A Brand is Your Gut Feeling

Brand = a name that stands for something in the mind of prospects.

The ironic thing with the term 'Brand' is that it has a poor brand. The perceptions of what a brand is are often misconstrued. People tend to think a brand is a logo, a visual identity, or a product. Rather, as Marty Neumeier explains in his book The Brand Gap, brand is a gut feeling! It is our perceptions towards an organization. And the logo, visual identity & products help foster that 'gut feeling'.

So, organizations do not define their brands - people do! Organizations, however, can influence their brands, and this process is branding.

First, why do we care about branding? We care because it leads to loyalty, which leads to long-term customer value indicating long-term organizational sustainability!

Branding begins with, as I've written many times before, a purpose! This purpose provides motivation and direction for the organization. For a brand to be successful, it must first ensure that internally everyone believes in the organization's purpose - this way everyone is working towards the same goal.

Once everyone is aware and passionate about the brand purpose, the employees' outwardly actions begin to communicate what the organization is all about. These actions become the reasons to believe in the brand. For instance, Wikipedia's brand purpose is to provide knowledge to the world, and a recent action to begin providing an offline version of its content to help rural students in Peru (via AdAge) creates a perfect reason to believe in its purpose!

These actions form interactions with people, and it's through these interactions where perceptions are developed. Interactions can be anything from reading an article in AdAge, to seeing a tweet on Twitter, to using a product or calling customer service. Literally, anything that references or involves the organization can influence its brand definition!

From this point, it is essential that the actions remain 'on brand'. The organization must follow through and continue to deliver on its brand promise. This consistency leads to credibility, which leads to trust, which results in loyalty!

So, when I read that Sigg, the producer of metal water bottles, has the toxic material (BPA), which we are trying to avoid by using its product, the credibility vanishes. Sigg is no longer properly delivering on its brand promise damaging its brand perceptions.

Dominos is another example of losing credibility & trust because of poor actions. A few months back, two Dominos employees decided it would be fun to put together a disgusting video, for YouTube, of them playing with the food, etc. before, presumably, serving it to customers. This video had such an enormous impact, that by the end of the week, the organization's share price fell by 9.6%, which is about $4.07 billion (facts via Brand Strategy Insider). That is a massive loss, just because 2 staff members were fooling around and acting 'off brand'. This proves that bad brand interactions impacts consumer trust and the organization's future value! Now, as seen in the YouTube video below, Dominos is working hard to regain that lost trust - and it's doing this through actions!

So, through branding, organizations are able to influence the 'gut feeling' people hold towards its brand. This begins with focus, which is set by the organization's brand purpose. That purpose then translates into actions creating interactions with consumers. Consistent interactions form credibility, which leads to trust and eventually loyalty! Brand is not a logo, a visual identity, or a product - rather these help influence the brand.

Note: Image from The Brand Gap SlideShare presentation

More Than A Logo is on Alltop

For those of you who use Alltop to gather your latest news, articles, etc., you can now find my blog there as well!

More Than A Logo is located on branding.alltop.com and marketing.alltop.com

For those who don't know what Alltop is, essentially, it's a content aggregator that brings together news articles, blog posts, etc. under certain topics. This enables you to search any of your favorite topics - in my case branding & marketing - and find all the latest news and information! I think it's a great resource, and has made finding some of my favorite blogs easier!

Online Brand Characterization

I have a quick post this week, but a fun one for sure!

MIT has launched a 'Personas' site. This site is designed for people to enter a person's name, then the site searches the web for content surrounding the name in an attempt to characterize that name.

Then I thought, why type in someone's name when you could type in a brand name & see how online content characterizes the brand's personality!

Although this tool is not perfect & uses a predetermined set of characteristics, which will inevitably affect the accuracy of the results, it's still fun to see how aggregating online content can begin to define brand perceptions & associations.

Also, when you enter in a brand name for the second time, you may notice the results change. This illustrates that the continuously changing content online affects the characterization of the name!

Check it out at http://personas.media.mit.edu/ & let me know what you think!

The Impact of Branding on Margins

This cool infographic was brought to my attention, today, on Twitter thanks to a tweet from Paul Worthington, the head of strategy for Wolff Olins New York.

I thought to myself, this is a great example of how strong brands = increased margins. Apple may only represent 8% of the total estimated revenue for the mobile phone industry, but it earns 32% of the total estimated profits! This is huge - Apple earns a 40% margin whereas Motorola loses 21%. In fact, the Apple iPhone is estimated to earn approximately $600M+ in profits relative to each of the other brands mentioned in this infographic - not bad for representing only 8% of the total market's revenue.

Apple's dedication to its brand purpose has focused the organization's efforts on creating exceptional user experiences through innovative design. This has caused Apple's share price to increase approximately 1,000% over the past 10 years. Not only that, Apple's brand value ($13.7 billion in 2008 according to Interbrand) represents about 66% of its market capitalization, as mentioned in Marty Neumeier's book The Designful Company. This is rather impressive when compared to Microsoft, who has a brand value of $59 billion, which represents only about 17% of its market cap. This indicates that Apple has higher customer confidence, loyalty & willingness to repurchase; therefore, it's cheaper for Apple to keep customers since they trust and believe in the brand.

I feel it is this loyalty and trust for the Apple brand that has contributed to the success of the iPhone. Apple's higher margins indicate its customer's willingness to pay for the brand, even though the product isn't significantly better than the competition. 

Getting back to the brand: '...Inspired by STARBUCKS'

A little while ago, I wrote about Starbucks and its disappointing decision to start selling salads with its coffee, and just when I started to question my belief in Starbucks' ability to make a recovery and begin to truly focus on its brand purpose - deliver experiences that make life better in some small way - it did something no one saw coming.

Starbucks has opened a low-profile coffeehouse in Seattle that has shed the typical Starbucks look & feel and called it 15th Ave E Coffee and Tea...Inspired by STARBUCKS. These new coffeehouses are to feel more local & rustic, losing the global styling of the Starbucks we know so well. These shops may even sell wine or beer and host live music & poetry readings focusing heavily on the coffeehouse experience.

Some may feel this is a bad move by Starbucks as it's deceiving the public by going 'stealth', or that they are avoiding the real issues of people not willing to pay $4-$5 on a cup of coffee at the global stores. But I think this is a great move by Starbucks for a few reasons:

1. ...Inspired by STARBUCKS is allowing the organization to explore ways to improve the current Starbucks stores without disrupting the global brand, which would cost more in the long run. In addition, Starbucks is being really upfront about its association with the new shops as it's leveraging the Starbucks name in the new name.
2. These new coffeehouses are a way for Starbucks to penetrate a consumer group that desires a more down-to-earth coffee shop experience without alienating its current core consumer group who yearn for their grande non-fat lattes on the way to work.
3. If Starbucks was to lower its prices forcing it to directly compete with McDonalds, it would lose some of its brand cache causing long-term damage to the brand. So with the new ...Inspired by STARBUCKS concept the organization can focus on what it does best - creating a coffee experience. At Starbucks, you are not paying for just coffee, you are paying for a sense of belonging to a special coffee club and the experience when you walk into a store and place your unique order - Starbucks must not jeopardize this! 
4. Lastly, and most importantly, Starbucks is embracing a new way to achieve its brand purpose. Hayes Roth, a vice president of marketing at Landor Associates, a consultancy that has advised Starbucks on branding strategy, once said, "...the essence of Starbucks is not about the coffee, although it's great coffee. It's about the coffee-drinking and the coffeehouse experience." This goes back to my post on innovating with your brand purpose in mind - the brand purpose never changes, as it's the reason the organization exists, but how you strive towards your purpose will vary as the market & consumers change - Starbucks is simply adapting, but with its purpose in mind!

I'm excited for this new endeavor because I can tell Starbucks is really pushing to get back to creating great coffee experiences - the reason why Howard Schultz was able to turn the plummeting out-of-home coffee consumption industry around in the 1980's and bring it to stardom!

I would love to hear some of your thoughts on the new ...Inspired by STARBUCKS undertaking

Note: Inspiration and images came from Fast Company article, How Do You Disguise A Starbucks Store?

Brand Purpose & Audacious Goals

David Packard, one of the co-founders of HP, once said in a 1960's speech:

"I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company's existence, we have to go deeper and find the real reasons for our being."

If you have been reading my blog, you know this is something I'm truly passionate about and believe is the foundation of branding! 

Having a core purpose represents the reason WHY an organization exists. This is something that should never change no matter where or how the market turns - it is the soul of the organization. Sadly, many organizations feel their purpose is to satisfy the needs of the shareholders - but this is only a weak answer for organizations who have yet to determine their core purpose. Satisfying the needs of the shareholders is not motivating or inspiring to employees, nor does it provide adequate guidance in moving the organization forward.

To determine the core purpose of your organization, there are a couple of questions you  and your executive leadership team can work through to begin to prioritize WHY your organization exists and what makes it important:

• If you did not have to worry about shareholders/board members/etc., why would you still come to work?
• If someone bought your organization and sold it, so that it no longer existed, what would the world be missing out on?

Once you have your purpose defined & you and the organization truly believes in it, it's important to develop big hairy audacious goals, as described in Built to Last, to propel the organization forward in an attempt to satisfy the purpose. These goals give employees & management an overarching direction for the organization along with inspiration and motivation to complete the task knowing they are doing something above and beyond generating revenue and incremental profits. There are 2 types of goals that can be set:

1. Goal = Purpose: This is where the audacious goal and the brand purpose go hand-in-hand, like how Google's brand purpose, to organize the world's information and make it universally accessible to the world, is also a hairy audacious goal
2. Goal Perpetuates Purpose: In this case the organization has a core purpose and uses audacious goals to move the organization towards its purpose. Take for example JFK & NASA's purpose to Explore the Heavens, as it was defined in the 1960's, and it's audacious goal, to begin to accomplish this purpose, was to send a man to the moon within a decade.

In celebration of the 40th Anniversary of the landing on the moon, I will continue to talk about NASA.

If we look at NASA's purpose, today, it's to "Pioneer the future in space exploration, scientific discovery & aeronautics research", which remains consistent with the 1960's purpose to Explore the Heavens. And it continues to create audacious goals, like sending a people to Mars and beyond, to perpetually drive towards its purpose.

So, I believe it is crucial for organizations to determine its purpose and have the entire organization rally around it. Followed by setting audacious goals to guide to organization forward making that purpose a reality, as many wonderful and amazing things, like landing on the moon, have occurred with a purpose in mind!

A few videos for fun

This week I haven't had much time to work on my blog, but I wanted to leave you with a few videos...

Why would you never hear Steve Jobs saying this about Apple? Because his customers will do it for him! Mac is, truly, a cult brand with a strong, dedicated and devoted following! I mean, this gentleman, in the video below,  took time out of his life to film himself talking about why he loves his Mac over a PC & then uploaded it to YouTube! That is dedication to a brand! So, no, Steve Jobs doesn't need to run around declaring his love to Apple. Great branding can turn your customers into brand evangelists!

I will close off this short post with one of the best ads of all time (for me that is) - the 1984 Apple commercial that aired during the Superbowl. This was only the beginning of Apples quest to Change the World, and it continues to achieve its purpose!

I will have another blog post later this week! Until then...