We Do More! Well Don't.

Anytime a brand's advertising slogan begins with
"We do more than _____," you know the brand is making a major mistake.

This is exactly the case with the UPS Store’s new slogan: “We do more than shipping.”

Backed by a $30 million campaign, the UPS Store hopes to introduce customers to its expanded services which include a myriad of things from document & brochure printing to office supplies. What they are obviously doing is trying to take on Kinko’s (now FedEx office) in the document business.

The problem, of course, is that consumers don’t think about going to a UPS Store to do anything except to ship something. The advertising even makes fun of this fact. In one radio ad, a UPS Store worker tells a customer: “I’ll help you print out all those documents you need for your client meeting.”

The customer replies: “The UPS Store? But you guys just ship stuff.” The worker responds, “We do a lot more than shipping.” Oh boy. This is a huge problem. One that cannot be solved with advertising and one that UPS should have never gotten into in the first place.

Once your brand stands for something in the mind, it is almost impossible to change the brand’s position. UPS stands for shipping and the UPS Store stands for a place to ship. And that is not a bad thing, in fact it is an enormously profitable business.

Brands like UPS should reinforce their strengths in advertising and not try to expand into other companies’ categories.

Here are two branding lessons to be learned from this situation.

What makes a brand strong is a focus.
What makes a company successful is dominating a large category.

FedEx is a very strong brand. FedEx got into the mind by being the first overnight package company. “When it absolutely positively has to be there overnight.” Its unique name, focused position, colorful logo and upscale image has made FedEx the leading air cargo brand and Memphis, the leading air cargo airport in the world. In the last 10 years FedEx had $257.3 billion in sales, $10.7 billion in profit or a net profit margin of 4.2 percent. Not bad.

But that doesn’t come even close to UPS. UPS might not have as strong a brand as FedEx. For starters, the UPS name is a weak generic name that often gets confused with its competitor, the USPS. Of course, what has made UPS successful is its focus on shipping and the strength of the shipping category.

UPS is the real thing when it comes to parcel delivery because they were first. When you are first in the mind, you are seen as the original, the authentic and the real thing. Consumers don’t crave brands, they crave the authenticity that only strong and focused brands provide.

When it comes to colors, UPS might not be pretty but it is memorable. They have stuck to the rather unfashionable color brown from their logo, to their trucks even down to their drivers socks and probably even their underwear.

But like I said, success comes not just from your brand but from your category. What has made the UPS company so strong is the explosion of the shipping category itself. When your iceberg grows so does your brand. No matter how strong your brand, when your category melts so does your sales (ex. Kodak and Blockbuster are both in deep trouble because the film category and the video rental category are melting.)

That is why UPS is a bigger company than FedEx. In the last 10 years UPS had $353.4 billion in sales and $25.8 billion in profits or a net profit margin of 7.3 percent.

UPS makes more than twice as much in net profits as FedEx. That’s because overnight shipping is a small segment of the overall shipping category and because FedEx has expanded into markets like ground shipping where its brand is clearly at a disadvantage.

First of all, customers think of UPS first when it comes to ground shipping. Secondly, FedEx has a high price perception from its overnight business and when shipping ground, customers generally want the cheapest. FedEx has followed an “We do a lot more that overnight” strategy for years and it has hurt them.

You don’t necessarily need your name on more places.

Both the UPS Store and the FedEx Office store were successful independent pioneers in their categories before being bought out. The UPS Store was called “Mailboxes Etc.” and dominated ground shipping and packing services. The FedEx Office store was called Kinko’s and dominated document printing. Today both are trying to be everything to everybody with names that don’t make sense.

Mailboxes Etc. had a focus: mailing. They offered post boxes, shipping services and supplies. Of course, the most important part of that business was UPS packages and probably the reason the UPS company felt the need to buy the Mailboxes chain. But while it makes sense for UPS to own Mailboxes Etc., it doesn’t make sense to change the name to the UPS Store.

The UPS Store will never be known for anything but shipping. The stores are independently owned, so don’t call UPS with a question about something that happened at a UPS Store. Bad service at UPS Stores therefore hurt the UPS reputation.

Also, having the UPS name on the store undermines UPS’s relationship with other important vendors like Office Depot. But more importantly there was no need to change the name. Mailboxes Etc. was perceived as authentic, original and the pioneer in the category. From a marketing point-of-view, Mailboxes Etc. would have been the perfect second brand for UPS. But obviously, management won the battle in the boardroom on this one.

The FedEx Office store faces the exact same problems. What does FedEx have to do with document printing? Nothing. Kinko’s owned the idea in the mind. The name was brilliant. Starting as a copy shop in California in 1970, Kinko’s dominated documents and in 2004was bought by FedEx for $2.4 billion. Again, management own in the boardroom on this one, too.

I think FedEx bought Kinko’s mainly as a reaction to UPS buying Mailboxes Etc. FedEx feared losing drop locations and losing face against the competition. Because otherwise buying Kinko’s makes little sense from an operational standpoint for FedEx. The printing business is quite different from the air cargo business.

And changing the name from Kinko’s to FedEx Office makes absolutely no sense at all. FedEx stands for overnight packages what in the heck does that have to do with printing? Most people would never think to go to FedEx for help for signs, brochures, business cards, stationery or printing needs. People think hey we need to go to Kinko’s, oh yeah you know that place that used to be Kinko’s but they have the FedEx name on now.

Today, both stores are a mess. Both have names that don’t make sense. Both are driven by ego and the belief that having your brand name in more places is better. Having your brand name on the same thing in more places is good. Having your brand name on different things in more places is not good.

Trying to “do more than _____” is just never a good branding idea.

Comments

[Sunil S Chiplunkar]

A very interesting & painstakingly done blogpost: on the importance of focus of a brand. A brand is a composite of positioning, experiences and associations. One needs to understand this and brand marketers need to nurture the brand. So the trick is to evolve the brand correctly, and make sales grow - may be Laura can elaborate on EVOLUTION OF BRANDS in some future post.

I have written a post named BRAND MOUNTAINS based on my experiences as a pharma marketer and my readings of Laura Ries posts and books .

[Jason Karpf]

The reason the iPhone has not gone down "in a blaze of convergence glory" is because it is not a phone; it is the world's handiest and trendiest computer. It's just nice that you can talk to people on it, and you can even get a version that does away with that function. It also carries the world's coolest brand, Apple, supported by the mass-customization masterstroke, the App Store.

[Chad Rothschild]

I agree with you on this one. I love Seth Godin and he says if you cant be the best in the world at, then don't do it.

When you think of a UPS store you are thinking about shipping something. Like just a UPS terminal that where they pick up your packages...

If you have to try to explain in greater detail what the hell you do, then people arent going to remember anyway. You only get a one maybe two things for someone to remember about your brand, so you better make it good.

Laura, how do you feel about a company just saying Kinkos, by Fed Ex so it is like co branding. Kinkos is the best at document imaging and Fed Ex overnight shipping. I was so shocked that Belk bought Parisian and changed the name to Belk. Parisian had such a name and people paid more for that shopping experience than someone ever would for Belk. Belk's name too me was like Piggly Wiggly and Parisian was a premium name like Publix.

Would love to hear a post on your thoughts.

Chad Rothschild
http://employeeandclientengagement.wordpress.com/

[Rich Vicenzi]

"FedEx" used to mean "overnight." Now when someone asks you to FedEx something you have to clarify: "Do you mean overnight, 2 business days, 5-7 business days, etc.?"

The "we do more" mentality plagues many local businesses. They think they're helping their business by adding "and more!" at the end of the laundry list of items/services they sell, but all it does is dilute their brand.

[Rob]

The line "we do more than shipping" sucks, but because it's unimaginative, not because it's a strategic error. I'm surprised that you think UPS should limit itself to something as functional as "we ship stuff" when the strength of their brand gives them freedom to stand for something much bigger in the minds of consumers. See my response to your post, "All branding and no business" here: http://www.semanticargument.com/?p=258. Would love to hear your comments.

[Cody Vest]

I've often wondered if the marketing managers at these brands read your posts. If so they're kicking themselves now. It seems so clear! Spot on Laura, and thanks for your focus.

[Laura]

The success or failure of a line-extension strategy depends more on the competition than anything else. If you have the leading brand and you line-extend and face nothing but other line-extensions you will be successful. ex. Diet Coke, Bud Light.

But if you line-extend and face focused competition then it spells trouble like Red Bull Cola.

The key is to understand that line-extension does weaken your brand. If you face other weak brands maybe it doesn't matter. But don't line extend thinking you are helping your brand out.

[Jay Godse]

Thanks Laura.

Based on reading your posts over a few years, a brand is strong if it dominates a well-defined category of goods and services that serves a well-defined market.

Most of your tales of brand failures had to do with the fact that somebody tried to expand a brand's footprint by trying to serve too many distinct markets or by trying to associate an already strong brand with another category.

If this is true, can you give any examples of how a powerful brand was extended without diluting the category or increasing the number of categories it covered, or without serving other markets? And if it is not true, can you generalize brand failures in another way?

Also, if strong brands (ones that dominate a category) cannot be strengthened by category dilution, taking on other categories, or taking on new distinct markets, how can strong brands be strengthened to enhance revenue and/or profitability, and/or mindshare?

Curiously, Jay

[stacy]

I want to know too. What do you think of the iPhone now Laura? The data is in, the competitive response is in. Don't wait until there's some near "obvious" conclusion. Share your thoughts NOW.

[Erik]

Great post, the FedEx Office will be a disaster. And Kinko's was such a great name...tragic. The importance of what you name your company is grossly underrated.

Hey Charles- time to move on from the iPhone post. Most people who own an iPhone like the mobile internet and apps but HATE the phone. I could easily see someone having a simple cell phone and a mobile device. Time will only tell but I wouldn't bet against Al and Laura. Time to move on.

[BrochuresPrintingOnline.com]

Great insights. Thanks for providing tips. You did a great job in writing this piece.

[Charles Jolley]

Hey it's been a long while since you projected the iPhone would go down in a blaze of convergence glory. I usually really love your approach to marketing, but I think to most casual observers it would seem you called that one wrong.

Would love to see a post updating us of your thoughts on the matter.

-Charles