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 website, a pitch book and a LinkedIn page—likely all blue and peppered with navigational logos and images. 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
Intermediaries rank past performance (a perpetual top driver) and brand strength as the leading factors for attracting assets from their clients.
Most Important Factors for Attracting Assets – U.S. Intermediary Market
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 identical, creating a virtual sea of sameness. 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 became 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 having a deep understanding of key audiences to unlock what they need to hear to engage. From this foundation, strong brands can grow.
For deeper insights, contact:
John K. Grace
President & Managing Partner
June 28, 2018 Comments Off on The Investment Management Brand Imperative
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 Offerings. 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.
Need for New Understanding. The shakeout from the economic trough we experienced, while difficult for most businesses, has presented the opportunity to look at the resulting business through a new lens and to sharpen focus to generate new levels of interest and generate higher revenues. Further, this sharpening can have enormous benefit for the financial community, helping them not only understand the business better, but also have more confidence in a company as it moves forward.
Galvanize and Engage Employees. In addition to the obvious outward value of a clear and easy-to-understand brand architecture, in many cases the employee base doesn’t always understand the breadth of what their own company offers, how the parts are interrelated, and the opportunities to expand customer relationships. Just imagine the power if every employee more fully understood your business and could be a true brand ambassador.
So focusing on a clearer and more understandable framework is an essential task in the new economy. The good news is that there is a disciplined process to determine the best way to organize and communicate a business’s offerings to more easily engage with key audiences.
Organizational Architecture Should Not Drive Brand Architecture.
Brand architectures should be designed for external (outside) audiences to “explain” a company’s business so that they can understand and engage. The easier it is for an external audience to understand, the greater the chances they will respond, whether it is a customer audience, a business or trade editor, or a financial analyst.
Companies are often organized for reasons that may not make sense to external audiences. The drivers of internal organization can include:
- Legal requirements
- Tax circumstances
- Financial reporting
- Legacy business history
- Acquisition complexity
- Leadership opportunities
But often these organizational decisions are not the way outside audiences see a company’s business. From their standpoint, they want to engage to find a specific product or service, and really don’t care how the company is organized. The consequence is that a company needs to have a “brand” architecture constructed from the outside in. While this sounds relatively obvious, getting internal leaders to agree is usually a significant challenge.
Below are some helpful ideas about how to engage the leaders to successfully develop an appropriate brand architecture.
What kind of Brand Architecture?
A Brand Architecture is a systematic means of focusing and organizing your brand assets to ensure that target audiences understand the breadth and depth of value you offer them.
There are several basic types of brand architectures that, in a pure or hybrid form, are the underpinnings of clarity. Each is developed by determining the best way to express the business vision through the lines of business.
A Masterbrand Architecture is a monolithic structure where, from a branding standpoint, all business units, subsidiaries and divisions share the same brand. The “Masterbrand “ is also sometimes referred to as the “Corporate, Umbrella, Parent or Mono” brand. Good examples of this strategy are FedEx and GE. In general, everything carries the FedEx and GE Masterbrand and sub-units are defined by descriptive language.
An Endorsement Brand Architecture uses a common endorsement for all of the operating units, and the parent brand functions in a subordinate manner to each operating unit brand. For example, United Technologies operates as a parent brand as it faces Wall Street, but each operating unit is identified by its own brand with an endorsement. The Sikorsky business is branded Sikorsky, “A United Technologies Company,” but uses the iconic “gear wheel” symbol, as does Hamilton Sundstrand, etc. To make matters more complex, sometimes the sub-brands of United Technologies use a legacy identity when facing specific customer audiences.
A Portfolio Brand Architecture, sometimes called a “Free-Standing Brand Architecture”, keeps separate identities for many or all of its brands. Particularly if there is sufficient marketing support for individual brands and it is believed the parent does not provide any brand equity that would benefit the individual brands, a portfolio architecture is appropriate. Procter & Gamble manages a portfolio brand architecture. General Motors also manages a portfolio of brands with little overt brand equity supplied by the parent.
An Ingredient Brand Architecture uses a principle brand (e.g., Intel or NutraSweet) as a common element in supporting and qualifying other brands. The premise is that if the ingredient is good, the brand it amplifies is better than without it. In the case of purchasing a PC, there is research that indicates that consumers look first for the “ingredient”, the (Intel) processor, before the brand it is within.
How do you decide which type of architecture is best? If you remember the golden rule (from the “outside in”), that should be the starting point. You start by determining which are the most important audiences. For most companies it is customers. But for others, it is financial & industry analysts, key trade media, and even governments. Therefore, the first task is to determine audience priority. The next step is to determine what each discrete audience needs to “hear” or understand in order to engage with your brand. You must look at your company from their point-of-view. This often requires outside help and research so that you can have an objective view of the marketplaces you serve. Almost every company we work with has a belief about how external audiences view them, and this view is naturally biased and often incorrect. Having objective insights also helps put in perspective internal beliefs that have built up over the years.
How do you engage the line of business and other leaders? Evolving to an external facing brand architecture is a process. It not only requires audience research, but also leadership team involvement so everyone understands their role in how the company speaks outwardly. Today, when companies have many different lines of business and products and services, it becomes imperative for the key stakeholders to work together to arrive at a brand architecture that serves both their individual need, but more importantly the corporate vision.
Where we have seen the most resistance is in situations where the broad leadership is not deeply involved. Because how a company portrays itself is so critical to the future, developing a strong, outward-facing brand architecture is a strategic mandate. Get the leadership involved and keep them involved.
Who should manage the process? Development of brand architecture is a strategic initiative and should be managed by the most senior corporate leader who can rise above line-of-business interests. In some cases it is the CEO, but more often it is the Chief Strategy Officer or Chief Marketing Officer. Among other values, strong brand architectures usually signal a new future while creating clarity. Thus, if a specific line-of-business leader is tasked with the initiative, the solution often becomes weighted in favor of that business unit, and not reflective of where the long-term business is headed.
Brand architecture can be a powerful tool to help a company accelerate its growth. Investing the time and effort to optimize a company’s brand architecture can deliver higher near and long-term revenues and profits.
For deeper insights, contact:
John K. Grace
President & Managing Partner
April 26, 2018 Comments Off on Why Brand Architecture is a Critical Strategic Imperative
“Brand Congruence” Offers a New Path to Securing Loyalty
The erosion of loyalty in the workplace is pervasive, especially among millennials. This is the result of organizations not providing ways for employees to see meaning and purpose in their role and in what they do. If properly addressed, the over-arching “brand” can become the galvanizing idea to express an underlying inter-connection of Vision, Mission and Values, and provide a focal point for developing pride and greater loyalty. This new lens is about understanding the importance of congruence and how to use it.
As far back as 1968, various studies1 have concluded that the congruence between self-image and brand-image eventually plays an important role in improving brand loyalty. Today, the thinking about congruence and incongruence comes from Carl Rogers’ humanistic approach to psychology that suggests that humans want to experience and behave in ways that are consistent with their self-image and what they would like to be.
When examining what motivates us, it’s clear we are driven by intrinsic factors far more than extrinsic ones. Thus congruence, and how to shape it, is an under-lying key to engendering loyalty, which becomes a significant competitive advantage.
Shift in loyalty
What we know from research is that 71% of millennials2 say they are not emotionally and behaviorally connected to their job or company. The days of organization and corporate loyalty have shifted dramatically, and continue to do so. 66% of millennials3 already say they plan to leave their jobs by 2020. In other words, they are already thinking about moving on and not staying to build a long-term career. This puts an enormous burden on organizations to figure out the underlying needs and re-frame themselves so that they can align and engage. There are many companies trying many different activities to retain and build loyalty, but many of these programs are simply band-aids and not fundamental cures.
What is causing the shift?
There are many factors that collectively impact why employees do not feel congruent with the organization they work for. Here are some of the main reasons:
- Acceleration of industry disruption. The rate of change is increasing. Technology has disrupted virtually every industry. Thomas Friedman writes eloquently about this in “Thank You for Being Late”, a text describing the tectonic shift in attitudes resulting from technology evolution.
- Mergers creating mixed cultures with little rationalization or explanation of “why”. As markets consolidate, mergers have created larger and larger organizations, where different cultures may not share a common view of the future, and the role they can play in it.
- Mixed messages are everywhere. Think about how the world is filled with mixed and often untrue messages creating high levels of skepticism:
- Political messages are often untruths and shake our confidence in believing
- Religious leaders have been misleading us about pedophilia and other issues within the church
- Advertisers mislead us. Consumers know that we can find almost any product at a lower price than advertised
- Corporate communications from the top are often suspect. Employees are sensitized to reading between the lines
- Employees often feel unheard and unmanaged. Because of the rate of change, it is hard for companies to keep up with acknowledging individual needs. This dynamic can further distance employees at a time when they need more communication, not less.
- Corporate visions and missions are often generic and uninspiring. There are relatively few corporate visions and missions that are specific and unique to a company. Much of the time they use generic words instead of language that guides employees to feeling like they are part of something special.
- Corporate values can sound nice on paper, but are often not differentiating and compelling. When values start sounding generic, employees tune out as they do not feel any deep connection to the DNA of the company they have selected to work for. It’s about the specific values as well as the actions that support them such as compensation, incentives, training, advancement, etc.
Meaning and purpose are what employees want
At the core of millennials’ concerns (and we believe a much broader swath of employees) is the need to have meaning and purpose. They want to be part of something that aligns with their beliefs, and has a culture that validates what they are doing. 87% of millennials4 seek something greater than themselves, such as participating in cause work. This is a dramatic shift from prior generations.
The result is that to build and sustain a loyal workforce, organizations must establish congruence in the work place. The new mandate is that employees must truly believe what they do is viewed as part of what they would like to be. It is not enough to strive to be an organization that is the “best” at something, unless this is attached to a belief that reinforces purpose.
Congruence comes from the inter-connection of Vision, Mission, Values and Brand
In building a powerful brand, organizations need to think broadly about the narrative of Vision, Mission and Values. This is what, in total, creates congruence. Each element plays an important role in not only shaping the future, but building a community that employees want to be part of. Over the years, we have spent a lot of time guiding organizations to clarify and understand what each element is and the role it serves. We have found that stepping back and re-evaluating each element offers the opportunity for an organization to ask the hard questions about whether each is appropriate for the future the organization is facing. A tougher question is whether there is a consistent narrative that defines the organization, guides behaviors, and resonates with the changing needs of the emerging workforce.
- Vision describes what the organization aspires to be. It is, ideally, expressed to communicate the better world an organization hopes to bring about. It must be inspirational and speak to all stakeholders. A powerful vision becomes an aspirational north star.
- Mission is what the organization must do to achieve its vision. It is the guidance of what it must dedicate itself to achieve, to move ever closer to achieving the vision.
- Values are the non-negotiable beliefs an organization holds to deliver its mission. Each value should be backed up with explicit policies that are embedded in the way it does business.
- Brand is the promise of value represented by the sum of the vision, mission, values and expertise. It is conveyed through communications and behaviors.
Together, these elements form the narrative that creates meaningful congruence by embodying an idea or ideas that employees can attach to. What has changed is the need to look at all four elements as part of a whole so employees can experience congruence
The most successful brands today shape a unique narrative. One that it is honest and true, and expresses a belief system that resonates with employees. Importantly, they reject generic corporate language and develop a unique story that could only be from that organization and none other.
Amazon really gets it… no wonder they are successful. Their Vision is:
To be earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.
Knitted together with their Mission:
We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.
You can see how these core tenets might be attractive to employees.
Amazon Values (or what they call “Leadership Principles”) are very powerful. Notice how they focus on being the leader, and help shape the Amazon way of doing things:
- Customer Obsession.
- Invent and Simplify.
- Are Right, A Lot.
- Learn and Be Curious.
- Hire and Develop the Best.
- Insist on the Highest Standards.
- Think Big.
- Bias for Action.
- Earn Trust.
- Dive Deep.
- Have Backbone; Disagree and Commit.
- Deliver Results.
When Vision, Mission and Values are part of one fabric or narrative, they shape a brand that connects with current and prospective employees.
The internal brand language at Amazon is “Work Hard. Have Fun. Make History.” The words “make history” point to the opportunity to do something big and important. It means more than money… it signals that customers can derive extraordinary value because Amazon exists.
Successful brands that are driven by powerful ideas enable congruence
The truly great brands, large and small, spend a great deal of time focusing on their brands as the expression of the narrative.
IBM has brilliantly picked up on the need for congruence. They focus more today on “creating a world that is fairer, more diverse, more tolerant, more just.” Think about that… their over-arching philosophy does not reference products and services, but summarizes what they believe.
From a brand communications perspective, IBM links this idea to employees by speaking about “…a world we want to live in. The world you’re building…”. They make the connection for the employees so that they can see purpose in what they do every day. This is congruence at work.
Here are some corporate visions that communicate, in short form, a better world that employees can see themselves part of:
To the extent that a vision sets the stage for what millennials want to associate with, the company will attract the right people and develop greater levels of loyalty than their competitors.
The challenge is to determine whether each element provides enough guidance to shape a congruent experience so that employees stay loyal and enthusiastic. As meaning and purpose evolve as the primary driver of attracting and retaining talent, the “Congruence Narrative” becomes the epicenter of the connections.
If an organization creates a “Congruence Narrative” that resonates, just imagine how much easier many processes will become; from attracting the right talent, on-boarding, training, through internal communications, etc.
How to approach developing a “Congruence Narrative”
There is an organizing framework that can simplify developing a “Congruence Narrative”. It is based on acknowledging the role of specific groups in shaping the future. There are three distinct groups:
CEO & C-Suite. This should be the core group responsible for the Vision. They should be focused on the future and where the organization needs to go. By understanding their key task, this will simplify the number of people and speed of the process. Often, involving more people tends to complicate the process, not help.
Senior Leadership. This must be the wider team to articulate two things: 1) the Mission of the organization to achieve the Vision, and 2) the Values that drive behaviors. Involving the broader group not only develops these elements, but also generates critical alignment.
Associates. Once a draft of the Vision, Mission and Values are developed, it is imperative to involve associates to validate that these elements resonate. Critical listening to feedback will inform and help modify to result in a narrative that truly engages the workforce of the future and develops high levels of loyalty.
Organizations that take the time to truly step back and look at the inter-connectedness of Vision, Mission and Values, build much stronger levels of congruence. Think of the benefits:
- Employees will stay longer
- Turn-over costs will be significantly reduced
- Deeper corporate knowledge and intellectual capital can be transferred to each generation
- Employees will become advocates palpably socializing Vision, Mission and Values
- Internal and external communications will have an anchor to create consistency
When done, you should have a brand that signals an organizations core reason for being, and clearly telegraphs the purpose and meaning employees are seeking.
For deeper insights, contact:
John K. Grace
President & Managing Partner
1 Birdwell 1968; Bellenger, Steinberg, and Stanton 1976; Dolich 1968; Hughes and Guerrero 1971; Munson 1973; Sirgy 1980; Stern, Bush, and Hair 1977.
2 Gallup Reports (How Millennials Work)
3 Gallup Reports (How Millennials Work)
4 Case Foundation (Millennial Impact Report)
February 14, 2018 Comments Off on “Brand Congruence” Offers a New Path to Securing Loyalty
Reinvention is the Key to Sustaining a Brand
The tragedy of the day is Sears. They are nose-diving with no end in sight. After comparable store sales falling off between 16-17% in 2017, no one can see a way to reverse this trend. Wall Street ‘s collective view is that they will be lucky to survive 2018. They should have focused on reinvention all along.
What makes this so sad is they were not able to build upon the venerable brand equity established over generations. For much of the last century, Sears was the source of quality and durability for many things. It was literally where America went to shop. Most appliances that our grandparents counted on came from Sears. Their catalog was where Americans bought what they needed. Quality was assured. So powerful was the brand that it could carry the product offering of the “mail order bride”, then used by homesteaders who could look at a Sears and Roebuck or Montgomery Ward catalog and order a wife delivered to his home just as easily as an appliance. (The Zoosk, Match.com and eharmony of the time). That’s how embedded the brand was in our culture.
But things changed, and successive leadership never focused on reinvention to keep the brand relevant.
To prevent the erosion of a strong brand, leaders need to constantly evaluate where they are and where markets are headed. Of the powerful brands of the mid-to-late 1900’s, what happened to Kodak, Howard Johnson’s, Polaroid, Borders, and Blockbuster? Imagine the extraordinary brand equity each had built. At In the end, each brand did not manage their business into a changing future. Kodak didn’t believe in the digital revolution. Howard Johnson’s yielded being America’s rest stop to fast food chains, etc.
The big message here is having the forethought and will to acknowledge change can help a company navigate the future. It is about embracing disruption. Great leaders must continually make this a primary responsibility. Particularly with the ever-increasing acceleration of change, the mandate is here, right now.
One significant consulting firm that specializes helping companies focus on the future in a rigorous and strategic manner is Innosight. They have developed formalized processes to look at the future and manage to it. We have seen it in action and it is impressive.
Net… don’t put your head in the sand. Embrace that change will happen, identify what the future will look like and have a strategy to navigate there. If you do this well, you won’t become a Sears.
January 12, 2018 Comments Off on Reinvention is the Key to Sustaining a Brand
United Airlines… It Could Have Been Me or You.
When a brand has a problem, and all brands do at some point or another, people process the nature of the flaw differently. If it touches them… they react very personally. Key media platforms, like YouTube, feed this beast and all of a sudden a brand has a real problem.
Brands that have critical “flaws” that don’t directly touch us are not quickly damaged. For example, when VW misled us about their reporting incorrect MPG information, we read it as a corporate flaw. This was viewed as more distant, it remotely touched each of us, and then we moved on. Most people didn’t attach any fundamental connection to the issue, so they tuned out. Sure, the situation has been an on-going nightmare for VW causing management firings and re-alignments, but from an immediacy standpoint, it is perceived to be a somewhat distant issue. So the brand damage has been significantly less than if the issue had touched us directly.
But security personnel dragging a passenger off a United plane in Chicago is different. It touches us because it could have been us. For those of us who fly a lot, on planes that are generally full, the idea of having to give up a seat and take another flight becomes a personal decision. Most business people are on very tight schedules, and don’t have the time or patience to wait. Add to that the motive was United’s business, not the passengers, and we become outraged for good reason. The United brand has been damaged.
What if you were told your seat was not available? That alone would be a problem. But take it to the extreme, what if you were dragged off a flight (not politely asked and escorted)? Now that touches me on a very personal level. We can imagine ourselves in that circumstance.
From a brand management standpoint, these types of flaws must be addressed differently. When an issue touches consumers as individuals, it becomes critical to step up and address the public head-on and immediately. Delays in communicating only signal that the corporation (brand) is not prioritizing us, but focused on protecting itself. Today, consumers are very sensitized to these cues.
Oscar Munoz, United’s CEO, lost sight of this. His first instincts ignored the critical relationship the United brand has to its passengers. It took him a day or two to recover. But a lot of damage has been done.
The good news is that he did, relatively quickly, recognize what was at stake. Let’s hope passengers and the media cut him some slack. He finally “embraced” how his consumers felt about his brand. In our opinion, he stemmed what could have been an even worse situation. Now he must build back the positive brand equity that was lost. This requires; fixing the problem, communicating to all of us how will never happen again, and then speaking to us with conviction that he (the United brand) understands us. His tone better be empathetic and not corporate, or we will put United even further down our list of preferred airlines.
April 14, 2017 Comments Off on United Airlines… It Could Have Been Me or You.
Can Trust in a Brand Be Revived?
The question is… can trust be revived in a brand that is seriously damaged? Almost every year there are brands that amaze us with incredible stupidity… mostly generated by a drive for bigger sales numbers. Volkswagen not only misled consumers and dealers about emissions and gas mileage claims, but
tried to make it a small and inconsequential issue until investigators uncovered an ever-growing circle of management and leaders who actually knew exactly what was going on. [Read more →]
September 30, 2016 Comments Off on Can Trust in a Brand Be Revived?
Being Yourself is Terrible Advice… Authentic Brands Should Take Note.
The New York Times featured an interesting article by Adam Grant, a contributing Op-Ed writer entitled “Unless you are Oprah, ‘be yourself’ is terrible advice.” It sheds some new light on what individuals need to focus on to “erase the gap between what you firmly believe inside and what you reveal to the outside world”.
But doing this, being totally authentic and completely open and honest, has a downside and often a negative effect on advancing in the business world. Said another way, we really don’t want to know everything about the authentic you. There is much truth here for organizations, as well.
In the corporate branding world, professionals have been trying to mine the authentic “self” of an organization… that inner essence which needs to be brought forward to present a brand that is true and honest. While this is a strong starting point, as Mr. Grant points out for individuals, perhaps organizations don’t need to focus on all the warts and truths of their inner self, but define themselves to what they can credibly claim. “Rather than changing from the inside out, you bring the outside in”.
Corporations do need to understand the foundation of where they have come from, but build their brands based on reasonable aspirations of what they want to be. It is a fine line between aspiration and over-promise…and this task has to be very carefully approached. But in the end, if that seam can be found, great brands can be crafted.
The magic is in the synthesis. Understanding the reality of the past blended into a vision of the future.
To quote Grant… “they just want you to live up to what comes out of your mouth.” So spend meaningful time thinking about what that is, and then live it. Amen.
June 8, 2016 Comments Off on Being Yourself is Terrible Advice… Authentic Brands Should Take Note.
Political Primaries Spotlight Principles of Strong Brands
Brand experts everywhere are scratching their heads about how the candidates (“brands”) in the current primary system are challenging beliefs and apparently re-writing the rules. The candidates in both political parties are exhibiting unpredictable, and in some cases abhorrent, behavior. We have looked beyond the immediate to remind ourselves that there are very true and proven principles about short and long-term brand development. Lest we forget, great, powerful, sustainable brands do share important characteristics. They are:
Clear and focused. Powerful brands know what they stand for and stay focused on their core positioning. Rather than bounce around with multiple promises, they understand the need to be almost singular in purpose. At this stage of the run up to the primaries, some of the candidates have demonstrated clarity and focus, and they are being rewarded for this.
Authentic and true. Great brands are authentic. Authentic brands understand what they are and do what they say. Their behavior is consistent with their promises. That means that the organization making the brand promise must be congruent. So “brand” goes way beyond communications or image. It is a mandate for behaviors. Love a candidate or not, those that rise to the top are true to what they are and do not get distracted.
Truthful and honest. Brands that win, over the long haul, are ones that are true and honest. They don’t duck and weave between claims they make, but say things that they can back up. The gap between truth and fabrication will be a key determinate over the longer run.
Transparent. Strong brands develop a level of transparency so their key audiences understand that they are telling the truth, and not hiding or shielding key information. They understand that this transparency is the basis of the bond they have with their advocates. It would be fair to say that all the candidates, in both parties, are not transparent enough. Some believe that shouting louder masks the need to be transparent. In the long term, this strategy rarely works.
Consistent. Brands that last understand the need to be consistent over time. Brands that fail flip-flop from one position to another to satisfy immediate needs usually fail. That is because, in the long term, consumers and voters scratch their heads being unable to attach clarity and purpose to a constantly shifting target.
Delivery focused. Many brands can induce trial by making compelling claims and promises but only brands that actually deliver on promises will endure and develop loyalty. Consumers don’t tolerate bait and switch, and what may push a short-term victory could actually develop long-term detractors.
Shouting the loudest is not an enduring platform for a brand. It certainly gets media coverage and awareness. But in the end, it is the guiding principles above that will shape the outcome and the future.
We believe that the degree to which a candidate embraces these principles will determine their long-term viability. Not just in their electability, but also in terms of their effectiveness. So while the American electorate is attempting to select one “brand” over another, those that survive over the long-term will have met the test better than others.
March 10, 2016 Comments Off on Political Primaries Spotlight Principles of Strong Brands
Apple’s Refusal to Unlock it’s iPhone is “On-Brand”
This past week has been a flurry of activity between Apple and the U.S. Justice Department about unlocking an iPhone used in the San Bernadino terrorist attack. It is a profound question, and not a new one. Apple’s response so far has been consistent with the brand bond it has with its loyalists… that the relationship with consumers takes precedence.
In the New York Times, Eric Lichtblau and Matt Apuzzo cite that Apple’s refusal “appears to be based on its concern for its business model and public brand marketing strategy” rather than a legal rationale. They are partially correct. Apple knows that it is in the “relationship” business… and will, at all costs, defend that relationship with its consumers.
In a recent post, we focused on “Why Authenticity Matters”. As we wrote, “Authentic brands do what they say. Their behavior is consistent with their promises”. Apple is being true and authentic to its very reason for being. In the face of the immediacy of a legal challenge, it has deferred to its brand before compromising.
There is no question that this issue is complex. From a technical and legal standpoint, opening up the code could set a significant precedent that could have broad impact across many companies with strong intellectual property as a basis for their differentiation. Imagine some people being poisoned by drinking Coca-Cola and the company being asked by the Justice Department to reveal it’s 130 year-old, secret formula for the purposes of helping in a criminal investigation. This example isn’t as emotionally loaded as dealing with a terrorist situation, but the precedent is similar.
On the other hand, any way the authorities can gather information to thwart terrorist activities is a good thing to do. So this becomes a thorny problem.
There is no question that Apple needs to find a way to help the Justice Department without compromising its bond with consumers. Reading between the lines, both Apple and the Justice Department have essentially acknowledged this. The question is how to provide this information while protecting the Apple brand. I am confident, once the bluster dies down, this will be accomplished.
February 22, 2016 Comments Off on Apple’s Refusal to Unlock it’s iPhone is “On-Brand”
Why Authenticity Matters
One universal characteristic of market leaders and powerful brands is that they are authentic. Business leaders should challenge if they have embraced what authenticity means.
Authentic brands do what they say. Their behavior is consistent with their promises. That means that the organization making the brand promise must be congruent: its business processes have to be designed and aligned to ensure behavior that supports and delivers the brand promise. So ‘brand’ goes way beyond communications or image. It is an organizational mandate.
There have been three recent examples of brands that have broken this trust. Volkswagen completely diluted its brand by not only installing software in cars to cheat on emissions standards, but also hiding and denying this behavior for years. They impeded and obstructed regulators and provided misleading information, and thus violated not only customer trust, but also employee affection for the company. It will take years for VW to recapture its market position.
Takata, a leading supplier of air-bags, tried to duck responsibility for airbags that can explode when deployed by implying that it was a data manipulation issue. The truth did come out, and after years of denial, Takata is now paying the price for misleading customers. Their brand has suffered immeasurably. To quote the lead plaintiff, “The only thing they did not know was the names of the individuals who were going to be injured or killed, and the date it was going to happen.” Ouch.
Chipotle did not appear to react fast enough when it learned about a Norovirus outbreak. Apparently, the procedure for “washing down” produce didn’t seem to be effective. They have subsequently apologized, closed some restaurants and put in place new procedures. The question is whether consumers will believe that they will continue to act in a truthful manner. We give them praise for not denying the problem, but time will tell whether consumers believe Chipotle acted fast enough in the best interest of their consumers. For a brand based on credibility, they are dancing very close to the edge.
One of the benefits of being authentic is word-of-mouth recommendations and repeat purchases. In other words… loyalty. Whether B2B or B2C, understanding what authentic means and living it every day is a mandate in today’s complex markets.
February 19, 2016 Comments Off on Why Authenticity Matters