Archive for January, 2009
Brand Messaging
Brand Messaging
by Marty Neumeier, author of The Designful Company
Ever wondered how a mission statement relates to a tagline, whom a purpose statement matters to, or what a trueline is?
Developing effective brand messaging is a complex task, but it’s crucial to articulate your brand’s value proposition to everyone—from employees to vendors to customers. Strong, clear messaging emanates from a strong, clear purpose. A carefully considered messaging system allows you to dramatize the uniqueness of your brand and spread the word effectively.
Use this simple slide to help illustrate how your brand’s messaging elements move outward from its core purpose.
Purpose (never changes)
The fundamental reason your company is in business beyond making money.
Mission (can change every 10-25 years)
An over-arching strategy for achieving your purpose.
Vision (can change every 7-15 years)
A bold picture of the future to focus everyone’s efforts on the mission.
Trueline (can change every 3-10 years)
An internal expression of your brand’s most compelling differentiator.
Tagline (can change every 1-5 years)
An out-facing expression of your trueline.
Invisible Branding
Invisible Branding
by Marty Neumeier, author of The Designful Company
These days when CEOs and corporate marketers talk about investing in brand, they’re probably referring to traditionally visible touchpoints such as product design, advertising, or web experience. That’s great, but what they, and most people, don’t realize is that branding is much more than just the stuff you can see.
Invisible branding refers to those stakeholder touchpoints that have little or no visual presence in the market, but can have a huge impact on your company’s reputation. The list includes items such as CEO vision, employee training, pricing strategy, customer relationships, and sales force communications. Each of these items are an essential part of a company’s brand, but because they’re not visible, business leaders often overlook them.
How important is invisible branding to your company? The short answer: it depends. If you’re a company like Apple you probably have bigger fish to fry (hello, tech support?). But, if you’re a B2B company, invisible branding is everything. Why? Most B2Bs operate without the advantage of consumer-style marketing—their reputation is staked one hundred percent on invisible branding.
Does your company invest in this under-appreciated opportunity? If not, here’s a simple slide to help you start the conversation.
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Brand Extension
The 4 Dangers of Brand Extension
by Marty Neumeier, author of ZAG
The thorniest question in brand strategy is how to keep growing. At some point in the life of a successful brand, marketers will feel the pressure to extend its success by “leveraging” the brand into other offerings. Brand extensions can make a lot of sense, if the original brand has positive associations for customers.
The era of the stand-alone brand is coming to a close, as more and more companies understand the value of linking brands together. While brand portfolios can have valuable synergy, they face four dangers that single brands don’t: contagion, confusion, contradiction, and complexity.
CONTAGION is the dark side of synergy. Just as customer loyalty can spread quickly through brand linkages, so can bad news. If one brand has a problem, the rest of the portfolio can become infected too. For example, a number of years ago, 60 MINUTES aired a story on the Audi 5000’s tendency toward “sudden acceleration,” an untrue claim that spread like wildfire. It ruined the reputation of the 5000 and affected the reputation of ALL Audi models. It took years for Audi to restore luster to its brand.
By contrast, if the same fate were to befall Mini Cooper next year, its parent company BMW would suffer less damage. By building a separate brand for Mini, the company has built a firewall between the two brands.
Thus, the choice between building a brand portfolio or stand-alone brand involves the trade-off between synergy and safety.
While CONFUSION isn’t as dramatic as contagion, it’s much more common. It happens when companies extend their brands past the boundaries their customers draw for them. A customer may love Crest toothpaste, but now that there are 17 varieties of Crest, it’s unclear what Crest means anymore. Rather than analyze their confusion, the customer may simply reach for Tom’s Natural—at least they know what it stands for. Customers want choice, but they want it AMONG brands, not WITHIN them.
Brand confusion can be avoided by understanding the trade-off between stickiness and stretchiness. Stickiness is a brand’s ability to own a distinct meaning in people’s minds. Stretchiness is its ability to extend its meaning without breaking. For example, Dyson is closely identified with expensive, brightly colored, high-design vacuum cleaners. The brand has a high degree of stickiness in its category. If Dyson were to add a line of expensive, brightly colored, high-design wristwatches, however, the brand could eventually forfeit its position in vacuum cleaners. It would be equally dangerous if Dyson decided to stay with vacuum cleaners but market an inexpensive version alongside its original high-end version. The company could find its brand defined by the low end, not the high end; the high end would then be vulnerable to a more focused competitor.
The temptation to stretch is nearly irresistible. Companies need to grow, and in the short term, most brand extensions make money. In the long term, however, extensions can confuse customers and create a doom loop: 1) the company needs revenue growth, 2) so it adds brand extensions, 3) which increase revenues in the short term, 4) but un-focus the brand in the long term, 5) which leads to decreased revenues, 6) which leads to a need for revenue growth…and around and down it goes. The way to avoid the brand-extension doom loop is to focus, align, and think long-term.
CONTRADICTION can occur when a company tries to extend a brand globally. Because brands are defined by customers, not companies, customers in one culture may have a different view of a product or company than customers in another culture. The Disney brand, for example, may signify “wholesome entertainment” in one culture, “American entertainment” in another culture, and “cultural imperialism” in yet another. By extending its brand portfolio geographically, Disney risks cultural backlash from contradictory meanings.
One way to avoid contradiction is to build a separate brand for each culture, with a different name and a different set of associations for each discrete entity. Another way is to focus a global brand on a common denominator. Hewlett-Packard’s “Invent” position allowed it to travel easily around the world without contradiction or cultural backlash.
The last danger is COMPLEXITY. As a brand portfolio grows, what began as a way to simplify the brand-building process often ends up complicating it. Multiple segments, multiple products, multiple extensions, different competitive sets, and complex distribution channels can easily create an overgrown, hard-to-manage, inefficient brand portfolio. While the human mind is better at addition than subtraction, subtraction is the key to building strong portfolios—pruning back brands and subbrands that don’t support your zag.
Managing a portfolio requires establishing clear roles, relationships, and boundaries for brands. It requires the sacrifice of lucrative revenue streams that unfocus the portfolio. And it requires a strong sense of what customers will allow the brand to be. “As provocative as it sounds,” said CEO Helmut Panke of BMW, “the biggest task in brand-building is being able to say ‘no.’”
No commentsScissors, Paper, Rock
Scissors, Paper, Rock
by Marty Neumeier, author of ZAG
If you’re repositioning a brand, or if you’re curious about where to take your brand after you launch it, this tool will help you understand how and when to renew your zag as it moves through the three stages of the “competition cycle.”
Whenever our brand coaches give a workshop on brand positioning, this question always comes up: If focus is so important to success, how do so many unfocused companies grow so large? In other words, how can you explain the success of a company like General Electric, which markets everything from power plants to plastics, insurance to entertainment, and light bulbs to light rail systems? Or Mitsubishi, which puts its name on 23,720 offerings from automobiles to aerospace, textiles to tobacco, and banks to broccoli?
The fact is, as powerful as the principle of focus is, companies with different degrees of focus can coexist in the marketplace. Perhaps the easiest way to understand how this can happen is through the children’s game of scissors, paper, rock. Remember how it goes? Scissors cuts paper, paper covers rock, rock breaks scissors. Each position has its strengths and weaknesses, creating a balanced cycle of competition.
Business history suggests that companies thrive best when they settle into “stable states,” conditions in which the business environment is fairly predictable and employees have confidence in what they’re doing. In self-organization theory - the part of chaos theory that studies how order seems to arise spontaneously in complex systems - these stable states are called “attractors.” As a company grows, it’s attracted to one of three main states, which we can call scissors, paper, and rock.
A “scissors” company is a startup or small business, often having only one brand. What distinguishes a scissors company is its extremely sharp focus. It competes by cutting out a small area of business (white space) from the market dominated by much larger “paper” companies, who are too slow to respond.
As a scissors company becomes successful and begins to grow, it morphs into a “rock” company, a medium-sized organization that typically has more brands and less focus. Its defining characteristic is no longer focus but momentum. Rock companies thrive by crushing “scissors” companies, who don’t have the resources to compete head to head with them.
As a rock company grows, its momentum begins to fade, and eventually it turns into a “paper” company. What distinguishes a paper company is its sheer size. With even more brands and even less focus, it survives by using its network and resources to smother “rock” companies.
And round and round they go.
There are three observations you can make about the competition cycle: 1) companies tend to grow clockwise, from scissors to rock to paper; 2) they tend to compete counter-clockwise - paper covers rock, rock breaks scissors, scissors cuts paper; and 3) the spaces between the stable states are “unstable states” - periods of time when change is not only possible but necessary. It’s during these unstable periods that companies often need to reposition their brands.
What can you do with scissors-paper-rock? Tons. Seeing where you fit in the competition cycle lets you 1) exploit your company’s strengths and minimize its weaknesses; 2) exploit your competitors’ weaknesses and better prepare for their attacks; 3) use the unstable states to reinvent your zag; and 4) renew your zag during the stable states to block a competitive move or simply remain vital.
Renewing, repositioning or reinventing your brand? Start with scissors-paper-rock.
No comments7 Books To Zag By
7 Books To Zag By
Even today, books are the primary means by which business ideas are spread. Which books have had the most influence on modern brand strategy? For our money, it’s these seven. While none of them is strictly about brand, every one is about strategy, and every one is built on a surprising insight that can help you succeed in a super-cluttered marketplace. If you’ve read ZAG, you may recognize a few of these.
POSITIONING: THE BATTLE FOR YOUR MIND, Al Ries and Jack Trout (McGraw-Hill Trade, 2000). Positioning started as a brochure in the early 1970s, then grew into a book, and has been continuously updated without ever losing its salience. Ries and Trout pioneered the concept of positioning, the Big Bang of differentiation which soon they expanded into a dozen or more books, each viewing the subject from a different angle. If you can grasp the simple truths in this body of work, you’ll understand what 90% of what marketing people don’t—it’s the customer, stupid!
SIX THINKING HATS, Edward de Bono (Little, Brown and Company, 1985). When executives try to brainstorm the future of their organization, the discussion can quickly turn to confusion and disagreement. Edward de Bono, acknowledged master of thinking skills, shows how to get the group’s best ideas by focusing on one kind of thinking at a time. He organizes the session into a series of “hats,” (red for emotions, black for devil’s advocate, green for creativity) so that ideas aren’t shot down before they’re proposed. We at Neutron have used this system with our clients many times with gratifying results.
BLUE OCEAN STRATEGY, W. Chan Kim and Renee Mauborgne (Harvard Business School Press, 2005). A blue-ocean strategy is directly analogous to radical differentiation. It’s aimed at discovering wide-open market space (blue ocean) instead of going head to head with entrenched competition (red ocean). The authors’ tool for mapping a brand’s “value curve” against those of competitors is especially useful for adding clarity and rigor to big-picture thinking.
BUILT TO LAST, James C. Collins and Jerry I.Porras (1994, HarperBusiness Essentials). Brands may not last, but companies can, say Collins and Porras. The key to longevity is to preserve the core and stimulate progress. What’s the core of your business? Your values? Your promise? This is the place where differentiation must start, whether your company is a house of brands or a branded house. The authors spent six years on research, which gives the book a certain gravitas.
THE FIFTH DISCIPLINE, Peter M. Senge (Currency, 1994). Senge brought systems thinking—what he terms the fifth discipline—to the business management dialogue. Other disciplines include personal mastery and team learning. He encourages employees and managers to examine the mental models that at first allow organizations to codify their successes and later keep them from evolving with the market. Senge offers his own mental models, based on archetypal systems thinking, to help companies look at their businesses holistically.
THE INNOVATOR’S SOLUTION, Clayton M. Christensen and Michael E. Raynor (Harvard Business School Press, 2003). The authors show how innovative companies can disrupt incumbents with products and services that seem “not good enough” compared with those of competitors, while setting the table for future success. They also show that large companies don’t have to sit idly by while scrappier upstarts reposition their business. A seminal work.
LEADING THE REVOLUTION, Gary Hamel (Plume, 2000). Hamel issues a call to arms for would-be revolutionaries, saying it’s not enough to develop one or two innovative products—in the 21st century you need to create a state of perpetual innovation, not just with products but whole business models. Once an innovation becomes a best practice, he says, its potency is lost. “If it’s not different, it’s not strategic.” Highly recommended for provocateurs on every rung of the corporate ladder.
No commentsBrand Illustrated
Brand Illustrated
A lighthearted look at the relationships among marketing roles
by Marty Neumeier, author of ZAG
Here’s a fun set of slides from ZAG that you can use to kick off a meeting, illustrate a point, or spark a discussion. It simplifies (to the point of absurdity) the relationships among the disciplines of marketing, telemarketing, public relations, advertising, graphic design, and branding. What makes it more than a joke is the kernel of truth in each simplification.
What’s Your Brand Worth?
What’s Your Brand Worth?
by Marty Neumeier, author of ZAG
Can you place a dollar value on your company’s brand? You’d be smart to try, and for some companies the estimates are astonishing. Coca-Cola has a brand worth nearly $70 billion, which accounts for a whopping 60% of its market capitalization. As brands become more measurable, companies are focusing on ways to increase their value. Use this tool to powerfully bring brand value to life, and initiate a deeper conversation in your company.
| 1 | PRICE PREMIUM. This approach measures how much you can charge for your products or services over and above what you could charge for their generic equivalents. The difference is the brand’s price premium, which correlates closely to brand value. |
| 2 | CUSTOMER PREFERENCE. If prices are very similar in a category, an alternate way to measure a brand’s value is to find out how likely customers are to buy your brand instead of a competing brand. The value of the brand, therefore, is the marginal value derived from the extra sales. |
| 3 | REPLACEMENT COST. How much would it cost to replace your brand by building it again from scratch? This method is particularly useful if you’re buying or selling a brand. The total market value of the brand would be roughly equivalent to the cost of replacing it. |
| 4 | STOCK PRICE. According to proponents of this method, the stock market will adjust the market capitalization of a company to reflect the future prospects of the brand. The formula that translates stock price into brand value approaches the complexity of rocket science, but it has the advantage of looking forward instead of backward. |
| 5 | FUTURE EARNINGS. This method tries to predict the future earnings attributable to brand assets by using an earnings multiplier. The multiplier is a guesstimate based on historical models or comparable industries. Though somewhat crystal-ballish, this method gets at the real-life issues of brand valuation. |
Your Brand Ecosystem
Your Brand Ecosystem
The gives and gets of a healthy brand community
by Marty Neumeier, author of ZAG
Every brand is built by a community. Not just the community of people inside the company, but its partners, suppliers, investors, customers, non-customers, and even competitors. It’s a complete ecosystem in which there are gives and gets all around. Everyone has a role to play, and all the players are repaid for their efforts.
Use the downloadable PDF to illustrate the brand ecosystem for your team. It prescribes an orderly chain of relationships in which management nurtures employees, employees serve customers, customers attract investors, investors support management, management nurtures employees, and so on around the loop, creating a virtuous cycle of profitability.
The usual cause for a system breakdown is unlinking the chain or linking the chain in the wrong way. For example, since investors owe their gains to customers and not to management, their trying to extract gains directly from management only disrupts the system. Management soon begins paying more attention to investors and less attention to nurturing the employees who serve the customers who make the investors wealthy.
A simplistic view? Perhaps, but it’s a view that allowed Whole Foods to grow from one store in 1980 to 192 stores by 2007 to become one of America’s most sought-after brands. An investor who bought stock for $4 a share in 1996 could have sold it for $45 a share in 2005.
Who are the participants in your brand ecosystem? What can they give and what can they get in order to build a wealth-creating brand community? Start by making a list of all possible stakeholders, then describe how you’ll make each stakeholder successful and loyal to your brand. In a healthy ecosystem, their success will enable your success.
No commentsThe Good and Different Chart
A tool for evaluating customer feedback on brand concepts
by Marty Neumeier, author of ZAG
What prevents most companies from zagging—creating new and different offerings—is the cloud of uncertainty that follows innovation. In an effort to remove the cloud, marketers often conduct focus groups, which, while helpful in some situations, are notably unhelpful for encouraging innovation. This is because radical differentiation doesn’t test well in focus groups. When you ask people what they want, they’ll invariably say they want more of the same, only with better features, a lower price, or both. This is not a recipe for radical differentiation, but for me-too products with minimal profit potential.
A better way to judge a new offering is to map customer feedback against a success pattern. When you draw a chart with two axes, one for “good” and one for “different”, you can see how your business concept stacks up against other successful zags. You can also begin to see why most companies are fooled by focus groups.
On the chart, the “good” axis can include any attributes that customers typically value: quality workmanship, good aesthetics, low price, high functionality, ease of use, speed, power, style, and so on. These are the qualities on which most offerings compete. The “different” axis is for any attributes that make an offering, well—different. These can include attributes that customers may characterize as surprising, weird, ugly, fresh, crazy, offbeat, novel, and so on.
As with other charts of this type, the best place to be is in the upper right corner—in this case, where good and different combine to create a successful zag. Classic examples are the Aeron chair, Citibank, Toyota Prius, Charles Schwab, and Cirque du Soleil. However, successful zags usually test poorly with consumers before they’re launched. They fare pretty well on the “good” axis, but then attract so many negative comments on the “different” axis that companies get nervous and reject them.
Not surprisingly, where companies find the most encouragement is in the upper left corner. Offerings here test extremely well, and the “good” comments are rarely undermined by negative comments such as “weird”, “ugly”, or “offbeat”. But the reason customers don’t make negative comments about offerings in this corner is that there’s nothing new or different to dislike. So while offerings in the upper left may test extremely well, there’s little chance that they’ll open up profitable new market space.
Offerings in the lower left corner, where “not very good” meets “not very different”, test fairly well with customers, since there’s little to dislike or misunderstand about them. While this can encourage companies to proceed, in the end these offerings fail because there’s either too little demand or too much competition.
Offerings in the lower right corner usually don’t get off the ground at all. They’re perceived from the start to be dogs—and guess what?—they are.
What makes the good/different chart tricky, though, is that some of the potential winners in the upper right corner look a lot like the losers in the bottom right corner. The line is often blurred, and the consequences for making a bad call can be extreme. It may take an experienced innovator to tell the difference—someone who can match the customer research to a previous pattern of success.
HERE ARE FIVE STEPS FOR USING THE GOOD/DIFFERENT CHART:
1. Prototype a wide range of concepts for any brand expression, whether it’s a product, service, experience, or communication.
2. Expose potential customers to your top 2-4 options in a realistic brand environment—not a testing lab.
3. Ask questions that probe what each offering “means” to the customer in relation to competing offerings.
4. Plot the answers on the good/different chart to see which options fit quadrant 2.
5. Repeat as necessary until you find your zag.
Download this PDF deck and get buy-in for your next zag.
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