Ries' Pieces

Crazy for Consumers? RIM is insane.

 

            Mike Lazaridis, one of the two chief executives of Research In Motion, is baffled and defensive. In a rare interview, Lazaridis complained, whined and spent more time asking questions than answering them.

            “Why is it that people don’t appreciate our profits?

            “Why is it that people don’t appreciate our growth?

            “Why is it that people don’t appreciate the fact that we spent the last four years going global?

            “Why is it that people don’t appreciate that we have 500 carriers in 170 countries with products in almost 30 languages?”      

            To make matters worse, the exasperated Lazaridis ended with: “I don’t fully understand why there’s this negative sentiment, and I just don’t have the time to battle it. Because in the end, what I’ve learned is you’ve just got to prove it over and over and over.”

            Lazaridis is right and Lazaridis is wrong about RIM’s problem.

            He is right because RIM, the maker of the BlackBerry, has been on a roll. It wasn’t nicknamed the BarakBerry for nothing. From the President in the White House to business people around the world, BlackBerry is the preferred phone.

            During the last fiscal year, Research In Motion shipped a record 52.3 million phones, a 43 percent increase over the previous year. And RIM’s fourth quarter income of $924 million exceeded forecasts.

            He is wrong because RIM has made many marketing mistakes. If you have to prove anything over and over again, you are doing something wrong. Repeating the same thing over and over again and expecting a different result is the definition of insanity. And RIM’s recent marketing moves have been insane.

            What is RIM doing wrong? Why don’t people appreciate RIM’s BlackBerry brand, profits or growth? Because they are fighting the wrong battle. They are focused on the wrong target. BlackBerry has been chasing the consumer instead of chasing its less-sexy business customer.

            Why it is that companies that have great success and profits with business clients feel the need to ditch them for the fickle, finicky and thin-margined consumer?

            Dell has been making the very same mistake for years. Instead of staying focused on businesses, they continue to spend time and money chasing consumers. Consumers who will never think Dell is cool.

            Cisco learned the consumer lesson the hard way, too. After buying Flip cameras for $590 million in an attempt to be cool, they are shutting Flip down. It didn’t work, Flip didn’t make Cisco cool, nor did it make them much money. Compared to enterprise networking systems the Flip profits likely looked too slim to make it worth continuing.

            The reality is the business market isn’t cool or sexy, but it can be extremely profitable. Just ask Cisco. The business market also works very differently than the consumer market. Consumers are less loyal and always looking for the next new thing. Business users are extremely loyal and like to keep the same product or software for as long as possible, sometimes even if it is inferior.

            BlackBerry has been chasing consumers with an array of new phones with touch screens and other flashy features. New, different and flashy is exactly what business consumers don’t want. Flashy and sexy turns off business buyers.

            Not to mention that fighting the sexy war is a losing battle. If BlackBerry is going to compete on beauty, Apple is going to win every time.

            You can’t beat or even compete with Apple on the cool “it” factor. The only way to succeed is to avoid Apple and do the opposite by stayed focused on your core customers.

            For BlackBerry, the core customers are corporate users that value security above almost all else. Consumers who post every dumb photo of themselves online could obviously care less about security. But every company does. And with more and more business communication taking place via phone and email, security is going to get even more important.

            But if RIM wants to get credit for BlackBerry’s successes and wants to continue to thrive in the future, it needs to refocus on security and business. If they let their brand erode too much longer, they risk losing their leadership as well as their luster the way Dell did.

            No business could take a $50 million Dell contract seriously after they launched the “Dude, you got a Dell” commercials. BlackBerry is in the process of making the same mistake.

            There are some other fundamental issues with RIM’s marketing that are problematic:

1.    Why the double-naming?
Research In Motion is a long and meaningless name. And it usually gets shortened to the even worse-sounding “RIM.” The company would be better off just calling itself “BlackBerry.”

2.    Where is the powerful visual?
Apple has the “Apple.” Android now has the “Robot.” Blackberry has some weird dots that nobody understands or even uses. Never underestimate the power of a visual.

3.    Why not focus on three aspects of its core market?
Business. Security. Email. It doesn’t mean RIM can’t sell anything to consumers. It doesn’t mean RIM can’t add cool features like cameras or touch screens. It doesn’t mean RIM can’t launch a tablet. But it does mean that anything RIM does should be tailored to what the business customer wants and needs.

 

            All brands need to stay focused on the battles they can win. Not the ones they can’t. RIM needs to forget about being cool. Ugly can be great and very profitable.

 

 

Super Bowl 2011: Game scores big, Advertising mostly fumbles

The stand out star of last night’s Super Bowl was clearly Aaron Rogers. Most people will be talking about Aaron and the Packers today instead of the commercials. Because it was the game that was far more super than any of the ads. But with the most-watched commercials of the year, the Super Bowl provides a good picture of the state of the advertising industry.

Here is my roundup of who scored and who fumbled.

Touch-downs

BMW: “Advanced Diesel – Changes.” Good commercials use good visuals. And nothing beats seeing the ultimate driving machine on the road. Unfortunately, diesel engines connote strong images of “smog,” so BMW brilliantly counteracts that concept with the song “Changes” to introduce us to the new advanced diesel cars from BMW.

Doritos: “Best Part.” Again, Doritos has a strong visual to work with: Its unique triangle covered in orange goodness. Everybody knows how the chips stain your fingers and how the crumbs stain your clothes, so the guy licking his co-workers fingers was the perfect twist. The twist really hammers in the brand strategy. Viewer-created commercials like this one have got to make Madison Ave nervous.

 

First downs

Pepsi Max: “First Date.” What men are thinking vs. what women are thinking is a simple idea brilliantly executed. Again, this viewer-created ad shows that big budgets aren’t necessary for a super Super Bowl ad. The key is a powerful idea. It also makes me think that a lot of talented creative people are out of work and submitting ads. “Zero Calories, Maximum-Pepsi Taste” is the closing slogan. “Zero” is nice, but it’s too bad Coca-Cola grabbed it first. The other problem is that half the commercial goes by without the viewer knowing exactly what the commercial is for? That’s a problem. The guy could have just as easily been distracted by a beer, a car or a Snickers bar.

E*Trade: “Baby -- Tailor.” What I love about these E*Trade ads is that they are in the game every year and stick to one visual that hammers their brand idea. “The site that is so easy a baby can do it.” However, this wasn’t my favorite execution. I much prefer the iPad/dog commercial that has been running the past few months.

Volkswagen: “Darth Vader.” As a parent, the Darth Vader spot pulled at my heartstrings. As a piece of work, it was brilliant. It beautifully captured the innocence of childhood. What it didn’t do, however, was to connect the idea to Volkswagen. Any car with a remote start could have been slotted in.

Volkswagen: “Beetle.” I loved it. I would have loved it more, if I knew up front the beetle was suppose to be a “Beetle.” The arrival of a new Beetle car is a big deal, so they should have showed the new car. That would have also made news and increased the chatter about the ad.

Audi: ”Release the Hounds.” Well, at least they didn’t release any more dead horse heads: Audi ads have come a long way since. They now have come up with the idea of a luxury car for a new generation. The visuals (Kenny G, the hounds) were hysterical. The only problem is that consumers don’t necessarily buy the idea of Audi being more prestigious or cooler than Mercedes. First, they need to establish the prestige of the brand before they run ads like one.

 

Fumbles:

Pepsi Max : “Torpedo Cooler.” Not every viewer-generated ad was brilliant, including this one. The commercial relies on the classic joke of hitting the guy in the crotch. Funny, sure. But the idea has nothing to do with Pepsi.

BMW X3: ”Defying Logic.” I think it is great that BMW is building cars in America. I think it is great that they are designing the cars in America, too. But they shouldn’t throw out their German roots. The brand is German and most of the profits are going back to Germany. I think that people buy BMWs not because they are made in the U.S., but in spite the fact they are made in the U.S. I think they should have spent more time showing off the new car.

Sealy: “Super Bowl After Glow.” Since I was watching the game with my 8-year-old son, I wanted to immediately change the channel for this one. Advertisers need to remember the Super Bowl is a family event as well as an adult one. The other problem with the commercial is that viewers have no idea what the company is selling. I certainly would have never guessed it was mattresses! They might have started off with the line “It’s better on springs.” I like the idea of being the opposite. Bouncy springs vs. memory foam. However, Sealy has been trying to tell us springs aren’t bouncy, haven’t they?

Anheuser-Busch: All of them. How the mighty have fallen. For years A-B seemed to have a system for creating a stable of funny, talk-of-the-party Super Bowl ads, along with a killer visual, the Clydesdales. This year, the ads weren’t funny and the Clydesdales were relegated to a bit part.

Stella-Artois: “Crying Jean.” This ad made me cry for the brand. Absolutely horrible. Again, the brand has an iconic image, the Stella glass. They showed the glass but connected it to crying ladies and a moody, pathetic-looking singer.

GoDaddy: “New Girl.” The twist of using Joan Rivers was funny. But their sexist shtick is worn out. The site is very effective, the advertising is not. They are lucky because they face no real competition in the category.

Groupon: “Tibet.” We can chalk it up as a rookie mistake to run a shocking and disturbing commercial without much redeeming value. After the intense excitement about the company and a pending IPO, this was a big PR black eye. The first part of the commercial showing Tibet and the needs of its people was poignant, but then to make a joke of it and your company, not savvy. Groupon has a problem when creating an commercial since they don’t have a strong visual to work with. What they are known for are their email messages. It’s harder to advertise a service that is unseen. The most successful service-company commercials first develop a powerful visual like the Aflac duck, the Geiko gecko and the E*Trade baby.

Snickers: “Logging.” It is hard to follow-up on the commercial that brought back the beloved Betty White. It was a classic, Betty White getting tackled on a muddy football field. It was fitting and shocking. This year Snickers substituted Lewis & Rosanne Barr. Nobody wants these celebrities back, and who even remembers Lewis? And getting hit with a log, not funny.

Chevrolet: “Old-Age Home.” Funny! Very funny. But the spot never got the brand message across. Could have been a commercial for anything. Chevrolet ran several spots during the game. Each was totally different, each was a one-off joke. So typical of GM; they spend a ton of money but they never get an message or idea into the mind.

Chrysler: “Eminem movie.” Chrysler is going to need a lot more than Eminem to save the company. The commercial was powerful in showing the images of Detroit and using its hometown hero Eminem. But I’m not sold that Detroit will ever come back to past glory. It is sad. Chrysler and “imported luxury from Detroit” are just not an easy sell. Chrysler should have started with what it already owns, the Minivans. (For Ford, it’s trucks.) What also watered down this ad is that Eminem also appeared as a cartoon in a dreadfully-awful Brisk ice-tea ad.

Motorola Mobility: “Empower the People.” If you want to compare yourself to Apple’s 1984 Macintosh commercial, you’d better be able to walk the walk and not just talk the talk. The Xoom tablet? I’d rather see them hammer the success of the Motorola Droid, an Android phone has been the much talked about alternative to the iPhone.

 

Redesigning a Brand

    So you want to start a business? You’ve got an idea, you see an opportunity in marketplace and you plan to work hard in building your business, but where do you start?

    You start by building a brand.

    There are lots of ideas and opportunities and people who work hard, but few ever become truly successful because they don’t know how to build a brand.

    So how do you build a brand? You need to do three things: get focused, be first and become famous.

    You need a focus in order to stand for something in the mind.

    You need to be first in order to establish authenticity and hopefully create a new category.

    And in the long run, you need to become famous because PR is what builds brands. Since a brand can’t talk, you’ll need a spokesperson get the message out via traditional media, social media and word of mouth.

    Build a brand still isn’t going to be easy. You’ll also need some tools to get your brand in the mind. You’ll need the right name, the right verbal strategy (a nail) and the right visual (a hammer) to drive that nail into the mind of the consumer.

    May sound gruesome, but in today’s tough and competitive climate brute force is needed. Nobody said branding wasn’t messy.

    Recently, my friend Audrey who is a personal trainer decided to make a change in her life. She wanted to start a new business.

    She had always been gifted at helping people decorate and organize. Unlike your stereotypical “decorator,” Audrey is very practical and thrifty. With the tight economy, she thought there might be great opportunity for her idea. To be the opposite of a high-end decorator who goes out and spends thousands of your dollars buying stuff to make your house look great. Audrey’s idea was to take exactly what consumers have and simply reorganize, restyle and reduce the clutter in order to redesign their homes to make them fantastic.

    Audrey has a great idea and she also sees a great opportunity, but she still needs to build the brand.

    Audrey got some pro-bono help from a friend. Here is what he suggested for her brand:

        The brand name: Simple Redesign

        The verbal nail: Restyle, Reuse, Reduce

        The visual hammer:

        The website: SimpleRoomRedesign.com

     I wasn’t impressed. So I decided to give Audrey my advice and I thought you might be interested in reading about it.

    In theory, generic names like Simple Redesign sound like a great idea. They tell prospects exactly what it is your business does. And they give the illusion your company is bigger than perhaps it is.

    At the beginning of the 20^th century, generic names were all the rage. When most businesses were small and local, the advantage was in being the opposite: big and national.

    At that time, brands like General Electric, General Mills and Standard Oil stood out. The problem is that over time, as lots of people jumped on the generic bandwagon and most companies were national, the advantage was gone. You can't build a company with a name like GE now.

    Today, launching a brand with a generic name is a killer. There are just too many brands in the marketplace. A generic name gives your brand little protection or power.

    Look at the word “Natural.” There is a big trend towards more natural products and foods. But using the generic word “natural” in your name doesn’t work. There are too many brands with similar names and so none of them stand out.

    The same is true with a generic word like “Simple.” On the other hand, “Redesign” is a nice word for Audrey’s business. It implies the restyle, reuse, reduce concept.

    The final misfortune of Audrey’s initial branding effort was that the website and name didn’t even match. SimpleRedesign.com was taken so she had to use SimpleRoomRedesign.com  

    Big mistake. If you can’t get the url, you shouldn’t use the name. These days, checking with GoDaddy.com has become a regular part of our naming sessions.

    Instead of a generic name like Simple Redesign, what could Audrey use as a brand name?

    The strategy of personalizing a brand has a lot of advantages. It leads to a proper name and has the spokesperson built right in. Think Papa John’s, Forbes, Ralph Lauren, Dell and Charles Schwab to name a few.

    Audrey is a terrific and perfect name to use for a brand. It is usual yet easy to spell. So I suggested changing the name to Audrey Redesigns.

    Luckily when you have an unusual name the chances of getting the url increase dramatically. AudreyResdesigns.com was available.

    The verbal nail Audrey was working with was really nice. I love “restyle, reuse, reduce.” It is repetitive and reinforces the concept of Redesigning instead of just interior designing.

    But no verbal nail will get into the mind without a good visual hammer to drive it in with. A hammer is a key marketing element missing from many programs. For Audrey, her original “leaf” hammer was pretty but had no relation to her brand or her category.

     So if the idea is “Redesigning,” the idea of recycling comes to mind. The visual everybody associates with recycling are the three green arrows that indicate recycling.

      Now that was a perfect visual hammer for Audrey’s brand. So I redesigned the three arrows to simplify them and make them fit her brand name .

    The result is a logotype with a strong visual hammer that reinforces Audrey’s memorable “restyle, reuse, reduce” verbal nail.

Starbucks dumps “Coffee” and I think is likely to get burned

    Change can be good and many times change can be welcomed. Change is so powerful a concept that the word itself put Obama in the White House.

    But when it comes to branding, the best kind of change is usually no change at all. Sure, over the decades a brand needs subtle, almost unperceivable, changes to keep the brand current and fresh. But radical changes by well-known brands is most often a bad idea.

    Just ask The Gap or Tropicana.

    Today, Starbucks unveiled a new logo which drops its name “Starbucks” as well as the word it owns in the mind “Coffee.” What is left is a large green Mermaid.

    Smart move? I think not.

    Is the Mermaid the first thing you think of when you think of Starbucks? No.

    Is a Mermaid a powerful visual for a coffee brand? No.

    That’s why the Mermaid isn’t top of mind for Starbucks. It is a unique visual which is good, but it is not very powerful since it has no clear relation to the brand.

    Powerful visuals like the golden arches for McDonald’s, the cowboy for Marlboro and the chili pepper for Chili’s all have clear connections to the brands and their positions.

    Is the Mermaid simple? No.

    Powerful visuals should also be very simple in design. Over the years, Starbucks has done a good job of making simplifying its Mermaid. But it is still far more complex than visuals like the Nike swoosh, the Mercedes tri-star or Apple’s apple.

    But what is really troubling about the change is the explanation Chief Executive Howard Schultz gave: “Even though we have been and always will be a coffee company and retailer, it’s possible we’ll have other products with our name on it and no coffee in it.”

    No coffee in it? Is that a good idea for Starbucks? Apparently one of the reasons Starbucks took the word “coffee” off the logo is that they want to launch stuff that has nothing to do with coffee. This is a fundamental marketing mistake. A strong brand is focused and owns a word or category in the mind.

    The Starbucks brand was built on coffee and nobody knows that better than Howard Schultz. Seeing him so blatantly and arrogantly remove it from the logo is blasphemous.

    And not because Starbucks shouldn’t launch non-coffee products. Starbucks today is big enough that it can and probably should be thinking of launching non-coffee products.

    But not with the Starbucks name. They should think like Toyota and launch brands like Lexus, Prius and Scion.

    Instead, Starbucks seems to be planning line-extensions that will dilute the brand in consumers’ minds. And nothing is worse that a watery cup of Joe.

    Starbucks is also following the dangerous trend of removing names from logos and signs. While visuals are powerful, the reality is that they are much more powerful with the words attached. Remember when Prince changed his name to a symbol only? Bad idea. Other examples include Chili's restaurant using just a chili pepper to Shell gas stations using only the shell.

 

    The combination of the visual with the name of the brand is more powerful than the visual alone. Companies should never give up the chance to hammer the name along with the image. Only on rare occasions, for simplicity and fashion reasons, should a brand use a visual only. For example, Nike’s swoosh on a shirt or Apple’s shinning apple on a laptop.

    Conventional thinking suggests that words are really not necessary. A typical comment: “The Mermaid is visual shorthand for 'coffee' much like the swoosh is visual shorthand for sports apparel."

    True. But what about the younger generation? Removing the brand name from a logotype makes it more difficult for kids growing up to learn what the visual stands for.

    In some ways, it’s like saying a well-known brand doesn’t need to advertise because “everybody knows what the brand stands for.” But over time, memories decay and without constant reminders even a well-known brand will lose some of its identity.

    Will dropping “Starbucks Coffee” from the logotype hurt the brand tomorrow?

    Probably not. But marketing strategies are not designed for the short term. They’re designed for the long term.

     And in the long term, the Starbucks brand is likely to get burned.

Coupons, Groupon and Cocaine

         These days marketers are going in exactly the wrong direction.

         The recession has caused a lots of companies to panic. And when companies panic, they print coupons and throw up sale signs. Look in your mailbox, your email inbox or your newspaper and you will see what I mean. Everybody is having a sale.

         But does this coupon-sale-discount strategy work?

         Yes and no.

         Yes, in the short term coupons, sales and discounts do work. Discounts bring in customers and ring up sales. But the short term is not the only thing that needs to be considered when building a business and brand.

         Coupons are like cocaine. The first time you do it, it is the best feeling in the world. But over time it takes more and more of it to achieve that same feeling. And then you need it just to function. You are a cocaine addict. From the mug shots of Lindsay Lohan and others we know how personally destructive cocaine is, yet we fail to realize the similar brand-destroying danger of coupons.

         Think about it. The effects of coupons, sales and discounts are exactly the same as cocaine. The first time you get a discount card in the mail you are elated! Wow! 10% off, 20% off, 2-for-1! You might rush out to the store and take advantage of the offer. But next time you drive by that store you think, I’ll just wait and see if there are any more coupons coming. Next time you drive by that store you get mad since you forgot the coupon. Eventually you refuse to step into the store without a coupon.

         Try checking out of one of these stores without using a coupon and even the sales clerk looks at you like a pathetic loser. Nobody pays full price here what’s the matter with you! She may even reach down to pull out a coupon of her own to give you.

         Coupons and discounts do one thing every well. They teach consumers that your regular prices are too high. A lesson consumers learn very quickly. Once they think your regular prices are too high, they won’t buy from you until given a discount. And desperate companies are too quick to oblige.

         High-low pricing is devastating to the consumer’s opinion of your brand. It’s also devastating to your bottom line. If you are giving away the merchandise, you aren’t making any profits.

         You might be thinking in this economy what other choice do I have? My competition is doing deals so I have to do them too.

         Wrong. Its peer pressure. But Mom, all the other kids are doing cocaine so I have to do it too. No parent would buy that argument. And no marketer should either.

         What is even scarier is that there is excitement surrounding the rise of coupons. Look at the recent love affair with Groupon. A recent front page article of Advertising Age magazine proclaims “Suddenly, Everyone wants to be on Groupon.”

         Suddenly, everyone wants to damage their brand by undermining its position with Groupon! Great.

         Many marketers make it even worse by thinking that Groupon can help their brand and don’t acknowledge any downsides. Instead of a Valupak delivered in your mailbox, Groupon is an electronic coupon delivered via the internet.  

         It is new? Yes.

         Is it a cheaper form of discounting? Probably.

         Do consumers like discounts? Yes.

         Do discounts build your brand? No.

         Do discounts damage your brand? Yes.

         For local and small businesses, the rise of Groupon is seen as the obvious answer to the decline of the Yellow Pages. The marketing dollars for local businesses used to be predominately spent on a listing and an ad in the Yellow Pages. And for decades, this approach was enormously  effective.
         Of course, today the internet has made the Yellow Pages obsolete.

         So how do you build a business whether you are Joe, the Plumber or JC Penny? It comes down to basic marketing philosophy.

         Do you build a brand by:

         1) Standing for something in the mind of the consumer?

         2)  Offering coupons and discounts?

         My answer should be obvious, you build a brand by standing for something in the mind.

         If you are Joe, the Plumber you might be the leading plumbing company in your area, you might be the 24-hour plumber focused on fast service, or you might be the high-end plumber focused on custom work, or you might be the plumber focused on commercial jobs or you might be something else that is focused and clear.

         In any case, Joe needs a good name and a strong, unique visual. He needs to verbalize his focus so his customers can pass along his message. He needs to put his message on his truck, website, business cards. He may also need to advertise his message and credentials.

         Many small businesses today are desperately looking for an easy replacement to the Yellow Pages. So they have jumped on Groupon as the Holy Grail.

         I’m sorry to tell you, but Groupon isn’t the messiah as the hype promises. To me it looks more like coupons in sheep’s clothing.

         Coupons don’t build a brand, they destroy it.

 

Gap's Fall into the Mushy Middle

             They used to sing “Fall into the Gap.” And consumers did. Since the Woodstock era, the Gap has outfitted millions of consumers with its lines of basic clothing.

            But over the past few years, it is the Gap brand that is doing the “falling.”

            The latest fiasco is Gap’s logo redesign.

            Changing a brand that is 50 years old and as well-known as the Gap is not well advised. If you do make a change, it had better be subtle and definitely not drastic.

            Look at what happened when Tropicana went for a drastic make-over? Another disaster. The backlash was so intense that it eventually led them to bring back the previous package design. The message, don’t mess with my orange.

            The internet is burning up with criticism surrounding the new Gap logo. It has pretty much been universally panned. And rightfully so.

            The biggest mistake with the redesign is that Gap thought it had equity in the blue square. Nothing could be further from the truth. The word GAP reversed on blue was the focus. The original design was problematic not because it wasn't cool, it was problematic because it was too hard to read. Never neglect legibility in a design.

            If I was helping the Gap, I would recommend updating its logo so that it was more legible. Perhaps like this?

            This change uses the new typeface which makes it much more legible, but it doesn't change the overall look of the words reversed on blue. A change like this would likely have been far less controversial. The only problem is that the logo looks awfully close to Old Navy's logo. This is a real issue of brand conflict that goes way beyond logos.

            But the quality of the design is irrelevant. Because even if the new design was beautiful, it would still generate outrage. Changing an icon, freaks people out.

            All the criticism didn’t go unnoticed at the Gap. Marka Hanson, President of Gap North America, started back peddling right away and issued this statement after the debuted and backlash trying to explain why they made the change and why they may not implement it.

                “The natural step for us on this journey is to see how our logo - one that we've had for more than 20 years - should evolve. Our brand and our clothes are changing and rethinking our logo is part of aligning with that.

                We want our customers to take notice of Gap and see what it stands for today.

                We chose this design as it's more contemporary and current. It honors our heritage through the blue box while still taking it forward.

                Now, given the passionate outpouring from customers that followed, we've decided to engage in the dialogue, take their feedback on board and work together as we move ahead and evolve to the next phase of Gap.

                From this online dialogue, it's clear that Gap still has a close connection to our customers, so tapping into this energy is right. We've posted a message on the Gap Facebook Page that says we plan to ask people to share their designs with us as well. We welcome the participation we've seen so far.

                We'll explain specifics on how everyone can share designs in a few days.”

            Well, we got the specifics today. Gap is scraping the new logo, scraping the idea of letting consumers participate in creating a new logo and going back to the old logo. Good for them. At least they admitted they were wrong and did the right thing to correct it.

            Unfortunately, the Gap still has a huge problem. The problem has nothing do with the logo or with being a more contemporary brand. Gap isn’t as much out of style as it is out of place in the market.

            What is the Gap?

            It used to be the place for everyday basics. Neat, affordable and classic.

            “Affordable Basics” built the Gap into a multi-billion-dollar brand and the biggest specialty apparel retailer in the U.S.

            Two things have undermined the Gap brand in the mind of consumers.

 

1. Expansion

            When management sees the great success of its brand, the next thing they usually say is, “What else can we get into with our hot brand?” The answer is usually trouble.

            Gap expanded into four varieties: GapBody, GapKids, GapBaby and regular Gap.

            Teenagers and 20-somethings don’t want to wear the same outfits as kids and babies. All the expansion diluted the power of the Gap brand. And it diluted the time and energy of management. Instead of thinking about how to make the Gap better. They were focused on building the line-extension stores like GapKids, GapBaby and GapBody.

            We have seen this type of extension disasters before.

            After the success of Blockbuster, management expanded and introduced Blockbuster Music stores. They should have stayed focused on movies. Today Blockbuster is bankrupted and trapped in the mushy middle between Netflix and Red Box.

            Toys R Us became the number one toy retailer in the U.S., then management expanded the brand into Kids R Us and Babies R Us. The line-extension distractions let Walmart and Target takeover the toy leadership position.

 

2. Old Navy

            Nothing hurt the Gap brand as much as the introduction of Old Navy in 1994.

            Sixteen years later the thriving Old Navy chain accounts for 41% of the company’s revenues. The Gap accounts for 40%. Banana Republic 17%.

            Old Navy is a no-frills, low-price clothing chain. A great concept, but the company already had a no-frills, low-price clothing chain called the Gap.

            To make room for Old Navy, the Gap brand had to move more upscale. That moved the Gap right into the mushy middle of the market. The mushy middle is not the place to be and the Gap has had problems ever since.

 

            Take this as a warning. Don’t let your brand fall into the mushy middle Gap.

Non-Profit Rebrand: On the House 2010

            As part of my ongoing partnership with Matchstic’s On The House project, I have helped transform another non-profit brand this year.

 

            Last year it was the Swift School. And On the House transformed the branding strategy and identity for a relatively new school that works with children with dyslexia. The success of that On The House project has far exceeded expectations. It shows that it isn’t just about doing good work, success also depends on building a powerful brand in the mind. Enrollment at the Swift School is way up this year. But more importantly, the students at Swift feel a new sense of pride about the themselves and their school.

 

 

On The House 2010

 
            This year we worked with the Atlanta Union Mission. The Atlanta Union Mission is a non-profit that was established in 1938 for individuals in crisis that were displaced by the Great Depression.

              Seventy-two years later, the Great Depression of 1932 is ancient  history but the Atlanta Union Mission is still going strong. The Mission provides emergency food and shelter, residential recovery programs and transitional housing to as many as 1,200 homeless, addicted or disenfranchised men and women and their children.

            The Challenge: Help a 72-year-old brand founded during the Great Depression update its image, clarify its mission and focus its message.

            The Name: Atlanta Union Mission.

            In the early part of the 20^th century, long, generic names were all the rage. General Electric. International Business Machines. American Telephone & Telegraph. Standard Oil. When most businesses were small and local there was an advantage to sounding big and scopy.

            Today, it is different. Today, generic names make poor brand names. The ear hears the name and doesn’t distinguish between uppercase and lowercase. A generic name is a description, not a brand. Almost all the best-known, most valuable brands in the world are proper names not generic ones. Coca-Cola, Microsoft, Apple, Disney, Ford, Susan G. Komen.

            The one stand out is General Electric. But G.E. is No 1 or No 2 in the categories it competes in and more importantly it only competes against other conglomerates with equally poor brand names. G.E. hasn’t succeed in new technologies like computers and got out of the consumer appliance business. Remember, just because G.E. can violate a law of branding it doesn’t mean you can too.

            Atlanta Union Mission is a very long and very generic name. So long that most people inside the organization and in the community call it by its acronym AUM. AUM is even worse than Atlanta Union Mission. AUM? They need to have a name people will use and that stands for something.

            The most focused word they have is Atlanta, because that is the market they serve. Atlanta differentiates them from their competitors which are the large international charities.

             “Union,” what does that mean? Today it has a much different meaning than it did. Back then it was used to show that the organization was “non-denominational.” Today it means “labor unions” and voting for Obama. This isn’t a political action committee, so using the word is confusing and worse polarizing.

            Mission is a nice word, it conveys action and purpose but gets lost.

            The suggestion was to drop Union. And to shorten the name to “Mission Atlanta” my choice. Or alternatively “Atlanta Mission” the clients choice.

            Starting over from scratch isn’t always an option for a brand. The Atlanta Union Mission has a lot of support in the community and without a huge budget a totally new name would not have been the best decision. Here we have simplified and shorten the name to its core elements. And most importantly will help get people to use the name and not an acronym.

 

            The verbal nail

            The current tagline for the Atlanta Union Mission is “Saving Lives with Your Help.”

            Like most taglines it is not specific enough. Is this a school for lifeguards?

            No, the Atlanta Mission is a charity that helps people who are homeless get back on their feet. They help them with emergency assistance and with on-going educational and transitional programs.

            Therefore, the word that Atlanta Mission needs to own is “homelessness.”

            The verbal nail that drives that word in the mind is “Ending homelessness.” That is a tagline that is specific, memorable and emotional.

 

            The visual hammer.

            The current visual is an old-fashion lamp post. The new visual is a lantern.

            The concept of "Shining The Light" has been a core element of the Atlanta Mission brand. This idea is retained while modernizing it with a new spin on its meaning. Instead of waiting for people to come to it, the Atlanta Mission will strive to bring the "light" to those who need it. The lantern is also a visual that can be incorporated in many creative ways. Giving people lanterns as they walk the streets. Using lanterns at fundraising events etc.

            The mark also now includes a simple cross at the heart of the lantern representing Christ as the central force of the Atlanta Mission. If you are a Christian group than it is best to disclose this in an open, honest and friendly way.

  

            The official launch of the new Atlanta Mission brand will be in Jan 2011. So this is a sneak peek. I feel very proud to have participated in this project. And look forward to the next On the House experience.

High Fructose Corn Syrup, not so sweet.

            Would a sugar taste as sweet by another name?

             I say absolutely. Even sweeter.

            High fructose corn syrup has become public enemy number one in the fight against obesity. Having successfully attacked trans-fat the food police have turned to high fructose corn syrup with great vim and vigor. And great success.

            Sales of high fructose corn syrup are in rapid decline. Consumption of corn-derived sweeteners sank 20% in the past decade compared to only a 3% decline in refined sugar.

            Just as we saw with trans-fat, food companies are racing to replace high fructose corn syrup with sugar in their products. Hunt’s ketchup, Gatorade, Wheat Thins, Ocean Spray juice and all the baked goods at Starbucks now are being touted as made with real sugar.

            But what is “real” and what is not? Hard to say. But when you give your product a name like “high fructose corn syrup,” it doesn’t sound very real at all. In fact, the name sounds dangerous.

            Yet most experts agree that sugar is sugar. “Leading scientists,” reported The New York Times, “say that high fructose corn syrup, made when various chemicals convert corn starch into syrup, is not any worse than sugar. Both sweeteners are made up of roughly equal amounts of glucose and fructose.”

            Ironically, what happens in a modern corn-refining plant is just like what happens in your mouth where an enzyme breaks up starch (a polymer made up of thousands of sugar molecules) into sucrose, glucose and fructose.

            But I am not here to argue about the science. Personally, I try to eat as little processed food as possible. Overly-processed foods and sodas containing either high fructose corn syrup or refined sugar are unhealthy and should be eaten sparingly.

            What I am here for is to analyze the branding of high fructose corn syrup.

            There is an interesting twist to this story because my Dad/partner Al Ries handled the advertising account for Corn Products International back in the mid-70’s.

            After the FDA approved high fructose corn syrup in the 1970’s, Corn Products hired Al to run a campaign to urge manufactures to switch to its high fructose corn syrup product. The main target was carbonated drinks since high fructose corn syrup was less expensive and also a liquid making easer to blend into drinks.

            The name used for the corn product was “55-percent high fructose corn syrup.” The 55 relates to the strength of the sugar, 55 is the same sweetness level as table sugar. Al’s first reaction to the name was “Wait a minute, that name is going to cause you problems! Why don’t you call it corn sugar?”

            Al’s agency developed a series of trade advertisements promoting corn-sugar. “Consider all three types of sugar,” said one headline. And the copy outlined the advantages of corn sugar over cane sugar and beet sugar.

           The ads were a hit, but neither Corn Products nor the corn industry did anything about changing the name of product. Would it have been easy to get the FDA to approve the “corn sugar” name? No. But it would have been worth the fight.

            Initially, the negatives of the high fructose corn syrup (HFCS) name didn’t hinder the rise of the category because the economics of high fructose corn syrup were so clear-cut. Because of its low cost and ease of use, HFCS now dominates the food and beverage sweetener business.

            Because it’s a syrup it’s clear to understand how much easier it is use. But why is high fructose corn syrup so cheap?

            A system of sugar tariffs and sugar quotas imposed in 1977 significantly increased the cost of imported sugar in the U.S. The cost of domestic sugar is artificially inflated to almost twice the global price. On top of that, the price of corn is artificially low because of government subsidies paid to growers.

            Today, HFCS is still cheap, but public opinion has turned against the sweetener leading to rapidly declining sales. What was the reaction of the Corn Refiners Association? Advertising. Two years ago, they started a $30 million campaign touting the “Sweet Surprise” of corn sugar. Did this help? No, of course not. Advertising is a terrible way to change a strongly-held perception.

            The perception is that high fructose corn syrup is worse for you than sugar. Well with a name like that, how could it not be?

             A name is important in creating a perception in the mind. And the not just the brand name, but the category name as well.

            Every brand has two names: a brand name and a category name. It’s not just Red Bull, it’s Red Bull energy drink.

            Too many marketers take the category name as a “given” or even worse they think it doesn’t matter. So all their efforts are spent on promoting their brand name, not the category names.

            This is a mistake. The category name is an extremely important element in the success of a brand. The consumer is more interested in the category than the brand. In the mind, the brand just represents the category. And if your category has the wrong name, you are going to be in trouble, no matter what the brand is.

            Take diet cola versus light beer. About 70 percent of carbonated beverages sold in America are regular-calorie products. Only about 30 percent are “diet” products.            

            Beer is different. Today, “light” beer accounts for about 60 percent of the U.S. market. And regular beer accounts for about 40 percent.

            Light beer is a roaring success. Diet cola and the other diet beverages are not.            

            One reason for the difference is the category names themselves. Calling a product a “diet” cola screams out loud and clear, “You’re not going to like the taste.”

            Calling a product a “light” beer sends a different psychological message, a message that can be twisted into a benefit. With a light beer, you can drink more of the product, as exploited in the famous Miller Lite campaign: “Tastes great. Less filling.”

            For corn-syrup producers, the high-fructose name was a time bomb. But it has taken decades for the bad name to sabotage the category.

            Outside the U.S., realizing their mistake, the major cola companies are using “light” as the category name and not “diet.” The recent success of Coca-Cola Zero shows dropping the “diet” is a better direction for a brand.

            The existence of “diet” colas sends a dual message to consumers, both of which are negative:

            (1) There are too many calories in regular colas.

            (2) Diet colas don’t taste as good as regular cola.

            On the other hand, few consumers react negatively to light beer. But suppose Anheuser-Busch had called its leading brand “Diet Budweiser?”

            Joe Sixpack would have laughed. And ordered a Miller Lite.

            A good category name should be simple, easy to remember and imply a benefit.

            What if Activia had called its product “high bacteria microorganism yogurt?” Technically, that is what Activia is. But instead they used the much better “probiotics” category name.

            Probiotics sounds like a benefit. Corn sugar sounds like sugar. High fructose sounds like hazardous. Too bad the industry didn’t take Al’s advice in the 1970’s and change the name to “corn sugar.” Unfortunately now it might be too late to do today.

 

You can also check out my segment from yesterday's CNBC's Power Lunch where I discuss HFCS.

Non-Profit Marketing: Lessons from Kate's Club

            For many non-profits, spending money or time on branding is a hard pill to swallow. Too many non-profit leaders think it is either shallow or useless to spend either time or money on improving their brand image, tagline or logo.

            Nothing could be further from the truth. Branding is the key to success no matter if you are selling sneakers or helping the homeless.

            Here in the Atlanta area I have had the pleasure of working with several non-profits including Kate’s Club which was founded by Kate Atwood to help kids deal with the death of a parent. I have known Kate since the beginning of her journey in starting the non-profit.
            There are important lessons to learn from watching a brand emerge. If you are building a new brand, remember to keep these lessons in mind:

 

1. Start Slow.

            Kate’s Club was founded in 2003 with six children, their families and an outing to a bowling alley. In the beginning, Kate kept her day job and worked on Kate’s Club on the side. If she had expected to the club to take off rapidly, she probably would have quit her job right away. That likely would have been a disaster.

            Start slow. Don’t expect donations, volunteers or even people in need to break down your door right way. Just because you are doing good work doesn’t mean you can defy the rules of branding. And the more revolutionary, the more remarkable your work, the more time it is likely to take to build the brand.

 

2. Have Patience.

            Brand building takes time. You need to show great patience. Getting into the human mind isn’t easy. You need to wait it out as word of mouth delivers the message about your brand. That won’t be easy, especially when you feel strongly about your work and your non-profit mission.

            But is the key to success. Without it patience you are likely to make foolish errors in strategy. Early on I remember sitting with Kate wondering how we would get anybody to talk about death, which is  not an easy subject. But because of her own experience she showed great patience and conviction that it was an idea worth sticking to. Too many kids are left to suffer alone after a parent dies because nobody knows how to talk to them.

 

3. Don’t force it.

            You cannot force your way into the mind. Turning too quickly to advertising to build a brand is the biggest mistake companies and non-profits can make. Until your brand has gained credibility and established a position in the mind, any ad dollars spent are wasted.

            In addition, trying to force people to change beliefs or behavior with advertising is doubly foolish. It just doesn’t work. Even if your brand is the best thing since sliced bread, consumers won’t believe you if you say it with advertising.

 

4. Focus on PR

            Say it with PR. It works because it is third-party endorsement of your brand. That’s why Red Bull, Starbucks, Google and many other brands used no advertising to build their brands and instead relied on PR.

            Getting PR for your brand isn’t easy, especially if editors have never heard of your organization. But again, stay patient and keep at it.

            And don’t just write press releases. You need to focus on creating news. What are you the first in? What is your story? Who is the spokesperson? What is your category?

            Remember that neither consumers nor the media care about brands. What they really care about are categories. Nobody cares much about Kate’s Club, but they care about “kids facing the death of a parent.” That’s why it is so important to create a category you can be first in and then position your organization as the pioneer, leader and voice of the movement.

            Kate has very much been a pioneer in the “grief” category. She has been on The View, The Today Show, CNN and many other television shows. She has been profiled in People magazine. And last year published her first book: A Healing Place: Help Your Child Find Hope and Happiness After the Loss of a Loved One.

 

5. Stay Consistent

            You might start slow and show great patience but you won’t succeed unless also remain consistent with your brand.

            You need a razor-like focus, not just weeks or months but for years. Too many leaders and marketers like to tinker. So they constantly change messages, taglines, events, spokespersons etc. That never works.

            At Kate’s Club the brand and message has stayed very focused. They have also stayed focused and consistent with their big yearly gala called the Kate’s Club Cabaret. The first Cabaret was held back in 2004 just over a year after Kate’s Club was founded and every year since.

            A yearly event is a great way for any non-profit to raise money. But you need to keep the event consistent with its name, date and position.

            Unlike most non-profits, Kate’s Club went after a younger audience. While this meant having lower ticket prices, it allowed the Kate’s Club Cabaret to build a reputation as a fun, young people gala. Nor did this strategy turn away the older folks who are now attending in droves. What middle-age person doesn’t want to attend the in-crowd gala with all the fun young pretty people?

            Locking the name of the event to your non-profit is also key. Kate’s Club Cabaret uses alteration one of the best ways to increase memorability of a word in the mind.

            No date you pick for an event is ever perfect. Don’t feel the need to have your gala during the “season,” the best strategy is to pick a date and stick to it.

            The first Kate’s Club Cabaret was in August. Why? Who knows? August is hot in Atlanta and kids are going back to school. Getting the venue might have been cheap? Kate might have just picked it at whim. Whatever the reason doesn’t matter, August became the time for the Cabaret and it was locked into the mind.

            One year Kate’s Club tried to move the Cabaret to September. September is a better month for a charity event, less people are on vacation, the weather is beautiful and there is a more serious feeling in the air. Did it work for the Cabaret?

            No! It was one of worst events in terms of attendance. I was there and it was definitely less crowded and didn’t feel right.

            As a result, the Cabaret quickly went back to August where it has remained ever since, growing bigger and better every year.

            The Kate’s Club Cabaret has grown from a 200 person event to a 500 person event. Last year the tickets were sold out.

            In this sour economy, that is an amazing accomplishment. But it speaks to the power of the brand, the message, the PR and the consistency. Bravo Kate and Kate’s Club.

            The 7^th annual Kate’s Club Cabaret is this Friday, August 20^th. Hope to see you there.

Also read another post with more of my Marketing tips for non-profits

High Five to FiveFingers

 

              There is nothing I get more excited about than seeing a new category and a new brand hit the market. There’s the thrill of discovery the first time you hear about one or read about one. The challenge of finding the store that has one. The glory of getting your hands on one. The pride in showing yours off. And the jealousy and bewilderment on the faces of those who don’t have one.

 

            I’m not alone. In every category, there are always enthusiasts or early adopters who jump on new trends and make them future brand successes.

 

            Creating excitement is one of the keys to brand success. Easy to say, hard to do, you might be thinking. Wrong. There are some surefire keys to generating enthusiasm.

 

            1. Be specific and narrow.

 

            Don’t promise everything; promise one thing. Your product or service might be great at lots of things, but “lots of things” isn’t an idea that gets into the minds of consumers and isn’t an idea to get excited about. Focus on one key idea. Preferably one that is the opposite of the competition.

 

            For years, running shoes have added springs, cushions, treads, electronics and all sorts of things. MBTs and Sketchers even have extra thick heals.

 

            Vibram did the opposite. They don’t wrap your feet in an array of features; they free your feet. More of a sock than a sneakers, wearing Vibram FiveFingers is more like being barefoot. With 26 bones, 33 joints, 20 muscles, and hundreds of sensory receptors, tendons and ligaments the typical human foot is an anatomical marvel of evolution. Like the rest of the body, the feet need to be stimulated and exercised to keep them healthy.  Vibram FiveFingers’ barefoot technology stimulates and exercises your feet.

  

 FiveFingers = Barefooting.

Stimulating your feet to make you stronger and improve your balance.

 

            2. Create a visual difference.

 

            If your brand doesn’t have a visual difference it is going to be very difficult to create excitement. Shock and surprise is what generates excitement. You need to stop consumers in their tracks to say “What is that?!”

 

            Sometimes a visual difference is a natural part of the product; at other times you need to exaggerate or create a difference.

 

            Monster introduced an energy drink in a 16-oz can. That shocking visual difference generated interest and excitement. It also made Monster the #2 brand behind leader Red Bull whose 8.3 oz can created its own visual difference by being the first small can. Most recently 5-Hour Energy entered the market with the energy shot in the exciting 2-oz bottle.

 

            With Vibram FiveFingers, the difference is shocking and easy to see.

             It’s the toes!

 

            Vibram could have easily hidden the toe pockets, but they didn’t. Instead, the design enhanced them. Every time you wear a pair of FiveFingers you are sure to get several people asking “what is that on your feet?”

 

            3.  Make it pass along friendly.

 

            One of the biggest mistakes companies make is not giving a product a strong brand name that consumers can use to pass along the message to others. Both the name and brand message need to be in language that consumers will actually use.

 

            Seattle’s Best Coffee. Too generic, not distinctive, hard to pass along.

            MBT. Meaningless initials, hard to remember, hard to pass along.

            Eucerin. Impossible to pronounce, impossible to spell, hard to pass along.

 

            Eucerin has survived and thrived in spite of its impossibly horrible, unpronounceable name only because of its strong in its position as the dry-skin treatment dermatologist recommend. (Apparently the dermatologist figured out how to pronounce it.) The rest of us are unlikely to ever learn it. I buy Eucerin, but never tell anyone, because I have no idea how to say it.

 

            It’s best to have a name and a message that are both pass-along friendly. A unique, memorable name combined with an easy-to-understand and easy-to-explain message.

           

            FiveFingers is a super name. Much better than TenToes which is too generic. The idea of using fingers for toes is what makes the name stick in the mind. They look like gloves for your feet. That idea hooks the visual difference into the name. Of course, that difference also leads itself into the explanation of why FiveFingers?

 

            “I love my FiveFingers because being barefoot is better for my feet. It makes them stronger and healthier and improves my balance.” A nice pass-along name and message.

 

          

                A few problems with the FiveFingers brand.

 

            First, the typeface they use is very difficult to read. Never sacrifice legibility for visual gymnastics. Graphic designers may love to create artistic looks, but the bottom line is that consumers need to read the words.

 

            Second is the double branding and third branding when you throw in the model names. I bought the Vibram FiveFingers Bikila for example.  Way too many names going on.

 

            The box has a large Vibram logo. That extra word just drags down and dilutes the idea. It is best to focus on one name. Vibram is unnecessary. Sure Vibram is the company that makes them. But FiveFingers is the brand. If Vibram is there at all it should be tiny and more oriented towards the trade. Consumers buy FiveFingers. The trade orders them from Vibram. Of course, the company is most likely in love with its Vibram name and heritage. Consumers could care less, they should have put the FiveFingers brand name on the shoes. Sadly the company doesn’t own the fivefingers.com website either, they use vibramfivefingers.com.