brand.extension

It’s been a while. More than 6 months, actually, since my last “real” blog post. I’m sorry I didn’t find the time to write anything for this blog in such a long time. Then again, starting my own business seems to be a good excuse for it.

“Give the orang-utan a break”

Most of you have probably heard about the Nestlé vs. Greenpeace affair by now. Greenpeace posted a video on the Facebook fan page of the Swiss food company. The video was a mock-up commercial for Nestlé’s Kitkat, showing the finger of an orang-utan instead of the chocolate bar. The video and the reactions by Nestlé caused a huge wave of critizism for both Nestlé’s ethical behavior and their snarky comments towards some of their Facebook “fans”.

I don’t know how valid Greenpeace’s claim is that the palm-oil Nestlé uses for Kitkat comes from a company destroying the Indonesian rain forest, the last resort for orang-utans. The way Nestlé dealed with the issue shows, that there is still a lot to learn for big companies using social media. A study shows how the real wave of criticizm began only after Nestlé started arguing with their critics on Facebook. When you’re under attack by angry activists it’s just not the time to worry about trademark infringements!

72% of German CEOs are in fear of losing control

While Nestlé vs. Greenpeace is a particularly good (or rather bad) example, I don’t think many other big companies would have done a lot better in a situation like this. They are still so used to the rules of the old media world, they simply get overwhelmed when it comes to dealing openly with an issue like this. They embrace the internet for its cheap and fast ways of communication, but only as long as it’s them sending the message. As soon as things go the other way – instead of them talking to millions, millons are talking to them – there is no strategy. Fair play to them: Things have become a lot more difficult. The good old press release doesn’t bail you out anymore. Open two-way-communication can be tricky, though. How do companies maintain control over the messages their brand is sending out to consumers?

In a recent poll 130 CEOs here in Germany were interviewed on social media. While most of them see its potential for their marketing and are willing to invest in social media, 72% are scared of losing control over their marketing messages. This fear totally makes sense to me! People tend to be scared of things they don’t understand. And how are people, who have their secretaries print out their emails, supposed to understand the internet? It may take some more years until top managers in internet-averse Germany understand the paradigm shift we are going through at the moment. It is no longer about creating messages consumers are supposed to learn. It is about what consumers really think and feel about brands and how they share it with their peers.

Help people share their opinion about your brand

Word of mouth, which seemed so out of date only 10 years ago, is becoming the most important aspect of marketing again. People use the internet and especially social networks to talk about brands. Marketing managers will need to understand that “word of mouse” is not a tool. Instead of trying to keep control over what people are saying, give them good reasons to talk about your brand in a good way. It all comes down to creating value for your customers. If you fail to do so, someone else will – and this might be the real issue CEOs should be afraid of.

Social media is a great way to monitor what people are saying about your brand. Here you have all the feedback you need. Use it to understand what your prospects want. Listen to them and take their opinions seriously. Help them share it with their peers. They will appreciate it. Sounds easy? It’s not! It’s only easy in theory, but it actually is a really tough job. Nestlé’s problem was not so much that Greenpeace’s argument was so much better than theirs, but that they completely caught them on their back foot. I’m sure Nestlé could have done a lot better, maybe even benefited from the debate after all, had they only had a good social media strategy.

Some good takes on this issue:

• “Brand builder” Olivier Blanchard has some very good thoughts in his two part analysis: Part 1 & Part 2 (if you only have time to read one of them, read Part 2!)
• For the German speakers: PR Blogger Thomas Euler points out the mistakes Nestlé made in their communication: 2:0 Greenpeace vs. Nestlé

I have transferred my blog to a new domain: blog.tobiassinger.com. The old domain still works though. I have also transferred this blog from Typepad to Wordpress. Unfortunately, I didn’t have the time to make a new blog design yet, so it looks a little boring right now with the standard WP-Theme. I’m going to fix that as soon as I can.

For my German speaking readers: Wie JAKO sein Image ruiniert (How German sportswear company JAKO destroy their own brand image).

I went to the local farmers‘ market today to buy some groceries. I really love going there. The experience a lot better than going to a regular grocery store. I thought about why I prefer shopping at farmers‘ markets and I found six main reasons:

Friendliness & Generosity:

The first booth I went to was a small fruit & vegetable dealer. The owner is an old woman who, despite looking like she can barely walk anymore, is very energetic and overwhelmingly friendly (which I have to say, is not very usual for northern Germany). She always finds time to chat with her customers and gives out samples to everyone. Whenever I go there I get something for free. Today, she gave me some extra plums – „for your lunch break!“

Identification & Honesty:

Afterwards I went to a Turkish owned antipasti booth. I was going to buy a small loaf of pita bread, but the lady who runs the shop told me it wasn‘t very good because she had left it in the oven for too long. The bread looked fine to me, so I bought it anyways, but she insisted to sell it to me for half the price. She could have sold me the bread without saying anything and I would not have complained (the bread was delicious). Still, she decided not to because the product didn‘t match her own standards.

Expertise & Determination:

The last booth I went to was specialized on potatoes (there goes another German stereotype). I asked the vendor what kind of potato would fit best to the meal I was going to prepare. His reply surprised me a lot: Instead of just pointing on one of the potato baskets in front of him, he asked me some more questions about my preferences and how I planned to prepare the potatoes. He then gave me two choices, explaining which one he‘d prefer and why. After I made my decision he gave me some more advice on how to cook that kind of potato to get the best result.

There are some valuable lessons for marketers to learn from that story. Even though you can‘t copy the atmosphere of a farmers‘ market, you can adopt the attitude of the vendors.

There are some questions marketers should ask themselves:

1. Are you friendly to your customers/clients because you want to? Or are you friendly because you have to?
2. Do you show your customers/clients that you like to give? Or do you only like to take?
3. Do you identify with the product or service you‘re marketing? Or do you not actually care?
4. Are you being honest about the things you‘re marketing? Or are you trying to hide their weaknesses?
5. Are you an expert on the product or service you‘re marketing? Or are you only an expert on marketing?
6. Are you determined to go the extra mile? Or are you merely doing what people expect you to do?

What about you? Do you do marketing the farmers‘ market way?

Customers can be annoying. Every marketer knows that. Wouldn't companies be better off, if they didn't have to deal with them anymore?

This is a 5 step guide to losing your customers and making sure they won't come back:

Step 1: Screw up!

This one is a no brainer. Nothing gets the attention of your customers like doing something really annoying. So this should be your first step. For example, if you are- a pizza delivery service, show up 90 minutes late. Or do, what Joey's Pizza (a big pizza franchise in Germany) did with my brother's order the other day: Burn the pizza until it's inedible. There are plenty of ways to annoy your customers, so I'm sure you will find one that works for your company.

Step 2: Don't apologize!

Apologies are for losers. You are not a loser, so don't apologize for screwing up. Instead, make up excuses you cannot be blamed for by angry customers. Obviously it wasn't your fault. Be creative and you will find a scapegoat you can blame. If you are a true master, your angry customers will eventually start believing what went wrong was their own fault.

Step 3: Tell your customers they are wrong!

This is an effective alternative to step 2. Sometimes consumers get a little off track and accuse you or your company, but you are (or feel) totally innocent. In this case you shouldn't hesitate to tell them just how wrong they are! Here's another example you can learn from: When my brother complained to Joey's about the burnt pizza, the delivery guy told him the pizza wasn't burnt and he should eat it. Just the kind of extra advice customers appreciate.

Step 4: No refunds!

Some persistent customers might not accept that they are wrong and ask for their money back. In this case you should stay strong and say no! They should have thought about that before they did business with you. You don't have anything to give away for free, especially in these tough economic times. Consistency is very important here: If you give one customer a refund, everybody will ask for one. It's not your fault they aren't satisfied! That's why Joey's delivery guy didn't give my brother a refund. After all, he had already told him his pizza wasn't burnt. So, there!

Step 5: Make sure people spread the word!

If you follow steps 1 through 4 thoroughly, you should be on the right track to losing most of your customers. Keep in mind that this is not enough! You also want to make sure your annoyed (ex-)customers tell this story to as many other people as possible. That's why you should add a little cherry on top to make their experience with your brand unforgettable. You can really use the power of word-of-mouth here, since annoyed customers tend to tell more people about it than happy customers. The internet will help them spread the word.

One way to achieve this, is by doing what Joey's delivery guy did after my brother called his supervisor and eventually did get the refund: Refuse to pay back the tip! After all, he had to come back to my brother's house for a second time because of my brother's complaint. It was hard-earned mone, why should he let my brother take it away from him?

There are infinite paths to losing customers, but this guide will help you focusing on the key factors: condescension and a lack of common decency.

But wait, you might say, how do you make money, if you don't have any customers?

Well, that's what bail-out money is for…

When it comes to learning, we usually seek to get insight from the best people we know. It is a very natural thing. Even little children try to imitate their parents because they see them as role models. Trying to be as the people we look up to seems to be reasonable. Or is it?

The problem with learning from the best is the assumption that people who ARE the best also KNOW IT best. But do successful people really know the reason for their success? Most of them probably think they do. They follow a certain strategy and they achieve the results they intend to, so they link these results to their strategy. In reality our life of uncertainty is a lot more complex, but people like to be in control of their own destiny, so they ignore the fact that there are factors they can't change. Another person who follows the same strategy might get a completely different result.

This is true for brands as well. The success of one brand is simply not repeatable. There is always a combination of things that lead to success. One of the most important factors is being in the right place at the right time. And in most cases, that's not the result of strategic planning, but simply chance, or luck, or destiny, or however you will call it.

It turns out you can learn just as much from the not so successful examples. If you look back at your life, would you say you learned more from the things you did right or the things that went wrong? I bet it's the latter.

People learn from mistakes because failure forces them to think and figure out why something went wrong. As long as everything is fine, there is no reason to overthink your actions. Just look at the financial crisis: Bankers just kept on doing what they were doing because it used to be their way to success. When things went bad, only few of them saw it coming. Not because there were no warning signs, but because they believed they couldn't fail.

I'm not saying you can't learn from successful brands or people. But taking only the best as an example can be frustrating for two reasons:

1. You will find that many of the things that worked for them don't work for you. Just because something works for one brand/person it doesn't mean it works for everyone else.
2. You will always be second – at most. If you do whatever the leader in your specific field does, you can never be as good. You will always be a copy. Like a generic drug: Works as well as the original, but will never be seen as equal or better.

Just look at it from this perspective: Many brands know what makes their competitors more successful. If it would be so easy to copy, wouldn't there be a lot more successful brands?

Here is the reason why it doesn't work that way:

 Every person and every brand has an identity. This identity makes them unique and special. Only if you know your identity as a brand/person you can really learn from others because only then you can adopt the things that work for you and neglect the ones that don't.

If there is one thing that most successful brands have in common, it's that they all walked on new paths and found their own unique way of doing things. They became so successful because they did NOT just follow the example others set for them. Perhaps this is the most important lesson to learn.

(Second picture by Permbroke Dave)

This morning I heard a radio ad that really stuck with me – but not in a good way. Recently it has become quite obvious to me that radio advertisments are usually not very well made. Their relevance seems to have diminished so much over the years that companies don't pay much attention to the messages they send, if they only find a way to yell them loud enough to be heard in the multitude of voices consumers try to ignore. What happens afterwards doesn't really matter. Hopefully, consumers will go through a process called AIDA: Once you've got their attention there will be interest, desire and finally action. Never mind this is an old sales concept.

While TV commercials use images and hence attract the most powerful human sense, radio ads lack visual support of the intended message. But does that mean the best thing to do in a radio ad, is to use as many words as possible in 20 seconds to talk about your product? To me it seems like it would be more efficient to just play the jingle and have someone say your slogan than spending money on producing those kinds of radio spots. Of course, there are a few really good, interesting and funny radio ads, but they are the exceptions that prove the rule. What amazes me even more is the total lack of a clear message in most of them. An ad is supposed to support the brand message, not to confuse consumers by contradicting it.

As you can probably tell by now, my opinion on radio ads is not very high, so how did the ad this morning make an even worse impression on me?

It was an ad for the American car brand Chevrolet: "Ganz Deutschland feiert den neuen Chevrolet." Translates to: "Everybody in Germany is celebrating the new Chevrolet." Quite a statement for a niche brand, which Chevrolet is in the German car market! I know it's easy to pick on American auto manufacturers these days, but this lack of self-awareness is really incredible.

I'll try to say it as unmistakably as possible: For many Germans the term American car is an oxymoron! This may not be a very rational opionion and it may also not be Chevrolets fault. In fact, it doesn't even matter how good this new car may be or how good the value of their offer is. What matters is how consumers perceive them. Chevrolet will have to deal with this poor image, if they like it or not. It looks like it will take them a while to accept that. Right now they are apparently in the stage of denial. Sure, you want to say something positive about your brand, but it should be anywhere close to reality. It is absurd to claim that everybody in Germany is celebrating the new Chevy.

Perhaps General Motors should have asked the Japanese auto makers. It took them decades to overcome their notoriously bad image in Germany. Toyota's slogan at that time was a lot more appropriate: "Nichts ist unmöglich" – nothing is impossible.

The other week, my girlfriend bought expensive new shoes. That might not sound like it is anything worth mentioning at all – if you don't know my girlfriend. It's a stereotype that women spend lots of money on shoes, but she is usually not like that. Neither does she own 70 pairs of shoes, nor did she ever spend that much money on one single pair. That made me think: What made my girlfriend break her habit of not caring about shoes?

In marketing we talk a lot about involvement. If something, a product or a category, is very important to you, we call that high product involvement. That means you spend a lot of time thinking about this type of product and gather information before you make a buying decision. With a high involvement product you are more likely to make a rational choice than with low involvement products. Low involvement products are products you buy, but don't really care about, e.g. toothpaste or toilet paper.

Of course, whether your involvement is high or low depends on your personal preferences. Some people might spend hours finding out the pros and cons of every toothpaste available on the market to purchase the best possible product for their teeth. The majority however, will just buy the same toothpaste brand they always buy, without even thinking about it. There are more important things for them to think about.

But sometimes new products are introduced to the market that change the involvement of a group of people. People, who never spent time thinking about toilet paper, find out they should buy Charmin because they deserve better than that scratchy regular toilet paper (Charmin was introduced to the German market in 1999). Or people, who used to base their decision of which MP3 player they'd buy on storage capacity, suddenly want an iPod and no other brand, no matter how high the capacity may be.

It is the goal of every marketer to make their product and brand stand out, but it doesn't happen very often that consumers change their involvement. So, how does it work?

Did iPod buyers really care more about MP3 players than they used to? Unlikely. What happened is that people saw the iPod as a category of its own that replaced their need for MP3 players. The position of the iPod in people's minds is different from all the other MP3 players. That is the goal of positioning: To distance oneself from the competition in a way that makes you look better in the eyes of your target group.

If you sell shoes and your target group are people who don't care about shoes, what do you do? MBT knew the answer: They made the anti-shoe! It's a strategy that worked for 7Up, which has been positioned successfully as the "Uncola". Apparently, that was enough to get my girlfriend's attention, make her research all the benefits of those anti-shoes, try them on, order them from an online shop and obsess about possibly missing the delivery truck for three days.

The anti-shoe has a rounded sole that is supposed to improve posture and increase muscle activity. I'm not an orthopedist, so I have no idea if it works or if it's just a marketing trick. I only know it increased my girlfriends involvement and made her spend a lot of money on a pair of anti-shoes, she would have never spent on shoes.

Today, I'm launching a little brand.extension of my own: From now on, I am going to include interviews in this blog. Every month, I will interview an expert on a field related to brand management. You can find the interviews by clicking on the new "Interviews" button in the navigation bar at the top of this website.

My first interview guest is Katie Konrath. Katie is a creativity specialist who helps companies come up with fresh
new product and service ideas, increase visibility, and attract new
customers. She runs a top innovation blog, getfreshminds.com – ideas so fresh… they should be slapped, and is one of the authors of the Personal Branding Blog.

Hi Katie! Today, many brands seem generic. Consumers can‘t really see differences between brands of the same category anymore. How can innovation help here?

The reason why many brands seem generic is they do the exact same thing. They figure out what has worked reliably in the past and then they take the safe route every time. Unfortunately, when companies do what is "safe", it gets to the point where people can't see any differences between brands anymore. Innovation can help brands coming up with new ideas that make them stand out from the rest.  When new innovations take a product or service far beyond what is already available, they create a whole new market. And then, when the competition is obsolete, it's easy to stand out.

One of the most important things in brand management is consistency. That limits the room for innovation. How can consistent brands still be creative?

It depends on what your brand is about. Let‘s say you have a brand such as Coke. Since that brand is known for its specific taste, there isn't much room to innovate with the product. You have to have a specific color, you have to have a specific flavor. With such a brand, marketing is really the only opportunity for creativity. However, if you have a brand like 3M, Pixar or Apple, a major part of the brand is being creative and come up with new innovations. In those cases, customers are always waiting to see what the brand comes up with next. If a brand wants to be innovative while still being consistant, the brand needs to get its customers to expect innovation from it. It does that by demonstrating that it's not a static brand that never changes no matter what happens to the times.

What do you think is the main reason why companies don‘t innovate enough?

Because it is risky. Innovation is about failure. If you never take a risk, innovation is not going to happen and you are never going to come up with great ideas. Many companies are too focused on the bottom line, too focused on making their shareholder value and too focused on showing profit with everything they do.  They are constantly trying not to make mistakes that will cost them money.  But you can‘t come up with fantastic innovations unless you screw up once in a while!

In today's globalized world, it became a lot easier for your competitors to copy your innovations. Is there any safe way to protect them? And if not, doesn‘t that make innovation less important?

There are not many ways to protect innovations right now. It takes a long time to get a patent certified. If you actually go through that process you‘ll probably miss the market opportunity. But that doesn‘t mean innovation is less important, in fact it makes it more important because everyone is trying to be innovative and come up with the next big thing. Your brand will become obsolete very quickly, if you fail to innovate. If you come up with an innovation that is ahead of the competition and creates a market of its own, however, you can get an advantage in consumers minds that your competitors can't take away from you, even if they catch up to your technology. You don't need a patent if you are the brand customers think of when they think of your market.

Can you give us a "best practice“ example? What brand is doing a GREAT job at being innovative?

Of course, I have to name Apple. They are always on the forefront coming up with new ideas. Another company that is doing a good job right now is amazon.com. They have come up with an ebook reader that takes exactly what their customers love to do – read lots of books – and gives them a new way to do it. They're addressing all the frustrations book lovers face – books take up a lot of space, are heavy when traveling, take a couple days to arrive by mail – and solved those problems by creating the Kindle, which supports amazon.com's business further by making it incredibly easy for book lovers to buy books anytime and anywhere.  It's a great example of how a brand can create new opportunities and a new audience for itself without abandoning its core principles.

Thank you for the interview, Katie!

If you want to learn more about the field of innovation, you should read Katie's blog at getfreshminds.com and at the Personal Branding Blog. She is also on Twitter, so don't forget to follow her there!