I’m working on two big and juicy brand repositioning projects.  While both involve quite significant departures from the companies’ current strategies and it’s still pretty early on in the projects, it’s likely one is going to be successful and the other, not, or at least less so. I thought the reason for the difference between the two would make for a good post.

Essentially both companies are suffering from poor sales performance and little reason to expect recoveries without making big changes.  For each brand we’ve identified new spaces in the competitive landscape which hold the potential to not only stabilize the businesses but also to unleash new growth.

But both companies have long heritages and have experienced successes in the past, so they suffer from organizational cultures which are somewhat resistant to change.  And both enjoy broad awareness and loyalty among core groups of customers who like the brands the way they are.

So, both are looking at taking on significant risks by repositioning – quite literally betting their businesses that it’s a smart move.

The difference is that one company is going to move forward and the other is only going to sort-of change.  That is, one company is assessing the risks and requirements of the repositioning and is choosing to do it, while the other is getting cold feet and will probably end up trying to straddle between its old and new positions, leaving itself in a kind of no-man’s brand-land.

On many levels, I understand the latter’s ambivalence.  Making such a dramatic change usually means being willing to lose a significant amount of business in the short-term with the expectation that you may potentially reap greater returns in the long run – a stance which investors and Boards tend not to reward.  It also requires considerable investment at a time when cutting costs and managing cash flows are the priority.

But when you recognize that doing the same thing quarter after quarter and expecting a different result is indeed the definition of insanity, not only does a new brand strategy make sense, it becomes imperative.  Plus the business may not be deteriorating so dramatically that it’s considered a burning platform which must be abandoned immediately, but the ultimate destiny of a slow steady decline is nonetheless the same.

So at some point, the company leadership must decide that taking on such a risk is the right thing to do and so they’re going to do it.  At that point they are in fact deciding to “do it anyway” and to “do it well.”

do it anyway

It’s likely that a decision to reposition will contradict learning from consumer research. That’s because getting consumer input on a brand repositioning is tricky – particularly if the brand is well-known and brand perceptions are generally neutral to positive.

If you use traditional concept testing methods, consumers are likely to reject the new brand.  It’s human nature to resist change – and people are hardwired to dislike something if it causes cognitive dissonance (the mental state that can result when new knowledge conflicts with existing knowledge.)

Repositioning is all about changing people’s minds. Changing the minds of current customers who know they brand and accept its current state is difficult.  The most frequent, loyal customers are the most resistant to change – but if they’re not generating enough sales and profits to keep the business growing, they probably shouldn’t be the priority. Changing the minds of folks who have rejected the brand usually depends on the execution of the concept (see my next point below – “do it well.”)

So, asking consumers about the appropriateness of a brand change is generally not helpful.  Instead of assessing brand fit of the new concept, evaluate its unbranded appeal – and then explore how the company might make the concept believable for its brand.

Armed with these insights, the company can determine whether or not the appeal of the concept is strong enough and whether or not they are willing and able to do what it takes to make the concept believable.  If the answers are yes, then they can move forward understanding the consumer risks, but “doing it anyway.”

do it well

Equally if not more important than the decision to proceed with the repositioning is the commitment to executing it fully.  That means, not simply changing the logo, image, and messaging, but driving the new brand strategy through everything the company does.   It must be willing to re-think everything and align its entire operations with the new direction.

It also means not doing it half-assed.  The company needs to decide — either execute the heck out of its current positioning and adjust its growth expectations accordingly OR reject it in favor of a new direction and pursue that with abandon.

I realize this sounds unrealistic and perhaps naïve – designating priorities and hedging bets are the stuff of business after all.  But in the case of brand strategy, trying to embody two positionings almost always results in a weaker competitive position.  And it’s usually a more expensive and more complex undertaking.  At a time when the company is already struggling, it just doesn’t make sense to pick a middle ground.

Certainly the repositioning must be tested – whether in prototypes or virtual reality or in live markets in a limited geography or designated segment or channel – and refined over time.  But once the new direction is set, the company needs to either pursue it or cut bait.

By neither embracing its core, limited niche nor shifting to a new, more broadly appealing identity, I fear my client will try to be all things to all people and end up being nothing to no one.   The company is likely to remain directionless and continue to struggle.

Believe me, I’m trying to prevent this from happening – I want them to succeed as much as they do – and I haven’t given up hope yet.  But at the very least, I thought I’d share this tale of two repositionings in the hopes we can all learn something from this.

related post:  a tale of two re-brands

Recently I met with the folks in Cisco’s brand group and was delighted to find a few simple brand tools sitting in the place where a person’s business cards are usually found.

The first tool is a brand platform “cheat sheet” in the form factor of an i.d. badge. The front spells out the Cisco “Brand Aspirations”:

I like the simplicity and digest-ability of this. A succinct sentence conveys the Brand Promise and Position. Three words comprise the Brand Personality and six comprise Brand Behaviors. The use of bulls-eye clearly communicates that the Brand Promise and Position are the core of the Brand. And the background image supports the written concepts well.

The back of the “cheat sheet” complements the front of it, by indicating how the Cisco brand communicates:

I like the Is/Is Not approach, as I think understanding what a brand is not is often more instructive than learning what it is – especially for a business like Cisco which is already so expansive and continues to evolve.

Moreover, this tool is clearly intended for employees to insert into their i.d. badge holders so they have it with them at all times. This tactic is not new but I found the simplicity of the content and design to be quite compelling — and if I were a Cisco employee, I think I would actually want to look at and use the tool.

The other tool seems like a recruiting piece, but it speaks volumes about the brand as well. It’s actually a series of business card-like cards – the front conveys a welcoming message:

On the back of each card is one of several images and quotes from a Cisco staffer:

Neither the messages, images, or quotes are remarkable on their own, but as a whole, they represent the humanity, diversity, and energy of the brand – things that are important to communicate to potential employees, and anyone who works on or with Cisco.  I’m not sure how these cards are intended to be used, but they make me think about Cisco differently despite not being a potential recruit.  And I find them more memorable than most corporate brochure-ware.

Some companies draw a distinction between their “customer brand” and their “employer brand” — I’ve never really bought into such a delineation because I think the value you deliver and the way you do business (your brand) should be the same for customers and employees.  Seeing these Cisco tools together reinforces my view — they facilitate understanding of the brand from multiple perspectives.

Finally, I like how both of these tools are available for anybody to take. The “cheat sheet” was sitting in a dispenser on the desk of one of the people I was meeting with, right next to her business cards. The recruiting cards were prominently displayed in a business card dispenser at the reception desk.

Instead of guarding their brand strategy like a piece of corporate i.p., Cisco makes it accessible and interesting. Instead of silo-ing off their recruiting efforts, they share a taste of the employment experience with everyone. Cisco, it seems, understands the value of engaging internal and external folks with their brand – after all, we’re all brand stakeholders in some way and every touchpoint is a brand touchpoint.

Yesterday I explained that I’m devoting my blog posts this week to a series on “5 Brands We Would Miss.”  The series, prompted by 24/7 Wall’s list of “Twelve Major Brands That Will Disappear,” is intended to explore what we would miss as a result of some of brands’ demise.  Today, it’s Budget.

24/7 Wall explains the problems Avis/Budget faces:  “As the travel industry continues to falter, problems at Avis/Budget are going to get worse…Avis/Budget will find it impossible to support the costs of maintaining two brands. The Budget brand will have to be eliminated.”

Some may argue that the Budget brand should have been eliminated when Avis’s owner Cendant first acquired it back in 2002 — but I will miss Budget as a consumer and as a brand strategist.

As a consumer, I have consistently received good, reliable customer experiences from Budget — particularly in comparison to its primary competitor, Dollar.  And I believe consumers have benefited from the healthy competition between Budget and Dollar.

As a brand strategist, I’ve found it interesting to observe the management of the two brands, Avis and Budget, by one company.  The company has tried to position Avis as a business travelers’ brand and Budget as the local market/leisure traveler brand.  Although the consolidation of back office functions must have created some efficiencies for the two brands, apparently other operational costs must not have been offset — after all, the selection of cars/trucks, services, locations, etc. all had to be different for the two brands.

But does this mean it is just too much to expect one (non-fast moving consumer goods) company to be able to support two brands with completely different positioning?  I suppose we won’t have the opportunity to find out if Budget is folded.

And that’s why I will miss it.  What do you think?  Are we really losing anything by the departure of the Budget brand?  Please let me know.  And look for tomorrow’s post on why we would miss Saturn.

There’s a healthy debate going on over at AdAge.com this week — a POV by Michael Fassnacht, Chief Customer Intelligence Officer at DRAFTFCB entitled “The Death of Consumer Segmentation?” has prompted a lot of comments.  While the traditional consumer segmentation vs. “self-segmentation” discussion is interesting, I found myself wanting to return to the basics of segmentation.  It seems that, before we debate the merits of any segmentation approach, we should revisit why segment at all.

Broadly speaking, segmentation is a tool intended to guide strategy — but which strategy?  Different segmentation approaches are appropriate for different strategies.

The most common strategy is brand positioning — that is, segmentation is used to help determine how you want people to think of your brand.  You need to determine a prevailing attitude about your category (or frame of reference) which is held by a group of customers that spend enough to make them an appealing target, and then position your brand to appeal to that target mindset.  As such, an attitudinal or mindset-based segmentation is the appropriate approach to use in brand positioning strategy.

It’s important to note, though, that such an approach is limiting when it comes to the development of other strategies.  Media planning relies on primarily on demographic/firmographic and media usage variables, so a segmentation based on those factors is what is needed for media strategy.  In the same vein, customer relationship management relies on primarily on purchase data, so a segmentation based on current purchase behaviors and projected lifetime value is appropriate for CRM strategy.  Segmentation by technology adoption (e.g., pioneers vs. early adopters vs. early majority, etc.) is a useful framework when planning product introductions and product development/life cycle strategies.  And so on, and so on.

So when it comes to segmentation, one size does not fit all.  As such, a debate of the merits of traditional consumer segmentation (that is, in Fassnacht’s words, “brand-controlled segmentation” — i.e., marketers decide which customers they want to engage with) should consider what the segmentation is used for.

Despite the emergence of new ways to engage consumers and the rapid rate of change in today’s business environment, most segmentation approaches still serve the valuable purposes outlined above.

Why do brands that have a strong point of differentiation not position themselves on it??  Quizno’s serves a case in point.

The sub sandwich chain has just launched a new campaign to promote its new line of Toasty Torpedos.

In the ads a raspy-voiced toaster asks the employee to “put it in me” (the sandwich, that is.)  The double entendre comes off as goofy, but the stupid joke is only a small part of why the campaign is completely off-target.

The bigger issue is that the ad doesn’t say what should be said about the brand — that is, toasting makes its subs taste better than Subway‘s.  I fully admit to being biased because I do indeed believe Quizno’s products are better than Subway’s, but don’t take my word for it.

Brand Tags, Noah Brier‘s nifty web site which catalogs the top-of-mind responses of people who have been  shown a brand’s logo, confirms that Quizno’s has a better and distinct positioning relative to its 3,000  lb. gorilla competitor.  The top 10 word associations with Quizno’s are:

• toasted
  toasty
  sandwich
  sub
  food
  sandwiches
  tasty
  yummy
  subs
  hot

Compare the list to Subway’s top 10 brand associations:

• delicious
  good
  yummy
  sandwich
  yuck
  diet
  bland
  shit
  tuna
  hungry

I’m baffled by Quizno’s decision not to leverage its strongest differentiator — “toasted.”  Many brands long for a clear, easy-to-understand reason-to-believe why their product or service is different/better than competitors’.  Especially in the commoditized price-oriented QSR industry, companies struggle against the pull of deals and promotions to develop a brand position that’s grounded in a sustainable competitive advantage.  Quizno’s has a powerful point of differentiation in “toasted” (Subway may offer toasting, but they’re not known for it — it doesn’t inform the brand’s position) — and yet, their brand communications don’t leverage it.

Sure the ad features a talking toaster and the new product line’s moniker includes the word “Toasted,” but that’s not enough — the core idea of the campaign should focus on it and its benefit (better taste, that is.)  Furthermore, it seems the chain has dropped its subline “mmm…TOASTY.”

This isn’t the first time the brand has gotten off track — remember the sponge monkeys campaign?  or the ads about the man raised by wolves?  Understandably the company’s ads must be bold enough to compensate for its huge share of voice deficit vs. Subway — TNS Media Intelligence estimates Subway’s 2008 ad spending at $369MM, while Quizno’s logged in at about a fourth of that at $90MM.

But it seems in its effort to breakthrough and be memorable, Quizno’s has allowed gimmicks and the pursuit of creativity to overshadow the key brand message.  Burger King has fallen into this trap from time to time.  That chain enjoys two strong brand differentiators, Have It Your Way and flamebroiling — both of which make their products taste better.  In the past when BK took its eye off the ball and moved away from promoting their differentiation, the chain’s performance suffered.  Today the brand enjoys enough brand equity to sustain their position even when their communications meander (for now).

Unfortunately Quizno’s is not in a position to wander.  The company is in the midst of a turnaround — after struggling with franchisee profitability and closing 300 restaurants last year, founder Rick Schaden has returned to the helm and is helping get the business back on track.  I hope the organization’s turnaround efforts will include a re-assessment of their brand position and advertising strategy.

With such great differentiation, I hope they don’t leave their brand half-baked — or half-toasted, as the case may be.

Martin Bishop, author of the blog Brand Mix, recently posted about some new research on brand loyalty.  An implication from the research findings is that you can steal brand loyalists from the competition by focusing on the similarities between your product and theirs; and if you want to keep your fans loyal, you should focus on how you are different.  (Thanks to Tom Fishburne for the cartoon!)

As you will note in my comments to Martin, his post reminded me of something I was taught a long time ago about brand positioning (I can’t remember where I heard this, so if you know the source, I’d love to be reminded.)  It went something like this:

• the first step in positioning a new brand is to explain how you’re the same as existing choices;
• then the second step is to explain how you’re different.

If I recall correctly, the thinking behind this instruction was that your first goal is simply to get people to consider your new brand.  By explaining how you are the same as existing choices, de facto you’re saying you belong in the same consideration set.

Then once you’ve gotten in that set, your goal becomes getting people to purchase your new brand.  By explaining how you are different/better than existing choices, you make a case for why someone should buy your brand.

This seems particularly relevant to the war between private label and package-goods brands that is currently being waged at stores around the world today.

With the recession providing a strong tailwind, newer private label brands have been entering the market quite successfully.  Private-label market shares grew 0.8 percentage points to 21.9% of volume and 0.7 points to 17.1% of dollars in all package-goods categories and retail channels last year including Walmart, according to Information Resources Inc. And they’re gaining more momentum — private-label grew only 0.1 point in the first quarter of 2008 but 1.3 points in the fourth quarter among households earning more than $100,000 annually.

Most private label brands have achieved this level of penetration with the first step of positioning — they’ve put themselves in the consideration set by explaining how similar they are to existing branded goods (I ran a brief post about this last fall).  Meanwhile, established branded goods have been doing the second step of postioning for quite awhile — their marketing is focused on the product attributes, feature sets, or even in some cases the emotional resonance which makes them different (and presumably worth paying more for than private label goods.)

But now we’re seeing some private label brands with such strong positions in the consideration set, they’ve moved on to the second step of positioning and are focused on promoting their differentiation.  Examples:  Trader Joe’s house brand is the facilitator of discovering (or at least easily sourcing) interesting tastes and new foods/ingredients; messaging for Target’s Choxie chocolate brand says it’s, “Chocolate with Moxie.”

Branded goods have started to fight back (I wrote another post about packaging efforts to do so.)  But now that “value” has become the prevailing mindset for most shoppers, branded goods may find themselves in a quandary.  Their positioning efforts to differentiate may actually become a hindrance if consumers automatically associate those differences with higher prices — or simply decide those differences are not that important.

It almost seems the established brands may need to go back to the first positioning step and explain why they belong in the “value” consideration set with the private labels.  This may unfortunately lead some brands to adopt a price-based approach, but hopefully others can figure out how to make a more compelling value argument.  What do you think?  I’d love to hear more thoughts on this.

P.S.  In a sidebar in Ad Age’s piece about private labels this week, it’s reported that some barnded goods are finding ways to ways to work with — rather than against — private-label products, with store displays that showcase their offerings side by side.  Kudos to General Mills and Kraft!