5.182012

what’s your addiction?

brand-as-business bit:  A couple of sound bites connected for me recently.

In a recent Bloomberg BusinessWeek piece entitled, “Has CNN’s All-News Strategy Become Old News?,” Alex Sherman writes about the cable networks’ reliance on “the story” to drive its audiences, unlike other networks that balance breaking news with opinions and personalities.  Phil Grffin, president of MSNBC, observed:

“CNN is the place for breaking news.  Unfortunately you become totally dependent upon it.”

Then this week’s announcement about J.C. Penney’s disappointing first quarter results, CEO Ron Johnson, explained “Our No. 1 issue is traffic.” Acknowledging the transition to “Fair and Square” pricing was tougher and taking longer than they had estimated, WSJ/Market Watch’s Andria Cheng reported. Johnson said:

“Coupon is a drug…We got to learn to drive traffic in different ways.”

Both of these laments are commonplace among organizations that rely on a single lever to drive traffic – news in CNN’s case, deals in J.C. Penney’s.  For other companies it’s new products, advertising campaigns, sales incentives, or external factors like school schedules or holidays.

Such reliance is like an addiction, producing high highs (sharp sales spikes) and low lows (deep sales valleys.)  And like addictions, the consequences of such volatility are far reaching, wreaking havoc on supply chain and staffing, and trying shareholder patience.

A strong brand can offset dramatic swings by sustaining consistent purchase consideration levels.  Just look at Apple stores – consumers pack those houses day in and day out.  Certainly lines form and sales jump when a new product is released and stores are more crowded during holiday season, but the company isn’t dependent upon news or any other single lever to drive traffic.  Instead, the brand has formed such a rich bond with customers that they will make a visit just to soak in the brand experience. For companies like Apple, their brand is their drug – it’s one addiction that’s actually desirable (well, that and chocolate!)

, , , , , , ,