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The Touch of a Brand

In past articles, we’ve covered the sense of smell and sound and how they enhance the brand relationship. Here our goal is to explore the sensation of touch and its impact on branding. The sense of touch isn’t often considered in building a brand. For some brands this is a huge missed opportunity.

 

One of the obvious ways we use touch is shopping for clothes. Our first instinct is to touch the fabric to feel it against our fingers. The quick touch tells many things about the garment – its softness, wear ability, durability and quality. Think of the last time you visited a car dealership showroom when you inspected a vehicle. The first impression is how the door handle felt in your hand, how it opened and closed. If the interior was leather you assessed the quality by touching the seat or better yet felt the experience by sitting in the driver’s seat. Then grab the steering wheel. With every touch point our brains are processing the information and analysing the vehicle’s durability, craftsmanship and overall quality.

 

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Touch is the first sensory system we develop in the womb and is the most developed by birth. If you ever raised a child you know that holding, rocking and rhythmic stroking are all ways to calm and connect with babies. Trust me, I had many sleepless nights using all of these techniques to make my loved ones fall peacefully asleep hopefully as humanly possible.

 

The somatosensory cortex of your brain, which processes touch information, dedicates a large numbers of neurons to your fingers, lips and tongue. What this means is these areas are more perceptive and finely attuned, maximizing the sensory richness and brain intimacy.

 

touch sense

 

Greek philosopher Aristotle concluded that man was more intelligent than other animals because of the accuracy of his sense of touch. The sensation of touch influences what we buy, who we love and how we heal. We use touch to gather information, establish trust and social bonds.

 

Dr. David Linden said in his book, Touch: The Science of Hand, Heart and Mind that the “genes, cells and neural circuits involved in the sense of touch have been crucial to creating our unique human experience.”

 

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Test Your Touch

 

Let’s try a touch test. Imagine that you are in a pitch-dark room with no light and you’re handed a bottle. Through the power of touch you determine what I have given you.

 

You feel the cold glass bottle in the palm of your hand. You sense a distinct curvature of the glass in an elongated shape. Moving your fingers along the side you notice subtle smooth groves like ribs that flow up & down the bottle. Through the glass you can sense the content. It feels cold and wet as the glass sweats droplets of water on your hand. You remove the cap with a pop then move the bottleneck towards your lips. You feel the coldness against your bottom lip and tongue. The effervescence of tiny little bubbles dance and tingling against your lip and mouth. You smile with excitement and embrace the bottle’s opening with your lips like a wet kiss. It’s the real thing!

 

If we really conducted this experiment you would have quickly determined that the glass bottle was indeed the most famous shaped soft drink bottle in the world – the iconic contour fluted lines of the Coca-Cola bottle. In 1915 Coca-Cola challenged several glass companies to design a bottle that could be recognized by feel in the dark. 101 years later this unique design still succeeds with its objective.

 

Two Types of Touch

 

We’re not going to talk about appropriate and inappropriate touching if that’s where your mind went. If you want to explore the topic of sex and branding check out my article on Using Sex to Build a Brand.

 

The first type of touching is the sensory pathway that provides us with facts about touch such as pressure, location, texture, vibration and temperature. The coke bottle test is exactly this type of touching. Linden explains it as “figuring out the facts…uses sequential stages of processing to gradually build up tactile images and perform the recognition of objects.”

 

The second pathway processes social and emotional information, with human touch, for instance; a simple handshake, a hug, a caress of the arm, or a pat on the back. Friendly touching communicates trust and cooperation. The Journal of Personality and Social Psychology published a study stating that people are making judgments and base their initial opinions of you based on a simple handshake. Linden explains “In both kids and adults, touch is the glue that makes social bonds.” Further echoing this idea is Dacher Keltner, Ph. D. and professor of psychology at the University of California, Berkeley who explains “that touch is truly fundamental to human communication, bonding, and health.”

 

What does this have to do with building brands? Both types of touch are very important in helping build brand perceptions and trust.

 

Tactile Branding

 

This is all about what the brand or components of the brand feel like. Jeremy Hsu in his article Just a Touch Can Influence Thoughts and Decisions on Livescience.com says “hardness may evoke concepts of stability, rigidity and strictness. Roughness can lead to thoughts of difficulty and harshness, while heaviness conjures up impressions of importance and seriousness.”

 

In a study conducted by Joshua Ackerman, an assistant professor of marketing at MIT in Boston, Mass., he had participants sit in a hard and soft chair as they negotiated the price of a new car. Guess who was less willing to move on their position? If you guessed the poor people in the hard chairs where the hardest negotiators, you’d be right.

 

Apple is a great example of a brand that has embraced the importance of touch. Their smooth, rounded edged, metal and glass iPads, iPod and iPhones convey a sense of ease and simplicity. They also make sure their customers have ample opportunity to touch and feel the merchandise in their interactive Apple stores.

 

If your brand isn’t an actual product but more based on services, understand that anything you physical give a customer, like a brochure, contract or correspondence, is tactile and communicates your brand by touch. Jeff Bezos, CEO of Amazon says “The physical world is the best medium ever invented and betting against it has always proved wrong.” No surprise that Amazon takes pride in their shipping experience with custom printed boxes and custom packing tape with a program called “Frustration-Free Packaging.”

 

Packaging can be paramount to a brand experience. Again, Apple shines with its packaging. Their new Apple watch packaging is a masterpiece, making the watch seem bigger and weighty to help deliver the “a-ha” moment of expectation.

 

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Ever wonder why a diamond ring box is as important as the ring itself? The jewelry box must communicate the feel of love and commitment while showcasing the ring in all its glittery splendor. The most popular materials are velvet (commonly used on valentine day), silk and leather. All soft and sensual to the educated and expensive touch.

 

ringbox

 

Bed Bath & Beyond organizes their customer experience around touch as their store layout is designed to allow consumers to feel their way through the various sections of towels, curtains, linens and rugs, etc.

 

In the book Brand Sense: Sensory Secrets Behind The Stuff We Buy, the author Martin Lindstrom shares an example of ASDA supermarket chain in UK where they displayed their store brand toilet paper so shoppers could actually touch the tissue and compare textures with other brands. The sales for the store brand T.P. “soared.”

 

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Human Touch Branding

 

The power of interpersonal touch can be euphoric or at least communicate the feeling of warmth, safety and reassurance. The outcome of this feeling motivates consumers to spend and consume more. No brand has been immune to the changes digital technology has given to the consumer relationship, but technology will never replace the human touch. Brands live in a highly competitive and fast moving environment where creating meaningful connections with customer is almost impossible. More and more brands forgo the bricks and mortar for a digital brand connection. If your brand has any chance to reach out and touch a customer in a truly meaningful way – the human touch is a true differentiator.

 

Research conducted by Ackerman found that waitresses who touch restaurant patrons (mainly men) earn more in tips, and customers (mainly men) innocently touched by female bartenders drink more alcohol. The key point here is woman touching men. Are we so gullible? You don’t have to answer. The research is clear.

 

Have you ever checked into a Starwood Westin Hotel? Once you have completed the check-in transaction they make sure they move away from the counter that divides you from them and stand face to face in front of you. There is a moment of peace and warmth when they welcome you and hand you the passkey. The touch is minimal but the effect is powerful. But the best part is tucking into the Heavenly Bed with its luxurious 100% Egyptian cotton sateen sheets. Now I am in heaven and been touched by a angel.

 

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The Last Touch

 

The simple use of touch can be profound when used properly and authentically. The sense of vision might dominate many aspects of branding, but the subtleties of touch can increases the brand perception immensely. In the book In Touch with the Future, authors Alberto Gallance and Charles Spence state that more companies have started utilizing the growing field of cognitive neuroscience to help guide product development and marketing decisions.

 

Look at everything your brand is doing to build relationships – where do tactile touch points fit to heighten your brand relationship? Are you maximizing the human touch points? You must clearly understand how your customers interact with your brand to ensure the right touch points are consistently in place to strengthen the brand experience.

 

Think about the key moment when the customer interacts with your brand for the first time. Are they excited to open the box or remove the wrapping? Do they need to read a 10 page instruction manual before they start engagement with your brand? Have you made it idiot-proof for them to turn it on? Is the packaging inviting? Does it feel expensive or simple and clean? Does it reinforce their purchase decision?

 

IKEA has an obsession with efficient packaging to lower transport costs and ensure their products are affordable. CEO Peter Agnefjäll explains “We hate air at IKEA.” But it is a balancing act in efficiency and customer satisfaction. Allan Dickner, packaging manager at IKEA admits that they have destroyed products because they were driven by efficiencies and not customer needs.

 

One word of caution as people get older their sense of touch decline so does a lot of other senses (like hearing, seeing, and smelling). Today, there is a large portion of the population that is aging. If older people are your target audience you might need to reengineer or increase the intensity of your brand’s sensory touch points to make the emotional connection remain with your brand.

 

Whether or not a customer physically interacts with your brand today, consider the influential power it plays to reinforce your brand relationship. It might be time to reach out and touch someone.

 

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Brand Overkill – Why Less is More

Everything is a brand today. Brand experts even tell us that we must build our own personal brand. Everywhere we look we are being attacked by brands. We are lucky to get through a day without being bombarded with over 5,000 brand messages (Yankelovich study) of which only about 12 get any brain attention. There is over 4 million new brand names every year added to the brand shopping list. There is a serious problem of brand overload. Is it really important to have over 50 different shampoo brands and hundreds of specialized types to give you the perfect bouncy, curly, wavy, shiny or smooth tresses?

 

 

The biggest problem facing companies today is the world is running out of pronounceable brand names. We are making it almost impossible for consumer to keep up. The World Intellectual Property Organization report that in absolute terms, trademark demand quadrupled from just under 1 million applications per year in 1985 to 4.2 million trademark applications by 2011. In developing countries such as China, India and Brazil the rise in trademark applications is exploding. In the last four years there has been approximately 16.8 million new trademark applications.

 

Are we reaching a point of saturation where the proliferation of brands are doing more harm than good? Our memory banks just can’t keep up.

 

Barry Schwartz, PhD, a Swarthmore College psychologist and author of The Paradox of Choice: Why More is Less explains “there’s a point where all of this choice starts to be not only unproductive, but counterproductive – a source of pain, regret, worry about missed opportunities and unrealistically high expectations.”

 

 

Have we reached a state where a brand is no longer able to differentiate itself from other brands? How many deep brand relationships do we really want or can handle in our busy lives? A Gallup research study (2004) suggests that on average, Americans say they have about nine ‘close friends’ and the older you get the number maxed out to 13 close friends. Can we expect any more from a consumer concerning a meaningful relationships with brands?

 

The Beginning of Brands

 

We can blame Japan for starting some of the world’s first and oldest brands such as Kongo Gumi which was established in the year 578 and Hoshi Ryokan founded in 718 according to William O’Hara book Centuries of Success. Kongo Gumi is a construction company that built Buddhist temples, Shinto shrines and castles. But after surviving 14 centuries (1,428 years!) as a family business it closed its doors in 2006. There wasn’t a huge demand for  building temples anymore which occupied 80% of their business focus. Hoshi Ryokan is a Japanese inn located in Komatsu for over 1300 years. You can book a room today on booking.com. In a study conducted by the Bank of Korea they discovered over 3,146 companies that are over 200 years old in Japan, 837 in Germany, 222 in the Netherlands, and 196 in France.

 

Brands Come & Go

 

But brand age doesn’t guarantee brand success. Jim Collins, a co-author of Built to Last—Successful Habits of Visionary Companies, says brands must follow a set of unchanging and sustainable principles of who they are, yet constantly change in what they do and how they do it. Today, we have many examples of brands who knew who they were but didn’t have the courage to change what they did such as old favourites as Kodak, Blackberry, Blockbuster, Nokia and Hummer. Check out the article Lessons from the Brand Graveyard.

 

If you go back to the Fortune 500 in 1955, 88% of those brands no longer exist on the 2014 Fortune 500 list. Brands continually get destroyed by mergers, acquisitions, bankruptcies or break-ups. There is a healthy churn in brands coming and going. Steven Denning reported in Forbes that fifty years ago, the life expectancy of a firm in the Fortune 500 was around 75 years. Today, it’s less than 15 years and declining all the time.

 

That being said, there are about 250,000 new brands launched globally each year which keeps the world’s advertising agencies very busy. Lynn Dornblaser, an analyst at market research firm Mintel who tracks new products, says the typical failure rate of new product launches can be anywhere for 85% to 95%. That’s a lot of new business cards and advertising wasted. Schneider Associates and research partners SymphonyIRI Group and Sentient Decision Science did a consumer survey (2010) that found 45% of participants couldn’t name a single new product brand.

 

The Virgin of Everything

 

But all of these setbacks in launching a new brand hasn’t stop brand extension and introducing new products.

 

Many brands have tried to extend their brands from the classic offering to capture new markets and target groups – some successfully and others with less clarity. I call it the “Virgin of Everything.” Sir Richard Branson has taken the irreverent and fun Virgin brand and has stretched it across 350 different products from life insurance to lingerie. David Taylor blogger on Brand Gym said in his article Virgin: the worst or best of brand extension? that this was a “brand ego trip, where the brand gets too big for its boots.”

 

Then there are sub brands of brands with unique attributes, quality and value levels. For example, Coca Cola with its line of Classic Coke, Diet Coke, Caffeine Free Coke, Caffeine Free Diet Coke, etc. Nothing is simple today. Too many choices.

 

Brand Apathy

 

Everything in life is moving faster and faster. Nothing is predictable and digital technologies are changing everything except our brains. Humans still have only so much memory power and capacity to retain and process information. Bob Nease, behavioural scientist and author of the book, The Power of Fifty Bits explains that the brain can process 10 billion bits of information each second but when it comes to the “decision-making part of the brain [it] only processes a maximum of 50 bits per second.” This is a major bottleneck in the decision making process that won’t change anytime soon. Just think, we have a bandwidth issue in our brains. The proliferation of brands and branding messages means fewer chances that new brands will find a permanent place in a consumer’s mind. Steve Jobs said on his return to Apple in 1997 that “For me, marketing is about values. This is a very noisy world, and we’re not going to get a chance to get people to remember much about us. So, we have to be very clear what we want them to know about us.” Almost twenty years later Jobs’ comment is even more relevant today. A simple route to the consumer’s head and heart doesn’t exist anymore.

consumer path 2

 

We can get a new product brand to market faster and more efficient than ever before. We have more channels to get our message out than ever before. But the resulting complexities has created brand apathy. As we continue along this path of madness, brands have less of a chance to be successful. Aldo Cundari, CEO of Cundari agency, explains in his book Customer-Centric Marketing, “The new customer behavior has serious implications for all brands. If organizations don’t commit to meeting their customers’ expectations today, customers will go elsewhere tomorrow.”

What Cundari says isn’t revolutionary thinking but the warning signs are everywhere–consumers are reaching a point of brand overkill. It’s like a stadium full of brands all screaming to persuade potential customers to reach for their brand. The noise is deafening.

Havas Media Group’s annual global Meaningful Brands survey (2015) has been consistent in the last five years in saying “most people would not care if 74% of brands disappeared.”

 

Survival Tips

 

Put our branding feet into the consumer’s shoes for a day. They truly need our support.

Help them manage the daily complexities, simplify the burden of choices and reduce the cognitive load. Be where they want your brand to be and be relevant. Solve their problems even before they become problems. Take away the need for them to have to make another decision or remember another brand name.

Automate to eliminate repeating issues or tasks. Make them feel good even when your brand isn’t about feeling good. Help them navigate a simpler life. Stop yelling and start listening more.

Your brand will be rewarded for its simple solutions and not for more choices. Remember less is more and always be empathetic and relevant.

Just be human.

 

2

Making Employees Brand Crusaders: 5 Examples Of A Strong Brand [Cult]ure

Your greatest brand asset is starring right at you – your employees. So what are they saying about your brand? Are they selling your brand virtues to friends and family? Do they share great stories or bitch while they BBQ? Turning employees into brand advocates or ambassadors should be a major priority for any brand.

 

 

One big problem – most employees aren’t engaged in their jobs and workplace. Gallup has been tracking employee engagement for over 15 years and worldwide only 13% of employees working for an organization are engaged. The number improves to 32% in U.S. but that still means 68% of Americans are unhappy at work. Unhappy or disengaged employees spell trouble for branding.

 

If an employee isn’t engaged in your brand why should a customer be any different? This has to be the biggest missed opportunity for brands around the world. The Weber Shandwick Employees Rising report found that only 42% of employees can describe to others what their employer does. Only 42%! That’s better than my kids. Meanwhile 70% of adults online in the USA trust brand or product recommendations from friends and family says a study done by Forrester in 2013. Imagine if every employee recommended your brand to all of their friends and family. Sounds so simple? It isn’t.

 

With the advent of social media every employee can be a brand advocate or brand destroyer. But as Jay Baer, author and President of Convince & Convert, says “If your employees aren’t your biggest fans, you’ve got problems WAY bigger than social media.”

Brand Culture

The first step is creating engaged employees by building an enthusiastic culture and collaborative environment. Engaged employees feel empowered, trusted and valued and those who lead them show confidence, provide feedback and demonstrate appreciation. The workplace must be truthful, open, transparent and fun. Stever Robbins, a personal coach and podcaster, says “Transparency and authenticity build a trusting relationship in which people are more likely to bring their full creativity, commitment, and motivation to work. The way you treat your employees will be mirrored in the way your employees treat your customers. Treat your employees poorly and they’ll pass that treatment along to your customers.”

 

Employee expectations are also changing. Gone are the days of just using the carrot and the stick to motivate employees. Today employees are looking for companies that will pay them well, but just as important, they are looking for a job with a purpose. Daniel Pink author of the book DRIVE The Surprising Truth About What Motivates Us says employees are seeking more autonomy with a clear sight of purpose that matters in the big picture of life. Millennials aren’t asking for much are they?

 

 

 

Brand Purpose

Brand purpose should be the beacon that every employee understands and wants to follow within an organization. The recent pioneers of branding understand this and have levered their employees to the good of the brand. How do you instill employees with the feeling that it’s “their” business to the point where they take ownership through good and bad times? They must have a strong sense of what the brand stands for, understand where it is going and its ultimate mission, and know where they fit within the purpose. Here are a few brand examples of highly engaged cult-like brand evangelists:

Zappos

Zappos (now owned by Amazon), located in Las Vegas with roughly 1,500 employees, is an online retailer selling shoes and clothes. Their campus-style-meets-frat-house environment gives everyone the ability to make their space their own which doesn’t match any other office space I have ever seen. If you want privacy this wouldn’t be the place for you. Every new employee goes through five weeks of extensive training including call centre support and shipping. After the five weeks, they are offered $3,000 to quit. The purpose is to ensure the new employee is dedicated and motivated to support the Zappos customer value culture.

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CEO Tony Hsieh says “We believe that your company’s culture and your company’s brand are really just two sides of the same coin. The brand may lag the culture at first, but eventually it will catch up. Your culture is your brand.” Zappos number one core value is “Deliver WOW Through Service” through its employees who are ambassadors of delivering a customer-centric experience.

Google

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Google goes to great lengths to create an environment for employees with perks such as free gourmet food, beach volleyball courts, mini golf courses, and adult playgrounds. The goal is to create an environment that lets employees feel relaxed and comfortable with vocalizing creative, even wacky, ideas. But more importantly Larry Page, Google’s chief executive, says the people who work at Google “believe in what they’re doing.” He also explains that “We have somewhat of a social mission, and most other companies do not. I think that’s why people like working for us…”

Starbucks

epa04318933 Employees celebrate during opening of the first Starbucks coffe store in Colombia, in Bogota, Colombia, 16 July 2014. EPA/Mauricio Duenas Castaneda

The global coffee chain Starbucks is another company dedicated to building a culture where their employees matter and they invest in them. The retail industry isn’t known for employee engagement or retention but Starbucks CEO Howard Schultz claims that their relationship “with our people and the culture of our company is our most sustainable competitive advantage.” Starbucks doesn’t leave their employees to magically become brand ambassador. They have invested over $35 million into a ‘Leadership Lab’ designed help store managers better understand the Starbucks brand and culture. In Schultz’s book Onward he explains that “[Employees] are the true ambassadors of our brand, the real merchants of romance and theater, and as such the primary catalysts for delighting customers.”

SAP

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The German software company SAP has quantified what employee engagement means to their bottom-line. In their 2014 Integrated Report they estimate that for every percentage point on their employee engagement index the impact on their operating profits go up between € 35 million and € 45 million. Their secret ingredient? Their employees understand the “why” behind their jobs and how their personal inspiration ties to a bigger vision. The reason why they come to work each day.

 

Southwest Airlines

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Southwest Airlines has been around for over 40 years as a very successful airline in an industry that sees many businesses fail. As Herb Kelleher, founder of Southwest, explains any airline can buy all the physical things and copy our business model but “The things you can’t buy are dedication, devotion, loyalty—the feeling that you are participating in a crusade.” In 2013, Southwest updated their vision and purpose, and according to Southwest CEO Gary Kelly, “Southwest is a great place to work and brings the greatest joy because we have such meaningful purpose.” The purpose to “connect people to what’s important in their lives through friendly, reliable, and low-cost air travel.”

Making Crusaders

No surprise the strong and admired brands we know and love are also strong brands within their company’s walls. Employee brand advocacy is a competitive advantage. The power of employees who are truly engaged as brand advocates is difficult for competitors to replicate and for customers to ignore. The key elements required to make the right environment for employees to succeed as ambassadors are:

  • Strong understanding of the brand’s big picture and purpose
  • Clearly linking their aspiration with those of the brand
  • Freedom to speak and share via social channels about their brand experiences
  • Autonomy to enhance a customer relationship or fix a problem
  • Tools to help employees share the brand
  • Trust that the brand and culture has their well-being covered
  • Feeling appreciated and having an impact on the purpose

 

Brand crusaders don’t originate overnight nor does a strong brand culture just happen. It starts at the top and is clearly supported by all levels of the organization. Building a robust employee culture will help build a durable brand cult. Keep a pulse on your brand culture and employee engagement. Chances are if you have a strong customer brand you already have a very dedicated employee culture. Just make sure you give them the tools and support to help them amplify your brand. If you don’t start building a culture that will support your brand vision, you are only renting your employees, and in turn, your customers. As Hsieh said “The brand may lag the culture at first, but eventually it will catch up.”

 

May the employee brand force be with you!

0

5 Important Tips to Protect Your Brand in an Economic Storm

Daily economic news in Canada and around the world is replacing my desire for suspense novels. Every day, we are seeing new financial lows and ominous warning signs to make any brand get nervous. Household indebtedness is an important number to watch because it tells us how much disposable income consumers have to spend on our brands.

 

Canadians are leveraged through the Teeth

Statistics Canada reported that the ratio of household credit-market debt to disposable income rose to its highest level of 163.7%!  Total credit-market debt reached $1.89-trillion in the third quarter another record. Mortgage debt makes up 65% and the other 35% is consumer credit, such as credit cards, car loans, personal loans, etc.  If we assume most of this debt resides with people aged 20 to 65 years of age, the average consumer debt (not including mortgages) is $25,744. The Bank of Canada sounded the alarm that household indebtedness and imbalance on the housing sector are key vulnerabilities to the financial sector. In particular there is a segment of younger households with debt-to-income of 350% or higher!

So what does this all mean for brands? The ultimate outcome is consumers have less disposable income to spend on brands. Decrease spending on brands means decrease profits.

But looking just at the wallet isn’t the only thing we have to be concerned about. We also need to understand what consumers are thinking and feeling. Are they optimistic or pessimistic about their future and money supply? Some economists say consumer expectations concerning economic conditions tend to be a self-fulfilling prophecy. If they expect doom and gloom, the economic conditions worsen because they stop consumption. But in most cases they just follow reality.

A Storm Is a Brewin!

There are a number of possible storms that can trigger a negative change in consumer consumption such as:

  • A recession or economic downturn with loss of employment
  • Physical disaster or state of war
  • Increased interest rates
  • Increased government taxes
  • Hard to borrow money or obtain credit
  • Housing bubble burst
  • Fear and political instability

All or none of these could happen. If I knew, I wouldn’t be writing this article. I would be too busy spending my millions from my last successful financial prediction. If any of these storms appear, brands need to be prepared and take the necessary steps to respond to the market and adjust their brand strategies appropriately.

 

Consumer Mindshift in a Storm

In a time of uncertainty and fear of losing one’s job or investments, consumer purchasing habits will change and in some cases drastically. Most brands have a knee jerk reaction not dissimilar to their customers by cutting costs, including advertising, reducing prices and postponing new investments. Harvard Business Review has analysed historical market downturn data since the 1970s identifing four distinct psychological groups of consumers in hard times:

Slam-on-the-brakes

This is the group that is directly hit with financial pain and reduce all types of spending. It might be futile to go after this group if they truly are strapped for money or credit.

Pained-but-patient

This group tends to be the largest group who aren’t as pessimistic as the slam-on-the brakes but they too economize in all areas. As the bad news gets closer to home they can easily migrate to the slam-on-the-brakes group. Let’s hope it’s not the middle class. MoneySense estimates 60% of Canadians fit in the middle class (based on 2013) and have an average family income between $40K to 125K (a difference of 200% from the lower-middle to the upper-middle).

Comfortably well-off

Like the title describes, these consumers feel secure to ride out the difficult times but are more selective and careful about their purchases, it’s less about their pocket-book but more about image. This group is generally part of the top 5% income bracket.

Live-for-today

This group is less concerned about the downturn (if they are aware of it) and make little changes in their buying habits focusing more on experiences rather than stuff (except technology like smartphones, tablets, etc.). The only way this group’s consumption pattern will change is if they become unemployed. This is the group that has great parties every weekend. I want to be friends with these guys.

Remember, these are just generalizations but can help in setting your brand strategy when the economy gets difficult.

The main issue that brands need to address is price and value if they want to connect with the largest group (pained-but-patient) unless they feel they can survive with the top two groups. WPP, the world’s largest multinational advertising agencies, says in a study that brands need to face the reality of the situation and address customer needs by showing a sense of honesty and care. There are intelligent ways to acknowledge the problem and to reinforce your brands positioning and relationship. Similar to customers, brands must make difficult decisions with limited resources. But most importantly, don’t stop communicating to your customers in some way or fashion.

 

5 Tips to Manage an Economic Storm

Here are some possible tips for your brand to get customers to pull out their wallets, debit cards and credit cards during economic challenging times:

 

Create Added Value

Justify price – demonstrate superior performance and value, product comparison, and testimonials, are some examples.

Add features and services – free support & servicing, check-ups, extra quantity, extended warranties, free shipping or setup, and choice of colours, are some examples.

Economy sizes – buy more, get more – you are positioning savings, retaining sales and not sacrificing value. This is the Costco model of buying bulk.

Do it yourself – The Ikea model. The perception that you have to assemble it means you will be saving money – or just creating more pain at home – “what do you do with all the extra bolts and screws they give you or should there be extra?!”

bounty 25 thicker

The Screaming Deals

Create urgency that this is the best-time to be buying your brand. Pull out all the starbursts, yell and scream – “We have a deal for you!” Art directors will cringe at the thought of this but it does work. Everything from price discounts, promotional and special offers, contests and giveaways. Remember, all you are doing here is renting customer loyalty in the short-term but it will help keep the cash flowing.

ford employee pricing

Reduce Risk & Barriers

Show that you brand cares and understands the situation customers are facing in difficult financial times. Provide alternative payment options – nothing down, don’t pay until next year, zero percent interest payments, free financing, no-credit-check, job loss protect, etc.

hyundai offer

New Innovations and Technology

Make consumers forget about the bad times and create excitement towards a new product with never seen features or never experienced benefits. For many brands this might be difficult to accomplish in a short-time frame. But you can adjust your brand to have new efficiencies or reduce costs. Reduced costs can be accomplished many ways such as production efficiencies, cheaper ingredients, smaller package size, single servings, and slimmed-down basic version with no bells or whistles. So if you can’t wow your customer into buying your products, then reach out with an offer they can’t refuse. Chances are they will end-up buying the more expensive version but the less-expensive version got them through the door.

There have been many new products successfully launched during difficult financial times such as Rice Krispies, Plymouth and the iPod.

ipod

A Beacon in the Storm

The smart brands not only weather the storm but they continue to strengthen their brand relationships. Remember that your best customers can be your best backer during difficult times. With the help of social media they can quickly be mobilized to get your brand message out – from a simple customer referral program to getting “likes” for a new product. Always talk about the value your brand brings –the rational and psychological. Tap into the concepts of small indulgence, sharing and helping. Do random acts of kindness like Starbucks did with #TweetACoffee campaign where people were encouraged to buy a friend a coffee using twitter, or Coca-Cola’s #WishUponACoke campaign in Dubai where they fulfilled wishes for immigrant workers who left home for a job.

 

Weathering the Storm

John Hayes, American Express CMO said at the American Marketing Association’s MPlanet 2009 conference “Consumers are more likely than ever to award their hard earned dollar to those brands that provide the greatest value, build the strongest relationship and connect in the most meaningful way.”

Keep an eye on the economic weather and have a plan ready if a storm should hit. Remember as you scrutinize your customers to determine if they can pay, they too will be watching your brand on how it also handles tough times.

 

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The Power of a Brand

How to extract value from nothing.

Years ago in my economic classes I learnt that supply and demand determined the price/value of most products especially commodities. If this is true, why is bottled water more expensive than gasoline? This is the power of branding.

 

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Transparency Market Research estimates that the global market for bottled water was worth about $157.3 US billion in 2013. In North America more bottled water is sold compared to milk or beer in terms of volume. Canadean research estimated that the global bottled water volumes would reach 233 billion litres in 2015. With all of Canada’s fresh water, Canada only produces less than one percent of the world’s bottled water of around 2.29 billion litres. However, US remains the fastest growing bottled water market outside Asia mainly due to customers becoming more health conscious shifting away from sugary carbonated soft drinks.

In many emerging markets, the scarcity of clean water makes bottled water a necessary staple rather than a value-added refreshment beverage like juice or soda. In North America the water in your tap is generally the same stuff you buy in the bottle. The big difference is that tap water is constantly tested to ensure they follow the drinking water quality guidelines. Bottle water doesn’t have the same stringent guidelines but does have the overall requirement of not containing “poisonous or harmful substances”. Let’s hope that the big brands follow some type of quality control.

Clean drinkable water is generally available everywhere throughout North America where the bottled water companies’ need to position their brands based on quality (healthy choice) and convenience (portable and handy). From this foundation the category gets complex with pricing strategies, water source and lifestyle attributes.

Magician duo Penn & Teller in their show Bullshit did a spoof on bottled water in a fine dining restaurant in Southern California to prove the general public can’t tell the difference between tap water and $4 a litre bottled water.

 


ABC’s Good Morning America conducted a blind tasting experiment in 2001 where they sampled branded bottle water such as Poland Spring, O-2, Evian and the popular New York City tap water. The results shouldn’t surprise you – NYC tap water beat them all.

If the bottled water is general the same thing as in tap water the real difference is the brand. Tap water is a commodity with no brand. It comes from any unmarked tap – hot or cold. You take the same thing, build a formidable brand image and you can extract a premium from consumers – by the litre (or ounce) at a time. Here is the secret on how to create brand value from nothing:

Emotional Connection

Byron Sharp, professor of marketing science at the University of South Australia and author of How Brands Grow, says growing a brand is based on “physical and mental availability” suggesting most brand purchase decisions are made with the emotional brain so keep it simple to help trigger instinctual responses.

Ammar Mian writer at SocialRank says the emotional tipping point for bottle water occurred back in the early 1980’s when Perrier launched its ‘Earth’s First Soft Drink’ campaign. This campaign embraced the belief that their sparkling water comes from the purity of nature, straight from mother-earth. This emotional connection resonated with consumers who were becoming more health-conscious and wanted an alternative to soft drinks. Other premium bottle water brands jumped onto the branding wagon touting the image of purity, youthfulness, healthy and earthliness. Water can’t get any better than this unless you turn it into alcohol. Here’s more on Emotional Branding.

 

Convenience and Easy Access

The brand must be easy to buy – when and where you want it – ideally everywhere. Not unlike tap water. Remember the days of drinking fountains? We though they were convenient – if we could find one. But it was like drinking from a water hose – only one quick sip if there was a line-up. Perhaps the biggest development in the bottle water industry growth has been the mass distribution systems that are dominated by the same companies that have covered the world with sugar water like Coca-Cola (who has such popular brands as Dasani and Glacéau smartwater), Nestle (who has all the water champs such as Perrier, Pure Life, S. Pellegrino, Deer Park and Poland Spring) and PepsiCo ( with Aquafina). Where is Evian in the distribution mix you ask? In 2002, Evian signed a distribution agreement with Coca-Cola Co., Inc. which ended in 2014. Then Evian found new wings with distribution partner Red Bull. And Fiji Water? Dr Pepper Snapple Group website states that they distribute Fiji Water in various territories.

Fame and Attention

Getting people to pay for water where its widely available, safe and free is hard work and takes a great deal of money to build a distinctive brand. It doesn’t hurt to have a big bank account to ensure the advertising messages get noticed and the brand stays top-of-mind. Back in 2003 (based on an article in The New York Times) TNS Media Intelligence/CMR estimated Aquafina spent $24.6 million on media and Dasani spent $18.8 million on media, while Evian spent only $800,000. Ten years later, Evian is still spending around a million in measured media annually according to Kantar Media and over the years have lost market share to the more aggressive competitors, sitting in 3rd place behind Fiji Water and Smartwater. Eric O’Toole, president-GM at Danone Waters North America (parent company to Evian), contributes the brand stabilization in recent years, in part, to the launch of the Baby & Me advertising effort. Great creative never hurts if you can’t afford to advertise year-round. See more on Creativity.

 


The soft drink industry is notorious for using celebrity endorsers to help push their sugary drinks (check out a partial list of famous celebrities and soft drink brands). It’s not surprising that the bottle water brands use the same branding tool to build credibility and gain the coolness factor. Evian has used Maria Sharapova, the young and popular tennis champion, while the elite Fiji Water has uses the former James Bond star Pierce Brosnan. Glacéau smartwater has used actress Jennifer Aniston to create a buzz around their relatively new brand.

A Memorable Story

Great brands always come with a great brand story. Many bottle water brands have great stories that would put National Geographic to shame. My favorite is the Fiji story or as some say the Fiji myth. Fiji Water, natural artesian water bottled at the source in Viti Levu (Fiji islands), is a leading premium bottled water in the United States and one of the fastest-growing brands worldwide. Here is their story of the world’s finest water and it should be for the price of $3.50 – 4.00 per litre (3 times the price of gasoline). For more on Storytelling.

 

Stunning Design

Water has no distinct taste, no unique colour, no smell and all water feels wet – physical there is no difference from one glass of water to another, so packaging is king. If nothing else is going to sell you, it must be the memorable packaging, beyond the great stories and celebrities who would never drink it if it didn’t look good.

Packaging can help define a brand experience. Do you remember the first iPhone, iPad or iPod you unwrapped from its packaging? The simplistic and beautifully designed box with everything in its own place – clean and white. A perfect brand fit.

 

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Since 2008 Evian has been working with some of the world’s most prestigious designers to create a limited edition bottle each year. Evian has worked with such creative artists such as Diane von Furstenberg, Paul Smith, Christian Lacroix, Jean-Paul Gaultier, Elie Saab, KENZO and most recently with Alexander Wang (2016 limited edition bottle). Former zone director for the Middle East & Indian Ocean for Evian, Elias Fayad explains the limited edition concept: “Our water is untouched by man and perfected by nature, so we attempt to give the bottle an artistic expression.” In a September 9, 2015 press release from Evian, they explain each collaboration as “a renewed celebration of purity and playfulness and a reinterpretation of evian’s spirit through art and design.” I have to remind myself that we are talking about a simple natural resource that can be found anywhere on the planet (except currently in California) – simple water.

Dreams or Nightmares in a Bottle

Water is living proof that anything can be branded and can be elevated from no value to high value with sufficient investments. It is through the brand investments and the dreams the brand image creates that help achieve the value. In essence, consumers are buying dreams in a bottle. Dreams to be on a pristine tropical island or a youthful energetic baby once again. Stories of spiritual purity, blissful health and a fountain of youth – the water of life. Potentially over $200 US billion worth.

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But there is a dark side to this story. While dreams are created and value generated from the replenishing resource, there is a social cost. Today Wikipedia lists over 144 bottled water brands, and from the statistics, the market continues to grow. The Pacific Institute, which conducts research on water use and conservation, has estimated that bottled water is up to 2,000 times more energy-intensive than tap water. It is estimated that in 2006, U.S. bottle water consumption used the energy equivalent of 17 million barrels of oil and produced over 2.5 million tons of carbon dioxide – in one year. There’s also the worry that we are shifting water consumption from one region to another, creating an imbalance with consequences to our planet and to our future consumers.

Just because we can create formidable brands to extract more value, it doesn’t mean we should. As marketing and brand experts, it’s important we use our craft wisely. We have the ability to create formidable brands and extract value to support business growth. But if we aren’t able to balance the benefit for the consumer, society and environment, we need to consider how we’re using our power of branding.