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Unless you’re Warren Buffett if you want to get something done in business you’re going to have to sell others on the idea. So if you’re wise, you’ll read every word of this article by VCU Brandcenter Professor, Peter Coughter. Peter teaches presentation skills to the best ad agencies in the world and he’s been a part of the recipe at the Brandcenter for more than 10 years.
The article is on the blog of Heidi Ehlers of BLACK BAG creative recruitment + career management. Heidi is a friend of the Brandcenter with a passion for identifying and developing the best creative talent in the advertising business. You’ll want to bookmark her blog and make it a frequent destination.
Click here to read the article: Black Bag Blog.
After posting a comment on Twitter about the Art of Shaving acquisition by P&G, I got a note from a student, Joe Hagel, telling me how great the Art of Shaving stores are. A week later, in DC’s Washington Square, I ran across one of the stores and went inside. I was met by Enrique Navarrete, a well-dressed gent who quickly engaged me in a conversation about shaving and proceeded to demonstrate the proper method at the sink in the store. This had become more that a visit by a curious brand strategist, it was now about my face, and the wrongs inflicted upon it over years of clumsy shaves. I left with a full set of man-pampering tools and lotions, a new respect for the Art of Shaving and a faint scent of sandalwood. This is the kind of experience that builds a great brand. Thanks Joe and Enrique!
[This is a follow-up to the Art of Shaving story below.]
Last week Procter & Gamble announced the purchase of the retail chain the Art of Shaving. Stepping into retail might seem like a peculiar move for the consumer products company, but it follows a pattern of increasing innovation for the organization.
Back in 2005 P&G made a lot of noise when it bought Gillette. At the time, I was interviewed by BusinessWeek, which picked up on the innovative shift signaled by the $57 billion deal. [The article is available here: Branding: Five New Lessons.]
The deal made a lot of sense for P&G. Gillette was a master at marketing a cohesive family of products under one brand. P&G is growing in this area, extending brands like Crest into broad families of related products. Gillette also benefitted from the combination of innovative hardware paired with consumables — the razor and the blades. P&G has expanded greatly in this area with electric toothbrushes, Febreze air cleaners, Mr. Clean car wash kits and Swiffer wet mops.
So if putting hardware and consumables together and building product families can boost your brands, why not control even more of the consumer experience? The Art of Shaving deal could teach P&G some important lessons, but only if they do it right. Back in the 1980s, P&G picked up the Vidal Sassoon product line, but left the high-end hair salons alone. The brand languished, and Sassoon and P&G found themselves on opposite ends of a heated lawsuit. In retrospect, P&G might have missed an opportunity to explore the connection between product and service. A connection the folks at Starbucks exploited when they expanded from selling bags of coffee beans to serving the coffee in upscale bistros. When brands mix product and service, the resulting experience can increase customer loyalty, reduce price sensitivity and boost differentiation.
Given its position as the leading consumer products manufacturing company, P&G could content itself with sticking to the existing formulas and leaving the innovation to smaller, nimbler players. But with this entry into retail experiences, it looks like the company that invented brand management might just be on its way to reinventing it.
General Motors filed for bankruptcy. Too bad for my hometown of Detroit, but maybe it needed to happen. The GM name has come to represent an overgrown, overly complex conglomerate that expanded into everything from home mortgages to aerospace to computer programming. It’s hard to run a great company when you’re tangled up in too many businesses. But there is still great potential for the company’s strongest brands.
At the heart of this company you’ll find nameplates like Cadillac and Chevy. Chevrolet alone accounted for half of all GM sales last year. It sold 10 times as many cars as the company’s other brands. (100 times Hummer.) All by itself, Chevy would be among the world’s largest car companies and one of the best loved.
Here’s a thought for my friends working at GM and their ad agencies: Why not change the company name to Chevrolet? Most other car companies are named for their primary car line. This includes Ford, Toyota, Honda, Hyundai, VW and many others. Most of these brands have high-end lines, like Lincoln, Lexus, Infinity and Audi – Chevrolet can do the same with Cadillac. The change would signal that the company was serious about focusing on its core brands and products. And that’s the right move for the company and for its customers.
Note: For more about GM’s brand, check out my interview on Fox Business here: GM Brand
There was a time when advertising account managers were sales people. They had firm handshakes, wore crisp suits and boasted low handicaps. They were great company of course – it was their job. They had a knack for knowing the best restaurant and trendiest tavern in any city, and they always picked up the tab. They were the most powerful people in an agency because they owned the accounts. So much so that when they left the agency, the client would often follow.
That was a long time ago, and now the account manger’s role is less clear. Planners, brand strategists and creative directors often have more input into strategy than account managers, who are left to organize projects and act as go-betweens.
At a time when our entire industry is being redefined, few have bothered to redefine the role of the account manager.
This was the subject of a conversation I had about a year ago with the 4As new leader, Nancy Hill along with VCU Brandcenter Director, Rick Boyko, and colleagues, Don Just and Caley Cantrell. Nancy challenged us to develop a graduate-level program that would train the catalysts for a new era of account leadership. She asked us to develop leaders who understood brands, embraced new ways to engage consumers and who would never cede their seat at the strategic table.
We spent a year working with industry leaders, agency owners, digital experts, CMOs, CEOs, and CCOs. We spoke with agencies like Crispin Porter + Bogusky, Publicis, The Martin Agency, McCann and Ogilvy. We built a 5-day program that will shape in the careers of a handful of account leaders. The program begins on June 5th and those who are able to attend will emerge stronger, more confident leaders. The kind of leaders who win new business, grow accounts and establish trust among clients and colleagues.
At the time I’m writing this there are still a few seats available. If you or someone you know would benefit from attending, I encourage you to drop everything and follow the links below for more information or contact our program coordinator Megan Clifton at 804 828-8384.
This week, Fox News asked me to comment on the challenges facing a bankrupt Chrysler as it attempts to win consumer confidence. [Watch the video] Here are a few things for the company to consider:
Chrysler’s reorganization is intended to proceed in record time, with surgical precision. Maybe so, but to survive as a brand, Chrysler management must now execute the most flawless marketing campaign in the history of the company in order to hold onto skeptical consumers.
First the challenges:
- The buy-American approach, used by Lee Iacocca after the 1979 bailout, won’t work in the current environment, since the company will be controlled by Italian automaker Fiat.
- New cars are probably two years or more away, so the current product line will have to do.
- Many of Chrysler’s customers aren’t happy about the billions in government funds that have gone into shoring up the company.
- The dealer base is demoralized and worried, with no clear direction about the future of the company or their contracts with it.
- The company’s past blunders, from the failed Daimler merger to unsuccessful takeover by private equity speculators have ravaged the management team and led to stale product lines and tarnished brands.
The company should emerge from bankruptcy on firmer financial footing, with favorable union contracts and reduced operating costs, but none of this matters if customers won’t buy the cars. Here is what the company MUST do to survive.
The company must demonstrate that it’s a new day at Chrysler. There can be no doubt in the consumer’s mind that new ideas and energy will guide the company’s future. Telling the public that things have changed will mean nothing given the unfulfilled hype that surrounded past turnaround efforts. Only with a change in corporate behavior demonstrated through tangible actions will the company earn back the attention of consumers.
This change must affect:
- The Dealer Experience
- The Product
- The Advertising
The Dealer Experience
The most important change in behavior will be the hardest to accomplish. The dealer experience must be completely reinvented. With no new product in the lineup the company must rely on dealers as the primary avenue for contact with consumers. That’s too bad, because car dealers are independent companies, so controlling their behavior is difficult in the best of times. Management must convince dealers that providing a reinvented customer experience is the best path to recovery and they must develop clear guidelines for this experience. Customers must leave the dealers ready to talk about the whole new approach they experienced. And while they’re at it, the company should take a cue from Saturn and move to no-haggle pricing. Nobody feels good about playing cat-and-mouse with sales people to guess the price they should pay for their car.
The Product
While the product line can’t be reinvented overnight, the company can alter the product in ways that can generate positive feelings among consumers. Chrysler should consider introducing special editions for 2010 that stand out. For example a line of “platinum edition” vehicles could come equipped with a full list of premium features, all for the regular price. The line should feature altered exterior trim to freshen the look. Promotion should focus on how the new editions are Chrysler’s way of thanking the consumer for supporting the company.
Long-term, Chrysler must stop killing its own babies. They’ve shut down consumer favorites like the Jeep Cherokee and Dodge Neon to introduce untested new products like the Caliber and the Nitro. Customers want stable, long-term brands they can trust. The success of cars like the Corolla, introduced in 1968, and the Accord, introduced in 1972, demonstrates the value of consistent improvement to trusted brands. Chrysler has been careless and self-destructive in this arena.
The Advertising
Once freshened products are paired with new pricing and dealer experience, it’s going to be time to tell the story in a new way. This can’t be the same old automobile campaign. It’s time to shake things up and that can happen only when you change the way you do business. Chrysler should break the rules by asking the 10 best creative directors in advertising to spend a few days together brainstorming about how to make the company a poster child for new approaches to consumer engagement — and let the press go along for the ride. Instead of tired executions hammered into submission by uninspired bureaucrats, this approach will yield original thinking and smart solutions.
On a Personal Note
I love to write about troubled brands, but this collapse hits me where it hurts. I grew up in a Chrysler family — there was never a car in the garage that wasn’t a Chrysler. My father worked for the corporation from the time he graduated from law school to the day he retired more than 30 years later. So I care about the future of this American icon and you should too, since we all have a stake in its future.
At a time when the news is filled with the ugly side of corporations, I thought I’d share a story about a series of selfless acts involving a well-known brand.
It all began about two weeks ago when MasterCard generously donated a $100 gift card to each team competing in the Kansas City Regional FIRST Robotics competition. The donation was intended to help the teams purchase parts and equipment for their robots.
Later that day, one of the teams learned their trailer had been stolen from the arena. After word of the theft spread through the audience, 20 competing teams donated their gift cards to help replace the trailer and some parents added cash donations. The Kansas City Star quoted the team’s advisor, Kathy Shirk, who said, “There were lots of tears in the stands. We know we are in a generous community. And we know that gracious professionalism is a tenet of FIRST Robotics. But to have it played out that way — it was like getting a gift you were not expecting.”
When they learned about the good sportsmanship demonstrated by the robot teams, the people from MasterCard were inspired to add one more act of generosity to the story. After making sure the trailer was fully paid for, the company gave each team another $100 cash card to spend on parts. A company spokesman said MasterCard’s employees attending the event were “impressed by the kindness and graciousness shown by the FIRST Robotics teams and wanted to extend their gratitude.”
I was one of hundreds of people who heard this story today at the FIRST Robotics competition in Virginia, which shows how a message about a few acts of generosity can spread across communities, rewarding the brand that’s involved.
Today is the last day of life for Circuit City. The bankrupt company announced it will close the last of its stores this evening. Thus ends the tragic tale of a company that in 2001 was cited in Jim Collins’ book Good to Great as one of the best-run American businesses. As with most corporate failures, the seeds of Circuit City’s destruction were sown long ago.
One of the first signs of trouble came with the decision to abandon the core business as the principal driver of growth. A determination was made by management to look elsewhere for innovation. The result was the launch of CarMax, a used-car chain. At the time, Circuit City was the largest consumer electronics company in the world. Archrival Best Buy wasted no time in exploiting the distraction, overtaking Circuit City and never looking back.
Circuit City was further distracted by the launch of DIVX. The technology platform was developed to compete with DVDs, but famously failed, costing the company over $100 million. By the time Circuit City jettisoned CarMax and exterminated DIVX, Best Buy had become the strong front-runner in the race.
Refocused on its core business, Circuit City began to explore ways to improve the store experience and revive the brand. But on March 28, 2007, the company shot itself in the foot by firing over 3,000 experienced employees to replace them with lower-priced staff. The move famously backfired as the quality of customer service and employee morale sunk to new lows. Employees never again trusted management and consumers lost patience with the brand. The company continued to plummet, but the free fall ends today.
What lessons can we take from this brand fatality? Circuit City and Best Buy operated with similar product lines, prices and locations. But Best Buy took care of its employees, consumers and its brand – Circuit City didn’t. And the rest is history.
References:
From Good to Great to Bankruptcy: Jim Collins’ book revisited
Fortune Most Admired Companies
Spend much time reading today’s headlines and you’ll get the impression that big businesses are just decaying hulks of greed and corruption. But a new article in Fortune reminds us that many corporations are not only surviving, but earning the admiration of their peers.
The list of the world’s most admired companies includes innovative consumer brands like Disney, Apple, Google and Southwest Airlines, along with respected holding companies like Berkshire Hathaway and Procter & Gamble. Skim through the top 50 and you’ll be reminded there are still leaders in this world.
Brand-builders should note there are two key qualities exhibited by most of the companies on the list: The vision to avoid the crowd and the wisdom to build long-term stability. As always, individuality and predictability are the building blocks for great brands.
The Top 20:
1 Apple
2 Berkshire Hathaway
3 Toyota Motor
4 Google
5 Johnson & Johnson
6 Procter & Gamble
7* FedEx
7* Southwest Airlines
9 General Electric
10 Microsoft
11 Wal-Mart Stores
12 Coca-Cola
13 Walt Disney
14 Wells Fargo
15 Goldman Sachs Group
16 McDonald’s
17 IBM
18 3M
19 Target
20 J.P. Morgan Chase
Hyundai Assurance Program
I can’t think of a major American corporation that doesn’t have one or more employees whose responsibility it is to gather consumer insights. So why are so few brands truly insightful about consumers in this turbulent economy?
It doesn’t take a rocket scientist to know that consumers are worried about the economy. Most studies like the Rasmussen Consumer Index show consumer confidence at a record low. But can you name any brands that are standing up to do something about it? Not many.
An example is Hyundai, which is responding to consumer anxiety by offering to let purchasers of new vehicles out of their contract if they lose their jobs. A great idea that seemed destined to be followed by other automakers, but the U.S. automakers have all been too busy lobbying for their own aid to think about lending a hand to their customers.
American Business seems to have adopted a victim mentality preferring to whine about circumstances beyond its control rather than demonstrate conviction and leadership despite adverse conditions.
Is there any reason Ford can’t announce a move to bring a percentage of its manufacturing back to the U.S., creating more jobs and stimulating the economy? What about Nike, or Target, or Dell, or P&G? Instead of eliminating hiring, what if they announced plans to reduce outsourcing so they could increase domestic hiring. Imagine how consumers would feel about a brand that demonstrated that kind of leadership!
Concern for internal issues shouldn’t keep corporations from turning some of their attention to brainstorming ways to help their customers and the economy. This is a time for decisive private action and those who participate in the solution will find themselves on top when prosperity returns.
Addendum: David Hartman, designer of the VCU Brandcenter’s logo and other works of graceful creativity, pointed out that Intel is bucking the victim trend by increasing its investment in the U.S. You can read about it here.
Sam Walton's 1993 Autobiography
The folks at Walmart have been working hard to improve their image of late. They’ve pumped up their public relations, hooked up with environmental advocates and launched appealing new ads with the help of The Martin Agency. The work is beginning to take hold, but as the deepening economic crisis casts shadows on the U.S. economy, Walmart may have an opportunity to take a giant leap forward with their brand.
Imagine if Walmart announced a decision to work with its manufacturers to move 20% of their production back to the U.S. within five years. It would be a private economic stimulus that would have a huge impact on the economy and the brand.
Walmart would have no problem arranging a press conference with President Obama – the press would be filled with quotes from grateful consumers – and the actions might inspire companies like Target and Home Depot to follow suit. Goods sold under the program could be showcased under “Made in the USA” signs. And while consumers might pay slightly more for these products, they’d be contributing to bringing jobs back to their hometowns.
Walmart’s significant economic power could really make a difference in increasing employment and jump-starting a recovery, which would lead to stronger sales and a higher stock price. Think of it as a virtuous cycle that results in passionate admiration of the brand.
Am I dreaming the impossible dream? Maybe, but Walmart is working hard to reclaim the legacy created by Sam Walton, a man who titled his autobiography “Made in America.” In his time, Walton encouraged his company to buy domestically made goods and consumers rewarded the company for it. What a powerful statement it would make for the brand to signal its commitment to the consumers who buy its goods, by buying theirs.
Google's Robert Wong and VCU Brandcenter's Rick Boyko
Last week the folks at Google brought a small army of trainers and a truckload of technology to the VCU Brandcenter as part of their Google Campus program.
In the early morning hours, workers started unloading trucks containing loads of interactive kiosks, touchscreen monitors and – just as essential for attracting the attention of graduate students – buckets of candy and snacks. By the time students started trickling in, they encountered about 30 Google employees, and the Brandcenter had been transformed into the Googleplex for a day.
The students and faculty were treated to in-depth discussions of a wide range of technology from Google Analytics and AdWords to new features in YouTube and GPS applications tied to Google Android and Google Maps. For the Brandcenter’s 200 students and faculty, it provided great exposure to new methods of engaging consumers in an increasingly digital world. And for Google, it was a smart investment aimed at influencing the influencers who will help to shape the future of brand building.
Richmond advertising firm The Martin Agency co-sponsored the event and many of their leaders attended – I ran into Mike Hughes, John Adams, Bruce Kelley, Matt Williams, Steve Bassett and others. Robert Wong, Creative Director at Google Creative Labs, gave a fascinating talk that covered a variety of creative topics and demonstrated some of the ways Google tries to live up to its “Don’t be Evil” motto.
In all, it was an outstanding event that provoked ongoing conversations about shaping brands in a connected culture.
Introduction
A few weeks ago, a brilliant marketer and former colleague of mine, Dee Papit, commented on my article about the “Branding of Barack Obama.” Her reference to Obama’s use of the Internet and social networking led me to reflect on the way he and libertarian candidate Ron Paul bypassed the smoke-filled rooms of power to connect directly with supporters. I thought I’d share a few of my thoughts on the cultural evolution that made these events possible and continues to reshape competition in the new century.
The Seeds of Change
In 1960, Ford didn’t need a better idea. They had manufacturing capacity, supply chain efficiency and a distribution network. The investment required to build this kind of capacity was an enormous competitive barrier and it successfully choked off the efforts of all but three of the world’s most powerful companies. By a wide margin, General Motors was the largest company in the world and industrial powerhouses like Ford, Chrysler, General Electric and U.S. Steel were all in the top 10.
It was an age of consolidated power. Three networks controlled all television programming. A handful of Hollywood moguls controlled mainstream film. IBM controlled 70 percent of the computer market, and the only phone service you could buy came from AT&T. In the ’60s, the scale that such companies operated on made it nearly impossible for smaller companies to compete. Fortunately, the ’60s also laid the groundwork for all this to change.
The rebellion by young people in the 1960s, punctuated by the popular slogan “Power to the people,” didn’t disrupt established power bases overnight, but it did establish a pattern of independent thinking that led to the proliferation of entrepreneurship. As more young people questioned authority, we saw the rise of cultural classes that would begin to reshape our world at the end of the twentieth century. Most notable among these were the hippy, the artist and the geek.
Hippies and their ilk openly questioned the motives of big business, big politics and anything that came out of an assembly plant. Their back-to-nature message set the stage for the rapid rise of the organic movement, but it also coincided with the spread of the creative class.
In the ’60s, the creative community came alive with writers like Jack Kerouac, Allen Ginsberg, Maya Angelou, Ken Kesey, Gloria Steinem, Truman Capote and Harper Lee; musicians like Miles Davis, Herbie Hancock, The Velvet Underground, Jimmy Hendrix, Bob Dylan and Neil Young; and artists like Andy Warhol and Robert Rauschenberg. These influences worked their way into film and television. They also inspired advertising leaders like Bill Bernbach to usher in the era known as the “Creative Revolution.”
At the same time creativity was on the rise, the growth of technology was accelerating, sparking new innovations in the ways people worked and communicated. “Geeks,” a derogatory term for social outcasts who tinkered with technology, would soon become a badge of honor as young geniuses like Steve Wozniak, Steve Jobs, Adam Osborne, John Draper and Bill Gates turned their parents’ garages into the primordial pool of the evolution of technology. This growing subculture of basement businessmen was greatly influenced by social activists like Fred Moore, cofounder of the Homebrew Computer Club. In the 1970s and beyond, Moore and others around him pushed for the democratization of technology. This led to an increased number of these garage geeks breaking away from corporate confines to start their own, venture-backed businesses.
Throughout the ’60s, ’70s and ’80s, anti-establishment attitudes, increased emphasis on creativity and expanded democratization of technology provided fertile conditions for the incubation of changes that were to erupt onto the scene in the late 1990s. The rocket fuel that propelled the final stage of transformation was the Internet.
Ironically, the Internet was born out of the US Department of Defense in the 1960s. It was originally known as the ARPANET and developed through the ’70s and ’80s, but it wasn’t until the launch of the Mosaic browser in 1993 and Netscape in 1994 that the “Information Superhighway,” as it was called, came into popular use.
In the latter half of the 1990s, the Internet would go from a largely unknown plaything of geeks, phreaks and researchers to a middle-class mainstay. With this change, virtually any individual or business had an equal shot at capturing the attention of a global audience. While the dot-com bust in 2000 purged the new economy of many of its weakest businesses, the transformation of the economy continued, altering the landscape, weakening large institutions and emboldening challenges to the status quo.
Aided by technology and a strong will to break away from mainstream institutions, independent enterprise has flourished. The Sundance Festival launched the era of the independent filmmaker, while cable access broke down the dominance of the Big Three Networks. AT&T’s breakup led to the vast expansion of communications options, including the development of mobile telephony, texting and smart phones. IBM’s dominance in computers gave way to dozens of new companies, like Apple, Microsoft, Oracle, HP and Dell. Electronic publishing, paired with distribution through online retailers like Amazon.com, would allow any author to bypass the major publishing companies and self-publish their book. And thousands of innovative new businesses, from eBay to Google, would change the nature of the way we trade and promote goods and services, democratizing access to online markets and advertising.
So where does all this lead? It is bringing us to a time when anyone with an innovative idea and the conviction to pursue it can compete in a global marketplace. We are seeing small branding boutiques pull choice assignments away from global giants. Multinational banks are crumbling, even as small community banks thrive. And political candidates like Ron Paul and Barack Obama are able to raise millions of dollars from small donors, while bypassing the traditional paths to power.
Only time will tell what lies next along this path, but it is certain to lead to greater diversity of opportunity and unprecedented competitive freedom.
I’m often wary of reading business books, especially books relating to branding and marketing. Most are shallow and repetitive, squeezing 200 pages out of a concept that was better told on the back cover.
So I picked up the unfortunately-titled “Yes!” with a great deal of apprehension. But I was wrong to judge this book by its cover. Though it may look like a self-help book or a new audio CD from Tony Robbins, “Yes!” is a well researched and succinctly written exploration of the art of persuasion. The authors, Noah J. Goldstein, Steve J. Martin and Robert B. Cialindi, explore a wide range of methods for influencing audiences.
If you’re in the business of encouraging people to do things, as all marketers are, you will find this book to be very useful. Buy it at Amazon.com.
