Contributing Factors to Great Brands

While scanning Twitter today, I came across a great post from FutureBrand's blog, written by Chris Nurko, which I thought you may enjoy. I like how Chris exemplifies how great brands are more than a logos, and who's actions speak louder than words, which are guided by purpose.

I have posted the writeup below, but you can find the original here:

Branding and thought leadership. 

A UK perspective.

The polling organisation, Populus has just produced in the UK a list of the UK’s most trusted and respected companies. They based this on a poll of 1,000 opinion formers and asked them to correlate which brands were seen as ‘thought leaders’. Let’s have a look…

1. Apple
2. Google
3. John Lewis partnership (Including Waitrose)
4. Amazon
5. Facebook
6. Microsoft
7. Innocent
8. Co-op Group
9. Co-op Bank
10. Twitter

In addition, a thought leader should be able to influence the opinion of those who listen or who’s behaviour or decision-making is influenced by the company or brand. The poll also identified which media most influences thought leadership (e.g. radio, print, tv or on-line). The idea is that if you influence people’s thoughts you influence their perceptions and their decision-making. If you are able to do this it means that a company’s reputation is stronger and therefore of greater value and power. Ok, so far I am with them.

What is most interesting about this list is that no matter whether they are considered by other polls or lists the most powerful, the strongest or whether they are ‘love marks’ one cannot escape the fact that all of them have used their brands to great advantage. They all represent more than just a logo, or a set of values. They actually practice what they preach across a whole experience which the punter (or customer) wants and clearly is willing to pay for or use with loyalty and advocacy. Again, just look at the list. On there for those who are familiar are brands which have passionate armies of devotees. They are product or service leaders. They define their category by innovating and by continuously reinforcing their view of the world with a distinctive language, approach or ethos which is consumer or people centric. They also make or offer great products and services, which once tried either set the standard or ‘lock in’ behaviour to the extent that any other company or brand is a ‘me too’.

Now, what is really interesting is that when you look at the patterns behind these brands you begin to see a very clear list of characteristics for brands to win the minds as well as the hearts.

First of all, you have to have a good product or service. There is no denying that – if you don’t have quality goods you won’t have a quality reputation.

Second of all, ‘thought leadership’ is important when it comes to the things we ‘think about or think with’. So, unsurprisingly – companies like Apple, Microsoft, Google, Facebook and twitter all come out highly. These are the brands and businesses that are governing our world of communications and entertainment. Broadly speaking, they influence our ‘social technology’ and ‘social media for entertainment’. Where would we be if we couldn’t upload or download? If we couldn’t tweet or ‘poke’? If we couldn’t Google with immediacy and accuracy what we need to know RIGHT NOW!? What is interesting, is that only ONE consumer goods product is on this list – yes, Innocent. Why? What is there not to like..they have led us to understand that Carbonated fizzy drinks, high sugar water drinks and beverages are just not the same as good old ‘innocent’ smoothies or ‘this water’. From woollen cap bottles knitted by grannies to the description of ‘Fruit Towers’ their HQ, the irreverent humour of being straightforward and anti-corporate has influenced our collective conscience and sub-conscious around beverages and foodstuffs. The more natural, the more honest and innocent equals the more thoughtful.

And lastly, there is something to be said for the whole idea of mutuality and shared values, purpose and participation. The fact that John Lewis and Co-op are on this list reveals the extent to which the antidote to corporate greed are companies that are owned by their employees, customers or both. The whole concept of shared values and mutual interests combined with open dialogue and transparency identifies thought leadership with being associated with open thinking! In fact, the degree to which this list uses open thinking and digitally enabled participation, knowledge sharing and communications is a testimony to how branding must evolve and embrace ‘inside out’ and ‘outside in’ management. The ability to leverage on-line and web enabled communications and real-time advocacy, insight and customer communities is the key to future brand success. That is what makes people ‘love’ companies (or rather, their brands) because it facilitates and encourages dialogue and conversation. The fact that many of these brands are American brands is another interesting feature – true leadership comes from the ability to ‘democratize’ information, and to package it in a personalized and interesting manner…Apple leads the pack on this, and deserves all credit for pioneering the view that aesthetics and simplicity go hand in hand. Interesting, I wonder what the least thoughtful, respected and trusted brands would be….? What categories would they embrace and are their lessons in the link between branding and thought leadership?

If you want to be well thought of, you need a strong brand. If you want or have a strong brand – you need to be thoughtful. And, you need to be open to leveraging the participation of customers, employees and opinions at the core of your ‘offer’ or ‘service’.

Just Make It Right

A couple of stories stood out to me while reading the news today, as they happen to have fallen on the same page, and involved well-known brands experiencing potentially catastrophic incidences. They were the emergency landing of the Quantas Airbus A380 due to a Rolls-Royce Trent 900 engine failing, and that Boeing had to suspend a test flight of its new 787 Dreamliner after a fire broke out in one of the jets.

The stories got me thinking about consumer tolerance. Specifically, what level of tolerance do people have for brands that fail to deliver on their promise and, instead, horribly screw up?  Because, lets be honest, everyone, even organizations, screw up - it's inevitable and it's what makes us human.

I feel consumer tolerance is dependent on two actions, which are not mutually exclusive:

1. How the brand handle the incident at the onset and everyday after
2. How many times the brand promise neglected (aka - how many times does the brand continue to screw up?)

For Rolls-Royce and Boeing, I don't think their current malfunctions will cause them severe damage because they are acknowledging the problem, taking ownership of it and are looking to resolve the situation.  However, if the issues continue to arise, in one shape or another, I may begin singing a different tune.

If we look at other relatively recent examples, like Toyota and BP, we can begin to learn about consumer tolerance.

Toyota and its massive number of product recalls in 2009-2010, due to unintended acceleration, sticking pedals and anti-lock brake issues, which all ran entirely counter to its brand promise of dependability, reliability, efficiency, innovation, longevity & sustainability, caused severe brand damage. In fact, Toyota experienced a 16% brand value loss due to these incidences according to the Interbrand Top 100 Brand Report.

Being reluctant to initially acknowledge the problem and suffering from three separate malfunctions is where consumer tolerance for the brand became jeopardized.  However, Toyota did eventually own up to its problems and issued massive recalls, over 9 million worldwide, including suspending sales until the situation was resolved. It is these kinds of actions that will help it in the long run.  

Although people will remember Toyota's massive recalls, they will also remember the effort they went to to ensure the safety of its drivers. However, the expectations for Toyota to deliver on its promise are higher than ever, so it can't just deliver on its promise, it has to knock it out of the park.

Then there's BP, whose accidental oil spill, and poor decisions along the way, have left the brand in anguish. Its market value was halved by mid-June and its debt skyrocketed making bankruptcy look very possible.

Pointing fingers of blame, not wanting to take ownership of the situation, not clearly communicating the situation and having the CEO say he wants to his 'life back', after 11 lives were taken and many peoples' livelihoods were compromised, did not help long-term brand trust. In fact, BP didn't even make the Top 100 Brand list, for which it was ranked 83 last year, indicating a massive loss in brand value due to this catastrophic event.

In addition, the news reports claiming BP executives chose cutting-costs over safety had a significant impact on the brand value.  However, the sun may rise again for BP as the preliminary reports from the commission investigating the spill, noted in the Economist, have found no evidence to suggest "a conscious decision to sacrifice safety concerns to save money"

Although people have very limited tolerance for any kind of failure from BP, and even the oil industry as a whole, BP is lucky in that it's in a needs market, where demand is greater than supply, with a low share price making it a great short-term investment. Having said that, if it makes any slight mistake in the near future it will lose all shareholder trust plummeting the value of the organization even further.  

Also, if BP wants to carve out a strong position for itself in the future and influence the future of the energy sector, it needs to get serious about being truly 'Beyond Petroleum' and make some heavy investments in some ground-breaking initiatives, for which they plan to roll out in an attempt to revolutionize how we will consume energy in the future. Only by creating these meaningful reasons to believe, will BP start to alter their brand perceptions. But it has to really believe in what it's doing, or like I read in the Economist this morning, "to do the right deed for the wrong reason, T.S. Elliot wrote, is 'the greatest treason'".

So, overall, I feel people are pretty tolerant of brand mistakes - I mean Volkswagen was originally founded by the Nazi Trade Union and heavily supported by Hitler, yet it became a very popular automotive brand in the 50s and 60s, post WWII, and still remains a brand loved by many.  So, as long as the brand accepts blame, is quick to make things right and consistently over-delivers on its brand promise for a long time after the incident, brands will find that consumers can be tolerant.

Our Online Identities' Impact on Brand Value

The other morning I went for a run using the Nike+ GPS iPhone application for the first time, and mid-run my back pocket started talking to me: "One mile completed. Current pace 8 minutes 23 seconds per mile". Let's just say, I was startled at first, but I've grown to like it as it makes me push myself harder to beat my last pace.

During my run, I couldn't help but think, are our lives becoming real-world video games?  The online and offline worlds have merged so seamlessly that they're now building off each other. We can check-in to virtually any location, earn points, badges and even titles, like mayor, based on the activities we perform. Take the mid-term elections that happened in the US a few weeks back - people could check-in to polling stations across the country and earn an "I Voted" badge once they placed their vote, indicating they took part in the elections.

And with the emergence of augmented reality we can place a digital layer over our current environment to learn about our surroundings.  Not to mention the real-time texts, BBM messages, Facebook updates and Tweets we seem to be constantly sending out to note our current emotions, thoughts and activities.

But what does this all mean to brands?

It means new behaviors are emerging and with that, I believe brand value is beginning to evolve.

Like the Harvard Business School suggests, "You need to know more than ever how consumers are redefining value", so lets take a look at the Millennials, who are, currently, spending more than any other generation, according to the 8095 Whitepaper that was recently released by Edelman, and they represent today and tomorrow's most dominant consumers with a predisposition to keep going back to the brands they like.

Within this segment, I see three key behaviors emerging, which demand new forms of value-add from brands. These behaviors are fueled by mobile technology and social platforms working together:

1. Reverberation - taken from the 8095 Whitepaper, is the idea of being in constant connection with your peer group to seek advice and opinions in-the-moment. This is commonly done through BBM (Blackberry Messenger) and Text Messaging.
2. Hyper Sharing - this is our newfound desire to share practically everything that is happening in our lives, from what we're feeling to eating to seeing. This is done through Facebook updates, comments, posting photos, Tweeting, etc.
3. Expressive Association - this is where we express our personal identity and values through virtual associations. It was found that 86% of Millennials, globally, share their brand preferences online as brands rank top with religion and ethnicity as online personal identifiers. Liking, checking-in and badge collecting are common means to associate.

These emerging behaviors are making the speed at which brands can gain or lose trust increasingly more rapid, as they eliminate any delay between the actual brand experience to sharing that experience with others. And it's important to note that, good or bad, and they usually lean positive, Millennials will write about their brand experience online, and this has a direct impact on whether or not their peers will adopt your brand.  So it's essential brands get their experience right every time a consumer engages with it - from any touchpoint. This only enhances the need for strong consistency and brand understanding from within the organization. 

Secondly, as these behaviors stimulate the need to continually communicate something about one's self, to enhance his/her online identity, a product/service must provide extended brand experiences that give customers something to share. Take, for example, my Nike+ app, it allows me to automatically update my Facebook and Twitter with my running stats so I can share my progress with my friends. Or, for instance, Starbucks rewards its visitors who, most frequently, check-in to its store locations through Foursquare with discounts and other perks.  Millennials look for brands that have a long history of caring for their customers - gone are the days when you can classify a brand as a product or a service, as all brands, today, are in the service business - the product is only the loss leader.

So, if the role of the brand to is to drive demand for a product/service and provide the reason to select it over one of its competitors, we can look to these behaviors, and ask ourselves, "how are we providing status, bragging rights and rewards for our customers' online identities?"