highest list price is still under $30K, it isn’t a luxury car.  Hyundai may be a very fine automotive brand, but it’s not a luxury one. It shouldn’t try to be something it’s not.

Instead it should embrace what it is – and right now, that is a superior choice to Toyota.  With all of Toyota’s recall troubles, this is Hyundai’s moment to shine.  And shine it did in its Body Pass spot.

In this ad, a Sonata is shown moving through “one of the most technologically advanced factories in the world” — but instead of machines and conveyor belts, Hyundai employees are shown passing the car above their heads like a rock star at a concert.   The spot closes with the title, “Assembled by 3,300 quality experts.”  This spot used a strong, visually-interesting way to make a credible and compelling point about the brand – it’s high quality.

I’m sure the spot was conceived and shot before Toyota’s troubles arose, but it is a brilliant execution – and, most importantly, one that is true to the Hyundai brand.

unsavory associations

The third fundamental rule broken by some of last nights’ spots relates to subliminal messaging.  Effective marketers use the power of suggestion in advertising to create associations to exist in people’s subconscious.  One might argue whether or not sexually-shaped ice-cubes and flashing images are used (and effective), but every advertising person knows to employ subtle tactics to create associations — like choosing to shoot an ad in an upscale setting in order to evoke a more premium image.

While these approaches are usually intended to create positive associations for the brand, occasionally unintended negative ones are made.  For this reason last year I criticized Cheetos for using pigeons in its Super Bowl ad – this year I have the same beef with Denny’s use of chickens.

Denny’s two spots featured lots of screaming chickens, panicked over the amount eggs they’d have to produce for the chain’s Free Grand Slam breakfast offer.  However, no one wants to think about live chickens when they think about eating eggs.  That’s why you don’t see cows in burger chain campaigns or pigs in bacon ads.

Denny’s not only made the association between their offer and the chickens their diners’ eggs will come from – they made it the core idea of their spots.  Most people might not have been turned off by the association when the ad ran, but the message was so powerful, some will likely experience a subconscious negative feeling if they recall the ad when they sit down at the restaurant.

Fortunately for Denny’s, their offer is so compelling, most people will ignore the cognitive dissonance.  But that begs the question – the offer is so compelling, why let a drove of chickens spoil it?!

Doritos is also an offender.  I don’t know which is worse — the thought of Doritos as dog food (as depicted in the dog collar spot) or the image of the gross gym guy spitting out a Dorito in the Dorito ninja ad.  Both have created negative associations in my mind that I’m not likely to forget soon.

Marketers should know better – and be more careful.

Just as winning in football requires mastering the fundamentals, winning in Super Bowl ads begins with adherence to simple, generally-accepted rules for effective advertising.

P.S. Most Super Bowl ad critiques are a matter of personal taste.  I’m hoping the above comments reflect a little less subjectivity and a little more critical thinking about advertising in general.  Having said that, I do want to give a shout-out to two spots which stood out to me simply because I liked them:

• NFL – the drama created by the super slo-mo of the tremendous play by Reggie Bush followed by the emotion captured in the multiple shots of fans made this spot captivating.  It stirred my passion for football even though I’m not a really big follower of the sport.
• Google – the Googly simplicity of this ad drew me in and held my attention.  Beyond that, it was such a great product demo:  it didn’t “tell;” it “showed” – the product wasn’t integrated into the story; it was the story.

I’m eager to hear your take on the spots.  Comment away!

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Ever since the phrase “you manage what you measure” made its way into the dialogue of corporate America, metrics have played an increasingly important role in the management of businesses.  No one can argue the value of timely, detailed, and accurate measures of performance as assessments of effectiveness and guides for decision-making.  Yet, which metrics are best remains highly debatable.

Lately I’ve been troubled by two metrics.  I’d like to outline my concerns and then hear your feedback, as I’m sure not everyone will agree with them.

First, there’s ROI.  While return-on-investment is a legitimate and helpful metric for evaluating the efficiency of an investment in finance and economics, I’m concerned about it as a method for measuring the effectiveness of many business moves.

I see ROI as a tool for use in the capital budgeting process – leaders must make projections of future rates of return of different projects in order to select which projects to pursue.  It also has value when evaluating marketing outcomes at a high level, comparing, for example, two different product launches by calculating the revenue that each new product generated divided by its respective marketing expenses.

However, I question whether ROI is the best way to measure discrete tactical activities.  Christine Crandell, EVP and CMO of Egenera, explains my concern well in a piece published by CMO.com:

“The problem with ROI is that it forces a myopic view on short-term objectives while disregarding the fact that it is very rare for any single marketing activity to be directly responsible for new net revenue.  The focus on ROI fuels a never-ending debate about spending levels for brand-building activities while disregarding the fact that customers typically buy only after being repeatedly touched by a series of separate and discrete marketing activities.” (emphasis mine)

She points to the current debate about the ROI of social media to show how such a focus can be so misguided. She also suggests an alternative:

“…Replace ROI with benchmarks.  Benchmark marketing’s performance against itself quarter over quarter and year over year.  Benchmark against comparable competitors.   Benchmark the number of leads passed to sales that closed, the average revenue per lead, the percentage of the forecast generated by marketing, the percentage of customers actively engaged in advocacy programs, or the number of lead referrals from industry analysts.  And so on.” (emphasis mine)

This approach makes sense to me, as it focuses metrics on specific measures that can be compared apples-to-apples. And rather than simply offering a referendum on an outcome that happened in the past, it provides more direction for the planning of future strategies and tactics.

ROI also isn’t the right metric for measuring much of the work that brand-building practitioners like myself do. Even the most bottom-line oriented business person would be hard pressed to calculate the ROI of identifying the optimal competitive positioning or implementing a customer experience strategy to increase the consistency of value delivery.  Trying to attach a sales or profit result to changes that have such foundational and broad-sweeping effects would be futile at best, misleading at worst.

That’s not to say that measuring the impact of such initiatives is unimportant.  An evaluation of the value created by them is more fitting.  Last year, I wrote a series on brand value creation which outlines the different outcomes produced by a strong brand, including price premium, business process efficiency, and stakeholder engagement. It’s measurements like these that would be a more accurate and direct reflection of brand-building effectiveness.

The other metric that has me concerned is comp store sales.  Comp store sales, which indicates the growth or decline of sales of stores that have been open for a year or more compared to the same period the year before, is the primary means of reporting retail results.  It’s an important measurement of operational performance because it distinguishes between revenue growth that comes from new stores and growth from improved operations at existing outlets.

Problems arise though because a strong comp store sales result this period may reflect poor performance last period, not necessarily good performance in this one.  No doubt, many retailers’ comp stores sales are going to start looking good later this year as we start rolling over the depths of last year’s recession.

Furthermore, longer quarters and holidays falling in different quarters can have a significant impact on comp store sales.  And higher comp store sales can often be a result of price increases, not unit sales or traffic increases.  That’s why I cringe when I see people placing too much emphasis on monthly or quarterly comp store sales, as they did this past holiday season when repeated reports of increases were released.

Perhaps benchmarks make sense here as well.  The focus on comp store sales seems more appropriate if we use the metric to benchmark one company’s results against its primary competitors and against the industry average.  Instead of reporting comp stores sales as a percentage of growth or loss, perhaps it should be reported as a score relative to an index.

Also looking at trends vs. absolutes is more revealing.  If a company has been experiencing a steady increase in comp store sales over multiple quarters and years, it’s clear that operational improvements — not flukes or fads — are driving the results.  Wide variations from month to month or quarter to quarter, however, indicate a much less stable business.  So perhaps tracking deviations from a mean expected increase would be a meaningful metric.

I don’t mean to make measuring performance more complicated – it just seems the over-reliance on one number, whether it’s ROI or comp store sales, can be dangerous.  And in the end, the point of a metric is not the number itself.  Rather, a good metric is a tool by which future decisions are guided.

So to the adage “you manage what you measure,” I would suggest the following corollary be added: “you manage well what you measure well.”

I’m eager to hear your thoughts on this post. Comments are open.

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Later today I will be presenting the new strategic brand platform to the Board of Directors for an organization I’ve been working with.  I thought I’d take this opportunity to share my approach to brand strategy.

Why do you need a brand strategy?

I believe a brand is a driver and compass for the organization – it focus and aligns all decision-making and it guides what we do/don’t do and what we say/don’t say.  Having a clearly articulated brand strategy ensures everyone who works on our brand shares one clear, consistent, common understanding of what our brand stands for and how it competes.  And this, in turn, helps them align their behaviors and decision-making with the brand so that it is delivered through every touchpoint with the outside world.

Simply put, if we are clear about our brand, so will our customers be.

The brand strategy should be clearly articulated and written down.  Whether your organization has 5 employees or 500,000 – whether you’re just starting the business or it’s been around for decades — it’s dangerous to assume everyone knows what your brand platform is or to rely only on informal means for sharing it.  Particularly in these times of so much change, it’s easy for efforts to become unfocused or focused on the wrong things.  Your brand strategy should be codified.

Also, with so much buzz about customer co-creation and the power of word of mouth vs. traditional one-way brand communication, some pundits have proffered, “Your brand is whatever your customers say it is.”  This would suggest that there is little value in defining and articulating your brand strategy – I completely disagree.

An organization must know and make clear what it wants its brand to stand for and how it wants it to be positioned.  There is definitely a place for collaboration and integration with customers on how the brand manifests itself and how it is expressed (see 2 great presentations 1, 2 on this topic from German agency nouve, but I believe a brand strategy is as valuable a tool for business leaders today as it ever has been – if not more.

What is a brand strategy?

A strong brand strategy is really comprised of a complete strategic platform:

• brand identity – what your brand stands for – the values and attributes that define your brand
• competitive brand positioning – how your brand compares to existing options – this includes your target customers, the frame of reference in which they consider your brand, and the unique benefit or value you provide to them

An example I came across years ago is Campbell’s.

The two parts of the platform are integrated and interdependent. The brand identity explains who/what the brand is; the competitive brand positioning explains how the brand does what it does.  The brand identity tends to be more timeless, serving as the constant foundation of the brand; while the competitive brand positioning can change as the competitive context and target audiences change.

Your brand understanding is incomplete if you only have one part.  Without a brand identity, your company lack beliefs and principles to guide its market activity. You define yourself more by your context and less by your organization’s strategic intent.  Particularly in categories in which the products have become commoditized (fast food, for example) or in which the distinctions between competitors is difficult to ascertain (healthcare), the who and the what of the brand is the basis for most of a brand’s differentiation.

Without a brand positioning, the business orientation of the brand platform is missing. In isolation, a brand identity can seem only conceptual.  You need a brand positioning to reference who you are selling to, what your business scope is, and what you do to create value for your customers.  If the brand is defined separately from the business strategy, often the two aren’t aligned — and so when conflicts arise, the brand takes a back seat to the business.

Together the brand identity and competitive brand positioning function symbiotically – complementing and supporting each other.

A strategic brand platform is intended to provide richness and depth, not complexity.  Some of the best brands can be summarized in a single word or idea (Southwest Airlines = fun; Disney = family magic).  But in order to fulfill its potential as a business driver, leaders must expound on the brand and dimensionalize it into a full platform.

There are many frameworks that can be used to communicate the brand identity and competitive brand positioning.  Building blocks, circles/wheels, four-boxes, etc. — each is relevant to a different type of brand.  Storytelling, images, and videos are often helpful approaches to expressing a brand strategy.

What makes a brand strategy good?

The strength and integrity of a brand platform can be judged by several criteria.

1. Is it meaningful? – is it relevant and compelling to our target customers?  Some brands create new desires; others simply meet existing demand – either way, people must value what the brand stands for and delivers.
2. Is it believable? – does it over-promise or set up false expectations, or does it pass muster among even the most skeptical of customers?
3. Is it differentiating? – does it give us a distinct advantage over competitors?  The advantage must be noticeable, understood, and appreciated by your target customers.
4. Is it feasible? – does it accurately reflect our organization’s capabilities?  A brand platform can be aspirational but it must be possible.
5. Is it sustainable? – does it enable us to provide value and compete now and in the future?  The brand should be an enduring proposition which drives continuous improvement and innovation, not a fad-dependent or short-lived idea.

How is a brand strategy used?

As I explained earlier, the brand drives everything the organization does.  So it guides and influences R&D, product/service development, manufacturing, operations, sales, distribution, employee recruitment/training/development, stakeholder engagement, strategic planning – oh, and also marketing.

In the case of the organization I’m meeting with today, the new brand platform is of particular interest to the staff, who see it being particularly helpful in their prospective employee interviewing/screening process (“The brand personality explains the exact kind of employee we’re looking for,” said one manager).

Also it’s serving as a guide for the website re-design they’re undertaking, ensuring that the experience of using the website is aligned with the brand attributes we’ve developed.
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I hope this information has been helpful.  I haven’t done a post like this in awhile — I’ve been doing more observation and analysis lately.  So if you’d like to see more posts like these, please let me know.  Also if you or someone you know wants to know more about engaging me to develop a strategic brand platform, here’s an overview of my Brand Platform service offering.

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Companies need to make money – I get it.  And as a capitalist at heart, I generally subscribe to the business practice of charging what the market will bear.

But as I’ve learned about the recent pricing decisions of two high-profile institutions of American culture – Starbucks and The New York Times – I’ve wondered if pricing models based on traditional understandings of profit margins and price elasticity can backfire.  That is, charging higher prices for certain offerings may make sense on paper – but they actually incentivize the wrong behaviors and reward the wrong customers. Here’s what I’m thinking:

Starbucks rolled out a new pricing plan last week, boosting the cost of some menu items by as much as 33% in some markets, according to the New York Post.  The price of an extra shot of espresso jumped from 55¢ to 70¢; shots of syrup and soy milk also cost more now.  However, customers with simple orders like plain coffee were rewarded with a price decrease of around 10¢.

On the one hand, I can see the logic behind this decision.  Given that the coffee drink passionistas who order their venti soy caramel lattes are already paying around $5 for their drug, er, I mean drink of choice, perhaps they won’t notice or care about paying an additional 50¢.  These kinds of drinks are already perceived as premium products, the logic might continue, so if you’re going to raise prices on anything, you should do it on these products.

The extra shots and special orders also require extra labor, something any margin-conscious business wants to make up for with higher prices.  Plus, you want to protect market share from the competitive encroachments of Dunkin’ Donuts and McDonald’s. Offering plain coffee at lower prices seems important, since many plain-joe customers are more price-sensitive and it’s easier to compare prices on a simple cup of coffee.

But here’s my question – does Starbucks want people to buy plain cups of coffee or does it want them to buy fancy souped-up coffee creations? I would think the latter – after all, those specialty coffees are unique product offerings which differentiate the brand and add to the brand cachet.  I’m also guessing that folks who buy the specialty products are more likely to linger in Starbucks’ stores and partake in the “romance” and “theater” of the coffee experience which CEO Howard Schultz has been trying to reinvigorate.

Charging disproportionately more for higher priced products also doesn’t seem to make sense in the current post-recession period.  I would think you’d want to encourage people to trade-up, not down – and make it easier for people to get back in the habit of buying premium products.

That’s why I’m thinking Starbucks’ pricing move may make sense in spreadsheets but, viewed through the lens of customer behavior, it may end up hurting the chain’s profitability more than help it.

The New York Times’ recent pricing announcement also raised questions for me.  The venerable newspaper announced that starting next year, people will be allowed to view a certain number of articles free each month on NYTimes.com — but to read more, readers will be charged a flat fee for unlimited access.  Subscribers to the print newspaper will receive full access to the site without any additional charge.

Again, this seems a logical solution to the problem that all publishers are struggling with.  Advertising revenue is no longer sufficient to sustain the business and as James McQuivey, media analyst at Forrester Research explains, “You can’t continue to be The New York Times unless you find” a new source of revenue.

Plus it’s clear NYTimes.com provides a valuable service and the capitalist in me believes people should pay for things of value.  So I’m all for levying a (reasonable) price for the site’s content.

What I question, though, is the practice of charging more for the exact behavior the Times want to encourage.  Reporting on the change, NY Times writer Richard Pérez-Peña says, company executives “said they wanted to create a system that would have little effect on the millions of occasional visitors to the site, while trying to cash in on the loyalty of more devoted readers.” (emphasis mine)

Said another way, the Times wants to assuage infrequent users while gouging loyal readers.  This doesn’t make sense if the ultimate goal is to increase readership.

Yes, most business models incorporate some sort of free offering and do so with the hopes of upgrading folks to a paid service.  We’re all familiar with the barebones software which is offered for free, while its full-featured counterpart is available for a price.  This approach is a form of sampling.

But this is not what the Times will be offering.  It won’t be offering access to exclusive content, additional services, or any other value-added benefits for its fee.  It’s simply charging more for more usage.  Won’t this discourage additional usage?  Particularly when there are so many other sources for content?

It might seem the Times is trying to get more print subscribers by waiving the fee for those customers.  But does it really want more print subscribers?  Perhaps having print subscriptions was the way the company used to make its money, but given the costs of distributing printed vs. digital content, I can’t imagine its future profitability is in print.

Why not, instead, institute a pricing strategy that encourages digital subscribers?  Make a digital subscription worth something and charge for it.

Am I wrong?  It seems price is not simply a tactic for making margin.  It’s a powerful tool for influencing customer behavior and impacting brand perceptions which ultimately have far more impact on profitability.

I’m really trying to get my head around both of these companies’ pricing moves, so I would appreciate hearing your perspectives.   Please comment (it’s free!)

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