Branding Strategy Insider

How Brands Build Trust

Trust is the most critical component in building and maintaining a strong, emotionally driven and enduring brand. However, in a world of promotion-driven-marketing tactics, many brand owners forget that building trust is the only thing holding the relationship with the customer together.

Most marketers are in business to create demand and sell more stuff. They are rewarded on their skill and ability to help organizations sell. For most customers, selling is not a very trustworthy practice. Nobody likes to be sold, but people sure do love to buy. More than ever customers buy from brands they trust. At the beginning of any relationship, trust is the most difficult component to establish.

There are two kinds of people–those who begin a relationship with little trust which needs to be earned over time, and those who begin with trust freely given, but is forever taken away on the first sign of behavior deemed untrustworthy. Either way trust must be established or there will be no relationship.

Relationships with trusted brands are built and maintained in this same fashion.

People naturally will measure, with great care and consideration, how the brand is likely to behave in a given situation depending on the rewards for being trustworthy and the deterrents against untrustworthy behavior. When trust is established at its highest level between a brand and the customer, there is always an emotional “investment” made between the two parties.

This bond is based wholly on strong emotional connections as a result of the perceived shared values between the brand and the customer. It is never based on functional benefits or feature based ingredients. Trusted brands understand what customers really care about so completely that they become a badge of identification for the relationship. 

The components of trust in building enduring brand value.

Social Media Strategy For Today's CMO

As the one-time Chief Marketing Officer of a large global wealth management business with severe reputational issues during the 2007 financial crisis, I struggled mightily with how to engage with and use social media to help my brand.

Five years later, you’d think things would be better. But almost all of the CMO’s and Marketing leaders I talk with are still struggling with Social. Everyone knows it’s important, they know they need to engage with it, yet they are still trying to answer fundamental questions that are relevant to any Marketing activity:

1) How do I engage and use social media to benefit my brand and drive sales?

2) How do I measure social media and the impact it’s having on my brand—positive or otherwise?

These are challenging questions that almost all Marketers, no matter their sophistication, are struggling with. The question is, why?

Social Media as a Business Driver

In most Marketing activities, Marketers design marketing programs that they believe will increase basic Marketing measures like awareness, trial and consideration, and ultimately result in higher sales.

To do so, Marketers have created predictive tools that increase their confidence that these programs will ultimately work. Examples include:

• Copy testing to predict likely advertising success in building sales
• Purchase intent scores, which measure the likelihood of consumers buying your product
• Market mix modeling norms, which indicate how much sales $1 of investment will yield
• Etc.

A key issue with social marketing programs is that there are few of these measures, and even where they exist, they are highly suspect. Here’s why.

The Anti-laws Of Luxury Marketing #22

22  Do not implement group synergies

Implementing group synergies is one of the most obvious ways to improve the net financial result of a brand. But, as Ford discovered with Jaguar and GM with Saab, in luxury, it is the best way to destroy the dream of the brand. For some pennies saved, you lose your pricing power - one of the strongest points of a luxury strategy. This is well known in the luxury market - as proven by the number of luxury brands that have been almost eliminated by group synergies implementation -- where improving the net financial result is the ultimate goal.

Luxury brands face this threat each time one is acquired 
by an organization who does not understand luxury strategy. One example is Dell’s acquisition of Alienware in 2006. Founded in 1996 in Miami, Alienware was the success story of luxury gaming laptop and desktop computers. In 2005, Alienware had a net profit of $170 million. To improve on already strong profits, Dell decided to reduce production costs. This was counter to Alienware's business strategy which had built its success on using the best elements among all suppliers - whatever the cost. A strategy which earned the brand thousands of passionate and loyal customers. Discounts were never offered nor needed. Willing to implement ‘group synergies’, Dell cancelled all of the agreements with top-end suppliers, relocated production to Poland, created new distribution agreements and offered discounts on the corporate website. The result: Alienware remains a premium brand, but has lost its aura - and its pricing power. This is why luxury groups such as LVMH maintain the independence of their brands as much as they can.

Contributed to Branding Strategy Insider by: JN Kapferer, excerpted from his book, The Luxury Strategy with permission from Kogan Page publishing.

See all of the Anti-laws of Luxury Marketing here.

Sponsored By: The Brand Positioning Workshop

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The Brand Values Alignment Workshop

Leading brands are always differentiated by their shared values. If the values your brand represents are not aligned to the values of your target customer, no amount of marketing will move them to your brand.

Customers build an emotional connection with brands whose values align with their own. This alignment separates brands that lead and brands that follow. To help brands gain and maintain the advantage values alignment delivers, The Blake Project developed The Brand Values Alignment Workshop. 

Shared values form the basis for all relationships

The Brand Values Alignment Workshop helps you to determine the values that are authentic for your brand and mirror the values of its target customers. The workshop is preceded by customer research that identifies the values that are most important to your customers along with the values that are perceived to be appropriate for your brand and its product/service category.

In this one-day, research based, strategic workshop, we help you select the most powerful and authentic values for your brand to own. And then we help you articulate those values in a truly compelling way. And finally, we facilitate a high-energy ideation session in which you are able to generate many meaningful ways to demonstrate and reinforce those values at each point of customer contact.

Leading brands connect with people on a values level

One of the most powerful things a brand can do is align its values with its customer’s values. While brands can promise functional, emotional, experiential or self-expressive benefits, those whose values are aligned with their customers’ values are much more likely to achieve a deeper and longer lasting loyalty. This coupled with today's competitive environment makes brand values alignment a priority of every brand marketer.

Please email me for more about how The Brand Values Alignment Workshop can benefit your brand.

Brand Research: Emotions, Feelings And Behavior

If I ever needed proof that our emotional response to the world around us is quicker than our ability to think, I got it a couple of weeks ago. Anticipating that I was about to hear another pseudo-science sales pitch, I cut off the speaker with an ill-considered outburst. In retrospect, I suspect that I did them an injustice. But the episode does highlight the powerful role that emotions play in shaping our behavior.

The primary role of emotions is to dictate our response to the world around us. Based on our prior experience, the emotional “charge” either impels us toward or away from something. What was being said on this occasion triggered a negative anticipation for me, and I reacted without engaging my conscious brain first. But then my conscious brain caught up and shut down my ill-tempered rant. I could then reflect on why I had acted the way I did and take action to put things right.

At the time of the outburst I am not sure I was conscious of any particular emotion, but afterwards I interpreted the reaction as anger. And that led to me feeling guilty and defensive. I had behaved badly and felt the need to make amends.

Now let’s look at this event from the research viewpoint. Could we have predicted that I would react this way?

This blog proves that I am allergic to the suggestion that traditional research gets it wrong most of the time. If I was asked in advance, then I could have easily predicted my reaction to the speaker's statement (he was suggesting that people don’t know why they act the way they do). What I could not have predicted was the strength of my reaction or exactly when it would come to fruition; that depended on the specific circumstances and what was said. However, after the event I was able to easily reflect on why I behaved the way I did and how it made me feel.

Consumer Expectations: A New High

No doubt, when Maryland state delegate Emmett C. Burns, Jr., penned his letter to Baltimore Ravens owner Steve Biscotti demanding that linebacker Brendon Ayanbadejo be silenced about his support of marriage equality, presumably by threatening his job, Burns had no idea what sort of rebuttal he was inviting. It didn’t take long for him to find out.

Ten days later, Minnesota Vikings punter Chris Kluwe posted an open letter to Burns at Deadspin.com taking him to task for the views Burns had expressed in his letter to Biscotti. Kluwe already had a popular following for his blunt, acerbic, occasionally vulgar, frequently derisive tweeting, but his letter to Burns was over the top. The New York Times described it as a “profanity-laden rant,” which doesn’t even begin to describe it. It was helmet to helmet, and it took Burns right out of the game. Kluwe’s letter ignited a firestorm of support, and 48 hours after it was published Burns conceded he was wrong.

But Kluwe – who had a perfect score on his verbal SAT and turned down Harvard to play football at U.C.L.A. where he earned a double major in political science and history – was doing more than showing off his compositional dexterity with George Carlin’s seven dirty words. His letter was also, said The New York Times, an “insidiously thorough” and “multilayered, point-by-point decimation of Burns’s argument.” Kluwe didn’t just rant; he made a reasoned, logical argument, but in a ranting style that Kluwe was quoted as saying “comes from a storied history on the World of Warcraft forum boards.” In other words, Kluwe argued in the mode and vernacular of the most popular MMORPG of all-time, which is to say the rhetorical style of contemporary popular culture.

Stay with me as I build towards an important marketing point.

Kluwe’s sharp, vulgar tongue wasn’t deplored; it was celebrated, left and right. Rush Limbaugh said of Kluwe’s letter, “It is profane. It's funny; it's humorous. The guy's got a way with words.” St. Paul Pioneer Press columnist Bob Sansevere remarked, “[Kluwe] might be a better writer than he is a punter…I’ve never seen an athlete who can write like that.” Kluwe was not criticized for speaking with an uncivil tongue; rather, his utterly unfriendly, discourteous manner was praised. However abrasive, however brash, however crude, it was commended for a good turn of phrase.

Creating A Transcendent Brand

Being the owner of a strong enduring, financially valuable brand is what “branding” and brand management should be all about. When it comes down to it however, most marketers place the emphasis of their brand building initiatives on the decorative aspects of branding – things like making logos, taglines, imagery, and marketing communications. 

Marketers, at long last, need to stop, step back and adjust their thinking and approach to brand management as a means of delivering what customers expect and what customers experience. When brands deliver the goods, they become indispensable. When customers perceive brands as indispensable, they become transcendent brands and the brand’s owners reap the rewards of competitive advantage and enduring financial equity. 

The wrong strategy and the wrong tactics. 

Most marketers approach branding as a communications problem and spend many millions of dollars crafting messages to build brand awareness. Of course awareness is a critical component in marketing, but awareness of something is not the experience of something.  

Building awareness is not strategy it’s a tactic. In many cases it’s the wrong strategy and the wrong tactic. It’s the cart before the horse. So much creative energy is placed on creating communications and promotional activities to build awareness that the communication itself becomes a surrogate for real brand experience. Just because your ads are cool, funny, or even memorable does not guarantee customers will engage with a brand in ways that make the brand indispensable to them. 

Most media advertising is entertainment. While entertainment value may help build awareness, it does nothing for delivering long-term indispensable experiences customers crave from the brands they love. 

So much branding is nothing more than flavor of the month. This is propagated by marketers throwing their advertising accounts up for review every year or so, seeking new “creative” ideas to “freshen” the brand and to get their brand name out there in ever more sticky ways. Ad agency business executives love these pitches. Most of this stuff is temporary rather than transcendent. 

In our fragmented, media-obsessed culture, creating a transcendent indespensible brand requires a completely different approach to brand creation and brand management.

Brand Marketing: The Opportunity Of Big Data

The era of Big Data has arrived! Yet, few brand marketers seem to properly understand it, at least from the point-of-view of consumers.

Like Noah and The Flood, magazine covers have been foretelling the coming data deluge. The headline “Getting Control of Big Data” resounded from the cover of the October Harvard Business Review above a drawing of a lion tamer reeling backwards, hat flying. Two years ago, The Economist published a special section on “The Data Deluge and How to Handle It” with cover art of a businessman funneling the downpour of data being collected by his upturned umbrella to water a blooming flower. This past July, trade publication Target Marketing asked on its cover, “Are You Ready for Big Data?”

In August, Time reported a story for its general readership about the ways in which Big Data will revolutionize retail. In October, Bloomberg BusinessWeek posted a “Bloomberg West” video interview with EMC CEO Joseph Tucci who declared that Big Data will “transform every industry.”

The McKinsey Global Institute weighed in last year with a white paper entitled, “Big Data: The Next Frontier for Innovation, Competition, and Productivity.” IBM has established The Big Data Hub online as an overview of enterprise applications, including introductory resources for brand marketers such as an infographic summarizing four areas in which Big Data can optimize bottom-line marketing performance.

Big Data numbers are staggering. An Economist video reports that the quantity of global data is forecasted to be an eye-bugging 7,910 exabytes by 2015, over 60 times greater than 2005. This is three times the number of stars in the universe! Twitter alone generates over 230 million tweets each day, equivalent to 46 megabits of data per second.  In this future, says The Economist, people will live in a world of sensors and software in which their “every move is instantly digitized and added to the flood of public data.”

Revitalizing A Damaged Brand

Today on Branding Strategy Insider, another brand strategy question from the BSI Emailbag. Malcolm from Rockville, Maryland writes: 

"I’m an editor for a trade magazine covering the pharmaceutical and consumer health care product markets. I’m working on a story about a cold product brand, Zicam, that has had some big trouble in the past few years and is launching a marketing campaign to turn around the brand.

Problems for the Zicam brand, marketed by Matrixx Initiatives, began in 2009 when the brand’s top-selling products – intranasal gels – were recalled and discontinued after the Food and Drug Administration (FDA) said there was a problem with the zinc in the gels causing anosmia, loss of smell.

So, Matrixx Initiatives loses huge revenues and faces class action suits about Zicam, but stays afloat, is taken private and now is launching marketing to turn around sales. The marketing positions the product as best in shortening the duration of a cold when used at the first sign of a cold, or the first sign of the “monster” of a cold coming on. Now to my questions.

1. Shortening the duration of a cold, the new tag line of Zicam, is not a product category that I’ve seen before. What are the chances for Zicam or any brand to drive sales with marketing based on a category that might be new to consumers? Do brands run a risk of turning off consumers by claiming the lead in a category consumers might not be familiar with? 

Creating a new "category of one" brand can be a very effective branding strategy as there is only one brand that can address the need(s) represented by the new category. In fact, this is the ultimate branding strategy, to become a "category of one" brand. Having said that, the need represented by the new category must be real. That is, the need must resonate with people as a powerful latent need. In this case, the need is to substantially reduce the impact of the cold from the very start. I would think that this is a very real need. If it is not a need to which people can immediately relate, then the brand would encounter a long and expensive uphill battle to communicate the new category to people so that they "get" what it is all about, with a lower probability of ultimate success.

The Anti-laws Of Luxury Marketing #21

21  Do not look for consensus

Testing implies looking for consensus: any option could be chosen as long as 
it is elected by the majority of common consumers. In fact, intimacy with luxury 
decision makers teaches us that big success as a rule creates a lot of 
discussion within the company itself. This can be held as a working principle 
of luxury brand management. The key questions are: How to lead? Are consensual 
decisions the sign that it will be a lasting success or a temporary fad? 
Interestingly, in the perfume business - which is dominated by mass strategies - 
the most successful fragrance launch of the past 20 years, Angel, was chosen 
despite poor test results. Its success was driven by a minority of respondents 
that rallied around the product’s new and completely original scent. Religions start the same way: they succeed in creating a sect 
of militants and advocates. 

Contributed to Branding Strategy Insider by: JN Kapferer, excerpted from his book, The Luxury Strategy with permission from Kogan Page publishing.

See all of the Anti-laws of Luxury Marketing here.

Sponsored By: The Brand Positioning Workshop

FREE Publications And Resources For Marketers