Brand Strategies are Changing – 8 New Rules

There has been a fundamental shift in how brands are perceived and the value they provide. This is true in consumer and corporate brand arenas alike. There is truly a “different world” emerging in how brands build relationships with customers, consumers, employees, the media, the financial community and other important audiences. To understand the impact on brand strategies, it is important to understand what is changing.

What Has Happened to Get Us Where We Are Today?

Loss of Credibility and Increased Skepticism

Over the past four decades there has been a continual downward drift in the credibility of many institutions that we have admired in the past.

  • Government and political leaders have misled us for personal agendas and gain
  • Church leaders have tried to hide the truth and stay aloof to their responsibilities
  • Corporations have become places where employees are skeptical of messages from the leaders feeling that there may be a different agenda than the words often incorporated in a corporate email.
  • Manufacturers, by the nature of offering everything from cents-off deals to deep discounts, have undermined the perceptions of the value of what they make or provide.

The result has been a growing “tuning out” of messaging.

The Millennial Workforce Values Different Things
Millennials are driven, to a large extent, by meaning and purpose. They are seeking something larger than themselves, the job they hold and the company they work for. If they don’t connect with fundamental purpose of a company and how it shapes a better world, they will leave. Recent research indicates that 71% of millennials say they are not emotionally or behaviorally connected to their job. Additionally, they want to use their skills for a greater good… 87% feel encouraged to volunteer or participate in their company’s cause work. Consequently, understanding the workforce is critical to building the future.

Brands are Overpromising More Than Ever
In challenging times, two things can occur. First, brands tend to amplify and exaggerate their brand promises to ensure that their voices are heard above the crowd. This often accelerates customer frustrations as claims are often filled with over-promise and become unbelievable to key audiences. Second, brand marketers may become nervous and start to throw as many promises “against the wall” as possible hoping that some will resonate somewhere. This creates an atmosphere of uncertainty and wariness. To succeed today’s world, it is imperative to resist overpromising and scatter strategies.

Intelligent Purchasing is The New Status Symbol
Since the 1970’s, there has been a continual rise in discounting and promotional couponing. The result is that we have been sensitized that things can always be purchased at a lower price. Corporations and consumers know they can find and purchase goods and services below promoted price-points. One consequence is that “intelligent purchasing” has grown to become the new status symbol both socially in the consumer markets, and as reputation builders in B2B markets. This puts the burden on crafting a strong value proposition to mitigate price and build strong and loyal customers. This shift in emphasis is how company’s must differentiate in competitive markets today.

Consumer Support is Where Brands are Frequently Defined
Because of the access and availability of almost everything, at attractive prices, brand loyalty is often defined at the point a customer needs support. There are some companies that put the customer first and stick with them until a problem is solved. They tend to be market leaders. Because, in that moment when we need help, the way in which a brand responds to us says a lot about who it is and how it chooses to build a customer relationship. For a period, companies did not “see” the value of customer support as a brand-defining behavior, but this is changing. Today, strategies for helping customers and building longer-term loyalty through customer support have become brand-defining elements. An additional benefit is that customers will often pay for additional support, as long as it is superior and meets their needs.

“Community” is Where We Get Authentic Help and Insights
Technology has enabled the rapid growth of communities. They are critical as today we get our information and confidence from these communities, both consumer and corporate. So for brands to succeed, they must recognize the power and value of communities, and build strong and deep involvement in each to stay connected, knowledgeable and relevant. Smart companies today use communities to test ideas and concepts before putting enormous resources against new concepts. Not only efficient, feedback often provides new insights and innovative directions.

8 Rules for Branding in the “New World”

Brands must be shaped in new ways. These new rules should become the “filters” used to create and evaluate brand strategies, communications and behaviors.

Rule 1. Value must be communicated. Key audiences want to understand the value they receive by engaging with a corporation, product or service. This is as true in the B2B and B2C arena. Where lofty aspirational promises were part of some brand positionings, there has been a natural shift towards “value” as a foundational element. Customers and consumers have a much larger magnifying glass to evaluate price/value comparisons and will find it hard to justify a purchase without a very strong reason-why. Therefore, value has become a very important driver of preference.

Rule 2. Finding and communicating a brand’s meaning and purpose is more important than ever. If a company or its brand does not communicate an authentic and relevant meaning or purpose, employees will not fully buy in and may ultimately leave. No longer are payroll, incentives and title enough. Today’s emerging workforce needs purpose in what they do more than ever. Further, as corporations strive to find socially responsible programs, consumers will applaud these efforts. Spend time on this important issue and build a long-term, committed and involved employee and customers.

Rule 3. Determine the balance between “function” and “end-benefit”. For practical and emotional reasons, customers need to both understand the functional benefits of a brand and the end-benefit as well. Finding the balance is harder than ever, but understanding that there is a balance will guide brand development. Every category and industry is different, so there is not a cookie-cutter solution. The most successful corporate brands communicate functional benefits under a compelling end-benefit driven brand idea.

Rule 4. Transparency and honesty are mandatory. There are two aspects to transparency; a) acting in a transparent manner, and b) communicating this transparency. In today’s world, both are imperative. This means changing internal behaviors to recognize the importance of being transparent, and communicating transparency in new ways. Customers will be looking at this aspect of their brand relationship as one important criteria for maintaining a relationship. Consequently leaders must ask: a) is my company/brand being as transparent as possible?, and b) are we communicating this transparency in a truthful manner? This is an important new filter for companies to meaningfully engage with their audiences.

Rule 5. Messaging must be simple and clear. The hype of the past decade has left everyone breathless. In the new economy, brands must shed multiple claims, over-promises and implied benefits, and bring a new simplicity and clarity to messaging. It means creating new ways to evaluate existing messaging and developing communications strategies that isolate what is important and what should be shed. A changing brand landscape offers the opportunity to re-evaluate everything from communications and marketing materials, to focusing speech content and training materials.

Rule 6. Express confidence and optimism through visual identity. In challenging times, it’s no surprise that people want to be uplifted. Because an identity is the visual expression of a brand, it should reflect a company’s core beliefs and strengths, and also signals an optimistic and positive attitude. This is a good time to take stock of both a company’s central identity, and also the rigidity or flexibility of the identity system. There may well be room for modifying an identity to project a more realistic and optimistic statement about the brand.

Rule 7. Communities are critical to brand acceptance. Participate. The evolving shift from top-down to bottom-up brand influence is being further accelerated. Trying to build a brand alone is very difficult without the value of communities to create forums for learning, sharing, connecting, validating, and testing. Embrace how communities can help. Allow them to be democratic and not autocratic. Think of them as organic opportunities to connect. And while there is no perfect answer, participating will be a very strong way to ensure brand acceptance.

Rule 8. Customer service can be a brand-defining attribute. For many companies, the critical touch-point where a brand is defined is when customer service and support is needed. For example, when there is a technical issue, or a product doesn’t work, or there is a general “how to” question, this becomes the seminal moment where a brand can build a bond and relationship or turn a customer off. It is a touch-point loaded with skepticism and hope at the same time. Successful brands of the future will embrace the importance of this interaction and think about building world-class customer service rather than merely adequate, competitive levels of service.

As the rules for brand strategies are shifting, it is up to smart leaders to evolve their brands into this new environment. Using these rules can be very effective in shaping brands to capture and sustain leadership.

John K. Grace

Managing Partner

jgrace@brand-taxi.com

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September 19, 2017   Comments Off on Brand Strategies are Changing – 8 New Rules

The Investment Management Brand Imperative

Build a great differentiated brand or drown in a sea of sameness. Today having a strong investment management brand is not a nice to have, it’s an imperative.

For years building an investment management brand was left to the big mutual fund players and others vying for retail clients. Then, with the global financial crisis and the massive outflows across segments, firms of all shapes and sizes rushed into the market with what they thought was “branding”. Today, just about every investment management firm has a name, logo, website and a trusty pitch book—likely all blue and peppered with navigational images and icons. Many thought, therefore, that they had built a brand and that this, combined with good, consistent performance was enough to get them noticed, win business and develop loyal clients. Once upon a time that may have worked, but not today.

With the increased complexity of the financial markets, expansion globally where firms may be virtually unknown, commoditization and a growing preference for specialty managers—many are taking serious stock of their brands.

The Value of Truly Building an Investment Management Brand

Brand strength is the second most important attribute in selecting an investment management firm after performance. As the lines between retail, intermediary and institutional buyers blur, more stringent disclosure requirements are imposed and with the move to more global distribution, brand and reputation are increasingly more important drivers in clients’ decision to invest. As the following chart shows, according to intermediaries, brand strength and reputation ranked as the second highest factor when considering a firm.

Key Drivers of Asset Growth

The field is crowded, noisy and confusing. Today hundreds of investment management firms with countless strategies and vehicles are battling it out for assets. Add to that the lack of distinction between firms, it’s nearly impossible for potential investors to see through and understand what a firm does and does better than its competitors. Net, it takes a lot to win and retain loyal clients.

Key promises sound the same. Without doing the work to create meaningful differentiation, most firms push out promises that sound the identical, creating a virtual sea of sameness. Here are some commonly used messages that permeate the market and have no specific insight into the manager:

So, to get noticed in an over-crowded marketplace a firm must build a brand that means something and ultimately matters to its clients. To do this, the story it tells must be clear, differentiated and memorable.

Investment Management Firms Face Unique and Formidable Challenges

Simply put, investment management brands are different—from their products and services to their diverse audiences—and operate by a different set of brand rules.

How do you brand thinking, advice and insight —all intangibles?

With consumer goods or manufacturing, customers can “experience” a product, they can taste it, wear it or drive it, and this offers more opportunities for differentiation. However, with an intangible based brand, creating an experience and ultimately building a brand is much more difficult. In investment management, the proposition rests largely on the thinking, insight and expertise of the managers and they are therefore chiefly responsible for conveying the brand to investors. It is important to identify and cultivate a brand idea that captures the essence of the “intangible”, is at the core of what the firm stands for, and that all can rally around.

How do you build an authentic brand experience when your audience is layered —sometimes its B2C, sometimes its B2B, sometimes it’s both and both at the same time?

Investment management brands are neither consumer brands or B2B brands, they’re different. Their primary audiences are a mix of professional buyers—financial advisors, plan sponsors, institutional consultants—and consumers with very different needs and expectations. They must be perceived as offering the deep insight and information required by professionals and at the same time instill a sense of trust and confidence with end investors. Adding to the challenge, is that all of this needs to be conveyed through a complex distribution system. Deep knowledge of the markets and investment products—from traditional to non-traditional—and a solid understanding of the nuances of various distribution channels is key to mapping out relevant propositions and communications.

Investment Management Layered Distribution

How do you build an investment brand when what investors are buying is a promise that their assets will grow and outperform, when the future lacks certainty and that promise is based upon past performance?

Customers and intermediaries alike are ultimately expecting that their assets will grow and they are being asked to believe that they will based on past performance and information. The problem is that the future is uncertain, promises are just that, and history doesn’t necessarily repeat itself. Therefore, clients need reasons other than history to believe that a firm will deliver. It ultimately comes down to trust. Crafting a brand of reliability, openness and confidence are keys to gaining that trust.

How do you build trust, because that’s what it takes, in an industry that is largely considered not trustworthy?

With the financial crisis came significant investor skepticism and lack of trust in financial institutions. It was a logical outgrowth. Rebuilding trust starts with uncovering the firm’s authentic identity and value and from there a compelling brand can be constructed.

The Keys to Building a Powerful Investment Management Brand

Developing an investment management brand takes not only an understanding of the complexities of the industry—intermingled audiences, complex distribution and nuanced products—but also the knowledge and expertise of brand-building.

Identify a core, unifying brand idea that embodies the purpose of the brand and the ultimate benefits to all that it engages. Brands are essentially about a firm’s identity, driven by purpose and meaning, and the connection that people make to that purpose and meaning. So, getting to the essence of a firm, who it is, what it believes, how it’s better or different than others and telling a credible, compelling story is how great brands are created.

Understand what each target audience needs to hear to engage. Because audiences are often layered and over-lapping, spend time developing a brand messaging strategy that communicates effectively to each important audience and at the same time builds common equity for the benefit of each product or service.

Tell a meaningful and differentiated story. For years, investment management firms stayed in a very narrow range of brand building—lackluster messages focused largely on performance, rock-star teams, and complex, at times mysterious, descriptions of who they are and what they provide. It became a maze of mirror images making it difficult to distinguish one firm from the next. So, the new rubric is about telling a true and meaningful “story” that is the surest route to clarity and differentiation.

Be consistent in all communications and behaviors. Again, investment management firms must appeal to a variety of different audiences. Add to this that each distribution channel has a distinct process and preferred system of communication. This condition offers ample opportunity for messaging to break down and ultimately dilute brand awareness and appreciation. To develop investor confidence and build brand equity, careful attention must be paid to consistency in communication and alignment with the brand messaging strategy.

Invest in building the brand. For a time, with good performance, generally content investors, reasonable compliance constraints and an intermediated sales process, many firms were reticent to develop a powerful brand. In fact, their strategy was to “stay under the radar”. Then the markets melted down in 2008 creating a fog of mistrust of the industry. This changed the game almost overnight with clients looking for reasons to believe beyond performance. This is where investing in a powerful, differentiated investment management brand is now an imperative.

Building a strong and enduring brand in the investment management business is both an art and a science. The pursuit involves two essential pieces; understanding the true and authentic identity of a firm to create powerful differentiation, and deep understanding of key audiences to unlock what they need to hear to engage. From this foundation, strong brand can grow.

For any questions, contact:

Kathy Kohler
Managing Director
E: kkohler@brand-taxi.com

John K. Grace
President & Managing Partner
E: jgrace@brand-taxi.com
T: 203-618-1100
Website: www.brand-taxi.com

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February 22, 2017   Comments Off on The Investment Management Brand Imperative

Don’t Confuse Loyalty with a Loyalty Program

“What really drives customer loyalty?” is a straightforward question that many CEO’s are asking themselves. A popular response is to employ a loyalty program. This is not necessarily the right answer.

Every airline, hotel, credit card, and grocery store has a loyalty program, and they spend in aggregate $50 billon dollars a year on rewarding customers according to Forbes. Just look at the numbers:

– 83% of consumers participate in a loyalty programAverage Household memberships
– On average each U.S. household belongs to 29 individual programs, but are only active in 12
– The airline industry alone in North America earned $9.6 billion by selling miles to partners in 2013.

Loyalty programs are big business.

Active Members pie chart

But if you peel back the onion, you’ll find that only 42 percent of program members are active, engaged or participate (The 2015 Colloquy Loyalty Census). That’s a lot of wasted dollars that could be put to use elsewhere. This is not to say that loyalty or reward programs don’t work. They should be used as a form of recognition for valuable customers. But marketers need to reframe how they view these types of programs. The purpose of the programs, including the common practice of providing awards to all customers – good, bad and even unprofitable ones – needs to be rethought. Read more →

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June 22, 2015   Comments Off on Don’t Confuse Loyalty with a Loyalty Program

Differentiation: The Key Challenge For Professional Service Firms

It is tough enough to stand out from the crowd when you sell something tangible – a product. But it is exponentially harder to distinguish your business from its competitors when what you sell is intangible – a service, or advice. That’s the challenge facing professional services firms, such as management consultants, law firms, accounting firms, architects, design firms, leadership development firms, executive recruiters, etc.

Professional Services are Big Business in the U.S.
The professional services sector is very large and growing. Of the U.S. services sectors, IT consulting alone accounts for US$354b, followed by law firms and management consulting firms. These firms are large and aggregately employ millions of associates. And, with the exception of executive search, are all growing.

PS Data

As the market grows and competitors proliferate, professional services firms face the commoditization of services and downward pressure on fees. The best defense against this is a strong brand that signals why your firm is unique in a meaningful and credible way that your clients, prospects and staff will value. Then, and only then, can you command a fee premium. Read more →

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November 14, 2014   Comments Off on Differentiation: The Key Challenge For Professional Service Firms

Brands Have Become a Critical Factor in Successfully Expanding into the U.S.

High growth globalizing companies often find it difficult and unprofitable to enter the U.S. and other developed markets. To achieve the turnover and ROI they seek, they are finding that it is the brand asset that differentiates an offering and drives higher margins and profitability. Particularly for companies in China, India, Brazil and other high growth countries, successfully expanding their global footprint is an enviable objective, but more difficult to achieve than ever. Many seek to minimize risk and expand with a price entry. However, unless corporations recognize and act upon the importance of building strong “brands”, they will most likely fail to achieve their U.S. objectives.

Mega-trend shift
The mega-trend shift towards high growth market-based companies who have been successful in their home countries trying to expand to the U.S. is based on sound logic:

  • Drive for greater revenues and profits
  • Appeal of the large middle class with strong per capita income
  • High number of diaspora living in the U.S. that often become the first wave of “acceptors”
  • Recognition that the U.S. ensures a stable government and significant economic incentives
  • Access to skilled labor forces, technology, and strong distribution channels.

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October 3, 2014   1 Comment

Why Brand Architecture is a Critical Strategic Imperative

Brand Architecture is a key strategic tool to organize a business so that audiences will understand what you offer and how they can engage.

The rules for organizing brands today are evolving. There are important forces that have changed how external audiences engage with brands. Probably the most important is technology and how it has enabled people to know more, purchase more efficiently, and decide more quickly. The consequence is that a company and its products and services need to be communicated with a new simplicity so that all key audiences easily understand the business you are in, how they can find what they need, and at the same time understand the breadth of value your company brings. This is the goal of building a strong brand architecture.

Why it is an Imperative?
Muddled Offering
The most common branding issue we see today is that corporations have a very muddled array of products and services that are not well organized and therefore difficult to figure out. This is caused by a variety of circumstances:

  • Consolidation through acquisition, merger or organic reorganization
  • Evolution of a business into new areas that are either completely new or adjacent to existing capabilities
  • Expansion into higher margin businesses from a legacy offering
  • Spin-offs that require new levels of explanation.

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May 29, 2014   1 Comment

Branding Can Differentiate an Outsourcing Company to Grow Business and Profits

The outsourcing industry has become highly competitive with many new entrants. It has also become highly commoditized. Purchase decisions are predominantly driven by price, recently fueled by pressures of the struggling global economy. Branding, which is often overlooked in the outsourcing industry, is a very helpful tool to break through the clutter and elevate a company away from commodity price comparisons. In addition, a strong brand can help secure new customers, grow the business franchise, and improve margins.

Buyers of outsourced services today expect more than tactical support and inexpensive labor. Today, companies look at outsourcing as a strategic imperative to grow on a national and global scale. So providers must address the customer’s needs in unique new ways. Said another way, a strong “brand” can help communicate a unique value-added aspect of a business and generate great interest.

Outsourcing has grown rapidly over the past decade and continues on an upward trajectory. HfS research estimates that the total market size will exceed $950 Billion in 2013. Traditionalists break it down between IT Services and general BPO services. The sheer scale has attracted many providers who claim anything and everything, muddying the waters for the legitimate companies that provide excellent solutions for their customers. The result is a complex melting pot of companies providing off-shoring, in-shoring and even rural-shoring. And because the traditional markets that have historically provided very inexpensive labor are changing, there is the added pressure for buyers to understand the implications, and find value-added partners to deliver services in new and different ways.

Outsourcing Market Size 2013

 

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March 21, 2013   Comments Off on Branding Can Differentiate an Outsourcing Company to Grow Business and Profits

Brand Valuation – Leveraging Brand Value to Increase Revenue, Lower Cost, and Reduce Risk

Brands have value, sometimes quite a bit. There are ways to measure and leverage this value to grow business. In the last two decades, there has been significant work in refining methodologies to both measure brand value, and then use it as a proactive business tool to benefit businesses. This paper will describe the methodologies and applications so that business leaders can determine if brand valuation has application to their organization.

What is Brand Value?
Brand value measures the economic asset value of a company or product brand. It details how much of the company’s operating income and free cash flow is derived from the brand, the influence of the brand within each consumer purchase decision driver, and the associated brand risks.

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February 21, 2013   1 Comment

How Brands Contribute to Successful IPO’s?

The IPO pipeline is the largest it has been since pre-financial crisis levels. It is projected that there will be 191 new IPO filings in 2011 which is a 24% increase over 2010 and significantly higher than the 9-year average of 133. There are currently 250 companies in the IPO pipeline, which means that it will be much harder for companies to get the attention and ultimately the public financing they need.

Number of IPOs Filed in the US by month

Brands contribute to IPOs

Source: Renaissance Capital, Greenwich, CT

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June 29, 2012   1 Comment

Lessons from the Tiger Woods Affair(s)

While the flurry of media buzz surrounding the Tiger Woods Affair(s) is relentless, it is a real time example of a brand in crisis. But by stepping back from the immediacy of the situation and taking an objective view of the Tiger Woods brand, there is a lot to be learned that can help companies make better judgments about managing their brands to sustain and grow their businesses. It’s about brand attributes. Here are some important lessons that can help guide both consumer, and especially corporate brands.

Brands are Fragile

Three observations

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June 29, 2012   Comments Off on Lessons from the Tiger Woods Affair(s)